UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 0-19890
LIFECELL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 76-0172936
(State or other jurisdiction of (IRS Employer
Incorporation or organization) Identification No.)
LifeCell Corporation
3606 Research Forest Drive
The Woodlands, Texas 77381
(Address of principal executive office) (zip code)
(713) 367-5368
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
As of May 13, 1996, there were outstanding 4,403,658 shares of Common Stock, par
value $.001, and 264,500 shares of Series A Convertible Preferred Stock, par
value $.001, of the registrant.
LIFECELL CORPORATION
Quarter Ended March 31, 1996
INDEX
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements ............................................. 3
Balance Sheets, March 31, 1996
(Unaudited) and December 31, 1995 ....................... 4
Statements of Operations, Three
Months Ended March 31, 1996 and 1995 (Unaudited) ........ 5
Statements of Cash Flows, Three
Months Ended March 31, 1996 and
1995 (Unaudited) ........................................ 6
Notes to Financial Statements ........................... 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations ........................................... 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings ................................................ 9
Item 2. Changes in Securities ............................................ 9
Item 3. Defaults upon Senior Securities .................................. 9
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information ................................................ 9
Item 6. Exhibits and Reports on Form 8-K ................................. 9
SIGNATURES ................................................................ 10
Part I. FINANCIAL INFORMATION
Item 1 Financial Statements
The following unaudited financial statements have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and note disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to those rules and regulations, although
the Company believes that the disclosures made herein are adequate to make the
information presented not misleading. These financial statements should be read
in conjunction with the Company's Annual Report on Form 10-K for the year ended
December 31, 1995.
The information presented in the accompanying financial statements is unaudited,
but in the opinion of management, reflects all adjustments (which include only
normal recurring adjustments) necessary to present fairly such information.
LIFECELL CORPORATION
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
------------ ------------
ASSETS (Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents ..................................... $ 1,949,572 $ 3,015,332
Accounts and other receivables, net ........................... 437,733 251,509
Inventories ................................................... 501,407 351,502
Prepayments and other ......................................... 136,247 51,838
------------ ------------
Total current assets ........................................ 3,024,959 3,670,181
FURNITURE AND EQUIPMENT, net ................................... 511,762 415,563
INTANGIBLE ASSETS, net ......................................... 293,298 290,295
------------ ------------
Total assets ................................................ $ 3,830,019 $ 4,376,039
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable .............................................. $ 564,021 $ 384,780
Accrued liabilities ........................................... 259,449 218,351
Notes payable ................................................. 132,734 --
Deferred revenues ............................................. 209,107 179,002
------------ ------------
Total current liabilities ................................... 1,165,311 782,133
Deferred credit ............................................... 1,500,000 1,500,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Series A preferred stock, $.001 par value, 300,000
shares authorized, 264,500 issued and outstanding ........... $ 5,561,713 $ 5,496,793
Common stock, $.001 par value, 12,500,000 shares authorized,
4,403,658 shares issued and outstanding ..................... 4,404 4,404
Warrants outstanding to purchase 574,066 shares of Common stock 226,560 226,560
Additional paid-in capital .................................... 21,160,808 21,160,808
Unearned portion of restricted stock
compensation and warrants ................................... -- (19,906)
Accumulated deficit ........................................... (25,788,777) (24,774,753)
------------ ------------
Total stockholders' equity .................................. 1,164,708 2,093,906
------------ ------------
Total liabilities and stockholders' equity .................. $ 3,830,019 $ 4,376,039
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements
LIFECELL CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
----------- -----------
<S> <C> <C>
REVENUES:
Product sales ................................................. $ 420,636 $ 97,793
Corporate alliance ............................................ 155,476 244,924
Research and development contracts and grants ................. -- 87,699
----------- -----------
Total revenues .............................................. 576,112 430,416
COSTS AND EXPENSES:
Costs of goods sold ........................................... $ 271,757 $ 102,332
Contract research and development ............................. 155,476 332,623
Proprietary research and development .......................... 190,035 313,726
General and administrative .................................... 387,346 408,679
Selling and marketing ......................................... 550,722 320,627
----------- -----------
Total costs and expenses .................................... $ 1,555,336 $ 1,477,987
----------- -----------
LOSS FROM OPERATIONS ............................................ (979,224) (1,047,571)
----------- -----------
Interest income and other, less interest expense .............. 30,120 89,485
----------- -----------
NET LOSS ........................................................ $ (949,104) $ (958,086)
LOSS PER SHARE BEFORE EFFECT OF PREFERRED DIVIDENDS AND ACCRETION
OF PREFERRED STOCK .............................................. $ (0.22) $ (0.22)
EFFECT OF PREFERRED DIVIDENDS AND ACCRETION OF PREFERRED STOCK .. (0.03) (0.05)
----------- -----------
LOSS PER SHARE .................................................. $ (0.25) $ (0.27)
----------- -----------
SHARES USED IN COMPUTING LOSS PER SHARE ......................... 4,403,658 4,297,592
</TABLE>
The accompanying notes are an integral part of these financial statements.
LIFECELL CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ....................................................... (949,104) (958,086)
Adjustments to reconcile net loss to net cash
used in operating activities -
Depreciation and amortization .............................. 44,074 32,242
Earned portion of restricted stock compensation and warrants 19,906 62,302
Change in assets and liabilities
(Increase) decrease in accounts and other receivables .... (186,224) (79,613)
(Increase) decrease in inventories ....................... (149,905) (86,421)
(Increase) decrease in prepayments and other ............. (84,409) (3,020)
Increase (decrease) in payable and accrued
liabilities ............................................ 220,339 (8,467)
Increase (decrease) in deferred revenues and credit ...... 30,105 (112,582)
----------- ----------
Total Adjustments .............................................. (106,114) (195,559)
----------- ----------
Net cash provided by (used in) operating activities ............ (1,055,218) (1,153,645)
----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ........................................... (136,931) (99,210)
Intangible assets .............................................. (6,345) (623)
Short-term investments ......................................... -- 1,468,128
----------- ----------
Net cash used in investing activities .......................... (143,276) 1,368,295
----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes payable ........................ 140,990 --
Payments of notes payable ...................................... (8,256) --
----------- ----------
Net cash provided by (used in) financing activities .......... 132,734 --
----------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS .................................................... (1,065,760) 214,650
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD ...................................................... 3,015,332 1,877,295
----------- ----------
CASH AND CASH EQUIVALENTS AT END OF
PERIOD ......................................................... 1,949,572 2,091,945
=========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the period for interest ....................... $ 1,919 $---
During 1996 and 1995, the Company recorded
a dividend payable of $105,800 and $79,350, respectively
</TABLE>
The accompanying notes are an integral part of these financial statements.
LIFECELL CORPORATION
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
(Unaudited)
Note 1. - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited interim financial statements reflect all adjustments
which, in the opinion of management, are necessary for a fair presentation of
the results for the interim periods presented. These financial statements should
be read in conjunction with the Company's Annual Report on Form 10-K for the
year ended December 31, 1995. The interim results are not necessarily indicative
of the results for a full year.
CASH, CASH EQUIVALENTS AND SHORT TERM INVESTMENTS For purposes of the statements
of cash flows, the Company considers all highly liquid investments purchased
with an original maturity of three months or less to be cash equivalents. The
Company invests any excess cash in interest bearing money market accounts and
A1/P1 commercial paper with maturities of one year or less.
CERTAIN RECLASSIFICATIONS Certain reclassifications have been made to the 1995
financial statements contained herein to conform with the classifications
presented in 1996.
Note 2. - LOSS PER SHARE
Loss per share has been computed by dividing net loss, which has been increased
for periodic accretion and imputed and stated dividends, by the weighted average
number of shares of Common Stock outstanding during the periods. In all
applicable periods, all Common Stock equivalents, including the Series A
Preferred Stock, were antidilutive and, accordingly, were not included in the
computation.
Note 3. - SERIES A PREFERRED STOCK
On November 10, 1994, the Company raised gross proceeds of approximately $5.3
million in a private offering of units consisting of convertible preferred stock
and warrants. The Company sold 264,500 units at a price of $20 per unit. Each
unit included one share of Series A Convertible Preferred Stock (Series A
Preferred Stock) and one warrant to purchase one share of Common Stock. Each
share of Series A Preferred Stock is convertible into 6.69 shares of Common
Stock. The Series A Preferred Stock is convertible at any time at the option of
the holder. The preferred stock automatically converts to Common Stock on
November 9, 1997 and may be redeemed sooner by the Company if, after November 9,
1995, the closing bid price of LifeCell's Common Stock averages $5.17 per share
for 20 consecutive days. The Series A Preferred Stock bears dividends at annual
rates of $1.20, $1.60, and $2.00 per share for each of the first, second and
third years, respectively, after the date of original issuance. Dividends may be
paid in cash, Common Stock, or any combination of cash and Common Stock at the
Company's discretion. The Series A Preferred Stock is senior to the Company's
Common Stock in liquidation. The Series A Preferred Stock has no ordinary voting
rights. While the preferred shares are outstanding or any dividends are owed
thereon, the Company may not declare or pay cash dividends on its Common Stock.
The units were not registered under the Securities Act of 1933 and may not be
offered or sold absent registration under the Act or an applicable exemption
from registration requirements. Each unit also includes a two-year warrant that
is exercisable for one share of Common Stock at $3.54 per share. The warrants
were recorded at $105,800 in the accompanying financial statements. As of March
31, 1996, warrants to purchase an aggregate of 263,250 shares of Common Stock
were outstanding. The private placement agent was issued a warrant to purchase
90,816 shares of Common Stock at $6.00 per share. The agent's warrant has a term
of five years commencing June 30, 1995 and was recorded at $5,000 in the
accompanying financial statements.
The carrying amount of the Series A Preferred Stock is increased for accrued and
unpaid stated dividends plus periodic accretion, using the effective interest
method, such that the carrying amount equals the redemption amount on the
earliest possible redemption date, November 9, 1997. Series A Preferred Stock is
also increased by imputed dividends resulting from the increasing dividend
rates.
On November 9, 1995, the Company paid dividends on the Series A Preferred Stock
of an aggregate of $317,400 by issuing 103,816 shares of Common Stock.
LIFECELL CORPORATION
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Revenues in the first quarter of 1996 were generated by product sales and a
corporate alliance. No significant change in the sources of revenues is
anticipated other than revenue generated from research and development contracts
and grants.
Total revenues for the first quarter of fiscal 1996 were $576,112, an increase
of $145,696 over the same period in fiscal 1995. As a result of increased
marketing activities, product sales for the quarter increased $322,843 over the
same period in fiscal 1995. The Company recognized $155,476 in corporate
alliance revenue from a license and development agreement with Medtronic, Inc.
for the co-development of tissue heart valves in the first quarter of 1996,
compared with $244,924 in the same quarter of 1995. The decrease in corporate
alliance revenues was directly related to a significant one-time event billed by
LifeCell in the first quarter 1995. The Company had research and development
grant income of $87,699 in the first quarter of 1995 and none in 1996, the
contract having expired in 1995. Interest income decreased by $59,365 for the
1996 first quarter of 1996 resulting from a decrease in average funds available
for investment and interest rates in 1996 as compared to 1995.
Total costs and expenses for the first quarter of fiscal 1996 were $1,555,336,
an increase of $77,349 from the same period in fiscal 1995 primarily due to
increased AlloDerm marketing. Costs of goods sold for the first quarter of
fiscal 1996 were $271,757 compared to $102,332 for 1995. This increase was due
to increased sales in 1996 versus 1995. Costs of goods sold as a percent of
sales decreased as a result of volume efficiencies. Cost of contract research
and development is equal to the total revenue recorded for research and
development contracts and grants and the corporate alliance, as they are cost
reimbursement type contracts. Proprietary research and development expense
decreased to $190,035 in 1996 from $313,726 in 1995 primarily as a result of the
transfer of the costs of AlloDerm related activities from proprietary research
and development to manufacturing (cost of goods sold). General and
administrative expenses remained relatively consistent with the prior year.
Selling and marketing expenses increased to $550,722 in 1996 from $320,627 in
1995 primarily due to the addition of sales personnel and promotional activities
related to AlloDerm marketing activities and the commercial introduction of the
AlloDerm graft in the periodontal and plastic surgery markets.
LIQUIDITY AND CAPITAL RESOURCES
Since its inception, LifeCell's principal sources of funds have been equity
offerings, product sales, a corporate alliance, government contracts and grants
and interest on investments.
LifeCell funds research and development activities with external funds from its
corporate alliance and government grants. In April 1996, LifeCell was awarded a
one year $613,000 contract from the U.S. Navy. LifeCell's strategy is to use
existing funds and funds raised from financings to fund a marketing and
distribution effort for AlloDerm.
In 1994, LifeCell entered into agreements with Medtronic pursuant to which
Medtronic paid LifeCell a license fee of $1.5 million and agreed, subject to
certain rights to terminate at Medtronic's discretion, to fund the development
of LifeCell's proprietary tissue processing technology in the field of heart
valves. To date, LifeCell has received approximately $1.5 million in development
funding for this program.
LifeCell expects to incur substantial expenses related to AlloDerm, including
costs of clinical studies, production, sales and marketing, product
introduction, technical seminars, ongoing administrative activities and research
and development activities, including regulatory and quality assurance programs
and continuing applications for patent protection for the proprietary aspects of
its technology.
The Company has increased its product marketing efforts in 1996 and anticipates
that its current financial resources will be adequate to maintain its current
and planned operations, including its marketing efforts into the third quarter
of 1996. If the Company does not obtain additional financing by the beginning of
the third quarter 1996, LifeCell intends to reduce its current operations and
delay certain planned expenditures including those related to increased
marketing efforts in order to conserve its resources and maintain its operations
through the end of 1996. The reduction of its operations and the delay of such
expenditures would limit its current product marketing efforts, resulting in
decreased product sales and total revenues. During such periods, the Company
would focus its efforts and resources on obtaining additional financing.
Thereafter, LifeCell expects that it will require additional financing to
continue its operations and to improve, complete the development of, obtain
regulatory approvals for and manufacture or market products. There can be no
assurance that LifeCell will be able to obtain requisite financing when needed
on acceptable terms. If the Company is unable to secure such financing, the
Company's ability to sustain operations would be materially adversely affected.
LIFECELL CORPORATION
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
CAUTIONARY STATEMENTS
The Company's expectations with respect to future results of operations
embodied in oral and written forward-looking statements made in connection with
this Quarterly Report on Form 10-Q are subject to the following risks and
uncertainties that must be considered when evaluating the likelihood of the
Company's realization of such expectations.
NO ASSURANCE OF ADDITIONAL NECESSARY CAPITAL
The Company anticipates that its current financial resources will be
adequate to maintain its current and planned operations into the third quarter
of 1996. In the event the Company is unable to obtain additional financing by
the beginning of the third quarter of 1996, the Company intends to reduce its
current operations and delay certain planned expenditures in order to conserve
its resources and be able to continue its operations through the end of 1996.
The report of Arthur Andersen LLP, the Company's independent public accountants,
on LifeCell's financial statements for the year ended December 31, 1995,
includes an emphasis paragraph with respect to the Company's need for future
financing to fund the manufacturing and development of markets for its products.
The Company's future capital requirements will depend on many factors, including
successful expansion of sales of AlloDerm, continued scientific progress with
its research and development programs and expansion of such programs and
progress of preclinical and clinical assessment of products under development.
There can be no assurance that the Company will be successful in obtaining
additional capital in amounts sufficient to continue to fund its operations and
product development.
HISTORY OF OPERATING LOSSES
The Company has incurred substantial losses since inception in January
1986, including losses of approximately $3.4 million, $3.7 million and $3.9
million in 1993, 1994 and 1995, respectively, and had an accumulated deficit of
approximately $25.8 million at March 31, 1996. There can be no assurance that
the Company will ever become profitable. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations".
