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
March 7, 2013
Date of Report (Date of earliest event reported)
Annies, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 001-35470 | 20-1266625 | ||
(State or other jurisdiction of incorporation or organization) |
(Commission File No.) |
(I.R.S. employer identification number) |
1610 Fifth Street
Berkeley, CA 94710
(Address of principal executive offices, including zip code)
(510) 558-7500
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement
On March 7, 2013, Annies, Inc. (the Company) entered into an Amendment No. 1 (the Amendment) to the Second Amended and Restated Loan Agreement dated as of December 21, 2011 (as amended, the Credit Facility) with the Bank of America, N.A. as lender. The Amendment provides for, among other things, an increase in the Companys line of credit to $40.0 million and extension of the term through August 2016. The Company may select from three interest rate options for borrowings under the Credit Facility: (i) LIBOR (as defined in the Credit Facility) plus 1.25%, (ii) IBOR (as defined in the Credit Facility) plus 1.25% or (iii) Prime Rate (as defined in the Credit Facility). The Company is required to pay a commitment fee on the unused Credit Facility commitments if the outstanding balance is less than half the commitment at an annual rate of between 0.25% to 0.40%, tiered depending on the Companys utilization rate. The Amendment includes restrictions on, among other things, the Companys ability to incur additional indebtedness, pay dividends or make other distributions and make investments and loans. The Amendment also limits the Companys ability to make capital expenditures in excess of $15.0 million. The Amendment requires that the Company maintain a Funded Debt (as defined in the Amendment) to Adjusted EBITDA (as defined in the Amendment) ratio of not less than 2.75 to 1.0 and a minimum Net Worth (as defined in the Amendment) equal to at least $50.0 million, plus 30% of earnings after taxes earned each quarter (if positive), beginning with the June 2013 quarterly earnings.
In connection with the Amendment, the Company also entered into a Reaffirmation of Amended and Restated Security Agreement (the Reaffirmation) to reaffirm the security under the Credit Facility.
The foregoing summary of the material terms of the Amendment and the Reaffirmation is qualified in its entirety by the Amendment and the Reaffirmation, which are attached as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
Exhibit Number |
Description | |
10.1 | Amendment No. 1 to the Second Amended and Restated Loan Agreement dated as of March 7, 2013 between Bank of America, N.A. and the Company. | |
10.2 | Reaffirmation of Amended and Restated Security Agreement dated as of March 7, 2013 between Bank of America, N.A. and the Company. |
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.
Annies, Inc. | ||||||
Date: March 8, 2013 | By: | /s/ Kelly J. Kennedy | ||||
Kelly J. Kennedy | ||||||
Chief Financial Officer |
EXHIBIT INDEX
Exhibit Number |
Description | |
10.1 | Amendment No. 1 to the Second Amended and Restated Loan Agreement dated as of March 7, 2013 between Bank of America, N.A. and the Company. | |
10.2 | Reaffirmation of Amended and Restated Security Agreement dated as of March 7, 2013 between Bank of America, N.A. and the Company. |
Exhibit 10.1
AMENDMENT NO. 1 TO SECOND AMENDED AND RESTATED LOAN AGREEMENT
This Amendment No. 1 (the Amendment) dated as of March 7, 2013, is between Bank of America, N.A. (the Bank) and ANNIES INC., a Delaware corporation, formerly known as Homegrown Naturals, Inc., which is qualified to do business in the State of California as Homegrown Naturals, ANNIES ENTERPRISES, INC., a Vermont corporation, which is qualified to do business in the State of California as Annies Naturals, ANNIES HOMEGROWN, INC., a Delaware corporation, and NAPA VALLEY KITCHENS, a California corporation (individually and collectively, the Borrower).
RECITALS
A. The Bank and the Borrower entered into a certain Second Amended and Restated Loan Agreement dated as of December 21, 2011 (together with any previous amendments, the Agreement).
B. The Bank and the Borrower desire to amend the Agreement.
AGREEMENT
1. Definitions. Capitalized terms used but not defined in this Amendment shall have the meaning given to them in the Agreement.
2. Amendments. The Agreement is hereby amended as follows:
2.1 In Paragraph 1.1(a), the amount Twenty Million U.S. Dollars ($20,000,000) is changed to Forty Million U.S. Dollars ($40,000,000).
