Exhibit 10.2

 

STOCKHOLDER AND REGISTRATION RIGHTS AGREEMENT

 

This STOCKHOLDER AND REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as
of March 31, 2005, by and among Tanox, Inc., a Delaware corporation (the
“Company”), Sunol Molecular Corporation, a Delaware corporation (the “Seller”),
and the parties identified on the signature page of this Agreement
(collectively, the “Initial Holders”).

 

W I T N E S S E T H:

 

WHEREAS, the Company and the Seller have entered into an Asset Purchase and
License Agreement (the “Asset Purchase Agreement”) dated as of March 25, 2005,
whereby the Company purchased certain assets of the Seller (the “Acquired
Assets”);

 

WHEREAS, as part of the consideration for the purchase of the Acquired Assets,
the Company issued to the Seller 800,000 shares of common stock (the “Shares”),
par value $0.01 per share (“Common Stock”) of the Company in a private placement
effected in reliance on the exemption from the registration requirements of the
Securities Act provided by Section 4(2) of the Securities Act and/or Regulation
D thereunder;

 

WHEREAS, as security for the indemnification obligations of the Seller set forth
in the Asset Purchase Agreement, at the Closing, 275,000 of the Shares
(collectively, the “Holdback Shares”) shall be held by the escrow agent under an
Escrow Agreement (the “Escrow Agreement”), as provided in the Asset Purchase
Agreement;

 

WHEREAS, the Seller proposes to transfer to the Initial Holders the number of
Shares of Common Stock for each Initial Holder set forth on the signature page
hereto;

 

WHEREAS, the Asset Purchase Agreement requires each Initial Holder to provide
this Agreement to the Company in connection with the issuance of the Shares of
Common Stock to Seller;

 

NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby with the intention that the Company and its
advisors rely upon the representations and covenants contained herein, the
parties hereto hereby agree as follows:

 

ARTICLE I

Definitions

 

As used herein, the following terms have the indicated meanings, unless the
context otherwise requires:

 

“Closing” has the meaning set forth in the Asset Purchase Agreement.

 

“Closing Date” has the meaning set forth in the Asset Purchase Agreement.

 

“Commission” means the Securities and Exchange Commission.

 

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“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

 

“Holder” means the Seller, an Initial Holder or any Permitted Transferee who
owns Registrable Shares.

 

“Permitted Transferee” means a transferee who acquires Registrable Shares from
an Initial Holder in compliance with applicable securities laws and agrees in
writing to be bound as a Holder by the terms of this Agreement (other than
Article IV), including without limitation the appointment of the Holder
Representative under Section 2.2.

 

“Registrable Shares” means each Share including, from and after disbursement to
Seller of any or all of the Holdback Shares under the Escrow Agreement, each
Holdback Share (together with any shares of Common Stock issued or issuable by
the Company with respect to any such Share or Holdback Share by way of a stock
dividend or other distribution or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or
reorganization) until (A) the earliest of (i) its effective registration under
the Securities Act and resale in accordance with the registration statement
covering it, (ii) expiration of the applicable holding period under Rule 144(k)
under the Securities Act, (iii) its sale to the public pursuant to Rule 144
under the Securities Act, or (iv) the time at which such Shares have ceased to
be outstanding, and (B) as a result of the event or circumstance described in
any of the foregoing clauses (i) through (iii), any legends with respect to
transfer restrictions are removed or removable in accordance with the terms of
such legend.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

 

“Shelf Filing Deadline” means the Share Filing Deadline (as defined in Section
2.1) and the Holdback Share Filing Deadline (as defined in Section 2.1), as
applicable.

 

“Shelf Registration Statement” means the Share Registration Statement (as
defined in Section 2.1) and the Holdback Share Registration Statement (as
defined in Section 2.1), as applicable.

 

ARTICLE II

Registration Rights

 

2.1 Shelf Registration.

 

As soon as reasonably practicable and in any event no later than sixty (60) days
after the Closing Date (the “Share Filing Deadline”), the Company shall file
with the Commission a “shelf” registration statement under the Securities Act
providing for the sale of the Shares (the “Share Registration Statement”). If
the Holdback Shares are not freely tradable in accordance with Rule 144 under
the Exchange Act at the time they are disbursed to Seller under the Escrow
Agreement, the Company shall file with the Commission within sixty (60) days
after such disbursement (the “Holdback Share Filing Deadline”) a shelf
registration statement providing for the sale of the Holdback Shares (the
“Holdback Share Registration Statement”).

