Document:

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                                                                   Exhibit 10.28

                               ESCROW AGREEMENT

                                     among

                             AMERICA ONLINE, INC.,

                                  TIVO INC.,

                                      and

                   U.S. TRUST COMPANY, NATIONAL ASSOCIATION

                        Dated as of September 11, 2000
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     This ESCROW AGREEMENT is entered into as of September 11, 2000 (this
"Agreement") by and among U.S. TRUST COMPANY, NATIONAL ASSOCIATION (the "Escrow
Agent"), AMERICA ONLINE, INC., a Delaware corporation (the "Purchaser"), and
TIVO INC., a Delaware corporation (the "Company" and, together with the
Purchaser, referred to herein collectively as the "Depositors" and each
individually, a "Depositor").

     WHEREAS, the Purchaser and the Company are parties to an Investment
Agreement, dated as of June 9, 2000 (the "Investment Agreement"); and

     WHEREAS, pursuant to the Investment Agreement, the Purchaser and the
Company have agreed to cause the deposit of certain funds with the Escrow Agent,
and the parties to this Agreement desire to define the terms and conditions
pursuant to which the Escrow Agent shall hold and release such funds or portions
thereof;

     NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the Escrow Agent shall hold in escrow and shall distribute the
Escrowed Funds (as defined herein) in accordance with and subject to the
following Instructions and Terms and Conditions:

                                I.  INSTRUCTIONS:

1.   Escrowed Funds.  As provided in Section 1.4(a) of the Investment Agreement,
     --------------
the Company shall deposit with the Escrow Agent in accordance with the terms of
the Investment Agreement (a) at the closing of the Share Purchase (as defined in
the Investment Agreement), an amount as specified in the Investment Agreement,
and (b) from time to time, upon the exercise of any of the Warrants (as defined
in the Investment Agreement), amounts as specified in the Investment Agreement,
in the aggregate totaling up to ninety-one million, five hundred thousand
dollars ($91,500,000), to be held subject to the terms and provisions herein.
The foregoing funds, plus all interest, dividends and other distributions and
payments thereon (collectively the "Distributions") received by the Escrow
Agent, less any funds distributed or paid in accordance with this Agreement, are
collectively referred to herein as the "Escrowed Funds."  The Escrow Agent shall
hold the Escrowed Funds in escrow and shall not withdraw, and none of the
Depositors shall be entitled to any disbursement of, the Escrowed Funds for any
purpose other than as set forth herein.

2.   Investment of Escrowed Funds.  The Escrowed Funds shall be invested and
     ----------------------------
reinvested in such of the following investments (the "Permitted Investments") as
specified in a joint written notice signed by an officer of each of the
Depositors and delivered from time to time by the Depositors to the Escrow
Agent:

          (a)  direct obligations of the United States or any agency thereof or
     obligations guaranteed by the United States or any agency thereof;
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          (b)  commercial paper that rates at least A-1 by Standard & Poor's
     Corporation or P-1 Moody's Investors Services, Inc. that is scheduled to
     mature not more than ninety (90) days after the date of issue and is issued
     by a corporation organized under the laws of the United States or any state
     thereof;

          (c)  time deposits with, including certificates of deposit (which are
     scheduled to mature not more than ninety (90) days after the date of issue)
     issued by, a bank or trust company organized under the laws of the United
     States or any state thereof (a "Qualified Financial Institution");

          (d)  repurchase agreements entered into with a Qualified Financial
     Institution that are secured by any obligations of the type described in
     paragraphs (a) through (c) above and have a market value at the time such
     repurchase agreement is entered into of not less than 100% of the
     repurchase obligation thereunder; and

          (e)  money market funds with a rating of AAAm or AAAm-G by Standard &
     Poor's Corporation or similar rating entity that invest only in securities
     described above in clauses (a) through (d).

