EXHIBIT 10.17

CERTAIN INFORMATION IN THIS EXHIBIT IS SUBJECT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. IN ACCORDANCE WITH RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, SUCH INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. THE LOCATION OF SUCH OMITTED INFORMATION HAS
BEEN INDICATED WITH AN ASTERISK(*).

                                  CONFIDENTIAL
                              TANOX BIOSYSTEMS INC.

                     Settlement and Participation Agreement

     This Settlement and Participation Agreement ("Agreement") is entered into
effective as of July 8, 1996 ("Effective Date") between Tanox Biosystems, Inc.,
a Texas corporation, with its principal offices at 10301 Stella Link, Houston,
Texas 77025 ("Tanox") and F. Hoffmann-La Roche Ltd. with its principal offices
at CH-4070, Basal, Switzerland ("Roche"), Hoffmann-La Roche, Inc., Roche Holding
Ltd. and Roche Holdings, Inc., (collectively with Roche, the "Roche Entities").

     Tanox and the Roche Entities are parties to a lawsuit, Civil Action No.
H-94-0189, in the United States District Court for the Southern District of
Texas, Houston Division, styled TANOX BIOSYSTEMS. INC. V. GENENTECH. INC. ET
AL., resulting from the consolidation of Civil Action No. H-94-0239, styled
TANOX BIOSYSTEMS. INC. V. GENENTECH. INC., ET. AL. with Civil Action No.
H-94-0189, styled GENENTECH., INC. V. TANOX BIOSYSTEMS. INC. (the "Lawsuit"),
which they desire to settle.

     Tanox, Genentech, Inc. ("Genentech") and Ciba-Geigy Ltd. ("Ciba"), together
with the participation of Roche, also have reached an agreement in principle
under which Genentech and Tanox and Ciba would merge their respective anti-IgE
antibody projects. Such agreement has been memorialized in an Outline of Terms
which Tanox, Genentech, and Ciba are executing on the Effective Date and which
provides for the development and commercialization of one or more anti-IgE
products with the participation of Roche, should it exercise certain options
provided therein {the "Multiparty Transaction").

     Discussions relating to the Multiparty Transaction and settlement of the
Lawsuit also have culminated in an agreement between Tanox and Genentech
entitled Settlement and Cross-Licensing Agreement which has been executed prior
to or simultaneously with the Effective Date {the "Genentech Agreement") and in
certain additional agreements between Tanox and Roche relating to such
collaboration and to certain licensing relationships based on the Parties desire
to avoid the possibility of future disputes.

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     Therefore, Tanox and Roche agree as follows:

     1.0 DEFINITIONS. In addition 10 the words otherwise used as defined 1em1s
throughout this Agreement, the words set forth below will have the meanings
indicated when used in this Agreement.

     1.1 "AFFILIATE" shall mean (i) an organization fifty (50%) percent or more
of the voting stock of which is owned and/or controlled directly or indirectly
by either Party; (ii) an organization which directly or indirectly owns and/or
controls fifty percent (50%) or more of the Voting stock of either Party; (iii)
an organization which is directly or indirectly under common control of either
Party through common share holdings; or (iv) an organization as to which either
Party can demonstrate that the operation and management of such organization is
under the control, directly or indirectly, of the Party.

     1.2 "ALL CLAIMS" shall mean all existing and future claims, demands, and
causes of action, known or unknown pending or threatened, for all existing and
future damages and remedies (i) that arise out of or are in any way related to
the Incident and (ii) that were brought, could have been brought, or were sought
to be brought in the Lawsuit. Under this definition, "All Claims" includes but
is not limited to all claims, demands, lawsuits, debts, accounts, covenants,
liens, encumbrances, agreements, actions, counterclaims, cross-actions,
liabilities, obligations, losses, attorney's fees, costs, expenses, remedies,
and causes of action of any nature, whether in contract or in tort, or based
upon fraud or misrepresentation, breach of duty or common law, or arising under
or by virtue of any judicial decision, or federal, state or foreign statute or
regulation, for past present and future damages, property or economic damage,
and for all other losses and damages of any kind, including BUT NOT LIMITED TO
the following: all actual damages; all exemplary and punitive damages; all
penalties of any kind, including WITHOUT LIMITATION any tax liabilities or
penalties; lost profits or goodwill; consequential damages; damages ensuing from
loss of credit; damages ensuing from breach of the covenant or