FDA REGULATORY STATUS OF ALLODERM
In November 1995, following LifeCell's commercial introduction of
AlloDerm for periodontal applications, the Company received a letter from the
CDRH. The letter stated that the CDRH considered AlloDerm to be a "device" as
defined by the FDC Act, and that a 510(k) premarket notification was required to
be submitted and cleared by the FDA in order to market the product. LifeCell
responded to the CDRH in November 1995 stating the Company's view that AlloDerm
is banked human tissue under an interim rule published by the FDA in 1993 and
that no 510(k) clearance is required. By letter dated March 6, 1996, the CDRH
indicated that both the CDRH and the CBER remained of the view that AlloDerm was
a device. The letter suggested that the Company contact the FDA Ombudsman's
Office if it disagreed with this view. The Company has requested a meeting with
the Ombudsman's Office, which has the authority to mediate disputes between
companies and the FDA, to discuss the regulatory classification of AlloDerm.
Although the Company believes that AlloDerm falls within the definition of
banked human tissue, there can be no assurance that the FDA will agree. If the
FDA were to conclude definitively that AlloDerm is a device, the Company would
explore the available options, including requesting the FDA's consent to
continue marketing the product while the Company seeks 510(k) clearance. There
is no assurance that the FDA would consent to the continued marketing of
AlloDerm pending the FDA clearance of a 510(k) notice, nor is there any
assurance that 510(k) clearance for AlloDerm ultimately would be obtained or
that the FDA would not take enforcement action against the Company related to
the continued marketing of this product. The failure to obtain any such consent
or clearance would have a material adverse effect on the Company.
AVAILABILITY OF MATERIALS
The Company's business will be dependent on the availability of human
cadaveric skin and cardiovascular tissue to the extent that LifeCell is unable
successfully to develop products using animal tissue. A limited supply of
donated skin is available. Although the Company has established what it believes
to be an adequate source of cadaveric skin to satisfy the expected demand for
AlloDerm, there can be no assurance that the availability of human skin and
cardiovascular tissue will be sufficient to meet LifeCell's demand for such
materials.
UNCERTAINTY OF MARKET ACCEPTANCE
Achieving broad market acceptance for AlloDerm and LifeCell's proposed
products will require substantial additional marketing efforts. There can be no
assurance that AlloDerm or any of LifeCell's proposed products ultimately will
achieve widespread commercial acceptance.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
3.1 Amended and Restated By-laws of LifeCell Corporation
10.1 Lease Agreement dated December 10, 1986, between the Company
and The Woodlands Corporation, Modification and Ratification
of Lease Agreement dated April 11, 1988, between and Company
and The Woodlands Corporation, Modification and Ratification
of Lease dated August 1, 1992, between the Company and The
Woodlands Corporation, Modification Ratification and Extension
of Lease dated March 5, 1993, between the Company and The
Woodlands Corporation, and Modification and Ratification of
Lease Agreement dated December 21, 1995, between the Company
and The Woodlands Office Equities -- '95 Limited.
11.1 Statement regarding Computation of Per Share Earnings
27.1 Financial Data Schedule
b. Reports on Form 8-K
None
LIFECELL CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
LIFECELL CORPORATION
Date: MAY 14, 1996 By: ____________________________________
Paul M. Frison
President and Chief Executive Officer
Date: MAY 14, 1996 By: ______________________________________
Anthony A. Brown
Vice President, Chief Financial Officer
and Secretary
INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
Number Description of Exhibits Page
3.1 Amended and Restated Bylaws of Lifecell Corporation
10.1 Lease Agreement dated December 10, 1986, between the Company and
The Woodlands Corporation, Modification and Ratification of Lease
Agreement dated April 11, 1988, between the Company and The
Woodlands Corporation, Modification and Ratification of Lease dated
August 1, 1992, between the Company and The Woodlands Corporation,
Modification Ratification and Extension of Lease dated March 5,
1993, between the Company and The Woodlands Corporation,and
Modification and Ratification of Lease Agreement dated December 21,
1995, between the Company and The Woodlands Office Equities -- '95
Limited.
11.1 Statement regarding Computation of Per Share Earnings 12
27.1 Financial Data Schedule
EXHIBIT 3.1
AMENDED AND RESTATED BY-LAWS
OF
LIFECELL CORPORATION
ADOPTED MARCH 15, 1996
ARTICLE I
OFFICES
SECTION 1.01. REGISTERED OFFICE. The registered office of the
corporation in the State of Delaware shall be in the City of Wilmington, County
of New Castle, and the name of its registered agent shall be The Corporation
Trust Company.
SECTION 1.02. OTHER OFFICES. The corporation may also have
offices at such other places both within and without the State of Delaware as
the Board of Directors may from time to time determine or the business of the
corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 2.01. PLACE OF MEETING. All meetings of stockholders for
the election of directors shall be held at such place, either within or without
the State of Delaware, as shall be designated from time to time by the Board of
Directors and stated in the notice of the meeting.
SECTION 2.02. ANNUAL MEETING.
(a) The annual meeting of stockholders shall be held for the
election of directors at such date and time as shall be designated from time to
time by the Board of Directors and stated in the notice of the meeting.
(b) Nominations of persons for election to the Board of
Directors of the corporation and the proposal of business to be transacted by
the stockholders may be made at an annual meeting of stockholders (i) pursuant
to the corporation's notice with respect to such meeting, (ii) by or at the
direction of the Board of Directors or (iii) by any stockholder of the
corporation who was a stockholder of record at the time of giving of the notice
provided for in this section, who is entitled to vote at the meeting and who has
complied with the notice procedures set forth in this section.
(c) For nominations or other business to be properly brought
before an annual meeting by a stockholder pursuant to clause (iii) of paragraph
(b) of this Section 2.02, the stockholder must have given timely notice thereof
in writing to the Secretary of the corporation and such business must be a
proper matter for stockholder action under the General Corporation Law of the
State of Delaware. To be timely, a stockholder's notice shall be delivered to
the Secretary at the principal executive offices of the corporation not less
than 60 days nor more than 90 days prior to the first anniversary of the date of
the corporation's annual meeting of stockholders held in the immediately
preceding year; provided, however, that in the event that no annual meeting was
held in the immediately preceding year or the date of the annual meeting is more
than 30 days prior to or more than 60 days after such anniversary date, notice
by the stockholder to be timely must be so delivered not earlier than the 90th
day prior to such annual meeting and not later than the close of business on the
later of the 60th day prior to such annual meeting or the 10th day following the
day on which public announcement of the date of such meeting is first made. Such
stockholder's notice shall set forth (i) as to each person whom the stockholders
proposes to nominate for election or reelection as a director all information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") (including such person's written consent to being named in
the proxy statement as a nominee and to serving as a director if elected); (ii)
as to any other business that the stockholder proposes to bring before the
meeting, a brief description of such business, the reasons for conducting such
business at the meeting and any material interest in such business of such
stockholder and the beneficial owner, if any, on whose behalf the proposal is
made; and (iii) as to the stockholder giving the notice and the beneficial
owner, if any, on whose behalf the nomination or proposal is made (A) the name
and address of such stockholder, as they appear on the corporation's books, and
of such beneficial owner and (B) the class and number of shares of the
corporation which are owned beneficially and of record by such stockholder and
such beneficial owner.
(d) Only persons nominated in accordance with the procedures set
forth in this Section 2.02 shall be eligible to serve as directors and only such
business shall be conducted at an annual meeting of stockholders as shall have
been brought before the meeting in accordance with the procedures set forth in
this Section 2.02. The chairman of the meeting shall determine whether a
nomination or any business proposed to be transacted by the stockholders has
been properly brought before the meeting and, if any proposed nomination or
business has not been properly brought before the meeting, the chairman shall
declare that such proposed business or nomination shall not be presented for
stockholder action at the meeting.
(e) For purposes of this Section 2.02, "public announcement"
shall mean disclosure in a press release reported by Dow Jones News Service,
Associated Press or a comparable national news service, or disclosure pursuant
to the corporation's notice with respect to the annual meeting of stockholders.
(f) Nothing in this Section 2.02 shall be deemed to affect any
rights of stockholders to request inclusion of proposals in the corporation's
proxy statement pursuant to Rule 14a-8 under the Exchange Act.
SECTION 2.03. VOTING LIST. The officer who has charge of the
stock ledger of the corporation shall prepare and make, at least ten days before
every meeting of stockholders, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order, and showing the address of
each stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours, for a period
of at least ten days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified in the notice,
or, if not so specified, at the place where the meeting is to be held. The list
shall also be produced and kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any stockholder who is present.
SECTION 2.04. SPECIAL MEETING. Special meetings of the
stockholders, for any purpose or purposes prescribed in the notice of meeting,
unless otherwise prescribed by statute or by the Restated Certificate of
Incorporation, may be called by only the Board of Directors or the President and
shall be held at such place, on such date and at such time as they, he or she
shall fix.
SECTION 2.05. NOTICE OF MEETING. Written notice of the annual,
and each special meeting of stockholders, stating the time, place and purpose or
purposes thereof, shall be given to each stockholder entitled to vote thereat,
not less than 10 nor more than 60 days before the meeting.
SECTION 2.06. QUORUM. The holders of a majority of the stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at any meeting of stockholders
for the transaction of business except as otherwise provided by statute or by
the Restated Certificate of Incorporation. Notwithstanding the other provisions
of the Restated Certificate of Incorporation or these by-laws, the holders of a
majority of the shares of capital stock entitled to vote thereat, present in
person or represented by proxy, whether or not a quorum is present, shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. If
the adjournment is for more than 30 days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting. At such adjourned meeting at which a quorum shall be present or
represented any business may be transacted which might have been transacted at
the meeting as originally notified.
SECTION 2.07. PROXIES AND VOTING. At any meeting of the
stockholders, every stockholder entitled to vote may vote in person or by proxy
authorized by an instrument in writing or by a transmission permitted by law
filed in accordance with the procedure established for the meeting. Any copy,
facsimile telecommunication or other reliable reproduction of the writing or
transmission created pursuant to this paragraph may be substituted or used in
lieu of the original writing or transmission for any and all purposes for which
the original writing or transmission could be used, provided that such copy,
facsimile telecommunication or other reproduction shall be a complete
reproduction of the entire original writing or transmission.
All voting, including on the election of directors but excepting
where otherwise required by law, may be by a voice vote; provided, however, that
upon demand therefore by a stockholder entitled to vote or by his or her proxy,
a stock vote shall be taken. Every stock vote shall be taken by ballots, each of
which shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
The corporation may, and to the extent required by law, shall, in advance of any
meeting of stockholders, appoint one or more inspectors to act at the meeting
and make a written report thereof. The corporation may designate one or more
persons as alternate inspectors to replace any inspector who fails to act. If no
inspector or alternate is able to act at a meeting of stockholders, the person
presiding at the meeting may, and to the extent required by law, shall, appoint
one or more inspectors to act at the meeting. Each inspector, before entering
upon the discharge of his duties, shall take and sign an oath faithfully to
execute the duties of inspector with strict impartiality and according to the
best of his ability. Every vote taken by ballots shall be counted by an
inspector or inspectors appointed by the chairman of the meeting.
All elections shall be determined by a plurality of the votes
cast, and except as otherwise required by law, all other matters shall be
determined by a majority of the votes cast affirmatively or negatively.
SECTION 2.08. CONSENT OF STOCKHOLDERS. Whenever the vote of
stockholders at a meeting thereof is required or permitted to be taken for or in
connection with any corporate action by any provision of the statutes, the
meeting and vote of stockholders may be dispensed with if all the stockholders
who would have been entitled to vote upon the action if such meeting were held
shall consent in writing to such corporate action being taken; or on the written
consent of the holders of stock having not less than the minimum percentage of
the vote required by statute for the proposed corporate action, and provided
that prompt notice must be given to all stockholders of the taking of corporate
action without a meeting and by less than unanimous written consent.
SECTION 2.09. VOTING OF STOCK OF CERTAIN HOLDERS. Shares
standing in the name of another corporation, domestic or foreign, may be voted
by such officer, agent or proxy as the by-laws of such corporation may
prescribe, or in the absence of such provision, as the Board of Directors of
such corporation may determine. Shares standing in the name of a deceased person
may be voted by the executor or administrator of such deceased person, either in
person or by proxy. Shares standing in the name of a guardian, conservator or
trustee may be voted by such fiduciary, either in person or by proxy, but no
such fiduciary shall be entitled to vote shares held in such fiduciary capacity
without a transfer of such shares into the name of such fiduciary. Shares
standing in the name of a receiver may be voted by such receiver. A stockholder
whose shares are pledged shall be entitled to vote such shares, unless in the
transfer by the pledgor on the books of the corporation, he has expressly
empowered the pledgee to vote thereon, in which case only the pledgee, or his
proxy, may represent the stock and vote thereon.
SECTION 2.10. TREASURY STOCK. The corporation shall not vote,
directly or indirectly, shares of its own stock owned by it; and such shares
shall not be counted in determining the total number of outstanding shares.
SECTION 2.11. FIXING RECORD DATE. The Board of Directors may fix
in advance a date, which shall not be more than 60 days nor less than 10 days
preceding the date of any meeting of stockholders, nor more than 60 days
preceding the date for payment of any dividend or distribution, or the date for
the allotment of rights, or the date when any change, or conversion or exchange
of capital stock shall go into effect, or a date in connection with obtaining a
consent, as a record date for the determination of the stockholders entitled to
notice of, and to vote at, any such meeting and any adjournment thereof, or
entitled to receive payment of any such dividend or distribution, or to receive
any such allotment of rights, or to exercise the rights in respect of any such
change, conversion or exchange of capital stock, or to give such consent, and in
such case such stockholders and only such stockholders as shall be stockholders
of record on the date so fixed shall be entitled to such notice of, and to vote
at, any such meeting and any adjournment thereof, or to receive payment of such
dividend or distribution, or to receive such allotment of rights, or to exercise
such rights, or to give such consent, as the case may be, notwithstanding any
transfer of any stock on the books of the corporation after any such record date
fixed as aforesaid.
ARTICLE III
BOARD OF DIRECTORS
SECTION 3.01. POWERS. The business and affairs of the
corporation shall be managed by its Board of Directors, which may exercise all
such powers of the corporation and do all such lawful acts and things as are not
by statute or by the Restated Certificate of Incorporation or by these by-laws
directed or required to be exercised or done by the stockholders.
SECTION 3.02. NUMBER, ELECTION AND TERM. The number of directors
which shall constitute the whole Board shall be not less than one. Such number
of directors shall be as specified in the corporation's Restated Certificate of
Incorporation, or, if not specified in the Restated Certificate of
Incorporation, such number of directors shall from time to time be fixed and
determined by the directors and shall be set forth in the notice of any meeting
of stockholders held for the purpose of electing directors. The directors shall
be elected at the annual meeting of stockholders, except as provided in Section
3.03, and each director elected shall hold office until his successor shall be
elected and shall qualify. Directors need not be residents of Delaware or
stockholders of the corporation.
SECTION 3.03. VACANCIES, ADDITIONAL DIRECTORS AND REMOVAL FROM
OFFICE. Unless otherwise provided in the Restated Certificate of Incorporation
or these by-laws, (a) if (i) any vacancy occurs in the Board of Directors caused
by death, resignation, retirement, disqualification or removal from office, or
otherwise, of any director elected by all of the stockholders having the right
to vote as a single class or (ii) any new directorship is created by an increase
in the authorized number of directors which shall be elected by all of the
stockholders having the right to vote as a single class, then a majority of the
directors then in office, even if less than a quorum, or a sole remaining
director, may choose a successor or fill the newly created directorship and any
director so chosen shall hold office until the next annual election and until
his successor shall be duly elected and shall qualify, unless sooner displaced
and (b) if (i) any vacancy occurs in the Board of Directors caused by death,
resignation, retirement, disqualification or removal from office, or otherwise,
of any director elected by the holders of any class or classes of stock or
series thereof entitled to elect such director pursuant to the Restated
Certificate of Incorporation or (ii) any new directorship is created by an
increase in the authorized number of directors which shall be elected by the
holders of any class or classes of stock or series thereof entitled to elect
such director pursuant to the Restated Certificate of Incorporation, then a
majority of the directors elected by such class or classes or series thereof
then in office, or a sole remaining director so elected, may choose a successor
or fill the newly created directorship and any director so chosen shall hold
office until the next annual election and until his successor shall be duly
elected and shall qualify, unless sooner displaced. Unless otherwise provided in
the corporation's Restated Certificate of Incorporation, any director may be
removed either for or without cause at any special meeting of stockholders duly
called and held for such purpose.