 

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2.2 Holder Representative.

 

Each of the Holders hereby appoints the Seller to be the representative (the
“Stockholder Representative”) of the Holders following the Closing Date in any
manner arising out of this Agreement. For any matter in which the Company is
entitled to rely on or otherwise deal with the Holders, the Company shall be
entitled to communicate solely with the Stockholder Representative and shall be
entitled to rely on any such communication as being the desire and will of each
of the Holders. Notice delivered to the Stockholder Representative in accordance
with Section 5.4 hereof shall be deemed to be notice to all of the Holders for
all purposes.

 

2.3 Effectiveness.

 

Subject to the provisions of Section 2.4, the Company shall use its reasonable
best efforts to cause (i) the Shelf Registration Statement to be declared
effective within sixty (60) days after the applicable Shelf Filing Deadline (the
“Effectiveness Target Date”) and shall use reasonable best efforts to keep the
Shelf Registration Statement continuously effective, supplemented and amended to
the extent necessary to assure that it is available for resale of the
Registrable Shares and that it conforms in all material respects with the
requirements of the Securities Act during the entire period (the “Effectiveness
Period”) beginning on the date the Shelf Registration Statement shall first be
declared effective under the Securities Act and ending on the earlier to occur
of (i) the sale pursuant to the Shelf Registration Statement of all of the
Registrable Shares registered under the Shelf Registration Statement and (ii)
the date on which all of the Shares and, if applicable, the Holdback Shares
registered under the Shelf Registration Statement are no longer Registrable
Shares.

 

2.4 Information Furnished by the Stockholder Representative.

 

The Stockholder Representative shall furnish to the Company in writing, as soon
as practicable after the Closing Date, the information specified in Items 507
and 508 of Regulation S-K under the Securities Act with respect to each Initial
Holder and any other information reasonably requested by the Company for
inclusion in the Shelf Registration Statement pursuant to the Securities Act.
Notwithstanding Section 2.1, the Company shall not be required to file the Shelf
Registration Statement until the Stockholder Representative has complied with
the immediately preceding sentence. In addition, the Stockholder Representative
shall promptly furnish to the Company (i) any additional information required to
be disclosed in the Shelf Registration Statement in order to make the
information previously furnished to the Company by the Stockholder
Representative not materially misleading and (ii) any additional information as
may be reasonably requested by the Company for inclusion in any new prospectus
or prospectus supplement or post-effective amendment.

 

2.5 Registration Procedures.

 

(a) In connection with the Shelf Registration Statement, the Company shall
comply with all the provisions of Section 2.5(b) hereof and shall, in accordance
with Sections 2.1, 2.3, and 2.4 hereof, prepare and file with the Commission the
Shelf Registration Statement on an appropriate form under the Securities Act.

 

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(b) In connection with the Shelf Registration Statement and any related
prospectus or prospectus supplement required by this Agreement to permit the
sale or resale of the Shares of Common Stock, the Company shall:

 

(i) Subject to any notice by the Company in accordance with this Section 2.5(b)
of the existence of any fact or event of the kind described in Section
2.5(b)(iii)(D), use its reasonable best efforts to keep the Shelf Registration
Statement continuously effective during the Effectiveness Period; upon the
occurrence of any event that would cause the Shelf Registration Statement or the
related prospectus or prospectus supplement (A) to contain a material
misstatement or omission or (B) not be effective and usable for resale of
Registrable Shares during the Effectiveness Period, the Company shall file
promptly an appropriate amendment or supplement to or a document to be
incorporated by reference into the Shelf Registration Statement or a report
filed with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act, in the case of clause (A), correcting any such misstatement or
omission, and, in the case of either clause (A) or (B), use its reasonable best
efforts to cause any such amendment to be declared effective and the Shelf
Registration Statement and the related prospectus or prospectus supplement to
become usable for their intended purposes as soon as practicable thereafter.
Notwithstanding anything in this Agreement to the contrary, the Company may
suspend the effectiveness or use of and elect not to keep current the Shelf
Registration Statement by written notice to the Stockholder Representative, for
a period not to exceed an aggregate of thirty (30) days in any 90-day period
(each such period a “Suspension Period”) if:

