Document:

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                           ELITRA PHARMACEUTICALS INC.
                          2000 NON-EMPLOYEE DIRECTORS'
                                STOCK OPTION PLAN

                             STOCK OPTION AGREEMENT
                           (NONSTATUTORY STOCK OPTION)

         Pursuant to your Stock Option Grant Notice ("Grant Notice") and this
Stock Option Agreement, ELITRA PHARMACEUTICALS INC. (the "Company") has granted
you an option under its 2000 Non-Employee Directors' Stock Option Plan (the
"Plan") to purchase the number of shares of the Company's Common Stock indicated
in your Grant Notice at the exercise price indicated in your Grant Notice.
Defined terms not explicitly defined in this Stock Option Agreement but defined
in the Plan shall have the same definitions as in the Plan.

         The details of your option are as follows:

         1.       VESTING. Subject to the limitations contained herein, your
option will vest as provided in your Grant Notice, provided that vesting will
cease upon the termination of your Continuous Service.

         2.       NUMBER OF SHARES AND EXERCISE PRICE. The number of shares of
Common Stock subject to your option and your exercise price per share referenced
in your Grant Notice may be adjusted from time to time for Capitalization
Adjustments, as provided in the Plan.

         3.       METHOD OF PAYMENT. Payment of the exercise price is due in
full upon exercise of all or any part of your option. You may elect to make
payment of the exercise price in cash or by check or in any other manner
permitted by your Grant Notice, which may include one or more of the following:

                  (A)      In the Company's sole discretion at the time your
option is exercised and provided that at the time of exercise the Common Stock
is publicly traded and quoted regularly in The Wall Street Journal, pursuant to
a program developed under Regulation T as promulgated by the Federal Reserve
Board that, prior to the issuance of Common Stock, results in either the receipt
of cash (or check) by the Company or the receipt of irrevocable instructions to
pay the aggregate exercise price to the Company from the sales proceeds.

                  (B)      Provided that at the time of exercise the Common
Stock is publicly traded and quoted regularly in The Wall Street Journal, by
delivery of already-owned shares of Common Stock either that you have held for
the period required to avoid a charge to the Company's reported earnings
(generally six months) or that you did not acquire, directly or indirectly from
the Company, that are owned free and clear of any liens, claims, encumbrances or
security interests, and that are valued at Fair Market Value on the date of
exercise. "Delivery" for these purposes, in the sole discretion of the Company
at the time you exercise your option, shall include delivery to the Company of
your attestation of ownership of such shares of Common Stock in a form approved
by the Company. Notwithstanding the foregoing, you may not exercise your option
by tender to the Company of Common Stock to the extent such tender

                                       1.
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would violate the provisions of any law, regulation or agreement restricting the
redemption of the Company's stock.

                  (C)      Pursuant to the following deferred payment
alternative:

                           (I)      Not less than one hundred percent (100%) of
the aggregate exercise price, plus accrued interest, shall be due four (4) years
from date of exercise or, at the Company's election, upon termination of your
Continuous Service.

                           (II)     Interest shall be compounded at least
annually and shall be charged at the minimum rate of interest necessary to avoid
the treatment as interest, under any applicable provisions of the Code, of any
portion of any amounts other than amounts stated to be interest under the
deferred payment arrangement.

                           (III)    At any time that the Company is incorporated
in Delaware, payment of the Common Stock's "par value," as defined in the
Delaware General Corporation Law, shall be made in cash and not by deferred
payment.

                           (IV)     In order to elect the deferred payment
alternative, you must, as a part of your written notice of exercise, give notice
of the election of this payment alternative and, in order to secure the payment
of the deferred exercise price to the Company hereunder, if the Company so
requests, you must tender to the Company a promissory note and a security
agreement covering the purchased shares of Common Stock, both in form and
substance satisfactory to the Company, or such other or additional documentation
as the Company may request.

         4.       WHOLE SHARES. You may exercise your option only for whole
shares of Common Stock.

         5.       SECURITIES LAW COMPLIANCE. Notwithstanding anything to the
contrary contained herein, you may not exercise your option unless the shares of
Common Stock issuable upon such exercise are then registered under the
Securities Act or, if such shares of Common Stock are not then so registered,
the Company has determined that such exercise and issuance would be exempt from
the registration requirements of the Securities Act. The exercise of your option
must also comply with other applicable laws and regulations governing your
option, and you may not exercise your option if the Company determines that such
exercise would not be in material compliance with such laws and regulations.

         6.       TERM. You may not exercise your option before the commencement
of its term or after its term expires. The term of your option commences on the
Date of Grant and expires upon the earliest of the following:

                  (A)      three (3) months after the termination of your
Continuous Service for any reason other than your Disability or death, provided
that if during any part of such three- (3-) month period your option is not
exercisable solely because of the condition set forth in the preceding paragraph
relating to "Securities Law Compliance," your option shall not expire until the
earlier of the Expiration Date or until it shall have been exercisable for an
aggregate period of three (3) months after the termination of your Continuous
Service;

                                       2.
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                  (B)      twelve (12) months after the termination of your
Continuous Service due to your Disability;

                  (C)      eighteen (18) months after your death if you die
either during your Continuous Service or within three (3) months after your
Continuous Service terminates;

                  (D)      the Expiration Date indicated in your Grant Notice;
or

                  (E)      the day before the tenth (10th) anniversary of the
Date of Grant.

         7.       EXERCISE.

                  (A)      You may exercise the vested portion of your option
(and the unvested portion of your option if your Grant Notice so permits) during
its term by delivering a Notice of Exercise (in a form designated by the
Company) together with the exercise price to the Secretary of the Company, or to
such other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require.

                  (B)      By exercising your option you agree that, as a
condition to any exercise of your option, the Company may require you to enter
into an arrangement providing for the payment by you to the Company of any tax
withholding obligation of the Company arising by reason of (1) the exercise of
your option, (2) the lapse of any substantial risk of forfeiture to which the
shares of Common Stock are subject at the time of exercise, or (3) the
disposition of shares of Common Stock acquired upon such exercise.

         8.       TRANSFERABILITY. Your option is not transferable, except (i)
by will or by the laws of descent and distribution, (ii) with the prior written
approval of the Company, by instrument to an inter vivos or testamentary trust,
in a form accepted by the Company, in which the option is to be passed to
beneficiaries upon the death of the trustor (settlor) and (iii) with the prior
written approval of the Company, by gift, in a form accepted by the Company, to
your "immediate family" as that term is defined in 17 C.F.R. 240.16a-1(e). The
term "immediate family" is defined in 17 C.F.R. 240.16a-1(e) to mean any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, and includes adoptive relationships. Your option is exercisable
during your life only by you or a transferee satisfying the above-stated
conditions. The right of a transferee to exercise the transferred portion of
your option after termination of your Continuous Service shall terminate in
accordance with your right to exercise your option as specified in your option.
In the event that your Continuous Service terminates due to your death, your
transferee will be treated as a person who acquired the right to exercise your
option by bequest or inheritance. In addition to the foregoing, the Company may
require, as a condition of the transfer of your option to a trust or by gift,
that your transferee enter into an option transfer agreement provided by, or
acceptable to, the Company. The terms of your option shall be binding upon your
transferees, executors, administrators, heirs, successors, and assigns.
Notwithstanding the foregoing, by delivering written notice to the Company, in a
form satisfactory to the Company, you may designate a third party who, in the
event of your death, shall thereafter be entitled to exercise your option.

                                       3.
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         9.       OPTION NOT A SERVICE CONTRACT. Your option is not a service
contract, and nothing in your option shall be deemed to create in any way
whatsoever any obligation on your part to continue in the service of the Company
or an Affiliate. In addition, nothing in your option shall obligate the Company
or an Affiliate, their respective shareholders, Boards of Directors, Officers or
Employees to continue any relationship that you might have as a Director or
Consultant for the Company or an Affiliate.

         10.      WITHHOLDING OBLIGATIONS.

                  (A)      At the time you exercise your option, in whole or in
part, or at any time thereafter as requested by the Company, you hereby
authorize withholding from payroll and any other amounts payable to you, and
otherwise agree to make adequate provision for (including by means of a
"cashless exercise" pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board to the extent permitted by the
Company), any sums required to satisfy the federal, state, local and foreign tax
withholding obligations of the Company or an Affiliate, if any, which arise in
connection with your option.

                  (B)      Upon your request and subject to approval by the
Company, in its sole discretion, and compliance with any applicable conditions
or restrictions of law, the Company may withhold from fully vested shares of
Common Stock otherwise issuable to you upon the exercise of your option a number
of whole shares of Common Stock having a Fair Market Value, determined by the
Company as of the date of exercise, not in excess of the minimum amount of tax
required to be withheld by law. If the date of determination of any tax
withholding obligation is deferred to a date later than the date of exercise of
your option, share withholding pursuant to the preceding sentence shall not be
permitted unless you make a proper and timely election under Section 83(b) of
the Code, covering the aggregate number of shares of Common Stock acquired upon
such exercise with respect to which such determination is otherwise deferred, to
accelerate the determination of such tax withholding obligation to the date of
exercise of your option. Notwithstanding the filing of such election, shares of
Common Stock shall be withheld solely from fully vested shares of Common Stock
determined as of the date of exercise of your option that are otherwise issuable
to you upon such exercise. Any adverse consequences to you arising in connection
with such share withholding procedure shall be your sole responsibility.

                  (C)      You may not exercise your option unless the tax
withholding obligations of the Company and/or any Affiliate are satisfied.
Accordingly, you may not be able to exercise your option when desired even
though your option is vested, and the Company shall have no obligation to issue
a certificate for such shares of Common Stock or release such shares of Common
Stock from any escrow provided for herein.

         11.      NOTICES. Any notices provided for in your option or the Plan
shall be given in writing and shall be deemed effectively given upon receipt or,
in the case of notices delivered by mail by the Company to you, five (5) days
after deposit in the United States mail, postage prepaid, addressed to you at
the last address you provided to the Company.

         12.      GOVERNING PLAN DOCUMENT. Your option is subject to all the
provisions of the Plan, the provisions of which are hereby made a part of your
option, and is further subject to all

                                       4.
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interpretations, amendments, rules and regulations which may from time to time
be promulgated and adopted pursuant to the Plan. In the event of any conflict
between the provisions of your option and those of the Plan, the provisions of
the Plan shall control.

                                       5.<PAGE>

                              AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

                                 BY AND BETWEEN

                                  RAJYABIOTICS

                                       AND

                                DR. HARRY HIXSON

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                              AMENDED AND RESTATED

                              EMPLOYMENT AGREEMENT

         THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is
made and entered into by and between RajyaBiotics, a California corporation (the
"Company"), and Dr. Harry Hixson ("Executive"), effective as of the Closing Date
of the Company's Series A financing (each as defined below). The Company and
Executive are hereinafter collectively referred to as the "Parties," and may
individually be referred to as a "Party."

                                    RECITALS

         A. The Company desires assurance of the association and services of
Executive in order to retain Executive's experience, skills, abilities,
background and knowledge, and is willing to engage Executive's services on the
terms and conditions set forth in this Agreement.

         B. Executive desires to be in the employ of the Company and is willing
to accept such an employment on the terms and conditions set forth in this
Agreement.

         C. The Company and Executive hereby acknowledge that the terms and
conditions set forth in this Agreement will only become effective and deemed to
govern Executive's employment with the Company on the date upon which the
Company's Series A financing closes ("Closing Date") pursuant to the terms
contemplated by the Summary of Terms attached hereto as Exhibit A ("Series A
Financing").