     Absent a joint notice of investment or reinvestment in accordance with this
Section 2, the Escrow Agent shall invest any uninvested portion of the Escrowed
Funds in a money market of the type specified in paragraph (e) above as shall be
selected by the Company pursuant to a written notice to the Escrow Agent and the
Purchaser.  Absent both a joint notice of investment or reinvestment in
accordance with this Section 2 and a notice from the Company in accordance with
the previous sentence, the Escrow Agent shall invest any uninvested portion of
the Escrowed Funds in such Permitted Investments of the type specified in
paragraph (e) above as shall be selected from time to time by the Escrow Agent.

     The Escrow Agent shall have no obligation to invest or reinvest the
Escrowed Funds if deposited with the Escrow Agent after 12:00 p.m. (E.S.T.) on
such day of deposit.  Instructions received after 12:00 p.m. (E.S.T.) will be
treated as if received on the following business day.

     The Escrow Agent shall have the power to sell or liquidate the foregoing
investments whenever the Escrow Agent shall be required to release the Escrowed
Funds pursuant to the terms hereof.  Requests (or instructions) received after
12:00 p.m. (E.S.T.) by the Escrow Agent to liquidate the Escrowed Funds will be
treated as if received on the following business day.  The Escrow Agent shall
have no responsibility for any investment losses resulting from the investment,
reinvestment or liquidation of the Escrowed Funds.  Any interest or other income
received on such investment and reinvestment of the Escrowed Funds shall become
part of the Escrowed Funds.  It is agreed and understood that the Escrow Agent
may earn fees associated with the investments outlined above.

     The Escrow Agent shall have no liability for any loss arising from or
related to any such investment other than in accordance with paragraph 1 of the
Terms and Conditions.

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3.   Distribution of Escrowed Funds.  The Escrow Agent is directed to hold and
     ------------------------------
distribute the Escrowed Funds in the following manner:

          (a)  Release of the Escrowed Funds to the Company. All of the Escrowed
     Funds shall be released by the Escrow Agent to the Company, by wire
     transfer of immediately available funds to such account as the Company
     shall designate in writing, upon receipt by the Escrow Agent of written
     instructions of the Company countersigned by the Purchaser certifying (i)
     that the Set Top Box Launch (as defined in the Investment Agreement) has
     occurred prior to the Planned Launch Date (as defined in the Investment
     Agreement), (ii) that the Put Option has expired without being exercised,
     or (iii) the Commercial Agreement has been terminated in accordance with
     Section 11.6 thereof; or

          (b)  Release of the Escrowed Funds to the Purchaser. All of the
     Escrowed Funds (less the amount of cash dividends received by the Purchaser
     on the Preferred Shares, if any, up to a maximum equal to the total amount
     of Distributions, as set forth in the Release Instructions (as defined
     below) (the "Preferred Dividend Amount")) shall be released to the
     Purchaser, by wire transfer of immediately available funds to such account
     as the Purchaser shall designate in writing, at the time and place
     specified in written instructions (the "Release Instructions") of the
     Purchaser and countersigned by the Company delivered to the Escrow Agent
     stating that the Put Option has been exercised by the Purchaser. The
     Release Instructions shall specify the Preferred Dividend Amount and the
     proposed time, date and place of the closing of the transactions
     contemplated by Section 1.4(b) of the Investment Agreement. Upon the
     release of Escrowed Funds to the Purchaser pursuant to this Section 3(b),
     an amount of Escrowed Funds equal to the Preferred Dividend Amount shall be
     released to the Company, by wire transfer of immediately available funds to
     such account as the Company shall designate in writing.

4.   Addresses and Account Information.  Notices, instructions and other
     ---------------------------------
communications hereunder shall be sent:

If to the Escrow Agent to:

           U.S. Trust Company, National Association
           One Embarcadero, Suite 2050
           San Francisco, CA 94111
           Attn:  Corporate Trust Department
           Facsimile: 415-392-0876

If to the Purchaser to:

           America Online, Inc.
           22000 AOL Way
           Dulles, VA 20166- 9323
           Attn:  General Counsel
           Facsimile: 703-265-1600

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With a copy to:

           Simpson Thacher & Bartlett
           425 Lexington Avenue
           New York, NY  10017- 3954
           Attn:  David J. Sorkin, Esq.
           Facsimile: 212-455-2502

