Exhibit 10.2

AGREEMENT

This Agreement (this “Agreement”) is entered into effective as of May 18, 2006,
by and among Eastbourne Capital Management, L.L.C. (“ECM”), Black Bear Offshore
Master Fund, L.P., a Cayman Islands limited partnership (“BBOM”), Black Bear
Fund I, L.P., a California limited partnership (“BB I”), Black Bear Fund II,
L.L.C., a California limited liability company (“BB II”), and Richard J. Barry
(“Barry,” and together with ECM, BBOM, BB I and BB II, “Eastbourne”) and Telik,
Inc., a Delaware corporation (the “Company”). Capitalized terms not defined
herein will have the meaning given in the Rights Agreement, dated November 2,
2001, by and between the Company and Wells Fargo Bank Minnesota, N.A., replaced
by Computershare Shareholder Services, Inc. and Computershare Trust Company,
N.A., as Rights Agent (the “Rights Agreement”).

A. As of May 17, 2006, Eastbourne had Beneficial Ownership, in the aggregate, of
approximately 10,449,084 shares of the Company’s Common Stock, $0.01 par value
per share (the “Common Stock”).

B. Except as otherwise disclosed in the most recent Schedule 13G filed by
Eastbourne, Eastbourne’s Beneficial Ownership of the Common Stock is primarily
attributable to investment power exercisable by ECM with respect to shares of
the Common Stock managed for its clients.

C. Eastbourne has indicated to the Company that it desires to purchase
additional shares of the Common Stock on behalf of its clients and itself in
amounts likely to cause Eastbourne’s Beneficial Ownership to exceed 20% of the
issued and outstanding shares of the Common Stock.

D. Pursuant to Section 1 of the Rights Agreement, a Person who or which,
together with all Affiliates and Associates (each as defined in the Rights
Agreement), becomes the Beneficial Owner of 20% or more of the issued and
outstanding Common Stock is an “Acquiring Person” for purposes of the Rights
Agreement.

E. The Company has determined that purchases of a limited number of additional
shares of the Common Stock by Eastbourne pursuant to the terms of this Agreement
would not currently be adverse or hostile to the Company or inconsistent with
the purpose and intent of the Board of Directors of the Company in adopting the
Rights Agreement.

Accordingly, in consideration of the foregoing premises and the mutual
covenants, representations and warranties contained in this Agreement,
Eastbourne and the Company agree as follows:

1. Representations and Warranties of Eastbourne. ECM, BBOM, BB I, BB II and
Barry jointly and severally represent and warrant to, and agree with, the
Company as follows:

(a) Assuming that a report pursuant to Section 13(g) of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder (the “Exchange
Act”) were required to have been filed as of May 17, 2006, Eastbourne would have
reported Beneficial

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Ownership of an aggregate of 10,449,084 shares of the Common Stock (the
“Original Shares”) consisting of approximately 19.9% of the issued and
outstanding shares of the Common Stock as of such date (assuming that 52,253,223
shares of Common Stock are issued and outstanding), subject to such disclaimers
of Beneficial Ownership by Eastbourne that may have been made pursuant to such
Section and the rules and regulations thereunder.

(b) As of the date hereof, Eastbourne’s Beneficial Ownership of the Common Stock
does not exceed 20% of the issued and outstanding Common Stock, assuming that
52,253,223 shares of Common Stock are issued and outstanding.

(c) Each Eastbourne entity has been provided with access to, or has received, a
copy of, and is familiar with the terms of, the Rights Agreement.

(d) The Original Shares were acquired (i) in the ordinary course of business
solely for investment purposes, (ii) not for the purpose of, and do not have the
effect of, changing or influencing the control of the Company and (iii) not in
connection with or as a participant in any transaction having such purposes or
effect.

(e) With the exception of ECM’s other clients, and their fiduciaries, to the
knowledge of ECM, BBOM, BB I, BB II and Barry, no Person other than Eastbourne
is a Beneficial Owner of any of the Original Shares.

(f) Any additional shares of the Common Stock purchased by ECM, BBOM, BB I, BB
II or Barry or their affiliates after the date hereof (the “Additional Shares,”
and together with the Original Shares, the “Eastbourne Shares”) will be acquired
(i) in the ordinary course of business solely for investment purposes, (ii) not
for the purpose of, or with the effect of, changing or influencing the control
of the Company and (iii) not in connection with or as a participant in any
transaction having such purpose or effect.