SECTION 3.04. REGULAR MEETING. A regular meeting of the Board of
Directors shall be held each year, without other notice than this by-law, at the
place of, and immediately following, the annual meeting of stockholders; and
other regular meetings of the Board of Directors shall be held each year, at
such time and place as the Board of Directors may provide, by resolution, either
within or without the State of Delaware, without other notice than such
resolution.
SECTION 3.05. SPECIAL MEETING. Special meetings of the Board of
Directors may be called by the Chairman of the Board or by the President and
shall be called by the Secretary on the written request of any two directors.
The Chairman or President so calling, or the directors so requesting, any such
meeting shall fix the time and any place, either within or without the State of
Delaware, as the place for holding such meeting.
SECTION 3.06. NOTICE OF SPECIAL MEETING. Written notice of
special meetings of the Board of Directors shall be given to each director at
least 24 hours prior to the time of such meeting. Any director may waive notice
of any meeting. The attendance of a director at any meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting for
the purpose of objecting to the transaction of any business because the meeting
is not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of, any special meeting of the Board of Directors need be
specified in the notice or waiver of notice of such meeting, except that notice
shall be given of any proposed amendment to the by-laws if it is to be adopted
at any special meeting or with respect to any other matter where notice is
required by statute.
SECTION 3.07. QUORUM. A majority of the Board of Directors shall
constitute a quorum for the transaction of business at any meeting of the Board
of Directors, and the act of a majority of the directors present at any meeting
at which there is a quorum shall be the act of the Board of Directors, except as
may be otherwise specifically provided by statute, by the Restated Certificate
of Incorporation or by these by-laws. If a quorum shall not be present at any
meeting of the Board of Directors, the directors present thereat may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
SECTION 3.08. ACTION WITHOUT MEETING. Unless otherwise
restricted by the Restated Certificate of Incorporation or these by-laws, any
action required or permitted to be taken at any meeting of the Board of
Directors, or of any committee thereof as provided in Article IV of these
by-laws, may be taken without a meeting, if a written consent thereto is signed
by all members of the Board or of such committee, as the case may be, and such
written consent is filed with the minutes of proceedings of the Board or
committee.
SECTION 3.09. COMPENSATION. Directors, as such, shall not be
entitled to any stated salary for their services unless voted by the
stockholders or the Board of Directors; but by resolution of the Board of
Directors, a fixed sum and expenses of attendance, if any, may be allowed for
attendance at each regular or special meeting of the Board of Directors or any
meeting of a committee of directors. No provision of these by-laws shall be
construed to preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
ARTICLE IV
COMMITTEE OF DIRECTORS
SECTION 4.01. DESIGNATION, POWERS AND NAME. The Board of
Directors may, by resolution passed by a majority of the whole Board, designate
one or more committees, including, if they shall so determine, an Executive
Committee, each such committee to consist of two or more of the directors of the
corporation. The committee shall have and may exercise such of the powers of the
Board of Directors in the management of the business and affairs of the
corporation as may be provided in such resolution. The committee may authorize
the seal of the corporation to be affixed to all papers which may require it.
The Board of Directors may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of such committee. In the absence or disqualification of any member of
such committee or committees, the member or members thereof present at any
meeting and not disqualified from voting, whether or not he or they constitute a
quorum, may unanimously appoint another member of the Board of Directors to act
at the meeting in the place of any such absent or disqualified member. Such
committee or committees shall have such name or names and such limitations of
authority as may be determined from time to time by resolution adopted by the
Board of Directors.
SECTION 4.02. MINUTES. Each committee of directors shall keep
regular minutes of its proceedings and report the same to the Board of Directors
when required.
SECTION 4.03. COMPENSATION. Members of special or standing
committees may be allowed compensation for attending committee meetings, if the
Board of Directors shall so determine.
ARTICLE V
NOTICE
SECTION 5.01. METHODS OF GIVING NOTICE. Whenever under the
provisions of the statutes, the Restated Certificate of Incorporation or these
by-laws, notice is required to be given to any director, member of any committee
or stockholder, such notice shall be in writing and delivered personally or
mailed to such director, member or stockholder; provided that in the case of a
director or a member of any committee such notice may be given orally or by
telephone or telegram. If mailed, notice to a director, member of a committee or
stockholder shall be deemed to be given when deposited in the United States mail
first class in a sealed envelope, with postage thereon prepaid, addressed, in
the case of a stockholder, to the stockholder at the stockholder's address as it
appears on the records of the corporation or, in the case of a director or a
member of a committee, to such person at his business address. If sent by
telegraph, notice to a director or member of a committee shall be deemed to be
given when the telegram, so addressed, is delivered to the telegraph company.
SECTION 5.02. WRITTEN WAIVER. Whenever any notice is required to
be given under the provisions of the statutes, the Restated Certificate of
Incorporation or these by-laws, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto.
ARTICLE VI
OFFICERS
SECTION 6.01. OFFICERS. The officers of the corporation shall
consist of a President and a Secretary. A Chairman of the Board, a Vice Chairman
of the Board, one or more Vice Presidents (any one or more of which may be
designated Executive Vice President or Senior Vice President), and a Treasurer
may also be elected by the Board of Directors. The Board of Directors may
appoint such other officers and agents, including Assistant Vice Presidents,
Assistant Secretaries and Assistant Treasurers, as it shall deem necessary, who
shall hold their offices for such terms and shall exercise such powers and
perform such duties as shall be determined by the Board. Any two or more offices
may be held by the same person. The Chairman and Vice Chairman of the Board
shall be elected from among the directors. With the foregoing exceptions, none
of the other officers need be a director, and none of the officers need be a
stockholder of the corporation.
SECTION 6.02. ELECTION AND TERM OF OFFICE. The officers of the
corporation shall be elected annually by the Board of Directors at its first
regular meeting held after the annual meeting of stockholders or as soon
thereafter as conveniently possible. Each officer shall hold office until his
successor shall have been chosen and shall have qualified or until his death or
the effective date of his resignation or removal, or until he shall cease to be
a director in the case of the Chairman or the Vice Chairman.
SECTION 6.03. REMOVAL AND RESIGNATION. Any officer or agent
elected or appointed by the Board of Directors may be removed without cause by
the affirmative vote of a majority of the Board of Directors whenever, in its
judgment, the best interests of the corporation shall be served thereby, but
such removal shall be without prejudice to the contractual rights, if any, of
the person so removed. Any officer may resign at any time by giving written
notice to the corporation. Any such resignation shall take effect at the date of
the receipt of such notice or at any later time specified therein, and unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
SECTION 6.04. VACANCIES. Any vacancy occurring in any office of
the corporation by death, resignation, removal or otherwise, may be filled by
the Board of Directors for the unexpired portion of the term.
SECTION 6.05. SALARIES. The salaries of all officers and agents
of the corporation shall be fixed by the Board of Directors or pursuant to its
direction; and no officer shall be prevented from receiving such salary by
reason of his also being a director.
SECTION 6.06. CHAIRMAN OF THE BOARD. The Chairman of the Board
(if one is elected by the Board) shall preside at all meetings of the Board of
Directors or of the stockholders of the corporation. In the Chairman's absence,
such duties shall be attended to by the Vice Chairman of the Board (if one is
elected by the Board). The Chairman shall formulate and submit to the Board of
Directors or the Executive Committee matters of general policy for the
corporation and shall perform such other duties as usually appertain to the
office or as may be prescribed by the Board of Directors or the Executive
Committee.
SECTION 6.07. VICE CHAIRMAN OF THE BOARD. The Vice Chairman of
the Board (if one is elected by the Board) shall, in the absence of the Chairman
of the Board, perform the duties and exercise the powers of the Chairman of the
Board. The Vice Chairman shall perform such other duties as from time to time
may be prescribed by the Board of Directors or the Executive Committee or
assigned by the Chairman of the Board.
SECTION 6.08. PRESIDENT. The President shall be the chief
executive officer of the corporation and, subject to the control of the Board of
Directors, shall in general supervise and control the business and affairs of
the corporation. In the absence of the Chairman of the Board and the Vice
Chairman of the Board (if elected by the Board), the President shall preside at
all meetings of the Board of Directors and of the stockholders. He may also
preside at any such meeting attended by the Chairman or Vice Chairman of the
Board if he is so designated by the Chairman, or in the Chairman's absence by
the Vice Chairman. He shall have the power to appoint and remove subordinate
officers, agents and employees, except those elected or appointed by the Board
of Directors. The President shall keep the Board of Directors and the Executive
Committee fully informed and shall consult them concerning the business of the
corporation. He may sign with the Secretary or any other officer of the
corporation thereunto authorized by the Board of Directors, certificates for
shares of the corporation and any deeds, bonds, mortgages, contracts, checks,
notes, drafts or other instruments which the Board of Directors has authorized
to be executed, except in cases where the signing and execution thereof has been
expressly delegated by these by-laws or by the Board of Directors to some other
officer or agent of the corporation, or shall be required by law to be otherwise
executed. He shall vote, or give a proxy to any other officer of the corporation
to vote, all shares of stock of any other corporation standing in the name of
the corporation and in general he shall perform all other duties normally
incident to the office of President and such other duties as may be prescribed
by the stockholders, the Board of Directors or the Executive Committee from time
to time.
SECTION 6.09. VICE PRESIDENTS. In the absence of the President,
or in the event of his inability or refusal to act, the Executive Vice President
(or in the event there shall be no Vice President designated Executive Vice
President, any Vice President designated by the Board) shall perform the duties
and exercise the powers of the President. Any Vice President may sign, with the
Secretary or Assistant Secretary, certificates for shares of the corporation.
The Vice Presidents shall perform such other duties as from time to time may be
assigned to them by the President, the Board of Directors or the Executive
Committee.
SECTION 6.10. SECRETARY. The Secretary shall (a) keep the
minutes of the meetings of the stockholders, the Board of Directors and
committees of directors; (b) see that all notices are duly given in accordance
with the provisions of these by-laws and as required by law; (c) be custodian of
the corporate records and of the seal of the corporation, and see that the seal
of the corporation or a facsimile thereof is affixed to all certificates for
shares prior to the issue thereof and to all documents, the execution of which
on behalf of the corporation under its seal is duly authorized in accordance
with the provisions of these bylaws; (d) keep or cause to be kept a register of
the post office address of each stockholder which shall be furnished by such
stockholder; (e) be authorized to sign with the President or any other officer
of the corporation thereunto authorized by the Board of Directors, certificates
for shares of the corporation, the issue of which shall have been authorized by
resolution of the Board of Directors; (f) have general charge of the stock
transfer books of the corporation; and (g) in general, perform all duties
normally incident to the office of Secretary and such other duties as from time
to time may be assigned to him by the President, the Board of Directors or the
Executive Committee.
SECTION 6.11. TREASURER. If required by the Board of Directors,
the Treasurer (if one is elected by the Board) shall give a bond for the
faithful discharge of his duties in such sum and with such surety or sureties as
the Board of Directors shall determine. He shall (a) have charge and custody of
and be responsible for all funds and securities of the corporation; receive and
give receipts for moneys due and payable to the corporation from any source
whatsoever and deposit all such moneys in the name of the corporation in such
banks, trust companies or other depositories as shall be selected in accordance
with the provisions of Section 7.03 of these by-laws; (b) prepare, or cause to
be prepared, for submission at each regular meeting of the Board of Directors,
at each annual meeting of the stockholders, and at such other times as may be
required by the Board of Directors, the President or the Executive Committee, a
statement of financial condition of the corporation in such detail as may be
required; and (c) in general, perform all the duties incident to the office of
Treasurer and such other duties as from time to time may be assigned to him by
the President, the Board of Directors or the Executive Committee.
SECTION 6.12. ASSISTANT SECRETARY OR TREASURER. The Assistant
Secretaries and Assistant Treasurers shall, in general, perform such duties as
shall be assigned to them by the Secretary or the Treasurer, respectively, or by
the President, the Board of Directors or the Executive Committee. The Assistant
Secretaries and Assistant Treasurers shall, in the absence of the Secretary or
Treasurer, respectively, perform all functions and duties which such absent
officers may delegate, but such delegation shall not relieve the absent officer
from the responsibilities and liabilities of his office. The Assistant
Secretaries and Assistant Treasurers may sign, with the President or a Vice
President or the Chairman or Vice Chairman, certificates for shares of the
corporation, the issue of which shall have been authorized by a resolution of
the Board of Directors. The Assistant Treasurers shall respectively, if required
by the Board of Directors, give bonds for the faithful discharge of their duties
in such sums and with such sureties as the Board of Directors shall determine.
ARTICLE VII
CONTRACTS, CHECKS AND DEPOSITS
SECTION 7.01. CONTRACTS. Subject to the provisions of Section
6.01, the Board of Directors may authorize any officer, officers, agent or
agents, to enter into any contract or execute and deliver any instrument in the
name of and on behalf of the corporation, and such authority may be general or
confined to specific instances.
SECTION 7.02. CHECKS, ETC. All checks, demands, drafts or other
orders for the payment of money, notes or other evidences of indebtedness issued
in the name of the corporation, shall be signed by such officer or officers or
such agent or agents of the corporation, and in such manner, as shall be
determined by the Board of Directors.
SECTION 7.03. DEPOSITS. All funds of the corporation not
otherwise employed shall be deposited from time to time to the credit of the
corporation in such banks, trust companies or other depositories as the Board of
Directors may select.
ARTICLE VIII
CERTIFICATES OF STOCK
SECTION 8.01. ISSUANCE. Each stockholder of this corporation
shall be entitled to a certificate or certificates showing the number of shares
of stock registered in his name on the books of the corporation. The
certificates shall be in such form as may be determined by the Board of
Directors, shall be issued in numerical order and shall be entered in the books
of the corporation as they are issued. They shall exhibit the holder's name and
number of shares and shall be signed by the President or a Vice President and by
the Secretary or an Assistant Secretary. If any certificate is countersigned (a)
by a transfer agent other than the corporation or any employee of the
corporation, or (b) by a registrar other than the corporation or any employee of
the corporation, any other signature on the certificate may be a facsimile. If
the corporation shall be authorized to issue more than one class of stock or
more than one series of any class, the designations, preferences and relative
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and rights shall be set forth in full or summarized on the face or back of the
certificate which the corporation shall issue to represent such class of stock;
provided that, except as otherwise provided by statute, in lieu of the foregoing
requirements there may be set forth on the face or back of the certificate which
the corporation shall issue to represent such class or series of stock, a
statement that the corporation will furnish to each stockholder who so requests
the designations, preferences and relative, participating, optional or other
special rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and rights. All certificates
surrendered to the corporation for transfer shall be canceled and no new
certificate shall be issued until the former certificate for a like number of
shares shall have been surrendered and canceled, except that in the case of a
lost, stolen, destroyed or mutilated certificate a new one may be issued
therefor upon such terms and with such indemnity, if any, to the corporation as
the Board of Directors may prescribe. Certificates shall not be issued
representing fractional shares of stock.
SECTION 8.02. LOST CERTIFICATES. The Board of Directors may
direct a new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the corporation alleged to
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificate of stock to be lost, stolen or
destroyed. When authorizing such issue of a new certificate or certificates, the
Board of Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate or certificates, or his legal representative, to advertise the same
in such manner as it shall require or to give the corporation a bond in such sum
as it may direct as indemnity against any claim that may be made against the
corporation with respect to the certificate or certificates alleged to have been
lost, stolen or destroyed, or both.
