Item 1.01. Entry into a Material Definitive Agreement.
On December 31, 2019, Craft Brew Alliance, Inc. (the "Company"), and Bank of
America, N.A. ("BofA"), executed a Fourth Amendment (the "Amendment") to the
Amended and Restated Credit Agreement dated as of November 30, 2015 (the "Credit
Agreement"), by and among the Company as borrower, its subsidiaries as
guarantors, and BofA as lender. The primary changes effected by the Amendment
were to: (i) add new defined terms relating to that certain Agreement and Plan
of Merger, dated as of November 11, 2019, by and among the Company, Barrel
Subsidiary, Inc., and Anheuser-Busch Companies, LLC (the "A-B Merger");
(ii) revise the definition of Consolidated EBITDA to account for legal fees and
expenses paid in cash in connection with the A-B Merger; and (iii) revise the
financial covenants contained in Section 7.11 of the Credit Agreement.
The Credit Agreement provides for a credit facility which includes a $45,000,000
reducing revolving facility, including a $2,500,000 sublimit for the issuance of
standby letters of credit, as well as a term loan facility in the amount of
$8,381,000 as of the date of this report. The maximum amount of the revolving
facility is subject to loan commitment reductions in the amount of $750,000 each
quarter beginning March 31, 2020. The Company may use the proceeds of the credit
facility for general corporate purposes, including capital expenditures. The
term of the credit facility expires on September 30, 2023.
As amended, the Credit Agreement requires the Company to satisfy the following
financial covenants: (i) on or after the earliest to occur of July 1, 2020 or
the termination of the A-B Merger, a Consolidated Leverage Ratio of 3.50 to
1.00; (ii) on or after the earliest to occur of July 1, 2020 or the termination
of the A-B Merger, a Fixed Charge Coverage Ratio of 1.20 to 1.00; and (iii) on a
trailing four-quarter basis at each of March 31, 2020 and June 30, 2020, a
minimum Consolidated EBITDA of $3,000,000. Failure to maintain compliance with
these covenants is an event of default and would give BofA the right to declare
the entire outstanding loan balance immediately due and payable.
Item 9.01. Financial Statements and Exhibits.
The following exhibit is filed with this Form 8-K:
10.1 Fourth Amendment to Amended and Restated Credit Agreement, dated
December 31, 2019, by and among Craft Brew Alliance, Inc., its subsidiaries, and
Bank of America, N.A.
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