(g) The Company has not induced, and is not inducing, Eastbourne or their
affiliates, or the clients of ECM, to purchase any additional shares of the
Common Stock and has not made and is not making any representation to Eastbourne
or the clients of ECM as to the value of the Common Stock, the suitability of
the Common Stock for investment by Eastbourne or the clients of ECM, or the past
or future results of the Company’s business and operations.

(h) ECM has sole voting and investment control over all of the Original Shares
and will have sole voting and investment control over any Additional Shares.

2. Voting of Shares. ECM shall vote the Original Shares in the manner in which
the Board of Directors of the Company has recommended generally in any proxy or
consent solicitation to the stockholders of the Company, subject to ECM’s
fiduciary duty to its clients. ECM shall vote the Additional Shares in the
manner in which the Board of Directors of the Company has recommended generally
in any proxy or consent solicitation to the stockholders of the Company.

3. Sale of Shares. In the event that, within five (5) years after the date
hereof, any of ECM, BBOM, BB I, BB II or Barry proposes to sell in a bona fide
transaction any shares of the Common Stock (other than (i) a sale in a “broker’s
transaction” or in a transaction directly with a

 

2.

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“market maker,” in either case as defined in and in a manner of sale consistent
with paragraphs (f) and (g) of Rule 144 promulgated under the Securities Act of
1933, as amended (the “1933 Act”), or (ii) in a sale from one ECM client to
another ECM client), then Eastbourne shall provide to the Company not less than
ten (10) days prior written notice of such proposed transaction, specifying the
number of shares of the Common Stock proposed to be sold, the price at which
such shares are to be sold and the proposed purchaser of such shares, and shall
only complete such sale with the written consent of the Company (the “Consent”),
such Consent to be provided or withheld at the Company’s sole discretion and
without regard to the economic consequences of providing or withholding such
Consent. ECM, BBOM, BB I, BB II and Barry shall jointly and severally indemnify
and hold harmless the Company and its representatives and employees from and
against any liability, demand, cost of judgment or claim to which the Company
may become subject (regardless of whether or not such liability, demand, cost or
claim relates to any third party claim) that arises out of or relates to the
providing or withholding of any Consent. The obligations of ECM, BBOM, BB I, BB
II and Barry in the preceding sentence shall be in effect regardless of whether
this Section 3 is otherwise in effect and survive the expiration or termination
of this Agreement. The parties acknowledge that nothing in this Agreement,
including, without limitation, this section 3, implies that Eastbourne is an
affiliate of the Company as that term is defined in Rule 144 under the 1933 Act.

 

4. Standstill. ECM, BBOM, BB I, BB II and Barry jointly and severally agree with
the Company that none of them shall:

(a) make, offer or propose (whether publicly or otherwise) to effect, initiate,
cause or participate in (i) any acquisition of Beneficial Ownership of the
Common Stock resulting in an increase in its aggregate Beneficial Ownership of
the Common Stock to a number of shares representing 25% or more of the
outstanding shares of the Common Stock at any time without the prior written
consent of the Company, (ii) any acquisition of any assets, indebtedness or
businesses of the Company or any assets, indebtedness or businesses of any
subsidiary or other affiliate of the Company, (iii) any tender offer, exchange
offer, merger, business combination, recapitalization, restructuring,
liquidation, dissolution or extraordinary transaction involving the Company or
any subsidiary or other affiliate of the Company, or involving any securities,
assets, indebtedness or businesses of the Company or any securities, assets,
indebtedness or businesses of any subsidiary or other affiliate of the Company
(it being understood that “participate” does not preclude Eastbourne and its
clients from tendering shares in any transaction described in this clause
(iii) as long as Eastbourne is passive in such transaction and otherwise has
complied with this section 4 with respect to such transaction), (iv) any
“solicitation” of “proxies” or stockholder consents (as such terms are defined
under Regulation 14A of the Exchange Act) with respect to any securities of the
Company or any of its subsidiaries or other affiliates of the Company or (v) any
stockholder proposals or recommendations or nominations for election to the
Board of Directors of the Company that would require disclosure in the Company’s
proxy statement prepared in connection with its annual meetings of stockholders;

(b) form, join or in any way participate in a “group” (within the meaning of
Section 13(d)(3) of the Exchange Act) with respect to any securities of the
Company or any of its subsidiaries, or otherwise act in concert with any person
in respect to any such securities, except that the ECM clients may be considered
to be a “group”;

 