                                    AGREEMENT

         In consideration of the foregoing premises and the mutual covenants
herein contained, and for other good and valuable consideration, the Parties,
intending to be legally bound, agree as follows:

1.       EMPLOYMENT.

         1.1 The Company hereby agrees to employ Executive, and Executive hereby
accepts employment by the Company, upon the terms and conditions set forth in
this Agreement beginning on the Closing Date.

         1.2 Executive shall be the Chief Executive Officer and Chairman of the
Board of Directors ("Board").

         1.3 Executive shall have the normal responsibilities, duties and
authorities associated with the positions of Chief Executive Officer and
Chairman of the Board, provided, however, that at all times during his
employment Executive shall be subject to the direction and policies from time to
time established by the Board. Executive's position will be deemed a full-time
position and Executive will be expected to allocate a number of hours per week
to the Company's business equal to the hours normally allocated by a Chief
Executive Officer and Chairman of the Board in a similarly situated company.

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         1.4 Unless the Parties otherwise agree in writing, prior to Executive's
termination in accordance with this Agreement, Executive shall perform the
services he is required to perform pursuant to this Agreement, reporting to the
Company's principal executive offices in San Diego, California; provided,
however, that the Company may from time to time require Executive to travel
temporarily to other locations in connection with the Company's business.

2.       LOYAL AND CONSCIENTIOUS PERFORMANCE; NONCOMPETITION.

         2.1 During his employment by the Company, Executive shall devote his
full energies, interest, abilities and productive time to the proper and
efficient performance of his duties under this Agreement. The foregoing shall
not preclude Executive from engaging in civic, charitable or religious
activities which will not present any direct conflict of interest with the
Company or affect the performance of Executive's duties hereunder.

         2.2 During his employment by the Company, Executive shall not engage in
competition with the Company, either directly or indirectly, in any manner or
capacity, as adviser, principal, agent, partner, officer, director, employee,
member of any association or otherwise, in any phase of the business of
developing, manufacturing and marketing of products which are in the same field
of use or which otherwise directly compete with the products or proposed
products or methods of the Company.

         2.3 Ownership by Executive, as a passive investment, of less than one
percent (1%) of the outstanding shares of capital stock of any corporation with
one or more classes of its capital stock listed on a national securities
exchange or publicly traded in the over-the-counter market shall not constitute
a breach of this Section 2.

3.       COMPENSATION OF EXECUTIVE.

         3.1 The Company shall pay Executive a base salary of Two Hundred and
Forty Thousand Dollars ($240,000.00) per year ("Base Salary"), payable in
regular periodic payments in accordance with Company policy. Such salary shall
be prorated for any partial year of employment on the basis of a 365-day fiscal
year. Executive's Base Salary shall be subject to annual review and thereafter
Executive shall be entitled to such increase in Base Salary as the Board may
determine from time to time.

         3.2 All of Executive's compensation shall be subject to customary
withholding taxes and any other employment taxes as are commonly required to be
collected or withheld by the Company.

         3.3 Executive shall, in the discretion of the Board and in accordance
with Company policy, be entitled to participate in benefits under any employee
benefit plan or arrangement made available by the Company now or in the future
to its executives and key management employees, including four weeks of annual
vacation.

         3.4 The Board shall, in its sole discretion, award to Executive an
annual bonus of up to thirty-five percent (35%) of Executive's Base Salary upon
Executive's completion of specific measurable goals as mutually agreed upon by
the Board and Executive within ninety (90) days of

                                       2.

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the Effective Date and thereafter within ninety (90) days of the commencement of
each fiscal year.

         3.5 The Company agrees that any unvested shares (the "Unvested Shares")
of the One Million Three Hundred Forty Thousand (1,340,000) shares of the
Company's Common Stock (the "Shares") previously issued to Executive pursuant to
the Restricted Stock Purchase Agreement, dated April 3, 1998, attached hereto as
Exhibit B (the "Restricted Stock Purchase Agreement") shall vest on a monthly
basis following the Closing Date at a rate equal to the product of (i) the
number of Unvested Shares and (ii) 0.208.

         3.6 Executive shall be entitled to receive reimbursement of all
reasonable travel and other business expenses incurred by Executive in
performing Company services, including expenses related to travel, parking and
business meetings. Such expenses shall be accounted for in accordance with the
policies and procedures established by the Company.

4.       TERMINATION BY COMPANY. Executive's employment with the Company may be
terminated by the Company under the following conditions:

         4.1 TERMINATION ON DEATH OR DISABILITY. This Agreement shall terminate
without notice upon Executive's death or upon Executive's Major Disability (as
defined in Section 4.1.1) for a period of 120 consecutive days, or for 180 days
in the aggregate in any 365-day period.

             4.1.1 The term "Major Disability" as used in this Agreement shall
mean the inability of Executive to properly perform the essential functions of
Executive's positions of Chief Executive Officer or Chairman of the Board by
reason of any incapacity, physical or mental, which the Board, based upon
medical advice or an opinion provided by a licensed physician acceptable to the
Board and approved by the Executive, which approval shall not be unreasonably
withheld, determines to have incapacitated Executive from properly performing
such essential functions. Based upon such medical advice or opinion, the
determination of the Board shall be final and binding and the date such
determination is made shall be the date of such Major Disability for purposes of
this Agreement.

         4.2 TERMINATION FOR CAUSE. The Company may terminate Executive's
employment under this Agreement for cause ("Cause") by delivery of written
notice to Executive specifying the cause or causes relied upon for such
termination. Any notice of termination given pursuant to this Section 4.2 shall
effect termination as of the date specified in such notice or, in the event no
such date is specified, on the last day of the month in which such notice is
delivered or deemed delivered as provided in Section 11 below.

         Grounds for the Company to terminate this Agreement for Cause shall be
limited to the occurrence of any of the following events:

             4.2.1 The willful failure, neglect or refusal by Executive to
perform his duties pursuant to Section 1.3 or Section 2.1, which failure is not
remedied within a reasonable period of time after written notice from the
Company.

                                       3.
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             4.2.2 Executive's engaging or in any manner participating in any
activity which is directly competitive with or intentionally injurious to the
Company or which violates any provision of Section 8 of this Agreement;

             4.2.3 Executive's commission of any fraud against the Company or
use or appropriation for his personal use or benefit of any material properties
or funds of the Company not authorized by the Board to be so used or
appropriated; or Executive's conviction of any crime involving dishonesty or
moral turpitude.

             4.2.4 Conduct by the Executive which in the good faith and
reasonable determination of the Board demonstrates gross unfitness to serve in
Executive's position.

         4.3 TERMINATION WITHOUT CAUSE. The Company may terminate the
Executive's employment without cause ("Without Cause") upon delivery of written
notice to the Executive at any time, which shall specify the effective date of
termination at any time. Any notice of termination given pursuant to this
Section 4.3 shall effect termination as of the date specified in such notice or,
in the event no such date is specified, on the last day of the month on which
such notice is delivered or deemed deliverable as provided in Section 11 below.

5.       VOLUNTARY TERMINATION BY EXECUTIVE.

         5.1 Executive may terminate his employment voluntarily by giving the
Company ninety (90) days advance notice in writing, at which time the provisions
of Section 6.2 shall apply; provided, however, that the provisions of Section
6.3.2 shall apply if Executive voluntarily terminates his employment as a result
of Constructive Termination (as defined in Section 7.3 hereof).

6.       COMPENSATION UPON TERMINATION.

         6.1 DEATH OR DISABILITY.

             6.1.1 BY DEATH. Upon termination of Executive's employment in the
event of death, the Company shall pay to Executive's beneficiaries or his
estate, as the case may be, any Accrued Compensation. In addition, Executive's
beneficiaries or his estate, as the case may be, shall be entitled to the
accelerated vesting of one-half of all Shares or stock options held by Executive
which are unvested as of the date of Executive's death. The Company shall
thereafter have no further obligations to Executive under this Agreement. The
term "Accrued Compensation" as used in this Agreement shall mean, to the date of
the termination of Executive's employment with the Company, any accrued Base
Salary, any bonus compensation to the extent earned, any vested deferred
compensation (other than pension plan or profit-sharing plan benefits which will
be paid in accordance with the applicable plan), any benefits under any plans of
the Company in which Executive is a participant to the full extent of
Executive's rights under such plans, any accrued vacation pay and any
appropriate business expenses incurred by Executive in connection with his
duties hereunder.

             6.1.2 BY DISABILITY. Upon termination of Executive's employment in
the event of Major Disability, the Company shall pay to Executive all Accrued
Compensation, and shall continue to pay to Executive his Base Salary until such
time (but not more than ninety (90) days

                                       4.
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following termination), as Executive shall become entitled to receive disability
insurance payments under the disability insurance policy maintained by the
Company, if any. In addition, Executive shall be entitled to the accelerated
vesting of one-half of all Shares or stock options held by Executive which are
unvested as of the date of Executive's Major Disability. The Company shall
thereafter have no further obligations to Executive under this Agreement.

         6.2 FOR CAUSE OR VOLUNTARY TERMINATION BY EXECUTIVE. If Executive's
employment shall be terminated by the Company for Cause or voluntarily by
Executive, the Company shall pay Executive his Accrued Compensation and the
Company shall thereafter have no further obligations to Executive under this
Agreement.

         6.3 WITHOUT CAUSE.

             6.3.1 TERMINATION WITHIN ONE YEAR OF CLOSING DATE. If Executive's
employment shall be terminated by the Company Without Cause within one year of
the Closing Date, the Company shall pay Executive his Accrued Compensation. The
Company shall thereafter have no further obligations to Executive under this
Agreement.

             6.3.2 TERMINATION ONE YEAR OR LATER FOLLOWING CLOSING DATE. If
Executive's employment shall be terminated by the Company Without Cause or as a
result of Constructive Termination (as defined in Section 7.3 hereof) one year
or later following the Closing Date, then upon Executive's furnishing to the
Company an executed waiver and release of claims (a form of which is attached
hereto as Exhibit C), Executive shall be entitled to the following: (i)
continuation of Executive's base salary for six months from the date of
termination with such base salary continuation to be at the rate of Executive's
then current base salary in effect as of the date of termination, (ii) in the
event the Shares or any stock options held by Executive have not yet vested in
their entirety, the vesting of the Shares or options shall be accelerated such
that the number of Shares or options vested shall equal the number of Shares or
options that would have vested if the Executive had remained an employee for an
additional six months, (iii) continuation of Executive's (and if applicable,
Executive's dependents') participation in any group health insurance plan or
plans maintained by the Company for six months from the date of termination
under COBRA, (iv) if employment terminates during the second half of the
Company's fiscal year, a lump-sum payment equal to a pro rata portion of the
Executive's actual annual cash bonus for the preceding year, based on the number
of completed months of Executive's employment in the year of termination, and
(v) all Accrued Compensation.

         6.4 NO MITIGATION. Executive shall not be required to mitigate the
amount of any payment contemplated by this Section 6 (whether by seeking new
employment or in any other manner).

