EXHIBIT 10.24

     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 (*).

                                MASTER AGREEMENT

     This MASTER AGREEMENT (the "Agreement") is entered into as of March 17,
2000 (the "Effective Date") by and between PROTEIN DESIGN LABS, INC., a
Delaware corporation having its principal office at 34801 Campus Drive, Fremont,
California 94555 U.S.A. ("PDL"), and TANOX, INC., a Delaware corporation
having offices at 10301 Stella Link, Houston, TX 77025 U.S.A. ("TANOX").

                                    RECITALS

     WHEREAS, PDL owns certain patents and related patent applications related
to humanized antibodies and antibody humanization technology that are sometimes
referred to as the "Queen et al. Patents."

     WHEREAS, PDL and TANOX are parties to a Patent License Agreement dated June
30, 1998, as amended by an amendment dated June 28, 1999 (as amended, the "Prior
Agreement").

     WHEREAS, PDL and TANOX desire to terminate the Prior Agreement and to enter
into this Agreement to provide TANOX the right to obtain certain nonexclusive
license rights under the Queen et al. Patents for the development, manufacture
and commercialization of antibody products directed against up to four antigens,
under the terms and conditions set forth below.

                                    AGREEMENT

     NOW, THEREFORE, the parties agree to follow:

1.  DEFINITIONS

     All references to particular Exhibits, Articles and Sections shall mean the
Exhibits to, and Articles and Sections of, this Agreement, unless otherwise
specified. References to this "Agreement" include the Exhibits. For the purposes
of this Agreement the following words and phrases shall have the following
meanings:

     1.1 "AFFILIATE" means, with respect to a party hereto, any corporate or
other entity which, directly or indirectly controls, is controlled by, or is
under common control with such party during the term of this Agreement, where
"control" means the ownership of not less than fifty percent (50%) of the voting
shares of a corporation, or decision-making authority as to an unincorporated
entity, provided that such entity shall be an Affiliate only so long as such
control exists.

     1.2 "ANTIBODY" means any antibody directed against an Antigen and shall
include, without limitation, monospecific and bispecific antibodies (but a
separate license shall be required for each Antigen targeted by a bispecific
antibody); less than full-length antibody forms such as Fv, Fab, Fab' and
F(ab')2; single-chain antibodies; and antibody conjugates bound to a toxin,
label or other moiety.

     1.3 "ANTIGEN" means a target molecule to which an Antibody specifically
binds and includes all epitopes on that target molecule.

     1.4 "LICENSED PRODUCT" means an Antibody with respect to which TANOX has
either significant marketing rights or has done significant development
(including without limitation created, humanized or conducted preclinical or
clinical development), the manufacture, import, use, offer to sell or sale of
which would infringe, if not licensed under this Agreement, a Valid Claim. *

     1.5 "PDL LICENSE AGREEMENT" means the form of PDL License Agreement
attached as Exhibit B.
<PAGE>
     1.6 "PDL PATENT RIGHTS" means the patent applications or patents (as well
as any foreign counterparts thereto identified on Exhibit A. PDL Patent Rights
shall include U.S. or foreign patents or patent applications which claim
priority to any application to which a listed U.S. Patent also claims priority.
PDL Patent Rights shall also include any foreign equivalents, including any
additions, continuations, continuations-in-part or divisions of such patents or
patent applications, or any substitute applications therefor; any patents issued
with respect to such patent applications, any reissues, extensions or patent
term extensions of any such patent, and any confirmation patents or registration
patents or patents of addition based on any such patents.

     1.7  "TANOX NAMED ANTIGENS"  shall mean: *

     1.8 "VALID CLAIM" means (a) any claim in any issued patent included in the
PDL Patent Rights which would be infringed but for the license granted under
Section 2.01 and which claim has not been disclaimed or held unenforceable or
invalid by a governmental agency or court of competent jurisdiction by a
decision from which no appeal has been taken within the time period permitted
for filing an appeal or may be taken; and (b) any pending claims under PDL
Patent Rights which, if granted, would be infringed but for the license granted
under Section 2.01 and which pending claim would be a Valid Claim if the pending
claim were treated as granted, provided that examination has been timely
requested for such pending claims and they are otherwise being diligently
prosecuted in an effort to have them allowed and granted in an issued patent.

2.  RIGHTS TO LICENSES

     2.1 ELECTION. Subject to the terms and conditions of this Agreement, PDL
hereby grants to TANOX through the * anniversary of the Effective Date
(or until such earlier time as TANOX has exercised its rights under this Section
2.1 with respect to four (4) Antigens), the rights upon written notice to
receive licenses under the PDL Patent Rights for up to four (4) Antigens
designated by TANOX. Each license shall be a nonexclusive, worldwide license
under the PDL Patent Rights to make, have made, use, import, market, promote,
offer for sale and sell or otherwise dispose of Antibodies pursuant to a PDL
License Agreements. The rights of TANOX under the PDL License Agreements shall
include the right to grant sublicenses for Antibodies in accordance with the
terms of the applicable PDL License Agreement. Each license elected by TANOX
hereunder shall be pursuant to a separate PDL License Agreement and effective as
of the date when the election for such license by TANOX becomes irrevocable,
pursuant to Section 2.2.

     2.2 PROCEDURE FOR EXERCISE OF LICENSE RIGHTS. TANOX shall provide PDL with
written notice identifying the Antigen for which TANOX desires to enter into a
PDL License Agreement pursuant to the provisions of Section 2.1. A separate
notice shall be provided with respect to each Antigen for which a license is
requested. Within fifteen (15) business days of the written notice or upon
execution and return of the relevant PDL License Agreement by PDL, whichever is
later, TANOX shall pay the applicable License Exercise Fee specified in Section
3.2. PDL shall promptly review and respond in writing to the request by TANOX
for a license within ten (10) business days of receipt of the written request.
PDL may refuse to grant TANOX a license only if PDL has previously granted an
exclusive or co-exclusive license or an unexpired option for an exclusive or
co-exclusive license with respect to an Antibody to the identical Antigen, can
demonstrate that it is then actively engaged in bona fide negotiations for such
an exclusive or co-exclusive license or option for an exclusive or co-exclusive
license, or then has development, marketing or co-promotion rights, or an option
to obtain such rights, to a product or a potential product directed against the
Antigen and which is on the market or in research or development and reasonably
expected to enter human clinical trials within twenty-four (24) months;
provided, however, that with respect to each of the Tanox Named Antigens, PDL
shall provide Tanox with written notice prior to entering into an exclusive or
co-exclusive license, development, marketing or co-promotion rights, or option
for such license or rights, with any third party with respect to that Tanox
Named Antigen and shall permit Tanox the opportunity to exercise its rights
under Section 2.1 for a period not to exceed fifteen (15) days for a

                                        2
<PAGE>
license for that Tanox Named Antigen prior to conclusion of an agreement with
such third party for a license or option; * In the event that PDL validly
refuses to grant TANOX a license under the PDL Patent Rights, TANOX' right under
Section 2.1 shall not be considered exercised. If PDL affirms TANOX' request or
has not responded by notice in writing with ten (10) business days of receipt of
TANOX' request under this Section 2.2, then TANOX' election shall be deemed
irrevocable and TANOX and PDL shall enter into a PDL License Agreement with
respect to that Antigen.

