Document:

Exhibit 10.10

 

TANOX, INC.

 

NON-QUALIFIED STOCK OPTION AGREEMENT

2000 Non-Employee Directors’
Stock Option Plan

 

1.                                       Grant of Option.

 

TANOX, INC., a Delaware corporation (the “Company”),
hereby grants to                         
(the “Director”), an option pursuant to the Company’s 2000 Non-Employee
Directors’ Stock Option Plan (the “Plan”) to purchase an aggregate of                  
shares of Common Stock, $.01 par value per share, of the Company (“Common Stock”)
at a price of $             
per share, purchasable as set forth in and subject to the terms and conditions
of this option and the Plan.  A copy of
the Plan is attached hereto and is hereby incorporated by reference herein. The
date of grant of this option is hereinafter referred to as the “Grant Date.”

 

2.                                       Exercise of Option.

 

(a)                                  Except as otherwise provided herein, this
option is exercisable for the first time with respect to 1/36th of
the shares initially covered hereby on each monthly anniversary date of the
Grant Date, such that the option shall be exercisable in full three years after
the Grant Date.  To the extent not
exercised, installments shall be cumulative and shall be exercisable in whole
or in part; provided that no partial exercise of the option shall be for less
than 10 whole shares.

 

This option shall become fully exercisable,
irrespective of the limitations set forth above, provided that the Director has
been in Continuous Service since the Grant Date, upon the Director being
removed from the Board of Directors following a Change in Control.  This option may not be exercised at any time
after the tenth anniversary of the Grant Date.

 

(b)                                 Subject to the conditions hereof, this option
shall be exercisable by the Director contacting the Company’s designated stock
option administration representative, specifying the number of shares to be
purchased and the exercise price to be paid therefor and accompanied by payment
of the exercise price in verifiable funds or as otherwise provided for in the
Plan.

 

(c)                                  A “Change in Control” shall be deemed to have
occurred as of the date that one or more of the following occurs:

 

(i)                                     Individuals who, as of the date hereof,
constitute the entire Board of Directors of the Company (“Incumbent Directors”)
cease for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the then

 

 

Incumbent
Directors shall be considered as though such individual was an Incumbent
Director, but excluding, for this purpose any such individual whose initial
assumption of office occurs as a result of either an actual or threatened
election contest, as such terms are used in Rule 14a-11 under the Securities
Exchange Act of 1934, as amended (“Exchange Act”) or other actual or threatened
solicitation of proxies or consents by or on behalf of any Person (as defined
below) other than the Board;

 

(ii)                                  The stockholders of the Company shall approve
(A) any merger, consolidation or recapitalization of the Company (or, if the
capital stock of the Company is affected, any subsidiary of the Company), or
any sale, lease, or other transfer (in one transaction or a series of transactions
contemplated or arranged by any party as a single plan) of all or substantially
all of the assets of the Company (each of the foregoing being an “Acquisition
Transaction”) where (1) the stockholders of the Company immediately prior to
such Acquisition Transaction would not immediately after such Acquisition
Transaction beneficially own, directly or indirectly, shares or other ownership
interests representing in the aggregate fifty one percent (51%) or more of (a)
the then outstanding common stock or other equity interests of the corporation
or other entity surviving or resulting from such merger, consolidation or
recapitalization or acquiring such assets of the Company, as the case may be
(the “Surviving Entity”) (or of its ultimate parent corporation or other
entity, if any), and (b) the Combined Voting Power of the then outstanding
Voting Securities of the Surviving Entity (or of its ultimate parent
corporation or other entity, if any) or (2) the Incumbent Directors at the time
of the initial approval of such Acquisition Transaction would not immediately
after such Acquisition Transaction constitute a majority of the Board of
Directors, or similar managing group, of the Surviving Entity (or of its
ultimate parent corporation or other entity, if any), or (B) any plan or
proposal for the liquidation or dissolution of the Company; or

 

(iii)  Any Person other than Nancy T. Chang or Tse
Wen Chang shall be or become the beneficial owner (as defined in Rules 13d-3
and 13d-5 under the Exchange Act), directly or indirectly, of securities of the
Company representing in the aggregate more than forty percent (40%) of either
(A) the then outstanding shares of common stock of the Company (“Common Stock”)
or (B) the Combined Voting Power of all then outstanding Voting Securities of
the Company; provided, however, that notwithstanding the foregoing, a Change in
Control shall not be deemed to have occurred for purposes of this Subsection (iii):

 

(1)
Solely as a result of an acquisition of securities by the Company which, by
reducing the number of Common Stock or other Voting Securities outstanding,
increases (a) the proportionate number of Common Stock beneficially owned by
any Person to more than forty percent (40%) of the Common Stock then
outstanding, or (b) the proportionate voting power represented by the Voting
Securities beneficially owned by any Person to more than forty percent (40%) of
the Combined Voting Power of all then outstanding Voting Securities; or

 

(2)
Solely as a result of an acquisition of securities directly from the Company
except for any conversion of a security that was not acquired directly from the
Company,

 

 

(3)
provided, further, that if any Person referred to in paragraph (1) or (2) of
this Subsection (iii) shall thereafter become the beneficial owner of any
additional Common Stock or other Voting Securities of the Company (other than
pursuant to a stock split, stock dividend or similar transaction), then a
Change in Control shall be deemed to have occurred for purposes of this Subsection (iii).

 

(iv)                              For purposes of this Section (c):

 

(1)  “Affiliate” shall mean, as to a specified
Person, another Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with,
the specified Person, within the meaning of such terms as used in Rule 405
under the Securities Act of 1933, as amended (“Securities Act”), or any
successor rule.

 

(2)  “Combined Voting Power” shall mean the
aggregate votes entitled to be cast generally in the election of the Board of
Directors, or similar managing group, of a corporation or other entity by
holders of then outstanding Voting Securities of such corporation or other
entity.

 

(3)  “Person” shall mean any individual, entity
(including, without limitation, any corporation, partnership, trust, joint
venture, association or governmental body) or group (as defined in Sections
14(d)(3) or 15(d)(2) of the Exchange Act and the rules and regulations
thereunder); provided, however, that Person shall not include the Company, any
of its subsidiaries, any employee benefit plan of the Company or any of its
majority-owned subsidiaries or any entity organized, appointed or established
by the Company or such subsidiaries for or pursuant to the terms of any such
plan.

 

(4)  “Voting Securities” shall mean all securities
of a corporation or other entity having the right under ordinary circumstances
to vote in an election of the Board of Directors, or similar managing group, of
such corporation or other entity.

 

3.                                       Delivery of Shares.

 

The Representative shall, upon receipt of the
exercise price, together with all applicable taxes and fees, and verification
of funds for the number of shares purchased and paid for, make prompt delivery
of such shares to the Director, provided that if any law or regulation requires
the Representative or the Company to take any action with respect to such
shares before the issuance thereof, then the date of delivery of such shares
shall be extended for the period necessary to complete such action.  No shares shall be issued and delivered upon
exercise of any option unless and until, in the opinion of counsel for the
Company, any applicable registration requirements of the Securities Act, any
applicable listing requirements of any national securities exchange on which
stock of the same class is then listed, and any other requirements of law or of
any regulatory bodies having jurisdiction over such issuance and delivery,
shall have been fully complied with.

 

 

4.                                       Miscellaneous.

 

(a)                                  Except as provided herein, this Agreement may
not be amended or otherwise modified unless evidenced in writing and signed by
the Company and the Director.

 

(b)                                 All notices under this Agreement shall be
mailed or delivered by hand to the parties at their respective addresses set forth
beneath their names below or at such other address as may be designated in
writing by either of the parties to one another.

 

(c)                                  This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.

 

 

	
  Grant Date:

  	
  TANOX, INC.

  	 

	
   

  	
   

  	
  By:

  	
   

  	
   

  	 

	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
								

 

DIRECTOR’S
ACCEPTANCE

 

The
undersigned hereby accepts the foregoing option and agrees to the terms and
conditions thereof.

 

	
  DIRECTOR

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature

  

 

 

TANOX, INC.

NON-QUALIFIED STOCK OPTION
AGREEMENT

2000 Non-Employee Directors’ Stock Option Plan

 

1.
Grant of Option.

 

TANOX,
INC., a Delaware corporation (the Company”), hereby grants to                   
(the “Director”) an option pursuant to the Company’s 2000 Non-Employee
Directors’ Stock Option Plan (the “Plan”) to purchase an aggregate of              
shares of Common Stock, $01 par value per share, of the Company (“Common Stock”)
at a price of                  
per share, purchasable as set forth in and subject to the terms and conditions
of this option and the Plan. A copy of the Plan is attached hereto and is
hereby incorporated by reference herein. The date of grant of this option is
hereinafter referred to as the “date of grant.”

 

2.
Exercise of Option.

 

(a)                                  Except as otherwise provided herein, this
option is exercisable for the first time with respect to 1/36th of the shares
initially covered hereby on each monthly anniversary date of the date of grant,
such that the option shall be exercisable in full three years after the date of
grant. To the extent not exercised, installments shall be cumulative and shall
be exercisable in whole or in part; provided that no partial exercise of the
option shall be for less than 10 whole shares.

 

In
addition to any provisions contained in the Plan with respect to a change in
control of the Company, this option shall become fully exercisable,
irrespective of the limitations set forth above, provided that the Director has
been in Continuous Service since the date of grant, upon the Director being
removed from the Board of Directors following a Change in Control (as defined
below). This option may not be exercised at any time after the tenth
anniversary of the date of grant.

 

(b)                                 Subject to the conditions hereof, this option
shall be exercisable by the Director giving written notice of exercise to the
Company, specifying the number of shares to be purchased and the purchase price
to be paid therefor and accompanied by payment of the exercise price in cash or
by check or as otherwise provided for in the Plan. Such exercise shall be
effective upon receipt by the Treasurer of the Company of the written notice
together with the required payment.

