Document:

10Q Q1 2001 EXH10.152

                                                          Exhibit 10.152

EMPLOYMENT AGREEMENT

This Employment Agreement ("Agreement") is entered into
as of this 23rd day of January, 2001 (the "Effective Date"), by and between
Paul Hastings ("Executive") and Axys Pharmaceuticals, Inc., a
Delaware corporation (the "Company").

Whereas, the Company desires to employ Executive to
provide personal services to the Company, and wishes to provide Executive with
certain compensation and benefits in return for such services; and

Whereas, Executive wishes to be employed by the
Company and provide personal services to the Company in return for certain
compensation and benefits.

Now, Therefore, in consideration of the mutual
promises and covenants contained herein, it is hereby agreed by and between the
parties hereto as follows:

1.Employment By The Company.
1.1The Company agrees to employ Executive in
the position of President and Chief Executive Officer of the Company. During
Executive's employment with the Company, Executive will devote his best efforts
and substantially all of his business time and attention to the business of the
Company.

1.2Executive shall serve in an executive capacity
and shall perform such duties as are customarily associated with his then
current titles, consistent with the Bylaws of the Company and as required by the
Company's Board of Directors (the "Board").

1.3The employment relationship between the parties
shall also be governed by the general employment policies and practices of the
Company, including those relating to protection of confidential information and
assignment of inventions, except that when the terms of this Agreement differ
from or are in conflict with the Company's general employment policies or
practices, this Agreement shall control.

1.4The Company and Executive each acknowledge that
either party has the right to terminate Executive's employment with the Company
at any time for any reason whatsoever, with or without Cause or advance notice.
This at-will employment relationship cannot be changed except in a writing
signed by both Executive and a majority of the Board.

2.Compensation.
2.1Salary. Executive shall receive, for services to
be rendered under this Agreement, an annualized base salary ("Base Salary")
equal to $400,000. Such Base Salary shall commence as of the Effective Date, and
shall be payable in installments consistent with the Company's payroll policies.
Executive's Base Salary shall be reviewed at least annually by the Board, and in
the Board's sole discretion, may be increased at any time.

2.2Termination.

(a)In the event Executive's employment
terminates for any reason other than death, disability, a termination upon a
Change of Control, a voluntary termination not for Good Reason, or a termination
for Cause, upon execution of an effective release in the form attached hereto as
Exhibit A: (i) Executive shall receive twelve (12) monthly payments each equal
in amount to one-twelfth (1/12th) of the sum of (x) the full amount
of one year's Target Bonus (at the level in effect at that time) and (y) his
then Base Salary; (ii) additional Stock Options (as defined below) shall,
immediately prior to Executive's termination of employment, become vested with
respect to that number of shares which would have become vested had Executive
remained in continuous service with the Company for an additional twelve (12)
months following the date of Executive's termination of employment; and (iii)
for a period of twelve (12) months (or until comparable benefits coverage
becomes available to Executive, if sooner), the Company shall pay the costs
associated with the continuation of Executive's medical, dental, and vision
benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA") as in effect immediately prior to Executive's termination of
employment.

(b)For purposes of this Agreement, "Good Reason"
means that any of the following are undertaken without Executive's express
written consent: (i) 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; (ii) a reduction by the Company
in Executive's Base Salary; (iii) the taking of any action by the Company which
would adversely affect Executive's participation in, or reduce Executive's
benefits under, the Company's benefit plans (including equity benefits) as of
the time this Agreement is executed, except to the extent the benefits of all
other executive officers of the Company are similarly reduced; (iv) a relocation
of Executive's principal office to a location more than forty (40) miles from
180 Kimball Way, South San Francisco, California, except for required travel by
Executive on the Company's business; (v) any breach by the Company of any
material provision of this Agreement; or (vi) any failure by the Company to
obtain the assumption of this Agreement by any successor or assign of the
Company. For purposes of this Agreement, "Cause" means: (V) an intentional
action or intentional failure to act by Executive which was performed in bad
faith and to the material detriment of the Company; (W) Executive intentionally
refuses or intentionally fails to act in accordance with any lawful and proper
direction or order of the Board; (X) Executive willfully and habitually neglects
the duties of employment; (Y) Executive violates Section 4 or Section 5 of this
Agreement or (Z) Executive is convicted of a felony crime involving moral
turpitude; provided, however, that in the event that any of the foregoing events
under clauses (V), (W), (X) or (Y) above is capable of being cured, the Company
shall provide written notice to Executive describing the nature of such event
and Executive shall thereafter have ten (10) business days to cure such
event.

(c)In the event of Executive's termination upon a
Change of Control, upon execution of an effective release in the form attached
hereto as Exhibit A: (i) Executive shall, within seven (7) days of such
termination, one lump sum payment equivalent to eighteen (18) months of his then
Base Salary, plus a pro rata share of his Target Bonus for the calendar year in
which such termination occurs, plus the amount of eighteen months of his Target
Bonus, minus standard withholdings and deductions; (ii) all of Executive's
outstanding Stock Options shall become fully vested and exercisable immediately
upon the occurrence of such termination; and (iii) for a period of eighteen (18)
months (or until comparable benefits coverage becomes available to Executive, if
sooner), the Company shall pay the costs associated with the continuation of
Executive's medical dental, and vision benefits under COBRA as in effect
immediately prior to Executive's termination of employment. For purposes of this
paragraph, both Executive's "Base Salary" and "Target Bonus" shall be the
greater of those amounts in effect either immediately prior to the Change of
Control or the termination of Executive's employment.

