Einstein Bros 2003 Annual Report Download - page 5

http://www.sec.gov/Archives/edgar/data/949373/000104746904009609/a2132006z10-k.htm[9/11/2014 10:13:55 AM]
In October 2002, we engaged CIBC World Markets Corp. ("CIBC") as our exclusive financial advisor in connection with our review of
strategic alternatives to rationalize our capital structure. From October 2002 to June 2003, we reviewed a variety of transactions and alternatives
for our business.
Debt Refinancing
On July 8, 2003, we issued $160.0 million of 13% senior secured notes due 2008 ("$160 Million Facility") in a private placement to replace
our $140 Million Facility. The $160 Million Facility was offered by us and guaranteed, jointly and severally, by all of our present and all future
subsidiaries other than the Non-Restricted Subsidiaries (as defined in the Indenture governing the notes). We used the net proceeds of the offering,
among other things, to refinance the $140 Million Facility. In November 2003, the original notes issued in the $160 Million Facility were
exchanged by us for notes that were registered with the SEC pursuant to a registration statement on Form S-4.
On July 8, 2003, we entered into a three-year, $15 million senior secured revolving credit facility with AmSouth Bank ("AmSouth Revolver").
The AmSouth Revolver was amended on December 30, 2003.
Equity Restructuring
On June 26, 2003, our board of directors approved an equity restructuring agreement ("Equity Recap") with the holders of all our preferred
stock and a substantial portion of our fully diluted common stock, including:
Greenlight Capital, L.P. ("Greenlight Capital");
Greenlight Capital Qualified, L.P. ("Greenlight Qualified");
Greenlight Capital Offshore, Ltd. ("Greenlight Offshore");
Brookwood New World Investors, L.L.C. ("Brookwood"); and,
NWCI Holdings, LLC ("NWCI").
These entities are collectively referred to as Greenlight in this filing. Additionally, we also agreed to the Equity Recap with Halpern Denny
Fund III, L.P. ("Halpern Denny"). Certain of these entities also held a portion of the $140 Million Facility.
On September 24, 2003, our stockholders approved the Equity Recap as follows:
•we issued Halpern Denny 57,000 shares of Mandatorily Redeemable Series Z Preferred Stock, par value $0.001 per share ("Series
Z"), in exchange for 56,237.994 shares of Mandatorily Redeemable Series F Preferred Stock par value $0.001 per share ("Series
F"), (including accrued and unpaid dividends, which were payable in additional shares of Series F), 23,264,107 shares of common
stock, and warrants to purchase 13,711,054 shares of common stock (collectively, the "Halpern Denny Interests"); and
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•each stockholder received 0.6610444 new shares of common stock for every share of common stock held by such stockholder
pursuant to a 1.6610444-for-one forward stock split in order to effect the transactions contemplated by the Equity Recap;
•the per share exercise price and the number of shares of common stock issuable upon the exercise of each outstanding option or
warrant (other than the warrants that were issued in connection with the $140 Million Facility pursuant to the Warrant Agreement
dated June 19, 2001, as amended between us and The Bank of New York, as warrant agent (the "Warrant Agreement")) were
adjusted to reflect the forward stock split;
•immediately following the forward stock split, we issued Greenlight 938,084,289 shares of common stock in exchange for
61,706.237 shares of Series F. These shares of Series F included
i) shares originally issued as Series F,
ii) shares converted into Series F from the $10 million contribution plus accrued interest resulting from the a bond purchase agreement
entered into with Greenlight ("Greenlight Obligation") and
iii) shares converted into Series F from the Bridge Loan (which was acquired by Greenlight from Jefferies & Company, Inc.).
Following the closing of the Equity Recap, Greenlight beneficially owned approximately 92% of our common stock on a fully diluted basis
and warrants issued pursuant to the Warrant Agreement represented approximately 4.3% of our common stock on a fully diluted basis.