7.       CHANGE IN CONTROL.

         7.1 A "Change in Control" of the Company shall be deemed to have
occurred if and when:

                 (a) The Company is merged, or consolidated, or reorganized into
or with another corporation or other legal person, and as a result of such
merger, consolidation or

                                       5.
<PAGE>

reorganization less than 50% of the combined voting power of the
then-outstanding securities of such corporation or person immediately after such
transaction are held in the aggregate by the holders of voting equities of the
Company immediately prior to such transactions;

                 (b) The Company sells all or substantially all of its assets to
any other corporation or other legal person and thereafter, less than 50% of the
combined voting power of the then-outstanding voting securities of the acquiring
or consolidated entity are held in the aggregate by the holders of voting
securities of the Company immediately prior to such sale;

                 (c) There is a report filed after the date of this Agreement on
Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report), each
as promulgated pursuant to the Securities and Exchange Act of 1934 (the
"Exchange Act"), disclosing that any person (as the term "person" is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the
beneficial owner (as the term "beneficial owner" is defined under Rule 13d-3 or
any successor rule or regulation promulgated under the Exchange Act)
representing 50% or more of the combined voting power of the then-outstanding
voting securities of the Company;

                 (d) The Company shall file a report with the Securities and
Exchange Commission pursuant to the Exchange Act disclosing in response to Item
1 of Form 8-X thereunder or Item 5(f) of Schedule 14A thereunder (or any
successor schedule, form or report or item therein) that the change in control
of the Company has or may have occurred or will or may occur in the future
pursuant to any then-existing contract or transaction; or

                 (e) During any period of two consecutive years, individuals who
at the beginning of any such period constitute the directors of the Company
cease for any reason to constitute at least a majority thereof unless the
election to the nomination for election by the Company's shareholders of each
director of the Company first elected during such period was approved by a vote
of at least two-thirds of the directors of the Company then still in office who
were directors of the Company at the beginning of such period.

         7.2 If within eighteen (18) months following the occurrence of a Change
in Control Executive is terminated Without Cause, or a Constructive Termination
(as defined in Section 7.3 hereof) occurs, then upon Executive's furnishing to
the Company an executed waiver and release of claims (a form of which is
attached hereto as Exhibit C), Executive shall receive the following: (i) in one
lump sum payment, Executive's base salary for six months at the rate of
Executive's then current base salary in effect as of the date of termination,
(ii) accelerated vesting of any unvested Shares or stock options held by
Executive, (iii) continuation of Executive's (and if applicable, Executive's
dependents') participation in any group health insurance plan or plans
maintained by the Company for six months from the date of termination under
COBRA, (iv) if employment terminates during the second half of the Company's
fiscal year, a lump-sum payment equal to a pro rata portion of the Executive's
actual annual cash bonus for the preceding year, based on the number of
completed months of Executive's employment in the year of termination, and (v)
all Accrued Compensation.

         7.3 For the purposes of this Agreement, a "Constructive Termination"
shall be deemed to have occurred if Executive's responsibilities and
compensation are diminished by any of the following actions without Executive's
written consent:

                                       6.
<PAGE>

                 (a) the assignment to Executive of any duties or
responsibilities which result in any diminution or adverse change of Executive's
position, status or circumstances of employment; or any removal of Executive
from or any failure to re-elect Executive to any of such positions, including,
but not limited to, Executive's membership on the Board, except in connection
with termination of his employment for death, disability, retirement, fraud
misappropriation, embezzlement (or any other occurrence which constitutes Cause,
as defined in Section 4.2 herein) or any other voluntary termination of
employment by Executive;

                 (b) a selective reduction by the Company in Executive's annual
Base Salary by greater than five percent (5%);

                 (c) a relocation of Executive, or the Company's principal
executive offices if Executive's principal office is at such offices, to a
location more than forty (40) miles from the location at which Executive is then
performing his duties, except for an opportunity to relocate which is accepted
by Executive in writing;

                 (d) any material breach by the Company of any provisions of
this Agreement; or

                 (e) any failure by the Company to obtain the assumption of this
Agreement by any successor or assigns of the Company.

         7.4 NO MITIGATION. Executive shall not be required to mitigate the
amount of any payment contemplated by this Section 7 (whether by seeking new
employment or in any other manner).

         7.5 CERTAIN REDUCTIONS IN PAYMENTS.

             7.5.1 In the event that any payment received or to be received by
Executive pursuant to this Agreement ("Payment") would (i) constitute a
"parachute payment" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code") and (ii) but for this Section 7.5.1
subject to the excise tax imposed by Section 4999 of the Code (the "Excise
Tax"), then, subject to the provisions of Section 7.5.2 hereof, such Payment
shall be reduced to the largest amount which Executive, in his discretion,
determines would result in no portion of the Payment being subject to the Excise
Tax. The determination by Executive of any required reduction pursuant to this
Section 7.5.1 shall be conclusive and binding upon the Company. The Company
shall reduce a Payment in accordance with this Section 7.5.1 only upon written
notice by Executive indicating the amount of such reduction, if any. If the
Internal Revenue Service (the "IRS") determines that a Payment is subject to the
Excise Tax, then Section 7.5.2 hereof shall apply, and the enforcement of
Section 7.5.2 shall be the exclusive remedy to the Company for a failure by
Executive to reduce the Payment so that no portion thereof is subject to the
Excise Tax.

             7.5.2 If, notwithstanding any reduction described in Section 7.5.1
hereof (or in the absence of any such reduction), the IRS determines that
Executive is liable for the Excise Tax as a result of the receipt of a Payment,
then Executive shall be obligated to pay back to the Company, within 30 days
after final IRS determination, an amount of the Payment equal to the "Repayment
Amount." The Repayment Amount with respect to a Payment shall be the smallest

                                       7.
<PAGE>

such amount, if any, as shall be required to be paid to the Company so that
Executive's net proceeds with respect to any Payment (after taking into account
the payment of the Excise Tax imposed on such Payment) shall be maximized.
Notwithstanding the foregoing, the Repayment Amount with respect to a Payment
shall be zero if a Repayment Amount of more than zero would not eliminate the
Excise Tax imposed on such Payment. If the Excise Tax is not eliminated pursuant
to this Section 7.5.2, Executive shall pay the Excise Tax.

8.       CONFIDENTIAL INFORMATION; NONSOLICITATION.

         8.1 Executive recognizes that his employment with the Company will
involve contact with information of substantial value to the Company, which is
not old and generally known in the trade, and which gives the Company an
advantage over its competitors who do not know or use it, including but not
limited to, methods, techniques, designs, drawings, processes, inventions,
developments, equipment, prototypes, sales and customer information, and
business and financial information relating to the business, products, practices
and techniques of the Company (hereinafter referred to as "Confidential
Information"). Executive will at all times regard and preserve as confidential
such Confidential Information obtained by Executive from whatever source and
will not, either during his employment with the Company or thereafter, publish
or disclose any part of such Confidential Information in any manner at any time,
or use the same except on behalf of the Company, without the prior written
consent of the Company. As a condition of this Agreement, Executive will
continue to be bound by the Employee Proprietary Information and Inventions
Agreement, previously executed by Executive, a copy of which is attached as
Exhibit D.

         8.2 While employed by the Company and for one (1) year thereafter,
Executive agrees that, in order to protect the Company's confidential and
proprietary information from unauthorized use, Executive will not, either
directly or through others, solicit or attempt to solicit (i) any employee,
consultant or independent contractor of the Company to terminate his or her
relationship with the Company in order to become an employee, consultant or
independent contractor to or for any other person or business entity; or (ii)
the business of any customer, vendor or distributor of the Company which, at the
time of termination or one (1) year immediately prior thereto, was listed on the
Company's customer, vendor or distributor list.

9.       SUCCESSORS. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance reasonably satisfactory to the Executive, to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken
place.

10.      ASSIGNMENT AND BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of Executive and Executive's heirs, executors, personal
representatives, assigns, administrators and legal representatives. Because of
the unique and personal nature of Executive's duties under this Agreement,
neither this Agreement nor any rights or obligations under this Agreement shall
be assignable by Executive. This Agreement shall be binding upon and inure to
the benefit of the Company and its successors, assigns and legal
representatives.

                                       8.
<PAGE>

11.      NOTICES. All notices or demands of any kind required or permitted to be
given by the Company or Executive under this Agreement shall be given in writing
and shall be personally delivered (and receipted for) or mailed by certified
mail, return receipt requested, postage prepaid, addressed as follows:

         If to the Company:                 RajyaBiotics
                                            Biology Department
                                            San Diego State University
                                            5500 Campanile Drive
                                            San Diego, California 92182-4614

         With a copy to:                    Frederick T. Muto, Esq.
                                            Cooley Godward LLP
                                            4365 Executive Drive, Suite 1100
                                            San Diego, California 92121

         If to Executive:                   Dr. Harry Hixson
                                            8518 Ruette Monte Carlo
                                            La Jolla, California 92037

Any such written notice shall be deemed received when personally delivered or
three (3) days after its deposit in the United States mail as specified above.
Either Party may change its address for notices by giving notice to the other
Party in the manner specified in this section.

12.      CHOICE OF LAW. This Agreement shall be construed and interpreted in
accordance with the laws of the State of California, without regard to the
conflict of laws provision thereof.

13.      INTEGRATION. This Agreement contains the complete, final and exclusive
agreement of the Parties relating to the subject matter of this Agreement, and
supersedes all prior oral and written employment agreements or arrangements
between the Parties.

14.      AMENDMENT. This Agreement cannot be amended or modified except by a
written agreement signed by Executive and the Company.

15.      WAIVER. No term, covenant or condition of this Agreement or any breach
thereof shall be deemed waived, except with the written consent of the Party
against whom the wavier in claimed, and any waiver or any such term, covenant,
condition or breach shall not be deemed to be a waiver of any preceding or
succeeding breach of the same or any other term, covenant, condition or breach.

16.      SEVERABILITY. The finding by a court of competent jurisdiction of the
unenforceability, invalidity or illegality of any provision of this Agreement
shall not render any other provision of this Agreement unenforceable, invalid or
illegal. Such court shall have the authority to modify or replace the invalid or
unenforceable term or provision with a valid and enforceable term or provision
which most accurately represents the Parties' intention with respect to the
invalid or unenforceable term or provision.

                                       9.
<PAGE>

17.      INTERPRETATION; CONSTRUCTION. The headings set forth in this Agreement
are for convenience of reference only and shall not be used in interpreting this
Agreement. This Agreement has been drafted by legal counsel representing the
Company, but Executive has been encouraged, and has consulted with, his own
independent counsel and tax advisors with respect to the terms of this
Agreement. The Parties acknowledge that each Party and its counsel has reviewed
and revised, or had an opportunity to review and revise, this Agreement, and the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting Party shall not be employed in the interpretation
of this Agreement.

18.      REPRESENTATIONS AND WARRANTIES. Executive represents and warrants that,
to the best of Executive's knowledge, he is not restricted or prohibited,
contractually or otherwise, from entering into and performing each of the terms
and covenants contained in this Agreement, and that his execution and
performance of this Agreement will not violate or breach any other agreements
between Executive and any other person or entity.

19.      COUNTERPARTS. This Agreement may be executed in two counterparts, each
of which shall be deemed an original, all of which together shall contribute one
and the same instrument.

20.      PARTICIPATION IN SERIES B FINANCING. Executive shall have the right to
purchase up to $250,000 of the Company's Series B Preferred Stock at the time
and on the same terms and conditions offered to other purchasers of such Series
B Preferred Stock.

                      [THIS SPACE INTENTIONALLY LEFT BLANK]

                                      10.
<PAGE>

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

                                      THE COMPANY:

                                      RAJYABIOTICS

                                      By: /s/ JUDITH W. ZYSKIND
                                          -------------------------------------
                                          Judith W. Zyskind, Ph.D.
                                          President

                                      EXECUTIVE:

                                          /s/  HARRY HIXSON
                                          -------------------------------------
                                          Dr. Harry Hixson

                                      11.
<PAGE>

                                    EXHIBIT A

                                SUMMARY OF TERMS

                                      12.
<PAGE>

               SUMMARY OF TERMS FOR PROPOSED PRIVATE PLACEMENT OF
                      SERIES A CONVERTIBLE PREFERRED STOCK
                                    8-NOV-97
<TABLE>
<S>                                <C>   <C>
Issuer:                                  RajyaBiotics (the "Company"), a California Corporation

Investors:                               Enterprise Partners, Johnson & Johnson Development
                                         Corporation, Mayfield Fund

Amount of Investment:                    $3 Million, as set forth in Exhibit I

Closing Date:                            The investment closing shall take place in two traunches. The first
                                         traunch of $300K will occur within one month of this Term Sheet being
                                         accepted. The second traunch will be invested subject to meeting the
                                         milestones listed below within the first four months of the signing of
                                         this Term Sheet.