2.2 In Paragraph 1.2, the date August 1, 2014 is changed to August 1, 2016.
2.3 In Paragraph 1.4(a), the amount 1.50 percentage point(s) is changed to 1.25 percentage point(s).
2.4 In Paragraph 1.5(a), the amount 1.50 percentage point(s) is changed to 1.25 percentage point(s).
2.5 In Paragraph 1.5(b), the amount 1.50 percentage point(s) is changed to 1.25 percentage point(s).
2.6 Paragraph 3.1(a) is hereby amended to read in its entirety as follows:
Unused Commitment Fee. Beginning on March 7, 2013, and on the last day of each following quarter until the expiration of the availability period, the Borrower agrees to pay a fee based on the difference between the Facility No. 1 Commitment and the amount of credit it actually uses, determined by the weighted average of credit outstanding during the quarter ending on such payment date. The fee will be calculated and assessed quarterly, as follows:
Utilization Rate |
Annual Percentage Rate | |||
Less than 10% |
0.40 | % | ||
Greater than or equal to 10% but less than 25% |
0.35 | % | ||
Greater than or equal to 25% but less than 40% |
0.30 | % | ||
Greater than or equal to 40% but less than or equal to 50% |
0.25 | % |
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If the amount of principal outstanding at the close of a quarter exceeds half of the Facility No. 1 Commitment, then no fee is due.
2.7 In Paragraph 7.8, the amount Five Million U.S. Dollars (U.S. $5,000,000) is changed to Ten Million U.S. Dollars (U.S. $10,000,000).
2.8 Paragraph 8.1 is hereby amended to read in its entirety as follows:
Use of Proceeds.
To use the proceeds of Facility No. 1 only for general business purposes, including acquisitions and share repurchases.
2.9 Paragraph 8.3 is hereby amended to read in its entirety as follows:
Funded Debt to Adjusted EBITDA Ratio.
To maintain on a consolidated basis a ratio of Funded Debt to Adjusted EBITDA not exceeding 2.75:1.00.
Funded Debt means all outstanding liabilities for borrowed money and other interest-bearing liabilities, including current and long term debt, less the non-current portion of Subordinated Liabilities.
Adjusted EBITDA means net income, less income or plus loss from discontinued operations and extraordinary items, plus income taxes, plus interest expense, plus depreciation, depletion, and amortization, adjusted for non-cash expense for equity compensation recorded in accordance with SFAS 123(R), goodwill impairment, non-cash asset write downs, and product recall expenses up to $5,000,000 associated with Borrowers January 22, 2013 announced product recall. This ratio will be calculated at the end of each reporting period for which the Bank requires financial statements, using the results of the twelve-month period ending with that reporting period.
Subordinated Liabilities means liabilities subordinated to the Borrowers obligations to the Bank in a manner acceptable to the Bank in its sole discretion.
2.10 Paragraph 8.4 is hereby amended to read in its entirety as follows:
Net Worth.
To maintain net worth equal to at least Fifty Million Dollars ($50,000,000), plus thirty percent (30%) of earnings after taxes earned each quarter (if positive), beginning with the quarter ending June 30, 2013.
Net Worth means the gross fair market value of total assets, including goodwill but excluding all other intangibles, less total liabilities, excluding product recall expenses up to $5,000,000 associated with Borrowers January 22, 2013 announced product recall.
2.11 Paragraph 8.5 is hereby amended to read in its entirety as follows:
Capital Expenditures.
Not to spend or incur obligations (including the total amount of any capital leases) to acquire fixed assets for more than Fifteen Million Dollars ($15,000,000) during the period commencing on April 1, 2013 and ending on March 31, 2016 on a consolidated basis.
2.12 Paragraph 8.6 is hereby amended to read in its entirety as follows:
Dividends and Distributions.
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Not to declare or pay any dividends (except dividends paid in capital stock), redemptions of stock or membership interests, distributions and withdrawals (as applicable) to its owners. Notwithstanding the forgoing, the Borrower may declare and pay a dividend, redeem stock of membership interests, make distributions and withdrawals (as applicable) to its owners if the Borrower is in compliance with this Loan Agreement when such dividend, redemption, distribution or withdrawal if effected and the Borrower will remain in compliance with this Loan Agreement after giving full effect to such dividend, redemption, distribution or withdrawal.
2.13 In Paragraph 8.8(e), the amount Five Million U.S. Dollars (U.S. $5,000,000) is changed to Ten Million U.S. Dollars (U.S. $10,000,000).
2.14 In Paragraph 8.8(f), the amount Five Million U.S. Dollars (U.S. $5,000,000) is changed to Ten Million U.S. Dollars (U.S. $10,000,000).