(d) A termination upon a Change of Control shall
be deemed to occur for purposes of this Agreement in the event of a Change of
Control (as defined below) upon which or within thirteen (13) months following
the consummation of which: Executive does not continue to render services as
President and Chief Executive Officer of the Company (or any successor or
surviving corporation) or Executive terminates employment with the Company (or a
successor or surviving corporation) for Good Reason. For purposes of this
Agreement, a Change of Control means (i) any sale, merger, consolidation, tender
offer or similar acquisition of shares, or other transaction or series of
related transactions (each a "Transaction") as a result of which at least a
majority of the voting power of the Company is not held, directly or indirectly,
by the persons or entities who held the Company's securities with voting power
before such Transaction (provided, however, that any person who acquired voting
securities of the Company in contemplation of the Transaction and who
immediately after such Transaction possesses direct or indirect ownership of at
least ten percent (10%) of the securities of the Company or the surviving entity
(or if the Company or the surviving entity is a controlled affiliate of another
entity, then of such controlling entity) shall not be included in the group of
those persons or entities who held the Company's securities with voting power
before such Transaction); (ii) a sale or other disposition of all or a
substantial part of the Company's assets, whether in one transaction or a series
of related transactions; or (iii) individuals who on the date hereof constitute
the Board and any new director (other than a director designated by a person or
entity who has entered into an agreement to effect a transaction described in
clause (i) or (ii) above) whose nomination and/or election to the Board was
approved by a vote of at least a majority of the directors then still in office
who either were directors on the date hereof or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority of the Board.

2.3Golden Parachute
Taxes.Notwithstanding anything contained in this Agreement to the
contrary, to the extent that payments and benefits provided under this Agreement
to Executive and benefits provided to, or for the benefit of, Executive under
any other Company plan or agreement (such payments or benefits are collectively
referred to as the "Payments") would be subject to the excise tax (the "Excise
Tax") imposed under Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code"), the Payments shall be reduced (but not below zero) to the
extent necessary so that no Payment to be made or benefit to be provided to the
Executive shall be subject to the Excise Tax, but only if, by reason of such
reduction, the net after-tax benefit received by Executive shall exceed the net
after-tax benefit received by him if no such reduction was made. For purposes of
this Section 2.3, "net after-tax benefit" shall mean (a) the Payments which
Executive receives or is then entitled to receive from the Company that would
constitute "parachute payments" within the meaning of Section 280G of the Code,
less (b) the amount of all federal, state and local income taxes payable with
respect to the foregoing calculated at the maximum marginal income tax rate for
each year in which the foregoing shall be paid Executive (based on the rate in
effect for such year as set forth in the Code as in effect at the time of the
first payment of the foregoing), less (c) the amount of excise taxes imposed
with respect to the payments and benefits described in (a) above by Section 4999
of the Code. The foregoing determination will be made by the a nationally
recognized accounting firm (the "Accounting Firm") selected by the Company
(which may be, but will not be required to be, the Company's independent
auditors). The Company will direct the Accounting Firm to submit its
determination and detailed supporting calculations to both the Executive and the
Company within fifteen (15) days after his date of termination of employment. If
the Accounting Firm determines that such reduction is required by this Section
2.3, the Executive, in his sole and absolute discretion, may determine which
Payments shall be reduced to the extent necessary so that no portion thereof
shall be subject to the excise tax imposed by Section 4999 of the Code, and the
Company shall pay such reduced amount to him. The fees and expenses of the
Accounting Firm for its services in connection with the determinations and
calculations contemplated by this Section 2.3 will be borne by the
Company.

2.4Annual Bonus. Executive will be eligible for an
annual bonus up to fifty percent (50%) of Executive's then current Base Salary
upon achievement of reasonable goals specified by the Board (the "Target
Bonus"). Such goals shall be set forth in writing by the Board prior to the
close of the first quarter of each fiscal year of the Company, with fifty
percent (50%) of such goals to be dependent on Executive's individual
performance and fifty percent (50%) of such goals to be dependent on the
Company's performance.

2.5Employee
Loan.On the Effective Date, the Company agrees to loan Executive
$300,000 pursuant to the terms of the form of promissory note attached hereto as
Exhibit B (the "Note"). The Note is full-recourse, secured by any shares of the
Company's common stock acquired by Executive upon the exercise of any Stock
Options, bears interest at the rate of 5.61% per annum and is payable in full on
the earlier of (a) thirty (30) days following Executive's termination of
employment (other than Executive's termination of employment for Good Reason or
Executive's termination of employment without Cause or due to death or
disability) or (b) January 2, 2004. Provided that Executive continues to render
services to the Company through each such date, the Company will forgive one
thirty-sixth (1/36th) of the principal amount of the Note and any
accrued interest thereon on the first day of each calendar month following the
Effective Date, such that (provided Executive has not ceased to render services
to the Company as of each such date) the Note shall be forgiven in its entirety
on January 1, 2004. In the event Executive is terminated without Cause or due to
death or disability or that Executive terminates his employment for Good Reason,
the Company will concurrently therewith forgive all remaining principal and
interest due under the Note.