Milestones to Second Traunch:      a.    Proof of concept completed to demonstrate that the Company's method can
                                         identify many essential genes in at least one bacterial organism
                                   b.    Initial proof of concept completed to demonstrate that the Company's method
                                         can identify at least one essential gene in a fungi
                                   c.    Patent(s) filed covering the method and essential genes identified to date
                                   d.    Experienced biopharmaceutical executive acceptable to the Investors agrees
                                         to join the Company in the position of VP of Business Development, VP of
                                         R&D, or CEO
                                   e.    License Agreement acceptable to the investors signed with San Diego State
                                         University.
                                   f.    R&D and patent strategy developed for mammalian applications of the
                                         technology.
                                   g.    Thorough patentability and patent infringement searches completed.

Services from Forge Medical        a.    Help recruit an experienced biopharmaceutical executive
Ventures:                          b.    Put in place the basic mechanics for the company (includes bank accounts,
                                         payroll services, employee benefits)
                                   c.    Complete an initial business model proforma projection and a review of
                                         competitors and high throughput screening technologies
                                   d.    Coordinate patent searches
                                   e.    Assist in negotiation of License Agreement with San Diego State University

Type of Security:                        Series A Convertible Preferred Stock ("Series A")
</TABLE>

                                      1.
<PAGE>

<TABLE>
<S>                                <C>   <C>
Number of Series A Shares:               4,812,500

Price per Share for Series A:            $.66 ("Original Series A Purchase Price")

Post Series A Investment Capital         See Exhibit I
Structure:

Bridge Loan:                             Upon acceptance of this Term Sheet, a $100,000 bridge loan will be provided
                                         by investors within one week and upon the signing of a term sheet acceptable
                                         to the Investors between the Company and San Diego State University (SDSU)
                                         for license of the technology and for monthly rental of laboratory space at
                                         SDSU, the Investors will provide additional bridge financing in the form of
                                         a $300,000 loan to fund the Company through achievement of the milestones
                                         listed above in "Milestones to Investment"; each Investor to provide its
                                         share pro rata as provided on Exhibit I.  The Note will bear 8% simple
                                         interest and the Note and interest will convert into Series A at closing.
                                         If, for whatever reason, the Series A financing is not consummated, the Note
                                         and interest will be repaid over one year in quarterly installments
                                         following the Company's receipt of at least $2 million in equity financing
                                         (Total bridge loan:  $400,000).

Dividend Provisions:                     The Series A Preferred (the "Preferred Stock") will be entitled to receive
                                         non-cumulative dividends of $0.08 (8%) per share of Series A in preference
                                         to any dividend paid on any other shares of capital stock, when and if any
                                         such dividends are declared by the Board.  The holders of Preferred Stock
                                         shall also be entitled to participate on a pro rata basis in any dividends
                                         paid on the Common Stock.

Liquidation Preference:                  In the event of liquidation or winding up of the Company, the holders of
                                         Preferred Stock will be entitled to receive in preference to the holders of
                                         Common Stock ("Common") an amount per share ("Liquidation Amount") equal to
                                         the Original Series A Purchase Price plus any dividends declared on the
                                         Preferred Stock but not paid.  After the payment of the Liquidation Amount
                                         to the holders of Preferred Stock, the remaining assets shall be distributed
                                         pro rata to the holders of Preferred Stock and Common Stock.  A merger,
                                         acquisition, sale of voting control or sale of substantially all the assets
                                         of the Company in which the stockholders do not hold a majority of the
                                         outstanding shares of the surviving corporation will be treated as a
                                         Liquidation.
</TABLE>

                                       2.
<PAGE>

<TABLE>
<S>                                <C>   <C>
Conversion:                              A holder of Preferred Stock will have the right to convert the Preferred
                                         Stock, at the option of the holder, at any time, into shares of Common
                                         Stock.  The number of shares of Common Stock into which the Series A may be
                                         converted will be equal to the number of shares of Preferred Stock being
                                         converted multiplied by a fraction, the numerator of which is the Original
                                         Series A Purchase Price, and the denominator of which is the conversion
                                         price.  The initial conversion price will be subject to adjustment as
                                         provided in the Antidilution Provision paragraph below.

Antidilution Provisions:                 The conversion price will initially be $.66 for Series A.  The conversion
                                         price will be automatically adjusted proportionately for stock splits, stock
                                         dividends, recapitalizations, and similar circumstances and will be subject
                                         to a weighted-average adjustment (based on the outstanding shares of Common
                                         Stock and Preferred Stock) to reduce dilution in the event the Company
                                         issues additional equity securities at a price lower than Series A (other
                                         than the reserved employee shares on Exhibit I)

Voting Rights:                           Except with respect to election of directors and certain protective
                                         provisions, the holders of Preferred Stock will have the right to that
                                         number of votes equal to the number of shares of Common Stock issuable upon
                                         conversion of the Preferred Stock.

Protective Provisions:                   Consent of the holders of a majority of the Preferred Stock will be required
                                         for (i) any sale by the company of substantially all of its assets, (ii) any
                                         Liquidation, (iii) any redemption of Common Stock (other than in connection
                                         with the termination of services), (iv) any amendments to the certificate of
                                         incorporation or bylaws of the Company adversely affecting the Preferred
                                         Stock, or (v) any amendment that increases or decreases the authorized
                                         number of shares of Preferred Stock or Common Stock or that creates any new
                                         class or series having rights, preferences or privileges senior to or on a
                                         parity with the Preferred Stock or (vi) any increase or decrease in the
                                         authorized size of the Board of Directors.

Reserved Shares:                         The Company currently has, or may in the future have, up to the
                                         number of shares of Common indicated as "Reserved Shares" on Exhibit I for
                                         issuance on the exercise of options. Such Reserved Shares will be issued
                                         from time to time.
</TABLE>

                                       3.
<PAGE>

<TABLE>
<S>                                <C>   <C>
Founder Vesting:                         The outstanding Common Stock currently held by Judith Zyskind and
                                         Allyn Forsyth (the "Founders") will be subject to vesting terms, provided that
                                         the Founders shall be credited with vesting of 20% of their ownership as of
                                         the Closing, with their remaining unvested shares to vest monthly over four years.

Information Rights:                      So long as any of the Preferred Stock is outstanding, the Company will
                                         deliver to each Investor audited annual, quarterly, and monthly
                                         financial statements, annual budgets, and other information reasonably
                                         requested by such Investor.

Registration Rights:                     The rights and provisions for registration will conform to standard venture
                                         capital deals.

Right of First Refusal:                  Investors shall have the right in the event the Company proposes to offer
                                         equity securities to any person (other than securities issued pursuant to
                                         employee benefit plans or pursuant to acquisitions) to purchase their PRO
                                         RATA portion of such shares.  Any securities not subscribed for by an
                                         eligible Investor may be reallocated among the other eligible Investors.
                                         Such right of first refusal will terminate upon a public offering.

Expenses                                 The Company shall bear its own legal and other expenses with respect to the
                                         transaction. Assuming a successful completion of the transaction, the
                                         Company will pay the reasonable actual legal fees of the Investor's counsel,
                                         not to exceed $15,000.

Use of Proceeds:                         The use of proceeds from the Bridge Loan shall be as outlined in
                                         Exhibit II. A budget detailing use of proceeds from the sale of Series A
                                         shall be completed prior to the second traunch.

Board Representation:                    The Board will initially be composed of up to six directors.  The board will
                                         initially be composed of one member to be elected by the Common shareholders
                                         (which will be reserved for the CEO).  The Preferred shareholders from
                                         Series A will hold three seats, one from Enterprise Partners, one from
                                         Johnson & Johnson Development Corporation, and one from Mayfield Fund.  Two
                                         directors will be selected to serve at the mutual agreement of the common
                                         and preferred shareholders with Judith Zyskind to be named to one of these
                                         seats.

Stock Vesting                            Except as otherwise approved by the Board, stock options issued to all
                                         but the Founders shall be subject to vesting over four years as follows: 25%
                                         will be vested after one year with the remaining vesting on a monthly basis.
                                         The vesting terms of all stock and stock equivalents issued by the Company
                                         shall be approved by the Board.
</TABLE>

                                       4.
<PAGE>

<TABLE>
<S>                                <C>   <C>
Co-Sale Agreement                        The shares of the Company's securities held by the Founders shall be made
                                         subject to a co-sale agreement (with certain reasonable exceptions) with the
                                         Investors such that such person may not sell, transfer or exchange his stock
                                         unless each holder of Series A has an opportunity to participate in the sale
                                         on a PRO RATA basis.  This right of co-sale shall not apply to and shall
                                         terminate upon an IPO.

Restrictions on Sale:                    The Company shall have a right of first refusal on all transfers of
                                         Common Stock subject to standard exceptions. This restriction on sales
                                         shall not apply to and shall terminate upon an IPO.

Acknowledged and Agreed by:

                                         /s/ JUDITH W. ZYSKIND
                                         ------------------------------------------------------------
                                         Judith W. Zyskind, Ph.D., President, RajyaBiotics

                                         /s/ WENDE S. HUTTON
                                         ------------------------------------------------------------
                                         Wende S. Hutton, General Partner, Mayfield Fund

                                         ------------------------------------------------------------
                                         Brad Vale, DVM, Ph.D., Vice President, Johnson & Johnson
                                           Development Corporation

                                         /s/ ANDREW E. SENYEI
                                         ------------------------------------------------------------
                                         Andrew E. Senyei, M.D., General Partner, Enterprise Partners
</TABLE>

                                       5.
<PAGE>

                                    EXHIBIT I
                   POST SERIES A INVESTMENT CAPITAL STRUCTURE
<TABLE>
<CAPTION>
                                                                        SHARES                PERCENT
                                                                ----------------------- --------------------
<S>                                                             <C>                     <C>
          Judith Zyskind                                               1,050,000                12.54%
          Allyn Forsyth                                                  350,000                 4.18%
                                                                ----------------------- --------------------
                   Subtotal Founders                                   1,400,000                16.72%

          Management Pool
                   Includes:
                   Unassigned Shares                                   2,428,425                29.00%
                   San Diego State                                          -                    0.00%
                   Advisory Board Members                                   -                    0.00%
                   Company Employees                                        -                    0.00%
                   David Coats                                              -                    0.00%
                   Other Technology                                         -                    0.00%
                                                                ----------------------- --------------------
                   Subtotal Management Pool                            2,428,425                29.00%

          Cumulative Subtotal                                          3,828,425                45.72%

          Investors:
          Enterprise Partners                                          1,515,152                18.09%
          J&J Development Corp.                                        1,515,152                18.09%
          Mayfield Fund                                                1,515,152                18.09%
                                                                ----------------------- --------------------
                   Subtotal:  Investors                                4,545,456                54.28%

          Total Fully Diluted                                          8,373,881               100.00%
</TABLE>

                                       6.
<PAGE>

                                    EXHIBIT B

                       RESTRICTED STOCK PURCHASE AGREEMENT

                                       1.
<PAGE>

                                  RAJYABIOTICS

                       RESTRICTED STOCK PURCHASE AGREEMENT

         THIS RESTRICTED STOCK PURCHASE AGREEMENT, dated as of the 3rd day of
April 1998 (the "Agreement"), is by and between RAJYABIOTICS, a California
corporation (the "Company"), and Dr. Harry Hixson ("Purchaser").