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(c) otherwise act, whether alone or in concert with others, to seek to propose
to the Company, any subsidiary of the Company or any of their stockholders any
merger, business combination, restructuring, recapitalization or similar
transaction to or with the Company or any of its subsidiaries or otherwise seek
or propose to influence or control the Company’s management, Board of Directors
or policies or to obtain representation on the Company’s Board of Directors;

(d) take any action that might require the Company to make a public announcement
regarding any of the types of matters set forth in clause “(a)” of this
sentence;

(e) agree or offer to take, or encourage or propose (publicly or otherwise) the
taking of, any action referred to in clause “(a)”, “(b)”, “(c)” or “(d)” of this
sentence;

(f) assist, induce or encourage any other Person to take any action of the type
referred to in clause “(a)”, “(b)”, “(c)”, “(d)” or “(e)” of this sentence;

(g) enter into any discussions, negotiations, arrangement or agreement with any
other Person relating to any of the foregoing; or

(h) request or propose that the Company or any of the Company’s representatives
amend, waive or consider the amendment or waiver of any provision set forth in
this section 4.

ECM, BBOM, BB I, BB II and Barry jointly and severally agree that, if any of
them or its representatives are approached by any third party concerning any of
their participation in a transaction involving any assets, indebtedness or
business of, or securities issued by, the Company or any of its subsidiaries or
other affiliates, Eastbourne will promptly inform the Company of the nature of
such transaction and the parties involved.

Notwithstanding anything in this section 4 to the contrary, ECM, BBOM, BB I, BB
II or Barry may take any action or enter into any agreement, if recommended or
approved by the Board of Directors of the Company.

5. Amendment to Rights Agreement. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of ECM, BBOM,
BB I, BB II and Barry contained in this Agreement, the Company agrees to amend
the definition of “Acquiring Person” in the Rights Agreement to provide that the
percentage Beneficial Ownership of the outstanding Common Stock used to
determine whether a Person constitutes an “Acquiring Person” will be 25% or more
in the case of Eastbourne. Promptly following the effective date of this
Agreement and approval by the Board of Directors of the Company, appropriate
officers of the Company will execute an amendment to the Rights Agreement in
substantially the form attached hereto as Exhibit A (the “Amendment”), instruct
the Rights Agent to execute the Amendment and notify Eastbourne when the
Amendment has been fully executed. ECM, BBOM, BB I, BB II and Barry hereby
covenant and agree not to effect any purchases or sales of the Common Stock
before the first business day after the date of filing by the Company of a Form
8-K with the Securities and Exchange Commission reporting such Amendment.
Notwithstanding any other provision hereof or of such Amendment, the Amendment
will have no effect on the definition of “Acquiring Person” with respect to any
client of ECM other than BBOM, BB I and BB II.

 

4.

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6. Certain Provisions Unaffected. It is expressly understood and agreed that,
notwithstanding the terms of this Agreement or the Amendment, the Company shall
not be precluded from a determination that ECM, BBOM, BB I, BB II or Barry or
any client of ECM, is a Person causing the occurrence of a Section 11(a)(ii)
event under Section 11(a)(ii) of the Rights Agreement.

7. Certain Statutory Matters. ECM, BBOM, BB I, BB II and Barry understand and
agree that the provisions of Section 203 of the Delaware General Corporation
Law, as amended, will continue to apply to Eastbourne entities, as well as the
clients of ECM, and that execution and delivery of this Agreement and the
Amendment on behalf of the Company do not constitute approval of any acquisition
of shares of the Common Stock by ECM, BBOM, BB I, BB II, Barry or the clients of
ECM, or any other transaction, for the purposes of such Section 203 and do not
result in Eastbourne entities or the clients of ECM, not being, collectively or
individually, an “interested stockholder” or “associate” as defined therein.
ECM, BBOM, BB I, BB II and Barry acknowledge and agree that, except with respect
to the matters contemplated by this Agreement, the Company has not disclosed
material nonpublic information to Eastbourne or any of ECM’s clients and that
the Company is under no obligation to disclose such information to Eastbourne or
any of ECM’s clients.

8. Entire Agreement and Amendment. This Agreement contains the entire agreement
among the parties with respect to the subject matter of this Agreement. All
prior and contemporaneous agreements, discussions or understandings, whether
oral or written, are expressly superseded by this Agreement and are null and
void. This Agreement may not be modified, waived, discharged or amended, in
whole or in part, except in writing signed by the parties.