 

(c)                                  A “Change in Control” for purposes of this
agreement shall be deemed to have occurred as of the date that one or more of
the following occurs:

 

(i)                                     Individuals who, as of the date hereof,
constitute the entire Board of Directors of the Company (“Incumbent Directors”)
cease for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the then

 

 

Incumbent
Directors shall be considered as though such individual was an Incumbent Director,
but excluding, for this purpose any such individual whose initial assumption of
office occurs as a result of either an actual or threatened election contest,
as such terms are used in Rule 1 4a-1 1 under the Securities Exchange Act of
1934, as amended (“Exchange Act”) or other actual or threatened solicitation of
proxies or consents by or on behalf of any Person (as defined below) other than
the Board;

 

(ii)                                  The stockholders of the Company shall approve
(A) any merger, consolidation or recapitalization of the Company (or, if the
capital stock of the Company is affected, any subsidiary of the Company), or
any sale, lease, or other transfer (in one transaction or a series of
transactions contemplated or arranged by any party as a single plan) of all or
substantially all of the assets of the Company (each of the foregoing being an ‘Acquisition
Transaction”) where (1) the stockholders of the Company immediately prior to
such Acquisition Transaction would not immediately after such Acquisition
Transaction beneficially own, directly or indirectly, shares or other ownership
interests representing in the aggregate fifty one percent (51%) or more of (a)
the then outstanding common stock or other equity interests of the corporation
or other entity surviving or resulting from such merger, consolidation or
recapitalization or acquiring such assets of the Company, as the case may be
(the “Surviving Entity) (or of its ultimate parent corporation or other entity,
if any), and (b) the Combined Voting Power of the then outstanding Voting
Securities of the Surviving Entity (or of its ultimate parent corporation or
other entity, if any) or (2) the Incumbent Directors at the time of the initial
approval of such Acquisition Transaction would not immediately after such Acquisition
Transaction constitute a majority of the Board of Directors, or similar
managing group, of the Surviving Entity (or of its ultimate parent corporation
or other entity, if any), or (B) any plan or proposal for the liquidation or
dissolution of the Company; or

 

(iii)
Any Person other than Nancy T. Chang or Tse Wen Chang shall be or become the
beneficial owner (as defined in Rules 1 3d-3 and 1 3d-5 under the Exchange
Act), directly or indirectly, of securities of the Company representing in the
aggregate more than forty percent (40%) of either (A) the then outstanding
shares of common stock of the Company (“Common Stock”) or (B) the Combined
Voting Power of all then outstanding Voting Securities of the Company;
provided, however, that notwithstanding the foregoing, a Change in Control
shall not be deemed to have occurred for purposes of this Subsection (iii):

 

(1)                                  Solely as a result of an acquisition of
securities by the Company which, by reducing the number of Common Stock or
other Voting Securities outstanding, increases (a) the proportionate number of
Common Stock beneficially owned by any Person to more than forty percent (40%)
of the Common Stock then outstanding, or (b) the proportionate voting power
represented by the Voting Securities beneficially owned by any Person to more
than forty percent (40%) of the Combined Voting Power of all then outstanding
Voting Securities; or

 

(2)                                  Solely as a result of an acquisition of
securities directly from the Company except for any conversion of a security
that was not acquired directly from the Company,

 

 

(3)                                  provided, further, that if any Person
referred to in paragraph (1) or (2) of this Subsection (iii) shall
thereafter become the beneficial owner of any additional Common Stock or other
Voting Securities of the Company (other than pursuant to a stock split, stock
dividend or similar transaction), then a Change in Control shall be deemed to
have occurred for purposes of this Subsection (iii).

 

(iv)
For purposes of this Section (c):

 

(1)                                  “Affiliate” shall mean, as to a specified
Person, another Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with,
the specified Person, within the meaning of such terms as used in Rule 405
under the Securities Act of 1933, as amended (“Securities Act”), or any
successor rule.

 

(2)                                  “Combined Voting Power” shall mean the
aggregate votes entitled to be cast generally in the election of the Board of
Directors, or similar managing group, of a corporation or other entity by
holders of then outstanding Voting Securities of such corporation or other
entity.

 

(3)                                  “Person” shall mean any individual, entity
(including, without limitation, any corporation, partnership, trust, joint
venture, association or governmental body) or group (as defined in Sections
14(d)(3) or 1 5(d)(2) of the Exchange Act and the rules and regulations
thereunder); provided, however, that Person shall not include the Company, any
of its subsidiaries, any employee benefit plan of the Company or any of its
majority-owned subsidiaries or any entity organized, appointed or established
by the Company or such subsidiaries for or pursuant to the terms of any such
plan.

 

(4)                                  “Voting Securities” shall mean all securities
of a corporation or other entity having the right under ordinary circumstances
to vote in an election of the Board of Directors, or similar managing group, of
such corporation or other entity.

 

3.                                       Delivery of Shares.

 

The
Company shall, upon receipt of the purchase price, and verification of funds
for the number of shares purchased and paid for, make prompt delivery of such
shares to the Director, provided that if any law or regulation requires the
Company to take any action with respect to such shares before the issuance
thereof, then the date of delivery of such shares shall be extended for the
period necessary to complete such action. No shares shall be issued and
delivered upon exercise of any option unless and until, in the opinion of
counsel for the Company, any applicable registration requirements of the
Securities Act, any applicable listing requirements of any national securities
exchange on which stock of the same class is then listed, and any other
requirements of law or of any regulatory bodies having jurisdiction over such issuance
and delivery, shall have been fully complied with.

 

 

4.                                       Certain Limits.

 

Notwithstanding
anything in this Agreement to the contrary, if any amounts due to the Director
under this Agreement and any other plan or program of the Company constitute a “parachute
payment,” as such term is defined in Code Section 280G(b)(2), and the
amount of the parachute payment, reduced by all federal, state and local taxes
applicable thereto, including the excise tax imposed pursuant to Code Section 4999,
is less than the amount the Director would receive if he were paid three times
his “base amount,” as defined in Code Section 280G(b)(3), less one dollar,
reduced by all federal, state and local taxes applicable thereto, then the
aggregate of the amounts constituting the parachute payment shall be reduced to
an amount that will equal three times his base amount less one dollar. The
determinations to be made with respect to this section shall be made by an
accounting firm jointly selected by the Company’s Board of Directors and the
Director and paid by the Company, and which may be the Company’s independent
auditors.

 

5.
Miscellaneous.

 

(a)                                  Except as provided herein, this Agreement may
not be amended or otherwise modified unless evidenced in writing and signed by
the Company and the Director.

 

(b)                                 All notices under this Agreement shall be
mailed or delivered by hand to the parties at their respective addresses set
forth beneath their names below or at such other address as may be designated
in writing by either of the parties to one another.

 

(c)                                  This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.

 

 

	
  Date of Grant:

  	
  TANOX, INC.

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
									

 

DIRECTOR’S
ACCEPTANCE

 

The
undersigned hereby accepts the foregoing option and agrees to the terms and
conditions thereof.

 

	
  DIRECTOR

  
	
   

  	
   

  
	
  Signature

  
	
  Address:

  	
   

  	
   

  
				

 

 

STOCK OPTION AGREEMENT

 

Agreement
made effective as of the                            ,
between TANOX, INC., a Delaware corporation (the “Company”), and                     
(“Director’) to carry out the purposes of the Tanox, Inc. 1992 Non-Employee
Directors Stock Option Plan (the Plan”), a copy of which is attached hereto as
Exhibit A, by affording Director the opportunity to purchase shares of the $01
par value common stock of the Company (the “Stock”).

 

In
consideration of the mutual agreements and other matters set forth herein and
in the Plan, the Company and Director hereby agree as follows:

 

1.
Grant of Option.

 

The
Company hereby grants to Director an option pursuant to the Plan to purchase an
aggregate of               
shares of Stock at a price of                 
per share, purchasable as set forth in and subject to the terms and conditions
of this Option and the Plan.

 

The
Option may not be assigned, transferred or disposed of by Director other than
by will or the laws of descent and distribution. For purposes of this
Paragraph, “disposed of” shall mean any gift or inter vivos transfer; any
transfer to a trust; any lien, pledge, mortgage or other encumbrance; any
transfer by reason of marital property laws or any decree of divorce,
separation or property division; any disposition pursuant to court, bankruptcy,
administrative or similar proceedings; or any disposition whatsoever, whether
voluntary or involuntary. During Director’s lifetime, the Option shall be
exercisable only by Director. Upon death, disability, cessation of service or
voluntary resignation, the Option shall be exercisable under the terms of Article VI
of the Plan.

 

2.                                       Exercise of Option.

 

(a)
Subject to the earlier expiration or termination of this Option as provided
under the Plan, this Option may be exercised for such percentage of the
aggregate number of shares covered by this Option as determined in accordance
with the following schedule:

 

1
/36th of the shares initially covered by this Option shall become exercisable on
each monthly anniversary of the date of grant, such that the Option shall be
fully exercisable three years after the date of grant.

 

To
the extent not exercised, installments shall be cumulative and shall be
exercisable in whole or in part; provided that no partial exercise of the
Option shall be for less than 10 whole shares.

 

Provided
that Director has been in Continuous Service (as defined below) since the date
of grant, this option shall become fully exercisable, irrespective of the
limitations set forth above, upon the Director being removed from the Board of
Directors following

 

 

a
Change in Control (as defined below). This option may not be exercised at any time
after the tenth anniversary of the date of grant.

 

(b)
Subject to the conditions hereof, Director may exercise giving written notice
thereof to the Company, specifying the number of shares to be purchased and the
purchase price to be paid therefor and accompanied by payment of the exercise
price in cash or by check or as otherwise provided for in the Plan. Such
exercise shall be effective upon receipt by the Company of the written notice
together with the required payment.

 

(c)
A “Change in Control” for purposes of this agreement shall be deemed to have
occurred as of the date that one or more of the following occurs:

 

(i)                                     Individuals who, as of the date hereof,
constitute the entire Board of Directors of the Company (“Incumbent Directors”)
cease for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the then Incumbent Directors shall
be considered as though such individual was an Incumbent Director, but
excluding, for this purpose any such individual whose initial assumption of
office occurs as a result of either an actual or threatened election contest,
as such terms are used in Rule 14a-1 1 under the Securities Exchange Act of
1934, as amended (“Exchange Act”) or other actual or threatened solicitation of
proxies or consents by or on behalf of any Person (as defined below) other than
the Board;

 

(ii)                                  The stockholders of the Company shall approve
(A) any merger, consolidation or recapitalization of the Company (or, if the
capital stock of the Company is affected, any subsidiary of the Company), or
any sale, lease, or other transfer (in one transaction or a series of
transactions contemplated or arranged by any party as a single plan) of all or
substantially all of the assets of the Company (each of the foregoing being an “Acquisition
Transaction’) where (1) the stockholders of the Company immediately prior to
such Acquisition Transaction would not immediately after such Acquisition
Transaction beneficially own, directly or indirectly, shares or other ownership
interests representing in the aggregate fifty one percent (51%) or more of (a)
the then outstanding common stock or other equity interests of the corporation
or other entity surviving or resulting from such merger, consolidation or
recapitalization or acquiring such assets of the Company, as the case maybe
(the “Surviving Entity”) (or of its ultimate parent corporation or other
entity, if any), and (b) the Combined Voting Power of the then outstanding
Voting Securities of the Surviving Entity (or of its ultimate parent
corporation or other entity, if any) or (2) the Incumbent Directors at the time
of the initial approval of such Acquisition Transaction would not immediately
after such Acquisition Transaction constitute a majority of the Board of
Directors, or similar managing group, of the Surviving Entity (or of its
ultimate parent corporation or other entity, if any), or (B) any plan or
proposal for the liquidation or dissolution of the Company; or

