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EXHIBIT 99.7
SUBLEASE
THIS AGREEMENT is made and entered into by and between Universal
Standard Healthcare, Inc., a Michigan corporation ("Sublessor") and Laboratory
Corporation of America Holdings, a Delaware corporation ("Sublessee") as of
August 3, 1998.
W I T N E S S E T H:
WHEREAS, Sublessor presently leases the following described premises
under that certain Lease dated as of November 18, 1994 but executed on November
23, 1994 (the "Master Lease") by and between Xxx-Xx Development Corporation, a
Michigan corporation (the "Landlord") and Sublessor (for purposes of the Master
Lease, the "Tenant"), as amended by a First Amendment to Lease dated April 13,
1995, Second Amendment to Lease dated October 19, 1995, Third Amendment to Lease
dated November 14, 0000, Xxxxxx Xxxxxxxxx to Lease dated December 15, 1995, and
any subsequent Amendments:
approximately 93,000 square feet of rentable space of the building
located at 00000 Xxxxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx (the
"Building");
and
WHEREAS, Sublessor now desires to (1) sublease the Laboratory on the
third floor of the Building and any other space within the Building used for
laboratory operations as of the date hereof (the "Premises") and (2) lease
and/or sublease all fixtures, equipment, laboratory inventory as consumed,
improvements and installations owned or leased by Sublessor and located in,
attached to, or built into the Premises as of the date hereof (the "Property")
to Sublessee, and Sublessee desires to sublease the Premises and lease and/or
sublease the Property from Sublessor. It is the intent of the parties hereto
that references herein to "sublease" also refer to the lease of the Property.
NOW, THEREFORE, in consideration of the sum of $10.00, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto do hereby agree
as follows:
1. Grant. Sublessor hereby subleases to Sublessee, its
successors and assigns, all of its right, title and interest in and to the
Premises and the Property and; TO HAVE AND TO HOLD THE SAME unto Sublessee,
its successors and assigns, from and after the Closing Date (as defined in
the Asset Purchase Agreement of even date), through January 31, 1999 (the
"Term"), unless terminated as hereinafter provided, subject to the rental,
terms, covenants and conditions contained herein.
2. Rent. Sublessee hereby agrees to pay on the date hereof, the
Base Rent of One Million Eight Hundred Fifty Thousand Dollars
$1,850,000.00. Sublessor represents that such Base
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Rent does not exceed that portion of rent due Landlord from Sublessor under
the Master Lease and attributable to the Premises.
3. Insurance.
A. Sublessee shall maintain comprehensive general
liability insurance for the Premises and the Property and Sublessee's
occupancy of the Premises and use and operation of the Property, including,
professional and products liability, in such amounts, against such risks,
in such form and with such deductible amounts or provisions for
self-insurance as Sublessee maintains on similar premises or property owned
or leased by Sublessee and as are in accordance with sound insurance
practice and as are generally maintained by corporations engaged in the
same or similar business as Sublessee and as contemplated by the Master
Lease. Sublessee agrees to apply any insurance proceeds received by
Sublessee by reason of insurance carried pursuant to this Section for the
purpose of restoration or repair of the Premises. Sublessor agrees to apply
any insurance proceeds received by, paid to or held by Sublessor pursuant
to this Section for the purpose of restoration or repair of the Premises in
accordance with the Master Lease and subject to the authority of NBD Bank
to collect and receive such proceeds pursuant to Section 6.2(b) of a
Revolving Credit and Loan Agreement, as amended, among NBD Bank, Universal
Standard Medical Laboratories, Inc. and other entities, dated as of April
30, 1997.
B. If Sublessee is self-insured as to general liability
insurance and insurance covering certain other risks, Sublessee shall
maintain financial resources sufficient to insure against any liability of
Sublessee and its authorized representatives arising out of and in
connection with Sublessee's use or occupancy of the Premises and use of the
Property up to Two Million Dollars ($2,000,000.00) on account of bodily
injuries to or death of one person, and Five Million Dollars
($5,000,000.00) on account of bodily injuries to or death or more than one
person as the result of any one accident or disaster and One Million
Dollars ($1,000,000.00) on account of damage to property.
