Einstein Bros 2006 Annual Report Download - page 59

http://www.sec.gov/Archives/edgar/data/949373/000104746907001622/a2176540z10-k.htm[9/11/2014 10:12:36 AM]
Company. The Subordinated Note is subject to certain mandatory prepayment provisions. In the event that we have not extended the maturity date
of the Series Z to a date that is on or after July 26, 2013 or redeemed the Series Z by June 29, 2009, then the Subordinated Note will mature on
June 29, 2009.
The Subordinated Note has usual and customary covenants including consolidated leverage ratios, fixed charge coverage ratios, limitations on
capital expenditures, etc. The loan is guaranteed by our material subsidiaries. The Subordinated Note is unsecured. As of January 2, 2007, we were
in compliance with all our financial and operating covenants.
Approximately $0.7 million in debt issuance costs have been capitalized and are being amortized using the effective interest method over the
term of the Subordinated Note. The debt discount of $625,000 is accretive to the Subordinated Note and is amortized to interest expense using the
effective interest method over the term of the Subordinated Note.
$160 Million Notes
On July 8, 2003, we issued $160 million of 13% senior secured notes maturing on July 1, 2008 ("$160 Million Notes"). On February 28, 2006,
the $160 Million Notes were replaced with $170 million in new term loans as discussed above. Debt issuance costs were capitalized and amortized
using the effective interest method over the term of the $160 Million Notes. During the first quarter ended April 4, 2006, debt issuance costs were
written off in the amount of $3.8 million.
AmSouth Revolver
On July 8, 2003, we entered into a three-year, $15 million senior secured revolving credit facility with AmSouth Bank ("AmSouth Revolver").
On February 28, 2006, the AmSouth Revolver was replaced with a new $15 million revolving credit facility as discussed above. Debt issuance
costs were capitalized and amortized using the effective interest method over the term of the AmSouth Revolver. During the first quarter ended
April 4, 2006, debt issuance costs were written off to interest expense in the amount of $0.2 million.
New Jersey Economic Development Authority Note Payable
In December 1998, Manhattan Bagel Company, Inc. entered into a note payable in the principal amount of $2.8 million with the New Jersey
Economic Development Authority ("NJEDA") at an interest
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rate of 9% per annum. Principal is paid annually and interest is paid quarterly. The note matures on December 1, 2008 and is secured by the assets
of Manhattan Bagel Company, Inc.
On July 3, 2003, we placed an advanced funding of the note in escrow to enact a debt defeasance as allowed for in the agreement. This
advanced funding is shown as restricted cash and the note is included in both current portion and long-term portion of debt in the January 2, 2007
and January 3, 2006 consolidated balance sheets in accordance with the payment terms. This classification will continue until the note is fully paid
from the escrow amount proceeds.
Our term loans and notes payable obligations for the five years following January 2, 2007 are as follows:
Fiscal year (in thousands of dollars):
2007 $ 3,605
2008 6,230
2009 11,250
2010 32,150
2011 25,900
Thereafter 91,026
$ 170,161
12. LEASES