SECTION 8.03. TRANSFERS. Upon surrender to the corporation or
the transfer agent of the corporation of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books. Transfers of shares shall be made only on the books
of the corporation by the registered holder thereof, or by his attorney
thereunto authorized by power of attorney and filed with the Secretary of the
corporation or the Transfer Agent.
SECTION 8.04. REGISTERED STOCKHOLDERS. The corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other notice thereof,
except as otherwise provided by the laws of the State of Delaware.
ARTICLE IX
DIVIDENDS
SECTION 9.01. DECLARATION. Dividends upon the capital stock of
the corporation, subject to the provisions of the Restated Certificate of
Incorporation, if any, may be declared by the Board of Directors at any regular
or special meeting, pursuant to law. Dividends may be paid in cash, in property
or in shares of capital stock, subject to the provisions of the Restated
Certificate of Incorporation.
SECTION 9.02. RESERVE. Before payment of any dividend, there may
be set aside out of any funds of the corporation available for dividends such
sum or sums as the Board of Directors from time to time, in their absolute
discretion, think proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
corporation, or for such other purpose as the Board of Directors shall think
conducive to the interest of the corporation, and the Directors may modify or
abolish any such reserve in the manner in which it was created.
ARTICLE X
INDEMNIFICATION
SECTION 10.01. THIRD PARTY ACTIONS. The corporation shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement or conviction, or upon
a plea of NOLO CONTENDERE or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
SECTION 10.02. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION.
The corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
SECTION 10.03. MANDATORY INDEMNIFICATION. To the extent that a
director, officer, employee or agent of the corporation has been successful on
the merits or otherwise in defense of any action, suit or proceeding referred to
in Sections 10.01 and 10.02, or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
SECTION 10.04. DETERMINATION OF CONDUCT. The determination that
a director, officer, employee or agent has met the applicable standard of
conduct set forth in Sections 10.01 and 10.02 (unless indemnification is ordered
by a court) shall be made (a) by the Board of Directors by a majority vote of a
quorum consisting of directors who were not parties to such action, suit or
proceeding, or (b) if such quorum is not obtainable, or, even if obtainable a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, or (c) by the stockholders.
SECTION 10.05. PAYMENT OF EXPENSES IN ADVANCE. Expenses incurred
in defending a civil or criminal action, suit or proceeding shall be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the director,
officer, employee or agent to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the corporation as
authorized in this Article X.
SECTION 10.06. INDEMNITY NOT EXCLUSIVE. The indemnification and
advancement of expenses provided by or granted pursuant to, the other sections
of this Article X shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement of expenses may be entitled under
the Restated Certificate of Incorporation, any other by-law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
SECTION 10.07. DEFINITIONS. For purposes of this Article X:
(a) "the corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger
which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents,
so that any person who is or was a director, officer, employee or agent
of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this Article X with
respect to the resulting or surviving corporation as he would have with
respect to such constituent corporation if its separate existence had
continued;
(b) "other enterprises" shall include employee benefit plans;
(c) "fines" shall include any excise taxes assessed on a person
with respect to any employee benefit plan;
(d) "serving at the request of the corporation" shall include
any service as a director, officer, employee or agent of the corporation
which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and
(e) a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted
in a manner "not opposed to the best interest of the corporation" as
referred to in this Article X.
SECTION 10.08. SURVIVAL OF INDEMNIFICATION. The indemnification
and advancement of expenses provided by, or granted pursuant to, this Article X
shall, unless otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. SEAL. The corporate seal shall have inscribed
thereon the name of the corporation, and the words "Corporate Seal, Delaware."
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or otherwise reproduced.
SECTION 11.02. BOOKS. The books of the corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at the offices of the corporation or at such other place or places as
may be designated from time to time by the Board of Directors.
ARTICLE XII
AMENDMENT
These by-laws may be altered, amended or repealed by a majority
of the number of directors then constituting the Board of Directors at any
regular meeting of the Board of Directors without prior notice, or at any
special meeting of the Board of Directors if notice of such alteration,
amendment or repeal be contained in the notice of such special meeting.
EXHIBIT 10.1
LEASE AGREEMENT
VENTURE TECHNOLOGY CENTER BUILDING
THE WOODLANDS, TEXAS
THIS LEASE AGREEMENT, made this the 10th day of December, 1986, by and
between THE WOODLANDS CORPORATION, a Delaware corporation (hereinafter called
"Lessor"), and LIFECELL CORPORATION, a Texas corporation (hereinafter called
"Lessee").
W I T N E S S E T H:
That in consideration of the rents, covenants, terms and conditions
hereinafter set forth, Lessor hereby leases to Lessee, and Lessee hereby rents
from Lessor the herein described premises upon the following terms and
conditions:
Section 1. LEASED PREMISES. Lessor hereby leases to Lessee and Lessee
hereby takes from Lessor 5198 rentable square feet (the "Premises"), together
with all appurtenances thereto, in a building known and referred to as the
Venture Technology Center Building (the "Building"), located at 3606 Research
Forest Drive, in The Woodlands, Montgomery County, Texas, and which contains
total of 39,817 rentable square feet of space. The Building is located on a
certain tract of land containing 3.5904 acres and is described in the attached
Exhibit A (the "Land"). The Premises is shown on the floor plan attached
hereto as Exhibit A-1.
Section 2. PARKING. In addition to the Premises, Lessee and its invitees
are hereby granted the exclusive right to use the service area and grade level
entry adjoining the Premises, and to park vehicles at or in the area abutting
said grade level entry. Additionally, Lessor shall provide and keep in good
condition through the term of this lease, parking areas for and vehicular
access ways to the Premises, which shall be available for the non-exclusive
use of Lessee, its employees and invitees. The use of such parking and access
areas shall at all times be subject to such reasonable rules and regulations
as Lessor may promulgate. No improvements may be constructed or maintained
within the service area adjoining the Premises without the written consent of
Lessor.
Section 3. TERM. This Lease shall commence on the earlier to occur of
February 1, 1987 or the date upon which Lessee takes occupancy of the
Premises, and shall expire on the last day of the sixtieth (60th) full
calendar month following the commencement of the term, subject to earlier
termination as hereinafter provided.
Section 4. DELAYED POSSESSION. If the Premises are not ready for
occupancy by Lessee on the Commencement Date set out above, the term of this
Lease shall begin on the date when Lessor tenders to Lessee possession of the
Premises with all work to be performed by Lessor pursuant to that certain
letter agreement regarding leasehold improvements (attached hereto as Exhibit
"B") substantially completed. Lessor shall not be liable or responsible for
any claims, damages or liabilities of any nature whatsoever in connection with
or by reason of any delayed occupancy. No such failure to give possession on
the Commencement Date shall in any way affect the validity of this Lease or
the obligations of Lessee hereunder (except as expressly provided in this
Section) nor shall same be construed in any way to extend the term of this
Lease. At Lessor's request, Lessee will execute a memorandum setting forth the
Commencement Date and the date of the expiration of the term of this Lease.
Notwithstanding anything contained herein to the contrary, if through no fault
of Lessee, the improvements have not been completed and the Premises are not
ready for occupancy by March 1, 1987, Lessee shall have the right to terminate
this Lease and have the security deposit hereinafter referred to, refunded.
SECTION 5. ACCEPTANCE OF THE PREMISES. By opening for business, Lessee
shall be deemed to have accepted the Premises, to have acknowledged that the
same are in the condition called for hereunder and to have agreed that the
obligations of the Lessor imposed by Exhibit "B" attached hereto have been
fully performed, subject to punchlist items submitted to Lessor at the time of
acceptance.
SECTION 6. USE OF THE PREMISES. The Premises shall be used by Lessee
solely for general office, laboratory, light manufacturing, assembly,
inspection and testing which are nonpolluting and non emissive of noise, dust,
or of unreasonable odor, contaminants, or other offensive matter, and
which do not unreasonably increase the risk of fire to the area surrounding
the Land and the Building and for no other purpose.
SECTION 7. BASE RENTAL. Lessee hereby agrees to pay to Lessor, at
Lessor's address as stated herein, Base Rental for the Premises during the
term of this Lease in the amount of Four Thousand One Hundred Fifty Eight and
40/100 Dollars ($4158.40) per month, in advance, on the first day of each
calendar month, first such payment due on the 1st day of February 1, 1987, and
a like amount payable on the same day of each and every succeeding calendar
month thereafter during the full term hereof, without offset, deduction or
right of counterclaim whatsoever. The first such payment shall also include
any prorated rental for the period from the Commencement Date to the first day
of the first full calendar month in the term.
SECTION 8. ADDITIONAL RENTAL. Lessor agrees to pay all Operating Expenses
as described in Section 14, up to a maximum amount of $1.85 per year for each
square foot of rentable floor area in the Building (the "Operating Cost
Allowance"). In the event the Operating Expenses shall, in any fiscal year
(ending January 31) exceed the Operating Cost Allowance (pro-rated for any
partial fiscal year at the beginning or end of the Term), Lessee agrees to pay
to Lessor, as Additional Rent, Lessee's pro-rata share of any such excess (the
"Excess Operating Expenses"). Lessee's pro-rata share shall be determined by
multiplying the Excess Operating Expenses by a fraction, the numerator of
which shall be the number of rentable square feet in the Premises, and the
denominator of which shall be the rentable square footage in the Building (as
set out in Section 1 above). Within ninety (90) days following the completion
of each fiscal year (after the Base Year), Lessor will provide to Lessee a
statement showing in reasonable detail the Operating Expenses for the
preceding fiscal year, the Additional Rent due with regard to Lessee's portion
of the Excess Operating Expenses, and Lessor's reasonable estimate of Excess
Operating Expenses for the then current fiscal year. Lessee shall, on or
before thirty (30) days following receipt of said statement, pay to Lessor the
amount of Additional Rent due as provided herein, less the amount of
Additional Rent paid in advance (if any) during the preceding fiscal year. Any
overpayment will be credited by Lessor to the next rental payment(s) due.
Lessee agreees to pay Additional Rent each month thereafter, in addition to
Base Rental, in an amount necessary to amortize the estimated Excess Operating
Expenses for the then current fiscal year over a period equal to the lesser of
(i) the number of months remaining in the Lease Term or (ii) the number of
months remaining in the current fiscal year. Notwithstanding that the Lease
Term has expired or been terminated, Lessee shall remain liable for and agrees
to pay to Lessor within thirty (30) days following receipt of an invoice
therefor, its pro-rata portion of Excess Operating Expenses for the fiscal
year (or portion thereof) during which the Term of this Lease expired or was
terminated. Lessee shall have the right, at its expense and at a reasonable
time, to audit Lessor's books relevant to the Additional Rent due under this
Section.
SECTION 9. PAYMENT OF RENTALS. Lessee covenants to promptly pay all
rentals when due and payable. A late charge of ten (10%) per cent shall be
added to any payment of Base Rental or Additional Rental which is more than
ten (10) days past due. If Lessor shall pay any monies or incur any expenses
in correction of violations of the covenants herein set forth (after the
expiration of applicable grace periods), the amounts so paid or incurred
shall, on notice to Lessee, be considered additional rental, payable by Lessee
with the first installment of rental thereafter to become due and payable, and
may be collected or enforced as by law provided in respect of rentals.
SECTION 10. SECURITY DEPOSITS. Lessor hereby acknowledges receipt from
Lessee of the sum of Four Thousand One Hundred Fifty Eight Dollars and 40/100
($4158.40) as security for the faithful performance and observance by Lessee
of the terms, provisions and conditions of this Lease. In the event Lessee
defaults in respect of any of the terms, provisions or conditions of this
Lease, including, but not limited to, the payment of Base Rental or Additional
Rental, Lessee may use, apply or retain the whole or any part of the security
so deposited to the extent required for the payment of any Base Rental,
Additional Rental or any other sum as to which Lessee is in default, or for
any sum which Lessor may expend or may be required to expend by reason of
Lessee's default in respect of any of the
terms, covenants or conditions of this Lease. Prior to the time when Lessee
shall be entitled to the return of the security deposit, Lessor shall be
entitled to intermingle such deposit with its own funds and to use such sum
for such purposes as Lessor may determine, and Lessee shall not be entitled to
any interest on the security deposit. In the event of a sale of the Land and
Building, Lessor shall thereupon be released by Lessee from all liability for
the return of such security, and Lessee agrees to look solely to the new
Lessor for the return of said security, provided the new owner expressly
assumes Lessor's obligations under this Lease. The provisions hereof shall
apply to every transfer or assignment made of the security to a new landlord,
provided that any Lessor making such a transfer or assignment shall be
obligated to give Lessee notice of the new landlord's name and address.
SECTION 11. TENANT IMPROVEMENTS. On or before the Commencement Date,
Lessor shall substantially complete all work required under Exhibit "B"
attached hereto. Lessee will be permitted to enter the Premises and for the
purpose of installing its equipment, provided that (a) Lessee shall have
obtained Lessor's prior written approval of the plans and specifications as
hereinafter provided, and (b) Lessee shall have deposited with Lessor the
policies or certificates of insurance required by Section 20. hereof. Lessee's
activities shall be conducted in such a manner as not to interfere with the
work of Lessor or other tenants in the Building. Lessee shall, at its expense,
remove from the Premises and from the Land all trash which may accumulate in
connection with Lessee's activities. If Lessee fails to remove such trash,
Lessor may remove same and Lessee shall reimburse Lessor promptly upon demand
for Lessor's expenses in connection therewith. Lessee's use of the Premises
prior to the Commencement Date shall be subject to all of the terms and
provisions of this Lease, excepting only the obligation to pay rent, which
obligation shall commence according to the other provisions of this Lease. No
improvement, alteration, remodeling or other similar work shall be made or
done without Lessor's prior written approval of the plans and specifications,
and of the contractor or contractors who are to make such improvements.
SECTION 12. MECHANICS OR MATERIALMEN'S LIENS. Lessee shall not permit any
mechanics or materialmen's lien to be filed against the Land or the Building,
or any portion thereof. In the event that any mechanics's or materialmen's
lien shall at any time be filed against the Land or the Building, purporting
to be for work, labor, services or materials performed or furnished to Lessee
or anyone holding the Premises through or under Lessee, Lessee shall forthwith
cause the same to be discharged of record. If Lessee shall fail to cause such
lien to be discharged within thirty (30) days after notice of the filing
thereof, then, in addition to any other right or remedy of Lessor, Lessor may,
but shall not be obligated to, discharge the same by paying any reasonable
amount claimed to be due. The amount so paid by Lessor and all reasonable
costs and expenses, including reasonable attorney's fees incurred by Lessor in
procuring the discharge of such lien, shall be due and payable by Lessee to
Lessor as additional rent on the first day of the next succeeding month.
Notice is hereby given that Lessor shall not be liable for any labor or
materials furnished to Lessee upon credit, and that no mechanics's,
materialmen's or other liens for any such labor or materials shall attach to
and affect the estate or interest of Lessor in and to the Land or the
Building.
Section 13. UTILITIES. Lessor shall make available to the Premises gas,
electricity and water. Lessee agrees to assume all costs and expenses for gas,
electricity, water, telephone, garbage, sewer and any other service needed for
its use at the Premises, including any license or deposit required to
establish or maintain such services, and the costs of installation and
hook-up. Lessee shall promptly pay for all utility services furnished to the
Premises during the term of this Lease. Lessor shall under no circumstances be
liable to Lessee in damage or otherwise for any interruption in service of
water, electricity, heating, air-conditioning or other utilities or services
caused by governmental regulation, emergencies, Acts of God, by the making of
any necessary repairs or improvements, or by any cause beyond Lessor's
reasonable control. Lessor shall endeavor in good faith to give at least 24
hours notice to Lessee when any necessary interruption in service will be made
by Lessor.
