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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
DECEMBER 30, 1996
-----------------
(Date of earliest event reported)
LABORATORY CORPORATION OF AMERICA HOLDINGS
------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 1-11353 13-3757370
-------- ------- ----------
(State or other (Commission (IRS Employer
jurisdiction or File Number) Identification
organization) Number)
358 SOUTH MAIN STREET, BURLINGTON, NORTH CAROLINA 27215
--------------------------------------------------------
(Address of principal executive offices)
910-229-1127
------------
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS
On December 30, 1996, Laboratory Corporation of America Holdings
("Company") entered into a promissory note ("Roche Debt") with
Roche Holdings Inc. ("Roche") for $187 million. The note is due
no later than March 31, 1997 and bears interest at a rate of
6.625%. The proceeds of this note were used to pay in full
obligations arising out the Company's previously announced
settlement agreement dated November 21, 1996 with the U.S.
government. The promissory note with Roche is attached as an
exhibit hereto and the text thereof is incorporated in its
entirety herein by reference.
In addition, the Company entered into the Fifth Amendment and
Fourth Waiver (the "Fifth Amendment") to its credit agreement
dated April 28, 1995 (as amended, the "Credit Agreement"). The Fifth
Amendment allows the Company to enter into the Roche Debt and extends
the Company's Third Waiver to the Credit Agreement ("Third Waiver")
dated as of November 4, 1996 through January 31, 1997. The Third
Waiver was filed with the Securities Exchange Commission on November
14, 1996 in connection with the Company's Quarterly Report on Form
10-Q dated September 30, 1996. The Fifth Amendment is attached as
an exhibit hereto and the text thereof is incorporated in its
entirety herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS
(c) Exhibit
10 Promissory note dated December 30, 1996 between the
Company and Roche Holdings Inc.
10.1 Fifth Amendment and Fourth Waiver to Credit
Agreement dated as of December 23, 1996 among the
Company, the banks named therein and Credit
Suisse (New York Branch)as Administrative Agent.
20 Press release of the Company dated December 30,
1996.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LABORATORY CORPORATION OF AMERICA HOLDINGS
------------------------------------------
(Registrant)
By: /s/ BRADFORD T. SMITH
-------------------------------------
Bradford T. Smith
Executive Vice President,
General Counsel and Secretary
Date: January 6, 1997
PROMISSORY NOTE
U.S. 187,000,000 New York, New York
December 30, 1996
FOR VALUE RECEIVED, LABORATORY CORPORATION OF AMERICA
HOLDINGS, a Delaware corporation (the "Borrower"), by this
Promissory Note hereby unconditionally promises to pay no later
than March 31, 1997 (the "Maturity Date"), to the order and for
the account of ROCHE HOLDINGS INC. (the "Lender") at a bank to be
designated by the Lender by notice to the Borrower, the principal
amount of ONE HUNDRED AND EIGHTY SEVEN MILLION DOLLARS in lawful
money of the United States of America in same day funds.
The Borrower shall pay interest in like funds on the unpaid
principal amount hereof until the unpaid principal amount under
this Note is paid in full. Interest shall accrue from the date
hereof on the outstanding principal amount of this Note at a rate
per annum equal to 6.625%. Interest shall be calculated on the
basis of a year of 360 days and the actual number of days elapsed
and shall be payable on the Maturity Date.
The Borrower shall pay interest on demand on any overdue
principal hereof or overdue interest hereon from and including the
date payment of such principal or such interest, as the case may
be, was due to but not including the day of actual payment,
calculated on a daily basis at a rate per annum which shall be
equal to the sum of (i) 2% per annum and (ii) the interest rate
applicable to this Note immediately before such amount became due.
If an Event of Default (as defined in the Credit
Agreement dated as of April 28, 1995 among the Borrower,
the banks party thereto and Credit Suisse (New York
Branch), as Administrative Agent (as the same may be
amended from time to time)) shall occur and be continuing,
then, in any such event, the Lender may by notice to the
Borrower declare this Note and all interest hereon to be
forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are
expressly waived by the Borrower; provided that in the
event of an actual or deemed entry of an order for relief
with respect to the Borrower under the Federal Bankruptcy
Code, then without any notice to the Borrower or any other
act by the Lender, this Note and all interest hereon shall
automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower.
The Borrower hereby authorizes the Lender, if and to
the extent any payment owed to the Lender is not made when
due, to charge from time to time against any or all of the
Borrower's accounts with the Lender any amount so due. The
Borrower expressly waives diligence, presentment, demand,
protest, notice of dishonor or other notice of any kind.
This Note may be prepaid in whole or in part at any time
upon three Business Days' notice.