3.  PAYMENTS

     3.1 INITIAL FEES. Within thirty (30) days after the Effective Date, TANOX
shall pay an initial nonrefundable, noncreditable fee of * for the right to
obtain nonexclusive licenses pursuant to Section 2.1.

     3.2 LICENSE EXERCISE FEES. Within fifteen (15) business days after the
delivery of a written notice to PDL for a nonexclusive license for Antibodies
for one (1) Antigen under Section 2.1 or PDL's execution of a PDL license
Agreement for the same, whichever is later, TANOX shall pay to PDL an exercise
fee ("License Exercise Fee") of * provided that such amount shall be increased
annually beginning April 1, 2001 and on each April 1 thereafter by an amount
equal to the Consumer Price Index-U (or its successor) published by the U.S.
Bureau of Labor Statistics ("CPI-U") for the prior calendar year; provided,
however, that if the CPI-U for the prior year has not been published by April 1
of the applicable year, any adjustments hereunder shall be payable within
fifteen (15) days of the publication of the CPI-U for the applicable year.

4.  TERMINATION OF PRIOR AGREEMENT

     In partial consideration of the rights granted to TANOX in Article 2, the
parties agree that upon execution and delivery of this Agreement, the Prior
Agreement shall immediately terminate and be of no further force or effect.

5.  REPRESENTATIONS, DISCLAIMERS

     5.1 VALID AGREEMENT. Each party represents and warrants to the other that
it knows of no legal reason to, and is not a party to any agreement which would,
prevent it from entering into and performing its obligations under this
Agreement, and the the signatory hereto is duly authorized to execute and
deliver this Agreement.

     5.2 CURRENT PDL PATENT RIGHTS. The PDL Patent Rights constitute all of the
patents and patent applications owned by PDL as of the Effective Date which
relate generally on the humanization of antibodies.

     5.3 NO WARRANTY OF VALIDITY, NON-INFRINGEMENT. Nothing in this Agreement
shall be construed as (a) a warranty or representation by PDL as to the validity
or scope of any PDL Patent Rights; or (b) a warranty or representation that any
Licensed Product made, used, sold or otherwise disposed of under any PDL License
Agreement is or will be free from infringement of patents, copyrights,
trademarks, trade secrets or other rights of third parties.

     5.4 DISCLAIMER OF WARRANTIES. EXCEPT AS SPECIFICALLY SET FORTH IN SECTIONS
5.1 AND 5.2, NEITHER PDL NOR TANOX MAKE TO THE OTHER ANY REPRESENTATIONS OR
EXTEND ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED. FURTHER, PDL DOES
NOT MAKE ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR THAT PRACTICE UNDER THE PDL PATENT RIGHTS UNDER A PDL LICENSE
AGREEMENT WILL NOT INFRINGE ANY THIRD PARTY RIGHTS.

                                        3
<PAGE>
6.  CONFIDENTIALITY

     6.1 PRIOR AGREEMENTS. This Agreement supersedes the Prior Agreement;
provided, however, that with respect to all Confidential Information disclosed
thereunder and/or within the definition of "Confidential Information" in the
Prior Agreement, or information otherwise subject to the terms and conditions of
Section 6.02 of the Prior Agreement, such Confidential Information shall be
subject to the terms and conditions of Section 6.2 of this Agreement.

     6.2 CONFIDENTIALITY. PDL and TANOX acknowledge that in the course of
negotiations of this Agreement or other discussions between the parties of
prospective agreements or business relationships and/or in furtherance of the
interests of the parties hereunder that it ("Recipient") has received and/or may
receive confidential information of the other party ("Provider"). "Confidential
Information" means any and all data and information which (a) has been reduced
to tangible form and marked clearly and conspicuously with a legend identifying
its confidential or proprietary nature; or (b) with respect to any oral
presentation or communication, is or was designated as confidential immediately
before, during, or within a reasonable time after the oral presentation or
communication and such designation is subsequently confirmed in writing; (c) is
or was otherwise characterized by Provider as confidential information; or (d)
is subject to the terms and conditions of this Section 6.2 as provided in
Section 6.1.

     Each party shall keep and protect as confidential, and shall not use for
any purpose (other than TANOX' use for the development and commercial
exploitation of Licensed Products or either party's use for specific purposes
otherwise contemplated by a business relationship entered into between them),
during the term of this Agreement and for five (5) years after termination
hereof, all Confidential Information heretofore and hereafter supplied by the
other, provided however, that the foregoing obligations of confidentiality shall
not apply to the extent that any Confidential Information (a) is already known
to the Recipient at the time of disclosure, as evidenced by written record, or
is developed by Recipient thereafter in the course of work entirely independent
of any disclosure by the other party; (b) is publicly known prior to or becomes
publicly known after disclosure other than through acts of omissions of the
Recipient; (c) is disclosed in good faith to Recipient by a third party who is
not under obligations of non-disclosure to the Provider; (d) is required to be
disclosed pursuant to an order of a court of law or regulation of a governmental
agency; provided that the disclosing party shall advise the other party promptly
of any such disclosure requirement (other than a filing of information or
materials with the U.S. Securities and Exchange Commission made with a request
for confidential treatment for portions of such material for which such
treatment may reasonably be expected to be granted) in order to permit such
other party to undertake efforts to restrict or limit the required disclosure
including by cooperating in drafting a protective order; or (e) disclosure is
made to a government regulatory agency as part of such agency's biological
license approval process.

7.  TERM AND TERMINATION

     7.1 TERM. Unless earlier terminated in accordance with this Article 7, this
Agreement shall remain in effect until the expiration of the last PDL License
Agreement.

     7.2  TERMINATION.

     (a) If either party shall at any time default in the making of any payment
hereunder, or shall commit any material breach of any covenant or agreement
herein contained, and shall fail to have initiated and actively pursued remedy
of any such default or breach within sixty (60) days after receipt of written
notice thereof by the other party, the other party may, at its option, cancel
this Agreement and revoke any rights herein granted by notice in writing to such
effect, but such act shall not prejudice the right of the party giving notice to
recover any sums due at the time of such cancellation, it being understood,
however, that if within sixty (60) days after receipt of any such notice the
receiving party shall have initiated and actively pursued remedy of its default,
then the rights herein

                                        4
<PAGE>
granted shall remain in force as if no breach or default had occurred on the
part of the receiving party, unless such breach or default is not in fact
remedied within a reasonable period of time.

     (b) This Agreement may be terminated by either party upon the occurrence of
any of the following which is not stayed or vacated within ninety (90) days of
such occurrence: (i) petition in bankruptcy filed by or against the other party;
(ii) adjudication of the other party as bankrupt or insolvent; (iii) appointment
of a liquidator, receiver or trustee for all or a substantial part of the other
party's property; or (iv) an assignment for the benefit of creditors of the
other party.

     (c) All right and licenses granted under or pursuant to this Agreement by
PDL to TANOX, are, and shall otherwise be deemed to be, for purposes of Section
365(n) of the U.S. Bankruptcy Code, licenses of rights to "intellectual
property" as defined under Section 101(52) of the U.S. Bankruptcy Code. The
parties agree that TANOX, as a licensee of such rights under this Agreement,
shall retain and may fully exercise all of its right and elections under the
U.S. Bankruptcy Code, subject to performance by TANOX of its preexisting
obligations under this Agreement.