Section 14. OPERATING EXPENSES. The terms "Operating Expenses", as used in
the Lease, means all of Lessor's reasonable costs to operate and maintain the
Land and the Building, as determined in accordance with Lessor's accounting
practices, including (to the extent and only to the extent same are Lessor's
obligation to pay or furnish under the other provisions of this Lease), but not
limited to Lessor's cost of providing security services, landscaping, parking
area maintenance and lighting, and general maintenance and repairs. Operating
Expenses shall also include all ad valorem taxes or assessments and Annual
Assessments of The Woodlands Community Association, Inc., which accrue against
the Building or the Land during the Term, together with all insurance premiums,
if any, which Lessor is required to pay or deems necessary to pay, with respect
to the Building or the Land, and a building management fee equal to five percent
(5%) of the Base Rental. Notwithstanding anything contained herein to the
contrary, if at the end of the Base Year, the Land, WITH the Building thereon,
has not yet been placed on the tax rolls, the Base Year ad valorem taxes and
assessments shall be adjusted and increased as if it had been.
Notwithstanding anything contained herein to the contrary, Operating
Expenses shall not include the cost of any structural repairs or of any capital
improvements, repairs or expenditures (except for Lessor's reasonable
amortization, without interest, amortized over the entire useful life of such
improvement, of the cost of any such capital improvement to the Building made
more than one year after the Commencement Date, only to the extent that such
improvement actually reduces or limits increases in Operating Expenses incurred
thereafter during the term of the Lease).
SECTION 15. EXTERIOR REPAIRS. Lessor will keep the exterior of the
Building, including any doors, windows, or glass, in repair at Lessor's
expense, providing Lessee shall give Lessor written notice of the necessity
for such repairs, and provided that the damage thereto shall not have been
caused by the negligence of Lessee, its agents, employees, licensees or
invitees, in which event Lessee shall be responsible for the cost therefor.
Lessor shall be under no liability for repair, maintenance, alteration or any
other action with reference to any plumbing, electrical or other mechanical
installation within or serving the Premises or any part thereof, except for
the service lines leading to the Premises.
SECTION 16. OPERATION BY LESSEE. Lessee agrees to (a) keep the inside of
all glass in the doors and windows of the Premises clean; (d) maintain the
Premises in a clean, orderly and sanitary condition and free of insects,
rodents, vermin and other pests; (e) keep any garbage, trash, rubbish or
refuse in rat-proof containers within the interior of the Premises until
removed from the area; (f) have such garbage, trash, rubbish and refuse
removed at its expense on a regular basis from location points and at such
times as designated by Lessor; (g) keep all mechanical apparatus free of
vibration, noise or pollution which may be transmitted beyond the Premises;
(h) comply with all laws, ordinances, rules and regulations of the Fire
Underwriters Rating Bureau now or hereafter in affect; and (i) conduct its
business in all respects in a dignified manner within the standards of other
tenants in the Building.
In addition, Lessee shall not (a) place or maintain any merchandise or
other articles in any vestibule or entry of the Premises, on the footwalks
adjacent thereto or elsewhere on the exterior of the Premises or Building
without the written consent of Lessor; (b) permit undue accumulation of
garbage, trash, rubbish or other refuse within or without the Premises; (c)
cause or permit objectionable odors to emanate or be dispelled from the
Premises; (d) cause or permit the parking of vehicles so as to interfere with
the use of any driveway, walk, parking area, dock or other common facility in
the area; (e) occupy, use or permit the use or occupancy of any portion of the
Premises for any business or purpose which is immoral, disreputable or in
violation of any legal direction of any public officer; or (f) to occupy, use
or permit the use or occupancy of any portion of the Premises for any business
or purpose, which, in the opinion of Lessor, reasonably formed, constitutes a
public or private nuisance or unduly disturbs the business of other tenants in
the Building.
Lessor shall have the right, upon written notice to Lessee, to provide
for rubbish and refuse removal services as required of Lessee above, and
Lessee agrees to reimburse Lessor for the reasonable cost incurred in
providing such service within thirty (30) days after receipt of a statement
setting forth the cost of such service.
SECTION 17. INTERIOR REPAIRS. Lessee will keep the interior of the
premises, together with all electrical, plumbing and other mechanical
installations therein, all heating and air conditioning equipment, and all
interior and exterior windows or doors serving the Premises, in good order and
repair, and will make all replacements thereto at its expense. Lessee will
surrender the Premises at the expiration or earlier termination of this Lease,
in as good condition as when received, excepting damage and depreciation caused
by ordinary wear and tear. Lessee will not overload the electrical wiring
serving the Premises or within the Premises, and will install at its expense,
but only after obtaining Lessor's written approval, any additional electrical
service which may be required in connection with Lessee's use or occupancy.
Notwithstanding anything herein to the contrary, Lessor, and not Lessee, shall
be liable for any and all interior repairs which may result from any structural
failure of the building, unless caused by Lessee, its agents, employees or
invitees. Lessee will repair promptly, at its expense, any damage to the
Premises caused by bringing into the Premises any property for Lessee's use, or
by the installation or removal of such property, regardless of fault or by whom
such damage was caused, unless caused by Lessor, its agents, employees or
contracts. If Lessee fails to make such repairs, Lessor may make same, and
Lessee agrees to pay, as additional rent, the cost thereof to Lessor promptly
upon Landlord's demand therefor.
SECTION 18. SIGNS AND ADVERTISING. Lessee will not place or suffer to be
placed or maintained on or displaced to the exterior of the Premises, any
sign, advertising matter or other thing of any kind, and will not place or
maintain any decoration, lettering or advertising matter on the glass of any
window or door of the Premises without first obtaining the written approval of
the Lessor, which approval will not be unreasonably withheld provided the
standards of the Development Standards Committee of The Woodlands are complied
with and it is of the type described below. Lessee understands that the only
sign it will be permitted to have is one sign board identifying Lessee, over
the entry to the Premises. Lessee will maintain any approved sign, decoration,
lettering, advertising matter or other thing in good condition and repair at
all times.
SECTION 19. ROOF AND WALLS. Lessor or its designee shall have the
exclusive right (a) to use all or any part of the roof of the Building for any
purpose including to erect additional stories or other structures over all or
any part of the Premises, and to erect in connection with the construction
thereof temporary scaffolds and other aids to construction on the exterior of
the Premises, provided that access to the Premises shall not be denied; and
(b) to install, maintain, use, repair and replace within the Premises, pipes,
ducts, conduits, wires and all other mechanical equipment serving other parts
of the Building, the same to be in locations within the Premises as will not
materially interfere with Lessee's use thereof. Lessee shall have no right to
erect improvements on the roof without the prior written consent of Lessor.
SECTION 20. INSURANCE. Lessee will keep in force at its expense during
the term of this Lease and during such other time as Lessee occupies the
Premises or any part thereof: (1) public liability insurance with respect to
the Premises in a company or companies and in a form acceptable to Lessor,
with minimum limits of One Million Dollars ($1,000,000) on account of bodily
injury or death as the result of any one accident or occurrence, and Three
Hundred Thousand Dollars ($300,000) per occurrence for property damage; (2)
fire and extended coverage insurance on Lessee's fixtures, goods, wares and
merchandise in or at the Premises; and (3) workers compensation or similar
insurance affording statutory coverage and containing minimum statutory
limits. Lessee will deposit copies of policies or policies of insurance or
certificates thereof with Lessor. If Lessee shall not comply with the
requirements of this section. Lessor may cause insurance as aforesaid to be
issued, and in such event Lessee agrees to pay, as additional rent, the
premium for such insurance upon Lessor's demand.
Lessee will not do or suffer to be done, or keep suffer to be kept,
anything in, upon or about the Premises which will contravene Lessor's policies
insuring against loss or damage by fire or other hazards (including, without
limitation, public liability) or which will prevent Lessor from procuring such
policies in companies and at such rates reasonably acceptable to Lessor. If
anything done, omitted to be done or suffered to be done by Lessee, or kept or
suffered to be kept by Lessee in, upon or about the Premises shall cause the
rate of fire or other insurance on the Premises, the building or other property
of Lessor, in a company reasonably acceptable to Lessor, to be increased beyond
the minimum rate from time to time applicable to the Premises for the use
permitted under this Lease, Lessee shall pay, as additional rental, the amount
of any increase attributable thereto upon Lessor's demand.
SECTION 21. WAIVER OF SUBROGATION. It is expressly agreed that neither
Lessor nor Lessee shall be liable to the other to the extent any loss or
damage incurred by the other is or could be covered by insurance, and both
Lessor and Lessee shall cause the carriers of any insurance covering or
affecting the Premises or the building to include provisions in all such
policies waiving any rights by way of subrogation against the other.
SECTION 22. INDEMNITY. Lessee will indemnify Lessor and save it harmless
from and against any and all claims, actions, damages, liabilities or expenses
in connection with loss of life, personal injury or damage to property arising
from or out of the occupancy or use by Lessee of the Premises, the Building,
the Land or any part thereof or from any breach, violation or nonperformance
of any covenant or condition hereof by Lessee unless caused by the negligent
act or omission of Lessor, its agents or employees. Likewise, Lessor will
indemnify Lessee and save it harmless from and against any and all claims,
action, damages, liabilities or expenses in connection with loss of life,
personal injury or damage to property arising from or out of occupancy or use
by Lessor of the Premises, the Building, the Land or any part thereof or from
any breach, violation or nonperformance of any covenant or condition hereof by
Lessor unless caused by the negligent act or omission of Lessee, its agents or
employees.
SECTION 23. DAMAGE OR DESTRUCTION OF PREMISES. In the event the Premises
shall be damaged by fire, explosion, storm, flood, Act of God, war, riot,
insurrection or other casualty to the extent that the Premises are rendered
substantially untenantable in the opinion of Lessor, reasonably formed, then,
at the option of either Lessor or Lessee, exercisable by written notice to the
other party at any time within twenty (20) days of the date when such damage
or destruction occurred; in such event, Lessor shall retain the security
deposit as partial payment for the damages incurred, if in Lessor's opinion,
reasonably formed, such damage was caused by Lessee's negligence.
Substantially untenantable shall mean that the Premises are completely
destroyed or so badly damaged that repairs cannot be commenced within sixty
(60) days and completed within six (6) months thereafter. In the event neither
party elects to cancel and terminate this Lease pursuant to the foregoing
provisions, or in the event such damage or destruction does not render the
Premises substantially or partially untenantable, Lessor shall with reasonable
diligence rebuild and reconstruct the Premises to as good condition as same
were in immediately prior to such damage or destruction. Lessee's obligation
to pay rental hereunder during the time the Premises are substantially
untenantable shall, unless such condition was caused by Lessee's negligence,
be proportionally abated in the proportion which the portion of the Premises
so rendered untenantable bears to the entire Premises, until full use of the
Premises is again tendered to Lessee.
SECTION 24. CONDEMNATION. If the whole or any part, of the Premises shall
be taken under the power of eminent domain, this Lease shall terminate as to the
part so taken on the date lessee is required to yield possession thereof to the
condemning authority. Lessor shall, with reasonable diligence, make such repairs
and alterations as may be necessary in order to restore the part not taken to a
useful condition, and rentals shall be reduced proportionately by the portion of
the Premises so taken. If in the reasonable opinion of Lessor, the amount of the
Premises so taken destroys the usefulness of the Premises for the uses permitted
under this Lease, either party may, within 20 days from the date of such taking,
terminate this Lease as of the date when Lessee is required to yield possession.
All compensation awarded for any taking of the fee and the leasehold shall
belong to and be the property of Lessor, and Lessee hereby assigns to Lessor be
the property of Lessor, and Lessee hereby assigns to Lessor any and all right,
title and interest in and to any such award or any part thereof; provided,
however, that Lessee shall be entitled to claim, prove and receive in the
condemnation proceeding such award as may be allowed for trade fixtures or for
loss of business or good will, depreciation or injury to and cost of removal of
stock-in-trade, but only if such awards shall be made by the condemnation court
in addition to, and shall not result in a reduction of, the award made for any
interest of Lessor in the Land and Building.
SECTION 25. RIGHT OF ENTRY. Lessee will permit Lessor, its agents,
employees or contractors, to enter all or any part of the Premises during
business hours, upon reasonable notice (except in the event of emergency, in
which case Lessor may enter immediately) to inspect the same, enforce or carry
out any provision of this Lease or show the premises to prospective
purchasers, mortgagees or lessees.
SECTION 26. MEMORANDUM. If requested by either party, the other party
agrees to execute, acknowledge and deliver a Memorandum of Lease, in
recordable form. In addition to other matters contained therein, said
Memorandum of Lease shall contain the notice with regard to mechanics or
materialmen's liens set forth in Section 12 hereof. Recording, transfer taxes
and like charges shall be paid by the party requesting such Memorandum.
SECTION 27. TERMINATION. This Lease and the tenancy hereby created shall
cease and terminate at the end of the term hereof without the necessity of any
notice from either Lessor or Lessee to terminate the same. Lessee hereby
waives notice to vacate the Premises and agrees that Lessor shall be entitled
to the benefit of all provisions of law respecting the summary recover of
possession of the Premises from a tenant holding over, to the same extent as
if statutory notice had been given. For the period of three (3) months prior
to the expiration of the term of this Lease, Lessor shall have the right to
display on the exterior of Lease, Lessor shall have the right to display on
the exterior of the Premises (but not in any window or doorway thereof, the
customary sign "For Rent"; during such period Lessor may show the Premises and
all parts thereof to prospective tenants between the hours of 9:00 a.m. and
5:00 p.m. on any day except Sunday or a legal or religious holiday on which
Lessee is not open for business.
SECTION 28. HOLDING OVER. In the event of holding over by Lessee after
the expiration or termination of this Lease and without the prior written
consent of Lessor, Lessee shall pay as liquidated damages for the use of the
Premises 150% of the rent specified for an equivalent period of time
immediately preceding the end of the term of this Lease. No holding over by
Lessee with or without the consent or acquiescence of Lessor, shall operate to
extend the term of this Lease for a longer period that one (1) month. In the
event of any unauthorized holding over, Lessee shall, in addition to the
liquidated damages for the use of the premises provided in this Section,
indemnify Lessor against all claims for damages by any other tenant to whom
Lessor may have leased all or any part of the Premises.
SECTION 29. ASSIGNMENT AND SUBLETTING. Lessor shall have the right to
convey, transfer, assign, mortgage or otherwise encumber, in whole or in part,
its right, title and interest in and to this Lease, the Building and the Land,
and Lessee shall in any such event recognize and respect any such conveyance,
transfer or assignment, and attorn to any person or entity who shall acquire any
such right, title or interest, whether by voluntary transfer, assignment or
conveyance, or through foreclosure of any mortgage, lien or other security
interest granted by Lessor. In the event of any such transfer by Lessor of all
of its interest in and to this Lease, Lessor shall be released from all further
obligations or duties thereafter accruing hereunder. Lessee will not assign this
Lease in whole or in part, nor sublet all of any part of the Premises, nor
license concessions or lease departments within the Premises, nor transfer
possession or occupancy thereof in any manner, without first obtaining the
written consent of Lessor. Lessor shall have the right, at its option, to
terminate the Lease as to any portion of the Premises covered by a proposed
assignment or sublease, or to approve any such assignment or sublease only upon
the condition that all rentals paid by the subleassee in excess of the rentals
due from Lessee hereunder, shall be paid directly to Lessor, otherwise Lessor's
consent to any proposed sublease or assignment shall not be unreasonably
withheld. Consent by Lessor to one assignment, subletting, occupation or use by
another person shall not be deemed to be a consent to any subsequent assignment,
subletting, occupation or use by the same or another person. Consent to an
assignment or sublease shall not release Lessee from liability for the continued
performance of the terms and provisions to be kept and performed by Lessee
hereunder unless Lessor specifically and entirely releases Lessee from said
liability. Lessee covenants and agrees that when the prior written consent of
Lessor is obtained, Lessee will treat all applications for sublease or
assignment in a uniform manner and will award leases according to objective
standards. No decision on any applications shall be made on the ground of the
applicant's race, color, religion, sex, or national origin.