         WHEREAS, the Company desires to issue, and Purchaser desires to
acquire, stock of the Company as herein described, on the terms and conditions
hereinafter set forth;

         WHEREAS, the issuance of Common Stock hereby is in connection with a
compensatory benefit plan for the employees, directors, officers, advisers or
consultants of the Company and is intended to comply with the provisions of Rule
701 promulgated by the Securities and Exchange Commission under the Securities
Act of 1933, as amended (the "Act").

         NOW, THEREFORE, IT IS AGREED between the parties as follows:

         1. PURCHASE AND SALE OF COMMON STOCK. Purchaser hereby agrees to
purchase from the Company and the Company agrees to sell, an aggregate of One
Million Three Hundred and Forty Thousand (1,340,000) shares of the Common Stock
of the Company (the "Shares") at $0.001 per share (the "Purchase Price"), for an
aggregate purchase price of $1,340.00, payable as follows:

<TABLE>
<S>                                                                   <C>
         Cash ........................................................$1,340.00
</TABLE>

         The closing hereunder, including payment for and delivery of the Shares
shall occur at the offices of the Company immediately following the execution of
this Agreement, or at such other time and place as the parties may mutually
agree.

         2. REPURCHASE OPTION

            (a) In the event Purchaser's employment with the Company is
terminated, whether pursuant to the Employment Agreement between Purchaser and
the Company, dated April 3, 1998 (the "Employment Agreement") or any amendments
thereto, or otherwise, by reason of Cause or Without Cause (as such terms are
defined in the Employment Agreement), then the Company shall have an irrevocable
option (the "Repurchase Option"), for a period of ninety (90) days after said
termination to repurchase from Purchaser or Purchaser's personal representative,
as the case may be, at the Purchase Price, the Shares which have not vested
under the provisions of Sections 2b, 2c and 2d below as of such termination
date.

            (b) One hundred percent (100%) of the Shares shall initially be
subject to the Repurchase Option. Thereafter, the Shares shall vest and be
released from the Repurchase Option on a monthly basis with the number of Shares
released for each elapsed full month following the Vesting Commencement Date (as
set forth on the signature page to this

                                       1.
<PAGE>

Agreement) equal to the product of (i) 1,340,000 and (ii) 0.016. As a result of
the foregoing vesting, all of the Shares shall be released from the Repurchase
Option on or before the five year anniversary of the Vesting Commencement Date.
Upon the closing of the Company's Series A financing (the "Series A Closing")
contemplated by the Summary of Terms, attached hereto as Exhibit A, the then
unvested Shares (the Unvested Shares") shall vest and be released from the
Repurchase Option on a monthly basis with the number of Shares released for each
elapsed full month following the Series A Closing equal to the product of (i)
the number of Unvested Shares and (ii) 0.208. As a result of the foregoing,
vesting shall continue until all Shares have vested or four years have elapsed,
whichever is shorter.

            (c) In the event the Employment Agreement is terminated by the
Company Without Cause subsequent to the Series A Closing, vesting shall be
accelerated such that an additional number of Shares shall be released from the
Repurchase Option equal to the number of Shares which would have been released
had Purchaser remained employed for an additional six months.

            (d) In the event the Employment Agreement is terminated by the
Company due to the death or the Major Disability (as defined in the Employment
Agreement) of Purchaser subsequent to the Series A Closing, fifty percent (50%)
of the Shares then subject to the Repurchase Option shall be released from the
Repurchase Option.

         3. EXERCISE OF REPURCHASE OPTION. The Repurchase Option shall be
exercised by written notice signed by an officer of the Company or by any
assignee or assignees of the Company and delivered or mailed as provided in
Section 16a. Such notice shall identify the number of Shares to be purchased and
shall notify Purchaser of the time, place and date for settlement of such
purchase, which shall be scheduled by the Company within the term of the
Repurchase Option set forth in Section 2a above. The Company shall be entitled
to pay for any Shares purchased pursuant to its Repurchase Option at the
Company's option in cash or by offset against any indebtedness owing to the
Company by Purchaser (including without limitation any Note given in payment for
the Shares), or by a combination of both. Upon delivery of such notice and
payment of the purchase price in any of the ways described above, the Company
shall become the legal and beneficial owner of the Shares being repurchased and
all rights and interest therein or related thereto, and the Company shall have
the right to transfer to its own name the Shares being repurchased by the
Company, without further action by Purchaser.

         4. ADJUSTMENTS TO STOCK. If, from time to time, during the term of the
Repurchase Option there is any change affecting the Company's outstanding Common
Stock as a class that is effected without the receipt of consideration by the
Company (through merger, consolidation, reorganization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating,
dividend, combination of shares, change in corporation structure or other
transaction not involving the receipt of consideration by the Company), then any
and all new, substituted or additional securities or other property to which
Purchaser is entitled by reason of Purchaser's ownership of Shares shall be
immediately subject to the Repurchase Option and be included in the word
"Shares" for all purposes of the Repurchase Option with the same force and
effect as the Shares presently subject to the Repurchase Option, but only to the
extent the Shares are, at the time, covered by such Repurchase Option. While the
aggregate price for

                                       2.
<PAGE>

the Shares shall remain the same after each such event, the Purchase Price per
each Share upon exercise of the Repurchase Option shall be appropriately
adjusted.

         5. CORPORATE TRANSACTION. In the event:

            (a) The Company is merged, or consolidated, or reorganized into or
with another corporation or other legal person, and as a result of such merger,
consolidation or reorganization less than 50% of the combined voting power of
the then-outstanding securities of such corporation or person immediately after
such transaction are held in the aggregate by the holders of voting equities of
the Company immediately prior to such transactions;

            (b) The Company sells all or substantially all of its assets or any
other corporation or other legal person and thereafter, less than 50% of the
combined voting power of the then-outstanding voting securities of the acquiring
or consolidated entity are held in the aggregate by the holders of voting
securities of the Company immediately prior to such sale;

            (c) There is a report filed after the date of this Agreement on
Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report), each
as promulgated pursuant to the Securities and Exchange Act of 1934 (the
"Exchange Act"), disclosing that any person (as the term "person" is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the
beneficial owner (as the term "beneficial owner" is defined under Rule 13d-3 or
any successor rule or regulation promulgated under the Exchange Act)
representing 50% or more of the combined voting power of the then-outstanding
voting securities of the Company;

            (d) The Company shall file a report with the Securities and Exchange
Commission pursuant to the Exchange Act disclosing in response to Item 1 of Form
8-X thereunder or Item 5(f) of Schedule 14A thereunder (or any successor
schedule, form or report or item therein) that the change in control of the
Company has or may have occurred or will or may occur in the future pursuant to
any then-existing contract or transaction; or

            (e) During any period of two consecutive years, individuals who at
the beginning of any such period constitute the directors of the Company cease
for any reason to constitute at least a majority thereof unless the election to
the nomination for election by the Company's shareholders of each director of
the Company first elected during such period was approved by a vote of at least
two-thirds of the directors of the Company then still in office who were
directors of the Company at the beginning of such period,

         then the Repurchase Option may be assigned by the Company to any
successor of the Company; provided, however, if the Company (or its assignee)
shall terminate the Purchaser's employment pursuant to the Employment Agreement
or otherwise (including a Constructive Termination, as defined in the Employment
Agreement) within eighteen (18) months of an event described in this Section 5,
all Shares shall be released from the Repurchase Option. In such case, the
references to the Company shall be deemed to refer to such successor.

         6. TERMINATION OF REPURCHASE OPTION. Sections 2, 3, 4 and 5 of this
Agreement shall terminate upon the exercise in full or expiration of the
Repurchase Option, whichever first occurs.

                                       3.
<PAGE>

         7. ESCROW OF UNVESTED STOCK. As security for Purchaser's faithful
performance of the terms of this Agreement and to insure the availability for
delivery of Purchaser's Shares upon exercise of the Repurchase Option herein
provided for, Purchaser agrees, at the closing hereunder, to deliver to and
deposit with the Secretary of the Company or the Secretary's designee ("Escrow
Agent"), as Escrow Agent in this transaction, three (3) stock assignments duly
endorsed (with date and number of shares blank) in the form attached hereto as
Exhibit B, together with a certificate or certificates evidencing all of the
Shares subject to the Repurchase Option; said documents are to be held by the
Escrow Agent and delivered by said Escrow Agent pursuant to the Joint Escrow
Instructions of the Company and Purchaser set forth in Exhibit C attached hereto
and incorporated by this reference, which instructions shall also be delivered
to the Escrow Agent at the closing hereunder.

         8. RIGHTS OF PURCHASER. Subject to the provisions of Sections 7, 9, 12
and 14 herein, Purchaser shall exercise all rights and privileges of a
shareholder of the Company with respect to the Shares.

         9. LIMITATIONS ON TRANSFER. In addition to any other limitation on
transfer created by applicable securities laws, Purchaser shall not assign,
hypothecate, donate, encumber or otherwise dispose of any interest in the Shares
while the Shares are subject to the Repurchase Option. After any Shares have
been released from the Repurchase Option, Purchaser shall not assign,
hypothecate, donate, encumber or otherwise dispose of any interest in the Shares
except in compliance with the provisions herein and applicable securities laws.
Furthermore, the Shares shall be subject to the right of first refusal in favor
of the Company or its assignees contained in the Company's Bylaws.

         10. RESTRICTIVE LEGENDS. All certificates representing the Shares shall
have endorsed thereon legends in substantially the following forms (in addition
to any other legend which may be required by other agreements between the
parties hereto):

            (a) THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN
OPTION SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER,
OR SUCH HOLDER'S PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL OFFICE OF THIS COMPANY. ANY TRANSFER OR ATTEMPTED TRANSFER OF ANY
SHARES SUBJECT TO SUCH OPTION IS VOID WITHOUT THE PRIOR EXPRESS WRITTEN CONSENT
OF THE COMPANY.

            (b) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

            (c) THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
RIGHT OF FIRST REFUSAL OPTION IN FAVOR OF THE COMPANY AND/OR ITS ASSIGNEE(S) AS
PROVIDED IN THE BYLAWS OF THE COMPANY.

                                       4.
<PAGE>

            (d) Any legend required by appropriate blue sky officials.

         11. INVESTMENT REPRESENTATIONS. In connection with the purchase of the
Shares, Purchaser represents to the Company the following:

            (a) Purchaser is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Shares. Purchaser is
purchasing the Shares for investment for Purchaser's own account only and not
with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Act.

            (b) Purchaser understands that the Shares have has not been
registered under the Act by reason of a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein.

            (c) Purchaser further acknowledges and understands that the Shares
must be held indefinitely unless the Shares are subsequently registered under
the Act or an exemption from such registration is available. Purchaser further
acknowledges and understands that the Company is under no obligation to register
the Shares. Purchaser understands that the certificate evidencing the Shares
will be imprinted with a legend which prohibits the transfer of the Shares
unless the Shares are registered or such registration is not required in the
opinion of counsel for the Company.

            (d) Purchaser is familiar with the provisions of Rules 144 and 701,
under the Act, as in effect from time to time, which, in substance, permit
limited public resale of "restricted securities" acquired, directly or
indirectly, from the issuer thereof (or from an affiliate of such issuer), in a
non-public offering subject to the satisfaction of certain conditions. Rule 701
provides that if the issuer qualifies under Rule 701 at the time of issuance of
the securities, such issuance will be exempt from registration under the Act. In
the event the Company becomes subject to the reporting requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934, the securities exempt under
Rule 701 may be sold by Purchaser ninety (90) days thereafter, subject to the
satisfaction of certain of the conditions specified by Rule 144 and the market
stand-off provision described in Section 12 below.

