Document:

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                                  EXHIBIT 10.23

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                                   EXHIBIT C-6

                                 PROMISSORY NOTE

$72,500                                                        San Francisco, CA
---------                                                           FEB 21, 2000

         FOR VALUE RECEIVED, KEVIN KASTER promises to pay to Kosan Biosciences.
Incorporated (the "Company"), or order, the principal sum of SEVENTY TWO
THOUSAND FIVE HUNDRED ($72,500), together with interest on the unpaid principal
hereof from (the date hereof at the rate of SIX AND 40/100 percent (6.46%) per
annum, compounded semiannually.

         Principal and interest shall be due and payable on FEB 21, 2003.
Should the undersigned fail to make full payment of principal or interest for a
period of 10 days or more after the due date thereof, the whole unpaid balance
on this Note of principal and interest shall become immediately due at the
option of the holder of this Note. Payments of principal and interest shall be
made in lawful money of the United States of America.

         The undersigned may at any time prepay all or any portion of the
principal or interest owing hereunder.

         This Note is subject to the terms of the Option, dated as of AUG 7,
1998 & AUG 7, 1999. This Note is secured in part by a pledge of the Company's
Common Stock under the terms of a Security Agreement of even date herewith and
is subject to all the provisions thereof.

         The holder of this Note shall have full recourse against the
undersigned, and shall not be required to proceed against the collateral
securing this Note in the event of default.

         In the event the undersigned shall cease to be an employee or
consultant of the Company for any reason, this Note shall, at the option of the
Company, be accelerated, and the whole unpaid balance on this Note of principal
and accrued interest shall be immediately due and payable.

         Should any action be instituted for the collection of this Note, the
reasonable costs and attorneys' fees therein of the holder shall be paid by the
undersigned.

                                    /s/ Kevin Kaster
                                    --------------------------------------------
                                    Signature

                                        Kevin Kaster
                                    --------------------------------------------
                                    Print Name

<PAGE>

                                   EXHIBIT C-7

                               SECURITY AGREEMENT

         This Security Agreement is made as of FEB. 21, 2000 between Kosan
Biosciences Incorporated ("Pledgee"), and KEVIN R. KASTER ("Pledgor").

                                    RECITALS

         Pursuant to Pledgor's election to purchase Shares under the Option
Agreement dated AUG 7, 1998 & AUG 7, 1999 (the "Option"), between Pledgor and
Pledgee under Pledgee's 1996 Stock Option Plan, and Pledgor's election under the
terms of the Option to pay for such shares with his promissory note (the
"Note"), Pledgor has purchased 72,500 shares of Pledgee's Common Stock (the
"Shares") at a price of $ONE per share, for a total purchase price of $72,500.
The Note and the obligations thereunder are as set forth in Exhibit C-6 to the
Option.

         NOW, THEREFORE, it is agreed as follows:

         1. CREATION AND DESCRIPTION OF SECURITY INTEREST. In consideration
of the transfer of the Shares to Pledgor under the Option Agreement, Pledgor,
pursuant to the California Commercial Code, hereby pledges all of such Shares
(herein sometimes referred to as the "Collateral") represented by certificate
number _______, duly endorsed in blank or with executed stock powers, and
herewith delivers said certificate to the Secretary of Pledgee ("Pledgeholder"),
who shall hold said certificate subject to the terms and
conditions of this Security Agreement.

         The pledged stock (together with an executed blank stock assignment for
use in transferring all or a portion of the Shares to Pledgee if, as and when
required pursuant to this Security Agreement) shall be held by the Pledgeholder
as security for the repayment of the Note, and any extensions or renewals
thereof, to be executed by Pledgor pursuant to the terms of the Option, and the
Pledgeholder shall not encumber or dispose of such Shares except in accordance
with the provisions of this Security Agreement.

         2.       PLEDGOR'S REPRESENTATIONS AND COVENANTS. To induce Pledgee to
enter into this Security Agreement, Pledgor represents and covenants to Pledgee,
its successors and assigns, as follows:

                  a.   PAYMENT OF INDEBTEDNESS. Pledgor will pay the principal
sum of the Note secured hereby, together with interest thereon, at the time and
in the manner provided in the Note.

                  b.   ENCUMBRANCES. The Shares are free of all other
encumbrances, defenses and liens, and Pledgor will not further encumber the
Shares without the prior written consent of Pledgee.

                  c.   MARGIN REGULATIONS. In the event that Pledgee's Common
Stock is now or later becomes margin-listed by the Federal Reserve Board and
Pledgee is classified as a "lender" within the meaning of the regulations under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G"),
Pledgor agrees to cooperate with Pledgee in making any amendments to the Note or
providing any additional collateral as may be necessary to comply with such
regulations.

