Form 8-K ALERE INC. For: Apr 22

ALERE INC.

Delaware		1-16789		04-3565120
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

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On April 22, 2016 (the “First Amendment Effective Date”), Alere Inc. (the “Company” or “Alere”) entered into a First Amendment, dated as of April 22, 2016, (as amended or otherwise modified from time to time, the “First Amendment”) among the Company, certain subsidiaries of the Company, the several lenders from time to time party thereto, Goldman Sachs Bank USA, as B term loan administrative agent (the “TLB Agent”), Healthcare Financial Solutions, LLC (formerly known as General Electric Capital Corporation), as pro rata administrative agent (the “Pro Rata Agent”, and together with the TLB Agent, the “Administrative Agents”) to the secured Credit Agreement, dated as of June 18, 2015 (as amended or otherwise modified from time to time, the “Credit Agreement”), among the Company, the several lenders from time to time party thereto, the Administrative Agents and certain other agents and arrangers.

On February 26, 2016, the Company filed a Form 12b-25 disclosing that the Company would be unable to file its Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (the “2015 Form 10-K”) within the prescribed time period without unreasonable effort or expense.  On March 15, 2016, the Company filed a Form 8-K disclosing that the Company would be unable to file its 2015 Form 10-K by March 15, 2016 (the extension period provided under Rule 12b-25) because it is continuing to conduct an analysis of certain aspects of the timing of revenue recognition, more specifically, revenue cutoff, in Africa and China for the years ended December 31, 2013, 2014 and 2015 (and each of the quarters in those annual periods) and that the Company will not be able to file its 2015 Form 10-K until this analysis is completed.  The Company will file the 2015 Form 10-K as soon as practicable.

Pursuant to the First Amendment, the requisite lenders under the Credit Agreement party to the First Amendment (such lenders, the “Consenting Lenders”) have agreed to (i) waive certain Defaults and Events of Defaults (each as defined in the Credit Agreement) that may have occurred, is occurring or hereafter occur, resulting from, among other things, (x) failure to deliver to the Administrative Agents the financial statements and the related deliverables for the fiscal year ended December 31, 2015, by the applicable deadline under the Credit Agreement, (y) any restatement of certain financial statements as a result of the Company’s incorrect application of revenue recognition principles for the years ended December 31, 2013, 2014 and 2015, and (z) any breach of any representation or affirmative covenant as a result of certain deliverables delivered being incorrect that is discovered as part of the audit of the 2015 Form 10-K to the extent that such breach is due to the Company’s incorrect application of revenue recognition principles for the years ended December 31, 2013, 2014 and 2015 and (ii) extend the deadlines for delivery of the financial statements for the fiscal year ended December 31, 2015, the financial statements for the fiscal quarter ended March 31, 2016 and certain related deliverables (collectively, the “Financial Reports”) as described below.  In connection with the First Amendment, the Company has agreed to pay, among other fees and expenses, to the Consenting Lenders an initial consent fee of 0.125% of the sum of such lender’s (i) aggregate principal amount of its Term Loans outstanding and (ii) Revolving Credit Commitment (each as defined in the Credit Agreement).

 

 

Cautionary Statement Regarding Forward-Looking Statements

This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Readers can identify these statements by forward-looking words such as “may,” “could,” “should,” “would,” “intend,” “will,” “expect,” “anticipate,” “believe,” “estimate,” “continue” or similar words. A number of important factors could cause actual results of Alere and its subsidiaries to differ materially from those indicated by such forward-looking statements.  These factors include, but are not limited to, (i) the risk that the proposed merger with Abbott Laboratories (“Abbott”) may not be completed in a timely manner or at all; (ii) the failure to receive, on a timely basis or otherwise, the required approval of the proposed merger with Abbott by Alere’s stockholders; (iii) the possibility that competing offers or acquisition proposals for Alere will be made; (iv) the possibility that any or all of the various conditions to the consummation of the merger may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals); (v) the occurrence of any event, change or other circumstance that could give rise to the termination of the Agreement and Plan of Merger, dated as of January 30, 2016, by and among Abbott and the Company (the “Merger Agreement”), including in circumstances which would require Alere to pay a termination fee or other expenses; (vi) the effect of the announcement or pendency of the transactions contemplated by the Merger Agreement on Alere’s ability to retain and hire key personnel, its ability to maintain relationships with its customers, suppliers and others with whom it does business, or its operating results and business generally; (vii) risks related to diverting management’s attention from Alere’s ongoing business operations; (viii) the risk that stockholder litigation in connection with the transactions contemplated by the Merger Agreement may result in significant costs of defense, indemnification and liability, (ix) the risk that Alere’s analysis of certain aspects of the timing of revenue recognition is not completed in a timely manner, (x) the risk that a failure by Alere to file its Form 10-K for the fiscal year ended December 31, 2015 in a timely manner could lead to the acceleration of the maturity of certain of Alere’s indebtedness, (xi) the possibility that the analysis discussed above uncovers an error or errors in revenue recognition which require adjustment which may be material, or material weaknesses in the Company’s internal controls over financial reporting, (xii) risks relating to the ongoing investigations by the SEC and the United States Department of Justice, (xiii) the risk that these or other risk factors impact the expected timing of the filing of the Form 10-K for the fiscal year ended December 31, 2015, and (xiv) the risk factors detailed in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 2014 (as filed with the Securities and Exchange Commission on March 5, 2015, as amended on April 30, 2015, May 28, 2015 and November 13, 2015) and other risk factors identified herein or from time to time in our periodic filings with the Securities and Exchange Commission. Readers should carefully review these risk factors, and should not place undue reliance on our forward-looking statements.  These forward-looking statements are based on information, plans and estimates at the date of this report. We undertake no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

