EXHIBIT 99.4
ESCROW AGREEMENT
This Escrow Agreement, dated as of December 18, 1996 (the "Closing Date"),
among MEDAREX, INC., a New Jersey corporation ("Medarex"), HOUSTON BIOTECHNOLOGY
INCORPORATED, a Delaware corporation ("HBI"), and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ &
▇▇▇▇▇ LLP, as escrow agent ("Escrow Agent").
This is the Escrow Agreement referred to in that certain Convertible Note
dated December 18, 1996 (the "Note") made by HBI in favor of Medarex pursuant to
which Medarex loaned (the "Loan") to HBI the sum of $500,000 and in that certain
Convertible Note to be dated January 15, 1997 (the "Additional Note") to be made
by HBI in favor of Medarex pursuant to which Medarex will make an additional
loan (the "Additional Loan"; the Loan with the Additional Loan are sometimes
collectively referred to herein as the "Loans") to HBI in the amount of $250,000
(the Note and the additional Note are sometimes collectively referred to herein
as the "Notes"). Capitalized terms used in this agreement without definition
shall have the respective meanings given to them in the Notes.
In order to induce Medarex to make the Loans to HBI and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged and confirmed, the parties, intending to be legally bound, hereby
agree as follows:
1. ESTABLISHMENT OF ESCROW
(a) HBI is delivering to Escrow Agent that certain License Agreement dated
as of December 18, 1996 (the "License Agreement") pursuant to which HBI has
granted to Medarex an exclusive, transferable, perpetual license to use, further
develop, manufacture, sell and otherwise commercialize HBI's 4197 X-RA
immunotoxin product in North America (the "Escrow Property") free and clear of
all encumbrances.
(b) Escrow Agent hereby agrees to act as escrow agent and to hold,
safeguard and distribute Escrow Property pursuant to the terms and conditions
hereof.
2. TERM
2.1 This Escrow Agreement shall become effective as of the date hereof,
and shall continue in force until the later of (i) all amounts due and payable
by HBI under the Notes have been paid in full or the Notes shall have been
converted in full (the "Expiration Date"), or (ii) the final distribution of the
Escrow Property held by Escrow Agent hereunder; provided,
however, Medarex and HBI may terminate this Escrow Agreement at any time by an
instrument in writing signed by Medarex and HBI. Medarex or HBI shall notify
the Escrow Agent of the Expiration Date or any termination of this Escrow
Agreement under this Section 2.1 (the "Expiration Notice").
2.2 Upon expiration of this Escrow Agreement as provided in Section 2.1
hereof, the Escrow Property shall be distributed by Escrow Agent as provided in
Section 3 of this Escrow Agreement.
3. DISTRIBUTION OF ESCROW PROPERTY
3.1 Unless Escrow Agent shall have received an Objection Notice (as
hereinafter defined), within five business days after the latest date that
either Escrow Agent or HBI shall have received a notice (a "Distribution
Notice") from Medarex that an Event of Default shall have occurred under the
terms of the Note, or such other date upon which Medarex and HBI may mutually
provide to Escrow Agent in writing (the "Distribution Date"), Escrow Agent shall
distribute the Escrow Property to Medarex.
3.2 Unless the Escrow Agent shall have received an Objection Notice (as
defined herein), within five business days after the Escrow Agent shall have
received an Expiration Notice, the Escrow Agent shall distribute the Escrow
Property to HBI.
3.3 If either Medarex or HBI desires to object to having the Escrow
Property released from escrow, then such party shall give written notice to such
effect to Escrow Agent with a copy to the other party ("Objection Notice")
setting forth with particularity the reasons Escrow Agent should not release the
Escrow Property from escrow; provided, however, notwithstanding anything
provided in this Escrow Agreement to the contrary, the sole grounds to object to
the release of the Escrow Property shall be a dispute regarding the facts
underlying the payment or conversion of the Notes.