<PAGE>

         3.       VOTING RIGHTS. During the term of this pledge and so long as
all payments of principal and interest are made as they become due under the
terms of the Note, Pledgor shall have the right to vote all of the Shares
pledged hereunder.

         4.       STOCK ADJUSTMENTS. In the event that during the term of the
pledge any stock dividend, reclassification, readjustment or other changes are
declared or made in the capital structure of Pledgee, all new, substituted and
additional shares or other securities issued by reason of any such change shall
be delivered to and held by the Pledgee under the terms of this Security
Agreement in the same manner as the Shares originally pledged hereunder. In the
event of substitution of such securities, Pledgor, Pledgee and Pledgeholder
shall cooperate and execute such documents as are reasonable so as to provide
for the substitution of such Collateral and, upon such substitution, references
to "Shares" in this Security Agreement shall include the substituted shares of
capital stock of Pledgor as a result thereof.

         5.       OPTIONS AND RIGHTS. In the event that, during the term of this
pledge, subscription Options or other rights or options shall be issued in
connection with the pledged Shares, such rights, Options and options shall be
the property of Pledgor and, if exercised by Pledgor, all new stock or other
securities so acquired by Pledgor as it relates to the pledged Shares then held
by Pledgeholder shall be immediately delivered to Pledgeholder, to be held under
the terms of this Security Agreement in the same manner as the Shares pledged.

         6.       DEFAULT. Pledgor shall be deemed to be in default of the Note
and of this Security Agreement in the event:

                  a.   Payment of principal or interest on the Note shall be
delinquent for a period of 10 days or more; or

                  b.   Pledgor fails to perform any of the covenants set forth
in the Option or contained in this Security Agreement for a period of 10 days
after written notice thereof from Pledgee.

         In the case of an event of Default, as set forth above, Pledgee shall
have the right to accelerate payment of the Note upon notice to Pledgor, and
Pledgee shall thereafter be entitled to pursue its remedies under the California
Commercial Code.

         7.       RELEASE OF COLLATERAL. Subject to any applicable contrary
rules under Regulation G, there shall be released from this pledge a portion of
the pledged Shares held by Pledgeholder hereunder upon payments of the principal
of the Note. The number of the pledged Shares which shall be released shall be
that number of full Shares which bears the same proportion to the initial number
of Shares pledged hereunder as the payment of principal bears to the initial
full principal amount of the Note.

         8.       WITHDRAWAL OR SUBSTITUTION OF COLLATERAL. Pledgor shall not
sell, withdraw, pledge, substitute or otherwise dispose of all or any part of
the Collateral without the prior written consent of Pledgee.

         9.       TERM. The within pledge of Shares shall continue until the
payment of all indebtedness secured hereby, at which time the remaining pledged
stock shall be promptly delivered to Pledgor,

                                       -2-
<PAGE>

subject to the provisions for prior release of a portion of the Collateral as
provided in paragraph 7 above.

         10.      INSOLVENCY. Pledgor agrees that if a bankruptcy or insolvency
proceeding is instituted by or against it, or if a receiver is appointed for the
property of Pledgor, or if Pledgor makes an assignment for the benefit of
creditors, the entire amount unpaid on the Note shall become immediately due and
payable, and Pledgee may proceed as provided in the case of default.

         11.      PLEDGEHOLDER LIABILITY. In the absence of willful or gross
negligence, Pledgeholder shall not be liable to any party for any of his acts,
or omissions to act, as Pledgeholder.

         12.      INVALIDITY OF PARTICULAR PROVISIONS. Pledgor and Pledgee agree
that the enforceability or invalidity of any provision or provisions of this
Security Agreement shall not render any other provision or provisions herein
contained unenforceable or invalid.

         13.      SUCCESSORS OR ASSIGNS. Pledgor and Pledgee agree that all of
the terms of this Security Agreement shall be binding on their respective
successors and assigns, and that the term "Pledgor" and the term "Pledgee" as
used herein shall be deemed to include, for all purposes, the respective
designees, successors, assigns, heirs, executors and administrators.