 

 

 

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 hereunto duly authorized.

 

	ALERE INC.
Date:  April 28, 2016	By:	/s/ Douglas Barry
		Name: Douglas Barry
		Title: Associate General Counsel

 

 

EXHIBIT INDEX

 

 

EXHIBIT NO.		DESCRIPTION
10.1		First Amendment, dated as of April 22, 2016, among the Company, certain subsidiaries of the Company, the several lenders from time to time party thereto, Goldman Sachs Bank USA as B term loan administrative agent, Healthcare Financial Solutions, LLC, as pro rata administrative agent, to the secured Credit Agreement, dated as of June 18, 2015, among the Company, the several lenders from time to time party thereto, the Administrative Agents and certain other agents and arrangers.

 

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THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “First Amendment”), dated as of April 22, 2016, among ALERE INC., a Delaware corporation (the “Borrower”), each of the Guarantors (as defined in the Credit Agreement referred to below) party hereto, the Lenders (as defined in the Credit Agreement referred to below) party hereto, GOLDMAN SACHS BANK USA, as the B Term Loan Administrative Agent (as defined in the Credit Agreement referred to below), and HEALTHCARE FINANCIAL SOLUTIONS, LLC, as the Pro Rata Administrative Agent (as defined in the Credit Agreement referred to below), is made with reference to that certain Credit Agreement, dated as of June 18, 2015 (as amended, modified or supplemented through, but not including, the date hereof, the “Credit Agreement”), by and among the Borrower, the Lenders, the Administrative Agents (as defined in the Credit Agreement referred to below) and the other parties thereto.  Unless otherwise indicated, all capitalized terms used herein and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Credit Agreement.

W I T N E S S E T H:

WHEREAS, the Borrower, the Administrative Agents and each Lender party hereto desire to amend the Credit Agreement and to waive certain Defaults thereunder, in each case as provided herein;

NOW, THEREFORE, it is agreed:

“In the event that the date of delivery of the Specified Financial Statements is extended to a date that is July 1, 2016 or later in accordance with this Agreement, each of the interest rate margins set forth above in this definition shall be increased by 0.25% for the period from July 1, 2016 to, but not including, the Financial Statement Delivery Date.”

 

“First Amendment Consenting Lender” means any Lender that has delivered to its Applicable Administrative Agent (or its counsel) an executed counterpart of the First Amendment on or prior to 4:00 p.m., New York City time, on April 21, 2016.

“Existing 2018 Senior Notes Trustee Notice” has the meaning specified in Section 6.1(b).

 

 

“Extension Fee” means, in respect of any First Amendment Consenting Lender, an amount payable in Dollars equal to 0.125% of the sum of (I) the aggregate principal amount of such Lender’s outstanding Term Loans on the First Amendment Effective Date and (II) the amount of such Lender’s Revolving Credit Commitment on the First Amendment Effective Date (it being understood and agreed that, to the extent any such First Amendment Consenting Lender has assigned all or a portion of its outstanding Term Loans and/or Revolving Credit Commitment after the First Amendment Effective Date, the Applicable Administrative Agent shall, notwithstanding anything to the contrary in the Applicable Assignment, still pay the full amount of such Extension Fee to such assigning Lender and, to the extent that all or any portion of any such Extension Fee is to be shared with any assignee of such assigning Lender, such arrangement shall be separately set forth in the applicable Assignment and such payment shall be made directly by such assigning Lender to such assignee Lender).