 

(iii)
Any Person other than Nancy T. Chang or Tse Wen Chang shall be or become the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly

 

 

or
indirectly, of securities of the Company representing in the aggregate more
than forty percent (40%) of either (A) the then outstanding shares of common
stock of the Company (“Common Stock”) or (B) the Combined Voting Power of all
then outstanding Voting Securities of the Company; provided, however, that
notwithstanding the foregoing, a Change in Control shall not be deemed to have
occurred for purposes of this Subsection (iii):

 

(1)                                  Solely as a result of an acquisition of
securities by the Company which, by reducing the number of Common Stock or
other Voting Securities outstanding, increases (a) the proportionate number of
Common Stock beneficially owned by any Person to more than forty percent (40%)
of the Common Stock then outstanding, or (b) the proportionate voting power
represented by the Voting Securities beneficially owned by any Person to more
than forty percent (40%) of the Combined Voting Power of all then outstanding
Voting Securities; or

 

(2)                                  Solely as a result of an acquisition of
securities directly from the Company except for any conversion of a security
that was not acquired directly from the Company,

 

(3)                                  provided further, that, if any Person
referred to in paragraph (1) or (2) of this Subsection (iii) shall
thereafter become the beneficial owner of any additional Common Stock or other
Voting Securities of the Company (other than pursuant to a stock split, stock
dividend or similar transaction), then a Change in Control shall be deemed to
have occurred for purposes of this Subsection (iii).

 

(iv)
For purposes of this Section (c):

 

(1)                                  “Affiliate’ shall mean, as to a specified
Person, another Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with,
the specified Person, within the meaning of such terms as used in Rule 405
under the Securities Act of 1933, as amended (“Securities Act”), or any
successor rule.

 

(2)                                  “Combined Voting Power” shall mean the
aggregate votes entitled to be cast generally in the election of the Board of
Directors, or similar managing group, of a corporation or other entity by
holders of then outstanding Voting Securities of such corporation or other
entity.

 

(3)                                  “Person” shall mean any individual, entity
(including, without limitation, any corporation, partnership, trust, joint
venture, association or governmental body) or group (as defined in Sections
14(d)(3) or 15(d)(2) of the Exchange Act and the rules and regulations
thereunder); provided, however, that Person shall not include the Company, any
of its subsidiaries, any employee benefit plan of the Company or any of its
majority-owned subsidiaries or any entity organized, appointed or established
by the Company or such subsidiaries for or pursuant to the terms of any such
plan.

 

 

(4)                                  “Voting Securities” shall mean all securities
of a corporation or other entity having the right under ordinary circumstances
to vote in an election of the Board of Directors, or similar managing group, of
such corporation or other entity.

 

In
no event shall this Option be exercisable after the expiration of ten (10)
years from the date of grant hereof. The purchase price of shares as to which
this Option is exercised shall be paid in full at the time of exercise (a) in
cash (including electronic wire, certified bank draft or money order payable to
the order of the Company), (b) by delivering to the Company unrestricted shares
of Stock held by Director for more than six months having a fair market value
equal to the purchase price, or (c) a combination of cash and such shares of
Stock. For purposes of this Agreement, fair market value of the Stock shall be
determined in accordance with the provisions of the Plan. No fraction of a
share of Stock shall be issued by the Company upon exercise of a option or
accepted by the Company in payment of the exercise price thereof; rather,
Director shall provide a cash payment for such cash amount as is necessary to
effect the issuance and acceptance of only whole shares of Stock.

 

Unless
and until a certificate or certificates representing such shares shall have
been issued by the Company to Director, Director (or the person permitted to
exercise this Option in the event of Director’s death) shall not be or have any
of the rights or privileges of a shareholder of the Company with respect to
shares acquirable upon an exercise of this Option.

 

3.
Withholding of Tax.

 

To
the extent that the exercise of this Option or the disposition of shares of
Stock acquired by exercise of this Option results in compensation income to
Director for federal or state income tax purposes, Director shall pay to the
Company at the time of such exercise or disposition such amount of money as the
Company may require to meet its obligation under applicable tax laws or regulations
and, if Director fails to do so, the Company is authorized to withhold from any
cash remuneration then or thereafter payable to Director any tax required to be
withheld by reason of such resulting compensation income.

 

4.
Termination of Relationship.

 

Any
question as to whether and when there has been a termination of Director’s
position with the Company, and the cause of such termination, shall be
determined by the Board of Directors of Company, and its determination shall be
final. Neither the Plan, this Agreement nor the award of this Option shall be
deemed to create any obligation on the part of the Company or its Board of
Directors-to nominate Director for reelection by the Company’s shareholders,
nor confer upon Director the right to remain a member of the Board of Directors
for any period of time, or at any particular rate of compensation.

 

 

5.
Binding Effect. This Agreement shall be binding upon and inure to the
benefit of any successors to the Company and all persons lawfully claiming
under Director.

 

IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by one of
its duly authorized officers, and Director has executed this Agreement, all as
of the day and year first above written.

 

	
   

  	
  TANOX, INC.

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Director

  

 

 

STOCK OPTION AGREEMENT

 

Agreement
made effective as of the          day
of               ,
between TANOX, INC., a Texas corporation (the “Company”), and                       
(‘Director”).

 

To
carry out the purposes of the Tanox Biosystems, Inc. 1992 Non-Employee
Directors Stock Option Plan (the “Plan”), a copy of which is attached hereto as
Exhibit A, by affording Director the opportunity to purchase shares of the $01
par value common stock of the Company (the “Stock”), and in consideration of
the mutual agreements and other matters set forth herein and in the Plan, the
Company and Director hereby agree as follows:

 

1.                                       Grant of Option. The Company hereby irrevocably grants to
Director the right and option (“Option”) to purchase all or any part of an aggregate
of             
shares of Stock, on the terms and conditions set forth herein and in the Plan,
which is incorporated herein by reference as a part of this Option. This Option
is not intended to constitute an incentive stock option, within the meaning of section 422A
(b) of the Internal Revenue Code of 1986, as amended (the “Code”).

 

This
Agreement, the grant of the Option, the Option and the exercise of the Option
are in all respects governed by the provisions of the Plan. The Option may not
be assigned, transferred or disposed of by Director other than by will or the
laws of descent and distribution. For purposes of this Paragraph, ‘disposed of’
shall mean any gift or inter vivos transfer; any transfer to a trust: any lien,
pledge, mortgage or other encumbrance; any transfer by reason of marital
property laws or any decree of divorce, separation or property division; any
disposition pursuant to court, bankruptcy, administrative or similar
proceedings; or any disposition whatsoever, whether voluntary or involuntary.
During Director’s lifetime, the Option shall be exercisable only by Director.
Upon death, disability, cessation of service or voluntary resignation, the
Option shall be exercisable under the terms of Article VI of the Plan. +

 

2.                                       Purchase Price. The purchase price of Stock purchased
pursuant to the exercise of this Option shall be             
per share.

 

3.                                       Exercise of Option. Subject to the earlier expiration or
termination of this Option as provided under the Plan, this Option shall be
cumulative and may be exercised, by written notice to the Company, only at such
time or times and for such percentage of the aggregate number of shares offered
by this Option, determined by the number of full years from the date of grant
hereof to the date of such exercise, in accordance with the following schedule:

 

 

	
  Number of

  Full Years

  	
   

  	
  Number of

  Shares

  Purchasable

  	
   

  	
  Cumulative

  Shares

  Purchasable

  	
   

  
	
  1 year

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2years

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3 years

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Notwithstanding
the foregoing, no Option shall be exercisable until the information required by
Rule 1 6b-3(b) of the Securities Exchange act of 1934, as amended, with respect
to the Plan is disseminated in accordance with the provisions of such Rule on
or prior to the date of the first annual meeting of shareholders held after the
first registration of an equity security of the Company under Section 12
of such Act.

 

At
or prior to the time this Option becomes exercisable, the Company shall provide
to Director certain information regarding the Company and the Stock useful to
Director in making an investment decision, if such information is not otherwise
available to Director.

 

In
no event shall this Option be exercisable after the expiration of One Hundred
Twenty-One (121) months from the date of grant hereof. The purchase price of
shares as to which this Option is exercised shall be paid in full at the time
of exercise (a) in cash (including check, bank draft or money order payable to
the order of the Company), (b) by delivering to the Company unrestricted shares
of Stock held by Director for more than six months having a fair market value
equal to the purchase price, or (c) a combination of cash and such shares of
Stock. For purposes of this Agreement, fair market value of the Stock shall be
determined in accordance with the provisions of the Plan. No fraction of a
share of Stock shall be issued by the Company upon exercise of a option or
accepted by the Company in payment of the exercise price thereof; rather,
Director shall provide a cash payment for such cash amount as is necessary to
effect the issuance and acceptance of only whole shares of Stock.

 

Unless
and until a certificate or certificates representing such shares shall have
been issued by the Company to Director, Director (or the person permitted to
exercise this Option in the event of Directors death) shall not be or have any
of the rights or privileges of a shareholder of the Company with respect to
shares acquirable upon an exercise of this Option.

 

4.                                       Withholding of Tax. To the extent that the exercise of this Option
or the disposition of shares of Stock acquired by exercise of this Option
results in compensation income to Director for federal or state income tax
purposes, Director shall pay to the Company at the time of such exercise or
disposition such amount of money as the Company may require to meet its
obligation under applicable tax laws or regulations and, if Director fails to
do so, the Company is authorized to withhold from any cash remuneration then or
thereafter payable to Director any tax required to be withheld by reason of
such resulting compensation income.

 

 

5.                                       Status of Stock. The Company may register for issue under
the Securities Act of 1933, as amended (the “Act”), the Option and the shares
of Stock acquirable upon exercise of this Option, and may keep such
registration effective throughout the period this Option is exercisable. In the
absence of such effective registration or an available exemption from
registration under the Act, exercise of this Option and delivery of shares of
Stock acquirable upon such exercise will be delayed until registration of such
shares is effective or an exemption from registration under the Act is
available. If the stock is not registered and an exemption from registration
under the Act is available upon an exercise of this Option, Director (or the
person permitted to exercise this Option in the event of Director’s death or
incapacity), if requested by the Company to do so, will be required to execute
and deliver to the Company in writing an agreement containing such
representations and other provisions as the Company may require to evidence
Director’s qualification to acquire the Stock and otherwise assure compliance
with applicable securities laws.