         In the event that the sale of the Shares does not qualify under Rule
701 at the time of purchase, then the Shares may be resold by Purchaser in
certain limited circumstances subject to the provisions of Rule 144, which
requires, among other things: (i) the availability of certain public information
about the Company and (ii) the resale occurring following the required holding
period under Rule 144 after the Purchaser has purchased, and made full payment
of (within the meaning of Rule 144), the securities to be sold.

            (e) Purchaser further understands that at the time Purchaser wishes
to sell the Shares there may be no public market upon which to make such a sale,
and that, even if such a public market then exists, the Company may not be
satisfying the current public current information requirements of Rule 144 or
701, and that, in such event, Purchaser would be precluded from selling the
Shares under Rule 144 or 701 even if the minimum holding period requirement had
been satisfied.

                                       5.
<PAGE>

            (f) Purchaser further warrants and represents that Purchaser has
either (i) preexisting personal or business relationships, with the Company or
any of its officers, directors or controlling persons, or (ii) the capacity to
protect his own interests in connection with the purchase of the Shares by
virtue of the business or financial expertise of himself or of professional
advisors to Purchaser who are unaffiliated with and who are not compensated by
the Company or any of its affiliates, directly or indirectly.

         12. MARKET STAND-OFF AGREEMENT. Purchaser shall not sell, dispose of,
transfer, make any short sale of, grant any option for the purchase of, or enter
into any hedging or similar transaction with the same economic effect as a sale,
any Common Stock of the Company held by Purchaser, including the Shares (the
"Restricted Securities"), for a period of time specified by the underwriter(s)
(not to exceed one hundred eighty (180) days) following the effective date of
the first registration statement of the Company filed under the Act so long as
all officers and directors of the Company also agree to such restrictions.
Purchaser agrees to execute and deliver such other agreements as may be
reasonably requested by the Company and/or the underwriter(s) which are
consistent with the foregoing or which are necessary to give further effect
thereto. In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to Purchaser's Restricted Securities
until the end of such period.

         13. SECTION 83(b) ELECTION. Purchaser understands that Section 83(a) of
the Code, taxes as ordinary income the difference between the amount paid for
the Shares and the fair market value of the Shares as of the date any
restrictions on the Shares lapse. In this context, "restriction" includes the
right of the Company to buy back the Shares pursuant to the Repurchase Option
set forth in Section 2a above. Purchaser understands that Purchaser may elect to
be taxed at the time the Shares are purchased, rather than when and as the
Repurchase Option expires, by filing an election under Section 83(b) (an "83(b)
Election") of the Code with the Internal Revenue Service within thirty (30) days
from the date of purchase. Even if the fair market value of the Shares at the
time of the execution of this Agreement equals the amount paid for the Shares,
the 83(b) Election must be made to avoid income under Section 83(a) in the
future. Purchaser understands that failure to file such an 83(b) Election in a
timely manner may result in adverse tax consequences for Purchaser. Purchaser
further understands that an additional copy of such 83(b) Election is required
to be filed with Purchaser's federal income tax return for the calendar year
1998. Purchaser acknowledges that the foregoing is only a summary of the effect
of United States federal income taxation with respect to purchase of the Shares
hereunder, and does not purport to be complete. Purchaser further acknowledges
that the Company has directed Purchaser to seek independent advice regarding the
applicable provisions of the Code, the income tax laws of any municipality,
state or foreign country in which Purchaser may reside, and the tax consequences
of Purchaser's death. Purchaser assumes all responsibility for filing an 83(b)
Election and paying all taxes resulting from such election or the lapse of the
restrictions on the Shares.

         14. REFUSAL TO TRANSFER. The Company shall not be required (a) to
transfer on its books any shares of stock of the Company which shall have been
transferred in violation of any of the provisions set forth in this Agreement or
(b) to treat as owner of such shares or to accord the right to vote as such
owner or to pay dividends to any transferee to whom such shares shall have been
so transferred.

                                       6.
<PAGE>
         15. NO EMPLOYMENT RIGHTS. This Agreement is not an employment contract
and nothing in this Agreement shall affect in any manner whatsoever the right or
power of the Company (or a parent or subsidiary of the Company) to terminate
Purchaser's employment for any reason at any time, with or without cause and
with or without notice.

         16. MISCELLANEOUS.

            (a) NOTICES. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal delivery or
sent by telegram or fax or upon deposit in the United States Post Office, by
registered or certified mail with postage and fees prepaid, addressed to the
other party hereto at his address hereinafter shown below its signature or at
such other address as such party may designate by ten (10) days' advance written
notice to the other party hereto.

            (b) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of the successors and assigns of the Company and, subject to the
restrictions on transfer herein set forth, be binding upon Purchaser,
Purchaser's successors, and assigns. The Repurchase Option of the Company
hereunder shall be assignable by the Company at any time or from time to time,
in whole or in part.

            (c) ATTORNEYS' FEES; SPECIFIC PERFORMANCE. Purchaser shall reimburse
the Company for all costs incurred by the Company in enforcing the performance
of, or protecting its rights under, any part of this Agreement, including
reasonable costs of investigation and attorneys' fees. It is the intention of
the parties that the Company, upon exercise of the Repurchase Option and payment
of the Purchase Price, pursuant to the terms of this Agreement, shall be
entitled to receive the Shares, in specie, in order to have such Shares
available for future issuance without dilution of the holdings of other
shareholders. Furthermore, it is expressly agreed between the parties that money
damages are inadequate to compensate the Company for the Shares and that the
Company shall, upon proper exercise of the Repurchase Option, be entitled to
specific enforcement of its rights to purchase and receive said Shares.

            (d) GOVERNING LAW; VENUE. This Agreement shall be governed by and
construed in accordance with the laws of the State of California. The parties
agree that any action brought by either party to interpret or enforce any
provision of this Agreement shall be brought in, and each party agrees to, and
does hereby, submit to the jurisdiction and venue of, the appropriate state or
federal court for the district encompassing the Company's principal place of
business.

            (e) FURTHER EXECUTION. The parties agree to take all such further
action(s) as may reasonably be necessary to carry out and consummate this
Agreement as soon as practicable, and to take whatever steps may be necessary to
obtain any governmental approval in connection with or otherwise qualify the
issuance of the securities that are the subject of this Agreement.

            (f) INDEPENDENT COUNSEL. Purchaser acknowledges that this Agreement
has been prepared on behalf of the Company by Cooley Godward LLP, counsel to the
Company and that Cooley Godward LLP does not represent, and is not acting on
behalf of, Purchaser.

                                       7.
<PAGE>

Purchaser has been provided with an opportunity to consult with Purchaser's own
counsel with respect to this Agreement.

            (g) ENTIRE AGREEMENT; AMENDMENT. This Agreement (and any written
employment agreement between the Company and the Purchaser) constitute the
entire agreement between the parties with respect to the subject matter hereof
and supersedes and merges all prior agreements or understandings, whether
written or oral. This Agreement may not be amended, modified or revoked, in
whole or in part, except by an agreement in writing signed by each of the
parties hereto.

            (h) SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (iii)
the balance of the Agreement shall be enforceable in accordance with its terms.

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

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

                                    RAJYABIOTICS

                                    By: /s/ JUDITH W. ZYSKIND
                                        ---------------------------------------
                                        Judith W. Zyskind, Ph.D.
                                        President

                                    Biology Department
                                    San Diego State University
                                    5500 Campanile Drive
                                    San Diego, California  92182-4614

                                    PURCHASER:

                                    /s/ HARRY F. HIXSON
                                    -------------------------------------------
                                    Dr. Harry F. Hixson

                                    8518 Ruette Monte Carlo
                                    La Jolla, California  92037

                                       8.
<PAGE>

                                                    VESTING COMMENCEMENT DATE:

                                                    FEBRUARY 15, 1998
<TABLE>
<CAPTION>

ATTACHMENTS:
<S>               <C>      <C>
Exhibit A         --       Summary of Terms
Exhibit B         --       Stock Assignment Separate from Certificate
Exhibit C         --       Joint Escrow Instructions
</TABLE>

                                       9.
<PAGE>

                                    EXHIBIT A

                                SUMMARY OF TERMS

<PAGE>

                                    EXHIBIT B

                      ASSIGNMENT SEPARATE FROM CERTIFICATE

         FOR VALUE RECEIVED and in connection with that certain Restricted Stock
Purchase Agreement (the "Agreement") dated as of this _____ day of _________,
_______, Dr. Harry Hixon hereby assigns and transfers herewith unto
RAJYABIOTICS, a California corporation (the "Company"),
_____________________________ (_______________) shares of Common Stock of the
Company, standing in the undersigned's name on the books of the Company
represented by Certificate No. _____, and does hereby irrevocably constitute and
appoint Cooley Godward LLP as attorney to transfer the said stock on the books
of the Company with full power of substitution in the premises. This Assignment
may be used only in accordance with and subject to the terms and conditions of
the Agreement, in connection with the pledge of shares of Common Stock issued to
the undersigned pursuant to the Agreement, and only to the extent that such
shares remain subject to the Repurchase Option, as such term is defined in the
Agreement.

Dated:  April 3, 1998

                                         Signature:  /s/ HARRY HIXSON
                                                     --------------------------
                                                         DR. HARRY HIXSON

<PAGE>

                                    EXHIBIT C

                            JOINT ESCROW INSTRUCTIONS

Cooley Godward LLP
4365 Executive Drive, Suite 1100
San Diego, California  92121

Dear Ladies and Gentlemen:

         As Escrow Agent for both RAJYABIOTICS, a California corporation
("Company"), and DR. HARRY HIXSON ("Purchaser"), you are hereby authorized and
directed to hold the documents delivered to you pursuant to the terms of that
certain Restricted Stock Purchase Agreement dated April 3, 1998 between the
Company and Purchaser (the "Agreement"), to which a copy of these Joint Escrow
Instructions is attached as Exhibit C, in accordance with the following
instructions:

         1. In the event the Company or an assignee shall elect to exercise the
Repurchase Option set forth in Section 2(a) of the Agreement, the Company or its
assignee will give to Purchaser and you a written notice specifying the number
of shares of stock to be purchased, the purchase price, and the time for a
closing thereunder at the principal office of the Company. Purchaser and the
Company hereby irrevocably authorize and direct you to close the transaction
contemplated by such notice in accordance with the terms of said notice.

         2. At the closing you are directed (a) to date any stock assignments
necessary for the transfer in question, (b) to fill in the number of shares
being transferred, and (c) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Company against the
simultaneous delivery to you of the purchase price (which may include suitable
acknowledgment of cancellation of indebtedness) for the number of shares of
stock being purchased pursuant to the exercise of the Repurchase Option.

         3. Purchaser irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as specified in the Agreement.
Purchaser does hereby irrevocably constitute and appoint you as his
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities all documents necessary or appropriate to make such
securities negotiable and complete any transaction herein contemplated,
including but not limited to any appropriate filing with state or government
officials or bank officials. Subject to the provisions of this paragraph 3,
Purchaser shall exercise all rights and privileges of a shareholder of the
Company while the stock is held by you. If Purchaser so requests, you may from
time to time deliver to Purchaser a certificate or certificates representing
those shares no longer subject to the Repurchase Option.

<PAGE>

         4. This escrow shall terminate upon expiration or exercise in full or
expiration of the Repurchase Option, whichever occurs first.

         5. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to Purchaser,
you shall deliver all of same to Purchaser and shall be discharged of all
further obligations hereunder; PROVIDED, HOWEVER, that if at the time of
termination of this escrow you are advised by the Company that the property
subject to this escrow is the subject of a pledge or other security agreement,
you shall deliver all such property to the pledgeholder or other person
designated by the Company.