3.4 If Escrow Agent receives an Objection Notice, Escrow Agent shall
retain the Escrow Property until it receives either of the following: (i)
written instructions signed by Medarex and HBI setting forth that the Escrow
Property shall be delivered as specified in such instructions or (ii) a final
order of a court of competent jurisdiction, or other final resolution in
writing determined in accordance with an alternative dispute resolution
procedure specified by Medarex and HBI, setting forth to whom the Escrow
Property shall be delivered. In the event a court of competent jurisdiction or
other forum specifically finds as part of its final order that a party has acted
in bad faith said party shall be liable for and shall pay to the other party its
reasonable attorney fees, costs and expenses with respect to such resolution.
3.5 Upon the occurrence of any of the events requiring Escrow Agent to
deliver the Escrow Property, Escrow Agent shall be permitted to deliver same
within such period of time as reasonably practicable under all of the
circumstances.
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4. GENERAL PROVISIONS
4.1 To induce Escrow Agent to act hereunder, it is agreed by the Medarex
and HBI that:
(a) Escrow Agent shall not be under any duty to give the Escrow Property
held by it hereunder any greater degree of care than it gives its own
similar property.
(b) This Escrow Agreement expressly sets forth all the duties of Escrow
Agent with respect to any and all matters pertinent hereto. No
implied duties or obligations shall be read into this Escrow Agreement
against Escrow Agent. Escrow Agent shall not be bound by the
provisions of any agreement among the other parties hereto, except to
the extent specified in this Escrow Agreement.
(c) Escrow Agent shall not be liable, except for its own gross negligence
or willful misconduct, and, except with respect to claims based upon
such gross negligence or willful misconduct that are successfully
asserted against Escrow Agent, the other parties hereto shall jointly
and severally indemnify and hold harmless Escrow Agent (and any
successor escrow agent) and its partners, counsel, associates, agents
and employees from and against any and all losses, liabilities,
claims, actions, damages and expenses, including reasonable attorneys'
fees and disbursements, arising out of and in connection with this
Escrow Agreement.
(d) Escrow Agent shall be entitled to rely upon any order, judgment,
certification, demand, notice, instrument or other writing delivered
to it hereunder without being required to determine the authenticity
or the correctness of any fact stated therein or the propriety or
validity of the service thereof. Escrow Agent may act in reliance
upon any instrument or signature believed by it to be genuine and may
assume that any person purporting to give notice or receipt or advice
or make any statement or execute any document in connection with the
provisions hereof has been duly authorized to do so.
(e) Escrow Agent may act pursuant to the advice of counsel with respect to
any matter relating to this Escrow Agreement, (including without
limitation, if Escrow Agent is an attorney or law firm, partners or
employees of Escrow Agent, and shall not be liable for any action
taken or omitted in accordance with such advice.
(f) Escrow Agent does not have any interest in the Escrow Property
deposited hereunder but is serving as escrow holder only and has only
possession thereof. Medarex and HBI shall each pay or reimburse
Escrow Agent upon request for one half of any reasonable costs, fees
or taxes, if any, relating to the Escrow Property incurred in
connection herewith and shall indemnify and hold harmless
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Escrow Agent from any amounts that it is obligated to pay in the way
of reasonable costs, fees or taxes.
(g) Escrow Agent makes no representation as to the validity, value,
genuineness or the collectability of any security or other documents
or instrument held by or delivered to it.
(h) Escrow Agent shall not be required to advise any party as to the
wisdom in taking or refraining from taking any action with respect to
any property deposited hereunder.
(i) Escrow Agent (and any successor escrow agent) may at any time resign
as such by delivering the Escrow Property to any successor escrow
agent jointly designated by the other parties hereto in writing, or to
any court of competent jurisdiction, whereupon Escrow Agent shall be
discharged of and from any and all further obligations arising in
connection with this Escrow Agreement. The resignation of Escrow
Agent will take effect on the earlier of (a) the appointment of a
successor (including a court of competent jurisdiction) or (b) the day
which is 30 days after the date of delivery of its written notice of
resignation to the other parties hereto. If at that time Escrow Agent
has not received a designation of a successor escrow agent, Escrow
Agent's sole responsibility after that time shall be to hold the
Escrow Property in safekeeping until receipt of a designation of a
successor escrow agent or a joint written disposition instruction by
the other parties hereto or a final order of a court of competent
jurisdiction.
(j) Escrow Agent shall have no responsibility for the contents of any
writing of any third party contemplated herein as a means to resolve
disputes and may rely without any liability upon the contents thereof.