If this Note is repaid on any day other than the
Maturity Date, the Borrower shall reimburse the Lender
within 15 days after demand for any resulting loss or
expense incurred by it, including (without limitation) any
loss incurred in obtaining, liquidating or employing
deposits from third parties, but excluding loss of margin
for the period after any such payment; provided that the
Lender shall have delivered to the Borrower a certificate
as to the amount of such loss or expense, which certificate
shall be conclusive in the absence of manifest error.
If any payment on this Note shall be due and payable
on a day which is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day and
any extended time for the payment of principal or interest
shall be included in computing interest at the rate this
Note bears in connection with such payment.
The failure of the Lender to exercise any rights
hereunder shall not constitute a waiver thereof in that or
any other instance.
Neither this Note nor any provision hereof may be
amended, modified, waived, discharged or terminated orally,
but only by a statement in writing signed by the Borrower
with the prior written consent of the Lender.
All payments made on account of principal and interest
hereof, may be recorded by the Lender and endorsed on the
grid attached hereto, which is part of this Note; provided
that the failure of the Lender to make such recordation or
endorsement, or any error therein, shall not affect the
obligations of the Borrower with respect to this Note.
As used herein, "Business Day" means any day on which
dealings in Dollar deposits are carried on in the London
interbank market and on which commercial banks are open for
domestic and foreign exchange business in London and New
York City.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
The Borrower irrevocably submits to the non-exclusive
jurisdiction of any federal or New York State court
sitting in New York City, and any appellate court from
such court, in any suit, action or proceeding arising out
of or relating to this Note, and hereby irrevocably
waives, to the fullest extent permitted by law, any
immunity from jurisdiction of any court or from any legal
process the Borrower has or may hereafter acquire with
respect to itself or its property in respect of its
obligations under this Note.
LABORATORY CORPORATION OF AMERICA
HOLDINGS
By: /s/ WESLEY R. ELINGBURG
-----------------------
WESLEY R. ELINGBURG
Title: Executive Vice President and
Chief Financial Officer
PAYMENTS OF PRINCIPAL AND INTEREST
---------------------------------------------------------------------
Unpaid
Amount of Principal Amount of Notification
Date Principal Repaid Balance Interest Paid Made By
---------------------------------------------------------------------
- --------------------------------------------------------------------------------
FIFTH AMENDMENT AND FOURTH WAIVER TO
CREDIT AGREEMENT
Dated as of December 23, 1996
Among
LABORATORY CORPORATION OF AMERICA HOLDINGS,
as Borrower,
-----------
THE BANKS NAMED HEREIN,
as Banks, and
--------
CREDIT SUISSE (NEW YORK BRANCH),
as Administrative Agent
-----------------------
- --------------------------------------------------------------------------------
FIFTH AMENDMENT AND FOURTH WAIVER TO CREDIT AGREEMENT
FIFTH AMENDMENT AND FOURTH WAIVER TO CREDIT AGREEMENT, dated as of
December 23, 1996 (this "Amendment") among LABORATORY CORPORATION OF AMERICA
HOLDINGS (formerly known as NATIONAL HEALTH LABORATORIES HOLDINGS INC.), a
Delaware corporation (the "Borrower"), the banks, financial institutions and
other institutional lenders (the "Banks") listed on the signature pages hereof,
and CREDIT SUISSE (NEW YORK BRANCH) ("CS"), as administrative agent (the
"Administrative Agent") for the Lenders hereunder.
PRELIMINARY STATEMENTS
The parties hereto (i) have entered into a Credit Agreement dated as
of April 28, 1995 (as amended, the "Credit Agreement") providing for, among
other things, the Lenders to lend to the Borrower up to $1,250,000,000 on the
terms and subject to the conditions set forth therein and (ii) desire to amend
the Credit Agreement in the manner set forth herein. Each capitalized term used
but not defined herein shall have the meaning ascribed thereto in the Credit
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
AMENDMENTS
SECTION 1.01. Amendment of Definitions. Section 1.01 of the Credit
Agreement is hereby amended as follows:
(a) by adding alphabetically the following new definition:
"'Roche Debt' means the unsecured Debt of the Borrower issued in favor
of Roche in an aggregate amount not to exceed $187 million, such Debt to (i)
rank pari passu in right of payment with the Obligations of the Borrower under
the Loan Documents, (ii) bear interest at a rate per annum equal to the
Eurodollar Rate plus 1.0% and (iii) be due and payable on March 31, 1997."
SECTION 1.02. Amendment of Negative Covenants. Section 5.02(j) of
the Credit Agreement is hereby amended as follows:
(a) by deleting the word "and" at the end of Section 5.02(j)(viii) and
by deleting the period at the end of Section 5.02(j)(ix) and by inserting in
lieu thereof ";and".
(b) by inserting the following new subsection 5.02(j)(x), to read in
its entirety as follows:
"(x) the Roche Debt; provided that at least $180 million of the
proceeds thereof is applied to pay amounts due pursuant to the settlement with
the Office of Inspector General of the U.S. Department of Health and Human
Services."