If to the Company, to:

           TiVo Inc.
           2160 Gold Street
           Alviso, CA 95002
           Attn:  Chief Financial Officer
           Facsimile: 408-519-5333

With a copy to:

           Latham & Watkins
           135 Commonwealth Drive
           Menlo Park, CA 94025
           Attn:  Alan C. Mendelson, Esq.
           Facsimile: 650-463-2600

All notices or communications required or permitted to be given hereunder shall
be in writing and shall be delivered by hand or sent by facsimile or sent,
postage prepaid, by registered, certified or express mail or reputable overnight
courier service and shall be deemed given when so delivered by hand, or
facsimile, or if mailed, three days after mailing (one business day in the case
of express mail or overnight courier service).

5.   Termination of Escrow Agreement.  This Agreement shall terminate upon the
     -------------------------------
distribution of all of the Escrowed Funds by the Escrow Agent pursuant to this
Agreement.

6.   Compensation.  The Escrow Agent's fees and expenses shall be in the amounts
     ------------
set forth on Exhibit A attached hereto.

                            II.  TERMS AND CONDITIONS

1.  Limitation of Escrow Agent's Duties and Liabilities.
    ---------------------------------------------------

          (a)  The duties and responsibilities of the Escrow Agent hereunder
     shall be determined solely by the express provisions of this Agreement, and
     no other or further duties or responsibilities shall be implied.

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          (b)  The Escrow Agent may rely and shall be protected in acting or
     refraining from acting upon any written notice, instruction or request
     provided for and furnished to it pursuant to the terms of this Agreement
     and believed by it to be genuine and to have been signed or presented by
     the proper party or parties. The Escrow Agent shall be under no duty to
     inquire into or investigate the validity, accuracy or content of any
     document or agreement. The Escrow Agent shall have no duty to solicit any
     item which may be due it hereunder.

          (c)  The Escrow Agent shall not be liable for any action taken or
     omitted by it in good faith unless a court of competent jurisdiction
     determines that the Escrow Agent's willful misconduct or negligence was the
     primary cause of any loss to either of the Depositors. The Escrow Agent may
     consult with counsel of its own choice and shall have full and complete
     authorization and protection for any action taken or omitted by it
     hereunder in good faith and in accordance with the opinion of such counsel.

          (d)  The Depositors hereby jointly and severally agree to indemnify
     the Escrow Agent for and to hold it harmless against any loss, liability or
     expense arising out of or in connection with this Agreement and carrying
     out its duties hereunder, including the costs and expenses of defending
     itself against any claim of liability, except in those cases where the
     Escrow Agent has acted with negligence or willful misconduct. Anything in
     this Agreement to the contrary notwithstanding, in no event shall the
     Escrow Agent be liable for special, indirect or consequential loss or
     damage of any kind whatsoever (including but not limited to lost profits),
     even if the Escrow Agent has been advised of the likelihood of such loss or
     damage and regardless of the form of action.

2.   No Third Party Beneficiaries.  This Agreement is for the exclusive benefit
     ----------------------------
of the parties hereto and their respective permitted successors hereunder, and
shall not be deemed to give, either express or implied, any legal or equitable
right, remedy, or claim to any other entity or person whatsoever except as
provided herein.

3.   Information Regarding the Escrowed Funds.  The Escrow Agent shall provide
     ----------------------------------------
to Depositors monthly statements identifying transactions, transfers or holdings
of the Escrowed Funds and each such statement shall be deemed to be correct and
final upon receipt thereof by the Depositors unless the Escrow Agent is notified
in writing, by the Depositors to the contrary within thirty (30) business days
of the date of such statement.

4.   Interest of the Escrow Agent.  The Escrow Agent does not have any interest
     ----------------------------
in the Escrowed Funds deposited hereunder (except for fees and expenses due to
the Escrow Agent hereunder, to the extent such fees and expenses are unpaid),
but is serving as escrow holder only and having only possession thereof.