“Financial Statement Delivery Date” means the date on which the Borrower shall have delivered all Specified Financial Statements then due to be delivered under this Agreement.

“First Amendment” means the First Amendment dated, as of April 22, 2016, to this Agreement.

“First Amendment Effective Date” means April 22, 2016.

“Notes Waiver” has the meaning specified in Section 6.1(b).

“Specified Audited Financial Statements” has the meaning specified in Section 6.1(b).

“Specified Financial Statements” means the Specified Audited Financial Statements and the Specified Unaudited Financial Statements.

“Specified Unaudited Financial Statements” has the meaning specified in Section 6.1(a).

“ ; provided, however, with respect to the Fiscal Quarter ended March 31, 2016, the foregoing quarterly financial statements (such quarterly financial statements for the Fiscal Quarter ended March 31, 2016 being herein referred to as the “Specified Unaudited Financial Statements”) do not have to be delivered by the Borrower to the Administrative Agents until the earliest of (i) June 30, 2016, (ii) to the extent that the trustee for any of the Existing 2018 Senior Notes, the Existing 2020 Subordinated Notes and/or the New 2023 Subordinated Notes has delivered a notice to the Borrower in accordance with the Existing 2018 Senior Notes Indenture, the Existing 2020 Subordinated Notes Indenture and/or the New 2023 Subordinated Notes Indenture (as applicable), in any such case, relating to the Borrower’s failure to timely deliver the Specified Unaudited Financial Statements pursuant to the terms of any such indenture, the date that is seven days prior to the date that any default would become an event of default under the Existing 2018 Senior Notes Indenture, the Existing 2020 Subordinated Notes Indenture and/or the New 2023 Subordinated Notes Indenture as a result of the Borrower’s failure to timely deliver such Specified Unaudited Financial Statements unless the requisite percentage of holders of the Existing 2018 Senior Notes, the Existing 2020 Subordinated Notes and/or the New 2023 Subordinated Notes, as applicable, have consented in writing to an extension for the delivery by the Borrower of such Specified Unaudited Financial Statements pursuant to the terms of the applicable indentures until no earlier than July 7, 2016 and have waived any default or event of default that has arisen from such Specified Unaudited Financial Statements not being timely delivered in accordance with the terms of the applicable indentures, (iii) the date that is 10 Business Days after the Borrower’s delivery to the Administrative Agents pursuant to Section 6.1(b) of the Specified Audited Financial Statements and (iv) the occurrence of any Event of Default unless such Event of Default occurs on or prior to May 15, 2016 ; and, provided further, however, if (x) the Borrower shall have paid to the Administrative Agents on or prior to June 30, 2016, for the benefit of each First Amendment Consenting Lender, the amount of each such Lender’s Extension Fee (which fee shall not be required to be paid more than once under Sections 6.1(a) and 6.1(b)) and (y) to the extent that the trustee for any of the Existing 2018 Senior Notes, the Existing 2020 Subordinated Notes and/or the New 2023 Subordinated Notes has delivered a notice to the Borrower in accordance with the Existing 2018 Senior Notes Indenture, the Existing 2020 Subordinated Notes Indenture and/or the New 2023 Subordinated Notes Indenture (as applicable), the requisite percentage of holders of such outstanding Existing 2018 Senior Notes, Existing 2020 Subordinated Notes and/or New 2023 Subordinated Notes, as applicable, have consented in writing to an extension for the delivery of such Specified Unaudited Financial Statements pursuant to the applicable indenture governing the respective notes until no earlier than July 8, 2016 and have waived any default or event of default that has arisen from such Specified Unaudited Financial Statements not being timely delivered in accordance with the terms of the Existing 2018 Senior Notes Indenture, the Existing 2020 Subordinated Notes Indenture and/or the New 2023 Subordinated Notes Indenture, as applicable, then the date of delivery of the foregoing Specified Unaudited Financial Statements specified in clauses (i) and (ii) above shall be extended to the earlier of (x) the date that is seven days prior to the earliest date that failure to deliver the Specified Unaudited Financial Statements under (or in respect of) the Existing 2018 Senior Notes, the Existing 2020 Subordinated Notes and/or the New 2023 Subordinated Notes would become an Event of Default under the relevant indenture (as described in Section 6.01(3) of such indenture) and (y) August 18, 2016.