         6. Your duties hereunder may be altered, amended, modified or revoked
only by a writing signed by all of the parties hereto.

         7. You shall be obligated only for the performance of such duties as
are specifically set forth herein and may rely and shall be protected in relying
or refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith and
in the exercise of your own good judgment, and any act done or omitted by you
pursuant to the advice of your own attorneys shall be conclusive evidence of
such good faith.

         8. You are hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law, and are hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case you obey or comply with any such order, judgment or decree of any
court, you shall not be liable to any of the parties hereto or to any other
person, firm or corporation by reason of such compliance, notwithstanding any
such order, judgment or decree being subsequently reversed, modified, annulled,
set aside, vacated or found to have been entered without jurisdiction.

         9. You shall not be liable in any respect on account of the identity,
authority or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.

         10. You shall not be liable for the outlawing of any rights under any
statute of limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.

         11. Your responsibilities as Escrow Agent hereunder shall terminate if
you shall cease to be counsel to the Company or if you shall resign as Escrow
Agent by written notice to each party. In the event of any such termination, the
Company shall appoint any officer or assistant officer of the Company as
successor Escrow Agent and Purchaser hereby confirms the appointment of such
successor or successors as his attorney-in-fact and agent to the full extent of
your appointment.

         12. If you reasonably require other or further instruments in
connection with these Joint Escrow Instructions or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.

                                       2.
<PAGE>

         13. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities held by you hereunder, you are authorized and directed to retain in
your possession without liability to anyone all or any part of said securities
until such dispute shall have been settled either by mutual written agreement of
the parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.

         14. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery, including
delivery by express courier, or four (4) days after deposit in any United States
Post Office, by registered or certified mail with postage and fees prepaid,
addressed to each of the other parties entitled to such notice at the following
addresses, or at such other addresses as a party may designate by ten (10) days'
advance written notice to each of the other parties hereto:

         COMPANY:                   RAJYABIOTICS
                                    Biology Department
                                    San Diego State University
                                    5500 Campanile Drive
                                    San Diego, California  92182-4614
                                    ATTN: Judith Zyskind, Ph.D.

         PURCHASER:                 DR. HARRY HIXSON
                                    8518 Ruette Monte Carlo
                                    La Jolla, CA  92037

         ESCROW AGENT:              COOLEY GODWARD LLP
                                    4365 Executive Drive, Suite 1100
                                    San Diego, California  92121
                                    Attn:  M. Wainwright Fishburn

         15. By signing these Joint Escrow Instructions, you become a party
hereto only for the purpose of said Joint Escrow Instructions; you do not become
a party to the Agreement.

         16. You shall be entitled to employ such legal counsel and other
experts (including, without limitation, the firm of Cooley Godward LLP) as you
may deem necessary properly to advise you in connection with your obligations
hereunder. You may rely upon the advice of such counsel, and may pay such
counsel reasonable compensation therefor. The Company shall be responsible for
all fees generated by such legal counsel in connection with your obligations
hereunder.

         17. This instrument shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns. It is
understood and agreed that references to "you" or "your" herein refer to the
original Escrow Agent and to any and all successor Escrow Agents. It is
understood and agreed that the Company may at any time or from time to time
assign its rights under the Agreement and these Joint Escrow Instructions in
whole or in part.

                                       3.
<PAGE>

         18. This Agreement shall be governed by and interpreted and determined
in accordance with the laws of the State of California, as such laws are applied
by California courts to contracts made and to be performed entirely in
California by residents of that state.

                                  Very truly yours,

                                  RAJYABIOTICS

                                  By:  /s/ JUDITH W. ZYSKIND
                                       ----------------------------------------
                                       Judith W. Zyskind, Ph.D.
                                       President

                                  PURCHASER

                                  /s/ HARRY F. HIXSON
                                  ---------------------------------------------
                                      Dr. Harry Hixson

ESCROW AGENT:

COOLEY GODWARD LLP

By: /s/ M. WAINWRIGHT FISHBURN
    -----------------------------
    M. Wainwright Fishburn

                                       4.
<PAGE>

                                    EXHIBIT C

                          RELEASE AND WAIVER OF CLAIMS

         In exchange for payment to me of amounts pursuant to Section 6.3 or
Section 7.2 (and for the other benefits provided therein) of my Amended and
Restated Employment Agreement (the "Agreement"), to which this form is attached,
I hereby furnish Rajyabiotics (the "Company") with the following release and
waiver.

         I hereby release, and forever discharge the Company, its officers,
directors, agents, employees, stockholders, successors, assigns and affiliates,
of and from any and all claims, liabilities, demands, causes of action, costs,
expenses, attorneys' fees, damages, indemnities and obligations of every kind
and nature, in law, equity, or otherwise, known and unknown, suspected and
unsuspected, disclosed and undisclosed, arising at any time prior to and
including my employment termination date with respect to any claims relating to
my employment and the termination of my employment, including but not limited
to, claims pursuant to any federal, state or local law relating to employment,
including, but not limited to, discrimination claims, claims under the
California Fair Employment and Housing Act, and the Federal Age Discrimination
in Employment Act of 1967, as amended ("ADEA"), or claims for wrongful
termination, breach of the covenant of good faith, contract claims, tort claims,
and wage or benefit claims, including but not limited to, claims for salary,
bonuses, commissions, stock, stock options, vacation pay, fringe benefits,
severance pay or any form of compensation (other than the obligations under
Section 6.3 of the Agreement).

         I also acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: "A general release does not extend
to claims which the creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him must have materially
affected his settlement with the debtor." I hereby expressly waive and
relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect with respect to any claims I may have against the
Company.

         I acknowledge that, among other rights, I am waiving and releasing any
rights I may have under ADEA, that this waiver and release is knowing and
voluntary, and that the consideration given for this waiver and release is in
addition to anything of value to which I was already entitled as an employee of
the Company. I further acknowledge that I have been advised, as required by the
Older Workers Benefit Protection Act, that: (a) the waiver and release granted
herein does not relate to claims which may arise after this agreement is
executed; (b) I have the right to consult with an attorney prior to executing
this agreement (although I may choose voluntarily not to do so); (c) I have
twenty-one (21) days from the date I receive this agreement, in which to
consider this agreement (although I may choose voluntarily to execute this
agreement earlier); (d) I have seven (7) days following the execution of this
agreement to revoke my consent to the agreement; and (e) this agreement shall
not be effective until the seven (7) day revocation period has expired.

Date: __________________            ___________________________________

<PAGE>

                                    EXHIBIT D

           EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

<PAGE>

                                  RAJYABIOTICS

                        EMPLOYEE PROPRIETARY INFORMATION
                            AND INVENTIONS AGREEMENT

         In consideration of my employment or continued employment by
RAJYABIOTICS (the "Company"), and the compensation now and hereafter paid to me,
I hereby agree as follows:

1. NONDISCLOSURE

         1.1 RECOGNITION OF COMPANY'S RIGHTS; NONDISCLOSURE. At all times during
my employment and thereafter, I will hold in strictest confidence and will not
disclose, use, lecture upon or publish any of the Company's Proprietary
Information (defined below), except as such disclosure, use or publication may
be required in connection with my work for the Company, or unless an officer of
the Company expressly authorizes such in writing. I will obtain Company's
written approval before publishing or submitting for publication any material
(written, verbal, or otherwise) that relates to my work at Company and/or
incorporates any Proprietary Information. I hereby assign to the Company any
rights I may have or acquire in such Proprietary Information and recognize that
all Proprietary Information shall be the sole property of the Company and its
assigns.

         1.2 PROPRIETARY INFORMATION. The term "PROPRIETARY INFORMATION" shall
mean any and all confidential and/or proprietary knowledge, data or information
of the Company. By way of illustration but not limitation, "PROPRIETARY
INFORMATION" includes tangible and intangible information relating to antibodies
and other biological materials, cell lines, samples of assay components, media
and/or cell lines and procedures and formulations for producing any such assay
components, media and/or cell lines, formulations, products, processes,
know-how, designs, formulas, methods, developmental or experimental work,
clinical data, improvements, discoveries, plans for research, new products,
marketing and selling, business plans, budgets and unpublished financial
statements, licenses, prices and costs, suppliers and customers, and information
regarding the skills and compensation of other employees of the Company.
Notwithstanding the foregoing, it is understood that, at all such times, I am
free to use information which is generally known in the trade or industry, which
is not gained as result of a breach of this Agreement, and my own, skill,
knowledge, know-how and experience to whatever extent and in whichever way I
wish.

         1.3 THIRD PARTY INFORMATION. I understand, in addition, that the
Company has received and in the future will receive from third parties
confidential or proprietary information ("THIRD PARTY INFORMATION") subject to a
duty on the Company's part to maintain the confidentiality of such information
and to use it only for certain limited purposes. During the term of my
employment and thereafter, I will hold Third Party Information in the strictest
confidence and will not disclose to anyone (other than Company personnel who
need to know such information in connection with their work for the Company) or
use, except in connection with my work for the Company, Third Party Information
unless expressly authorized by an officer of the Company in writing.

         1.4 NO IMPROPER USE OF INFORMATION OF PRIOR EMPLOYERS AND OTHERS.
During my employment by the Company I will not improperly use or disclose any
confidential information or trade secrets, if any, of any former employer or any
other person to whom I have an obligation of confidentiality, and I will not
bring onto the premises of the Company any unpublished documents or any property
belonging to any former employer or any other person to whom I have an
obligation of confidentiality unless consented to in writing by that former
employer or person. I will use in the performance of my duties only information
which is generally known and used by persons with training and experience
comparable to my own, which is common knowledge in the industry or otherwise
legally in the public domain, or which is otherwise provided or developed by the
Company.

2. ASSIGNMENT OF INVENTIONS.

         2.1 PROPRIETARY RIGHTS. The term "PROPRIETARY RIGHTS" shall mean all
trade secret, patent, copyright, mask work and other intellectual property
rights throughout the world.

         2.2 PRIOR INVENTIONS. Inventions, if any, patented or unpatented, which
I made prior to the commencement of my employment with the Company are excluded
from the scope of this Agreement. To

                                       1.
<PAGE>

preclude any possible uncertainty, I have set forth on EXHIBIT B (Previous
Inventions) attached hereto a complete list of all Inventions that I have, alone
or jointly with others, conceived, developed or reduced to practice or caused to
be conceived, developed or reduced to practice prior to the commencement of my
employment with the Company, that I consider to be my property or the property
of third parties and that I wish to have excluded from the scope of this
Agreement (collectively referred to as "PRIOR INVENTIONS"). If disclosure of any
such Prior Invention would cause me to violate any prior confidentiality
agreement, I understand that I am not to list such Prior Inventions in EXHIBIT B
but am only to disclose a cursory name for each such invention, a listing of the
party(ies) to whom it belongs and the fact that full disclosure as to such
inventions has not been made for that reason. A space is provided on EXHIBIT B
for such purpose. If no such disclosure is attached, I represent that there are
no Prior Inventions. If, in the course of my employment with the Company, I
incorporate a Prior Invention into a Company product, process or machine, the
Company is hereby granted and shall have a nonexclusive, royalty-free,
irrevocable, perpetual, worldwide license (with rights to sublicense through
multiple tiers of sublicensees) to make, have made, modify, use and sell such
Prior Invention. Notwithstanding the foregoing, I agree that I will not
incorporate, or permit to be incorporated, Prior Inventions in any Company
Inventions without the Company's prior written consent.