(k) In the event of any disagreement between the other parties hereto
resulting in adverse claims or demands being made in connection with
the Escrow Property, or in the event that Escrow Agent in good faith
is in doubt as to what action it should take hereunder, Escrow Agent
shall be entitled to retain the Escrow Property until Escrow Agent
shall have received (i) a final non-appealable order of a court of
competent jurisdiction directing delivery of the Escrow Property or
(ii) a written agreement executed by the other parties hereto
directing delivery of the Escrow Property, in which event Escrow Agent
shall disburse the Escrow Property in accordance with such order or
agreement. Any court order referred to in (i) above shall be
accompanied by a legal opinion by counsel for the presenting party
satisfactory to Escrow Agent to the effect that said court order is
final and non-appealable. Escrow Agent shall act on such court order
and legal opinions without further question.
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(l) Escrow Agent shall receive no fee for its services hereunder. HBI and
Medarex agree to reimburse Escrow Agent for all reasonable expenses,
disbursements and advances incurred or made by Escrow Agent in
performance of its duties hereunder (including reasonable fees,
expenses and disbursements of its counsel, which may include attorneys
who are partners or employees of Escrow Agent).
The provisions of this Section 4.1 shall survive the termination of this Escrow
Agreement.
4.2 The parties hereto hereby irrevocably submit to the jurisdiction
of any New York State or Federal Courts sitting in New York City in any action
or proceeding arising out of or relating to this Escrow Agreement and the
parties hereto irrevocably agree that all claims with respect to such action or
proceeding shall be heard and determined in such a New York State or Federal
court. The parties hereto hereby consent to and grant any such court
jurisdiction over the persons of such parties and over the subject matter of any
such dispute and agree that delivery or mailing of process or other papers in
connection with any such action or proceeding in the manner provided herein for
giving notice, or in such other manner as may be permitted by law, shall be
valid and sufficient service thereof.
4.3 This Escrow Agreement shall be binding upon and inure solely to
the benefit of the parties hereto and their respective successors and assigns
and shall not be enforceable by or inure to the benefit of any third party
except as provided in paragraph (i) of Section 4.1 with respect to a resignation
by Escrow Agent. No party may assign any of its rights or obligations under
this Escrow Agreement without the written consent of the other parties. This
Escrow Agreement shall be construed in accordance with and governed by the
internal law of the State of New York (without reference to its rule as to
conflicts of law).
4.5 This Escrow Agreement may only be modified by a writing signed by
all of the parties hereto, and no waiver hereunder shall be effective unless in
a writing signed by the party to be charged.
4.6 Any notice, request, demand or other communication required or
permitted under his Agreement shall be given in writing and shall be delivered
or sent by registered or certified mail, return receipt requested in a prepaid
envelope, by overnight mail or courier, or by facsimile transmission, to the
addresses set forth below or such other addresses as such party shall hereafter
specify in accordance with this Section:
If to Medarex: Medarex, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Senior Vice President
Fax Number: ▇▇▇-▇▇▇-▇▇▇▇
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with a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax Number: ▇▇▇-▇▇▇-▇▇▇▇/7
If to HBI: Houston Biotechnology Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
Fax Number: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇ ▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ L.L.P.
South Tower Pennzoil Place
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax Number: ▇▇▇-▇▇▇-▇▇▇▇
If to Escrow Agent: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax Number: ▇▇▇-▇▇▇-▇▇▇▇/7
Such notice or other communication shall be deemed to have been given (i) when
delivered, if sent be registered or certified mail or delivered personally or by
facsimile transmission confirmed by overnight mail or overnight courier or (ii)
on the second following business day if sent by overnight mail or overnight
courier.
4.7 This Escrow Agreement and the Notes together reflect the entire
understanding of the parties hereto and thereto with respect to the subject
matter hereof and thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Escrow
Agreement to be duly executed as of the day and year first written above.
BUYER: MEDAREX, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: PRESIDENT
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SELLER: HOUSTON BIOTECHNOLOGY INCORPORATED
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: PRESIDENT
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ESCROW AGENT: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇ LLP
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: PARTNER
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