Notwithstanding anything to the contrary contained herein, to the extent that the Specified Unaudited Financial Statements have not been delivered to the Administrative Agents by May 15, 2016, then the Borrower shall deliver to the Administrative Agents by no later than May 31, 2016 a preliminary unaudited Consolidated balance sheet of the Borrower as of the end of the Fiscal Quarter ended March 31, 2016 and related preliminary unaudited Consolidated statements of profit and loss and cash flow for such Fiscal Year; it being agreed that the Borrower makes no representation or warranty with respect any such preliminary financial statements.”

“ ; provided, however, with respect to the Fiscal Year ended December 31, 2015, the foregoing audited financial statements (and related certification by the Group Members’ Accountants) (such audited financial statements and related certification for the Fiscal Year ended December 31, 2015 being herein referred to as the “Specified Audited Financial Statements”) do not have to be delivered by the Borrower to the Administrative Agents until the earliest of (i) June 30, 2016, (ii) May 16, 2016 unless the requisite percentage of holders of each of the outstanding Existing 2020 Subordinated Notes and New 2023 Subordinated Notes have, in each case, consented in writing to an extension for the delivery by the Borrower of the Specified Audited Financial Statements pursuant to the applicable indentures until no earlier than July 7, 2016 and, in each case, have waived any default or event of default that has arisen from such Specified Audited Financial Statements not being timely delivered in accordance with the respective terms of the Existing 2020 Subordinated Notes Indenture and New 2023 Subordinated Notes Indenture (the “Notes Waiver”), (iii) to the extent that the trustee for the Existing 2018 Senior Notes has delivered a notice to the Borrower in accordance with the Existing 2018 Senior Notes Indenture relating to the Borrower’s failure to timely deliver the Specified Audited Financial Statements pursuant to the Existing 2018 Senior Notes Indenture (an “Existing 2018 Senior Notes Trustee Notice”), the date that is seven days prior to the date that any default would become an event of default under the Existing 2018 Senior Notes Indenture as a result of the Borrower’s failure to timely deliver such Specified Audited Financial Statements pursuant to the Existing 2018 Senior Notes Indenture unless the requisite percentage of holders of the Existing 2018 Senior Notes have consented in writing to an extension for the delivery by the Borrower of such Specified Audited Financial Statements pursuant to the Existing 2018 Senior Notes Indenture until no earlier than July 7, 2016 and have waived any default or event of default that has arisen from such Specified Audited Financial Statements not being timely delivered in accordance with the terms of the Existing 2018 Senior Notes Indenture and (iv) the occurrence of any Event of Default; and, provided further, however, if (x) the Borrower shall have paid to the Administrative Agents on or prior to June 30, 2016, for the benefit of each First Amendment Consenting Lender, the amount of each such Lender’s Extension Fee (which fee shall not be required to be paid more than once under Sections 6.1(a) and 6.1(b)), (y) the requisite percentage of holders of each of the outstanding Existing 2020 Subordinated Notes and New 2023 Subordinated Notes have, in each case, consented in writing to an extension for the delivery of the Specified Audited Financial Statements pursuant to the applicable indentures until no earlier than July 8, 2016 and, in each case, have provided the Notes Waiver and (z) to the extent that the trustee for the Existing 2018 Senior Notes has delivered an Existing 2018 Senior Notes Notice, the requisite percentage of holders of the Existing 2018 Senior Notes have consented in writing to an extension for the delivery of such Specified Audited Financial Statements pursuant to such Existing 2018 Senior Notes Indenture until no earlier than July 8, 2016 and have waived any default or event of default that has arisen from such Specified Audited Financial Statements not being timely delivered in accordance with the terms of the Existing 2018 Senior Notes Indenture, then the date of delivery of the Specified Audited Financial Statements specified in clauses (i), (ii) and (iii) above shall be extended to the earlier of (x) the date that is seven days prior to the earliest date that failure to deliver the Specified Audited Financial Statements under (or in respect of) the Existing 2018 Senior Notes, the Existing 2020 Subordinated Notes and/or the New 2023 Subordinated Notes would become an Event of Default under the relevant indenture (as described in Section 6.01(3) of such indenture) and (y) August 18, 2016.”