5.   Governing Law; Submission to Jurisdiction.  This Agreement shall be
     -----------------------------------------
governed by and construed in accordance with the laws of the State of New York
applicable to agreements

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made and to be performed entirely within such state. Each party hereby
irrevocably and unconditionally consents to submit to the exclusive juris
diction of the courts of the State of New York or the courts of the United
States of America located in the Southern District of New York for any actions,
suits or proceedings arising out of or relating to this agreement (and the
parties agree not to commence any action, suit or proceeding relating thereto
except in such courts), and further agrees that service of any process, summons,
notice or document by U.S. registered mail to the respective addresses set forth
above shall be effective service of process for any action, suit or proceeding
brought against the parties in any such court. Each party hereby irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this agreement, in the courts of the State of New
York or the United States of America located in the Southern District of New
York, and hereby further irrevocably and unconditionally waives its right and
agrees not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.

6.  Assignment.  No party may assign any of its rights or obligations under this
    ----------
Agreement without the written consent of the other parties hereto.  This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.

7.  Waivers.  No waiver by any party hereto of any condition or of any breach of
    -------
any provision of this Agreement shall be effective unless in writing and signed
by a duly authorized representative of the party granting such waiver.  No
waiver by any party of any such condition or breach in any one instance shall be
deemed to be a further or continuing waiver of such condition or breach or a
waiver of any other condition or breach of any other provision contained herein.

8.  Amendment.  This Agreement may only be amended by the written agreement of
    ---------
the Purchaser, the Company and the Escrow Agent.

9.  Merger of the Escrow Agent.  Any corporation into which the Escrow Agent in
    --------------------------
its individual capacity may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Escrow Agent in its individual capacity shall be a
party, or any corporation to which substantially all the corporate trust
business of the Escrow Agent in its individual capacity may be transferred,
shall be the Escrow Agent under this Agreement without further act.

10.  Successor Agent.  In the event the Escrow Agent becomes unavailable or
     ---------------
unwilling to continue in its appointed capacity hereunder, the Escrow Agent may
resign and be discharged from its duties or obligations hereunder by giving
notice of resignation to each of the Depositors, specifying a date not less than
sixty (60) days following such notice date when such resignation will take
effect; provided, however, that such resignation shall in no event take effect
before the successor to the Escrow Agent shall have been appointed pursuant to
this Section 10. The

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Purchaser and the Company shall designate a successor to the Escrow Agent prior
to the expiration of such sixty- day period by giving written notice to the
Escrow Agent. The Escrow Agent shall promptly transfer all assets in the Escrow
Account to such designated successor. In the event that the Depositors fail to
designate a successor within such sixty- day period, then the Escrow Agent shall
be entitled to petition a court of competent jurisdiction for the appointment of
a substitute for it hereunder or, in the alternative, it may transfer and
deliver the Escrowed Funds to or upon the order of such court.

11.  Use of Subcustodians/Agents/Affiliates.  The Escrow Agent is authorized to
     --------------------------------------
engage the services of any affiliate of the Escrow Agent, to hold the escrow
funds, as invested, through such agents or sub-custodians or their custodians or
registered depositories.  For purposes of this Agreement, all references to
services to be performed by the Escrow Agent shall be construed as if they
referred to any agent or sub-custodian of the Escrow Agent.   Notwithstanding
any of the foregoing, the Escrow Agent shall remain liable for any actions taken
by any such subcustodians, agents or affiliates.

12.  Severability.  The invalidity, illegality or unenforceability of any
     ------------
provision of this Agreement shall in no way effect the validity, legality or
enforceability of any other provision; and if any provision is held to be
unenforceable as a matter of law, the other provisions shall not be affected
thereby and shall remain in full force and effect.

13.  Headings.  The headings contained in this Agreement are for convenience of
     --------
reference only and shall have no effect on the interpretation or operation
hereof.

14.  Entire Agreement.  This Agreement with respect to the Escrow Agent, the
     ----------------
Purchaser and the Company, and this Agreement, the Investment Agreements and the
other Related Agreements (as defined in the Investment Agreement) with respect
to the Purchaser and the Company constitute the entire understanding and
agreement of the parties hereto with respect to the subject matter hereof and
supersede all prior agreements and understandings, written or oral, between the
parties hereto with respect to the subject matter hereof.