 

(A) an event occurs and is continuing as a result of which the Shelf
Registration Statement would, in the Company’s reasonable judgment, contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
and

 

(B) the Company reasonably determines that the disclosure of such event at such
time would or could reasonably be expected to either (i) have a material adverse
effect on the business or prospects of the Company and its subsidiaries, taken
as a whole, or (ii) adversely affect a material financing, acquisition or other
transaction (existing or planned);

 

provided, that (A) in the event the disclosure relates to a previously
undisclosed proposed or pending material business transaction, the disclosure of
which would impede the Company’s ability to consummate such transaction, the
Company may extend a Suspension Period from thirty (30) days to forty five (45)
days and (B) the Suspension Periods shall not exceed an aggregate of ninety (90)
days in any 365-day period. The Holders, by their acquisition of a Registrable
Share, agree to hold in confidence any communication by the Company relating to
an event described in Section 2.5(b)(i)(x) and (y) or Section 2.5(b)(iii)(D).

 

(ii) Prepare and file with the Commission such amendments and post-effective
amendments to the Shelf Registration Statement as may be necessary to keep the
Shelf Registration Statement effective during the Effectiveness Period; cause
the related prospectus to be supplemented by any required prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the Securities
Act, and to comply fully with the applicable provisions of Rules 424 and 430A
under the Securities Act in a timely manner (or any successor rules); and

 

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comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by the Shelf Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in the Shelf Registration
Statement or supplement to the prospectus.

 

(iii) Advise the Stockholder Representative, promptly:

 

(A) when the prospectus or any prospectus supplement or post-effective amendment
has been filed, and, with respect to the Shelf Registration Statement or any
post-effective amendment thereto, when the same has become effective;

 

(B) of any request by the Commission for amendments to the Shelf Registration
Statement or amendments or supplements to the prospectus or for additional
information relating thereto;

 

(C) of the issuance by the Commission of any stop order suspending the
effectiveness of the Shelf Registration Statement under the Securities Act or of
the suspension by any state securities commission of the qualification of the
Registrable Shares for offering or sale in any jurisdiction, or the initiation
of any proceeding for any of the preceding purposes; or

 

(D) of the existence (but not the nature) of any fact or the happening of any
event, during the Effectiveness Period, that makes any statement of a material
fact made in the Shelf Registration Statement, the related prospectus, any
amendment or supplement thereto, or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes in
the Shelf Registration Statement, the related prospectus or any amendment or
supplement thereto in order to make the statements therein not misleading.

 

If at any time the Commission shall issue any stop order suspending the
effectiveness of the Shelf Registration Statement, or any state securities
commission or other regulatory authority shall issue an order suspending the
qualification or exemption from qualification of the Registrable Shares under
state securities or Blue Sky laws, the Company shall use its reasonable best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.

 

(iv) If requested by the Stockholder Representative, incorporate in the Shelf
Registration Statement or prospectus, pursuant to a prospectus supplement or
post-effective amendment, if necessary, such non-confidential information as the
Stockholder Representative may reasonably request to have included therein,
including, without limitation: (1) information relating to the “Plan of
Distribution” of the Registrable Shares, (2) information with respect to the
number of Registrable Shares being sold, (3) the purchase price being paid
therefor and (4) any other terms of the offering of the Registrable Shares to be
sold in such offering; and make all required filings of such prospectus
supplement or post-effective amendment as soon as reasonably practicable after
the Company is notified of the matters to be incorporated in such prospectus
supplement or post-effective amendment.

 

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(v) Furnish to the Stockholder Representative, without charge, at least one copy
of the Shelf Registration Statement, as first filed with the Commission, and of
each amendment thereto (and any documents incorporated by reference therein or
exhibits thereto (or exhibits incorporated in such exhibits by reference) as
such person may request in writing).

 

(vi) Deliver to the Stockholder Representative, without charge, as many copies
of the prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such person reasonably may request.

 

(vii) Use its reasonable best efforts to cause the Registrable Shares to be
quoted on Nasdaq or listed or quoted on any other securities exchange or an
automated quotation system on which the Common Stock is then listed or quoted.

 

(viii) Cooperate with the Stockholder Representative to facilitate the timely
preparation and delivery of certificates representing Registrable Shares to be
sold and not bearing any restrictive legends (unless required by applicable
securities laws); and enable such Registrable Shares to be in such denominations
and registered in such names as the Stockholder Representative may reasonably
request within a reasonable time before any sale of Registrable Shares.