2.6Medical and Dental Coverage. The Company shall
provide Executive with the medical and dental coverage which is no less
favorable than that provided to any other executive of the Company.

2.7Standard Company Benefits. Executive shall be
entitled to all other rights and benefits for which he is eligible under the
terms and conditions of such benefits which may be in effect from time to time
and provided by the Company to its employees generally and/or to its management
and executive employees in particular.

2.8Expenses. Executive shall be entitled to
receive prompt reimbursement of all reasonable expenses incurred by Executive in
performing Company services. Executive agrees to furnish the Company reasonably
adequate records and other documentary evidence of such expenses for which
Executive seeks reimbursement. Such expenses shall be accounted for under the
policies and procedures established by the Company.

2.9Vacation and Sick Leave. Executive shall be
entitled to vacation and to sick leave in accordance with policies as
periodically established by the Company for Company officers. In addition,
Executive shall be entitled, without loss of pay, to be absent voluntarily from
the performance of employment duties for such periods of time and for such valid
and legitimate reasons as the Board in its discretion may determine.

2.10Stock Options.Executive shall be granted options to purchase
500,000 shares of the Company's common stock (the "Time Vesting Options") at an
exercise price equal to the fair market value of the Company's common stock as
of the date of grant of such options. Provided Executive remains in continuous
service with the Company as of the applicable vesting dates, twelve and one half
percent (12-1/2%) of the Time Vesting Options shall vest upon the six (6) month
anniversary of the Effective Date and the remaining Time Vesting Options shall
vest at the rate of 1/42nd of such remaining options per month, such that one
hundred percent (100%) of the Time Vesting Options shall be vested on the fourth
(4th) anniversary of the Effective Date. The Time Vesting Options shall be
treated as incentive stock options within the meaning of Section 422 of the Code
to the maximum extent possible and shall become exercisable as they become
vested, and the remaining portion of the Time Vesting Options shall become
exercisable upon the date of grant of such options. The vested portion of all
Stock Options which are not incentive stock options shall be transferable to
family members to the maximum extent permitted by the Securities Act of 1933, as
amended. Other terms and conditions of the Time Vesting Options shall be
consistent with the terms of the Company's compensatory stock plan under which
they are granted and as mutually agreed to by the Company and Executive. In
addition to the Time Vesting Options, effective as of the Effective Date,
Executive shall be granted non-statutory stock options to purchase 100,000
shares of the Company's common stock (the "Performance Vesting Options") at an
exercise price equal to the fair market value of the Company's common stock as
of the Effective Date. Provided Executive remains in continuous service with the
Company through the seventh (7th) anniversary of the Effective Date, the
Performance Vesting Options shall become vested and exercisable in their
entirety as of the seventh (7th) anniversary of the Effective Date; provided
however, that upon the determination by the Board of Directors that Executive
has met by Executive's performance during 2001 at least seventy-five percent
(75%) of certain performance goals to be established jointly by Executive and
the Board and/or the Compensation Committee of the Board during the first
quarter of calendar year 2001, the Performance Vesting Options shall vest and
become exercisable pursuant to the schedule described above with respect to the
Time Vesting Options as if governed by such schedule as of their date of grant.
Other terms and conditions of the Performance Vesting Options shall be
consistent with the terms of the Company's compensatory stock plan under which
they are granted and as mutually agreed to by the Company and Executive. The
Time Vesting Options and Performance Vesting Options, together with any
additional options to purchase shares of the Company's common stock that
Executive may be granted from time to time are referred to herein collectively
as the "Stock Options." The Stock Options shall be granted by the Board or
authorized committee of the Board, and shall be granted pursuant to, and except
as provided herein shall be governed by, the terms of the Company's stock option
plans and customary forms of stock option agreement as amended from time to
time.

3.Confidential Information Obligations.
3.1Agreement. Executive agrees to execute and abide
by Executive's Employment, Confidential Information and Invention Assignment
Agreement ("Confidentiality Agreement"),

3.2Remedies. Executive's duties under the
Confidentiality Agreement shall survive termination of his employment with the
Company. Executive acknowledges that a remedy at law for any breach or
threatened breach by him of the provisions of the Confidentiality Agreement
would be inadequate, and he therefore agrees that the Company shall be entitled
to injunctive relief in case of any such breach or threatened breach.

4.Outside Activities.
4.1Except with the prior written consent of
the Board, Executive will not during the term of this Agreement undertake or
engage in any other employment, occupation or business enterprise, other than
ones in which Executive is a passive investor. Executive may engage in civic and
not-for-profit activities and may, upon notice to the Board, serve as a member
of Boards of Directors of companies not deemed to be engaged in competition with
the Company so long as such activities do not materially interfere with the
performance of his duties hereunder, and the Company hereby agrees that
Executive may serve as a director of RxMarketplace.com, ViaCell, and LXR without
further notice to the Board.

4.2Except as permitted by Section 4.3, Executive
agrees not to acquire, assume, or participate in (directly or indirectly) any
position, investment or interest known by him to be adverse or antagonistic to
the Company, its business, or its prospects, financial or otherwise.