9. Termination and Effect Thereof.

(a) Except to the extent provided by Section 3 of this Agreement, Sections 2, 3
and 4 of this Agreement will not be in effect at any time that Eastbourne
Beneficially Owns less than 20% of the outstanding shares of the Common Stock,
and, from and after the second anniversary hereof, the Company shall have the
right to terminate this Agreement and reverse the Amendment, in its sole
discretion, from and after the date on which Eastbourne has not Beneficially
Owned 20% or more of the outstanding shares of the Common Stock for a period of
at least 20 trading days.

(b) If any of ECM, BBOM, BB I, BB II or Barry breaches its covenants,
representations or agreements in this Agreement, the Company will have the right
to terminate this Agreement and to reverse the Amendment; provided, however,
that any such termination will not prejudice any claim that the Company may have
with respect to any breach of any representation, warranty or covenant hereunder
occurring prior to such termination.

10. No Third Party Beneficiaries. This Agreement is solely for the benefit of
the parties hereto and is not intended to confer upon any other person any
rights or remedies hereunder.

 

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11. Governing Law and Venue. This Agreement and the legal relations among the
parties hereto will be governed by, construed and enforced according to the
internal laws of the State of Delaware (without regard to the laws of conflict
of any jurisdiction) as to all matters, including, without limitation, matters
of validity, interpretation, construction, effect, performance and remedies. The
parties to this Agreement hereby consent to the personal jurisdiction of the
state and federal courts located in the State of Delaware in connection with any
controversy related to this Agreement.

12. Counterparts; Facsimile. This Agreement may be executed in one or more
counterparts, and each such counterpart will be deemed an original, but all such
counterparts together will constitute one and the same instrument. Facsimile
signatures shall be treated the same as originals.

The parties have caused this Agreement to be duly executed as of the day and
year first above written.

 

EASTBOURNE CAPITAL MANAGEMENT, L.L.C.    TELIK, INC. By:  

/s/ Eric M. Sippel

   By:  

/s/ Michael M. Wick

  Eric M. Sippel      Dr. Michael M. Wick Its:   Chief Operating Officer    Its:
  Chairman, President and Chief Executive Officer

/s/ Richard J. Barry

   BLACK BEAR OFFSHORE MASTER FUND, L.P. Richard J. Barry           By  
Eastbourne Capital Management, L.L.C., its general partner      By:  

/s/ Eric M. Sippel

       Eric M. Sippel      Its:   Chief Operating Officer

 

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   BLACK BEAR FUND I, L.P.    By   Eastbourne Capital Management, L.L.C., its
general partner    By:  

/s/ Eric M. Sippel

     Eric M. Sippel    Its:   Chief Operating Officer    BLACK BEAR FUND II,
L.L.C.    By   Eastbourne Capital Management, L.L.C., its managing member    By:
 

/s/ Eric M. Sippel

     Eric M. Sippel    Its:   Chief Operating Officer

 

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EXHIBIT A

AMENDMENT TO RIGHTS AGREEMENT

BETWEEN TELIK, INC. AND

COMPUTERSHARE SHAREHOLDER SERVICES, INC. AND

COMPUTERSHARE TRUST COMPANY, N.A.

THIS AMENDMENT TO RIGHTS AGREEMENT (the “Amendment”) is made this 18th day of
May, 2006, by and between TELIK, INC., a Delaware corporation (the “Company”),
and COMPUTERSHARE SHAREHOLDER SERVICES, INC. AND COMPUTERSHARE TRUST COMPANY,
N.A. (the “Rights Agent”) to amend the Rights Agreement, dated November 2, 2001,
by and between the Company and Wells Fargo Bank Minnesota, N.A., replaced by
Computershare Shareholder Services, Inc. and Computershare Trust Company, N.A.,
as Rights Agent (the “Rights Agreement”).

WHEREAS, pursuant to the Rights Agreement, certain rights to purchase shares of
the Company’s Series A Junior Participating Preferred Stock, par value $0.01 per
share, become exercisable, subject to the terms and conditions set forth in the
Rights Agreement, if there is a public announcement that a person, entity or
group of affiliated or associated persons have acquired beneficial ownership of
20% or more of the outstanding Common Shares of the Company (an “Acquiring
Person”) or 10 business days following the commencement of, or announcement of
an intention to commence, a tender offer or exchange offer, the consummation of
which would result in any person or entity becoming an Acquiring Person;