         14.      GOVERNING LAW. This Security Agreement shall be interpreted
and governed under the laws of the State of California.

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

         "PLEDGOR"                        By: /s/ Kevin R. Kaster
                                             -----------------------------------
                                                  KEVIN R. KASTER
                                          --------------------------------------
                                          Print Name

                                          Address: 199 PORT ROYAL AVE
                                                  ------------------------------
                                                   FOSTER CITY, CA 94404
                                                  ------------------------------

         "PLEDGEE"                        Kosan Biosciences Incorporated

                                          By: /s/ [ILLEGIBLE]
                                             -----------------------------------
                                          Title: COO & VP
                                                --------------------------------

         "PLEDGEHOLDER"                   /s/ Kevin Kaster
                                          --------------------------------------
                                          Stock Option Administrator of
                                          Kosan Biosciences Incorporated

                                       -3-<PAGE>

                                  EXHIBIT 10.24

<PAGE>

                             KOSAN BIOSCIENCES, INC.

                              EMPLOYMENT AGREEMENT

         This Agreement is entered into by and between Kosan Biosciences, Inc.,
a California corporation (the "Company"), and Daniel V. Santi ("Executive"), as
of November 1, 1998.

         WHEREAS, Executive is currently employed as a professor with the
University of California at San Francisco ("UCSF") and works as a consultant for
the Company pursuant to the terms of the Amended and Restated Consulting
Agreement by and between Executive and the Company, dated March 29, 1996 (the
Consulting Agreement );

         WHEREAS, Executive shall take a leave of absence from UCSF to become an
employee of the Company;

         WHEREAS, as of the date Executive receives a leave of absence from
UCSF, the Company desires to employ the Executive as the Chief Executive Officer
and President of the Company, reporting to the Board of Directors of the Company
(the "Board");

         WHEREAS, the parties desire and agree to enter into an employment
relationship by means of this Agreement; and

         NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, it is mutually covenanted and
agreed by and among the parties as follows:

         1.       DUTIES AND SCOPE OF EMPLOYMENT.

                  (a) POSITION: EMPLOYMENT COMMENCEMENT DATE. As of the date
Executive receives a leave of absence from UCSF that, at a minimum, exceeds nine
(9) months ("Leave of Absence"), the Executive shall be employed as the Chief
Executive Officer and President of the Company reporting to the Board
("Commencement Date").

                  (b) OBLIGATIONS. Executive shall devote his full business
efforts and time to the Company. As Chief Executive Officer and President of the
Company, Executive shall have the duties and responsibilities customarily
associated with such positions, including senior management powers and
responsibilities for the Company's business and affairs. During the term of this
Agreement, Executive agrees not to actively engage in any other employment,
occupation or consulting activity for any direct or indirect remuneration that
creates an actual or potential conflict of interest with the Company without the
prior approval of the Board; provided, however, that Executive may engage in
activities that do not materially interfere with his duties and obligations
under this Agreement or create an actual or potential conflict of interest with
the Company for up to four hours per week. Executive shall report the nature and
extent of such activities, if any, to the Board every six months.

                                       -1-
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         2.       AT-WILL EMPLOYMENT. Executive and the Company understand and
acknowledge that Executive's employment with the Company constitutes "at-will"
employment. Executive and the Company acknowledge that this employment
relationship may be terminated at any time, with or without good cause or for
any or no cause, at the option either of the Company or Executive.

         3.       COMPENSATION, FRINGE BENEFITS AND STOCK OPTIONS.

                  (a) BASE SALARY. While employed by the Company pursuant to
this Agreement, the Company shall pay the Executive as compensation for his
services a base salary at the annualized rate of $250,000 (the "Base Salary").
Such salary shall be paid periodically in accordance with normal Company payroll
practices and subject to the usual, required withholding. Executive's Base
Salary shall be adjusted annually by a percentage equal to the percent change
set forth in the U.S. Department of Labor and Bureau of Labor Statistics'
Consumer Price Index for U.S. Cities. Executive understands and agrees that
neither his job performance nor promotions, commendations, bonuses or the like
from the Company give rise to or in any way serve as the basis for modification,
amendment, or extension, by implication or otherwise, of this Agreement.

                  (b) DISCRETIONARY BONUS. The performance of Executive and the
Company may be reviewed by the Board periodically, and, on that basis, the Board
may, in its discretion, award the Executive a bonus. Any such bonus shall be
subject to applicable withholding.