 

(ix) Subject to Section 2.5(b)(i) hereof, if any fact or event contemplated by
Section 2.5(b)(iii)(D) hereof shall exist or have occurred, use its reasonable
best efforts to prepare a supplement or post-effective amendment to the Shelf
Registration Statement or related prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Registrable Shares, the prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading.

 

(c) The Stockholder Representative and each Holder agrees that, upon receipt of
any notice from the Company of the existence of any fact of the kind described
in Section 2.5(b)(iii)(D) hereof, the Stockholder Representative and each Holder
will forthwith discontinue disposition of Registrable Shares pursuant to such
Shelf Registration Statement until:

 

(i) the Stockholder Representative has received copies of the supplemented or
amended prospectus contemplated by Section 2.5(b)(xiii) hereof; or

 

(ii) the Stockholder Representative is advised in writing by the Company that
the use of the prospectus may be resumed.

 

2.6 Stop Transfer Instructions.

 

The Company may give such stop transfer instructions to its transfer agent as it
shall deem reasonably necessary to prevent any sale of Registrable Shares under
the Shelf Registration Statement at any time when the Holders are not permitted
to make such a sale pursuant to this Agreement.

 

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2.7 No Piggyback or Other Registration Rights.

 

Other than as set forth in this Agreement, the Holders shall have no
registration rights with respect to Registrable Shares beneficially owned by
such Holder (including any “piggyback” registration rights). In addition, the
Company shall not be required to include any shares of its Common Stock owned or
acquired by the Holders for resale under the Shelf Registration Statement other
than the Registrable Shares.

 

2.8 Registration Expenses.

 

The Company shall bear all expenses incident to the filing of the Shelf
Registration Statement, including without limitation: (i) all registration and
filing fees and expenses; (ii) all fees and expenses of compliance with federal
securities and state Blue Sky or securities laws; (iii) all fees and
disbursements of counsel for the Company; (v) all application and filing fees in
connection with listing or quoting, as the case may be, the Common Stock on
Nasdaq or other securities exchange or automated quotation system on which the
Common Stock is then listed or quoted; and (vi) all fees and disbursements of
independent certified public accountants of the Company; provided, however, the
Holders shall bear the all the cost of (x) any discount or selling commission
incurred in connection with the sale of any of the Shares of Common Stock and
(y) any fees and disbursements of counsel for the Holders or any other
professional advisors engaged by the Holders.

 

2.9 Rule 144.

 

The Company covenants that it will file at times chosen by the Company any
reports required to be filed by it under Section 13 or 15(d) of the Exchange
Act, all to the extent required from time to time to enable the Holders to sell
Registrable Shares without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 under the Securities Act, as
such Rule may be amended from time to time (or any similar rule or regulation
hereafter adopted by the Commission). Upon the reasonable request of the
Stockholder Representative, the Company will deliver to the Stockholder
Representative a written statement as to whether it has complied with such
requirements. The Company further covenants that, upon the request of the
Stockholder Representative, it will take any further actions reasonably
necessary to permit the Holders to transfer the Shares of the Common Stock under
Rule 144, including, without limitation, causing any restrictive legends to be
removed from any certificates representing Shares of Common Stock in accordance
with the terms of such legends.

 

2.10 Indemnification.

 

(a) For purposes of this Section 2.10, the following terms shall have the
following meanings (as modified, if applicable, by successor rules adopted by
the Commission):

 

(i) “Preliminary Prospectus” means any preliminary prospectus supplement to the
base prospectus included in the Shelf Registration Statement, together with such
base prospectus, that describes the Common Stock and the offering thereof, filed
with the Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Securities Act and used prior to the filing of the
Prospectus.

 

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(ii) “Prospectus” means the final prospectus supplement, in the form first filed
pursuant to Rule 424(b) under the Securities Act, together with the base
prospectus included in the Shelf Registration Statement; and any reference
herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 under the Securities Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; and any reference to any amendment
or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Exchange Act.