SECTION 30. SUBORDINATION. Upon written notice given to Lessee by the
holder of any first mortgage, first deed of trust or other first security
instrument, Lessee's rights under this Lease are and shall be subordinate to
the operation and effect of any such first mortgage, first deed of trust or
other first security instrument now or hereafter placed upon the Building, the
Land or any part or parts thereof, provided the holder of any such first
mortgage or first deed of trust shall agree that Lessee shall not be disturbed
in its possession of the Premises or its rights hereunder terminated or
amended by the first mortgage or first deed of trusts, any purchaser at or in
lieu of foreclosure or other party so long as Lessee is not in default (beyond
applicable grace periods) under this Lease. The foregoing clause shall be
self-operative, and no further instrument subordinating this Lease to any
security instrument, after notice as aforesaid, shall be required. In
confirmation thereof, Lessee shall, upon request, execute such further
assurances, instruments, releases or other documents that may be reasonably
requested by any first mortgagee or holder of any other first security
instrument, further assuring the foregoing. The failure of Lessee to execute
and deliver any such instrument, release or document within ten (10) days
following written request by Lessor for the same shall constitute a default
hereunder.
SECTION 31. ATTORNMENT. Lessee agrees that upon any foreclosure or sale
under a mortgage or deed of trust to which this Lease is now or shall
hereafter become subject or subordinate, Lessee will attorn to the mortgagee
or purchaser upon foreclosure, will pay to said mortgagee or purchaser all the
rents and other monies required to be paid by Lessee hereunder and will
perform and comply with all of the other terms, covenants, conditions and
obligations contained in this Lease; provided, that upon Lessee's request in
writing, such mortgage or purchaser shall execute and deliver to Lessee its
agreement that so long as Lessee performs all of the terms, covenants and
conditions of this Lease on Lessee's part to be performed, Lessee's possession
hereunder shall not be disturbed by such mortgagee or purchaser.
SECTION 32. CERTIFICATES. Lessee agrees that at any time, and from time
to time, upon not less than five (5) business days' notice by Lessor, it will
execute, acknowledge and deliver to Lessor a statement in writing certifying
that this Lease is unmodified and in full force and effect (or if there have
been modifications, that the Lease is in full force and effect also modified,
and stating the modifications) and the dates to which the rent and other
charges have been paid, and stating whether or not to the best knowledge of
Lessee, Lessor is then in default in performance of any covenant, agreement or
condition contained in this Lease, and if so, specifying each such default of
which the Lessee may have knowledge, it being understood that any such
statement may be relied upon by third parties who are not a party to this
Lease.
SECTION 33. TRANSFER OF CONTROL. If at any time during the term of this
Lease, corporate shares of Lessee shall be transferred by sale, assignment,
operation of law or other disposition so as to result in a change in the
present control of said corporation by the person or persons now owning a
majority of said corporate shares, without the prior written consent of
Lessor, Lessee shall be in default of this Lease and Lessor may exercise its
rights in respect of default hereunder; provided, however, this paragraph
shall not prohibit the offering and sale of shares of the corporation to the
public through a registered offering.
SECTION 34. LANDLORD'S LIEN. Lessee expressly grants to Lessor a Landlord's
lien upon all of the machinery, equipment, goods, wares, chattels, implements,
fixtures, furniture, tools and other personal property which Lessee shall now or
at any time hereafter place in or upon the Premises, including all replacements
thereof and additions thereto, as security for the due and punctual payment by
Lessee to Lessor of all rent and other sums due hereunder and the performance
and observance by Lessee of all of the terms and conditions of this Lease. All
exemptions of said property or any part thereof are hereby expressly waived by
Lessee. The lien and security interest hereby granted is in addition to and
cumulative of Lessor's statutory lien. It is expressly agreed that the lien and
security interest herein granted may be foreclosed with or without the property
being present, to the highest bidder for cash, and that Lessor shall have the
right to become purchaser thereof if it shall be the highest bidder. The
proceeds of any such sale shall be applied first to the costs incurred in
holding such sale, next to the payment of any rent or other amounts then owing
by Lessee to Lessor, and the balance, if any, to Lessee. Lessee agrees to
deliver possession of any property so foreclosed upon to the purchaser thereof,
and to pay Lessor any deficiency remaining after such foreclosure sale. The
Lessee agrees to execute any Uniform Commercial Code financing statements
required by Lessor to evidence the security interest hereby granted. In addition
to all of its rights hereunder, Lessor shall also have all of the rights and
remedies of a secured party under the Texas Uniform Commercial Code.
All equipment, machines, furniture, trade fixtures or other apparatus
which are installed in the Premises by Lessee shall remain the property of
Lessee and shall be removable by Lessee from time to time and at the
expiration of the term of this Lease, or any renewal, extension or other
termination thereof, provided that such fixtures and apparatus can be and are
removed without damaging the Premises or the Building, and provided that
Lessee shall not at such time be in default under any covenant or agreement
contained in this Lease.
SECTION 35. DEFAULT. In the event Lessee shall fail to timely pay rent or
any other amount required to be paid by the terms hereof, or shall fail to
perform any other obligation or duty provided for herein within ten (10) days
after receipt of written demand from Lessor to do so, or shall abandon or vacate
the Premises, and not pay rental due under the terms of this Lease, or in the
event of filing of a petition in bankruptcy or other insolvency proceeding by or
against Lessee or the filing of a petition or answer seeking relief under any
provision of the Bankruptcy Laws, or in the event of assignment by Lessee for
the benefit of creditors or the filing of a petition or other proceeding for the
appointment of a trustee, receivor or liquidator of Lessee or any of Lessee's
property, or the filing of a proceeding by any governmental authority for the
dissolution or liquidation of Lessee, then in any such event, Lessee shall be in
default under this Lease and Lessor shall have the right, at its option, in
addition to any other right or remedy which it may have at law or in equity, to
enter upon or take possession of the Premises, to remove all persons and
property therefrom, with or without legal process, to change all locks to the
Premises and to take such other action as may be necessary to dispossess Lessee
therefrom. Lessee agrees that such acts or actions by Lessor shall in no event
be deemed an unauthorized entry or constitute a conversion of Lessee's property,
and all claims for damages by reason of any such reentry, repossession or
changing of any locks are hereby expressly waived by Lessee, as are any and all
claims for damages by reason of any legal proceedings instituted by Lessor to
recover possession of the Premises. The foregoing rights and remedies granted to
Lessor may be exercised by Lessor with or without terminating this Lease. The
exercise of any one or more of the rights hereinabove provided shall in no event
be deemed to be an acceptance of surrender of the Premises by operation of law
to otherwise, and shall in no event affect a waiver or other release of any
other rights which Lessor shall have under this Lease or otherwise. In the event
of default, Lessor shall be entitled to terminate this Lease and all of Lessee's
rights hereunder. If Lessor elects to terminate this Lease, Lessee shall
nevertheless be liable to Lessor for the full amount of all accrued and unpaid
rent as well as any and all other amounts then owing to Lessor at the time of
such termination, plus, as liquidated damages for such default, an amount equal
to the unpaid balance of the rental provided for in this Lease. In the event
Lessor elects to take possession of the Premises without terminating this Lease,
Lessor may, at its option and without any obligation to do so, re-let all or any
part of the Premises for any period satisfactory to Lessor, to any tenant
acceptable to Lessor, for a use and purposes acceptable to Lessor. If Lessor
does re-let all or part of the Premises, Lessee shall be entitled to a credit
against its obligations hereunder in the amount of all rents received by Lessor
as a result of such re-letting, less the total of all costs and expenses
incurred by Lessor in connection with such re-letting, such credit not to exceed
the rental payable by Lessee to Lessor hereunder. Lessee shall be liable to
Lessor for all attorney's fees incurred by Lessor in enforcing this Lease as a
result of default by Lessee.
SECTION 36. NOTICES. Any notice required or permitted to be given
pursuant to the terms of this Lease shall be sent by certified or registered
U.S. mail to Lessor at 2201 Timberloch Place, The Woodlands, Texas 77380,
Attn: Property Manager, and to Lessee at 3606 Research Forest Drive, The
Woodlands, Texas 77380. The place to which such notices shall be sent may be
changed by either party giving notice of such change to the other party in the
manner hereinabove provided.
SECTION 37. COMMISSIONS. Lessor and Lessee each represent and warrant to
the other that they have not used a realtor, broker, or real estate agent in
connection with the negotiation of this Lease. Lessee agrees to indemnify and
hold Lessor harmless from any commissions, compensation, or charges asserted
by any realtor, broker or agent claiming by, through, or under Lessee. Lessor
agrees to indemnify and hold Lessee harmless from any commissions,
compensation, or charges asserted by any realtor, broker, or agent claiming
by, through, or under Lessor.
SECTION 38. REMEDIES CUMULATIVE. No reference to any specific right or
remedy shall preclude Lessor from exercising any other right, from having any
other remedy or from maintaining any action to which it may otherwise be
entitled at law or in equity.
SECTION 39. NO WAIVER. Either party's failure to insist upon strict
performance by the other party of any covenant of this Lease or to exercise
any option or right herein contained shall not be a waiver or relinquishment
for the future of each covenant, right or option, but the same shall remain in
full force and effect.
SECTION 40. SEVERABILITY. If any of the provisions of this Lease shall
contravene or be invalid under the laws of the particular state, county or
jurisdiction where applied, such contravention or invalidity shall not
invalidate the Lease or any other portions thereof, and the remainder of this
Lease or the application thereof to other persons or circumstances shall not
be affected thereby.
SECTION 41. ENTIRE AGREEMENT. This Lease contains the entire agreement
between the parties with respect to the letting contemplated hereby and merges
all prior negotiations and agreements. No agreement now or hereafter made
shall be effective to change, modify or discharge this Lease or any provision
hereof, including the provisions of this Section, unless in writing and signed
by the party against whom enforcement is sought.
SECTION 42. JOINT AND SEVERAL LIABILITY. If two or more individuals,
corporation, partnerships or other business associations (or any combination
of two or more thereof) shall sign this Lease as Lessee, the liability of each
such individual, corporation, partnership, or other business association to
pay rent and perform all other obligations hereunder shall be deemed to be
joint and several. In like manner, if Lessee shall be a partnership or other
business association, the members of which are, by virtue of statute or
general law, subject to personal liability, the liability of each such member
shall bee deemed to be joint and several.
SECTION 43. NO OPTION. The submission of this Lease for examination does
not constitute a reservation of or option for the Premises, and this Lease
becomes effective only upon execution hereof by Lessor and Lessee, and
delivery of a fully executed copy to Lessee.
SECTION 44. CORPORATE RESOLUTIONS. In the event Lessee is a corporation,
Lessee will furnish Lessor, contemporaneously and together with the return of
this Lease, a certified copy of a corporate resolution of said corporation
authorizing Lessee, as a corporate entity, and the person executing same, to
enter into this Lease and each and every specific provision hereof, and
certified by the secretary or an assistant secretary of said corporation.
Lessor warrants to Lessee that the person executing this Lease on behalf of
Lessor has the authority to do so.
SECTION 45. GRACE PERIOD. Notwithstanding anything to the contrary, in the
event of default under the terms of this Lease by Lessee, which default can be
cured by the payment of money, the Lessor shall give written notice of such
default to Lessee and Lessee shall have ten (10) days from the date of the
notice to cure the default. Upon an event of default by Lessee under the terms
of this Lease which cannot be cured by the payment of money, Lessor shall give
notice of such default to Lessee and Lessee shall have thirty (30) days from the
date of the notice to cure the default.
SECTION 46. APPLICABLE LAW. This Lease shall be construed under the laws
of the State of Texas, and shall be performable only in Montgomery County,
Texas.
SECTION 47. CAPTIONS. The captions and headings herein are for
convenience and reference only.
IN WITNESS WHEREOF, the parties hereto have executed this Lease Agreement
under their respective hands and seals as of the day and year first above
written.
LESSOR
THE WOODLANDS CORPORATION
By: MICHAEL H. RICHMOND
Name: Michael H. Richmond
Date: 12-10-86 Title: Executive Vice President
Legal [ILLEGIBLE INITIALS]
Sales [ILLEGIBLE INITIALS] LESSEE
Other [ILLEGIBLE INITIALS] LIFECELL CORPORATION
By: PAUL M. FRISON
Name: Paul M. Frison
Date: Title: President
EXHIBIT A-1
[GRAPHIC DEPICTING LEASE SPACE]
VENTURE TECHNOLOGY CENTER
SITE PLAN
FLOORPLAN
LEGEND
LifeCell Lease 5,198 S.F.
LifeCell Right Of First Refusal 4,570 S.F.
LifeCell Right Of Second Refusal 5,310 S.F.
EXHIBIT B
The Woodlands Corporation
Gerald D. Iron
Director of Sales and Leasing
2201 Timberloch Place
The Woodlands, Texas 77380
(713) 363-6946
Mr. Paul Frison
LifeCell Corporation
1200 Binz, Suite 1380
Houston, Texas 77004
Re: Leasehold improvements for 5,198 rentable square feet of space in a
building known as Ventures Technology Center in The Woodlands, Texas.
Dear Gentlemen:
The Woodlands Corporation (TWC) is pleased to quote for your approval the
cost of work necessary to construct the proposed leasehold improvements in the
above-referenced space.
The cost of work is based upon the attached drawings dated November 21,
1986.
Total Cost of Work $ 105,780.45
--------------
Lessor Allowance $ (83,168.00)
--------------
Additional Landlord Contribution $ 22,612.45
--------------
Subtotal $
--------------
TWC Administration Fee $ -0-
--------------
Total Amount Due from Lessee $ -0-
==============
If The Woodlands Corporation further agrees to perform, at your request,
any additional or non-standard work over and above that specified on the
attached plans, such work shall be performed by TWC, at your sole expense, as
a tenant extra. Prior to commencing any such work requested by you, TWC will
submit to you written estimates of the cost of any such work. Within one (1)
week from the date of submission thereof by TWC, you shall either provide
written approval of the estimate for construction, submit to TWC revisions in
the plans and specifications, or notify TWC that the work is no longer
requested. You agree to pay TWC promptly upon being billed therefore, the cost
of all such work, together with fifteen percent (15%) of the cost for TWC's
overhead. You agree that in the event of default in payment thereof, TWC shall
(in addition to all other remedies) have the same rights as in the event of
default of payment of rent under the Lease. You further agree the items listed
on Exhibit B-1 attached are not to be included in this Agreement, and if
required, will be furnished and installed by Lessee.
* In lieu of six (6) months Base Rent abatement.
MR. PAUL FRISON
Page 2
It is agreed that, notwithstanding the date provided in the Lease for the
commencement of the lease term, your obligation for the payment of rental
thereunder shall not commence until TWC has substantially completed all work
to be performed by TWC pursuant to this agreement; provided, however, that if
TWC shall be delayed in substantially completing the work as required
hereunder as a result of:
(a) Your failure to timely furnish the information and approval as and
when required;
(b) Your request for materials, finishes or installations other than
specified on plans attached;
(c) Your changes in approved plans or specifications; or
(d) The performance by a person, firm or corporation employed by you and
the completion of said work by said person, firm or corporation,
then the commencement of the term of the Lease and the payment of rent
thereunder shall be accelerated by the number of days of such delay.
All monies due from you for leasehold improvements must be paid to TWC
prior to your occupancy of your space.
Upon your approval as indicated below, TWC will begin construction of
your leasehold improvements and estimate construction completion within 7
weeks of commencement of construction.
Sincerely,
PAUL M. FRISON
Tenant Acceptance
Date
GERALD D. IRONS
Gerald D. Irons
LEON LEE
Leon Lee
Project Manager
Design & Construction
GDI:pc
EXHIBIT B-1
The following items will be furnished and installed by the Lessee at its
sole cost and expense.
1. All furniture and window coverings.
2. Telephone and Intercom System: Lessor will furnish empty conduit
in ceiling space to building telephone cable connection. Lessee
will select and provide telephone system from building cable
connections to and including Lessee's space.
3. Building Graphics: Lessee will furnish and install interior and
exterior graphics desired by Lessee. Lessee shall use graphics
style, size, material, color and sign company selected by Lessor.