4.3During the term of his employment by the
Company, except on behalf of the Company, Executive will not have any direct or
indirect business connection or interest, in any capacity whatsoever, with any
other person or entity known by him to compete directly with the Company,
throughout the world, in any line of business engaged in (or planned to be
engaged in) by the Company. Nothing in this paragraph shall bar Executive from
owning securities of any competitor corporation as a passive investor, so long
as his aggregate direct holdings in any one such corporation shall not
constitute more than 1% of the voting stock of that corporation.

5.Noninterference. While employed by the Company,
and for one (1) year immediately following the termination of Executive's
employment, Executive agrees not to interfere with the Company's business by
soliciting, attempting to solicit, inducing, or otherwise causing any employee
of the Company to terminate his or her employment in order to become an
employee, consultant, or independent contractor to or for any competitor of the
Company. Executive agrees that this restriction is reasonably necessary to
protect the Company's legitimate business interest in its substantial
relationships with employees, consultants, and independent contractors and its
valuable confidential business information.

6.General Provisions.
6.1Notices. Any notices provided hereunder must be in
writing and shall be deemed effective upon the earlier of (i) personal delivery
(including delivery by fax or overnight courier) or (ii) the third day after
mailing by first-class mail, to the Company at its primary office location and
to Executive at his address as then listed in the Company's payroll records.

6.2Severability. Whenever possible, each provision
of this Agreement will be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is held to be
invalid, illegal, or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality, or unenforceability will
not affect any other provision or any other jurisdiction, but this Agreement
will be reformed and construed in such jurisdiction so as to render it
enforceable under applicable law insofar as possible consistent with the intent
of the parties.

6.3Waiver. If either party should waive any
breach of any provisions of this Agreement, that party shall not thereby be
deemed to have waived any preceding or succeeding breach of the same or any
other provision of this Agreement.

6.4Complete Agreement. This Agreement and its
Exhibits constitute the entire agreement between Executive and the Company and
it is the complete, final, and exclusive embodiment of their agreement with
regard to this subject matter and supersedes all prior letter agreements and
understandings between the parties. It is entered into without reliance on any
promise or representation other than those expressly contained herein, and it
cannot be modified or amended except in a writing signed by both the Executive
and at least one member of the Compensation Committee of the Board.

6.5Counterparts. This Agreement may be executed in
separate counterparts, any one of which need not contain signatures of more than
one party, but all of which taken together will constitute one and the same
Agreement.

6.6Headings. The headings of the sections hereof
are inserted for convenience only and shall not be deemed to constitute a part
hereof nor to affect the meaning thereof.

6.7Successors and Assigns. This Agreement is intended to bind and inure to the
benefit of and be enforceable by Executive and the Company, and their respective
successors, assigns, heirs, executors and administrators, except that Executive
may not assign any duties hereunder and may not assign any rights hereunder
without the written consent of the Company, which shall not be withheld
unreasonably.

6.8Choice of Law. All questions concerning the
construction, validity and interpretation of this Agreement will be governed by
the law of the State of California, without regard to such state's conflict-of-
laws rules.

6.9Non-Publication. The parties mutually agree not
to disclose publicly the terms of this Agreement except to the extent that
disclosure is mandated by applicable law or such disclosure is to the parties'
respective attorneys, accountants other advisors, and immediate family.

6.10Agreement Controls. In the event of a conflict
between the text of the Agreement and any summary, description or other
information regarding the Agreement, the text of the Agreement shall
control.

6.11Attorneys' Fees. If either party hereto brings
any action to enforce his or its rights hereunder, each party in any such action
shall be responsible for his or its costs and attorneys fees incurred in
connection with such action.

6.12Tax Withholding. All payments made pursuant to
this Agreement shall be subject to all applicable federal, state and local
income and employment tax withholding.

6.13Arbitration. To ensure rapid and economical
resolution of any and all disputes which may arise under this Agreement, the
Company and Executive each agree that any and all disputes or controversies,
whether of law or fact of any nature whatsoever (including, but not limited to,
all state and federal statutory and common law discrimination claims), with the
sole exception of those disputes which may arise from Executive's
Confidentiality Agreement, arising from or regarding the interpretation,
performance, enforcement or breach of this Agreement, or any other disputes or
claims arising from or related to Executive's employment or the termination of
his employment, shall be resolved by final and binding confidential arbitration
conducted by Judicial Arbitration and Mediation Services Inc. ("JAMS") under the
then existing JAMS Rules of Practice and Procedure; provided that the arbitrator
shall: (a) have the authority to compel adequate discovery for the resolution of
the dispute and to award such relief as would otherwise be permitted by law; and
(b) issue a written arbitration decision including the arbitrator's essential
findings and conclusions and a statement of the award. The Company shall pay all
of Executives' JAMS arbitration fees. In addition to any other relief, the
arbitrator may award to the prevailing party recovery of its attorneys' fees and
costs. Nothing in this Agreement is intended to prevent either Executive or the
Company from obtaining injunctive relief in court to prevent irreparable harm
pending the conclusion of any such arbitration.

6.14Right to Work. As required by law, this offer
of employment is subject to satisfactory proof of Executive's right to work in
the United States.

