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JSDA > SEC Filings for JSDA > Form 8-K on 3-Jan-2014All Recent SEC Filings

Show all filings for JONES SODA CO

Form 8-K for JONES SODA CO


3-Jan-2014

Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligati


Item 1.01 Entry into a Material Definitive Agreement.

On December 27, 2013, Jones Soda Co. (the "Company") entered into a revolving secured credit facility (the "Loan Facility") with BFI Business Finance (the "Lender"), pursuant to which the Company, through two of its wholly owned subsidiaries, Jones Soda (Canada) Inc. and Jones Soda Co. (USA) Inc. (together, the "Subsidiaries"), may borrow a maximum aggregate amount of up to $2,000,000 (the "Maximum Amount"), subject to satisfaction of certain conditions. All present and future obligations of the Subsidiaries arising under the Loan Facility are guaranteed by the Company and are secured by a first priority security interest in all of the assets of the Company and the Subsidiaries and proceeds thereof, including accounts receivable, inventory, equipment and intellectual property.

The Loan Facility provides that, from time to time, the Subsidiaries may request advances equal to the lesser of: (a) $2,000,000, or (b) the Borrowing Base which is the sum of and in the following priority (i) 85% of eligible U.S. accounts receivable, plus (ii) 35% of finished goods inventory not to exceed $300,000, plus (iii) 50% of eligible Canadian accounts receivable not to exceed $300,000, subject to any reserve amount established by the Lender. Annual interest on unpaid advances under the Loan Facility is equal to the Prime Rate plus 2.00%, where Prime may not be less than 4.00%, and a monthly loan fee of 0.15% will be payable to the Lender monthly on the daily loan balance. The Loan Facility has an initial term of one year which automatically extends for successive one-year terms unless either party gives at least 30 days' prior written notice of its intent to terminate the Loan Facility at the end of the then current term. The Lender has the right to terminate the Loan Facility upon 120 days' prior written notice.

The Loan Facility contains restrictions on the Subsidiaries' and the Company's ability to, among other things, dispose of certain assets, engage in certain mergers and acquisition transactions and create liens on assets. The Loan Facility contains events of default that include, among other things, default by the Subsidiaries on any payment or other obligations under the Loan Facility, default by the Subsidiaries or the Company on any other indebtedness for borrowed funds, adverse changes in the Subsidiaries' or the Company's business or financial condition, bankruptcy or insolvency, a change of control of the Subsidiaries, default or termination of any material third party agreement, and default by the Company on its obligations as guarantor. The occurrence of an event of default would increase the applicable rate of interest by 3% and could result in the acceleration of the Subsidiaries' obligations under the Loan Facility. The Subsidiaries paid an aggregate fee in the amount of $7,500 upon entry into the Loan Facility, with an additional $7,500 payable on July 1, 2014.

The foregoing description of the Loan Facility does not purport to be complete and is qualified in its entirety by reference to Loan and Security Agreement dated as of December 27, 2013, by and among the Subsidiaries and the Lender, the General Continuing Guaranty dated as of December 27, 2013, made by the Company for the benefit of the Lender, and related security agreements entered into in connection therewith, copies of which are attached as an exhibit to this Current Report and incorporated herein by reference.

The Loan Facility with the Lender replaces the Company's prior loan facility with Access Business Finance LLC that expired on December 27, 2013.



Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 above is incorporated herein by reference.



Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

10.1 ++ Loan and Security Agreement dated as of December 27, 2013, by and between

        Jones Soda Co. (USA) Inc., and JONES SODA (CANADA) INC., and BFI Business
        Finance.
10.2    General Continuing Guaranty dated as of December 27, 2013, made by Jones
        Soda Co. in favor of BFI Business Finance.


10.3 ++ Intellectual Property Security Agreement dated as of December 27, 2013, by and between Jones Soda Co. and BFI Business Finance.
10.4 Security Agreement dated as of December 27, 2013, by and between Jones Soda Co. and BFI Business Finance.
10.5 ++ Intellectual Property Security Agreement dated as of December 27, 2013, by and between Jones Soda Co. (USA) Inc. and JONES SODA (CANADA) INC. and BFI Business Finance.

++Portions of the marked exhibit have been omitted pursuant to a request for confidential treatment filed with the SEC.


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