2.15 Paragraph 8.8(g) is hereby deleted in its entirety.
2.16 In Paragraph 8.14(b), the amount Fifteen Million U.S. Dollars (U.S. $15,000,000) is changed to Thirty Million U.S. Dollars (U.S. $30,000,000).
3. Representations and Warranties. When the Borrower signs this Amendment, the Borrower represents and warrants to the Bank that: (a) there is no event which is, or with notice or lapse of time or both would be, a default under the Agreement except those events, if any, that have been disclosed in writing to the Bank or waived in writing by the Bank, (b) the representations and warranties in the Agreement are true as of the date of this Amendment as if made on the date of this Amendment, (c) this Amendment does not conflict with any law, agreement, or obligation by which the Borrower is bound, and (d) if the Borrower is a business entity or a trust, this Amendment is within the Borrowers powers, has been duly authorized, and does not conflict with any of the Borrowers organizational papers.
4. Conditions. This Amendment will be effective when the Bank receives the following items, in form and content acceptable to the Bank:
4.1 If the Borrower or any guarantor is anything other than a natural person, evidence that the execution, delivery and performance by the Borrower and/or such guarantor of this Amendment and any instrument or agreement required under this Amendment have been duly authorized.
4.2 Payment by the Borrower of all costs, expenses and attorneys fees (including allocated costs for in-house legal services) incurred by the Bank in connection with this Amendment.
4.4 Reaffirmation of the Amended and Restated Security Agreement.
5. Effect of Amendment. Except as provided in this Amendment, all of the terms and conditions of the Agreement, including but not limited to the Dispute Resolution Provision, shall remain in full force and effect.
6. Counterparts. This Amendment may be executed in counterparts, each of which when so executed shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.
7. FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS DOCUMENT REPRESENTS THE FINAL AGREEMENT BETWEEN PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF, (B) THIS DOCUMENT SUPERSEDES ANY COMMITMENT LETTER, TERM SHEET OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS RELATING TO THE SUBJECT MATTER HEREOF, UNLESS SUCH COMMITMENT LETTER, TERM SHEET OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS EXPRESSLY PROVIDES TO THE CONTRARY, (C) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (D) THIS DOCUMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
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AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.
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This Amendment is executed as of the date stated at the beginning of this Amendment.
BANK OF AMERICA, N.A. | ||||||
By: | /s/ Thomas K. McComas | |||||
Name: | Thomas K. McComas | |||||
Title: | Senior Vice President |
Address where notices to the Bank are to be sent: | ||||||
Farmington-Notice Desk | ||||||
CT2-515-BB-03 | ||||||
70 Batterson Park Road | ||||||
Farmington, CT 06032 | ||||||
Telephone: |
| |||||
Facsimile: |
|
Address where notices to the Borrower are to be sent: | ANNIES, INC., a Delaware corporation | |||||
ANNIES, INC. | ||||||
1610 Fifth Street | ||||||
Berkeley, CA 94710 | By: | /s/ Kelly J. Kennedy | ||||
Phone:510-558-7500 | Name: | Kelly J. Kennedy | ||||
Fax: 510-558-6072 | Title: | Chief Financial Officer | ||||
Address where notices to the Borrower are to be sent: | ANNIES ENTERPRISES, INC., a Vermont corporation | |||||
ANNIES ENTERPRISES, INC., | ||||||
c/o ANNIES, INC. | ||||||
1610 Fifth Street | By: | /s/ Kelly J. Kennedy | ||||
Berkeley, CA 94710 | Name: | Kelly J. Kennedy | ||||
Phone: 510-558-7500 | Title: | Treasurer | ||||
Fax: 510-558-6072 | ||||||
Address where notices to the Borrower are to be sent: | ANNIES HOMEGROWN, INC., a Delaware corporation | |||||
ANNIES HOMEGROWN, INC. | ||||||
c/o ANNIES, INC. | ||||||
1610 Fifth Street | ||||||
Berkeley, CA 94710 | By: | /s/ Kelly J. Kennedy | ||||
Phone: 510-558-7500 | Name: | Kelly J. Kennedy | ||||
Fax: 510-558-6072 | Title: | Treasurer |
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
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Address where notices to the Borrower are to be sent: | NAPA VALLEY KITCHENS, a California corporation | |||||
NAPA VALLEY KITCHENS | ||||||
c/o ANNIES, INC. | ||||||
1610 Fifth Street | ||||||
Berkeley, CA 94710 | By: | /s/ Kelly J. Kennedy | ||||
Phone: 510-558-7500 | Name: | Kelly J. Kennedy | ||||
Fax: 510-558-6072 | Title: | Treasurer |
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Exhibit 10.2