 

No
sale, transfer or other disposition of any shares of Stock acquired upon
exercise of this Option shall be made in the absence of an effective
registration statement being on file with respect to such shares under the Act
unless an opinion of counsel satisfactory to the Company that such sale or
disposition will not constitute a violation of the Act or any other applicable
securities laws is first delivered by Director to the Company.

 

The
certificates representing shares of Stock acquired under this Option may bear
such legend as the Committee deems appropriate, referring to the provisions of
this Paragraph 5.

 

6.                                       Termination of Relationship. Any question as to whether and when there
has been a termination of Director’s position with the Company, and the cause
of such termination, shall be determined by the Board of Directors of Company,
and its determination shall be final. Neither the Plan, this Agreement nor the
award of this Option shall be deemed to create any obligation on the part of
the Company or its Board of Directors to nominate Director for reelection by
the Company’s shareholders, nor confer upon Director the right to remain a
member of the Board of Directors for any period of time, or at any particular
rate of compensation.

 

7.                                       Binding Effect. This Agreement shall be binding upon and
inure to the benefit of any successors to the Company and all persons lawfully
claiming under Director.

 

IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by one of
its duly authorized officers, and Director has executed this Agreement, all as
of the day and year first above written.

 

	
   

  	
  TANOX, INC.

  
	
   

  	
  BY:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DirectorExhibit
10.24

 

LEASE ASSIGNMENT AND ASSET
PURCHASE AGREEMENT

 

THIS LEASE
ASSIGNMENT AND ASSET PURCHASE AGREEMENT (this “Agreement”)
is made and effective on December 9, 2004 by and between TANOX WEST, INC., a Delaware corporation (“Purchaser” or “Tanox West”) and BIOGEN IDEC INC., a Delaware corporation (“Seller”), with reference to the facts set forth in the
Recitals below:

 

Recitals

 

WHEREAS, Seller is
the tenant under a certain Lease dated July 9, 1992 (the “Initial Lease”), as amended by (i) that certain First
Amendment to Lease dated November 9, 1992 (the “First
Amendment”), (ii) that certain Lease Exhibit executed by
Landlord and Tenant on December 22, 1994 (the “Lease
Exhibit”), (iii) that certain Lease Amendment dated December 30,
1994 (the “Second Amendment”), and
(iv) that certain Third Lease Amendment Agreement dated as of April 22,
2004 (the “Third Amendment,” and collectively
with the Initial Lease, the First Amendment, the Lease Exhibit and the Second
Amendment, the Confirmation of Lease Commencement Date, dated September 22,
1993, and the Letter agreement re BFP/Cell Bank Remodel, dated October 16,
2001, the “Lease”), for the premises located
at 11011 Torreyana Road, San Diego, California, as the same are more
particularly described in the Lease (the “Premises”).  TSI, L.P., a California limited partnership,
the successor-in-interest to Torrey Sorrento, Inc., a California corporation,
is the landlord under the Lease (“Landlord”).  A copy of the Lease is attached hereto as Exhibit ”A.”

 

WHEREAS, Subject
to all the terms and provisions of this Agreement, Seller desires to assign,
and Purchaser desires to assume, the leasehold interest of Seller in and to the
Premises and the Lease, subject to certain modifications to the Lease more
particularly set forth in that certain amendment to the Lease in the form of
the attached Exhibit ”C” (the “Lease Amendment” and, together with the Lease, the “Amended Lease”) .  Seller also desires to sell, and Purchaser
also desires to purchase certain equipment (the “Equipment”),
furniture and fixtures (the “FF&E”),
maintenance inventory (the “Maintenance Inventory”)
and copies of maintenance and validation documentation with respect to the
Equipment and the Premises (the “Documentation,”
and collectively, with the Equipment, FF&E and Maintenance Inventory, the “Assets”) from Seller. 
Purchaser further desires that Seller provide certain assistance to
Purchaser in connection with the Premises, all on the terms and provisions of
this Agreement.

 

NOW, THEREFORE, in
consideration of the foregoing and the mutual promises of the parties contained
herein, and for other good and valuable consideration which is acknowledged to
have been received, the parties agree as follows:

 

Agreement

 

ARTICLE 1

 

ASSIGNMENT OF LEASE

 

1.1                                 Assignment.  Subject to all of the terms and provisions of
this Agreement regarding the Closing (as defined below) and the other
conditions contained herein, this

 

Execution Version

 

 

Agreement, together with the Lease Amendment and the Confirmation of
the Assignment (defined below), will effectuate the assignment and transfer by
Seller to Purchaser, and the acceptance by Purchaser (the “Assignment”)
of all of Seller’s right, title and interest in and to the Lease and the
Premises, including Seller’s interest in the Security Deposit (as defined in
the Lease).  From and after the Effective
Date (defined below), subject to all the terms, provisions and closing
conditions of this Agreement, Purchaser will assume and agree to keep, perform
and fulfill all of the terms, covenants, conditions and obligations required to
be kept, performed and fulfilled by the tenant (the “Tenant”)
under the Amended Lease, including the making of all payments due or payable to
Landlord, or on behalf of the Tenant under the Amended Lease, as and when the
same are due and payable (collectively, the “Lease
Obligations”), to the extent they accrue during, are attributable
to, and are to be performed by the Tenant during periods from and after the
Effective Date (the “Post-Effective Date Lease
Obligations”).  Seller shall
retain liability for performance of Lease Obligations to the extent the same
accrued during, were attributable to, and were to be performed by the Tenant
during periods prior to the Effective Date (the “Pre-Effective
Date Lease Obligations”).  Subject
to satisfaction or waiver of the conditions to Closing set forth in Article 5,
the parties shall execute and deliver a separate instrument confirming the
Assignment (the “Confirmation of Assignment”) in the form attached hereto as Exhibit ”B,”
which shall be delivered to Landlord upon the Closing as confirmation of the
Assignment.  The Assignment shall be
effective for all purposes on January 10, 2005 (the “Effective
Date”).  On the Effective
Date, Seller shall deliver the Premises to Purchaser in broom clean condition,
free of Seller’s personal property other than the Assets transferred to
Purchaser pursuant to this Agreement; provided, however, Seller
shall have completed, not later than the Effective Date the items identified on
the attached Schedule 1.1.

 

1.2                                 Amendment
to Lease; Consent of Landlord. 
Concurrently with the execution of this Agreement, Seller, Purchaser and
Landlord shall have entered into a certain amendment to the Lease (the “Lease Amendment”), in the form of the attached Exhibit ”C.” The Lease Amendment includes
Landlord’s Consent to the Assignment. 
The Assignment and the Closing are each expressly contingent on the
parties’ receipt of Landlord’s executed counterpart to the Lease Amendment.

 

1.3                                 Transfer
Assistance.  In connection with the
Assignment and transfer to Purchaser of Seller’s interest in the Premises under
the Lease, Seller shall make available to Purchaser the services of certain
personnel as provided in the Transition Services Agreement (the “Transition Services Agreement”) to be entered into
concurrently with the execution of this Agreement, in the form attached hereto
as Exhibit ”D.”

 

1.4                                 Early
Access.  Seller and Purchaser shall
cooperate in providing early access to the Premises for the period from and
after the date of full execution of this Agreement (the “Signing Date”)
and prior to the Effective Date, to permit Purchaser to familiarize itself
with, and prepare for full occupancy of, those portions of the Premises vacated
by Seller and accepted by Purchaser in accordance with a phased occupancy plan
approved by Seller and Purchaser and attached hereto as Schedule 1.5.  Purchaser’s activities on the Premises during
such early access period shall be in full compliance with applicable provisions
of the Lease.  Purchaser shall have no
obligation for rent,  property taxes or
other Premises operating expenses; provided, however, Purchaser shall
be responsible for (i) all of its costs of clean rooms cleaning, and (ii) costs
for the treatment and removal of its biohazard, hazardous materials and waste
products and

 

2

 

environmental
materials, the handling, treatment, disposal and/or storage of which is
regulated under applicable law, all such activities to be in accordance with
such laws during such early occupancy.  Seller
shall have no obligation to provide services to Purchaser as to such
materials.  Purchaser’s activities on the
Premises prior to the Effective Date shall not interfere with Seller’s activities
on the Premises during such period. 
Seller shall maintain and Purchaser shall obtain appropriate liability
and casualty insurance policies during the period of such early occupancy,
which each of such insurance policies shall name the other party as an
additional insured thereunder to the extent of their respective interests.  Purchaser shall also maintain workers
compensation insurance in statutorily required amounts with respect to its
employees occupying any portion of the Premises prior to the Effective
Date.  Each party shall receive
appropriate certificates of such insurance prior to the commencement of
Purchaser’s early occupancy.  From and
after the Signing Date until the Effective Date, Purchaser shall have the right
to contact and initiate meetings with Landlord directly regarding the Lease and
the Premises; provided, however, Seller shall be provided
contemporary notice of such contact and Seller shall have the right to
participate in all such contacts and meetings.

 

1.5                                 Retained
Access.  In order to permit Seller to
effect the decommissioning of certain radioactive materials licenses affecting
portions of the Premises (the “Rad Areas”),
Purchaser agrees to permit Seller to retain use and control over the Rad Areas
until decommissioning in accordance with applicable law has been effected.  Seller shall undertake to complete such
decommissioning activities as soon as reasonably practicable, but in any event
shall have completed such decommissioning not later than nine (9) months
following the Effective Date.  The
location of the Rad Areas is set forth on the attached “Exhibit E.”  Seller shall effect
such decommissioning activities in compliance with applicable provisions of the
Lease.  In the event the Rad Areas are
not decommissioned by May 1, 2005, Seller shall be responsible for a pro rata
portion (computed by reference to the square footage subject to the Rad Areas)
of rent and property taxes accruing during the period after said date for those
Rad Areas that Purchaser does not have full use of due to Seller’s use thereof
until such full use is available.

 

1.6                                 Certain
Agreements Regarding the Lease.

 

(a)                                  Extension
Payments.  In connection with the
modification of the Lease described in the Lease Amendment, Purchaser and
Seller agree that any amounts payable by Landlord in connection with the
extensions of the term of the Lease described below shall be treated as
follows:

 

(i)                                     Initial
Lease Extension.  Any amounts payable
by Landlord for the extension of the Lease term from its current expiration
date to September 30, 2011 shall be for the account of Seller and, to the
extent Purchaser receives, or is credited by Landlord with any such amounts,
the full amount thereof shall be promptly remitted to Seller;

 

(ii)                                  First
Extension Option.  The amount payable
by Landlord under Section 3.3.8 of the Lease, as amended by the Lease
Amendment, with respect to Purchaser’s exercise of the Tenant’s option to
extend the term of the Amended Lease from October 1, 2011 to September 30,
2016, in the event Purchaser elects, in its sole discretion, to exercise such
option, shall be split equally between Seller and Purchaser.