     (d) To the extent permitted under applicable law, the rights granted under
this agreement may be terminated as to any country by PDL upon thirty (30) days
prior written notice in the event that TANOX challenges the PDL Patent Rights in
that country.

     7.3 NO WAIVER. The right of either party to terminate this Agreement as
provided herein shall not be affected in any way by its waiver of, or failure to
take action with respect to, any previous failure to perform hereunder.

     7.4 RIGHTS AND OBLIGATIONS UPON TERMINATION OR EXPIRATION. Upon expiration
or termination of this Agreement for any reason, nothing herein shall be
construed to release either party from any obligation that matured prior to the
effective date of such termination. In addition, the obligations set forth in
Articles 6 and 7 shall survive the expiration or termination of this Agreement.
Upon termination of this Agreement, each party shall return to the other party
any confidential information disclosed by the other party under this Agreement.

8.  MISCELLANEOUS

     8.1 ASSIGNMENT. This Agreement may not be assigned by either party without
the prior written consent of the other, except to Affiliates upon prior written
notice to the other party, and except that either party may assign this
Agreement to a party which acquires all or substantially all of its business,
whether by merger, sale of assets or otherwise.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement
between the parties hereto with respect to the within subject matter and
supersedes all previous Agreements (except as provided in Section 6.1), whether
written or oral. This Agreement shall not be changed or modified orally, but
only by an instrument in writing signed by both parties.

     8.3 SEVERABILITY. If any provision of this Agreement is declared invalid by
a court of last resort or by any court, the decision of which appeal is not
taken within the time provided by law, then and in such event, this Agreement
will be deemed to have been terminated only as to the portion thereof which
relates to the provision invalidated by that decision and only in the relevant
jurisdiction, but this Agreement, in all other respects and all other
jurisdictions, will remain in force; provided, however, that if the provision so
invalidated is essential to the Agreement as a whole, then the parties shall
negotiate in good faith to amend the terms hereof as nearly as practical to
carry out the original interest of the parties, and, failing such amendment,
either party may submit the matter to a court of competent jurisdiction for
resolution.

     8.4 NOTICES. Any notice or report required or permitted to be given under
this Agreement shall be in writing and shall be sent by expedited delivery or
telecopied and confirmed by mailing, as follows and shall be considered received
three (3) days after such delivery:

                                        5
<PAGE>
If to PDL:                 Protein Design Labs, Inc.
                           34801 Campus Drive
                           Fremont, California 94555 USA
                           Attention: Chief Executive Officer
                           Fax No: 510-574-1500

Copy to:                   Protein Design Labs, Inc.
                           34801 Campus Drive
                           Fremont, California 94555 USA
                           Attention: General Counsel
                           Fax No: 510-574-1473

If to TANOX:               Tanox, Inc.
                           10301 Stella Link
                           Houston, TX 77025 USA
                           Attention: Nancy T. Chang, President and CEO
                           Fax No: (713) 664-8914

Copy to:                   Tanox, Inc.
                           10301 Stella Link
                           Houston, TX 77025 USA
                           Attention: Head of Legal Affairs

     8.5  DISPUTE RESOLUTION.

     (A) NEGOTIATIONS. Any dispute, controversy or claim arising out of or
relating to any provision of this Agreement or a PDL License Agreement or the
interpretation, enforceability, performance, breach, termination or validity
hereof or thereof, including without limitation, this dispute resolution
provision, shall be subject to the procedures set forth in this Section 8.5. A
designated representative of PDL and TANOX will meet as reasonably requested by
either party to review any dispute, controversy or claim arising out of or
relating to any provision of this Agreement or a PDL License Agreement. If the
disagreement is not resolved by the designated representatives by mutual
agreement within thirty (30) days after a meeting to discuss the disagreement,
either party may at any time thereafter provide the other written notice
specifying the terms of such disagreement in reasonable detail. Upon receipt of
such notice, the chief executive officers of PDL and TANOX shall meet at a
mutually agreed upon time and location for the purpose of resolving such
disagreement. They will discuss the problems and/or negotiate for a period of up
to sixty (60) days in an effort to resolve the disagreement or negotiate an
acceptable interpretation or revision of the applicable portion of this
Agreement or a PDL License Agreement, as applicable, mutually agreeable to both
parties, without the necessity of formal procedures relating thereto. During the
course of such negotiations, the parties will reasonably cooperate and provide
information that is not materially confidential in order that each of the
parties may be fully informed with respect to the issues in dispute. The
institution of a formal legal proceeding under Section 8.5(b) or (c) to resolve
the disagreement may occur by written notice to the other party only after the
earlier of: (a) the chief executive officers mutually agreeing that resolution
of the disagreement through continued negotiation is not likely to occur, or (b)
following expiration of the sixty (60) day negotiation period.

     (B) ARBITRATION. Subject to Section 8.5(a), any dispute, controversy or
claim arising out of or in connection with or relating to this Agreement or a
PDL License Agreement or the breach or alleged breach thereof, but not including
any dispute, controversy or claim concerning the validity of any PDL Licensed
Patent, shall be submitted by the parties to arbitration in Denver, Colorado in
accordance with the then-current JAMS Comprehensive Arbitration Rules and
Procedures under the auspices of JAMS ("JAMS") except as otherwise provided
herein. If the dispute, controversy or claim concerns the validity of any PDL
Licensed Patent, all matters subject to dispute, controversy or claim hereunder
shall be removed to Federal District Court as provided in Section 8.5(c).

     Any arbitration proceeding hereunder shall be held in English and a
transcribed record prepared in English. The parties shall choose, by mutual
agreement, one (1) neutral arbitrator within thirty (30)

                                        6
<PAGE>
days of receipt of notice of the intent to arbitrate. If no arbitrator is
appointed within the times herein provided or any extension of time which is
mutually agreed upon, JAMS shall make such appointment of a person who shall
devote substantial time to arbitrating within thirty (30) days of such failure.
Discovery permitted by the arbitrator shall be pursuant to the Federal Rules of
Civil Procedure, provided that all discovery shall be completed within sixty
(60) days of the appointment of such arbitrator and the decision rendered by
such arbitrator shall thereafter be delivered in writing setting forth the basis
therefor within thirty (30) days after the completion of discovery. The award
rendered by the arbitrator shall include costs of arbitration, reasonable
attorneys' fees and reasonable costs for expert and other witnesses, and
judgment on such award may be entered in any court having jurisdiction thereon.
Nothing in this Agreement shall be deemed as preventing either party from
seeking injunctive relief (or any other provisional remedy) from any court
having jurisdiction over the parties and the subject matter of the dispute but
only to the extent necessary to protect either party's name, proprietary
information, trade secrets, know-how or any other similar proprietary rights. If
the issues in dispute involve scientific or technical matters related to
monoclonal antibody technology, any arbitrator chosen hereunder shall have not
less than five (5) years of educational training and/or experience sufficient to
demonstrate a reasonable level of relevant scientific and/or technical knowledge
related to monoclonal antibody technology or such arbitrator shall have the
right to appoint an expert with such experience to assist such arbitrator as
necessary. If the issues in dispute involve patent matters (other than validity
of a PDL Licensed Patent), then such arbitrator shall also be knowledgeable
about patent law matters and to the extent possible, with monoclonal antibody
technology. The decision of the arbitrator shall be in writing and shall set
forth the basis therefor. The arbitrator shall have the authority to award such
remedies as he or she believes appropriate in the circumstances, including, but
not limited to, compensatory damages subject to the Three and Three-Quarters
Percent (3.75%) royalty maximum set forth in the PDL License Agreement,
consequential and incidental damages, interest, tort damages (but not punitive
or similar damages) and specific performance and other equitable relief.