WHEREAS, Eastbourne Capital Management, L.L.C. (“ECM”), Black Bear Offshore
Master Fund, L.P., a Cayman Islands limited partnership (“BBOM”), and Richard J.
Barry (“Barry,” and together with ECM, BBOM, Black Bear Fund I, L.P., a
California limited partnership, and Black Bear Fund II, L.L.C., a California
limited liability company, the “Eastbourne Entities”) have reported that they
beneficially owned in the aggregate 19.9% of the Common Shares of the Company;

WHEREAS, pursuant to Section 27 of the Rights Agreement, the Board of Directors
of the Company has determined that it is in the best interest of the Company and
its stockholders to amend the Rights Agreement to exclude from the definition of
an “Acquiring Person” the Eastbourne Entities, but only so long as none of the
Eastbourne Entities, together with any of their respective affiliates or
associates, either individually or collectively, is the beneficial owner of 25%
or more of the Common Shares then outstanding; and

WHEREAS, the Board of Directors of the Company has approved this Amendment and
authorized its appropriate officers to execute and deliver the same to the
Rights Agent.

NOW, THEREFORE, in accordance with the procedures for amendment of the Rights
Agreement set forth in Section 27 thereof, and in consideration of the foregoing
and the mutual agreements herein set forth, the parties hereby agree as follows:

1. Capitalized terms that are not otherwise defined herein shall have the
meanings ascribed to them in the Rights Agreement.

2. The definition of “Acquiring Person” set forth in Section 1(a) of the Rights
Agreement is amended in its entirety to read as follows:

“Acquiring Person” shall mean any Person (as such term is hereinafter defined)
who or which, together with all Affiliates and Associates (as such terms are
hereinafter defined)

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of such Person, shall be the Beneficial Owner (as such term is hereinafter
defined) of 20% or more of the Common Shares then outstanding. Notwithstanding
the foregoing, (A) the term Acquiring Person shall not include (i) the Company,
(ii) any Subsidiary (as such term is hereinafter defined) of the Company,
(iii) any employee benefit or compensation plan of the Company or any Subsidiary
of the Company, (iv) any entity holding Common Shares for or pursuant to the
terms of any such employee benefit or compensation plan, or (v) any of
Eastbourne Capital Management, L.L.C. (solely in connection with investment
power exercisable by Eastbourne Capital Management, L.L.C. with respect to
Common Shares managed for Black Bear Offshore Master Fund, L.P., a Cayman
Islands limited partnership, Black Bear Fund I, L.P., a California limited
partnership, and Black Bear Fund II, L.L.C., a California limited liability
company), Black Bear Offshore Master Fund, L.P., a Cayman Islands limited
partnership, Black Bear Fund I, L.P., a California limited partnership, Black
Bear Fund II, L.L.C., a California limited liability company, and Richard J.
Barry (collectively the “Eastbourne Entities”), but only so long as none of the
Persons described in this clause (v), together with any of their respective
Affiliates or Associates, either individually or collectively, is the Beneficial
Owner of 25% or more of the Common Shares then outstanding, and (B) no Person
shall become an “Acquiring Person” either (x) as the result of an acquisition of
Common Shares by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially owned by
such Person to 20% (or 25% with respect to the Eastbourne Entities) or more of
the Common Shares then outstanding; provided, however, that if a Person shall
become the Beneficial Owner of 20% (or 25% with respect to the Eastbourne
Entities) or more of the Common Shares then outstanding by reason of share
purchases by the Company and shall, following written notice from, or public
disclosure by the Company of such share purchases by the Company, become the
Beneficial Owner of any additional Common Shares without the prior consent of
the Company and shall then Beneficially Own more than 20% (or 25% with respect
to the Eastbourne Entities) of the Common Shares then outstanding, then such
Person shall be deemed to be an “Acquiring Person,” (y) as the result of the
acquisition of Common Shares directly from the Company, provided, however that
if a Person shall become the Beneficial Owner of 20% (or 25% with respect to the
Eastbourne Entities) or more of the Common Shares then outstanding by reason of
share purchases directly from the Company and shall, after that date, become
Beneficial Owner of any additional Common Shares without the prior written
consent of the Company and shall then Beneficially Own more than 20% (or 25%
with respect to the Eastbourne Entities) of the Common Shares then outstanding,
then such Person shall be deemed to be an “Acquiring Person” or (z) if the Board
of Directors determines in good faith that a Person who would otherwise be an
“Acquiring Person,” as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently, and such Person divests, as
promptly as practicable (as determined in good faith by the Board of Directors),
but in any event within five Business Days, following receipt of written notice
from the Company of such event, of Beneficial Ownership of a sufficient number
of Common Shares so that such Person would no longer be an Acquiring Person, as
defined pursuant to the foregoing provisions of this paragraph (a), then such
Person shall not be deemed to be an “Acquiring Person” for any purposes of this
Agreement; provided, however, that if such Person shall again become the
Beneficial Owner of 20% (or 25% with respect to the Eastbourne Entities) or more
of the Common Shares then outstanding, such Person shall be deemed an “Acquiring
Person,” subject to the exceptions set forth in this Section 1(a).”