 

3

 

Purchaser shall promptly remit Seller’s portion
following Purchaser’s receipt of such amount, or its entitlement to any credit
with respect thereto from Landlord.  No
modification of Section 3.3.8 of the Lease with respect to such extension
option will be effected by Purchaser without Seller’s prior written consent.

 

(iii)                               Second
Extension Option.  Any amounts
payable with respect to the second extension option described under Section 3.3.8
of the Lease, as amended by the Lease Amendment, to extend the term of the Amended
Lease from October 1, 2016 to September 30, 2021, shall be retained
by Purchaser solely for its own account.

 

(b)                                 Extended
Term Rental Payment.  As partial
consideration for Purchaser’s agreement to the extension of the Lease term to September 30,
2011 as provided in the Lease Amendment, Seller shall make two (2)
payments to Purchaser, each in the amount of Two Million Three Hundred
Sixty-One Thousand Six Hundred Ninety-Two and 50/100 Dollars ($2,361,692.50)
each (the “Rent Reimbursements”).  The first payment shall be made on September 30,
2007, and the second payment shall be made on November 30, 2008, provided
each of the following conditions has been met at the time of each payment:

 

(i)                                     No
Default.  Purchaser shall not be in Default
(as defined in the Lease) beyond applicable cure periods under the terms of the
Lease or in breach of its obligations under this Agreement at the time such
payment is due as to any monetary obligation owed to Landlord, nor shall
Landlord have commenced any eviction, or unlawful detainer action against Tanox
under the Lease, including the posting of a “3-Day Notice to Pay Rent or Quit”
which has not been withdrawn or satisfied ; and

 

(ii)                                  No
Demand by Landlord.  There shall be
no unsatisfied demand from Landlord for amounts due under the Lease as Rent (as
defined in the Lease), or for property taxes or insurance premiums, resulting
from Purchaser’s breach of the Lease, nor shall any payment by Seller to
Landlord, or other party entitled thereto, pursuant to the terms of the Lease,
resulting from any such breach by Purchaser have been made or be required to be
made; provided, however, Purchaser shall still be entitled to
receive the Rent Reimbursements to the extent the same exceed any payments made
by Seller to Landlord or other party entitled thereto as a result of Purchaser’s
breach of the Lease, after deduction for all such amounts paid by Seller; provided
further, however, to the extent such amounts paid by Seller exceed
the Rent Reimbursement amounts payable by Seller to Purchaser, Purchaser shall
continue to remain liable for reimbursement to Seller of all such amounts paid
by Seller.

 

In the event that
the foregoing conditions are not satisfied as of the date any Rent
Reimbursement is to be made, but such conditions are satisfied as of a
subsequent date in a manner which does not result in the termination of the
Lease or liability to Seller in an amount in excess of such Rent Reimbursement
amount(s), Seller shall be obligated to make such Rent Reimbursement on such
subsequent date, less any amounts paid to Landlord on account of Purchaser’s
failure to timely satisfy such condition at such earlier date.

 

(c)                                  Insurance;
Notices of Default; Lease Modifications. 
From and after the Effective Date until October 1, 2008:  (i) Purchaser shall provide Seller with
certificates of all

 

4

 

insurance policies required to be maintained by the tenant under the
Lease, naming Seller as an additional insured thereunder and providing that no
cancellation of such policies may occur without at least thirty (30) days
prior written notice to Seller thereof; (ii) Purchaser shall promptly
forward to Seller upon receipt, copies of any demands or notices of default
received by Purchaser from Landlord or Landlord’s lender, or given by Purchaser
to Landlord or Landlord’s lender, with respect to the Lease or the Premises;
and (iii) Purchaser shall provide not less than three (3) business
days prior written notice to Seller (or such shorter notice as is reasonable
under the circumstances) of any meeting or other contact with Landlord that
might materially affect Seller’s retained liability and/or responsibility under
the Lease, and Seller shall have a reasonable opportunity to participate in
such meeting or communication.  Except
with the prior written consent of Seller, Purchaser shall not agree to any
modification to the Lease that, individually, or in the aggregate with all
other modifications not previously consented to by Seller, would increase or
materially affect Seller’s retained liability and/or responsibility under the
Lease.  With respect to any breach or
default under the Lease occurring prior to October 1, 2008 and with
respect to which, Seller has retained liability under the Lease as amended by
the Lease Amendment, and which is not timely cured by Purchaser, Seller shall have
the right, without any obligation to do so, to cure such default, including
payment of any default interest or late payment charges owed to Landlord with
respect to such default, provided Seller has given Purchaser not less than five (5)
business days notice of such intent to cure and Purchaser has not cured such
matter within said five-day period.  Any
amounts paid by Seller to Landlord on account of any Purchaser default under
the Lease shall be reimbursed by Purchaser to Seller within three (3)
business days of Purchaser’s receipt of Seller’s written demand therefor, and,
to the extent the Rent Reimbursements have not been made, such amounts shall be
offset against Seller’s obligation to pay the Rent Reimbursements.

 

(d)                                 Security
Deposit Credit.  At Closing, Seller
shall receive from Purchaser the amount of One Hundred Ninety-Two Thousand Five
Hundred Dollars ($192,500) representing the Security Deposit held by Landlord
under the Lease (the “Security Deposit Credit”).

 

(e)                                  Security
System.  On the Effective Date, BI
shall have effected the decommissioning of the current security system computer
server and system (the “Security System”)
such that it services the Premises only and not any of BI’s other facilities or
premises, and secured a software license for Tanox for the use of the software
necessary to operate the Security System.

 

(f)                                    Additional
Premises Repair.  As of the Signing
Date, or as soon thereafter as practicable, and in all events prior to, and as
a condition of, the Closing, Seller shall arrange for Landlord to conduct an
inspection of the Premises to identify items of deferred maintenance or items
requiring repair under applicable provisions of the Lease.  Based on such inspection, Seller and
Purchaser shall agree on a list of items of repair (the “Additional Repair
Items”) which were identified by Landlord, or are consistent with
Landlord’s expressed criteria for the standard of maintenance and repair
required under the Lease, as mutually agreed by Seller and Purchaser.  The Additional Repair Items shall be added to
Schedule 1.1 to the extent not already listed thereon, and Seller
shall effect the repair of the Additional Repair Items
prior to the Effective Date at Seller’s sole cost and expense.  Seller reserves the right to contest with

 

5

 

Landlord its imposition of any item of repair which Seller, in good
faith, believes is inconsistent with the provisions of the Lease before such
item is included on the Additional Repair Items.

 

1.7                                 Performance
Under Lease. 
Seller shall continue to satisfy and perform all obligations under the
Lease in accordance with the terms thereof for the period from and after the
Signing Date through the Effective Date.

 

ARTICLE 2

 

PURCHASE AND SALE OF ASSETS

 

2.1                                 Purchase
and Sale.  Subject to the terms of
this Agreement, on the Closing Date (as defined in Section 6.1
below), Purchaser agrees to buy and Seller agrees to sell, transfer, convey and
assign to Purchaser all of Seller’s right, title and interest in and to the
Assets, subject to the retentions and reservations set forth herein.

 

2.2                                 Consideration
for Purchase.  On the Closing Date,
in exchange for the purchase of the Assets pursuant to Section 2.1
above, Purchaser shall deliver to Seller in cash or immediately available
funds, the amount of Five Million Four Hundred Eighty-One Thousand One Hundred
Forty-Eight and 00/100 Dollars ($5,481,148.00) (the “Asset
Purchase Price”).  Purchaser
will also deliver to Seller funds in an amount equal to one-half (1/2) of the
California sales tax (the “Sales Tax Payment”)
payable by Seller in connection with the sale of the Assets.  Subject to such receipt, Seller shall pay the
full amount of such sales tax to the appropriate authorities on a timely basis.  The Asset Purchase Price shall be allocated
as follows:

 

(a)                                  Equipment.  The Equipment consists of the “MSM Equipment,” as described in the attached Exhibit ”F,”
the “Process Development Equipment,” as
described in the attached Exhibit ”G,” and the “QA/QC Equipment”, as described in the attached Exhibit ”H.”  The portion of the Asset Purchase Price
allocable to each such Equipment category is as follows:

 

	
  (i)

  	
   

  	
  MSM Equipment

  	
   

  	
  $1,856,148.00;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  Process Development Equipment

  	
   

  	
  $220,000.00; and

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  QA/QC Equipment

  	
   

  	
  $300,000.00.

  

 

(b)                                 FF&E.  The FF&E is more particularly described
on the attached Exhibit ”I.”  The portion of the Asset Purchase Price
allocable to the FF&E is One Million Five Hundred Thousand and 00/100
Dollars ($1,500,000.00).  In addition, Purchaser
shall pay Seller Ten Thousand and 00/100 Dollars ($10,000) for the Security
System.

 

(c)                                  Maintenance
Inventory.  The Maintenance Inventory
is more particularly described on the attached Exhibit ”J.”  The portion of the Asset Purchase Price allocable
to the Maintenance Inventory is Ninety-Five Thousand and 00/100 Dollars
($95,000.00).

 

(d)                                 Documentation/Retained
Rights.  The Documentation is more
particularly described on the attached Exhibit ”K.”  The portion of the Asset Purchase Price
allocable to the

 

6

 

Documentation is One Million Five Hundred Thousand and 00/100 Dollars
($1,500,000.00).  Notwithstanding the
sale of the Documentation pursuant to this Agreement, Seller hereby retains and
reserves ownership rights in, and a perpetual royalty-free non-exclusive
license to use, copies and originals of the Documentation retained by
Seller.  Seller shall be permitted access
to, and the opportunity to copy at its cost, any of the Documentation (subject to
coordination with Purchaser so as not to interfere with Purchaser’s use
thereof) for a period of six (6) months following the Effective Date.  Seller and Purchaser acknowledge and agree
that the Documentation will not include any information related to Seller’s
products, processes and quality systems information, all of which information
shall be redacted from the Documentation. 
The list of Documentation on the attached Exhibit”K” is
representative of the types and categories of Documentation which are intended
to be conveyed by Seller to Purchaser under this Agreement, and, upon Purchaser’s
written request therefor,  to the extent
the same exists and is in Seller’s possession (or reasonably accessible to
Seller), Seller shall provide to Purchaser, as soon as reasonably practicable
after receipt of such request, such additional Documentation as Purchaser shall
request which is consistent with the types and categories of Documentation described
on the attached Exhibit”K.”