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duty of good faith and fair dealing; damages ensuing from breach of any
federal, state or foreign antitrust law; damages ensuing from breaches of
confidential and fiduciary duties; damages ensuing from breach of contract;
damages ensuing from actual or constructive fraud; and prejudgment and post
judgment interest, costs and attorney's fees.

     1.3 "ANTI-IgE ANTIBODY(IES)" shall mean an antibody directed against the
immunoglobulin IgE as an antigen, fragments or conjugates of such antibodies,
and other constructs comprising antibodies which are derived from or contain any
of the above-specified components. ANTI-IgE ANTIBODY PRODUCT(S) means any
pharmaceutical formulation, product, method or system which contains an Anti-IgE
Antibody.

     1.4 "CONSIDERATION" shall mean the value or benefit to each of the Parties,
respectively, of-the licenses, royalties, payments and agreements contained
herein, in the Genentech Agreement and in the Outline of Terms and all other
mutual promises, covenants, agreements, releases, and representations set forth
in this Agreement.

     1.5 "INCIDENT" shall mean the negotiations, beginning in 1989 and ending in
December 1993, between Tanox and Genentech with regard to a potential
collaboration in the identification and development of anti-immunoglobulin E
("anti-IgE") monoclonal antibodies and anti-IgE therapy; the agreements entered
into pursuant to those negotiations, as well as any supplements or amendments to
those agreements ("the Collaboration Agreements"), including but not limited to
a Confidentiality Agreement dated (by Tanox) March 29, 1989 and a Biological
Material Transfer and Confidentiality Agreement dated (by Tanox) July 27, 1989;
negotiations concerning the construction and meaning of the Collaboration
Agreements; the performance of the Collaboration Agreements; any interference in
the performance of the Collaboration Agreements; any statements regarding the
performance of the Collaboration Agreements; any acts or events prior to or
subsequent to the negotiation or execution of the Collaboration Agreements that
form the basis of any cause of action alleged in or that could have been alleged
in the Lawsuit; any other matters arising out of the Collaboration Agreements;
the use by

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Genentech of information provided by Tanox to Genentech pursuant to the
Collaboration Agreements or otherwise during such negotiations; the solicitation
and obtaining of licensing rights heretofore from third parties in the area of
monoclonal antibody research and technology; the research, development and
commercialization of anti-IgE monoclonal antibodies and/or anti-IgE therapy
heretofore; any infringement heretofore of patents rights held at any time by
the Parties to this Agreement regarding recombinant immunoglobulin preparations
and monoclonal antibody identification and development; and any statements or
representations heretofore made by either Party regarding research, development
and commercialization of anti-IgE monoclonal antibodies and/or anti-igE therapy.

     1.6 "OUTLINE OF TERMS" shall mean the agreement between Tanox, Genentech
and Ciba which sets forth the basic terms agreed by such parties with respect to
the joint development and commercialization of Anti-IgE Antibodies, with the
participation of Roche to the extent it exercises its options thereunder, and
which is intended to be followed and superseded by a definitive agreement(s) as
contemplated by Section 8.2 of the Outline of Terms [which agreement(s) is
referred to as the ("Definitive Agreement")].

     1.7 "PARTY" shall mean, when used in the singular, either Tanox or the
Roche Entities, as appropriate, and "Parties" shall mean Tanox and the Roche
Entities.