 

(iii) “Registration Statement” means the various parts of the Shelf Registration
Statement, including all exhibits thereto and including (i) the information
contained in the form of final prospectus supplement to the base prospectus
included in the Shelf Registration Statement, filed with the Commission after
the date hereof pursuant to Rule 424(b) under the Securities Act in accordance
with this Agreement and deemed by virtue of Rule 430A under the Securities Act
to be part of the Shelf Registration Statement at the time it was declared
effective and (ii) the documents incorporated by reference in such final
prospectus supplement.

 

(b) The Company will indemnify and hold harmless the Holders against any losses,
claims, damages or liabilities, joint or several, to which the Holders may
become subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse the Holders for any legal or other expenses reasonably
incurred by the Holders in connection with defending any such action or claim
promptly after such expenses are incurred; provided, however, the Company shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to Company by the Holders expressly for use therein.

 

(c) The Holders will indemnify and hold harmless the Company against any losses,
claims, damages or liabilities to which the Company may become subject, under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, Registration Statement or Prospectus, or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, Registration Statement or Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by the Holders expressly for use therein; and will reimburse the
Company for any legal or other expenses reasonably incurred by the Company in
connection with defending any such action or claim as such expenses are
incurred.

 

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(d) Promptly after receipt by an indemnified party under Sections 2.10(b) or (c)
above of notice of the commencement of any action, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party under
such subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and, after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. The indemnifying party shall not, in connection with any
one action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for (i) the fees and expenses of more than one separate firm of attorneys
for the Company, its directors, its officers and all persons, if any, who
control the Company within the meaning of the Securities Act and (iii) the fees
and expenses of more than one separate firm of attorneys for all Holders and all
persons, if any, who control any Holder within the meaning of the Securities
Act. No indemnifying party shall, without the written consent of the indemnified
party, effect the settlement or compromise of, or consent to the entry of any
judgment with respect to, any pending or threatened action or claim in respect
of which indemnification or contribution may be sought hereunder (whether or not
the indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.

 

(e) If the indemnification provided for in this Section 2.10 is unavailable to
or insufficient to hold harmless an indemnified party under Sections 2.10(b) or
(c) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative fault of the
Company, on the one hand, and the Holders, on the other hand, in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The amount paid or payable by an indemnified party as
a result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this Section 2.10(e) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with defending any such action or claim. Notwithstanding the
provisions of this Section 2.10(e), the Holders shall not be required to
contribute any amount in excess of the amount by which the aggregate
consideration received by

 

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the Holders from the sale of any Registrable Shares pursuant to the Shelf
Registration Statement exceeds the amount of any damages which the Holders have
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

 

(f) The obligations of the Company under this Section 2.10 shall be in addition
to any liability which the Company may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Holder
within the meaning of the Securities Act; and the obligations of the Holders
under this Section 2.10 shall be in addition to any liability which the Holders
may otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company and to each person, if any, who controls the
Company within the meaning of the Securities Act.

 

2.11 Lock-up Agreements.

 

Notwithstanding any provision herein to the contrary, if the Company at any time
shall register shares of its Common Stock or securities that are convertible,
exchangeable or exercisable into or for shares of its Common Stock under the
Securities Act for sale in an underwritten offering of its securities, then to
the extent requested by the underwriters for such offering, the Holders shall
not, and shall cause their affiliates not to, sell, make any short sale of,
grant any option for the purchase of, or otherwise dispose of, directly or
indirectly, any shares of common stock of the Company without the prior written
consent of the underwriters, for a period designated by the managing underwriter
in writing to the Holders prior to the beginning of such period, which period
shall (i) begin not more than three business days prior to the effectiveness of
the registration statement pursuant to which such underwritten offering shall be
made (or within three business days prior to the execution of the applicable
underwriting agreement in the case of an offering pursuant to Rule 415 under the
Securities Act) and (ii) end not more than ninety (90) days after the closing of
such underwritten offering or such shorter lockup period to which the Company or
any other stockholders of the Company holding at least 5% of the shares of
Common Stock of the Company (on a fully diluted basis) are subject. If
requested, the Holders will enter into an agreement with the underwriters to the
foregoing effect.