 

2.3                                 Asset
Transfer.  The transfer of title to
the Assets shall be effected by delivery of a bill of sale (the “Bill of Sale”) substantially in the form of the attached Exhibit ”L,”
to be executed and delivered by Seller on the Closing Date.

 

2.4                                 Equipment,
FF&E and Maintenance Inventory.  Seller shall assign to Purchaser as of the
Closing Date all intangible rights and warranties with respect to the
Equipment, FF&E, Maintenance Inventory and Documentation pursuant to an
Assignment of Intangibles and Warranties (the “Assignment
of Intangibles and Warranties”) in the form of the attached Exhibit ”M.”

 

2.5                                 Maintenance
of Assets.  Seller shall maintain the
Assets in accordance with Seller’s current practices and procedures from the
Signing Date through the Closing Date.

 

ARTICLE 3

 

REPRESENTATIONS AND WARRANTIES OF
SELLER

 

3.1                                 Seller
hereby represents and warrants to Purchaser as follows:

 

(a)                                  Leasehold
Interest.  Seller currently holds,
and has not previously assigned or transferred, the leasehold interest
represented by the Lease which is the subject of the Assignment.  Such interest is a valid leasehold interest
in accordance with the terms of the Lease, and, to Seller’s knowledge, is free
and clear of adverse interests other than those of public record  against title to the Premises.  Seller shall convey its leasehold interest in
the Lease to Purchaser on the Effective Date. 
To Seller’s knowledge, the copy of the Lease attached to this Agreement
as Exhibit “A”, is a true and complete copy of the Lease by which Seller
is bound with respect to the Premises.  There
is no Default (as defined in the Lease) under the Lease by Seller, or to Seller’s
knowledge, or occurrence or condition which with the giving of notice or
passage of time would constitute a Default under the Lease, except as listed on
the attached Schedule 3.1. 
To Seller’s knowledge the Premises have been maintained in good
condition and repair (ordinary

 

7

 

wear and tear
excepted) except for the items to be repaired under Schedule 1.1, as
supplemented by the inclusion of the Additional Repair Items.

 

(b)                                 Assets.  Seller holds, and shall convey to Purchaser
on the Effective Date, good and marketable title, as sole owner, to all of the
Assets, free and clear of any and all liens, mortgages, pledges, security
interests, conditional sales or title retention agreements.

 

(c)                                  No
Insolvency.  Seller is not the
subject of any insolvency or bankruptcy proceeding, and the entry by Seller
into, and performance of its obligations under, this Agreement, will not render
Seller insolvent.

 

(d)                                 Binding
Agreement.  This Agreement
constitutes the valid and legally binding obligation of Seller, is enforceable
in accordance with its terms and does not conflict with, or result in a breach
of, any material agreement by which Seller is bound.  Seller has full power, authority and legal
right to execute and deliver this Agreement, to transfer its right, title and
interest in the Assets and to grant the Assignment in the Lease, and to perform
and observe the terms and conditions hereof.

 

(e)                                  Equipment;
Maintenance Inventory.  To Seller’s
knowledge:  (i) the Equipment has
been maintained in all material respects as described in Seller’s records
provided to Purchaser as part of the Documentation and reflect such maintenance
for a period of not less than eighteen (18) months prior to the Signing Date
(the “Maintenance Records”), except to the
extent, and for such periods, as the Equipment, or part thereof, was
decommissioned from use by Seller; and (ii) Seller has received no
notification from any governmental agency or authority with jurisdiction
thereover that the Equipment as used in the Premises by Seller is in violation,
in any material respect, of any applicable building, zoning, subdivision, fire
protection, health or similar law, order, ordinance or regulation.  To Seller’s knowledge, the Maintenance
Inventory has not been subject to flood, fire or other casualty event.

 

(f)                                    Compliance
with Law.  Seller is, and to Seller’s
knowledge, at all times has been, in material compliance with legal requirements
applicable to Seller’s use and occupancy of the Premises and its ownership and
use of the Assets.  To Seller’s
knowledge, Seller has not received any notice from any governmental entity with
jurisdiction thereover, alleging any actual, alleged or potential violation of
any such legal requirement, except as set forth on the attached Schedule 3.1.

 

(g)                                 Litigation.  There is no action, arbitration, hearing,
investigation, litigation or suit (collectively, “Proceeding”)
pending or, to the knowledge of Seller, threatened against, or affecting the
Assets or the Premises, or Seller’s rights relating thereto, or Seller’s entry
into this Agreement, or its performance of its obligations hereunder, except as
set forth on the attached Schedule 3.1.

 

(h)                                 Environmental
Matters.  Seller is, and, to Seller’s
knowledge at all times has been, in compliance with, and in all material
respects, has not been and is not in violation or liable under, environmental
laws relating to its use and occupancy of the Premises under the Lease and
otherwise, except as described on (i) the URS Report dated November 11,
2004 and delivered to Purchaser prior to the Signing Date; or (ii) Schedule 3.1.  To Seller’s knowledge,

 

8

 

there has not been any activity conducted on the Premises involving
hazardous agents, compounds or products which are known to be life-threatening
to human beings other than the activities listed on Schedule 3.1.  To Seller’s knowledge, Seller has provided
Landlord with all notices of spillage, discharge, release or disposal of
hazardous materials onto or within the Premises required by Section 37.1
of the Lease except as listed on Schedule 3.1.

 

(i)                                     Alterations.  Seller has disclosed to Purchaser all
alterations made to the Premises by Seller and requiring Landlord’s consent
under the Lease,  and,
to Seller’s knowledge, Seller has provided to Purchaser all correspondence
between Seller and Landlord with respect to Seller’s request for consent to
such alterations and Landlord’s response thereto, if any.  To Seller’s knowledge, all alterations have
been installed in accordance with applicable provisions of the Lease, except as
listed on Schedule 3.1.

 

Except with
respect to clause 3.1(g) above, the term “Seller’s
knowledge,” as used in this Article 3, shall refer to and mean
the actual knowledge of Paul Draper and Patrick Hoy, who are Seller’s
employees, after reasonable inquiry, and shall not refer to any other employee,
director, shareholder or agent of Seller; provided, however, with
respect to clause 3.1(h) above, “Seller’s knowledge” shall also include, refer
to and mean the actual knowledge of, Joe Hess, Seller’s employee, after
reasonable inquiry.

 

ARTICLE 4

 

REPRESENTATIONS AND WARRANTIES OF
PURCHASER

 

4.1                                 Purchaser
hereby represents and warrants to Seller as follows:

 

(a)                                  Binding
Agreements.  This Agreement
constitutes the valid and legally binding obligation of Purchaser, is
enforceable in accordance with its terms, and does not conflict with, or result
in a breach of, any material agreement by which Purchaser is bound.  Purchaser has full power, authority and legal
right to execute and deliver this Agreement and to perform and observe the
terms and conditions hereof.

 

(b)                                 Insolvency.  Purchaser is not the subject of any
insolvency or bankruptcy proceeding, and the entry by Purchaser into, and
performance of its obligations under, this Agreement will not render Purchaser
insolvent.

 

(c)                                  Litigation.  There is no Proceeding pending or, to the
knowledge of Purchaser threatened against, or affecting, Purchaser’s entry into
this Agreement and performance of its obligations hereunder.

 

ARTICLE 5

 

CONDITIONS PRECEDENT TO CLOSING

 

5.1                                 Conditions
to Obligations of Purchaser.  The
obligations of Purchaser to acquire the Assets and pay the Asset Purchase Price
and execute the Confirmation of Assignment under this Agreement are subject to
the satisfaction or waiver of the following conditions precedent:

 

9

 

(a)                                  Seller
shall have taken all requisite action and fulfilled all covenants and
agreements for the valid performance of this Agreement and for the
effectiveness of the Assignment and transfer of the Assets to Purchaser
pursuant to the terms and conditions hereof;

 

(b)                                 Seller’s
representations and warranties contained herein shall be true and correct in
all material respects as of the Closing Date;

 

(c)                                  Since
the Signing Date, there shall not have been commenced or threatened against
Purchaser, any Proceeding involving any challenge to or seeking damages or
other relief in connection with any of the transactions contemplated by this
Agreement which is continuing; and

 

(d)                                 Since
the Signing Date there shall not have occurred a “Force Majeure Event” (as defined
in Section 8.6 below) which is continuing and has a material
adverse affect upon the Assets or the Premises, or the occurrence of any
material casualty to the Premises, or the destruction of any material portion
of the Assets.

 

5.2                                 Conditions
to Seller’s Obligations.  The
obligations of Seller to sell, assign and transfer the Assets and execute the
Confirmation of Assignment under this Agreement are subject to the satisfaction
or waiver of the following conditions precedent:

 

(a)                                  Purchaser
shall have taken all requisite action and fulfilled all covenants and
agreements for the valid performance of this Agreement, including, but not
limited to, delivery of the Asset Purchaser Price in full;

 

(b)                                 Purchaser’s
representations and warranties contained herein shall be true and correct in
all material respects as of the Closing Date;

 

(c)                                  Since
the Signing Date, there shall not have been commenced or threatened against
Seller any Proceeding involving any challenge to or seeking damages or other
relief in connection with any of the transactions contemplated by this
Agreement which is continuing.

 

ARTICLE 6

 

CLOSING

 

6.1                                 Time
and Place.  The transactions provided
for herein shall be consummated (the “Closing”)on the Effective Date, or such other date and time as the
parties may agree (the “Closing Date”),
at the offices of the Seller or such other location as the parties may agree.

 

6.2                                 Actions
and Deliveries.  On the Closing Date,
the following actions and deliveries shall take place (and be deemed to take
place concurrently):

 

(a)                                  Delivery
by Seller.  Seller shall deliver or
cause to be delivered to Purchaser the following:

 

10

 

(i)                                     A
certificate executed by Seller certifying to the accuracy of its
representations and warranties as of the Closing Date in all material respects;

 

(ii)                                  A
countersigned original of the Confirmation of Assignment executed by Seller;

 

(iii)                               A
countersigned original of the Lease Amendment executed by Seller;

 

(iv)                              The
Bill of Sale executed by Seller;

 

(v)                                 A
countersigned original of the Assignment of Intangibles and Warranties executed
by Seller;

 

(vi)                              A
counterpart original of the Lease Amendment executed on behalf of Landlord;

 

(vii)                           A
countersigned original of the Transition Services Agreement, executed on behalf
of Seller; and

 

(viii)                        Such other
documents as are necessary to effect the intent of this Agreement as Purchaser
may reasonably request.