ARTICLE II
WAIVERS
SECTION 2.01. Extension of Third Waiver. The undersigned Required
Lenders hereby agree that the Third Waiver to Credit Agreement dated as of
November 4, 1996, by the Required Lenders, in favor of the Borrower (the
"Waiver"), shall remain in effect through January 31, 1997 notwithstanding the
settlement with the Office of Inspector General of the U.S. Department of
Health and Human Services referred to in Section 1.02 of the Waiver.
SECTION 2.02. Roche Debt. The undersigned Required Lenders hereby
agree as follows:
(a) the Roche Debt shall be excluded from the calculation of the
Borrower's Consolidated Debt for the Borrower's four fiscal quarters ending
December 31, 1996 and March 31, 1997 for the purpose of determining the
Borrower's compliance with the covenant set forth in Section 5.01(i) of the
Credit Agreement [Leverage Ratio].
(b) the Roche Debt shall be excluded from the calculation of the
Interest Coverage Ratio for the Borrower's four fiscal quarters ending December
31, 1996 and March 31, 1997 for the purpose of determining compliance with the
covenant set forth in Section 5.01(j) of the Credit Agreement [Interest
Coverage Ratio].
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
(b) The execution, delivery and performance by the Borrower of this
Amendment are within its corporate powers, have been duly authorized by all
necessary corporate action, and do not contravene the Borrower's charter or
by-laws.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required
for the due execution, delivery and performance by the Borrower of this
Amendment.
(d) This Amendment has been duly executed and delivered by the
Borrower. This Amendment is the legal, valid and binding obligation of the
Borrower, enforceable against the Borrower, in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforceability of creditors' rights generally
and by general principles of equity.
(e) The representations and warranties contained in Section 4.01 of
the Credit Agreement are correct in all material respects on and as of the
date hereof, as though made on and as of the date hereof.
(f) No event has occurred and is continuing which constitutes a
Default.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Governing Law. This Amendment shall be governed by,
and construed in accordance with, the laws of the State of New York, without
regard to the conflicts of law principles thereof.
SECTION 4.02. Execution in Counterparts. This Amendment may be
executed in any number of counterparts and by any combination of the parties
hereto in separate counterparts, each of which counterparts shall be an original
and all of which taken together shall constitute one and the same instrument.
Delivery of an executed counterpart of a signature page to this Amendment by
facsimile shall be effective as delivery of a manually executed counterpart of
this Amendment.
SECTION 4.03. Effect on the Credit Agreement. Upon execution and
and delivery of this Amendment and Waiver, each reference in the Credit
Agreement to "this Agreement", "hereunder", "hereof", "herein", or words of like
import shall mean and be a reference to the Credit Agreement, as amended
hereby and each reference to the Credit Agreement in any Loan Document (as
defined in the Credit Agreement) shall mean and be a reference to the Credit
Agreement, as amended hereby. Except as expressly modified hereby, all of the
terms and conditions of the Credit Agreement shall remain unaltered and in full
force and effect. This Amendment and Waiver shall become effective as of the
date first above written when counterparts hereof shall have been executed by
the Required Lenders. This Amendment and Waiver is subject to the provisions of
Section 8.01 of the Credit Agreement.
Each of the undersigned has caused this Amendment to be executed by
its respective officer or officers thereunto duly authorized, as of the date
first written above.
BORROWER: LABORATORY CORPORATION OF AMERICA
HOLDINGS
By:/s/ WESLEY R. ELINGBURG
-------------------------
Name: Wesley R. Elingburg
Title:Executive Vice President
and Chief Financial Officer
ADMINISTRATIVE
AGENT: CREDIT SUISSE (NEW YORK BRANCH),
as Administrative Agent
By:/s/ RICHARD CAREY
---------------------------------
Name: Richard Carey
Title:Member of Senior Management
and
By:/s/ KARL M. STUDER
---------------------------------
Name: Karl M. Studer
Title:Member of Senior Management
LENDERS: CREDIT SUISSE (NEW YORK BRANCH)
By:/s/ KARL M. STUDER
----------------------------------
Name: Karl M. Studer
Title: Member of Senior Management
By:/s/ DANIELA E. HESS
----------------------
Name: Daniela E. Hess
Title: Associate
BANK OF AMERICA ILLINOIS
By:
Name:
Title:
BANQUE NATIONALE DE PARIS
By:/s/ RICHARD L. STED
----------------------------
Name: Richard L. Sted
Title: Senior Vice President
By:/s/ BONNIE G. EISENSTAT
--------------------------
Name: Bonnie G. Eisenstat
Title: Vice President
BAYERISCHE LANDESBANK GIROZENTRALE
By:/s/ WILFRIED FREUDENBERGER
-------------------------------
Name: Wilfried Freudenberger
Title: Executive Vice President
and General Manager
By:/s/ PETER OBERMANN
-------------------------------
Name: Peter Obermann
Title: Senior Vice President
Manager Lending Division
THE CHASE MANHATTAN BANK
By:/s/ SCOTT S. WARD
---------------------
Name: Scott S. Ward
Title: Vice President
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
By:/s/ PASCAL POUPELLE
---------------------------
Name: Pascal Poupelle
Title: Authorized Signature
DEUTSCHE BANK AG NEW YORK BRANCH
and/or CAYMAN ISLANDS BRANCH
By:/s/ WOLF A. KLUGE
----------------------
Name: Wolf A. Kluge
Title: Vice President
By:/s/ SHERINE FANOUS
-------------------------------
Name: Sherine Fanous
Title: Assistant Vice President
FIRST UNION NATIONAL BANK
By:/s/ JOSEPH H. TOWELL
----------------------------
Name: Joseph H. Towell
Title: Senior Vice President
THE FUJI BANK, LTD. (NEW YORK BRANCH)
By:/s/ MASANOBU KOBAYASHI
------------------------------
Name: Masanobu Kobayashi
Title: Vice President & Manager
NATIONSBANK, N.A.