RESEARCH FOREST
PARCEL 2B-6 3.5904 ACRES
Being a 3.5904 acre tract of land situated in Montgomery County, Texas in the
John Taylor Survey, A-547, and being more particularly described by metes and
bounds as follows with all control referred to the Texas State Plane
Coordinate System, Lambert Projection, South Central Zone:
BEGINNING at the westernmost corner of the herein described tract having a
Texas State Plane Coordinate Value of X= 3,111,160.49, Y= 870,303.83 and being
S 66(degree) 43' 18' W, 1,270.86 feet from the southeast corner of the Henry
Applewhite Survey, A-51, common to the southwest corner of the James Stephens
Survey, A-536. Said common survey corner being located in the north line of
said John Taylor Survey, A-547;
THENCE N 43(degree) 32' 24' E, 368.00 feet to a point for corner;
THENCE S 46(degree) 27' 36' E, 425.00 feet to a point for corner;
THENCE S 43(degree) 32' 24' W, 368.00 feet to a point for corner;
THENCE N 46(degree) 27' 36' W, 425.00 feet to a POINT OF BEGINNING and
containing 3.5904 acres of land.
LEONARD McBEE
Leonard McBee
Registered Public Surveyor
Texas Registration No. 1854
[SEAL WITH TEXT BELOW]
STATE OF TEXAS
LEONARD McBEE
1854
REGISTERED
PUBLIC SURVEYOR
Exhibit "A"
ADDENDUM TO LEASE AGREEMENT
DATED 12-20-86
BY AND BETWEEN THE WOODLANDS CORPORATION, AS LESSOR,
AND LIFECELL CORPORATION, AS LESSEE
1) Lessor and Lessee agree that the following shall be added to the Lease
Agreement as Section 48:
SECTION 48. RIGHT OF FIRST REFUSAL. For a period of two (2) years from
the Commencement Date of this Lease Agreement Lessee shall have a
right of first refusal to lease all or a portion of approximately 4570
square feet adjoining the Premises and outlined in red on the attached
Exhibit A-1 ("Adjacent Space I"), on the following terms and
conditions. If Lessor shall receive a bona fide offer to lease all or
any portion of the Adjacent Space I, at or above the prevailing market
rate, which offer Lessor is willing to accept, Lessor shall give
Lessee written notice thereof. Lessee shall have the right for ten
(10) working days after receipt of notice of such third party offer,
which is acceptable to Lessor, to execute a lease covering such space
on the following terms. The terms of the lease will be the same as set
forth in this Lease Agreement except that the Base Rental shall be at
the prevailing market rate of the Building, and Lessee shall have a
tenant improvement allowance of $16.00 per each square foot of space
being leased. Lessee's right of first refusal shall be paramount to
any rights of the third party in question. If Lessee shall fail to
execute a lease for the portion of the Adjacent Space I within the
time herein specified, Lessor shall be at liberty to make such lease
to the third party. The right of Lessee under this paragraph shall
apply successively to each and every offer to lease all or any portion
of the Adjacent Space I.
It is understood and agreed that Lessee's right of first refusal set
forth above is conditioned upon its being in full compliance with all
the terms and conditions of this Lease Agreement at the time Lessor
receives an offer from a third party to lease any portion of the
Adjacent Space I. Any default or noncompliance with the Lease
Agreement existing at the time of the offer shall terminate Lessee's
first refusal rights hereunder.
2) Lessor and Lessee agree that the following shall be added to the
Lease Agreement as Section 49:
SECTION 49. RENTAL ABATEMENT.
In lieu of Base Rental abatement, Lessor agrees to provide Lessee
$22,612.45 for leasehold improvement work.
3) Lessor and Lessee agree that the following shall be added to the Lease
Agreement as Section 50:
SECTION 50. RENEWAL OPTION. As long as Lessee is not in default in the
performance of its covenants under this Lease, Lessee is hereby granted
the option to renew the Term of this Lease for One (1) period(s) of Five
(5) additional years each ("Renewal Term"), to commence at the expiration
of the initial term of this Lease. Lessee shall exercise each option to
renew by delivering written notice of such election to Lessor at least
sixty (60) days prior to the expiration of the Term of this Lease. The
renewal of this Lease shall be upon the same terms and conditions of this
Lease, except (a) the Base Rent during the Renewal Term shall be the
prevailing market Base Rent rate (similarly defined) for similar space in
the Building at the time the Renewal Term commences, but in no event less
than the Base Rent that Lessee is then paying, (b) Lessee shall have no
option to renew this Lease beyond the Renewal Term set out above, (c)
Lesseee shall not have the right to assign its renewal rights to any
sublessee of the Premises or assignee of the lease, (d) the leasehold
improvements will be provided in their then existing condition (on an "as
is" basis) at the time the Renewal Term commences, (e) the "Term" as
defined in the Lease, shall include any Renewal Term that has been duly
exercised by Lessee; and (f) any Provision, Rider, Amendment or Addendum
to the Lease providing for abatement of Base Rent shall be inapplicable
to the Renewal Term.
4) Lessor and Lessee agree that wherever in the Lease Lessor's consent or
approval is required to any action, such consent or approval shall not be
unreasonably withheld or delayed. Wherever Lessor's judgment or discretion is
to be exercised, it shall be exercised reasonably.
5) Lessor and Lessee agree that Section 24, CONDEMNATION, of the Lease shall
be deleted in its entirety and the following Section 24 inserted in its stead:
(24) CONDEMNATION. If any portion of the Building or Premises which is
condemned or taken by eminent domain shall result in Lessee's loss of access
to the Premises or shall render the balance of the Premises unsuitable for the
use set forth in Section 6 above, Lessee, may, at its option, cancel this
lease upon fifteen (15) days' prior written notice to Lessor, effective as of
the date of such taking by the condemning authority or Lessee's surrender of
possession of the Premises, whichever is earlier. If a portion of the Premises
is taken which does not render the balance unsuitable for the use set forth in
Section 6 above, Lessor shall, at its expense, restore the reduced Premises as
far as practicable to the condition existing just prior to such taking, and
the rent shall thereafter be equitably abated. Lessee shall have the right to
appear at any condemnation proceeding to claim any separate award with respect
to the value of Lessee's fixtures, improvements, furniture, partitions,
equipment, relocation expenses and loss of business.
6) Lessor and Lessee agree that notwithstanding anything contained herein
to the contrary, during the term hereof, Lessee shall have the right as part
of the Base Rental payable hereunder, to use at least 3.4 assigned parking
spaces per 1,000 rentable square feet of space leased, plus adequate visitor
parking for use by Lessee's customers and invitees, in the parking lot or
garage, as the case may be, no less than 12 parking spaces.
7) Lessor and Lessee agree that the following will be added to the Lease
Agreement as Section 51:
SECTION 51. RIGHT OF SECOND REFUSAL. For a period of two (2) years from
the Commencement Date of this Lease Agreement Lessee shall have a right of
second refusal to lease all or a portion of the approximately 5,310 square
feet adjoining the Premises and outlined in red on the attached Exhibit A-1
("Adjacent Space II"), on the following terms and conditions. The Adjacent
Space II is presently subject to a right of first refusal held by University
of Texas Health Science Center at Houston ("UT"). If Lessor shall receive a
bona fide offer to lease all or any portion of the Adjacent Space II, which
offer Lessor is willing to accept, and UT does not exercise its right of first
refusal to lease the space on the terms set forth in the third party offer or
on the terms Lessee herein may lease the space as set forth in this right of
second refusal, Lessor shall give Lessee written notice thereof. Lessee shall
have the right for five (5) working days after receipt of notice of such third
party offer, which is acceptable to Lessor, to execute a lease covering such
space on the following terms. The terms of the lease will be the same as set
forth in this Lease Agreement except that the Base Rental shall be at the
prevailing market rate of the Building, and Lessee shall have a tenant
improvement allowance of $16.00 per each square foot of space being leased.
Lessee's right of second refusal shall be paramount to any rights of the third
party in question but shall be subordinate to the rights of UT. If Lessee
shall fail to execute a lease for the portion of the Adjacent Space II within
the time herein specified, Lessor shall be at liberty to make such lease to
the third party. The right of Lessee under this paragraph shall apply
successively to each and every offer to lease all or any portion of the
Adjacent Space II.
It is understood and agreed that Lessee's right of second refusal set
forth above is conditioned upon its being in full compliance with all the
terms and conditions of this Lease Agreement at the time Lessor receives an
offer from a third party to lease any portion of the Adjacent Space II. Any
default or noncompliance with the Lease Agreement existing at the time of the
offer shall terminate Lessee's second refusal rights hereunder.
8) Lessor and Lessee agree that the following will be added to the Lease
Agreement as Section 52:
During the term of this Lease, provided there is no default by Lessee,
Lessor agrees to furnish Lessee with one (1) Corporate Executive Golf
Membership in the Woodlands Country Club. The membership will be in the name
of Paul Frison. Lessee will be responsible for payment of monthly dues and use
fees.
THE WOODLANDS CORPORATION
By: MICHAEL H. RICHMOND
Name: Michael H. Richmond
Title: Executive Vice President
LIFECELL CORPORATION
By: PAUL M. FRISON
Name: Paul M. Frison
Title: President
MODIFICATION AND RATIFICATION OF LEASE AGREEMENT
This Modification and Ratification of Lease Agreement is made and entered
into, effective the 11th day of April, 1988, between THE WOODLANDS CORPORATION
("Lessor") and LIFECELL CORPORATION ("Lessee"), for and in consideration of
One Dollar ($1.00), and other good and valuable consideration.
W I T N E S S E T H:
1. Lessor and Lessee hereby confirm and ratify (as modified below) all of
the terms, conditions and covenants in that certain Lease Agreement ("Lease
Agreement") between the parties dated December 10, 1986, under which Lessee
has leased from Lessor approximately 5,198 square feet of net rentable area in
that building known as the Venture Technology Center Building, located at 3606
Research Forest Drive, The Woodlands, Montgomery County, Texas.
2. Lessee warrants that Lessee has accepted and is now in possession of
the demised premises and that the Lease Agreement is valid and presently in
full force and effect.
3. Lessor and Lessee agree that the Term of the Lease Agreement shall be
extended twelve (12) months, making the expiration date January 31, 1993
rather than January 31, 1992.
4. Lessor and Lessee agree that effective on the Expansion Date, the area
of the Premises shall be increased by 2,990 square feet of net rentable area,
which area is outlined in yellow on Exhibit "A" attached hereto and made a
part hereof for all purposes ("Expansion Space"), changing the size of the
Premises to 8,188 square feet of net rentable area. The Expansion Date shall
be January 31, 1988, with the work required under Exhibit "B" attached hereto
and made a part hereof for all purposes, substantially completed.
5. Lessor and Lessee agree that effective the Expansion Date, the monthly
Base Rental payments as set out in Section 7 of the Lease Agreement shall be
changed from Four Thousand One Hundred Fifty Eight and 40/100 Dollars
($4,158.40) per month to Six Thousand Five Hundred Fifty and 40/100 Dollars
($6,550.40) per month.
6. Lessor and Lessee hereby agree that provided there is no default by
Lessee in any of the terms and conditions of the Lease, during the period
December 9, 1987, through the earlier of a) seven (7) days after Lessor
substantially completes the improvements to the Expansion Space pursuant to
Exhibit "B" attached hereto, or b) March 1, 1988, for the sum of $100.00,
payable upon execution of this Modification and Ratification of Lease, Lessee
may use the space in the building located at 2408 Timberloch Place, Suite A-5,
The Woodlands, Montgomery County, Texas, outlined on Exhibit "C" attached
hereto ("Space"). Lessee's use of the Space shall be on the same terms and
conditions of the Lease, except that the term shall be as set forth herein,
Lessee may occupy the space on a rent free basis, except for the initial
payment of $100.00, and the space will be provided to Lessee in its then
existing ("as is") condition.
7. Lessor and Lessee agree that effective on the Second Expansion Date,
the area of the Premises shall be increased by 2,365 square feet of net
rentable area, which area is outlined in red on Exhibit "D" attached hereto
and made a part hereof for all purposes ("Second Expansion Space"), changing
the size of the Premises to 10,553 square feet of net rentable area. The
Second Expansion Date shall be May 1, 1988, with the work required under
Exhibit "E" attached hereto and made a part hereof for all purposes,
substantially completed.
8. Lessor and Lessee agree that effective the Second Expansion Date, the
monthly Base Rental payments as set out in Section 7 of the Lease Agreement
shall be changed from Six Thousand Five Hundred Fifty and 40/100 Dollars
($6,550.40) per month to Eight Thousand Four Hundred Forty Two and 40/100
Dollars ($8,442.00) per month.
SIGNED this the 11th day of April, 1988, at The Woodlands, Texas.
LESSOR:
THE WOODLANDS CORPORATION
By: /s/ Michael H. Richmond
Name: Michael H. Richmond
Title: Executive Vice President
LESSEE:
LIFECELL CORPORATION
By: /s/ Paul M. Frison
Name: Paul M. Frison
Title: President
EXHIBIT "A"
VENTURE TECHNOLOGY CENTER
SITE PLAN
[GRAPHIC DEPICTING LEASE SPACE]
EXHIBIT B
December 3, 1987
Mr. Paul Frison
President
LifeCell Corporation
3606-A/Research Forest Drive
The Woodlands, Tx. 77381
RE: Leasehold Improvements for 2,990 rentable square feet (2,990 usable
square feet) of space in a building known as Venture Technology Center
Building in The Woodlands, Texas.
Dear Mr. Frison:
The Woodlands Corporation (TWC) is pleased to quote for your approval the
cost of work necessary to construct the proposed leasehold improvements
in the above-referenced space.
The cost of work is based upon the drawings dated 9/16/87.
Total Cost of Work $ 227,039.15*
----------------
Lessor Allowance ($47,840.00)
----------------
Additional Landlord Contribution ($14,352.00)**
----------------
Subtotal $ 164,847.15
----------------
TWC Administration Fee $ -0-
----------------
Total Amount Due from Lessee $ 164,847.15*
================
The Woodlands Corporation further agrees to perform, at your request, any
additional or non-standard work over and above that specified on the attached
plans, such work shall be performed by TWC, at your sole expense, as a tenant
extra. Prior to commencing any such work request by you, TWC will submit to
you written estimates of the cost of any such work. Within one (1) week from
the date of submission thereof by TWC, you shall either provide written
approval of the estimate for construction, submit to TWC revisions in the
plans and specifications, or notify TWC that the work is no longer requested.
You agree to pay TWC promptly upon being billed therefore, the cost of all
such, together with fifteen percent (15%) of the cost for TWC's overhead. You
agree that in the event of default in payment thereof, TWC shall (in addition
to all other remedies) have the same rights as in the event of default of
payment of rent under the Lease.
*Includes renovation of 1,823 square feet of existing lease.
**Equals 6 mos. of free rent for 2,990 square feet at $.80/s.f./mo/.
LEASEHOLD IMPROVEMENTS
Page 2
It is agreed that, notwithstanding the date provided in the Lease for the
commencement of the lease term, your obligation for the payment of rental
thereunder shall not commence until TWC has substantially completed all work
to be performed by TWC pursuant to this agreement; provided, however, that if
TWC shall be delayed in substantially completing the work as required
hereunder as a result of:
(a) Your failure to timely furnish the information and approval as and when
required;
(b) Your request for materials, finishes or installations other than specified
on plans attached;
(c) Your changes in approved plans or specifications; or
(d) The performance by a person, firm or corporation employed by you and the
completion of said work by said person, firm or corporation,
then the commencement of the term of the Lease and the payment of rent
thereunder shall be accelerated by the number of days of such delay.
All monies due from you for leasehold improvements must be paid to TWC prior
to your occupancy of your space.
Upon your approval as indicated below, TWC will begin construction of your
leasehold improvements and estimate construction completion within six (6)
weeks of commencement of construction.