 

(b)                                 Delivery
by Purchaser.  Purchaser shall
deliver to Seller the following:

 

(i)                                     A
certificate executed by Purchaser certifying to the accuracy of its
representations and warranties as of the Closing Date in all material respects;

 

(ii)                                  The
full amount of the Asset Purchase Price, the Sales Tax Amount and the Security
Deposit Credit;

 

(iii)                               A
countersigned original of the Confirmation of Assignment executed by Purchaser;

 

(iv)                              A
countersigned original of the Lease Amendment executed by Purchaser; and

 

(v)                                 A
countersigned original of the Assignment of Intangibles and Warranties executed
by Purchaser;

 

(vi)                              A
countersigned original of the Transition Services Agreement, executed on behalf
of Purchaser; and

 

(vii)                           Such
other documents as are necessary to effect the intent of this Agreement as
Seller may reasonably request.

 

6.3                                 Prorations.  Within thirty (30) days following the
Effective Date, Seller and Purchaser shall agree on prorations as of the
Effective Date of Lease rent, utilities, real and personal property taxes, and
other amounts payable under the Lease with respect to the Premises,

 

11

 

and with respect
to the Assets.  To the extent Seller has
paid amounts in excess of its allocable share pursuant to such prorations,
Purchaser shall promptly remit such amounts to Seller.  To the extent Seller owes Purchaser for
amounts pursuant to such prorations, Seller shall promptly remit such amounts
to Purchaser.

 

6.4                                 Delivery
of Assets.  From and after the
Effective Date, the Assets shall be available at the Premises and Purchaser
shall have full access, custody and control of the Assets.  Purchaser shall have the right to confirm
that the Assets are located at the Premises on the Closing Date as a condition
to the closing of the transactions contemplated hereunder.  Notwithstanding the foregoing, the transfer
of the MSM Equipment, the QA/QC Equipment and related documentation may be
effected between the parties subsequent to the Signing Date and prior to the
Closing Date by written amendment to this Agreement specifying such early
delivery by Seller of such portions of the Assets, and payment by Purchaser of
the portion of the Asset Purchase Price allocable thereto.

 

6.5                                 Simultaneous
Transactions and Duration of Closing. 
All transactions on the Closing Date shall be deemed to have taken place
simultaneously, and no transaction shall be deemed to have been completed until
all transactions are completed and all documents delivered.

 

6.6                                 Termination.  This Agreement may be terminated by written
notice of either party if the Closing shall not have occurred by January 31,
2005.

 

ARTICLE 7

 

INDEMNITY; EQUIPMENT WARRANTY;
PARENT GUARANTY

 

7.1                                 Purchaser’s
Indemnity.  Purchaser agrees to
indemnify, defend and hold Seller harmless from and against any and all claims,
Proceedings (excluding declaratory actions) and demands (including those of
Landlord under the Lease) and all costs, expenses and liabilities
(collectively, the “Claims”)
arising out of (i) Purchaser’s performance of, or failure to perform, the
Post-Effective Date Lease Obligations, or Purchaser’s possession or use of the
Premises (including, without limitation, any violation of applicable
environmental laws), in each case, from and after the Effective Date,
(ii) Purchaser’s performance of, or failure to perform, its obligations
under this Agreement, or (iii) Purchaser’s ownership or use of the Assets, in
each case, from and after the Effective Date.

 

7.2                                 Seller’s
Indemnity.  Seller agrees to
indemnify, defend and hold Purchaser harmless from and against any and all
Claims arising out of (i) Seller’s performance of, or failure to perform,
the Pre-Effective Date Obligations, or Seller’s possession or use of the
Premises (including, without limitation, any violation of applicable
environmental laws), in each case, for all periods prior to the Effective Date,
(ii) Seller’s performance of, or failure to perform, its obligations under
this Agreement; (iii) any breach of the representations or warranties of
Seller contained in this Agreement, subject to all limitations under Section 
8.2 below; (iv) Seller’s ownership or use of the Assets for all
periods prior to the Effective Date, (v) the decommissioning of
radioactive material licenses affecting the Rad Areas or the use or occupancy
by the Seller or its employees of the Rad Areas after the Effective Date; or (vi) any

 

12

 

noncompliance
with applicable bulk sales law in connection with the sale of the Assets to
Purchaser as contemplated by this Agreement.

 

7.3                                 Indemnity
Exclusions.  In no event shall the
indemnity obligations under this Article 7 apply to Claims to the
extent arising out of the negligence or intentional misconduct of the party
requesting indemnity.  In no event shall
any indemnity or other claim for damages under this Agreement extend to
liability for consequential, indirect or punitive damages.

 

7.4                                 Procedure
for Indemnification and Defense of Claim. 
Promptly after receipt by a party entitled to indemnification hereunder
(the “Indemnitee”) of written notice of the
assertion or commencement of any proceeding by a third party with respect to
any matter referred to in Sections 7.2 or 7.3, the
Indemnitee shall give written notice thereof to the party obligated to
indemnify the Indemnitee (the “Indemnitor”)
who shall have the right to assume the defense of such Claim; provided, however,
that the failure of the Indemnitee to give the Indemnitor notice as provided
herein shall not relieve the Indemnitor of its obligations hereunder except to
the extent that the Indemnitor is prejudiced thereby.  If the Indemnitor declines to assume the
defense of such Claim within twenty (20) days of receipt of the Indemnitee’s
notice, the Indemnitee may proceed with such defense and seek indemnity for any
Claims resulting therefrom.  Any party
undertaking the defense of any Claim shall keep the other reasonably informed
with respect thereto.  Defense of the
Indemnitee shall be by counsel reasonably acceptable to the Indemnitee and the
Indemnitor shall have no right to settle a claim against the Indemnitee without
prior written consent of the Indemnitee; provided, however, that
an Indemnitee shall not unreasonably withhold,
condition or delay its consent to any such settlement.  Any claim for indemnification for any matter
not involving a third party may be asserted by notice to the party from whom
indemnification is sought and shall be paid promptly after such notice.

 

7.5                                 No
Liabilities Assumed.  Except as
expressly provided for by this Agreement, neither Seller or Purchaser shall be
deemed, by execution or performance of this Agreement or otherwise, to have
assumed or to be otherwise responsible for any debt, liability, obligation,
commitment of any nature of the other, or relating to the Assets or the other’s
employees, other assets, operations, businesses or activities, or claims for
any such liability or obligations, matured or unmatured, liquidated or
unliquidated, fixed or contingent, or known or unknown, whether arising out of
occurrences prior to, at or after the Effective Date.

 

7.6                                 Equipment
Warranty.

 

(a)                                  Warranty
Items.  Seller hereby warrants to
Purchaser that the Equipment identified on Schedule 7.6A attached
hereto (the “Warranty Item(s)”)
are, or will be as of the Effective Date, in good operating condition and
repair (subject to normal wear and tear). 
If  any Warranty Item: (i)  is
not in good operating condition and repair (subject to normal wear and tear), so
as to permit its operation substantially as conducted by Seller prior to Seller’s
decommissioning of such Warranty Item from operation, and in a fashion which
meets or exceeds the applicable equipment specifications with respect to each
such Warranty Item provided to Purchaser by Seller (the “Equipment Specifications”); or (ii) thereafter,
fails in its operation substantially as conducted by Seller prior to Seller’s
decommissioning of such Warranty Item from operation, or fails to meet or
exceed the applicable Equipment

 

13

 

Specifications, Purchaser’s exclusive remedy as to such Warranty Item
shall be limited to repair of the applicable Warranty Item by Seller or issuance
of a cash refund in the amount of the Asset Purchase Price allocable to such
Warranty Item by the Seller.  It shall be
within Seller’s sole discretion to elect to repair or to refund the portion of
the Asset Purchase Price allocated to any piece of Equipment which is a
Warranty Item.  Purchaser shall provide
prompt notice to Seller of any Warranty Item which requires repair following
Purchaser’s knowledge thereof, and in all events sufficiently promptly to
minimize any further damage to such Warranty Item.  Purchaser shall provide reasonable access to
the Premises to Seller, its employees or contractors so as to allow Seller to effect any repair to a Warranty Item.

 

(b)                                 Non-Warranty
Equipment.  Seller warrants to
Purchaser that the Equipment which are not Warranty
Items, shall be operational on the Effective Date.

 

(c)                                  Limitation
on Warranty.  Except
as otherwise provided in this Article 7, Purchaser acknowledges and
agrees that the provisions of the warranties given under this Section 7.6
constitute the sole and exclusive remedy available to it with respect to
defective Warranty Items.  Except
for the warranties provided in this Section 7.6, all warranties,
whether expressed, implied or statutory, are hereby expressly excluded and
disclaimed by Seller.  The warranty as to
the Warranty Items set forth in Section 7.6(a) above, shall only be
valid with respect to warranty claims submitted by Purchaser within the one
hundred fifty-four (154) day period commencing as to each such Warranty
Item, on the first to occur of:  (i) the
date on which Purchaser takes title to such Warranty Item pursuant to Section 6.4
above: and (ii) the Closing Date (the “Warranty
Period”).  The warranty set
forth in this Section 7.6 shall not apply to the extent any breach
of warranty is directly attributable to any damage or casualty occurring during
Purchaser’s ownership of the Warranty Items, or due to Purchaser’s failure to
maintain any Warranty Item in the ordinary course in accordance with Seller’s
past custom, and the Equipment Specifications. 
In no event shall Seller’s liability under this Section 7.6 as
to Warranty Items repair or replacement exceed the portion of the Asset
Purchase Price, on an aggregate basis, for the category of Equipment to which
such Warranty Items belong.

 

7.7                                 Remedies
Cumulative.  Remedies provided in
this Agreement shall be cumulative and shall not preclude any party from
asserting any other right or seeking any other remedies against the other party.

 

ARTICLE 8

 

MISCELLANEOUS

 

8.1                                 Notices.  Any notices or other communications pursuant
to this Agreement shall be deemed to have been given when delivered personally,
or within three (3) days of being deposited in the United States mail,
registered or certified, with proper postage and registration or certification
fees prepaid, or when delivered to Federal Express or a similar overnight
carrier, addressed to each party at such party’s principal place of business as
set forth on the signature page hereofor to such other addresses as may be
designated by any of the parties from time to time by written notice given to
the other party in the aforesaid manner.