     (C) PATENT VALIDITY. Subject to Section 8.5(a), any dispute, controversy or
claim (i) which involves the validity of a PDL Licensed Patent issued in the
United States shall be subject to actions before the United States Patent and
Trademark Office and/or adjudicated in Federal District Court, Central District,
Santa Clara County in the State of California and (ii) which involves the
validity of a PDL Licensed Patent issued in any other country shall be brought
before an appropriate regulatory or administrative body or court in that
country. The prevailing party shall be entitled to recover from the other party,
the reasonable attorneys' fees, costs and expenses incurred by such prevailing
party in connection with any action or proceeding under this Section 8.5(c).

     8.6 CHOICE OF LAW. The validity, performance, construction, and effect of
this Agreement shall be governed by the laws of the State of California which
are applicable to contracts between California residents to be performed wholly
within California.

     8.7 WAIVER. None of the terms, covenants and conditions of this Agreement
can be waived except by the written consent of the party waiving compliance.

     8.8 FORCE MAJEURE. Neither party shall be responsible to the other for
failure or delay in performing any of its obligations under this Agreement or
for other non-performance hereof provided that such delay or non-performance is
occasioned by a cause beyond the reasonable control and without fault or
negligence of such party, including, but not limited to war, terrorism,
earthquake, fire, flood, explosion, discontinuity in the supply of power, court
order or governmental interference, act of God, strike or other labor trouble
and provided that such party will inform the other party as soon as is
reasonably practicable and that it will entirely perform its obligations within
a reasonable time after the relevant cause has ceased its effect.

     8.9 PUBLICITY. PDL will issue a press release concerning the parties' entry
into this Agreement and the amount of the initial fees to be paid hereunder,
with the content of such release to be

                                        7
<PAGE>
approved in advance by TANOX, which approval shall not be unreasonably withheld.
Except as required by law or regulation, neither party shall publicly disclose
the other terms and conditions of this Agreement unless expressly authorized to
do so by the other party, which authorization shall not be unreasonably
withheld; provided, however that the parties may disclose such terms and
conditions to their respective investors, prospective investors, advisors, and
consultants under a written confidentiality agreement protecting the
confidentiality of the terms hereof as provided under Article 6, and to their
accountants and attorneys provided that such accountants and attorneys agree to
maintain the confidentiality of the terms hereof as provided under Article 6,
and either party may disclose such terms and conditions as deemed required in
connection with any securities offering it elects to make.

     8.10 HEADINGS. The captions used herein are inserted for convenience of
reference only and shall not be construed to create obligations, benefits, or
limitations.

     8.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and such
counterparts together shall constitute one agreement. Execution and delivery of
this Agreement by facsimile copies bearing the facsimile signatures of the
parties shall constitute a valid and binding execution and delivery of this
Agreement by the signing party, and such facsimile copies shall constitute
original documents.

     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the Effective Date.


PDL:                               TANOX:
PROTEIN DESIGN LABS, INC.          TANOX, INC.

By:  /s/ LAURENCE JAY KORN         By:  /s/ NANCY T. CHANG
    ----------------------             --------------------
     Laurence Jay Korn                  Nancy T. Chang
     CEO                                President and CEO

                                        8
<PAGE>
                                    EXHIBIT A

                                PDL PATENT RIGHTS

The following are patents and patent applications (also known as the "Queen et
al. patents") issued and filed in certain countries in the world and licensed as
part of the PDL Patent Rights under the Agreement. (Updated as of January 27,
2000.)

1.  The following issued U.S. patents and U.S. patent applications:

        No. 5,585,089, "Humanized Immunoglobulins," issued December 17, 1996.

        No. 5,693,761, "Polynucleotides Encoding Improved Humanized
        Immunoglobulins," issued December 2, 1997.

        No. 5,693,762, "Humanized Immunoglobulins," issued December 2, 1997.

        *

2.  The following patents and patent applications outside the U.S.:

<TABLE>
<CAPTION>
PATENT NO.                          COUNTRY                           TITLE*
<S>             <C>                 <C>              <C>
                                                          "Novel Immunoglobulins, Their

Issued          647383              Australia                  Production and Use"
Issued          671949              Australia                           "
Issued          AT E133452          Austria                             "
Issued          0451216             Belgium                             "
Issued          61095               Bulgaria                            "
Issued          98389               Chile                               "
Issued          P920500A            Croatia                             "
Issued          0451216B1           Europe1                             "
Issued          0682040 B1          Europe1                             "
Issued          FR0451216           France                              "
Issued          DE 68925536         Germany                             "
Issued          DE 68929061         Germany                             "
Issued          DD 296 964          East Germany                        "
Issued          GB 0451216          Great Britain                       "
Issued          1001050             Greece                              "
Issued          211174              Hungary                             "
Issued          IT 0451216          Italy                               "
Issued          2828340             Japan                               "
Issued          LU 0451216          Luxembourg                          "
Issued          92.2146             Monaco                              "
Issued          NL 0451216          Netherlands                         "
Issued          231984              New Zealand                         "
Issued          132068              Pakistan                            "
Issued          29729               Philippines                         "
Issued          92758               Portugal                            "
Issued          2126046             Russia                              "
Issued          SG 0451216          Singapore                           "
Issued          8912489             Slovenia                            "
Issued          89/9956             South Africa                        "
Issued          178385              South Korea                         "
Issued          0231090             South Korea                         "
Issued          2081974 T3          Spain                               "
Issued          2136760             Spain
</TABLE>

                                        9

LEGAL COMMON/CONTRACTS/TANOX/LIC OPTN/MSTR000316                          000316
<PAGE>
<TABLE>
<S>             <C>                 <C>              <C>
Issued          SE 0451216          Sweden                              "
Issued          CH 0451216          Switzerland                         "
Issued          50034               Taiwan                              "
Issued          13349               Uruguay                             "
Issued          56455               Venezuela                           "
Issued          48700               Yugoslavia                          "
<CAPTION>
                COUNTRY             APPLICATION NO.                   TITLE*

Pending            *                      *                             *
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
</TABLE>

------------

* Exact titles may differ in different countries.

1 and corresponding European national patents issued therefrom.

                                       10
<PAGE>

                                    EXHIBIT B

                          FORM OF PDL LICENSE AGREEMENT

                                       11
<PAGE>
                                    EXHIBIT B

                            PATENT LICENSE AGREEMENT

     This Agreement ("Agreement"), effective as of

("Effective Date"), is made by and between PROTEIN DESIGN LABS, INC., a
Delaware corporation having offices at 34801 Campus Drive, Fremont, CA 94555,
U.S.A. (hereinafter "PDL") and TANOX, INC., a Delaware corporation having
offices at 10301 Stella Link, Houston, TX 77025, U.S.A. (hereinafter "TANOX").