15.  Counterparts. This Agreement may be executed in two or more counterparts,
     ------------
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.

                 [Remainder of page intentionally left blank.]

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     IN WITNESS WHEREOF, each of the parties have caused this Agreement to be
executed by a duly authorized officer as of the day and year first written
above.

                              AMERICA ONLINE, INC.

                              By:  /s/ David M.Colburn
                                  --------------------------------------
                                  Name: David M. Colburn
                                  Title: President, Business Affairs

                              TIVO INC.

                              By:    /s/ David H. Courtney
                                    ------------------------------------
                              Name:  David H. Courtney
                              Title: Senior Vice President, Finance &
                              Administration

                              U.S. TRUST COMPANY, NATIONAL ASSOCIATION

                                 By: /s/ Sandra H. Leess
                                    ------------------------------------
                                 Name: Sandra H. Leess
                                 Title: Senior Vice President

                                       8
<PAGE>

                                                                       EXHIBIT A

                       SCHEDULE OF FEES FOR SERVICES AS
                                 ESCROW AGENT
--------------------------------------------------------------------------------
                                      TiVo
                                Escrow Agreement

                       Proposal for Escrow Agent Services
                                      from
                            U.S. TRUST COMPANY, N.A.
--------------------------------------------------------------------------------

ACCEPTANCE FEE                                $500
For review and complete analysis of the escrow agreement, meetings and
conferences with all parties, execution of documents and opening of required
accounts.

ANNUAL ADMINISTRATION FEE                     $2,500
For normal administrative functions as specified in the escrow agreement
including maintenance of administrative records and custody of funds.  Any
extraordinary services will be charged based on our appraisal of the services
rendered.

OTHER CHARGES
1099 Reporting                                $2.50 each

Wire transfers                                $25 per wire transfer

Purchase, sale, receipt, delivery, maturity,  $35 per transaction
or redemption of securities

Out-of-pocket expenses and disbursements      AT COST
Includes expenses incurred on the client's behalf such as postage, telephone,
insurance, express mail and messenger charges, etc.

          Charges for any services not specifically covered in this schedule
will be billed commensurate with the services rendered.  This schedule reflects
charges which are now in effect for our normal and regular services and are
minimal only, subject to modification where unusual conditions or requirements
prevail.

                                       9<PAGE>
                                                                   EXHIBIT 10.01

                      EMPLOYMENT AND CONSULTING AGREEMENT

     THIS EMPLOYMENT AND CONSULTING AGREEMENT (this "Agreement") is made between
                                                     ---------
John M. Carney, Ph.D. ("Dr. Carney") and Centaur Pharmaceuticals, Inc., a
                        ----------
Delaware corporation ("Centaur") effective September 22, 2000.
                       -------

                                 R E C I T A L

     Dr. Carney and Centaur desire to modify the employment relationship between
them and provide for certain other matters on the terms and subject to the
conditions described in this Agreement.

     N O W,  T H E R E F O R E, the parties hereto hereby agree as follows:

     1.  Dr. Carney and Centaur agree that Dr. Carney hereby resigns from all
positions he now holds with Centaur, including the position of Chief Technical
Officer effective on the date hereof (the "Transition Date").  Dr. Carney
                                           ---------------
previously resigned as a member of the Board of Directors of Centaur.

     2.  From the Transition Date through December 31, 2000, Dr. Carney will be
a part-time employee of Centaur, and will be responsible for specific tasks to
be designated by the Chairman of the Board of Centaur. Dr. Carney's new title
will be "Chief Technical Advisor," and he will report to the Chairman of the
Board. During this period, Dr. Carney will be provided an office, phones,
supplies, computer and support services, and the like in Centaur's Memorex Drive
facility. The number of hours of service to be provided to Centaur by Dr. Carney
shall be in Centaur's discretion; provided that the number of hours does not
exceed the maximum set forth in Section 3. At any time prior to December 31,
2000, Dr. Carney may choose to terminate his part-time employment arrangement
with Centaur as set forth in Section 2 and 3 and become a consultant as
described in Section 6 below.