 

ARTICLE III

Restrictions on Resale of Common Stock

 

3.1 Issuance Not Registered.

 

Each Initial Holder understands and acknowledges that the issuance of shares of
Common Stock under the Asset Purchase Agreement was not registered under the
Securities Act and constituted a private placement transaction effected in
reliance on an exemption from the registration requirements of the Securities
Act and in reliance on exemptions from the qualification requirements of
applicable state securities laws. Each Initial Holder acknowledges that such
shares of Common Stock will be “restricted securities” under federal and state
securities laws and must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available and unless such Initial Holder

 

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complies with the restrictions set forth in this Agreement. Each Initial Holder
represents and acknowledges that such Initial Holder is familiar with Rule 144
of the Securities Act as presently in effect and understands the restrictions
and resale limitations imposed thereby and by the Securities Act.

 

3.2 Limitations on Transfer.

 

Each Initial Holder understands and agrees not to make any disposition of all or
any portion of the Shares of Common Stock unless (a) pursuant to registration
under the Securities Act or (b) pursuant to an available exemption from
registration.

 

3.3 Restrictive Legend.

 

The certificates representing the Shares of Common Stock shall bear, in addition
to any other legends required under applicable state securities laws, the
following legend:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR UNDER ANY APPLICABLE STATE SECURITIES LAWS.
THESE SECURITIES MAY NOT BE SOLD, OFFERED, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED EXCEPT (I) PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION AND (II) IN ACCORDANCE WITH
THE RESTRICTIONS AND CONDITIONS SET FORTH IN A STOCKHOLDER AND REGISTRATION
RIGHTS AGREEMENT BY AND BETWEEN THE ISSUER, SUNOL MOLECULAR CORPORATION AND THE
HOLDER OF THESE SECURITIES. A COPY OF SUCH STOCKHOLDER AND REGISTRATION RIGHTS
AGREEMENT SHALL BE FURNISHED BY THE ISSUER TO THE HOLDER HEREOF UPON WRITTEN
REQUEST. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL, IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER, TO THE EFFECT THAT ANY
SALE OR TRANSFER OF THESE SECURITIES WILL BE IN COMPLIANCE WITH THE SECURITIES
ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

 

In order to prevent any transfer from taking place in violation of this
Agreement or applicable law, the Company may cause a stop transfer order to be
placed with its transfer agent with respect to the Shares of Common Stock. The
Company will not be required to transfer on its books any Shares of Common Stock
that have been sold or transferred in violation of any provision of this
Agreement or applicable law.

 

ARTICLE IV

Representations of the Initial Holders

 

Each Initial Holder, individually and not jointly or jointly and severally, on
behalf of itself and not the other Initial Holders, certifies and represents to
the Company as follows:

 

4.1 Authority of the Initial Holders.

 

Such Initial Holder has all necessary capacity, power and authority to execute
and deliver this Agreement, to carry out such Initial Holder’s obligations
hereunder and to consummate the transactions contemplated hereby.

 

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4.2 Execution and Delivery by the Initial Holders.

 

The execution and delivery of this Agreement by such Initial Holder, the
performance by the Initial Holder of such Initial Holder’s obligations hereunder
and the consummation by such Initial Holder of the transactions contemplated
hereby have been duly authorized by all requisite action, if any is required on
the part of such Initial Holder. This Agreement has been duly executed and
delivered by such Initial Holder, and constitutes a legal, valid and binding
obligation of such Initial Holder enforceable against such Initial Holder in
accordance with its terms.

 

4.3 Investment Intent.

 

Such Initial Holder will acquire the shares of Common Stock issued in connection
with the Asset Purchase Agreement for the Initial Holder’s own account for
investment and not with a view to, or for resale in connection with, the
distribution thereof, except as permitted by this Agreement. Such Initial Holder
has no present intent of distributing any portion of such Shares of Common Stock
(or any interest therein) in violation of applicable securities laws. Such
Initial Holder understands that the shares of Common Stock so issued to the
Initial Holder will not be registered under the Securities Act by reason of a
specific exemption from the registration provisions of the Securities Act which
depends upon, among other things, the bona fide nature of such Initial Holder’s
investment intent as expressed herein. The Initial Holder has not been formed to
acquire the shares of Common Stock issuable to the Initial Holder.

 

4.4 Investment Experience and Status.

 

Such Initial Holder has such knowledge and experience in financial and business
matters that such Initial Holder is capable of evaluating the merits and risks
of an investment in the Common Stock and protecting such Initial Holder’s own
interests in connection with such investment.