                                    RECITALS

     A. TANOX and PDL have entered in a Master Agreement effective March 17,
2000 (the "Master Agreement"), pursuant to which TANOX may enter into this
Agreement with respect to a license under the PDL Patent Rights (as defined
below) for TANOX'S antibody products.

     B. The Master Agreement provides TANOX with the right to obtain a
nonexclusive, worldwide, royalty-bearing license under the PDL Patent Rights
under the terms and conditions of this Agreement.

                                    AGREEMENT

     NOW THEREFORE, in consideration of the mutual covenants herein contained
and intending to be legally bound, the parties agree as follows:

1.  DEFINITIONS

     All references to Exhibits, Articles and Sections shall be references to
Exhibits, Articles and Sections of this Agreement. In addition, except as
otherwise expressly provided herein, the following terms in this Agreement shall
have the following meanings:

     1.01 "AFFILIATE" means with respect to a party hereto, any corporate or
other entity which, directly or indirectly, controls, is controlled by, or is
under common control with such party where "control" means the ownership of not
less than 50% of the voting shares of a corporation, or decision-making
authority as to an unincorporated entity.

     1.02 "ANTIBODY" means any antibody directed against an Antigen, including,
without limitation, monospecific and bispecific antibodies; less than
full-length antibody forms such as Fv, Fab, and F(ab')2; single-chain
antibodies; and antibody conjugates bound to a toxin, label or other moiety.

     1.03  "ANTIGEN" means the target molecule:
                                    .

     1.04 "COMBINATION PRODUCT(S)" shall mean any product containing both a
pharmaceutically active agent or ingredient which constitutes a Licensed Product
and one or more other pharmaceutically active agents or ingredients which do not
constitute Licensed Products.

     1.05 "LICENSED PRODUCT(S)" shall mean therapeutic products of TANOX or
TANOX'S sublicensees or Affiliates that include an Antibody developed by or for
TANOX or its Affiliates, jointly or otherwise, binding to the Antigen whose
development, manufacture, use or sale would, but for a license under this
Agreement, infringe a Valid Claim.

     1.06 "NET SALES" shall mean the aggregate gross revenues, whether in cash
or in kind, derived by or payable from or on account of the sale of Licensed
Products, less actual amounts incurred for (a) credits or allowances, if any,
actually granted on account of price adjustments, recalls, rejection or return
of items previously sold, (b) excise and sales taxes, duties or other taxes
imposed on and paid with respect to such sales (excluding income or franchise
taxes of any kind) and (c) outer packing, freight and freight insurance costs.
All amounts deducted under this Section 1.06 shall be properly documented and
specified in any summary report provided to PDL under Section 3.07. If TANOX or
any of its Affiliates or sublicensees receive non-cash consideration for any
Licensed Product sold or

                                        1
<PAGE>
otherwise transferred to an independent third party not an Affiliate of the
seller or transferor, the fair market value of such non-cash consideration on
the date of such transfer as known to TANOX, or as reasonably estimated by TANOX
if unknown, shall be included in the definition of Net Sales.

     1.07 "PDL PATENT RIGHTS" means the patent applications or patents (as well
as any foreign counterparts thereto) identified on EXHIBIT A. PDL Patent Rights
shall include U.S. or foreign patents or patent applications which claim
priority to any application to which a listed U.S. Patent also claims priority.
PDL Patent Rights shall also include any foreign equivalents, additions,
continuations, continuations-in-part or divisions of such patents or patent
applications or any substitute applications therefor; any patents issued with
respect to such patent applications, any reissues, extensions or patent term
extensions of any such patent, and any confirmation patents or registration
patents or patents of addition based on any such patents.

     1.08 "VALID CLAIM" means (a) any claim in any issued patent included in the
PDL Patent Rights which would be infringed but for the license granted under
Section 2.01 and which claim has not been disclaimed or held unenforceable or
invalid by a governmental agency or court of competent jurisdiction from which
no appeal has been taken within the time period permitted for filing an appeal
or may be taken; and (b) any pending claims under PDL Patent Rights which, if
granted, would be infringed but for the license granted under Section 2.01 and
which pending claim would be a Valid Claim if the pending claim were treated as
granted, provided that examination has been timely requested for such pending
claims and they are otherwise being diligently prosecuted in an effort to have
them allowed and granted in an issued patent.

2.  LICENSE

     2.01 LICENSE GRANT. Subject to the terms and conditions of this Agreement,
PDL hereby grants and TANOX hereby accepts a worldwide nonexclusive license
under the PDL Patent Rights, including the right to grant sublicenses in
accordance with Section 2.02 to make, import, have made, use, offer to sell or
sell Licensed Products.

     2.02 LIMITATION ON SUBLICENSES; NOTIFICATION. TANOX shall have the right to
grant sublicenses of its rights with respect to the Licensed Product under
Section 2.01 only to its Affiliates or in connection with the assignment or
license by TANOX of a Licensed Product to a third party. Notwithstanding the
assignment or grant of a sublicense by TANOX hereunder, TANOX shall remain
obligated to pay all royalties due to PDL with respect to the sale of Licensed
Products by its assignee or sublicensee. In addition, the grant of any
sublicenses under Section 2.01 shall be on terms and conditions which are
subject to and subordinate to the terms of this Agreement and TANOX shall remain
fully responsible to PDL for the performance of any and all such terms by its
sublicensees. Promptly following execution of any sublicense hereunder, but in
any event not less than ten (10) days thereafter, TANOX shall notify PDL of the
identity of the sublicensee and the scope of the sublicense.

     2.03 NO OTHER LICENSE RIGHTS. TANOX expressly acknowledges and agrees that,
except for the license expressly granted under Section 2.01, no rights to any
other PDL patents, patent applications, know-how or licenses are included in
this Agreement and that any royalties or payments that may be due to third
parties in order for TANOX to make, have made, use or sell Licensed Products
shall be the sole responsibility of TANOX.

     2.04 UPDATES TO LIST OF PDL PATENT RIGHTS. Upon written request of TANOX,
which request shall not be made more than once per calendar year, PDL agrees to
provide a written update listing the patents and patent applications under the
PDL Patent Rights, and such update shall constitute an amendment to Exhibit "A."
PDL may, at its option, furnish such update to TANOX from time to time during
the terms of this Agreement as part of an update to the Master Agreement.

                                        2
<PAGE>
3.  PAYMENT; ROYALTIES, REPORTS

     3.01 PAYMENTS.  In consideration for the licensed granted by PDL under
Article 2 of this Agreement TANOX shall pay to PDL a nonrefundable signing and
licensing fee by the later of fifteen (15) business days after Tanox' exercise
of its right under the Master Agreement to enter into this Agreement or the
Effective Date, the sum of                         United States Dollars
(US$            [DRAFTING NOTE: ENTER AMOUNT CALCULATED UNDER SECTION 3.2 OF THE
MASTER AGREEMENT]

     3.02 ROYALTIES TO PDL. Subject to reduction for any offset as provided in
Section 3.05, or withholding under Section 3.09(b), and in further consideration
of the rights and licenses granted under Article 2, TANOX shall pay to PDL a
royalty of * of the Net Sales of all Licensed Products sold by TANOX or its
Affiliates or sublicensees in each country until the last date on which there is
a Valid Claim that, but for a license granted to TANOX under this Agreement,
would be infringed by the making, using, having made or sale of that Licensed
Product in such country or by the manufacture of Licensed Product in the country
of manufacture.