6.15No Duty to Seek Employment.Executive and
the Company acknowledge and agree that nothing contained in the Agreement shall
be construed as requiring Executive to seek or accept alternative or replacement
employment in the event of his termination of employment by the Company for any
reason, and no payment or benefit payable hereunder shall be conditioned on
Executive's seeking or accepting such alternative or replacement employment.

[Remainder of this page intentionally left blank]

In Witness Whereof, the parties have executed this
Agreement on the day and year first above written.

Axys Pharmaceuticals, Inc. 

 

 

By: /s/ Douglas Altschuler

Name:Douglas Altschuler

Title:V.P./General Counselor

 

 

Accepted and agreed this

                   23rd day of January, 2001

 

/s/ Paul J. Hastings

Paul Hastings

Exhibit A

RELEASE

Certain capitalized terms used in this Release are
defined in the Employment Agreement entered into as of _____________, 2000
between Axys Pharmaceuticals, Inc. and me which I have reviewed.

I 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 my release of any claims I
may have against the Company.

Except as otherwise set forth in this Release, I hereby
release, acquit and forever discharge the Company, its parents and subsidiaries,
and their officers, directors, agents, servants, employees, shareholders,
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 out
of or in any way related to claims and demands directly or indirectly arising
out of my employment with the Company or the termination of that employment,
including but not limited to, claims of intentional and negligent infliction of
emotional distress, any and all tort claims for personal injury, claims or
demands related to salary, bonuses, commissions, or any other ownership
interests in the Company, vacation pay, fringe benefits, expense reimbursements,
severance pay, or any other form of disputed compensation; claims pursuant to
any federal, state or local law or cause of action including, but not limited
to, the federal Civil Rights Act of 1964, as amended; the federal Age
Discrimination in Employment Act of 1967, as amended ("ADEA"); the federal
Employee Retirement Income Security Act of 1974, as amended; the federal
Americans with Disabilities Act of 1990; the California Fair Employment and
Housing Act, as amended; tort law; contract law; statutory law; common law;
wrongful discharge; discrimination; fraud; defamation; and breach of the implied
covenant of good faith and fair dealing; provided, however, that nothing in this
paragraph shall be construed in any way to release the Company from its
obligation to indemnify me from any third party action brought against me based
on my employment with the Company, pursuant to the Company's by-laws, any
applicable agreement or applicable law, or to reduce or eliminate any coverage I
may have under the Company's director and officer liability policy, if any.

I acknowledge that I am knowingly and voluntarily waiving and
releasing any rights I may have under ADEA. I also acknowledge that the
consideration given under the Agreement for the waiver and release in the
preceding paragraph hereof is in addition to anything of value to which I was
already entitled. I further acknowledge that I have been advised by this
writing, as required by the ADEA, that: (A) my waiver and release do not apply
to any rights or claims that may arise on or after the date I execute this
Release; (B) I should consult with an attorney prior to executing this Release;
(C) I have twenty-one (21) days to consider this Release (although I may choose
to voluntarily execute this Release earlier); (D) I have seven (7) days
following the execution of this Release to revoke this Release; and (E) this
Release shall not be effective until the date upon which the revocation period
has expired, which shall be the eighth day after this Release is executed by
me.

Paul Hastings

Date:____________________10Q Q1 2001 EXH10.153

                                                          Exhibit 10.153

AXYS PHARMACEUTICALS, INC.

PLEDGE AGREEMENT

THIS PLEDGE AGREEMENT is made and entered into as of __________ ___, 2000
by Paul Hastings (the "Pledgor"), in favor of Axys
Pharmaceuticals, Inc. (the "Secured Party").

RECITALS

	The Pledgor and the Secured Party have entered into that certain
Promissory Note, dated as of ____________ ___, 2000 (as amended, modified and
supplemented to date, the "Promissory Note").  All capitalized
terms used herein which are not otherwise defined herein shall have the meanings
ascribed to them in the Promissory Note.
	The Pledgor has been granted those certain options to acquire shares of
common stock of the Secured Party as are described on Exhibit A hereto
(such options, the "Pledged Options," and the shares of common
stock which may be issued upon exercise of such options, the "Pledged
Stock").
	As a condition to advancing funds to the Pledgor under the Promissory Note,
the Secured Party has required that the Pledgor grant to the Secured Party a
security interest in the Pledged Options and the Pledged Stock as security for
the obligations of the Pledgor under the Promissory Note and any documents
executed in connection therewith (collectively, the "Loan
Documents").

AGREEMENT

NOW, THEREFORE, in consideration of the premises and in order to
induce the Secured Party to advance funds to the Pledgor, the Pledgor hereby
agrees with the Secured Party and grants as follows: 

	Pledge.  The Pledgor hereby pledges and grants to the Secured
Party a security interest in the following collateral (the "Pledged
Collateral"):

	the Pledged Options and the Pledged Stock and the certificates representing
the Pledged Options and the Pledged Stock, and all dividends, cash, instruments,
chattel paper and other rights, property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the Pledged Options and the Pledged Stock; and 
	all proceeds of the foregoing.