     1.8 "PERSON" OR "PERSONS" shall include any natural person, as well as any
entity such as a corporation, partnership, proprietorship, or business
association.

     1.9 "ROCHE ENTITIES" shall mean, jointly and severally, each and all of the
following companies and their Affiliates (excluding Genentech): F. Hoffmann-La
Roche Ltd. Hoffmann-LaRoche, Inc., Roche Holding Ltd., and Roche Holdings, Inc.

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     2.0 MUTUAL RELEASE, INDEMNIFICATION AND SETTLEMENT AGREEMENT

     2.1 DISMISSAL OF LAWSUIT. Tanox and the Roche Entities agree as follows:

          (i)  Tanox will file a motion to dismiss its claims in the Lawsuit
               against the Roche Entities with prejudice; and

          (ii) each of the parties shall bear its own costs of court incurred.

     2.2 RELEASE OF ROCHE ENTITIES. For the Consideration, including the
agreements set forth in this Section 2, Tanox hereby RELEASES, ACQUITS, and
FOREVER DISCHARGES the Roche Entities and (I) all of their present or former
agents, employees, officers, directors, shareholders, partners, joint venturers,
and attorneys; (ii) all companies partnerships, joint ventures, or firms
affiliated with or subsidiary to, the Roche Entities; (iii) their predecessors,
successors, and assigns; (iv) all other persons, partners, joint venturers,
firms, partnerships, joint ventures, and corporations for whose conduct the
Roche Entities may be liable; and (v) all of their insurers from All Claims that
have accrued or that may ever accrue to Tanox or any person or persons now or
hereafter claiming by, through, or under Tanox.

     2.3 RELEASE OF TANOX. For the Consideration including the agreements set
forth in this Section 2, the Roche Entities RELEASE, ACQUIT, and FOREVER
DISCHARGE Tanox and (i) all of its present or former agents, employees,
officers, directors, shareholders, partners, joint venturers, and attorneys;
(ii) all companies, partnerships, joint ventures, or firms affiliated with or
subsidiary to Tanox; (iii) its predecessors, successors, and assigns; (iv) all
other persons, partners, joint venturers, firms, partnerships, joint ventures,
and corporations for whose conduct Tanox may be liable; and (v) all of its
insurers from All Claims that have accrued or that may ever accrue to the Roche
Entities or any person or persons now or hereafter claiming by, through, or
under the Roche Entities.

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     2.4 NO ADMISSION OF LIABILITY. Agreement to the Consideration is not an
admission of liability and may not be so construed. The Roche Entities
vigorously deny the position taken by Tanox in the Lawsuit and Tanox
acknowledges the highly disputed nature of its claims in the Lawsuit. Tanox
vigorously denies the position taken by the Roche Entities in the Lawsuit, and
the Roche Entities acknowledges the highly disputed nature of their defenses in
the Lawsuit. Each party acknowledges that this Agreement is made as a
compromise to avoid further expense and to terminate for all time the
controversies which were asserted, could have been asserted, or were sought to
be asserted in the Lawsuit.

     2.5 INDEMNIFICATION BY TANOX. Tanox agrees to INDEMNIFY and to DEFEND and
to HOLD HARMLESS the Roche Entities and (i) all of their present or former
agents, employees, officers, directors, shareholders, partners, joint venturers,
and attorneys; (ii) all companies, partnerships, joint ventures, or firms
affiliated with or subsidiary to, the Roche Entities; (iii) their predecessors,
successors, and assigns; (iv) all other persons, partners, joint venturers,
firms, partnerships, joint ventures, and corporations for whose conduct the
Roche Entities may be liable; and (v) all of their insurers from All Claims,
together with all costs, expenses, and legal fees, that may be asserted against
the Roche Entities by any person, entity, firm, or corporation claiming by,
through, or under Tanox, that arise out of the Incident and/or the Lawsuit.