     3.  Subject to Section 4, Centaur will pay Dr. Carney in the ordinary
course on its regular payroll dates through December 31, 2000, as follows:

         (a)  Dr. Carney's time commitment to Centaur will be a maximum of
full-time during the period from the Transition Date through September 30, 2000.
Each semi-monthly payment during this period shall consist of $8,480.80 less
applicable deductions.

         (b) Dr. Carney's time commitment to Centaur will be a maximum of 75%
time during the period from the October 1, 2000 through December 31, 2000. Each
semi-monthly payment during this period shall consist of $6,360.60 less
applicable deductions.

Subject to Section 4, Dr. Carney will retain his benefits until December 31,
2000. Dr. Carney acknowledges that he is not entitled to any other payments or
amounts from Centaur, except that Centaur (i) will reimburse him for reasonable
business expenses incurred in the ordinary course of carrying out his duties,
not to exceed $2,000 per month without the advanced written approval of

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Centaur, in accordance with Centaur's standard reimbursement policies, and (ii)
will pay him for any accrued but unused vacation time upon termination of his
employment on December 31, 2000.

     4.  If Dr. Carney accepts consulting work (whether paid or unpaid) or part
or full time employment (whether paid or unpaid) from a third party, and Centaur
reasonably determines that these activities create a direct, competitive
conflict with the business of Centaur, then no additional payments will be made
and both parties will be released from future employment or consulting
obligations to Centaur pursuant to Section 2, 3 and 6. For the purposes of this
provision, a direct, competitive conflict shall mean Dr. Carney's working with a
company using a technology substantially similar to that of Centaur to pursue
applications substantially similar to those pursued by Centaur.

     5.  Dr. Carney currently holds stock options to purchase 41,375 shares of
Centaur's Common Stock. If Dr. Carney remains an employee from the Effective
Date through December 31, 2000, these stock options will continue to vest
uninterrupted until December 31, 2000 and will continue to be treated as
incentive stock options to the extent permitted by law. Thereafter, all unvested
stock options will continue to vest on the same schedule as is currently in
place until the end of Dr. Carney's consultancy described in Section 6, but
shall be characterized as non-qualified stock options. Dr. Carney acknowledges
that he does not have any other rights to acquire any other stock or other
equity interest of Centaur. Dr. Carney also acknowledges that to the extent that
his stock options are incentive stock options, they must be exercised within 90
days of the termination of his employment to retain such status.

     6.  For the period of January 1, 2001 to December 31, 2001, Dr. Carney will
become a consultant to Centaur, and will advise Centaur as requested by the
Chairman of the Board, on issues of importance to Centaur. The time allotted to
these tasks will be determined by mutual agreement between Dr. Carney and
Centaur, and the parties acknowledge that there is no understanding that Dr.
Carney will be available for any specific amount of time, or that Centaur will
utilize Dr. Carney for any minimum period of time. For his consulting time, Dr.
Carney will be paid $4,000 per month. When his consulting duties require it, Dr.
Carney will also have access to office and support services at Centaur. Centaur
will reimburse Dr. Carney for reasonable business expenses incurred in the
ordinary course of carrying out his duties, not to exceed $2,000 per month
without the advanced written approval of Centaur, in accordance with Centaur's
standard reimbursement policies. As a consultant, Dr. Carney shall be an
independent contractor and shall be responsible for and pay all taxes applicable
to any amounts he receives from Centaur as a consultant. As a consultant, Dr.
Carney shall undertake such tasks as are requested by Centaur and the
confidentiality and invention assignment provisions of Dr. Carney's
Confidentiality Agreement (described below) shall apply to his work as a
consultant.