	Security for Performance.  This Pledge Agreement (and all of
the Pledged Collateral) secures the payment of the principal of and the interest
on the advances made under the Promissory Note and the performance of the
Pledgor's obligations pursuant to this Agreement and the other Loan Documents
(the "Obligations").

	Delivery of Pledged Collateral.  All certificates or
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by the Secured Party pursuant hereto and shall be accompanied by
duly executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Secured Party.  The Secured Party shall have the
right, at any time in its discretion and without notice to Pledgor following the
occurrence of an Event of Default, to transfer to or to register in the name of
the Secured Party or any of its nominees any or all of the Pledged Collateral.
In addition, the Secured Party shall have the right at any time to exchange
certificates or instruments representing or evidencing Pledged Collateral for
certificates or instruments of smaller or larger denominations.

	Representations and Warranties.  Pledgor represents and
warrants as follows:

	The delivery of the Pledged Options and, as applicable, the Pledged Stock to
the Secured Party pursuant to this Pledge Agreement creates a valid and
perfected first priority security interest in the Pledged Collateral (other than
cash not in the possession of the Secured Party), securing the payment of the
principle of and the interest on advances made under the Promissory Note and the
performance of Pledgor's obligations pursuant to this Agreement and the other
Loan Documents.
	No consent of any other party (including, without limitation, any creditor
of the Pledgor) and no governmental approval is required either (i) for the
pledge by the Pledgor of the Pledged Collateral pursuant to this Pledge
Agreement or for the execution, delivery or performance of this Pledge Agreement
by Pledgor or (ii) for the exercise by the Secured Party of the voting or other
rights provided for in this Pledge Agreement or the remedies in respect of the
Pledged Collateral pursuant to this Pledge Agreement (except as may be required
in connection with such disposition by laws affecting the offering and sale of
securities generally).

	Further Assurances.  The Pledgor agrees that at any time and
from time to time the Pledgor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable or that the Secured Party may request, in order to perfect and protect
any security interest granted or purported to be granted hereby or to enable the
Secured Party to exercise and enforce its rights and remedies hereunder with
respect to any Pledged Collateral and to carry out the provisions and purposes
hereof.

	Administration of Security.  The following provisions shall
govern the administration of the Pledged Collateral:

	So long as no Event of Default shall have occurred:

(i)The Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Pledged Collateral or any part thereof for
any purpose not inconsistent with the terms of this Pledge Agreement or the
Promissory Note; provided, however, that the Pledgor shall not exercise or
refrain from exercising any such right if, in the Secured Party's judgment, such
action or inaction would have a material adverse effect on the value of the
Pledged Collateral or any part thereof; and provided, further, that the Pledgor
shall give the Secured Party at least thirty (30) days' written notice of the
manner in which he intends to exercise, and the reasons therefor, or the reasons
for refraining from exercising, any such right.

(ii)The Pledgor shall be entitled to receive all cash dividends and other
cash distributions paid or payable with respect to any of the Pledged
Collateral.   Any and all instruments and other property (other than cash or
checks) received, receivable or otherwise distributed in respect of, or in
exchange for, any Pledged Collateral, shall be, and shall be forthwith delivered
to the Secured Party to hold as Pledged Collateral and shall, if received by the
Pledgor, be received in trust for the benefit of the Secured Party, be
segregated from the other property or funds of  Pledgor, and be forthwith
delivered to the Secured Party as Pledged Collateral in the same form as so
received (with any necessary indorsement).

	Upon the occurrence of an Event of Default:

(i)All rights of the Pledgor to exercise the voting and other consensual
rights which he would otherwise be entitled to exercise pursuant to Section
6(a)(i) and to receive the dividends which he would otherwise be authorized to
receive and retain pursuant to Section 6(a)(ii) shall cease, and all such rights
shall, upon notice by the Secured Party to the Pledgor, become vested in the
Secured Party who shall thereupon have the sole right to exercise such voting
and other consensual rights and the sole right to receive and hold as Pledged
Collateral such dividends (and to the extent permissible, apply them to the
Obligations of Pledgor).

(ii)All dividends which are received by the Pledgor contrary to the
provisions of paragraph (i) of this Section 6(b) shall be received in trust for
the benefit of the Secured Party, shall be segregated from other funds of the
Pledgor and shall be forthwith paid over to the Secured Party as Pledged
Collateral in the same form as so received (with any necessary indorsement).

	Transfers and Other Liens; Additional Shares.  The Pledgor
agrees that he will not, except as permitted by this Pledge Agreement or the
Promissory Note:  (i) sell or otherwise dispose of, or grant any option
with respect to, any of the Pledged Collateral, (ii) create or permit to exist
any lien upon or with respect to any of the Pledged Collateral except pursuant
to this Pledge Agreement, or (iii) enter into any other contractual obligations
which may restrict or inhibit the Secured Party's rights or ability to sell or
otherwise dispose of the Pledged Collateral or any part thereof after the
occurrence of an Event of Default.

	The Secured Party Appointed Attorney-in-Fact.  The Pledgor
hereby appoints the Secured Party the Pledgor's attorney-in-fact effective upon
the occurrence of an Event of Default, with full authority in the place and
stead of the Pledgor and in the name of the Pledgor or otherwise, from time to
time in the Secured Party's discretion to take any action and to execute any
instrument which the Secured Party may deem necessary or advisable to accomplish
the purposes of this Pledge Agreement, including, without limitation, to
receive, indorse and collect all instruments made payable to Pledgor
representing any dividend or other distribution in respect of the Pledged
Collateral or any part thereof.