     2.6 INDEMNIFICATION BY THE ROCHE ENTITIES. The Roche Entities agree to
INDEMNIFY and to DEFEND and to HOLD HARMLESS Tanox and (i) all of its present or
former agents, employee, officers, directors, shareholders, partners, joint
venturers, and attorneys; (ii) all companies, partnerships, joint ventures, or
firms affiliated with or subsidiary to Tanox; (iii) its predecessors,
successors, and assigns; (iv) all other persons, partners, joint venturers,
firms, partnerships joint ventures, and corporations for whose conduct Tanox may
be liable; and (v) all of its insurers from All Claims, together with all costs,
expenses, and legal fees, that may be asserted against Tanox by any person,
entity,

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firm, or corporation claiming by, through, or under the Roche Entities that
arise out of the Incident and/or the Lawsuit

     2.7 NO OPPOSITION. The Roche Entities represent and warrant that they have
not filed any opposition in the European Patent Office to Tanox's patent No.
EP-B-407392 relating to Anti-IgE Antibodies or taken any other actions to
re oppose, request the examination of, or otherwise challenge the validity or
enforceability, directly or indirectly, of any Tanox patents covering Anti-IgE
Antibodies.

     2.8 ANTI-IgE ANTIBODY PATENTS. The Roche Entities represent and warrant to
Tanox that they do not have knowledge of any patents owned in whole or in part
and/or controlled by them which would prevent Tanox from being able to make, use
and sell Anti-IgE Antibodies. If Roche has exercised its option set forth in the
Outline of Terms (or Definitive Agreement) in a particular country or has
received a sublicense or assumed Genentech's rights and obligations under the
Genentech Agreement, then to the extent the Roche Entities should ever own in
whole or in part and/or control any such patents the Roche Entities agree to
grant to Tanox under all such patents a royalty-free, non-exclusive,
sublicensable license to make, have made, use, sell, have sold and import
Anti-IgE Antibodies for the treatment, prophylaxis or diagnosis of any disease
or condition in humans and animals in the country or territory with respect to
which Roche has exercised its options under the Outline of Terms (or Definitive
Agreement) or has received a sublicense or assumed Genentech's rights and
obligations under the Genentech Agreement.

     2.9 EXEMPTION FROM PROTECTIVE ORDER. Notwithstanding the terms of the
protective order agreed in connection with the Lawsuit, the Parties agree that
the employees, experts and consultants of a Party having access to information
during the course of the Lawsuit will not be prohibited from participating in
on-going development and commercialization activities associated with the
Anti-IgE Antibody projects of such Party

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and/or development and commercialization activities of the Parties pursuant to
the Outline of Terms or Definitive Agreement.

     2.10 REPRESENTATIONS OF TANOX. Tanox makes the representations and
warranties set forth in Exhibit 1 to the Roche Entities.

     2.11 REPRESENTATIONS OF ROCHE. The Roche Entities make the representations
and warranties set forth in Exhibit 2 to Tanox.

     3.0 BENEFICIARY OF AGREEMENTS. On the Effective Date, Tanox, Ciba and
Genentech have executed the Outline of Terms. The Outline of Terms and
Definitive Agreement, together with that certain Development and Licensing
Agreement dated May 11, 1990, between Tanox and Ciba (the "D & L Agreement"),
shall among them govern the development and commercialization of one or more
anti-IgE Products (as such term is used in the Outline of Terms) which have been
identified and synthesized by Tanox, Ciba, or Genentech before July 1, 1996.
Additionally, on the Effective Date, Tanox and Genentech have executed the
Genentech Agreement which, among other things, grants certain additional license
rights to such parties which may be effective in addition to or in lieu of
rights under the Outline of Terms and Definitive Agreement. The Parties
acknowledge that under such agreements, including the Genentech Agreement, and
subject to certain agreements between Roche and Genentech, Roche will have
certain rights to participate in the development and commercialization of
Anti-IgE Antibody products.