Upon the satisfaction of the conditions precedent set forth in  Section III.5 hereof, and in reliance upon the representations and warranties of the Loan Parties set forth in the Credit Agreement and in this First Amendment, the Lenders hereby waive any Defaults and/or Events of Default that may have occurred, is occurring or hereafter occur solely as a result of (i) the Borrower’s failure to deliver the audited Consolidated financial statements for the Fiscal Year ended December 31, 2015 pursuant to Section 6.1(b) of the Credit Agreement by no later than 90 days after the end of such Fiscal Year, together with the corresponding Compliance Certificate pursuant to Section 6.1(c) of the Credit Agreement and the related information pursuant to Sections 6.1(d), 6.1(f), 6.1(g) and 6.1(h) of the Credit Agreement, (ii) any restatement of any of the Borrower’s financial statements delivered to any Person prior to December 31, 2015 that may be required as a result of or in connection with the audit of the Specified Audited Financial Statements as a result of the Borrower’s incorrect application of revenue recognition principles for the years ended December 31, 2013, 2014 and 2015 (and each of the quarters in those annual periods) or (iii) any breach of any representation or warranty or affirmative covenant as a result of any misstatement or inaccuracy in any certificate, projection, management’s discussion and analysis, report, opinion or statement (including any financial statement) delivered to any Person that is discovered as part of or in connection with the audit of the Specified Audited Financial Statements to the extent that such breach is due to the Borrower’s incorrect application of revenue recognition principles for the years ended December 31, 2013, 2014 and 2015 (and each of the quarters in those annual periods) (the Defaults and/or Events of Default referred to in preceding clauses (i), (ii) and (iii), collectively, the “Specified Defaults”). The waiver contained in this Section II is limited as specified herein and (i) shall only be relied upon and used for the specific purpose set forth herein, (ii) shall not constitute nor be deemed to constitute a waiver of (x) any other Default or Event of Default or (y) any other term or condition of the Credit Agreement or the other Loan Documents, (iii) shall not constitute nor be deemed to constitute a consent by either Administrative Agent or the Lenders to anything other than the specific purpose set forth herein and (iv) shall not constitute a custom or course of dealing among the parties hereto.  The Borrower hereby acknowledges and agrees that, notwithstanding anything contained in the Credit Agreement or any of the other Loan Documents to the contrary, the failure by the Borrower to deliver (x) audited Consolidated financial statements for the Fiscal Year ended December 31, 2015 pursuant to Section 6.1(b) of the Credit Agreement, as amended by this First Amendment (the “Amended Credit Agreement”), together with the corresponding Compliance Certificate pursuant to Section 6.1(c) of the Amended Credit Agreement and the related information pursuant to Section 6.1(f) of the Amended Credit Agreement on or before the respective deadlines set forth in the provisos in Section 6.1(b) of the Amended Credit Agreement and (y) unaudited Consolidated financial statements for the Fiscal Quarter ended March 31, 2016 pursuant to Section 6.1(a) of the Amended Credit Agreement, shall constitute (in each case) an immediate Event of Default under the Credit Agreement without the need for any further notice by either Administrative Agent or the expiration of any additional grace periods.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this First Amendment as of the date first above written.

 

	ALERE INC.
	By:	/s/ James F. Hinrichs
		Name:  James F. Hinrichs
		Title:    Executive Vice President and CFO

 

 

[Signature Page to Alere First Amendment]

 

¹  Signature pages for Required Lenders on file with the Administrative Agents.

² If second signature line is required.

 

[Signature Page to Alere First Amendment]

 

 ACKNOWLEDGED AND AGREED:

ALERE CONNECT, LLC

ALERE HOLDCO, INC.

ALERE HOME MONITORING, INC.

ALERE INFORMATICS, INC.

ALERE INTERNATIONAL HOLDING CORP.

ALERE NORTH AMERICA, LLC

ALERE SAN DIEGO, INC.

ALERE SCARBOROUGH, INC.

ALERE TOXICOLOGY SERVICES, INC.

ALERE TOXICOLOGY, INC.

ALERE US HOLDINGS, LLC

AMEDITECH INC.

ATS LABORATORIES, INC.

AVEE LABORATORIES INC.

BIOSITE INCORPORATED

ESCREEN, INC.

GLOBAL ANALYTICAL DEVELOPMENT LLC

INNOVACON, INC.

INSTANT TECH SUBSIDIARY ACQUISITION INC.

INSTANT TECHNOLOGIES, INC.

IONIAN TECHNOLOGIES, LLC

LABORATORY SPECIALISTS OF AMERICA, INC.

PEMBROOKE OCCUPATIONAL HEALTH, INC.

QUALITY ASSURED SERVICES, INC.

REDWOOD TOXICOLOGY LABORATORY, INC.

RTL HOLDINGS, INC.

SELFCARE TECHNOLOGY, INC.

STANDING STONE, LLC

 

 ACKNOWLEDGED AND AGREED:

FIRST CHECK DIAGNOSTICS, LLC

INVERNESS MEDICAL, LLC

SPDH, INC.

 

[Signature Page to Alere First Amendment]