C. Throughout the Term, in accordance with the Master
Lease, Sublessor shall carry fire insurance for the full replacement cost
of the Premises and the Property, such insurance to be written by insurance
companies, and in amounts, satisfactory to Sublessor. Sublessor shall
charge Sublessee and Sublessee shall pay, independent of the Base Rent, a
pro rata portion of the cost of such fire insurance apportioned according
to the Premises and Property occupied and used by Sublessee and Sublessee's
interest, if any, in improvements to or in the Premises and its interest in
its office furniture, equipment, supplies and other property.
4. Fire or Other Casualty. Sublessee shall give immediate notice
to Sublessor of any damage to the Premises or Property by fire or other
casualty. Sublessor shall cause the damage
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to be repaired with reasonable speed. Rent shall be proportionally reduced
to the extent that the Premises are rendered untenantable. If the Premises
are destroyed or so damaged that in normal course the Premises cannot be
made tenantable within sixty (60) days, or if the damage occurs during the
last thirty (30) days of the Term, either Sublessor or Sublessee may
terminate this Sublease upon thirty (30) days written notice to the other
party and failure of Sublessor to correct such damage within such period.
Rentals shall be adjusted as of the date of the damage, and Sublessee shall
vacate the Premises within thirty (30) days from the date the
aforementioned written notice is provided.
5. Obligation to Landlord. The Parties hereby agree that the
obligations herein assumed by Sublessee are limited to those which arise as
a result of the Sublessee's use and occupation of the Premises and such
obligations shall inure jointly and severally to the Sublessor and Landlord
herein and to the successors and assigns of each.
6. Master Lease. Sublessee's rights pursuant to the Sublease are
subject and subordinate at all times to the Master Lease and to all of the
covenants and agreements of the Master Lease, except as expressly modified
by this Sublease. Sublessee shall not do, permit or tolerate anything to be
done in, or in connection with Sublessee's use or occupancy of the Premises
which would violate any Master Lease covenants or agreements. As to the
Premises and during the Term, Sublessee expressly assumes to be bound by
all obligations, covenants and restrictions which are set forth in the
Master Lease in the same manner as these obligations, covenants and
restrictions are binding upon Sublessor, as Tenant under the Master Lease,
except as expressly modified by this Sublease. Except as modified hereby,
during the Term Sublessee shall perform all of Sublessor's duties and
obligations under the Master Lease which relate to the Premises. Sublessor
shall have the same rights against Sublessee with respect to this Sublease
as the Landlord has against the Sublessor, as Tenant, pursuant to the
Master Lease. The Landlord, under the Master Lease, or the Sublessor may
enforce against Sublessee, each in its own capacity, any of the rights
granted to the Landlord pursuant to the Master Lease, except as expressly
modified by this Sublease. Sublessor may not grant to Sublessee, and
nothing in the Sublease shall be construed or interpreted to grant, any
greater rights than the Sublessor has received as Tenant from the Landlord
pursuant to the Master Lease. Sublessee does not have any greater rights
against Sublessor with respect to this Sublease or the Premises than
Sublessor has as Tenant against the Landlord with respect to the Master
Lease and the Premises. Notwithstanding the foregoing provisions of this
paragraph, Sublessee's duties and obligations relative to the Master Lease
shall at all times be limited by and proportional to the limited duration
and cost of Sublessee's occupation of the Premises, and Sublessee shall
only assume obligations, responsibilities or liabilities arising during the
Term.
7. Services.
A. Except as may be specifically identified herein as an
obligation of Sublessor, Sublessee agrees and acknowledges that Sublessor
shall have no obligation or
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responsibility whatsoever to provide or perform any service, repair,
alteration or other similar obligation which is the obligation of Landlord
to provide or perform pursuant to the provisions and terms of the Master
Lease.
B. Sublessee recognizes that Sublessor does not control
the operation of the Building or the furnishing of utilities and services
therein or to the Premises. Accordingly, all of the agreements and
obligations of Sublessor under this Sublease, express or implied, without
limitation, any agreement or obligation to furnish utilities or services,
are expressly dependent upon the performance and observation by the
Landlord of its agreements and obligations under the Master Lease. If the
Landlord shall default in the performance or observance of any of its
agreements or obligations under the Master Lease, either for the furnishing
of utilities or services or otherwise, Sublessor shall not be liable
therefor to Sublessee. Any condition resulting from such default by the
Landlord that adversely affects the habitability of the Premises at
Sublessee's option, shall constitute an eviction, and Sublessee shall be
entitled to cancel this Sublease or to accept a proportional reduction in
or abatement of the rents provided for herein, if such reduction or
abatement of rents is permitted by the terms of the Master Lease, upon
thirty (30) days notice of such condition to Sublessor and failure of
Sublessor to correct such condition within such period. Notwithstanding the
foregoing provisions of this paragraph, Sublessor agrees to assist
Sublessee in obtaining Landlord's performance of its obligations under the
Master Lease.
