Missing annotations.jar
So, when i updated sdk to L version i had same problem. But after Extra folders updating in SDK Manager i didn't find annotation.jar file. Maybe Google bug with new SDK version. So i copied annotation.jar file from old SDK folder (folder half a year ago)
I had the same problem. I went to the SDK Manager within eclipse (Window --> Android SDK Manager) and installed the Android Support package which is found in the Extras folder. After the install the error was gone (at least in my system)
Right click onto your project, in context menu choose Properties, your will see a window.Second line is Android - click onto it.You will see list of installed SDK.Check any SDK which has API level 16 or more.
annotationas.jar is embedded in SDK of 16 API level and after it.