Vice President of Research Reporting To Rodney Pearlman Employment Agreement

MEGABIOS CORP. LOGO] BENJAMIN F. MCGRAW, III
CHAIRMAN, PRESIDENT & CEO


April 22, 1998 Revised


John F. Warner, Ph.D. 101 Parkside Dr., Unit #88 Port Moody, B.C. Canada V3H 4W6


Dear John:


This letter is an offer from Megabios Corp. (the "Company") to you for the position of Vice President of Research reporting to Rodney Pearlman, Vice President Research & Development. The offer consists of the following:


1. Annual salary of $170,000.


2. Incentive stock option grant: 65,000 options, each entitling you to
purchase one share of the Company's common stock. The exercise price of
this option is set by the Board of Directors based on the price at which
equity was most recently sold. The option will vest over a four-year
period beginning with the effective date of your employment.


3. The company will reimburse you for relocating you and your household
goods to the San Francisco Bay area, and will sponsor temporary housing
benefits for up to six months. In addition, the Company will provide
housing assistance as outlined on the attached Relocation Program Summary.


4. The Company will pay you a one time signing bonus of $30,000 from which
applicable state and federal taxes will be withheld.


5. You ...