By:
Name:
Title:
SOCIETE GENERALE
By:/s/ R. CUENE-GRANDIDIER
--------------------------
Name: R. Cuene-Grandidier
Title: Vice President
By:/s/ GEORG L. PETERS
-----------------------
Name: Georg L. Peters
Title: Vice President
SUMITOMO BANK
By:/s/ SURESH S. TATA
----------------------------
Name: Suresh S. Tata
Title: Senior Vice President
SWISS BANK CORPORATION
By:/s/ MICHAEL A. DRISCOLL
----------------------------------
Name: Michael A. Driscoll
Title: Director Corporate Clients
Switzerland
By:/s/ JORG RAUTHE
--------------------------
Name: Jorg Rauthe
Title: Associate Director
Corporate Clients
Switzerland
WACHOVIA BANK OF GEORGIA, N.A.
By:/s/ JAMES C. RATCLIFF JR.
----------------------------
Name: James C. Ratcliff Jr.
Title: Vice President
WESTDEUTSCHE LANDESBANK
By:/s/ ALAN S. BOOKSPAN
-----------------------
Name: Alan S. Bookspan
Title: Vice President
By:/s/ CATHERINE ROHLAND
------------------------
Name: Catherine Rohland
Title: Vice President
COMMERZBANK AKTIENGESELLSCHAFT,
Atlanta Agency
By:/s/ H. YERGEY
----------------------
Name: H. Yergey
Title: Vice President
By:/s/ E. KAGERER
----------------------
Name: E. Kagerer
Title: Vice President
BANK BRUSSELS LAMBERT,
New York Branch
By:/s/ JURGEN RIGTERINK
------------------------
Name: Jurgen Rigterink
Title: Vice President
By:/s/ DOMINICK H.J. VANGAEVER
-------------------------------
Name: Dominick H.J. Vangaever
Title: Senior Vice President
Credit
FOR IMMEDIATE RELEASE Contact: Pamela Sherry
Telephone: (910)584-5171
Ext. 6768
LABORATORY CORPORATION OF AMERICA-TM- OBTAINS
$187 MILLION LOAN AND EXTENSION
TO JANUARY 31, 1997 OF BANK CREDIT WAIVER
BURLINGTON, NC, DECEMBER 30, 1996 -- Laboratory Corporation of America-TM-
Holdings (LabCorp-TM-) (NYSE: LH) today announced that it has obtained a loan of
$187 million from an affiliate of Roche Holding Ltd, which also controls the
Company's principal stockholder. The loan, which was made on terms approved by
the Company's independent directors, is an interim step in the Company's
previously announced intention of recapitalizing its balance sheet. The Company
intends to use the loan proceeds to pay the previously announced settlement with
the U.S. government to conclude federal investigations related to prior billing
practices of companies that merged to form LabCorp in 1995.
LabCorp has also obtained an extension to January 31, 1997, of the existing
waiver of certain covenants in its bank credit agreement.
Although the Company is still considering a range of alternatives for
recapitalizing its balance sheet, the Company believes that any successful
recapitalization plan will also require it to raise additional equity. There
can, however, be no assurance that the Company will be able to successfully
complete any proposed recapitalization plan.
Laboratory Corporation of America-TM- Holdings (LabCorp-TM-) is a national
clinical laboratory organization with estimated annualized revenues of $1.6
billion. The Company operates primary testing facilities nationally, offering
more than 1,700 different clinical assays, from routine blood analysis to more
sophisticated technologies. LabCorp performs diagnostic tests for physicians,
managed care organizations, hospitals, clinics, long-term care facilities,
industrial companies and other clinical laboratories.
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