REAFFIRMATION
OF
AMENDED AND RESTATED SECURITY AGREEMENT
In order to induce Bank of America, N.A. (the Bank) to enter into that certain Amendment No. 1 to the Second Amended and Restated Loan Agreement between the Bank and ANNIES, INC., a Delaware corporation, formerly known as Homegrown Naturals, Inc., which is qualified to do business in the State of California as Homegrown Naturals, ANNIES ENTERPRISES, INC., a Vermont corporation, ANNIES HOMEGROWN, INC., a Delaware corporation, and NAPA VALLEY KITCHENS, a California corporation (individually and collectively, the Borrower) dated as of March 7, 2013 (the Agreement), each of the undersigned (i) agrees that nothing contained in the Agreement shall diminish, alter, amend or effect the obligations of the undersigned under that certain Amended and Restated Security Agreement, dated August 25, 2010 (the Security Agreement) granting to the Bank a security interest in certain assets of the Borrower to secure all Indebtedness (as defined in the Security Agreement), or the Banks security interest in certain Collateral (as defined in the Security Agreement); (ii) agrees that the Security Agreement and the Banks security interest in such Collateral secures the Borrowers obligations under the Agreement; and (iii) confirms that the Security Agreement and the security interest in such Collateral remains in full force and effect and reaffirms the same.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the undersigned have executed this Reaffirmation of Amended and Restated Security Agreement effective as of the date first set forth above.
BANK OF AMERICA, N.A. | ||||||
By: | /s/ Thomas K. McComas | |||||
Name: | Thomas K. McComas | |||||
Title: | Senior Vice President | |||||
Farmington-Notice Desk | ||||||
CT2-515-BB-03 | ||||||
70 Batterson Park Road | ||||||
Farmington, CT 06032 | ||||||
Borrowers Location and address for notices (principal residence, if the Borrower is an individual; chief executive office, if the Borrower is not an individual): | ANNIES, INC., a Delaware corporation formerly known as Homegrown Naturals, Inc., which is qualified to do business in the State of California as Homegrown Naturals | |||||
ANNIES, INC. | ||||||
1610 Fifth Street | ||||||
Berkeley, CA 94710 |
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By: | /s/ Kelly J. Kennedy | |||||
Borrowers state of incorporation or organization (if Borrower is a corporation, partnership, limited liability company or other registered entity): | Name: | Kelly J. Kennedy | ||||
Delaware | Title: | Chief Financial Officer | ||||
Borrowers Location and address for notices (principal residence, if the Borrower is an individual; chief executive office, if the Borrower is not an individual): | ANNIES ENTERPRISES, INC., a Vermont corporation | |||||
ANNIES ENTERPRISES, INC. | ||||||
c/o ANNIES, INC. | ||||||
1610 Fifth Street | ||||||
Berkeley, CA 94710 | By: | /s/ Kelly J. Kennedy | ||||
Name: | Kelly J. Kennedy | |||||
Borrowers state of incorporation or organization (if Borrower is a corporation, partnership, limited liability company or other registered entity): | Title: | Treasurer | ||||
Vermont |
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the undersigned have executed this Reaffirmation of Amended and Restated Security Agreement effective as of the date first set forth above.
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ANNIES HOMEGROWN, INC., a Delaware corporation | ||||||
Borrowers Location and address for notices (principal residence, if the Borrower is an individual; chief executive office, if the Borrower is not an individual): | ||||||
ANNIES HOMEGROWN, INC. | ||||||
c/o ANNIES, INC. | By: | /s/ Kelly J. Kennedy | ||||
1610 Fifth Street | ||||||
Berkeley, CA 94710 | Name: | Kelly J. Kennedy | ||||
Borrowers state of incorporation or organization (if Borrower is a corporation, partnership, limited liability company or other registered entity): | Title: | Treasurer | ||||
Delaware |
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Borrowers Location and address for notices (principal residence, if the Borrower is an individual; chief executive office, if the Borrower is not an individual): | NAPA VALLEY KITCHENS, a California corporation | |||||
NAPA VALLEY KITCHENS | ||||||
c/o ANNIES, INC. | ||||||
1610 Fifth Street | ||||||
Berkeley, CA 94710 | By: | /s/ Kelly J. Kennedy | ||||
Name: | Kelly J. Kennedy | |||||
Borrowers state of incorporation or organization (if Borrower is a corporation, partnership, limited liability company or other registered entity): | Title: | Treasurer | ||||
California |
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