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http://www.sec.gov/Archives/edgar/data/949373/000104746903027186/a2116520z10-ka.htm[9/11/2014 10:14:22 AM]
Vendor contractual agreements (Note 3-C Other Adjustments) $ 8,210 $ 8,466 $ —
Distributor contractual agreements — 2,783 —
Guaranteed franchisee debt (a) 905 999 1,104
Other 1,445 943 175
$ 10,560 $ 13,191 $ 1,279
In connection with its acquisition of Manhattan Bagel Company, the Company agreed to guarantee certain loans to franchisees made by two
financial institutions. The Company evaluates the fair value of such liability at each balance sheet date. As of December 31, 2002, January 1, 2002
and December 31, 2000, the fair value of the liability reflected above is the maximum potential exposure related to such loans pursuant to
agreements with the financial institutions regarding the established caps on the Company's obligation.
F-48
14. Derivative Liability
The following table indicates the value of embedded derivatives related to the Company's debt and equity instruments as of December 31,
2002 and January 1, 2002 and the cumulative impact of changes in the derivative liability within the statement of operations for the years ended
December 31, 2002, and January 1, 2002 (Note 3-C):
December 31, 2002
For the Year Ended
December 31, 2002
Instrument
Value of Embedded
Derivative Liability
Cumulative Change in
Fair Value of
Derivatives
(amounts in thousands)
Series F preferred stock $ 266 $ (677)
Greenlight obligation 1,599 1,544
Bridge Loan 502 643
$140 Million Facility 480 (1,277)
Total $ 2,847 $ 233
As Restated
January 1, 2002
For the Year Ended
January 1, 2002
Instrument
Value of Embedded
Derivative Liability
Cumulative Change in
Fair Value of
Derivatives
(amounts in thousands)
Series F Preferred Stock $ 5,113 $ 41,654
Greenlight obligation 3,144 11,374
Bridge Loan 1,145 4,220
$140 Million Facility — 432
Total $ 9,402 $ 57,680
The amounts listed in the above table are affected by the market price of the underlying Common Stock and other factors described in Note 1
—Derivative Instruments. As of December 31, 2000, the closing price of the Common Stock was $1.125, which price had decreased to $0.26 by
January 1, 2002 and was $0.09 on December 31, 2002. Additionally, as disclosed in Notes 8 and 10, significant issuances of warrants (previously
contingently-issuable) under the $140 Million Facility and Series F preferred stock agreements occurred during the year ended December 31, 2002.
As a result of applying the classification methodology described in Note 1—Derivative Instruments, the fair value of the issued warrants was