C. So long as Sublessee shall not be in default under any
term of this Sublease, Sublessor shall, at its own cost and expense,
furnish the Premises with water, heat, air conditioning, electricity,
sewerage, and five-day per week janitorial services. These utilities and
services shall be provided during ordinary business hours in accordance
with the terms of the Master Lease. Sublessor shall not be liable or
responsible for any interruption in the utilities or other services due to
causes beyond Sublessor's reasonable control or interruptions in connection
with the making of repairs or improvements to the Premises, Property or the
Building. Any such interruption that adversely affects the habitability of
the Premises shall, at Sublessee's option, constitute an eviction, and
Sublessee shall be entitled to cancel this Sublease or to accept a
proportional reduction or abatement of rent upon thirty (30) days notice of
such interruption to Sublessor and failure of Sublessor to correct such
interruption within such period.. Electricity furnished by Sublessor shall
be used only for purposes of illumination and the operation of normal
office and laboratory equipment (excluding main frame computer equipment
but including personal computers). Electricity for any other use shall be
paid for by Sublessee.
D. If Landlord shall default in any of its obligations to
Sublessor with respect to the Premises, Sublessee may, at Sublessee's sole
cost and expense, enforce Sublessor's rights against Landlord with respect
to the Premises in Sublessor's name, provided, however, that Sublessee
shall indemnify and hold Sublessor harmless from and against all liability,
loss, demands,
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penalties or damage which Sublessor may incur or suffer by reason of the
negligent or intentional actions of Sublessee. Sublessor shall also execute
any and all documents reasonably required in furtherance of such action. In
amplification and not in limitation of the foregoing, except as otherwise
provided in this Sublease, Sublessor will not be responsible (i) for
furnishing, painting, window washing or any service to the Building or the
Premises or (ii) for any maintenance, repairs or alterations in or to the
Building or the Premises.
8. Assignment and Subletting. Sublessee shall not voluntarily,
by operation of law, or otherwise, assign or permit to be assigned this
Sublease or any interest herein or sublease the Premises or any part
thereof without the prior written consent of Sublessor and Landlord, which
consent shall not be unreasonably withheld or delayed. Any attempt to do
any of the foregoing shall be void and of no effect and shall be a material
default under this Sublease.
9. Default. Any act or omission by Sublessee which would
constitute a default by Sublessor as Tenant under the Master Lease shall
constitute a default by Sublessee under this Sublease. Sublessor has the
right, but not the obligation, to cure any act or omission by Sublessee
which would constitute a default under the Master Lease or could
reasonably, after notice and the passage of time, constitute a default
under the Master Lease and to recover from the Sublessee the costs incurred
by Sublessor, in curing the act or omission by Sublessee. All remedies
provided by the Master Lease which are hereby expressly incorporated by
reference, shall be available to Sublessor against Sublessee in the event
of default. Failure of Sublessee to perform any covenant, material term or
condition hereof shall constitute a default under the Master Lease and
entitle Sublessor to all rights of the Landlord under the Master Lease. In
the event of default by Sublessor under the Master Lease, Sublessee shall
attorn to Landlord at Landlord's request. Failure of Sublessor to perform
any covenant, material term, or condition hereof shall constitute
Sublessor's default hereunder, and entitle Sublessee, upon thirty (30) days
notice of such default to Sublessor and failure of Sublessor to correct
such default within such period, to terminate this Sublease and Sublessee's
obligation to pay rent hereunder.