     4.0 LICENSES FOR ANTI-IgE ANTIBODY PATENTS. If (i) Roche has exercised its
options set forth in the Outline of Terms (or Definitive Agreement) in a country
or has received a sublicense or assumed Genentech's rights and obligations under
the Genentech Agreement in a particular country and (ii) the Roche Entities
should ever desire to obtain exclusive access to a patent owned and/or
controlled by a third party which covers Anti-IgE Antibodies in such country in
any manner, then the Roche Entities will acquire rights to

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such patent in a manner which reserves for Tanox the opportunity to obtain
co-exclusive rights to such patent for Anti-IgE Antibodies in such country.

5.0 ADDITIONAL LICENSES. Subject to all of the existing licenses and existing
agreements that restrict the ability of 1he Roche Entities to grant licenses and
subject to the additional restrictions set forth below, "the Roche Entities
agree to grant to Tanox, a worldwide, nonexclusive, nonsublicenseable (except to
Affiliates, but only in conjunction with the license of a specific product)
license to make, have made, use, sell, have sold and import products for * under
patents owned by the Roche Entities now or in the future, and which the Roche
Entities have made or agree to make generally available on a non-exclusive
basis, except that such products shall not include those (i) that are the
subject of a prior exclusive license by the Roche Entities to a third party;
(ii) that are the subject of an active research or development program of the
Roche Entities; or (iii) that compete with, or will compete with, a then current
product of the Roche Entities or a product in an active research and/or
development program of the Roche Entities; provided, however, that if any such
patents desired by Tanox shall be subject to exclusive rights to a third party
which would prevent the license desired by Tanox , the Roche Entities agree that
Tanox shall have the right to negotiate a sublicense, if possible, from any such
third party on terms agreed between Tanox and such third party. The Roche
Entities also agree to negotiate in good faith with Tanox on the availability of
such a license for Tanox products under other patents owned by the Roche
Entities. The Parties agree to negotiate in good faith the royalty rate and
terms on which any license will be granted. Subject to the limitations set forth
above, Tanox may exercise its right to such a license, without threat of suit or
penalty from the Roche Entities, with respect to a product at any time prior to
the date of the first commercial sale of such product to an independent third
party following regulatory approval to sell such product. If Tanox should ever
have under development a product which could be subject to the restrictions on
receiving a license set forth herein, then the Roche Entities or Tanox should
notify the other of such possibility prior to taking any other actions. If the
Parties are unable to resolve the issues prior to the time the

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activities of Tanox would constitute an infringement of a patent owned and/or
controlled by the Roche Entities pursuant to applicable laws, which resolution
could include a collaboration or cross-licensing opportunity or Tanox's express
agreement not to manufacture, develop or market in such country in which a valid
claim of any patent of the Roche Entities covering such product may exist, then
the Roche Entities shall be entitled to pursue such legal or other actions as
they may determine, in their sole discretion, to be appropriate under the
circumstances.

     6.0 CONFIDENTIALITY. In connection with preparation and during the term of
this Agreement, one Party may disclose to the other or receive written
information from the other relating to the subject matter of this Agreement
which information, if so identified in writing either pursuant to this Section
6.0 or otherwise upon disclosure, shall be considered to be the disclosing
Party's Confidential Information. Each Party agrees that it will take the same
steps to protect the confidentiality of the other Party's Confidential
Information as it takes to protect its own proprietary and Confidential
Information. Each Party shall protect and keep confidential and shall not use,
publish or otherwise disclose to any third party, except as permitted by this
Agreement or with the other Party's written consent, the other Party's
Confidential Information for a period of ten (10) years from the date of
disclosure, respectively, of any such Confidential Information. For the purposes
of this Agreement, Confidential Information shall not include such information
that (i) was lawfully known to the receiving Party at the time of disclosure;
(ii) was generally available to the public or was otherwise part of the public
domain at the time of disclosure or became generally available to the public or
otherwise part of the public domain after disclosure other than through any act
or omission of the receiving Party in breach of this Agreement; (iii) became
known to the receiving Party after disclosure from a source that had a lawful
right to disclose such information to others; or (iv) is required to be
disclosed by the receiving Party to comply with applicable laws, to defend or
prosecute litigation or to comply with governmental regulations, provided that
the receiving Party provides prior written notice of such disclosure to the
other Party and takes reasonable and lawful actions to avoid and/or minimize the
degree of such disclosure.