	The Secured Party's Duties; Reasonable Care.  The powers
conferred on the Secured Party hereunder are solely to protect its interest in
the Pledged Collateral and shall not impose any duty on it to exercise any such
powers.  Except for the safe custody of any Pledged Collateral in its possession
and the accounting for monies actually received by it hereunder, the Secured
Party shall have no duty as to any Pledged Collateral.  The Secured Party shall
be deemed to have exercised reasonable care in the custody and preservation of
the Pledged Collateral in its possession if the Pledged Collateral is accorded
treatment that is not materially less protective than that which the Secured
Party accords its own property, it being expressly agreed that the Secured Party
shall have no responsibility for (i) ascertaining or taking action with respect
to calls, conversions, exchanges, maturities, tenders or other matters relative
to any Pledged Collateral, whether or not the Secured Party has or is deemed to
have knowledge of such matters, or (ii) taking any necessary steps to preserve
rights against any parties with respect to any Pledged Collateral, but the
Secured Party may do so at its option and all expenses incurred in connection
therewith shall be payable by and for the sole account of Pledgor.

	Defaults.  The occurrence of any one or more of the following
events or conditions shall constitute an Event of Default under this
Agreement:

	Failure to Perform.  The Pledgor fails to make any principle or
interest payment required pursuant to the Promissory Note or any other Loan
Documents and fails to cure such default within the grace period provided in the
applicable Loan Document.

	Representations and Warranties.  The Pledgor makes or has made or
furnishes or has furnished, any material written warranty, representation or
statement to the Secured Party in connection with this Agreement or any of the
other Loan Documents which is or was false or misleading when made or
furnished.

	Additional Liens; Attachment.  Any lien or encumbrance other than
that created by this Pledge Agreement is placed on, or any levy is made on the
Collateral, or any portion thereof; or the Collateral, or any portion thereof,
is seized or attached pursuant to legal process, and such lien, encumbrance,
levy, seizure, or attachment is not removed or released within sixty (60) days
from the time such lien or encumbrance was placed thereon or such levy, seizure
or attachment was effected.

	Voluntary Bankruptcy.  The Pledgor commences or proposes to commence
any bankruptcy, reorganization or insolvency proceeding, or other proceeding
under any federal, state or other law for the relief of debtors;

	Involuntary Bankruptcy.  The Pledgor fails to obtain dismissal,
within ninety (90) days after commencement thereof, of any bankruptcy,
insolvency, or reorganization proceeding or other proceeding for relief under
any bankruptcy law, including, without limitation, the Federal Bankruptcy Code,
or any law for the relief of debtors, instituted against the Pledgor by one or
more third parties, fails to oppose actively such proceeding, or, in any such
proceeding defaults or files an answer admitting the material allegations upon
which the proceeding was based, or alleges its willingness to have an order for
relief entered or its desire to seek liquidation, reorganization or adjustment
of its debts; and

	Receiver Appointed.  Any receiver, trustee or custodian is appointed
by a court of competent jurisdiction to take possession of all or any
substantial portion of the assets of Pledgor.

	Remedies upon Default.  If any Event of Default shall have
occurred:

	The Secured Party may exercise in respect of the Pledged Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party under applicable uniform
commercial codes, and the Secured Party may also, without notice except as
specified below, sell the Pledged Collateral or any part thereof in one or more
parcels at public or private sale, at any exchange, broker's board or at any of
the Secured Party's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Secured Party may deem commercially
reasonable.  The Pledgor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable to the seller than if such sale
were a public sale.  The Pledgor agrees that, to the extent notice of sale shall
be required by law, at least ten days' notice to the Pledgor of the time and
place of any public sale or the time after which any private sale is to be made
shall constitute reasonable notification.  The Secured Party shall not be
obligated to make any sale of Pledged Collateral regardless of notice of sale
having been given.  The Secured Party may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was
so adjourned.  The Secured Party shall be under no obligation to delay a sale of
any of the shared of Pledged Stock for the period of time necessary to permit
the issuing corporation of such securities to register such securities for
public sale under the Securities Act of 1933, as from time to time amended (the
"Securities Act"), or under applicable state securities laws,
even if the issuing corporation would agree to do so.
	Any cash held by the Secured Party as Pledged Collateral and all cash
proceeds received by the Secured Party in respect of any sale of, collection
from, or other realization upon all or any part of the Pledged Collateral may,
in the discretion of the Secured Party, be held by the Secured Party as
collateral for, and/or then or at any time thereafter applied in whole or in
part by the Secured Party for its benefit against, all or any part of  the
Obligations of the Pledgor pursuant to the Note or this Agreement.  Any surplus
of such cash or cash proceeds held by the Secured Party and remaining after
payment in full of all the Obligations shall be paid over to the Pledgor or to
whomsoever may be lawfully entitled to receive such surplus or as a court of
competent jurisdiction may direct; provided, that in the event that all of the
conditions to the termination of this Pledge Agreement pursuant to Section 13
shall not have been fulfilled, such balance shall be held and applied from time
to time as provided in this subsection 11(b) until all such conditions shall
have been fulfilled.