     3.03 SALES AMONG AFFILIATES. Sales between and among TANOX and its
Affiliates or sublicensees of Licensed Products which are subsequently resold or
to be resold by such Affiliates or sublicensees shall not be subject to royalty,
but in such cases royalties shall accrue and be calculated on the sale of such
Licensed Products to a third party.

     3.04 COMBINATION PRODUCTS. Net Sales in a particular country, in the case
of the Combination Products for which the pharmaceutically active agent or
ingredient constituting a Licensed Product and each of the other
pharmaceutically active agents or ingredients not constituting Licensed Products
have established market prices in that country in the Territory when sold
separately, shall be determined by multiplying the Net Sales for each such
Combination Product by a fraction, the numerator of which shall be the
established market price for the Licensed Product(s) contained in the
Combination Product and the denominator of which shall be the sum of the
established market prices for the Licensed Product(s) plus the established
market prices for the other pharmaceutically active agents or ingredients
contained in the Combination Product. When such separate market prices are not
established in that country, then the parties shall negotiate in good faith to
determine a fair and equitable method of calculating Net Sales in that country
for the Combination Product in question.

     3.05 ANNUAL MAINTENANCE FEE. In further consideration of the licenses
granted under Article 2, following the second (2nd) anniversary of the Effective
Date and not later than each anniversary thereafter within thirty (30) days
after receipt of an invoice from PDL, TANOX shall pay PDL a nonrefundable annual
maintenance fee in the amount of *. An amount of fifty percent (50%) of the
annual maintenance fee paid by TANOX hereunder shall be creditable against
royalties payable to PDL pursuant to Section 3.02 beginning in the year in which
a Biologist License Application ("BLA") or foreign equivalent thereof is filed
with the U.S. Food and Drug Administration (or any successor thereto, or a
foreign counterpart agency), with respect to a Licensed Product; provided that
in no event shall any portion of the annual maintenance fees paid prior to the
year in which a BLA is filed with respect to the Licensed Product be creditable
against royalties hereunder.

     3.06 CURRENCY CONVERSION. All amounts payable to PDL under this Agreement
shall be payable in U.S. Dollars by wire transfer to a bank account designated
by PDL. In the case of royalties on Net Sales, all amounts payable shall first
be calculated in the currency of sale and then converted into U.S. Dollars using
the average of the daily exchange rates for such currency quoted by Citibank,
N.A. for each of the last fifteen (15) banking days of each calendar quarter.

     3.7  ROYALTY REPORTS.

     (A)  CURRENT REPORTS.  TANOX agrees to make written reports and royalty
payments to PDL within sixty (60) days after the close of each calendar quarter
during the terms of this Agreement,

                                        3
<PAGE>
beginning with the calendar quarter in which the date of first sale of Licensed
Product by TANOX, its Affiliates or sublicensees, following regulatory approval
occurs. These reports shall show for the calendar quarter in question Net Sales
by TANOX, its Affiliates and sublicensees of the Licensed Products in the
Territory on a country-by-country basis, details of the quantities of Licensed
Products sold in each country and the country of manufacture, if different,
applicable offsets, withholding taxes and the net royalty due to PDL thereon
pursuant to Article 3. No later than at the time of the making of each such
report, TANOX shall make any payment due to PDL of royalties for the period
covered by such report.

     (B) TERMINATION REPORT. For each Licensed Product, TANOX also agrees to
make a written report to PDL within ninety (90) days after the date on which
TANOX, its Affiliates or sublicensees last sell that Licensed Product stating in
such report the same information required by quarterly reports for all such
Licensed Products made, sold or otherwise disposed of which were not previously
reported to PDL.

     3.08 INSPECTION. TANOX agrees to keep clear, accurate and complete records
for a period of at least three (3) years after each reporting period in which
Net Sales occur showing the manufacturing, sales and other disposition of
Licensed Products in the Territory in sufficient detail to enable the royalties
payable hereunder to be determined. TANOX further agrees to permit its books and
records to be examined by an independent accounting firm selected by PDL and
reasonably satisfactory to TANOX from time-to-time but not more than once a
year. Such examination is to be made at the expense of PDL, except in the event
that the results of the audit reveal that TANOX underpaid PDL by * or more, then
the audit fees shall be paid by TANOX. Any such discrepancies will be promptly
corrected by a payment or refund, as appropriate.

     3.09  WITHHOLDING.

     (A) PAYMENTS. All amounts payable under Section 3.01 and 3.05 shall
represent the actual proceeds to be received by PDL, net of any withholding or
other taxes or levies that may be applicable to such payments. PDL agrees to
reasonably cooperate with TANOX in obtaining a refund of any withholding taxes
or levies paid by TANOX if any, with respect to any payments to PDL hereunder.
In the event that PDL is successful in obtaining any refund of tax withholding
amounts paid by TANOX under this Agreement, PDL agrees to promptly remit such
refund amount to TANOX.

     (B) ROYALTY PAYMENTS. TANOX may withhold from royalties due to PDL amounts
for payment of any withholding tax that TANOX has actually paid to any taxing
authority with respect to the royalty payments due to PDL hereunder, provided
that such amounts are properly documented and specific in any summary report to
PDL hereunder. TANOX agrees to reasonably cooperate with PDL in obtaining a
foreign tax credit in the U.S. with respect to royalties due to PDL on the sale
or manufacture of Licensed Products at the sole expense of PDL.

4.  PATENT PROSECUTION AND MAINTENANCE.

     4.01  PROSECUTION.  PDL hereby agrees that, at its own expense it will use
commercially reasonable efforts to:

     (a) prosecute any patent applications included in the PDL Patent Rights and
     to secure the most extensive protection reasonably obtainable under the PDL
     Patent Rights; and

     (b) maintain the claims in patents included in the PDL Patent Rights as
     valid and enforceable claims for the full term thereof.

     4.02 UPDATES. Upon the written request of TANOX (which request shall not be
made more than once per calendar year), PDL agrees to provide a written update
of the information relating to the PDL Patent Rights as set forth on EXHIBIT A.

                                        4
<PAGE>
     4.03 DEFENSE OF PDL PATENT RIGHTS. With respect to the PDL Patent Rights
licensed under this Agreement, PDL at its sole cost and expense agrees to take
all steps and proceedings and to undertake such other acts as PDL may, in its
sole discretion, deem necessary or advisable to restrain any infringement or
improper or unlawful use of the PDL Patent Rights and to recover any actual or
punitive compensation therefor. TANOX shall provide reasonable assistance to PDL
and permit PDL to have the sole right to take such steps, conduct any such
proceedings or undertake any such action to restrain any infringement or
improper or unlawful use of the PDL Patent Rights, whether or not TANOX is a
party to such steps, proceedings or actions, all of which shall be at PDL's
expense. Any monies recovered from alleged infringers shall be retained by PDL.

5.  REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

     5.01 VALID AGREEMENT. Each party represents and warrants to the other that
it knows of no legal reason to, and is not a party to any agreement which would,
prevent it from entering into and performing its obligations under this
Agreement and that the signatory hereto is duly authorized to execute and
deliver this Agreement.