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Notwithstanding the above, the Parties may disclose Confidential information to
their legal representatives, to Affiliates and their legal representatives, and
to consultants (to the extent such disclosure is intended to further the
purposes contemplated under this Agreement) and provided such legal
representatives, Affiliates and consultants have agreed in writing to be bound
to protect the confidentiality of such information in a manner at least as
restrictive as that generally set forth herein.

     7.0 TERM; DEFAULT; SURVIVAL.

     7.1 TERM. Except as otherwise set forth herein, this Agreement shall
terminate at such time following the first commercial sale of an Anti-IgE
Antibody product as royalties are no longer owed to Tanox by or as a result of
sales for the benefit of the Roche Entities or any Affiliate, excluding
Genentech or sales by or for the benefit of Genentech. Notwithstanding the
foregoing, this Agreement shall terminate upon the prior occurrence of the
expiration unexercised of any option rights which the Roche Entities may have
under the Outline of Terms or Definitive Agreement and the expiration
unexercised of any rights which the Roche Entities may have to receive a
sublicense or to assume Genentech's rights and obligations under the Genentech
Agreement.

     7.2 DEFAULT. Failure by either Party (the "defaulting Party") to comply
with any of the material obligations contained in this Agreement shall entitle
the other Party (the "nondefaulting Party") to give the defaulting Party notice
specifying the nature of the default and requiring it to cure such default. If
such default is not cured within the sixty (60) day period after the receipt of
such notice, the nondefaulting Party shall be entitled, except as otherwise
specifically provided in this Agreement and without prejudice to any of its
other rights conferred on it by this Agreement, to terminate all or part of this
Agreement.

     7.3 SURVIVAL OF PROVISIONS. The obligations of the Parties under Sections
2.0 and 6.0 shall survive any termination of this Agreement, except to the
extent limited therein.

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     8.0 GENERAL PROVISIONS.

     8.1 ADEQUACY OF CONSIDERATION. By signing this Agreement, each Party to
this Agreement acknowledges the receipt by such Party and the sufficiency to
such party of the Consideration.

     8.2 NOTICES. All notices which may be required pursuant to this Agreement
(i) shal1 be in writing, (ii) shal1 be addressed, in the case of the Roche
Entities (except as otherwise specified herein), to Corporate Law, F.
Hoffmann-La Roche Ltd. at the address set forth at the beginning of this
Agreement and to Corporate Secretary, Hoffmann-La Roche, Inc., 340 Kingsland St,
Nutley, N.J. 07110, and in the case of Tanox to the President at the address set
forth at the beginning of this Agreement, (or to such other person or address as
either Party may so designate from time to time), (iii) shall be mailed,
postage-prepaid, by registered mail or certified mail, return receipt
requested, or transmitted by courier for hand delivery or sent by express
courier service, and (iv) shall be deemed to have been given on the date of
receipt if sent by mail or on the date of delivery if transmitted by courier or
express courier service.

     8.3 ENTIRE AGREEMENT. This Agreement is the entire agreement between the
Parties regarding the subject matter hereof, and there are no prior written or
oral promises or representations not incorporated herein. No amendment or
modification of the terms of this Agreement shall be binding on either Party
unless reduced to writing and signed by an authorized officer of the Party to be
bound.