 

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3. Section 2 of the Rights Agreement is hereby amended to read in its entirety
as follows: “APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the Rights
Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable upon ten (10) days’ prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and in no event be
liable for, the acts or omissions of any such co-Rights Agent.”

4. The second sentence of Section 18 of the Rights Agreement is hereby amended
to read in its entirety as follows:

“The Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.”

5. Section 21 of the Rights Agreement is hereby amended to read in its entirety
as follows:

“CHANGE OF RIGHTS AGENT. The Rights Agent or any successor Rights Agent may
resign and be discharged from its duties under this Agreement upon 30 days’
notice in writing mailed to the Company and to each transfer agent for the
Common Shares or Preferred Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. Unless this Agreement is
otherwise terminated by the parties, in the event the transfer agency
relationship in effect between the Company and the Rights Agent terminates, the
Rights Agent will be deemed to resign automatically on the effective date of
such termination; and any required notice will be sent by the Company. The
Company may remove the Rights Agent or any successor Rights Agent upon 30 days’
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent for the Common Shares or Preferred
Shares by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be either (a) a corporation business trust or limited liability company
organized and doing business under the laws of the United States or of any other
state of the United States which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million or (b) a direct or indirect wholly owned subsidiary of such an entity or
its wholly-owning parent. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and

 

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deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment the Company
shall file notice thereof in writing with the predecessor Rights Agent and each
transfer agent for the Common Shares or Preferred Shares, and mail a notice
thereof in writing to the registered holders of the Right Certificates. Failure
to give any notice provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal
of the Rights Agent or the appointment of the successor Rights Agent, as the
case may be.”

6. Section 26 of the Rights Agreement is hereby amended to read in its entirety
as follows:

“NOTICES. Notices or demands authorized by this Agreement to be given or made by
the Rights Agent or by the holder of any Right Certificate to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:

Telik, Inc.

3165 Porter Drive

Palo Alto, CA 94304-1213

Attn: Chief Executive Officer

Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:

Attn: Client Administration

Computershare Trust Company, N.A.

250 Royall Street, MS 3B

Canton, MA 02021

Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.”

7. A new Section 35 hereby added to the Rights Agreement and shall read in its
entirety as follows:

“FORCE MAJEURE. Notwithstanding anything to the contrary contained herein,
Rights Agent shall not be liable for any delays or failures in performance
resulting from acts beyond its reasonable control including, without limitation,
acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions,
interruptions or malfunction of computer facilities, or loss of data due to
power failures or mechanical difficulties with information storage or retrieval
systems, labor difficulties, war, or civil unrest.”

8. All references in the Rights Agreement to “20%” shall be followed by “(or 25%
with respect to the Eastbourne Entities)”, other than in the definition of
“Acquiring Person” set forth in Section 1(a), which is amended as provided
above.

9. Computershare Shareholder Services, Inc. (f/k/a EquiServe, Inc.) is hereby
removed as Rights Agent from and after the date hereof.

 

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10. Except as expressly set forth herein, this Amendment shall not alter,
modify, amend or in any affect any of the terms, conditions, covenants,
obligations or agreements contained in the Rights Agreement, all of which are
ratified and affirmed in all respects and shall continue to be in full force and
effect.

11. If any term, provision, covenant or restriction of this Amendment is held by
a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Amendment shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.

12. This Amendment shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.

13. This Amendment may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.

[SIGNATURE PAGES TO FOLLOW]

 

5.

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IN WITNESS WHEREOF, the parties herein have caused this Amendment to be duly
executed and attested, all as of the date and year first above written.

 

TELIK, INC. By:  

 

 

Name: Title: COMPUTERSHARE SHAREHOLDER SERVICES, INC. By:  

 

Name: Title: COMPUTERSHARE TRUST COMPANY, N.A. By:  

 

Name: Title:

 

6.