     5.02 NO WARRANTY OF VALIDITY, NON-INFRINGEMENT. Nothing in this Agreement
shall be construed as (a) a warranty or representation by PDL as to the validity
or scope of any PDL Patent Rights; or (b) a warranty or representation that any
Licensed Product made, used, sold or otherwise disposed of under the license
granted in this Agreement is or will be free from infringement of patents,
copyrights, trademarks, trade secrets or other rights of third parties.

     5.03 NO OTHER WARRANTIES. EXCEPT AS SPECIFICALLY SET FORTH IN ARTICLE 5,
PDL MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED, WITH RESPECT TO ANY CELL LINES, ANTIBODIES OR LICENSED PRODUCTS
DEVELOPED BY TANOX UNDER THE LICENSE SET FORTH IN THIS AGREEMENT AND PDL FURTHER
MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, OR THAT THE USE OF ANY CELL LINES, ANTIBODIES, LICENSED
PRODUCTS OR OTHER MATERIALS DEVELOPED BY TANOX UNDER THE LICENSE SET FORTH IN
THIS AGREEMENT WILL NOT INFRINGE ANY THIRD PARTY RIGHTS.

     5.04 INDEMNIFICATION. TANOX shall at all times, during the term of this
Agreement and thereafter, indemnify and hold harmless PDL and its Affiliates,
sublicensees, directors, officers, agents and employees from any claim,
proceeding, loss, expense, and liability of any kind whatsoever (including but
not limited to those resulting from death, personal injury, illness or property
damage and including legal expenses and reasonable attorneys' fees) arising out
of or resulting from (a) any claim of patent infringement (direct or
contributory) or including patent infringement with respect to the activities of
TANOX and (b) the development, manufacture, holding, use, testing,
advertisement, sale or other disposition by TANOX, its Affiliates or
sublicensees, or any distributor, customer or representative of TANOX or any one
in privity therewith, of any Licensed Product; provided, however, that PDL shall
promptly notify TANOX of such claim, proceeding, loss, expense or liability and
TANOX, at TANOX's cost, shall have sole control over the defense, including
settlement of any claim or action, with full cooperation from PDL.

6. CONFIDENTIALITY. PDL and TANOX acknowledge that in the course of negotiations
of this Agreement or other discussions between the parties of prospective
agreements or business relationships and/or in furtherance of the interests of
the parties hereunder that each has received and/or may receive confidential
information of the other party. To the extent that such information is
"Confidential Information" as defined in Section 6.2 of the Master Agreement,
each party is subject to the obligations of such Section 6.2 with respect to the
Confidential Information.

                                        5
<PAGE>
7.  TERM AND TERMINATION

     7.01 TERM. Unless earlier terminated as provided in this Article 7, this
Agreement shall come into force on the Effective Date and shall continue until
the expiration of the last obligation of TANOX to pay royalties to PDL in
accordance with Article 3 above. Thereafter, with the exception of the surviving
clauses specified in Section 7.04, this Agreement shall terminate and all
licenses or sublicenses granted hereunder shall become fully paid-up,
irrevocable licenses.

     7.02  TERMINATION.

        (A) This Agreement may be terminated in its entirety on sixty (60) days
prior written notice by TANOX.

        (B) If TANOX shall at any time default in the payment of any royalty, or
the making of any report hereunder, or shall commit any material breach of any
covenant or agreement herein contained or shall make any false report, and shall
fail to have initiated and actively pursued remedy of any such default or breach
within sixty (60) days after receipt of written notice thereof by the other
party, PDL may, at its option, cancel this Agreement and revoke any rights and
licenses herein granted and directly affected by the default or breach by notice
in writing to such effect, but such act shall not prejudice PDL's rights to
recover any royalty or other sums due at the time of such cancellation, it being
understood, however, that if within sixty (60) days days after receipt of any
such notice TANOX shall have initiated and actively pursued remedy of its
default, then the rights and licenses herein granted shall remain in force as if
no breach or default had occurred on the part of TANOX, unless such breach or
default is not in fact remedied within a reasonable period of time. If TANOX
disputes the existence of a default or material breach or making a false report
or the failure to pursue a remedy or to remedy the default or breach, the
provisions for resolution of a default shall be limited to those set forth in
Section 8.5 of the Master Agreement.

        (C) This Agreement may be terminated by either party upon the occurrence
of any of the following which is not stayed or vacated within ninety (90) days
of such occurrence: (i) petition in bankruptcy filed by or against the other
party; (ii) adjudication of the other party as bankrupt or insolvent; (iii)
appointment of a liquidator, receiver or trustee for all or a substantial part
of the other party's property; or (iv) an assignment for the benefit of
creditors of the other party.

        (D) All rights and licenses granted under or pursuant to this Agreement
by PDL to TANOX, are and shall otherwise be deemed to be, for purposes of
Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to "intellectual
property" as defined under Section 101(52) of the U.S. Bankruptcy Code. The
Parties agree that TANOX, as a licensee of such rights under this Agreement,
shall retain and may fully exercise all of its rights and elections under the
U.S. Bankruptcy Code, subject to performance by TANOX of its preexisting
obligations under this Agreement.

        (E) To the extent permitted under applicable law, the license granted
under this Agreement may be terminated as to any country by PDL upon thirty (30)
days prior written notice in the event that TANOX challenges any PDL Patent
Rights in that country.

     7.03 NO WAIVER. The right of either party to terminate this Agreement as
provided herein shall not be affected in any way by its waiver of, or failure to
take action with respect to, any previous failure to perform hereunder.

     7.04  SURVIVAL.

        (A) Termination for any reason hereunder shall not affect any accrued
rights or obligations of the parties arising in any manner under this Agreement
as of the date of termination. In any event, the confidentiality and indemnity
obligations and any accrued payment and reporting obligations under Articles 3,
5 and 6 shall survive any termination of this Agreement.

                                        6
<PAGE>
        (b) Upon termination of this Agreement under Section 7.02(c), PDL hereby
grants TANOX a license to sell within three (3) months of such termination any
Licensed Products in TANOX' or TANOX' Affiliate's or sublicensee's inventory on
the date of such termination, which have not previously been sold ("Inventory");
provided, however, that TANOX shall pay the royalties due on such inventory,
provide related reports and allow a final audit in the amounts and manner
provided for in Sections 7.07 and 3.08.

     7.05 DISPUTES. The provisions of Section 8.5 of the Master Agreement are
incorporated by reference as if set forth in their entirety herein.

8.  MISCELLANEOUS

     8.01 ASSIGNMENT. This Agreement may not be assigned by either party without
the prior written consent of the other, except to Affiliates upon prior written
notice to the other party, and except that either party may assign this
Agreement to a party which acquires all or substantially all of its business,
whether by merger, sale of assets or otherwise.

     8.02 ENTIRE AGREEMENT. This Agreement and the Master Agreement constitute
the entire agreement between the parties hereto with respect to the within
subject matter and together they supersede all previous agreements (except as
otherwise provided in the Master Agreement), whether written or oral. This
Agreement shall not be changed or modified orally, but only by an instrument in
writing signed by both parties.