Sincerely,
[UNREADABLE SIGNATURE]
Tenant Acceptance
1/6/88
Date
Gerald Irons
Sales Director
Leon Lee
Manager of Interior
Design & Construction
GI/rd
EXHIBIT C
[GRAPHIC DEPICTING LEASE SPACE]
2423 TIMBERLOCH PLACE
SCHE 1/8 3/4 = 1 1/40 3/4
AS BUILT
(STORAGE ABOVE)
SUITE A-5
DATE 9/22/80
GGS
FLOOR PLAN
EXHIBIT D
[GRAPHIC DEPICTING LEASE SPACE]
LEGEND
RELEASE SPACE 2,365 S.F.
VENTURE TECHNOLOGY CENTER
SITE PLAN
FLOOR PLAN
EXHIBIT E
January 28, 1988
Mr. Paul Frison
President
LifeCell Corporation
3606-A/Research Forest Drive
The Woodlands, Texas 77381
Re: Leasehold Improvements for 2,365 rentable square feet (2,365 usable
square feet) of space in a building known as Venture Technology
Center Building in The Woodlands, Texas.
Dear Mr. Frison:
The Woodlands Corporation (TWC), Lessor, is pleased to quote for your
approval the cost of work necessary to construct the proposed leasehold
improvements in the above-referenced space.
The cost of work is based upon the drawings dated TBD*.
Total Cost of Work $ 57,420.06
--------------
Lessor Allowance ($ 37,840.00)**
--------------
Additional Landlord Contribution ($ 11,352.00)**
--------------
Subtotal ($ 8,728.06)
--------------
TWC Administration Fee $ -0-
--------------
Total Amount Due from Lessee $ 8,728.06
--------------
If The Woodlands Corporation further agrees to perform, at your request,
any additional or non-standard work over and above that specified on the
attached plans, such work shall be performed by TWC, at your sole expense, as
a tenant extra. Prior to commencing any such work requested by you, TWC will
submit to you written estimates of the cost of any such work. Within one (1)
week from the date of submission thereof by TWC, you shall either provide
written approval of the estimate for construction, submit to TWC revisions in
the plans and specifications, or notify TWC that the work is no longer
requested. You agree to pay TWC promptly upon being billed therefore, the cost
of all such work, together with fifteen percent (15%) of the cost for TWC's
overhead. You agree that in the event of default in payment thereof, TWC shall
(in addition to all other remedies) have the same rights as in the event of
default of payment of rent under the Lease.
*The construction drawings have not been finalized as of 1/28/88.
Therefore, the estimated cost of construction has yet to be determined
(TBD). LifeCell is responsible for the overage.
**TWC is giving LifeCell $16.00 per square foot towards Leasehold
Improvements, plus the equivalent of 6 mos. of free rent for 2,365
square feet at $.80/S.F./month.
LEASEHOLD IMPROVEMENTS
Page 2
It is agreed that, notwithstanding the date provided in the Lease for
the commencement of the lease term, your obligation for the payment of
rental thereunder shall not commence until TWC has substantially
completed all work to be performed by TWC pursuant to this agreement;
provided, however, that if TWC shall be delayed in substantially
completing the work as required hereunder as a result of:
(a) Your failure to timely furnish the information and approval as and
when required;
(b) Your request for materials, finishes or installations other than
specified on plans attached;
(c) Your changes in approved plans or specifications; or
(d) The performance by a person, firm or corporation employed by you
and the completion of said work by said person, firm or corporation,
then the commencement of the term of the Lease and the payment of rent
thereunder shall be accelerated by the number of days of such delay.
All monies due from you for leasehold improvements must be paid to TWC
prior to your occupancy of your space.
Upon your approval as indicated below, TWC will begin construction of
your leasehold improvements and estimate construction completion within
six (6) weeks of commencement of construction.
Sincerely,
[UNREADABLE SIGNATURE]
Tenant Acceptance
4/11/88
Date
Gerald Irons
Sales Director
Leon Lee
Manager of Interior
Design & Construction
GI/rd
MODIFICATION AND RATIFICATION OF LEASE
This Modification and Ratification of Lease is made and entered into,
effective the 1st day of August, 1992, between THE WOODLANDS CORPORATION
(Lessor) and LIFECELL CORPORATION (Lessee), for and in consideration of One
Dollar ($1.00), and other good and valuable consideration.
WITNESSETH:
1. Lessor and Lessee hereby confirm and ratify (as modified below) all of the
terms, conditions and covenants in that certain Lease Agreement ("Lease")
between the parties dated December 10, 1986, modified April 11, 1988, under
which Lessee has leased from Lessor approximately 10,553 square feet of net
rentable area in the building known as Venture Technology Center I Building,
located at 3606 Research Forest Drive, The Woodlands, Montgomery County,
Texas.
2. Lessor and Lessee agree as follows:
During the Term of the Lease, in consideration of the payment to Lessor of the
sum of $100.00 per month ("Use Fee"), Lessee shall have the right to use that
portion of the storage building located on the Land, identified as Space C
("Space") and shown on Exhibit 1 detached hereto. All the terms and conditions
of the Lease which apply to the Premises shall apply to the Space except that
Lessee may use the Space for storage purposes and no other use.
The Use Fee shall be payable monthly, in advance, at the same time as the
payment to Lessor of the Base Rent.
SIGNED this the 1 day of August, 1992, at The Woodlands, Texas.
LESSOR:
THE WOODLANDS CORPORATION
By: Eric H Wojner
Name: Eric H. Wojner
Title: Vice President -
Asset Management
LESSEE:
LIFECELL CORPORATION
By: Paul M. Frison
Name: Paul M. Frison
Title: President
MODIFICATION, EXTENSION AND RATIFICATION OF LEASE
This Modification, Extension and Ratification of Lease is made and
entered into, effective the 5th day of March, 1993, between THE WOODLANDS
CORPORATION ("Lessor") and LIFECELL CORPORATION ("Lessee"), for and in
consideration of One Dollar ($1.00), and other good and valuable
consideration, receipt of which is hereby acknowledged.
W I T N E S S E T H:
1. Lessor and Lessee hereby confirm and ratify (as modified below) all of the
terms, conditions and covenants in that certain Lease Agreement ("Lease")
between the parties effective December 10, 1986, amended by Modification and
ratification of Lease dated April 11, 1988, under which Lessee has leased from
Lessor approximately 10,553 square feet of net rentable area in the building
("Building") known as Venture Technology Center Building located at 3606
Research Forest Drive, The Woodlands, Texas ("Leased Premises").
2. Lessor and Lessee hereby agree that the Term of the Lease Agreement shall
be extended for thirty-six (36) months, changing the expiration date of the
Lease from January 31, 1993 to January 31, 1996.
3. Lessor and Lessee hereby agree that effective February 1, 1993, the Base
Rent to be paid for the Premises shall be Nine Thousand One Hundred One and
96/100 Dollars ($9,101.96).
4. Lessor and Lessee hereby agree that effective February 1, 1993, the
Operating Cost allowance, provided for in Section 8 of the Lease, shall be Two
and 50/100 Dollars ($2.50).
5. So long as Lessee is not in default in the performance of its covenants
under this Lease, Lessee is hereby granted the option to renew the Term of
this Lease for one (1) period of thirty-six (36) months ("Renewal Term"), to
commence at the expiration of the herein extended Term of the Lease. Lessee
shall exercise each option to renew by delivering written notice of such
election to Lessor at least nine (9) months prior to the expiration of the
Term of the Lease. The renewal of the Lease shall be upon the same terms and
conditions of the Lease, except (a) Base Rent shall be negotiated at the then
prevailing market rate, (b) Lessee shall have no option to renew the Lease
beyond the Renewal Term set out above except as provided below, (c) Lessee
shall not have the right to assign its renewal rights to any sublessee of the
Premises or assignee of the Lease, (d) the leasehold improvements will be
provided in their then existing condition on an "as is" basis) at the time the
Renewal Term commences, (e) the "Term" as defined in the Lease, shall include
any Renewal Term that has been duly exercised by Lessee.
6. It is understood and agreed that in the event Lessee either a) leases
larger space in the Building or in another building owned or managed by
Lessor, or b) purchases land from Lessor to construct a building, this Lease
may be cancelled by Lessee, at Lessee's opiton, as of the commencement date of
such new lease, or as of the date of occupancy of the building constructed on
the purchased land, whichever is applicable, except that Lessee shall remain
liable for (a) any damages done to the Premises or the Building during the
relocation and (b) and Additional Rent due from Lessee at the end of Lessor's
fiscal year as a result of increased operating expenses incurred during the
portion of said fiscal year occurring prior to the termination.
The terms used herein unless otherwise defined shall have the meaning
attributed to such terms in the Lease.
SIGNED this the 5th day of March, 1993, at The Woodlands, Texas.
LESSOR:
THE WOODLANDS CORPORATION
By: ERIC H. WOJNER
Name: Eric H. Wojner
Title: Vice President
Investment Properties
LESSEE:
LIFECELL CORPORATION
By: ANTHONY A. BROWN
Name: Anthony A. Brown
Title: Vice President and Controller
<PAGE>
MODIFICATION AND RATIFICATION OF LEASE AGREEMENT
STATE OF TEXAS
} KNOWN ALL MEN BY THESE PRESENTS:
COUNTY OF MONTGOMERY
This Modification and Ratification of Lease Agreement is made and entered
into between WOODLANDS OFFICE EQUITIES--'95 LIMITED, a Texas limited
partnership, successor to The Woodlands Corporation, (Lessor) and LIFECELL
CORPORATION, a Delaware corporation ("Lessee"), for and in consideration of One
Dollar ($1.00), and other good and valuable consideration, receipt of which is
hereby acknowledged.
WITNESSETH:
1. Lessee hereby confirms and ratifies, except as modified below, all of the
terms, conditions and covenants in both that certain written Lease
Agreement, dated December 10, 1986, modified by instruments dated April 11,
1988, August 1, 1992, and March 5, 1993, regarding the lease by Lessee of
10,553 net rentable square feet ("Lease") in a building known and referred
to Venture Technology Center Building ("Building"), located at 3606 Research
Forest Drive, The Woodlands, Montgomery County, Texas, and that certain
written Lease Agreement dated September 1, 1988, and modified effective
March 5, 1993, regarding the lease by Lessee of 4,570 net rentable square
feet ("Lease II") in the Building. The Lease and Lease II shall be referred
to collectively herein as "Lease Agreements".
2. Lessee warrants that Lessee has accepted and is now in possession of the
demised premises and that the Lease Agreements are valid and presently in
full force and effect.
3. Lessor and Lessee agree that effective February 1, 1996, Lease II will
terminate and the 4,570 net rentable square feet of floor area now covered
by Lease II will become part of the Premises of the Lease. Effective
February 1, 1996, the Premises of the Lease shall contain 15,123 net
rentable square feet, and be all that area shown on Exhibit "A" attached
hereto.
4. Lessor and Lessee agree that effective February 1, 1996, the Term of the
Lease shall be extended for sixty (60) months so that the expiration date of
the Lease shall be changed from January 31, 1996 to January 31, 2001.
5. Lessor and Lessee agree that from and after February 1, 1996, through
January 31, 1997, the monthly Base Rent payable by Lessee to Lessor shall be
$10,772.11. From and after February 1, 1997, through January 31, 2001, the
monthly Base Rent payable by Lessee to Lessor under the Lease shall be
$18,343.36 per month.
6. Lessor and Lessee agree that effective February 1, 1996, the first sentence
in Section 8 of the Lease shall be deleted in its entirety and the following
sentence shall be inserted in its stead: "Lessor agrees to pay all Operating
Expenses as described in Section 14 up to a maximum amount of $2.50 per year
for each square foot of rentable floor area in the Building (the "Operating
Cost Allowance")."
7. Lessor and Lessee agree that effective February 1, 1996, a new provision
shall be added to the Lease as follows:
"During the Term, Lessee shall have the right of second refusal to lease
all or a portion of the approximately 19,761 square feet adjoining the
Premises and indicated on the attached Exhibit "A" ("Adjacent Space"), on
the following terms and conditions. The Adjacent Space is presently subject
to a right of first refusal held by Genometrix Incorporated ("Genometrix").
If Lessor shall receive a bona fide offer to lease all or any portion of
the Adjacent Space, which offer Lessor is willing to accept, and Genometrix
does not exercise its right of first refusal to lease the space Lessee
herein may lease the space to Lessee on the terms set forth hereon. Lessor
shall give Lessee written notice of the third party offer. Lessee shall
have the right for five (5) working days after receipt of notice of such
third party offer, which is acceptable to Lessor, to execute a lease
covering such space on the following terms. The terms of the lease will be
the same as set forth in the third party offer, except that the Base Rent
shall not be less than the Prevailing Market Base Rental Rate for similar
space in the Building. Lessee's right of second refusal shall be paramount
to any rights of the third party in question, but shall be subordinate to
the rights of Genometrix. If Lessee shall fail to execute a lease for the
portion of the Adjacent Space within the time herein specified, Lessor
shall be at liberty to make such lease to the third party and this
provision shall immediately terminate and be of no further force or effect.
It is understood and agreed that Lessee's right of second refusal set forth
above is conditioned upon its being in full compliance with all the terms
and conditions of this Lease at the time Lessor receives an offer from a
third party to lease any portion of the Adjacent Space. Any default or
noncompliance with the Lease Agreement existing at the time of the offer
shall terminate Lessee's second refusal rights hereunder."
8. Lessor and Lessee agree that effective February 1, 1997, the Premises shall
be increased by that certain 4,890 net rentable square feet of floor area,
identified as Expansion Area on Exhibit "A" attached hereto, so that the
Premises of the Lease shall contain 20,013 net rentable square feet.
9. Lessor and Lessee agree that during the Term, provided there is no default
by Lessee in any of the terms and conditions of the Lease, Lessee will
continue to have the right to utilize one
(1) executive golf membership as provided in the Lease.
10. Lessor agrees to provide an allowance of up to $75,950.00 for tenant
improvements to the premises.
EXECUTED this 21st day of December, 1995.
LESSOR
WOODLANDS OFFICE EQUITIES--'95 LIMITED
By: The Woodlands Office Equities, Inc.
Its General Partner
By: /s/ ERIC WOJNER
Name: Eric Wojner
Title: VP--Investment Properties
LESSEE:
LIFECELL CORPORATION
By: /s/ ANTHONY A. BROWN
Name: Anthony A. Brown
Title: Vice President and Chief Financial Officer
EXHIBIT 11.1
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
The following reflects the information used in calculating the number of
shares in the computation of net loss per share for each of the periods set
forth in the Statements of Operations.
1ST QUARTER ENDED MARCH 31, 1996
WEIGHTED AVERAGE SHARES OUTSTANDING:
- - ------------------------------------------------------------------
1-Jan-96 4,403,658 shares X 31 days = 136,513,398
1-Feb-96 4,403,658 shares X 29 days = 127,706,082
1-Mar-96 4,403,658 shares X 31 days = 136,513,398
-------- -------------
91 400,732,878 4,403,658
======== =============
NET LOSS (949,104)
DIVIDEND (105,800)
AMORTIZATION OF INCREASING
DIVIDEND (40,881)
ACCRETION OF SERIES A COSTS $ 0
----------
(1,095,785)
----------
EPS $ (0.25)
==========
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,949,572
<SECURITIES> 0
<RECEIVABLES> 437,733
<ALLOWANCES> 0
<INVENTORY> 501,407
<CURRENT-ASSETS> 3,024,959
<PP&E> 511,762
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,830,019
<CURRENT-LIABILITIES> 1,165,311
<BONDS> 0
0
5,561,713
<COMMON> 4,404
<OTHER-SE> (4,401,409)
<TOTAL-LIABILITY-AND-EQUITY> 3,830,019
<SALES> 420,6369
<TOTAL-REVENUES> 576,112
<CGS> 271,757
<TOTAL-COSTS> 706,198
<OTHER-EXPENSES> 577,381
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (949,104)
<INCOME-TAX> 0
<INCOME-CONTINUING> (949,104)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (949,104)
<EPS-PRIMARY> (0.25)
<EPS-DILUTED> 0
</TABLE>