                  (c) EXECUTIVE BENEFITS. During his employment hereunder,
Executive shall be eligible to participate in the employee benefit plans
currently and hereafter maintained by the Company of general applicability to
other key executives of the Company, including, without limitation, group
health, disability, and life insurance benefits and participation in any Company
profit-sharing, retirement or pension plan, and vacation consistent with the
vacation policies of the Company.

                  (d) STOCK OPTION. As of the Commencement Date, Executive shall
be granted a nonstatutory stock option which shall consist of 250,000 shares of
the Company's then issued and outstanding shares of Common Stock at an exercise
price equal to the fair market value of the Common Stock on the date of grant.
Subject to the acceleration of vesting provisions in this Section 3 and Section
5 of this Agreement, the Option shall commence vesting on October 1, 1998, and
shall vest and become exercisable as to 1/48th of the shares subject to the
Option per month, so as to be fully vested on October 1, 2002, subject to
Executive continuing to render services to the Company as President and Chief
Executive Officer. The Option shall be in all respects subject to the terms,
definitions and provisions of the Company's 1996 Stock Option Plan (the "Option
Plan") and the stock option agreement by and between Executive and the Company
(the "Option Agreement"), all of which documents are incorporated herein by
reference.

                  Notwithstanding the above,  Executive shall fully vest in and
have the right to exercise the Option as to all of the shares subject to the
Option, including shares as to which it would not otherwise be vested or
exercisable, in the event that (i) the Company enters into a merger or other
reorganization (as defined in Section 181 of the California Corporations Code)
with or into another

                                      -2-
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corporation or entity (except where California Corporations Code Section 1201(b)
does not require the approval of the outstanding shares of the Company with
respect to such merger or other reorganization), (ii) the Company sells all or
substantially all of its assets, (iii) a person or entity makes a tender or
exchange offer for and acquires 50% or more of the issued and outstanding voting
securities of the Company, or (iv) any person within the meaning of Section
3(a)(9) or Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
acquires more than 50% of the Company's issued and outstanding voting securities
of the Company.

         4.       EXPENSES. The Company will pay or reimburse Executive for
reasonable travel, entertainment or other expenses incurred by Executive in the
furtherance of or in connection with the performance of Executive's duties
hereunder in accordance with the Company's established policies.

         5.       CANCELLATION OF CONSULTING AGREEMENT. Upon the Commencement
Date, Executive and Company agree to cancel and forego their rights, if any,
under the Consulting Agreement.

         6.       SEVERANCE BENEFITS.

                  (a) TERMINATION WITHOUT CAUSE DURING LEAVE OF ABSENCE. If
Executive's employment with the Company terminates other than voluntarily by the
Executive or for "Cause" (as defined herein) at any time during Executive's
Leave of Absence, then (i) Executive shall become a consultant of the Company
and enter into an agreement with the Company containing the terms of the
Consulting Agreement; provided, however, that Executive's compensation level
shall equal that of Dr. Khosla, (ii) vesting of the Option will immediately
cease and Executive shall have the right to exercise any vested portion of the
Option for three (3) months following such termination, and (iii) Executive
shall only be eligible for severance benefits in accordance with the Company's
established policies as then in effect.

                  (b) VOLUNTARY TERMINATION DURING LEAVE OF ABSENCE. If
Executive's employment with the Company terminates voluntarily by the Executive
at any time during Executive's Leave of Absence, then (i) Executive shall become
a consultant of the Company and enter into an agreement with the Company
containing the terms of the Consulting Agreement; provided, however, that
Executive's compensation level shall equal that of Dr. Khosla, (ii) the vesting
of the Option will immediately cease and Executive shall have thirty (30) days
to exercise vested shares, if any, subject to the Option, and (iii) Executive
shall only be eligible for severance benefits in accordance with the Company's
established policies as then in effect.

                  (c) TERMINATION WITHOUT CAUSE AFTER LEAVE OF ABSENCE. If
Executive's employment with the Company terminates other than voluntarily by the
Executive or for "Cause" (as defined herein) at any time after Executive's Leave
of Absence, then (i) Executive shall be entitled to receive a lump sum severance
payment (less applicable withholding taxes) in an amount equal to eighteen (18)
months of his Base Salary, as then in effect; and (ii) an additional eighteen
(18) months of the shares subject to the Option shall vest as of the date of
such termination and Executive have the right to exercise, for three (3) months
following termination, the vested and exercisable shares subject to the Option.