     7.  At any time at the request of Centaur, Dr. Carney agrees that he will
identify to Centaur and turn over to Centaur all files, memoranda, records (and
copies thereof), credit cards, computer disks and other property in Dr. Carney's
possession that are the property of Centaur.  Dr. Carney further acknowledges
that he has previously entered into an Employee Invention Assignment and
Confidentiality Agreement effective June 24, 1996 (the "Confidentiality
                                                        ---------------
Agreement") with Centaur, that various provisions thereof are intended to
---------
survive the modification and termination of his employment relationship with
Centaur, including, without limitation, the provisions of Sections 6

                                       2
<PAGE>

(Assistance re: Inventions), 8 (Confidentiality) and 11 (Non-Solicitation), and
that Dr. Carney will abide by all such obligations.

     8.  Centaur and Dr. Carney each agree not to disparage the other.

     9.  EXCEPT FOR THE AGREEMENTS SET FORTH HEREIN, INCLUDING THE CONTINUING
OBLIGATIONS OF DR. CARNEY UNDER THE CONFIDENTIALITY AGREEMENT, EACH PARTY TO
THIS AGREEMENT HEREBY FOREVER RELEASES AND DISCHARGES THE OTHER, ITS SUCCESSORS,
SUBSIDIARIES, HEIRS, EMPLOYEES, STOCKHOLDERS, OFFICERS, DIRECTORS AND AGENTS,
FROM ANY AND ALL CLAIMS, LIABILITIES, EXPENSES, DAMAGES, DEMANDS AND CAUSES OF
ACTION, KNOWN OR UNKNOWN, FIXED OR CONTINGENT, WHICH SUCH PARTY HAS OR MAY
HEREAFTER HAVE ARISING OUT OF OR IN ANY WAY CONNECTED WITH DR. CARNEY'S
EMPLOYMENT OR OTHER RELATIONSHIP WITH CENTAUR, INCLUDING THE RESIGNATION OF HIS
ROLES AS CHIEF TECHNICAL OFFICER OF CENTAUR, THROUGH THE DATE HEREOF.

     10. The parties further agree that, upon Centaur's request provided at any
time after the date hereof (which request may be made on more than one occasion)
and with the consent of Dr. Carney, Centaur and Dr. Carney will enter into a
Release Addendum in the form attached hereto as Exhibit A for the purpose of
                                                ---------
extending the effective date of the release set forth herein.  If Dr. Carney
refuses to consent then Centaur may, at its option, terminate this Agreement
and/or unvest 80% of any options held by Dr. Carney that have vested since the
date of the most recent release provided by Dr. Carney pursuant to this
Agreement, such that those options will not be exercisable by Dr. Carney (or to
repurchase at cost any of such options that have been exercised by Dr. Carney);
provided that under no circumstances may Centaur unvest or repurchase any option
or shares that have vested as of the Effective Date.

     11. Dr. Carney understands and agrees that in consideration of the
foregoing, any current or future rights to pursue any and all remedies available
in any state or other jurisdiction under any employment or other Centaur-related
causes of action, are hereby waived, including without limitation:

         (a) claims of wrongful discharge, defamation, emotional distress,
breach of contract, breach of the covenant of good faith and fair dealing; and

         (b) claims under the Age Discrimination in Employment Act of 1967, as
amended; Title VII of the 1964 Civil Rights Act, as amended; the Equal Pay Act
of 1963, as amended; the Civil Rights Act of 1866, as amended; and any other
laws and regulations relating to employment discrimination.

Notwithstanding any provisions in this Agreement to the contrary, the releases
given under this Agreement shall not extend to any rights, claims or causes of
action currently unknown to Dr. Carney to the extent hereafter arising with
respect to Dr. Carney's rights regarding future medical benefits arising under
COBRA.

                                       3
<PAGE>

     12. Each party to this Agreement expressly acknowledges that the releases
set forth above are intended to apply to both known and unknown claims, causes
of action, etc., and accordingly each party agrees that:

         Each party expressly waives any right or benefit available to him in
any capacity under the provisions of section 1542 of the Civil Code of
California, which provides:

         "A 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."