     8.4 BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto, Affiliates, and their respective successors and
permitted assigns. This Agreement shall not be assignable by either Party
without the other's prior written consent, except that this Agreement may be
assigned in whole or in part to an Affiliate or a successor to all or
substantially all of a Party's business by merger, sale of assets, sale of stock
or otherwise.

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     8.5 WAIVER. The waiver by a Party hereto of any breach of or default under
any of the provisions of this Agreement or the failure of a Party to enforce any
of the provisions of this Agreement or to exercise any right thereunder shall
not be construed as a waiver of any other breach or default or as a waiver of
any such rights or provisions hereunder.

     8.6 SEVERABILITY. If any part of this Agreement shall be invalid or
unenforceab1e under applicable law, such part shall be ineffective only to the
extent of such invalidity or unenforceability, without in any way affecting the
remaining parts of this Agreement. In addition, the part that is ineffective
shall be reformed in such a manner as to as nearly approximate the intent of
the Parties as possible.

     8.7 PUBLICITY. Except for disclosure that settlement of the Lawsuit has
occurred, neither the Roche Entities nor Tanox shall issue any public statement
concerning this Agreement without the other Party's reasonable prior written
consent; provided, however, that either Party may disclose the transaction or
the terms hereof or thereof from time to time without the other Party's consent
(i) if such consent has been requested and not received and such information is
set forth in disclosures to investors and prospective investors in the
securities of a Party pursuant to laws, rules and regulations covering any such
transactions or such Party has a written opinion from outside counsel that it is
otherwise required by law to disclose the transaction or the terms thereof, or
(ii) to the extent that similar disclosure has been previously approved by the
Parties pursuant to this Section 8.7. The foregoing notwithstanding, Tanox may
disclose the terms of this Agreement to its shareholders, investment bankers and
other financial consultants, and prospective investors in Tanox, provided that
the recipients of such information agree to be bound to protect the
confidentiality of that information for a period of at least three (3) years and
in a manner otherwise at least as restrictive as that generally set forth in
Section 6.0 above.

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     8.8 NO PARTNERSHIP. Nothing in this Agreement is intended or shall be
deemed to constitute a partnership, agency, employer-employee or joint venture
relationship between the Parties. No party shall incur any debts or make any
commitments for the other.

     8.9 SURVIVAL OF REPRESENTATIONS. All agreements and representations made by
the parties in this Agreement shall survive the execution and delivery of this
Agreement, the receipt of the Consideration, and the execution and delivery of
any other instrument, or the taking of any other actions required or provided
for in this Agreement.

     8.10 DISPUTE RESOLUTION. The laws of the State of New York shall govern the
construction and interpretation of this Agreement, and any action to enforce
this agreement or resolve any disputes shall be by binding arbitration conducted
pursuant to the then current American Arbitration Association ("AAA") Commercial
Arbitration rules in New York City, New York, such arbitration to be conducted
by a panel of three arbitrators selected from a pool of arbitrators to be
presented to the Parties by AAA.

     8.11 AGREEMENT TO PERFORM NECESSARY ACTS. Each Party agrees to perform any
further acts and execute and deliver any and all further documents, agreements,
and/or instruments which may be reasonably necessary or desirable to carry out
or effect the provisions of this Agreement.

     8.12 COUNTERPARTS. This Agreement may be executed in counterparts, and each
such counterpart shall be deemed an original for all purposes.

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F. Hoffman-La Roche Ltd                         Roche Holding Ltd
By:   ILLEGIBLE                                 By:   ILLEGIBLE
Title: Authorized Signatory                     Title: Director

By:   ILLEGIBLE                                 By:   ILLEGIBLE
Title: Director                                 Title: Director

Hoffman-La Roche Inc.                           Roche Holdings, Inc
By:   ILLEGIBLE                                 By:   ILLEGIBLE
Title: V.P.                                     Title: Secretary

Tanox Biosystems, Inc.
By: David Anderson
Title: Executive Vice President

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                                   EXHIBIT 1
                    Representations and Warranties by Tanox

(a)  Before executing this Agreement, Tanox became fu11y informed of the terms
     contents, conditions, and effect of this Agreement.