	Remedies Cumulative.  Each right, power and remedy of the
Secured Party provided in this Pledge Agreement or now or hereafter existing at
law or in equity or by statute or otherwise shall be cumulative and concurrent
and shall be in addition to every other right, power or remedy provided for in
this Pledge Agreement or now or hereafter existing at law or in equity or by
statute or otherwise.  The exercise or partial exercise by the Secured Party of
any one or more of such rights, powers or remedies shall not preclude the
simultaneous or later exercise by the Secured Party of all such other rights,
powers or remedies, and no failure or delay on the part of the Secured Party to
exercise any such right, power or remedy shall operate as a waiver thereof.

	Release; Termination.

	So long as no Event of Default shall have occurred and the requirements of
payment set forth in the Promissory Note are satisfied, the Pledgor may sell
or dispose of any Pledged Collateral, if such sale or disposition is not
prohibited by any terms or conditions of this Pledge Agreement, the Promissory
Note or any other agreement related hereto.  The Secured Party shall upon
request of the Pledgor execute and deliver to the Pledgor a release or releases
in form reasonably satisfactory to the Secured Party to release the lien of this
Pledge Agreement with respect to such Pledged Collateral and assign, transfer
and deliver such Pledged Collateral to the Pledgor.  Such releases and
assignments shall be without warranty by or recourse to the Secured Party,
except as to the absence of any prior assignments by the Secured Party
of its interest in the Pledged Collateral, and shall be at the expense of
the Pledgor.
	This Pledge Agreement shall terminate upon full and complete payment in full
of all Obligations under the Promissory Note, this Pledge Agreement or any other
agreement related hereto.  The Secured Party, at the time of such termination
and at the expense of the Pledgor, will execute and deliver to the Pledgor a
proper instrument or instruments acknowledging the termination of this Pledge
Agreement, and will duly assign, transfer and deliver to the Pledgor such of the
Pledged Collateral as has not yet theretofore been sold or otherwise applied or
released pursuant to this Pledge Agreement, together with any moneys at the time
held by the Secured Party hereunder.  Such assignment and delivery shall be
without warranty by or recourse to the Secured Party, except as to the absence
of any prior assignments by the Secured Party of its interest in the Pledged
Collateral.

	Continuing Security Interest.  This Pledge Agreement shall
create a continuing security interest in the Pledged Collateral and shall
(i) remain in full force and effect until terminated pursuant to Section
13(b), (ii) be binding upon the Pledgor and its heirs, successors and assigns,
and (iii) inure, together with the rights and remedies of the Secured Party
hereunder, to the benefit of the Secured Party, its successors, transferees and
assigns.

	Waiver.  To the fullest extent he may lawfully so agree, the
Pledgor agrees that it will not at any time insist upon, claim, plead, or take
any benefit or advantage of any appraisement, valuation, stay, extension,
moratorium, redemption or similar law now or hereafter in force in order to
prevent, delay, or hinder the enforcement hereof or the absolute sale of any
part of the Pledged Collateral; the Pledgor for itself and all who claim through
him, so far as he or they now or hereafter lawfully may do so, hereby waive the
benefit of all such laws, and all right to have the Pledged Collateral marshaled
upon any foreclosure hereof, and agree that any court having jurisdiction to
foreclose this Pledge Agreement may order the sale of the Pledged Collateral as
an entirety.

	Reinstatement.  This Pledge Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time any amount
received by the Secured Party in respect of Pledgor's Obligations pursuant to
the Promissory Note is rescinded or must otherwise be restored or returned by
the Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Pledgor or upon the appointment of any intervenor or
conservator of, or trustee or similar official for, the Pledgor or any
substantial part of its assets, or otherwise, all as though such payments had
not been made.

	Severability.  The provisions of this Pledge Agreement are
severable, and if any clause or provision shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction and shall not in any manner affect such clause or provision in
any other jurisdiction, or any other clause or provision of this Pledge
Agreement in any jurisdiction.

	Survival of Provisions.  All representations, warranties and
covenants of the Pledgor contained herein shall survive the execution and
delivery of this Pledge Agreement, and shall terminate only upon the full and
final payment and performance by the Pledgor of its indebtedness and obligations
secured hereby.

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

	Governing Law.  This Pledge Agreement shall be construed in
accordance with and all disputes hereunder shall be governed by the laws of the
State of California, without regard to principles of conflicts of laws.

	Amendments.  This Agreement may be amended, modified or
supplemented only by a written instrument signed by the Pledgor and the Secured
Party.

IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to
be duly executed and delivered as of the date first above written.

Pledgor:
 

Paul Hastings
 

Secured Party:

AXYS PHARMACEUTICALS, INC.

By:________________________________

EXHIBIT A

(1)Options to purchase 500,000 shares of the
Company's common stock (the "Time Vesting Options") as described in
Section 2.10 of that certain Employment Agreement dated as of ______________,
2000 between the Company and Pledgor (the "Employment Agreement").

(2)Options to purchase an additional 100,000 shares
of the Company's common stock (the "Performance Vesting Options") as
described in Section 2.10 of the Employment Agreement.

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