     13. Dr. Carney hereby acknowledges that he has read and understands the
releases set forth in Sections 9 through 12 above (collectively, the "Release")
                                                                      -------
and has executed this Agreement voluntarily and without coercion.  Dr. Carney
further acknowledges that he was given 21 days within which to consider the
Release; that he was advised by Centaur to consult with an attorney of his own
choosing concerning the waivers contained in the Release; that he has done so or
has had the opportunity to do so and that the waivers made herein are knowing,
conscious and with full appreciation that he is forever foreclosed from pursuing
any of the rights so waived.  Dr. Carney further acknowledges that the financial
and other terms of this Agreement are consideration for the Release.

     Dr. Carney understands that for a period of seven days after signing the
Release he has the right to revoke it and that this Agreement, including but not
limited to the Release, shall not become effective or enforceable until after
those seven days.

     14. The Indemnification Agreement entered into between Dr. Carney and
Centaur will continue in full force and effect as to Dr. Carney's role as
Advisor and consultant to Centaur.

     15. Dr. Carney represents and acknowledges that he has carefully read and
fully understands all of the provisions of this Agreement, which sets forth the
entire agreement between the parties. This Agreement supersedes any and all
prior agreements or understandings between the parties, including, but not
limited to, all corporate policies, practices or procedures pertaining to the
subject matter of this Agreement. Dr. Carney represents that he has full
authority to enter into this Agreement and that no other person has any claim or
interest in the matters described herein, and that this Agreement is binding on
himself, his estate, heirs and assigns. Dr. Carney acknowledges that the
Consulting Agreement dated March 18, 1992 has previously been terminated, except
for the Section 5 (Nondisclosure) and Section 6 (Inventions, Etc.).

     16. Dr. Carney understands and agrees that in the event of a breach of his
confidentiality or non-solicitation obligations under this Agreement and/or the
Confidentiality Agreement Centaur may suffer irreparable harm and will therefore
be entitled to injunctive relief to enforce this Agreement and the
Confidentiality Agreement.

     17. This Agreement will be governed and interpreted in accordance with the
internal laws of the State of California, excluding that body of law governing
conflicts of law.

                                       4
<PAGE>

     18. If one or more provisions of this Agreement or the Confidentiality
Agreement are held to be unenforceable under applicable law, such provision
shall be enforced to the maximum extent permitted by law, and the balance of
this Agreement and the Confidentiality Agreement shall remain in full force and
effect and shall be interpreted so as to effect the intent of the parties.

     19.  Any term of this Agreement may be amended and the observance of any
term of this Agreement may be waived only with the written consent of Centaur
and Dr. Carney.

                                       5
<PAGE>

PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.

           Executed at Sunnyvale, California on September 22, 2000.

                                     JOHN CARNEY

                                     By   /s/ John Carney
                                       -----------------------------------------
                                         John Carney

                                     (You may sign on any date not more than
                                     25 days after September 22, 2000 the date
                                     that Centaur presents you with this
                                     Agreement.)

           Executed at Sunnyvale, California on September 22, 2000.

                           CENTAUR PHARMACEUTICALS, INC.

                                     By:   /s/ Charles R. Engles
                                        ----------------------------------------
                                          Charles R. Engles, Acting Chief
                                                Operating Officer

            [Signature page of Employment and Consulting Agreement]

                                       6
<PAGE>

                                   Exhibit A

                               RELEASE ADDENDUM

     Centaur Pharmaceuticals, Inc. ("Centaur") and John Carney ("Dr. Carney")
hereby agree that the Release set forth in Section 9 of that certain Employment
and Consulting Agreement dated September 22, 2000 (the "Agreement") shall apply
to matters occurring on or before December 31, 2001 [or each earlier date
requested by Centaur]. To implement the foregoing, it is agreed that the last
four words of Section 9 are hereby amended to read "through December 31, 2001
[or each earlier date requested by Centaur]". All other provisions of the
Agreement remain in full force and effect and apply to this Release Addendum,
including, without limitation, Section 13 of the Agreement.

CENTAUR PHARMACEUTICALS, INC.

By:
   -----------------------------------   -----------------------------------
   Name:                                 John Carney
   Title:

Date:                                     Date:
     ---------------------------------    -----------------------------------

                                       7

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