(b)  Tanox is a corporation duly organized, existing, and in good standing under
     the laws of the State of Texas.

(c)  Tanox possesses all requisite power and authority to enter into and perform
     this Agreement and to carry out the transactions contemplated herein.

(d)  Tanox has taken a1l necessary corporate and legal addition to authorize the
     execution, delivery, and performance of this Agreement.

(e)  No consent or authorization of, filing with or any other act by or in
     respect of any other person (including any shareholder or creditor) or
     court is required in connection with the settlement of All Claims as set
     forth in this Agreement or with the execution, delivery, or performance by
     Tanox or the validity or enforceability as to Tanox of this Agreement.

(f)  This Agreement has been duly executed and delivered by Tanox and
     constitutes a legal, valid and binding obligation of Tanox enforceable
     against Tanox in accordance with its terms.

(g)  No promise or representation of any kind has been made to Tanox or by
     anyone acting for Tanox, except as is expressly stated in this Agreement.

(h)  Except for certain claims or portions thereof which may have been assigned
     to its attorneys, Tanox is the lawful owner of All Claims asserted by Tanox
     in the Lawsuit and has not assigned, pledged, or in any other manner sold
     or transferred any right, title, interest, or claim that arises out of or
     is the subject of the Incident and/or the Lawsuit.

(i)  In entering this Agreement, Tanox has had the benefit of the advice of
     lawyers of its own choosing; and Tanox enters this Agreement freely, by
     Tanox's own choice and judgment, and without duress or other influence.

(j)  Tanox understands that this Agreement is a full, final, and complete
     release of the other Party to this Agreement and that the Consideration
     includes the ONLY benefits Tanox shall ever receive from such Party as a
     result of the Incident and the Lawsuit.

(k)  Tanox recognizes that the recitations contained in this Agreement are
     contractual and not a mere recital.
<PAGE>
                                   EXHIBIT 2
              Representations and Warranties by The Roche Entities

(a)  Before executing this Agreement, the Roche Entities became fully informed
     of the terms, contents, conditions, and effect of this Agreement.

(b)  The Roche Entities are corporations duly organized, existing, and in good
     standing under the laws of the respective states, cantons, and countries
     under which they have been organized.

(c)  The Roche Entities possess all requisite power and authority to enter into
     and perform this Agreement and to carry out the transactions contemplated
     herein.

(d)  The Roche Entities have taken all necessary corporate and legal action to
     authorize the execution, delivery, and performance of this Agreement.

(e)  No consent or authorization of, filing with or any other act by or in
     respect of any other person (including any shareholder or creditor) or
     court is required in connection with the settlement of All Claims as set
     forth in this Agreement or with the execution, delivery, or performance by
     the Roche Entities or the validity or enforceability as to the Roche
     Entities of this Agreement.

(f)  This Agreement has been duly executed and delivered by the Roche Entities
     and constitutes a legal, valid and binding obligation of the Roche Entities
     enforceable against the Roche Entities in accordance with its terms.

(g)  No promise or representation of any kind has been made to the Roche
     Entities or by anyone acting for the Roche Entities, except as is expressly
     stated in this Agreement.

(h)  In entering this Agreement, the Roche Entities have had the benefit of the
     advice of lawyers of its own choosing; and the Roche Entities enter this
     Agreement freely, by their own choice and judgment, and without duress or
     other influence.

(i)  The Roche Entities understand that this Agreement is a full, final, and
     complete release of the other Party to this Agreement and that the
     Consideration includes the ONLY benefits the Roche Entities shall ever
     receive from such Party as a result of the Incident and the Lawsuit.

(j)  The Roche Entities recognize that the recitations contained in this
     Agreement are contractual and not a mere recital.