 

14

 

8.2                                 Survival.  Seller’s representations and warranties under
Sections 3.1(a),  (b) and (h) shall survive
indefinitely.  Seller’s representations
and warranties under Sections 3.1(c),(d),
(f), and (g) above shall survive for a period of twelve (12)
months following the Closing Date. 
Seller’s representations and warranties under Section 3.1(e)
above shall survive for a period of six (6) months following the Closing Date.  Seller’s representations and warranties under
Section 3.1(i) above shall survive until September 30, 2011.  Except for the foregoing representations and
warranties and the warranty contained in Section 7.6 (subject to the
limitations on survival specified hereinbelow), none of the representations and
warranties contained in this Agreement shall survive beyond the Closing
Date.  All covenants and agreements of
the parties set forth in this Agreement which indicate they are to be performed
after the Closing Date shall survive the Closing Date until performed,
including for avoidance of doubt, Sections 1.4, 1.6, 1.7,
2.2(d), 6.3, 6.4, Article 7 and Article 8
hereof.  Any warranties provided by
Seller under Section 7.6 are expressly limited to the periods, if
any, specified in Section 7.6. 
 Each party shall provide written
notice to the other party, as soon as practicable thereafter and in all events
prior to the Closing, of any matter which is actually known by such party prior
to the Closing to constitute a breach of 
any representation or warranty of the other party untrue, incorrect or
misleading in any material respect.  The persons
whose actual knowledge shall be the basis for compliance with the foregoing
covenant shall be limited to Ashraf Hanna and Katie-Pat Bowman on behalf of
Purchaser and Paul Draper and Patrick Hoy on behalf of Seller.

 

8.3                                 Binding
Effect.  The terms and provisions of
this Agreement shall be binding upon, and shall inure to the benefit of, the
parties hereto and their respective assigns, heirs, representatives and
successors; provided, however, this Agreement shall not be
assignable or transferable by either party hereto without the written consent
of the other party, except that either party may assign its rights under this
Agreement to any of its Affiliates or to a successor in connection with the
merger, consolidation, or sale of all or substantially all of its assets or
that portion of its business pertaining to the subject matter of this
Agreement, with prompt written notice to the other party of any such assignment,
provided that the assigning party shall not be relieved of any obligations
under this Agreement by any such assignment or transfer, and the assignee or
transferee shall agree to be bound by all of the terms and conditions of this
Agreement in a writing delivered to the other party as a condition to the
effectiveness of such assignment or transfer.

 

8.4                                 Applicable
Law;  Waiver of
Bulk Sales Law.  This Agreement and
the rights and obligations of the parties hereunder shall be construed under,
and governed by, the laws of California without giving effect to conflict of
laws provisions.  The parties jointly waive
all bulk sales laws applicable to the transfers effected
pursuant to this Agreement.

 

8.5                                 Entire
Agreement.  This Agreement, the
attached exhibits referenced herein, and the instruments, agreements and
certificates to be executed and delivered pursuant hereto, together with that
certain Mutual Confidentiality Agreement dated as of March 15, 2004, as
amended by a certain Letter Amendment, of even date herewith, by and between
Purchaser and Seller (the “Amended March CDA”),
constitute the entire understanding of the parties with respect to the subject
matter hereof and supersede any and all prior letters, agreements or
memorandums of understanding.  No
modification or waiver of this Agreement or any part hereof shall be valid or
effective unless in writing and signed by the party or parties sought to be

 

15

 

charged
therewith; and no waiver of any breach or condition of this Agreement shall be
deemed to be a waiver of any other subsequent breach or condition, whether of
like or different nature.

 

8.6                                 Headings;
Terminology.  The various headings or
titles used herein are for convenience only and shall not affect the
interpretation of any of the provisions hereof. 
All personal pronouns used in this Agreement, whether used in the
masculine, feminine or neuter gender, shall include all other genders; and the
singular number shall include the plural, and vice versa.

 

8.7                                 Force
Majeure.  In the event, as the result
of the occurrence of an act of God, governmental action (including any
proceeding instituted by any governmental agency or authority to enjoin or
prevent the transactions contemplated by this Agreement or condemn the
Premises), labor or workforce stoppage or strike, fire, flood, material
destruction or damage to the Premises or the Assets, act of terrorism or other
unforeseen event (such a “Force Majeure Event”), beyond the reasonable control
of the party affected thereby, such party is prevented from performing its
obligations under this Agreement, such failure to perform shall be excused and
shall not be a breach or default of this Agreement for the period in which said
condition prevails.  Any party claiming
the occurrence of a force majeure event as an excuse for performance shall give
prompt written notice to the other party of such event and the estimated
duration of such event.  Force Majeure
Event shall not be deemed to include financial capacity of a party to perform
its obligations under this Agreement.

 

8.8                                 Confidentiality.  The
parties acknowledge that they are parties to the Amended March CDA and
that it remains in full force and effect. 
In addition, the parties agree that the terms of this Agreement may be
disclosed by either party in connection with reporting obligations, if any,
required by the rules and regulations of the United States Securities and
Exchange Commission, and that such disclosure shall not be deemed a violation
of the obligations contained in the Amended March CDA; provided, however,
each party shall provide the other party with reasonable advance notice of, and
an opportunity to comment on, any such disclosure.  Notwithstanding the foregoing,  the parties agree
that any press releases regarding the transactions provided for under this
Agreement shall be subject to mutual approval of the parties prior to any
public dissemination thereof.

 

8.9                                 Counterparts.  This Agreement may be executed in
counterparts, all of which when taken together shall be deemed a fully executed
original.

 

8.10                           Other
Assurances.  Each party agrees to
take such actions as may be reasonably required by the other party to
effectuate the transactions contemplated by this Agreement upon written request
from the other party stating the necessity and basis for such additional
action.

 

8.11                           Attorneys’
Fees.  In the event that any action
is brought for the enforcement or interpretation of this Agreement, the party
determined by the court in which such action is brought to be the prevailing
party in such action shall be entitled to recovery of reasonable attorneys’ fees
and costs incurred in said action.

 

8.12                           Joint and Several Liability.  The
undersigned Tanox, Inc., a Delaware corporation (“Tanox Parent”), the sole
shareholder of Tanox West, hereby assumes joint and several liability

 

16

 

for the
obligations of the Purchaser under this Agreement, and agrees to be bound by
all the terms and provisions of this Agreement. 
Tanox Parent hereby accepts, not as a surety but as a principal and
co-debtor, joint and several liability with Tanox West with respect to the
payment of all of the obligations of the Purchaser hereunder, upon and subject
to the terms hereof, it being the intention of the parties hereto that all such
obligations shall be the joint and several obligations of Tanox Parent and
Tanox West without preferences or distinction among them.  If and to the extent that Tanox West shall
fail to make any payment with respect to any obligation of the Purchaser
hereunder as and to the extent due in accordance with and subject to the terms
thereof, then in such event Tanox Parent will make such payment with respect to
such obligation.

 

[Remainder of Page
Intentionally Blank]

 

17

 

IN WITNESS
WHEREOF, the parties have executed this Lease Assignment and Asset Purchase
Agreement as of the date first above written.

 

	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  TANOX WEST, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nancy T. Chang

  	
   

  
	
   

  	
  Name: Nancy T. Chang

  	
   

  
	
   

  	
  Title: President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  10301 Stella Link

  	
   

  
	
   

  	
  Houston, Texas 77025

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  BIOGEN
  IDEC INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward M. Rodriquez

  	
   

  
	
   

  	
  Name:

  	
  Edward M. Rodriquez

  	
   

  
	
   

  	
  Title:

  	
  Vice President, Finance

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  5200 Research Place

  	
   

  
	
   

  	
  San Diego, CA 92122

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TANOX, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nancy T. Chang

  	
   

  
	
   

  	
  Name: Nancy T. Chang

  
	
   

  	
  Title:
  President & CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  10301 Stella Link

  	
   

  
	
   

  	
  Houston, Texas 77025

  	
   

  
																	

 

 

[SIGNATURE PAGE TO LEASE
ASSIGNMENT AND

ASSET PURCHASE AGREEMENT]

 

 

INDEX OF EXHIBITS

 

	
  EXHIBITS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “A”

  	
   

  	
  -

  	
   

  	
  Lease

  
	
  “B”

  	
   

  	
  -

  	
   

  	
  Form of Confirmation of Assignment

  
	
  “C”

  	
   

  	
  -

  	
   

  	
  Form of Lease Amendment

  
	
  “D”

  	
   

  	
  -

  	
   

  	
  Form of Transition Services Agreement

  
	
  “E”

  	
   

  	
  -

  	
   

  	
  Location of Rad Areas

  
	
  “F”

  	
   

  	
  -

  	
   

  	
  List of MSM Equipment

  
	
  “G”

  	
   

  	
  -

  	
   

  	
  List of Process Development Equipment

  
	
  “H”

  	
   

  	
  -

  	
   

  	
  List of QA/QC Equipment

  
	
  “I”

  	
   

  	
  -

  	
   

  	
  List of FF&E

  
	
  “J”

  	
   

  	
  -

  	
   

  	
  List of Maintenance Inventory

  
	
  “K”

  	
   

  	
  -

  	
   

  	
  List of Documentation

  
	
  Sub-Exhibits

  	
   

  	
   

  	
   

  	
  K-1 Maintenance and Calibration Records

  
	
   

  	
   

  	
   

  	
   

  	
  K-2 Turnover Packages

  
	
   

  	
   

  	
   

  	
   

  	
  K-3 SOPs

  
	
   

  	
   

  	
   

  	
   

  	
  K-4 Validation Protocols

  
	
   

  	
   

  	
   

  	
   

  	
  K-5 Environmental Reports

  
	
   

  	
   

  	
   

  	
   

  	
  K-6 QA/QC
  Equipment Qualification Documents

  
	
   

  	
   

  	
   

  	
   

  	
  K-7 EFCRs

  
	
   

  	
   

  	
   

  	
   

  	
  K-8 Change
  Control Documents 2003

  
	
   

  	
   

  	
   

  	
   

  	
  K-9 Change
  Control Documents 2004

  
	
   

  	
   

  	
   

  	
   

  	
  K-10 Drawings

  
	
   

  	
   

  	
   

  	
   

  	
  K-11 Training Material

  
	
   

  	
   

  	
   

  	
   

  	
  K-12 Document Plan

  
	
  “L”

  	
   

  	
  -

  	
   

  	
  Form of Bill of Sale

  
	
  “M”

  	
   

  	
  -

  	
   

  	
  Form of Assignment of Intangibles and
  Warranties

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 1.1

  	
   

  	
  -

  	
   

  	
  List of Premises Repairs

  
	
  Schedule 1.5

  	
   

  	
  -

  	
   

  	
  Phased Occupancy Plan

  
	
  Schedule 3.1

  	
   

  	
  -

  	
   

  	
  Seller’s Disclosures

  
	
  Schedule 7.6A

  	
   

  	
  -

  	
   

  	
  List of Warranty Items

  

 

1

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