10. Restoration of Premises. No alterations or improvements to
the Premises shall be made without the prior written consent of the
Landlord and of the Sublessor, which consent shall not be unreasonably
withheld or delayed. The Property shall, upon termination of this Sublease,
and without any obligation of Sublessor to compensate Sublessee therefor,
be and remain part of the Premises and be deemed the property of Sublessor,
provided that Sublessee shall have the obligation to remove any of its
trade fixtures, furniture and equipment and such alterations and
improvements made during the term hereof if so requested by Sublessor. In
the event of such removal, Sublessee agrees to promptly reimburse Sublessor
for the cost of necessary repairs required as the result of damage done to
the Premises, the Property, or the Building. Any of Sublessee's property
not removed at the expiration or termination of the Sublease shall remain
the property of Sublessor.
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11. Disposition of Property. Sublessor may, as of the date hereof
and at any time during the term of the Sublease, remove, sell or otherwise
dispose of all or any item, component or portion of the Property. If
Sublessor elects to remove, sell or otherwise dispose of the Property,
Sublessor shall either orally or in writing notify Sublessee of such action
and, within sixty (60) days from the date of such notice or such time as
may be reasonably requested by Sublessee and agreed upon by Sublessor,
Sublessee may offer in writing to purchase the Property. Any purchases
under this provision shall be by mutual agreement of the Sublessee and
Sublessor with regard to price and terms of purchase and Sublessor shall be
under no obligation to agree to sell the Property to Sublessee.
12. Maintenance of Property. Sublessee shall maintain the
Property in the condition of the Property as of the date hereof, excluding
normal wear and tear, and as specified by the manufacturers' guidelines or
the equivalent and shall furnish all parts, substitutions, mechanisms,
devices and services required therefor so that the Property will remain in
the same condition as f the date hereof, excluding reasonable and customary
wear and tear. All repairs, parts, accessories and equipment incorporated
in, attached to or installed on any of the Property shall immediately
without further act become the property of the Sublessor and part of the
Property for all purposes of this Sublease, with costs or expense to
Sublessor. Sublessee will use the Property in a careful manner, solely in
the conduct of its lawful business; and Sublessee will comply in all
material respects with and conform to all governmental laws, ordinances,
rules and regulations relating to the possession, use, operation and
maintenance of the Property. Sublessee agrees that the Property will be
operated by competent, qualified personnel in connection with Sublessee's
business for the purpose for which the Property was designed and in
accordance with applicable operating instructions, laws, government
regulations, and that Sublessee shall use all reasonable precautions to
prevent loss or damage to the Property from fire and other hazards.
Notwithstanding any provision of this Sublease to the contrary,
the following are Sublessor's responsibilities:
A. To the extent required by the Master Lease, Sublessor,
at its cost, shall maintain or ensure that the Landlord maintains in good
condition pursuant to the Master Lease (1) the structural portions of the
Building and other improvements that are a part of the Premises, such
structural parts include the foundations, load-bearing and exterior walls,
sub-flooring and roof, (ii) the electrical, plumbing, and sewage systems,
(iii) window frames, gutter, and downspouts on the Building and other
improvements that are a part of the Premises, and (iv) heating, ventilation
and air conditioning systems servicing the Premises.
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B. Sublessor shall repair the Premises if they are
damaged by (i) causes over which Sublessee has no control, (ii) acts or
omissions of Sublessor, or its authorized representatives, or (iii)
Sublessor's failure to perform its obligations under this paragraph.
C. Sublessor shall repair the Premises, including
partitions and glass, damaged due to the neglect of Sublessor, its agents
or employees.
13. Quiet Enjoyment. Sublessor and Landlord agree that Sublessee,
upon paying the rent and performing all the terms and conditions of this
Lease, shall quietly have, hold and enjoy the Premises for the Term as
herein stated.
14. Warranties Regarding Property. Except with respect to any
assignable warranties on any of the Property, which Sublessor agrees to
assign to Sublessee within fifteen (15) days of the Closing Date, Sublessor
makes no representation or warranty, express or implied, as to any matter
whatsoever, including, without limitation, the design or condition of the
Property or its merchantability, suitability, quality, or fitness for a
particular purpose, and hereby disclaims any such warranty. Sublessee
specifically waives all rights to make a claim against Sublessor for breach
of any warranty whatsoever. Sublessee leases the Property "as is". Except
with respect to claims based upon the negligence or intentional act of
Sublessor, Sublessor have no liability, for any liability, claim, loss,
damage, or expense caused directly or indirectly by the Property or any
deficiency or defect thereof, or the operation, maintenance, or repair
thereof, or any consequential damages as that term is used in Section
2-719(3) of the Model Uniform Commercial Code, as amended from time to time
("UCC").