 

4.5 Information.

 

Such Initial Holder acknowledges that such Initial Holder is sufficiently aware
of the Company’s business affairs and financial condition and has had the
opportunity to acquire sufficient information about Company to reach an informed
and knowledgeable decision to acquire the Common Stock. Such Initial Holder has
relied upon, and is making his investment decision based upon, the information
made available to the Initial Holder and other information publicly available
about the Company.

 

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4.6 No General Solicitation.

 

Such Initial Holder is not acquiring the Shares of Common Stock as a result of
any general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act), including advertisements, articles,
notices or other communications published in any newspaper, magazine or similar
media or broadcast over radio or television, or any seminar or meeting whose
attendees have been invited by general solicitation or general advertising.

 

4.7 Professional Advice.

 

With respect to the tax and other economic considerations involved in acquiring
the Common Stock, such Initial Holder is not relying on the Company, and such
Initial Holder has carefully considered and has, to the extent the Initial
Holder believes such discussion necessary, discussed with the Initial Holder’s
professional legal, tax, accounting and financial advisors the implications of
acquiring the Common Stock for the Initial Holder’s particular tax, financial
and accounting situation.

 

ARTICLE V

Miscellaneous

 

5.1 Binding Effect; Assignability.

 

Unless otherwise provided herein, the provisions of this Agreement shall be
enforceable by, binding upon and accrue to the benefit of the parties hereto and
their respective heirs and legal representatives and permitted transferees,
successors and assigns.

 

5.2 Amendment.

 

This Agreement may be amended or terminated only by a written instrument signed
by the Company and each Holder that at the time of such amendment or termination
holds any Registrable Shares.

 

5.3 Applicable Law.

 

The internal laws of the State of Delaware applicable to contracts entered into
and performed solely in such state shall govern the interpretation, validity and
performance of the terms of this Agreement.

 

5.4 Notices.

 

All notices provided for herein shall be in writing and shall be deemed to have
been duly given if delivered personally or sent by facsimile or by registered or
certified mail, postage prepaid:

 

(i) if to the Company, to:

 

      Tanox, Inc.

      10301 Stella Link

      Houston, Texas 77025

      Attention: President

      Facsimile No.: (713) 578-5000

 

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(ii) if to the Holders, to the Stockholder Representative:

 

      Sunol Molecular Corporation

      2810 North Commerce Parkway

      Miramar, FL 33025-3958

      Attention: Hing C. Wong, Ph.D.

      Facsimile No.: (954) 443-8610

 

5.5 Counterparts.

 

This Agreement may be executed and delivered in one or more counterparts
(including by facsimile transmission), each of which shall be deemed to be an
original and all of which together shall be deemed to be one instrument.

 

5.6 Severability.

 

If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants, and restrictions of this
Agreement shall remain in full force and effect.

 

5.7 Entire Agreement.

 

This Agreement constitutes the entire agreement between the parties with respect
to the subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.

 

[SIGNATURES ON THE FOLLOWING PAGE]

 

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

 

TANOX, INC. By:   Nancy T. Chang Title:   President & CEO SUNOL MOLECULAR
CORPORATION By:   Hing C. Wong Title:   Chairman and CEO HOLDER: Donald H.
Baxter Name:   Donald H. Baxter HOLDER: Banc One Equity Capital SBIC Fund II,
LLC Name:   Theodora Stojka, Vice President HOLDER: Evelyn M. Tai Name:   Evelyn
M. Tai HOLDER: Jin Li Zhou Name:   Jin Li Zhou HOLDER: Christopher D. & Hsin H.
Lu Name:   Christopher D. & Hsin H. Lu

 

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HOLDER: Cape 1998 Trust Name:   Ronald Cape, Trustee HOLDER: ISA Venture Capital
Corp. Name:   Chang Fwu-Tang HOLDER: Kao Feng Ling Name:   Kao Feng Ling HOLDER:
TVM IV GmbH & Co. KG Name:   [Illegible] HOLDER: Doris Kia Name:   Doris Kia
HOLDER: Ming M. Wu Revocable Trust Name:   Ming M. Wu HOLDER: Peter C. Thomas
Name:   Peter C. Thomas

 

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HOLDER: Penelope C. Thomas Name:   Penelope C. Thomas HOLDER: Emily T. Lu TTEE
U/A Name:   Emily T. Lu HOLDER: Ducio Limited Name:   [Illegible] HOLDER: Sonia
F.F. Lai Name:   Sonia F.F. Lai HOLDER: Man-Li Wang Trust Name:   [Illegible]
HOLDER: Ronald F. Rohe Name:   Ronald F. Rohe HOLDER: Peng Hsili Jen Name:  
[Illegible]