     8.03 SEVERABILITY. If any provision of this Agreement is declared invalid
by a court of last resort or by any court, the decision of which appeal is not
taken within the time provided by law, then and in such event, this Agreement
will be deemed to have been terminated only as to the portion thereof which
relates to the provision invalidated by that decision and only in the relevant
jurisdiction, but this Agreement, in all other respects and all other
jurisdictions, will remain in force; provided, however, that if the provision so
invalidated is essential to the Agreement as a whole, then the parties shall
negotiate in good faith to amend the terms hereof as nearly as practical to
carry out the original interest of the parties, and failing such amendment,
either party may submit the matter to a court of competent jurisdiction for
resolution.

     8.04 NOTICES. Any notice or report required or permitted to be given under
this Agreement shall be in writing and shall be sent by expedited delivery or
telecopied and confirmed by mailing, as follows and shall be considered received
three (3) days after such delivery.

          If to PDL:             Protein Design Labs, Inc.
                                 34801 Campus Drive
                                 Fremont, California 94555 USA
                                 Attention: Chief Executive Officer
                                 Fax No: 510-574-1500

          Copy to:               Protein Design Labs, Inc.
                                 34801 Campus Drive
                                 Fremont, California 94555 USA
                                 Attention: General Counsel
                                 Fax No: 510-574-1473

          If to TANOX:           Tanox, Inc.
                                 10301 Stella Link
                                 Houston, TX 77025 USA
                                 Attention: Nancy T. Chang, President and CEO
                                 Fax No: (713) 664-8914

          Copy to:               Tanox, Inc.
                                 10301 Stella Link
                                 Houston, TX 77025 USA
                                 Attention: Head of Legal Affairs

                                        7
<PAGE>
     8.05 CHOICE OF LAW. The validity, performance, construction, and effect of
this Agreement shall be governed by the laws of the State of California which
are applicable to contracts between California residents to be performed wholly
within California.

     8.06 WAIVER. None of the terms, covenants and conditions of this Agreement
can be waived except by the written consent of the party waiving compliance.

     8.07 FORCE MAJEURE. Neither party shall be responsible to the other for
failure or delay in performing any of its obligations under this Agreement or
for other non-performance hereof provided that such delay or non-performance is
occasioned by a cause beyond the reasonable control and without fault or
negligence of such party, including, but not limited to war, terrorism,
earthquake, fire, flood, explosion, discontinuity in the supply of power, court
order or governmental interference, act of God, strike or other labor trouble
and provided that such party will inform the other party as soon as is
reasonably practicable and that it will entirely perform its obligations within
a reasonable time after the relevant cause has ceased its effect.

     8.08 PUBLICITY. PDL will issue a press release concerning the parties'
entry into this Agreement and the amount of signing and licensing fees paid
hereunder, with the content of such release to be approved in advance by TANOX,
which approval shall not be unreasonably withheld. Except as required by law or
regulation, neither party shall publicly disclose the other terms and conditions
of this Agreement unless expressly authorized to do so by the other party, which
authorization shall not be unreasonably withheld, and both parties agree that
PDL shall not disclose the antigen which is the subject of this Agreement,
without TANOX' prior written consent; provided, however, that the parties may
disclose such terms and conditions to their respective investors, prospective
investors, advisors, and consultants under a written confidentiality agreement
protecting the confidentiality of the terms hereof in a manner at least as
restrictive as provided under Article 6 of the Master Agreement, and to their
accountants and attorneys provided that such accountants and attorneys agree to
maintain the confidentiality of the terms hereof in a manner at least as
restrictive as provided under Article 6 of the Master Agreement, and either
party may disclose such terms and conditions as deemed required in connection
with any securities offering it elects to make.

     8.09 HEADINGS. The captions used herein are inserted for convenience of
reference only and shall not be construed to create obligations, benefits, or
limitations.

     8.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and such
counterparts together shall constitute one agreement. Execution and delivery of
this Agreement by facsimile copies bearing the facsimile signatures of the
parties shall constitute a valid and binding execution and delivery of this
Agreement by the signing party, and such facsimile copies shall constitute
original documents.

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

PDL:                                                    TANOX:
PROTEIN DESIGN LABS, INC.                               TANOX, INC.

By:______________________                               By:___________________
     Laurence Jay Korn                                  Nancy T. Chang
     CEO                                                President and CEO

                                        8
<PAGE>
                                    EXHIBIT A

                                PDL PATENT RIGHTS

The following are patents and patent applications (also known as the "Queen et
al. patents") issued and filed in certain countries in the world and licensed as
part of the PDL Patent Rights under the Agreement. (Updated as of January 27,
2000.)

1.  The following issued U.S. patents and U.S. patent applications:

        No. 5,585,089, "Humanized Immunoglobulins," issued December 17, 1996.

        No. 5,693,761, "Polynucleotides Encoding Improved Humanized
        Immunoglobulins," issued December 2, 1997.

        No. 5,693,762, "Humanized Immunoglobulins," issued December 2, 1997.

        *

2.  The following patents and patent applications outside the U.S.:

<TABLE>
<CAPTION>
PATENT NO.                          COUNTRY                           TITLE*
<S>             <C>                 <C>              <C>
                                                          "Novel Immunoglobulins, Their

Issued          647383              Australia                  Production and Use"
Issued          671949              Australia                           "
Issued          AT E133452          Austria                             "
Issued          0451216             Belgium                             "
Issued          61095               Bulgaria                            "
Issued          98389               Chile                               "
Issued          P920500A            Croatia                             "
Issued          0451216B1           Europe1                             "
Issued          0682040 B1          Europe1                             "
Issued          FR0451216           France                              "
Issued          DE 68925536         Germany                             "
Issued          DE 68929061         Germany                             "
Issued          DD 296 964          East Germany                        "
Issued          GB 0451216          Great Britain                       "
Issued          1001050             Greece                              "
Issued          211174              Hungary                             "
Issued          IT 0451216          Italy                               "
Issued          2828340             Japan                               "
Issued          LU 0451216          Luxembourg                          "
Issued          92.2146             Monaco                              "
Issued          NL 0451216          Netherlands                         "
Issued          231984              New Zealand                         "
Issued          132068              Pakistan                            "
Issued          29729               Philippines                         "
Issued          92758               Portugal                            "
Issued          2126046             Russia                              "
Issued          SG 0451216          Singapore                           "
Issued          8912489             Slovenia                            "
Issued          89/9956             South Africa                        "
Issued          178385              South Korea                         "
Issued          0231090             South Korea                         "
Issued          2081974 T3          Spain                               "
Issued          2136760             Spain
</TABLE>

                                        9

LEGAL COMMON/CONTRACTS/TANOX/LIC OPTN/MSTR000316                          000316
<PAGE>
<TABLE>
<S>             <C>                 <C>              <C>
Issued          SE 0451216          Sweden                              "
Issued          CH 0451216          Switzerland                         "
Issued          50034               Taiwan                              "
Issued          13349               Uruguay                             "
Issued          56455               Venezuela                           "
Issued          48700               Yugoslavia                          "
<CAPTION>
                COUNTRY             APPLICATION NO.                   TITLE*

Pending            *                      *                             *
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
</TABLE>

------------

* Exact titles may differ in different countries.

1 and corresponding European national patents issued therefrom.

                                       10