                                      -3-
<PAGE>

                  (d) VOLUNTARY TERMINATION AFTER LEAVE OF ABSENCE. If
Executive's employment with the Company terminates voluntarily by Executive at
any time after the Leave of Absence, then Executive shall only be eligible for
severance benefits in accordance with the Company's established policies as then
in effect.

                  (e) TERMINATION FOR CAUSE. If Executive's employment with the
Company terminates for "Cause" (as defined herein) by the Company, then
Executive shall only be eligible for severance benefits in accordance with the
Company's established policies as then in effect. For this purpose, "Cause" is
defined as (i) an act of dishonesty made by Executive in connection with
Executive's responsibilities as an employee, (ii) Executive's conviction of, or
plea of NOLO CONTENDERE to, a felony, (iii) Executive's gross misconduct, or
(iv) Executive's failure to perform his employment duties.

         7.       ENFORCEMENT. In the event of any action to enforce the terms
of this Agreement, the prevailing party in such action shall be entitled to such
party's reasonable costs and expenses of enforcement including, without
limitation, reasonable attorneys' fees.

         8.       ASSIGNMENT. This Agreement shall be binding upon and inure to
the benefit of (a) the heirs, executors and legal representatives of Executive
upon Executive's death and (b) any successor of the Company. Any such successor
of the Company shall be deemed substituted for the Company under the terms of
this Agreement for all purposes. As used herein, "successor" shall include any
person, firm, corporation or other business entity which at any time, whether by
purchase, merger or otherwise, directly or indirectly, acquires all or
substantially all of the assets or business of the Company. None of the rights
of Executive to receive any form of compensation payable pursuant to this
Agreement shall be assignable or transferable except through a testamentary
disposition or by the laws of descent and distribution upon the death of
Executive following termination without cause. Any attempted assignment,
transfer, conveyance or other disposition (other than as aforesaid) Of any
interest in the rights of Executive to receive any form of compensation
hereunder shall be null and void.

         9.       NOTICES. All notices, requests, demands and other
communications called for hereunder shall be in writing and shall be deemed
given if delivered personally, one (1) day after mailing via Federal Express
overnight or a similar overnight delivery service, or three (3) days after being
mailed by registered or certified mail, return receipt requested, prepaid and
addressed to the parties or their successors in interest at the following
addresses, or at such other addresses as the parties may designate by written
notice in the manner aforesaid:

         If to the Company:         Kosan Biosciences, Inc.
                                    1450 Rollins Road
                                    Burlingame, CA 94010

         If to Executive:           Daniel V. Santi
                                    at the last residential address known by
                                    the Company.

                                      -4-
<PAGE>

         10.      SEVERABILITY. In the event that any provision hereof becomes
or is declared by a court of competent jurisdiction to be illegal, unenforceable
or void, this Agreement shall continue in full force and effect without said
provision.

         11.      ENTIRE AGREEMENT. This Agreement, the Option Agreement and the
Confidential Information and Invention Assignment Agreement dated November 1,
1998 represent the entire agreement and understanding between the Company and
Executive concerning Executive's employment relationship with the Company, and
supersede and replace any and all prior agreements and understandings concerning
Executive's employment relationship with the Company.

         12.      NO ORAL MODIFICATION, CANCELLATION OR DISCHARGE. This
Agreement may only be amended, canceled or discharged in writing signed by
Executive and the Company.

         13.      GOVERNING LAW. This Agreement shall be governed by the
internal substantive laws, but not the choice of law rules, of the State of
California.

         14.      EFFECTIVE DATE. This Agreement is effective immediately after
it has been signed.

         15.      ACKNOWLEDGMENT. Executive acknowledges that he has had the
opportunity to discuss this matter with and obtain advice from his private
attorney, has had sufficient time to, and has carefully read and fully
understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement.

         IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
respective dates set forth below

                                  KOSAN BIOSCIENCES, INC.

                                  By:  /s/ MICHAEL S. OSTRACH
                                     -------------------------------------------
                                  Name:    MICHAEL S. OSTRACH

                                  Title:   VP AND COO
                                        ----------------------------------------

                                  DANIEL V. SANTI

                                      /s/ DANIEL V. SANTI
                                  ----------------------------------------------
                                    Signature

                                      -5-

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