 

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HOLDER: Jeffrey D. Janke Name:   Jeffrey D. Janke HOLDER: Siu-Bing Wang, Yip-Kun
Lee Name:   Siu-Bing Wang, Yip-Kun Lee HOLDER: David Kung Name:   David Kung
HOLDER: Song Y. Lee, Karla H. Lee Name:   Song Y. Lee, Karla H. Lee HOLDER:
Min-Mei Chen Name:   Min-Mei Chen HOLDER: Chun-fan Chen Name:   Chun-fan Chen
HOLDER: Edith Chen, POA Name:   Edith Chen

 

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HOLDER: Emma Chen, POA Name:   Emma Chen HOLDER: Lasertech Holdings Investment
Limited Name:   [Illegible] HOLDER: Pan Pacific Investment Co., Ltd. Name:  
[Illegible] HOLDER: Jin Y. Yu, POA Name:   Melissa Yu HOLDER: Jin Y. Yu, POA
Name:   Steven Yu HOLDER: Jin Y. Yu Name:   Jin Y. Yu HOLDER: Li Hui Yu Name:  
Li Hui Yu

 

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HOLDER: Hoi-Sang Yeung, Hing Yu Yueng Name:   Hoi-Sang Yeung, Hing Yu Yueng
HOLDER: Stanley Y. Yu Name:   Stanley Y. Yu HOLDER: F.H. Lin Name:   F.H. Lin
HOLDER: Audin & Doris Lin Name:   Audin & Doris Lin HOLDER: Chi-Chi-Chiu Mei-Li
Lin Name:   Chi-Chi-Chiu Mei-Li Lin HOLDER: Ray Cheng Revocable Trust Name:  
Ray Cheng HOLDER: Kwei-Mei Tseng Name:   Kwei-Mei Tseng

 

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HOLDER: Pocantico Corporation Name:   Kwei-Mei Tseng HOLDER: Tao-Chun Lee Name:
  [Illegible] HOLDER: Bee Yau Huang & Hing C. Wong Name:   Bee Yau Huang & Hing
C. Wong HOLDER: Maxwell Holdings LLC Name:   William E. Conway, Jr., Managing
Member HOLDER: Chris & Ling Cheung Name:   Chris & Ling Cheung HOLDER:
Technology Directors XIOS LL Name:   [Illegible] HOLDER: Teong Hwang, Chad L.
Hwang Name:   Teong Hwang, Chad L. Hwang

 

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HOLDER: Delta Investment Group Partnership Name:   Yeh Bin Wu HOLDER: Yeh Bin Wu
Name:   Yeh Bin Wu HOLDER: Barjil Partners Name:   Yeh Bin Wu HOLDER: Industrial
Bank of Taiwan Name:   Kenneth C.M. Lo HOLDER: Chris Cheung & Ling Cheung Name:
  Chris Cheung & Ling Cheung HOLDER: John Wu Revocable Trust Name:   John Wu
HOLDER: David Kung Name:   David Kung

 

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HOLDER: Michael L. Jones Name:   Michael L. Jones HOLDER: Jang H. Hsiao Name:  
Jang H. Hsiao HOLDER: Shurway Capital Corporation Name:   K.W. McArthur,
Chairman HOLDER: Fu Jen Wang, Pin Pin Wang Name:   Fu Jen Wang, Pin Pin Wang
HOLDER: Garrett Capital Advisors Name:   James G. Connelly, III, Managing
Partner HOLDER: Siu-Bing Wong, Yip-Kun Lee Name:   Siu-Bing Wong, Yip-Kun Lee
HOLDER: Eduardo Yi, Mariana Yi Name:   Eduardo Yi, Mariana Yi

 

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HOLDER: Wachovia Bank of NC & Gordon Gray, Jr. Trust Name:   C. Boyden Gray
HOLDER: Wachovia Bank of NC & Clayland Boyden Gray TTEE U/A Name:   C. Boyden
Gray HOLDER: C. Boyden Gray Name:   C. Boyden Gray HOLDER: Stoll Family Limited
Partnership #1 Name:   Charles S. Stoll, G.P.

 

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