15. Notices. Any notice, consent, approval, agreement,
certification, request, invoice, xxxx, demand, statement, acceptance or
other communication hereunder ("Notice") shall be in writing and shall have
been duly given or furnished if delivered personally or mailed in a
postpaid envelope (registered or certified mail only) addressed to
Sublessor or Sublessee at the address set forth below, or to such other
address or addressee as either party may designate by a Notice given
pursuant thereto:
Sublessor: Universal Standard Healthcare, Inc.
00000 Xxxxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxx, C.F.O.
(000) 000-0000 (telephone)
(000) 000-0000 (facsimile)
with a copy to: Xxxxxx Xxxxxxx PLLC
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
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Attention: Xxxxxx X. Xxxxxx, Esq.
(000) 000-0000 (telephone)
(000) 000-0000 (facsimile)
Sublessee: Laboratory Corporation of America Holdings
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Legal Department
(000) 000-0000 (telephone)
(000) 000-0000 (facsimile)
with a copy to: Menzullo & XxXxxxxxxx
Suite 825
0000 Xxx Xxxxx Xxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
(000) 000-0000 (telephone)
(000) 000-0000 (facsimile)
16. Indemnification of Sublessor. Sublessee will indemnify and
save harmless Sublessor from and against any and all liabilities,
obligations, damages, penalties, claims, costs, charges and expenses,
including reasonable attorneys' fees, which may be imposed upon or incurred
by or asserted against Sublessor by reason of any negligent or
intentionally wrongful act or omission of the Sublessee occurring during
the term of this Sublease or by reason of noncompliance of Sublessee with
any applicable environmental law, regulation or ordinance with respect to
any action or event occurring with respect to the Premises and the Property
after the date hereof.
17. Indemnification of Sublessee. Sublessor will indemnify and
save harmless Sublessee from and against any and all liabilities,
obligations, damages, penalties, claims, costs, charges and expenses,
including reasonable attorneys' fees, which may be imposed upon or incurred
by or asserted against Sublessee by reason of any negligent or
intentionally wrongful act or omission of Sublessor, or by reason of
noncompliance of Sublessor with any applicable environmental law,
regulation or ordinance with respect to any action or event occurring prior
to the date hereof.
18. Interpretations and Meanings. All words used in this Sublease
shall have the same meaning as the words used in the Master Lease, unless
specifically defined to the contrary in the Sublease.
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19. Condemnation. If the whole or any part of the Premises shall
be taken or condemned by any competent authority for any public or quasi
public use or purpose such as to render the Premises unsuitable for
Sublessee's use, in Sublessee's discretion, then the Term shall terminate
from the date of such taking or condemnation, and rentals shall be
apportioned accordingly. The condemnation award shall be paid to Sublessor
or Landlord with the exception of any portion as may be attributable to
Sublessee's property, such portion shall be paid to Sublessee.
20. Landlord's Acknowledgment. Sublessor will obtain Landlord's
consent to the subleasing of the Premises by Sublessor to Sublessee
pursuant to this Sublease.
21. Change in Law or Regulation. Notwithstanding anything in this
Sublease to the contrary, should legal counsel for Sublessor or Sublessee
reasonably conclude that this Sublease or Sublessee's use of the Premises
is or may be in violation of any law or regulation, this Sublease shall
terminate upon a sixty (60) day notice to the other party unless within
said thirty (30) day period the parties agree to such modifications in this
Sublease or use of the Premises that may be necessary to establish
compliance with the law or regulation.
IN WITNESS WHEREOF, Sublessor and Sublessee have executed this
instrument as of the date first above written.
SUBLESSOR:
WITNESSES: UNIVERSAL STANDARD HEALTHCARE,
INC., a Michigan corporation
/s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
/s/ Xxxx Xxxxxxx By: Xxxxxx X. Xxxxxxxx
---------------------------- Its: President
/s/ Xxxxxx X. Xxxxxx
----------------------------
SUBLESSEE:
WITNESSES: LABORATORY CORPORATION OF
AMERICA HOLDINGS, a Delaware
corporation
/s/ Xxxxxxxx Xxxxx
------------------
By: Xxxxxxxx Xxxxx
----------------------------- ----------------------------------
Its: E.V. President
----------------------------- ----------------------------------
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