         2.3 ASSIGNMENT OF INVENTIONS. Subject to Sections 2.4, and 2.6, I
hereby assign and agree to assign in the future (when any such Inventions or
Proprietary Rights are first reduced to practice or first fixed in a tangible
medium, as applicable) to the Company all my right, title and interest in and to
any and all Inventions (and all Proprietary Rights with respect thereto) whether
or not patentable or registrable under copyright or similar statutes, made or
conceived or reduced to practice or learned by me, either alone or jointly with
others, during the period of my employment with the Company. Inventions assigned
to the Company, or to a third party as directed by the Company pursuant to this
Section 2, are hereinafter referred to as "COMPANY INVENTIONS."

         2.4 NONASSIGNABLE INVENTIONS. This Agreement does not apply to an
Invention which qualifies fully as a nonassignable Invention under Section 2870
of the California Labor Code (hereinafter "SECTION 2870"). I have reviewed the
notification on EXHIBIT A (Limited Exclusion Notification) and agree that my
signature acknowledges receipt of the notification.

         2.5 OBLIGATION TO KEEP COMPANY INFORMED. During the period of my
employment and for six (6) months after termination of my employment with the
Company, I will promptly disclose to the Company fully and in writing all
Inventions authored, conceived or reduced to practice by me, either alone or
jointly with others. In addition, I will promptly disclose to the Company all
patent applications filed by me or on my behalf within a year after termination
of employment. At the time of each such disclosure, I will advise the Company in
writing of any Inventions that I believe fully qualify for protection under
Section 2870; and I will at that time provide to the Company in writing all
evidence necessary to substantiate that belief. The Company will keep in
confidence and will not use for any purpose or disclose to third parties without
my consent any confidential information disclosed in writing to the Company
pursuant to this Agreement relating to Inventions that qualify fully for
protection under the provisions of Section 2870. I will preserve the
confidentiality of any Invention that does not fully qualify for protection
under Section 2870.

         2.6 GOVERNMENT OR THIRD PARTY. I also agree to assign all my right,
title and interest in and to any particular Company Invention to a third party,
including without limitation the United States, as directed by the Company.

         2.7 WORKS FOR HIRE. I acknowledge that all original works of authorship
which are made by me (solely or jointly with others) within the scope of my
employment and which are protectable by copyright are "works made for hire,"
pursuant to United States Copyright Act (17 U.S.C., Section 101).

         2.8 ENFORCEMENT OF PROPRIETARY RIGHTS. I will assist the Company in
every proper way to obtain, and from time to time enforce, United States and
foreign Proprietary Rights relating to Company Inventions in any and all
countries. To that end I will execute, verify and deliver such documents and
perform such other acts (including appearances as a witness) as the Company may
reasonably request for use in applying for, obtaining, perfecting, evidencing,
sustaining and enforcing such Proprietary Rights and the assignment thereof. In
addition, I will execute, verify and deliver assignments of such Proprietary
Rights to the Company or its designee. My obligation

                                       2.
<PAGE>

to assist the Company with respect to Proprietary Rights relating to such
Company Inventions in any and all countries shall continue beyond the
termination of my employment, but the Company shall compensate me at a
reasonable rate after my termination for the time actually spent by me at the
Company's request on such assistance.

In the event the Company is unable for any reason, after reasonable effort, to
secure my signature on any document needed in connection with the actions
specified in the preceding paragraph, I hereby irrevocably designate and appoint
the Company and its duly authorized officers and agents as my agent and attorney
in fact, which appointment is coupled with an interest, to act for and in my
behalf to execute, verify and file any such documents and to do all other
lawfully permitted acts to further the purposes of the preceding paragraph with
the same legal force and effect as if executed by me. I hereby waive and
quitclaim to the Company any and all claims, of any nature whatsoever, which I
now or may hereafter have for infringement of any Proprietary Rights assigned
hereunder to the Company.

3. RECORDS. I agree to keep and maintain adequate and current records (in the
form of notes, sketches, drawings and in any other form that may be required by
the Company) of all Proprietary Information developed by me and all Inventions
made by me during the period of my employment at the Company, which records
shall be available to and remain the sole property of the Company at all times.

4. ADDITIONAL ACTIVITIES. I agree that during the period of my employment by the
Company I will not, without the Company's express written consent, engage in any
employment or business activity which is competitive with, or would otherwise
conflict with, my employment by the Company. I agree further that for the period
of my employment by the Company and for one (l) year after the date of
termination of my employment by the Company I will not induce any employee of
the Company to leave the employ of the Company.

5. NO CONFLICTING OBLIGATION. I represent that my performance of all the terms
of this Agreement and as an employee of the Company does not and will not breach
any agreement to keep in confidence information acquired by me in confidence or
in trust prior to my employment by the Company. I have not entered into, and I
agree I will not enter into, any agreement either written or oral in conflict
herewith.

6. RETURN OF COMPANY DOCUMENTS. When I leave the employ of the Company, I will
deliver to the Company any and all drawings, notes, memoranda, specifications,
devices, formulas, and documents, together with all copies thereof, and any
other material containing or disclosing any Company Inventions, Third Party
Information or Proprietary Information of the Company. I further agree that any
property situated on the Company's premises and owned by the Company, including
disks and other storage media, filing cabinets or other work areas, is subject
to inspection by Company personnel at any time with or without notice. Prior to
leaving, I will cooperate with the Company in completing and signing the
Company's termination statement.

7. LEGAL AND EQUITABLE REMEDIES. Because my services are personal and unique and
because I may have access to and become acquainted with the Proprietary
Information of the Company, the Company shall have the right to enforce this
Agreement and any of its provisions by injunction, specific performance or other
equitable relief, without bond and without prejudice to any other rights and
remedies that the Company may have for a breach of this Agreement.

8. NOTICES. Any notices required or permitted hereunder shall be given to the
appropriate party at the address specified below or at such other address as the
party shall specify in writing. Such notice shall be deemed given upon personal
delivery to the appropriate address or if sent by certified or registered mail,
three (3) days after the date of mailing.

9. NOTIFICATION OF NEW EMPLOYER. In the event that I leave the employ of the
Company, I hereby consent to the notification of my new employer of my rights
and obligations under this Agreement.

10. GENERAL PROVISIONS.

         10.1 GOVERNING LAW; CONSENT TO PERSONAL JURISDICTION. This Agreement
will be governed by and construed according to the laws of the State of
California, as such laws are applied to agreements entered into and to be
performed entirely within California between California residents. I hereby
expressly consent to the personal jurisdiction of the state and federal courts
located in San Diego County,

                                       3.
<PAGE>

California for any lawsuit filed there against me by Company arising from or
related to this Agreement.

         10.2 SEVERABILITY. In case any one or more of the provisions contained
in this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect the other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein. If moreover, any one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively broad
as to duration, geographical scope, activity or subject, it shall be construed
by limiting and reducing it, so as to be enforceable to the extent compatible
with the applicable law as it shall then appear.

         10.3 SUCCESSORS AND ASSIGNS. This Agreement will be binding upon my
heirs, executors, administrators and other legal representatives and will be for
the benefit of the Company, its successors, and its assigns.

         10.4 SURVIVAL. The provisions of this Agreement shall survive the
termination of my employment and the assignment of this Agreement by the Company
to any successor in interest or other assignee.

         10.5 EMPLOYMENT. I agree and understand that nothing in this Agreement
shall confer any right with respect to continuation of employment by the
Company, nor shall it interfere in any way with my right or the Company's right
to terminate my employment at any time, with or without cause.

         10.6 WAIVER. No waiver by the Company of any breach of this Agreement
shall be a waiver of any preceding or succeeding breach. No waiver by the
Company of any right under this Agreement shall be construed as a waiver of any
other right. The Company shall not be required to give notice to enforce strict
adherence to all terms of this Agreement.

         10.7 ADVICE OF COUNSEL. I acknowledge that, in executing this
Agreement, I have had the opportunity to seek the advice of independent legal
counsel, and I have read and understood all of the terms and provisions of this
Agreement. This Agreement shall not be construed against any party by reason of
the drafting or preparation hereof

         10.8 ENTIRE AGREEMENT. The obligations pursuant to Sections 1 and 2 of
this Agreement shall apply to any time during which I was previously employed,
or am in the future employed, by the Company as a consultant if no other
agreement governs nondisclosure and assignment of inventions during such period.
This Agreement is the final, complete and exclusive agreement of the parties
with respect to the subject matter hereof and supersedes and merges all prior
discussions between us. No modification of or amendment to this Agreement, nor
any waiver of any rights under this Agreement, will be effective unless in
writing and signed by the party to be charged. Any subsequent change or changes
in my duties, salary or compensation will not affect the validity or scope of
this Agreement.

         This Agreement shall be effective as of the first day of my employment
with the Company, namely: February 15, 1998.

         I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE
COMPLETELY FILLED OUT EXHIBIT B TO THIS AGREEMENT.

Dated:  4/3/98

/s/ HARRY HIXSON
---------------------------------------
(SIGNATURE)

DR. HARRY HIXSON

ACCEPTED AND AGREED TO:

RAJYABIOTICS

By: /s/ JUDITH W. ZYSKIND
---------------------------------------
Judith Zyskind, Ph.D.
President

---------------------------------------
(Address)

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

Dated: April 3, 1998

                                       4.
<PAGE>

                                    EXHIBIT A

                         LIMITED EXCLUSION NOTIFICATION

         THIS IS TO NOTIFY you in accordance with Section 2872 of the California
Labor Code that the foregoing Agreement between you and the Company does not
require you to assign or offer to assign to the Company any invention that you
developed entirely on your own time without using the Company's equipment,
supplies, facilities or trade secret information except for those inventions
that either:

         1. Relate at the time of conception or reduction to practice of the
     invention to the Company's business, or actual or demonstrably anticipated
     research or development of the Company;

         2. Result from any work performed by you for the Company.

         To the extent a provision in the foregoing Agreement purports to
require you to assign an invention otherwise excluded from the preceding
paragraph, the provision is against the public policy of this state and is
unenforceable.

         This limited exclusion does not apply to any patent or invention
covered by a contract between the Company and the United States or any of its
agencies requiring full title to such patent or invention to be in the United
States.

         I ACKNOWLEDGE RECEIPT of a copy of this notification.

                                       By: /s/ HARRY HIXSON
                                           ------------------------------------
                                           DR. HARRY HIXSON

                                       Date:  APRIL 3, 1998
                                           ------------------------------------
WITNESSED BY:

/s/ JUDITH W. ZYSKIND
---------------------------------------
JUDITH W. ZYSKIND

                                      A-1

<PAGE>

                                    EXHIBIT B

TO:            RAJYABIOTICS

FROM:          DR. HARRY HIXSON

DATE:          APRIL 3, 1998

SUBJECT:       PREVIOUS INVENTIONS

1.  Except as listed in Section 2 below, the following is a complete list of all
inventions or improvements relevant to the subject matter of my employment by
RajyaBiotics (the "Company") that have been made or conceived or first reduced
to practice by me alone or jointly with others prior to my engagement by the
Company:

        |X|    No inventions or improvements.

        | |    See below:

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

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

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

| |     Additional sheets attached.

2.  Due to a prior confidentiality agreement, I cannot complete the disclosure
under Section 1 above with respect to inventions or improvements generally
listed below, the proprietary rights and duty of confidentiality with respect to
which I owe to the following party(ies):

<TABLE>
<CAPTION>

        INVENTION OR IMPROVEMENT        PARTY(IES)            RELATIONSHIP
<S>                                     <C>                   <C>
1.      ___________________________     _________________     _________________________________

2.      ___________________________     _________________     _________________________________

3.      ___________________________     _________________     _________________________________
</TABLE>

| |     Additional sheets attached.

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