Einstein Bros 2005 Annual Report Download - page 52

http://www.sec.gov/Archives/edgar/data/949373/000110465906016136/a06-3178_110k.htm[9/11/2014 10:13:03 AM]
E. Nelson Heumann is the chairman of our board of directors and is a current employee of Greenlight. Greenlight and its affiliates beneficially
own approximately 95 percent of our common stock on a fully diluted basis. As a result, Greenlight has sufficient voting power without the vote of
any other stockholders to determine what matters will be submitted for approval by our stockholders, to approve actions by written consent without
the approval of any other stockholders, to elect all of our board of directors, and among other things, to determine whether a change in control of
our company occurs.
In July 2003, Greenlight purchased all of the outstanding Einstein/Noah Bagel Corp. 7.25% Convertible Debentures due 2004 from Jefferies.
Greenlight also purchased $35.0 million of our $160 Million Notes. Upon consummation of the equity recapitalization, we issued 4,337.481 shares
of Series F to Greenlight in full payment of the outstanding Bridge Loan. The shares of Series F were converted into common stock in the equity
recapitalization.
In 2003, pursuant to the equity recapitalization, we reimbursed Greenlight for legal fees and disbursements incurred in connection with their
investment in our company and the equity restructuring in the amount of $0.2 million.
In January 2006, we called for redemption the investment Greenlight held in our $160 Million Notes. The notes were redeemed from the
proceeds our refinancing in February 2006 as further described in Note 27.
Leonard Tannenbaum, MYMF Capital LLC and BET
Leonard Tannenbaum, a director, was the Managing Director of MYFM Capital LLC until July 2004. In July 2004, Mr. Tannenbaum founded
Fifth Street Capital LLC and is the managing partner. He is also a limited partner and 10% owner in BET. His father-in-law is Bruce Toll, an
affiliate of BET. On May 30, 2002, we entered into a Loan and Security Agreement (the facility) with BET, which provided for $75.0 million
revolving loan facility at 11% interest. The facility was secured by substantially all of our assets. In February 2003, we executed an amendment to
the facility to extend the maturity of the facility from March 31, 2003 to June 1, 2003. From February 1, 2003 to June 1, 2003, the interest rate
increased from 11% to 13% per annum. BET and MYFM Capital LLC received an extension fee of $0.2 million in connection with the
amendment, payable at maturity, and an additional $0.1 million because the facility was not paid in full by June 2, 2003. After June 1, 2003, the
interest rate for borrowings under the facility was 15% per annum, and MYFM Capital LLC received a $30,000 fee for entering into a standstill
agreement with us. The facility was repaid with the proceeds of issuance of the $160 Million Facility in July 2003, and BET received $3,000 for
reimbursement of legal fees and expenses. BET purchased $7.5 million of our $160 Million Notes and Mr. Tannenbaum purchased an additional
$0.5 million of our $160 Million Notes in the market.
In January 2006, we called for redemption the investment BET and Mr. Tannenbaum held in our $160 Million Notes. The notes were
redeemed from the proceeds our refinancing in February 2006 as further described in Note 27.
67
NEW WORLD RESTAURANT GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Halpern Denny
In 2003, pursuant to the equity recapitalization, we reimbursed Halpern Denny for legal fees and disbursements incurred in connection with
their investment in our company and the equity restructuring in the amounts of $0.2 million.
Jill B.W. Sisson
On December 8, 2003, we entered into a consulting agreement with Ms. Jill B. W. Sisson to provide legal, consulting and advisory services to
us and to serve as General Counsel and Secretary. The agreement provided that Ms. Sisson be paid $15,833 per month and, on December 19,
2003, was granted options to purchase 75,000 shares of common stock pursuant to the 2003 Plan. The options vest in part, upon length of service
and in part, upon the achievement of specified financial goals by us. In addition, Ms. Sisson is eligible to receive annual additional premium
compensation based upon our performance and personal performance and has subsequently received an increase to $18,750 per month. Ms. Sisson
will also be reimbursed for reasonable and necessary out-of-pocket expenses. The agreement provides for non-solicitation of our employees for a
year after termination of the agreement, and can be terminated by either party upon 30 days notice.
24. PURCHASE COMMITMENTS
We have obligations with certain of our major suppliers of raw materials (primarily frozen bagel dough and cream cheese) for minimum
purchases both in terms of quantity and pricing on an annual basis. Furthermore, from time to time, we will commit to the purchase price of certain
commodities that are related to the ingredients used for the production of our bagels. On a periodic basis, we review the relationship of these