Einstein Bros 2007 Annual Report Download - page 67

http://www.sec.gov/Archives/edgar/data/949373/000104746908002111/a2183061z10-k.htm[9/11/2014 10:12:02 AM]
guarantees are secured by a first priority security interest in all of our assets and our material subsidiaries, including a pledge of 100% of our
interest in all shares of capital stock (or other ownership or equity interests) of each material subsidiary. As of January 1, 2008, we were in
compliance with all our financial and operating covenants.
The senior secured credit facility contains a number of negative covenants that limits us from taking certain actions including issuing debt,
paying dividends and making investments. In addition, we are required to maintain:
•a minimum consolidated fixed charge coverage ratio; and
•a maximum consolidated leverage ratio of 2.75x.
The senior secured credit facility contains a limitation on annual capital expenditures, but allows for the greater of either (i) unused capital
expenditure amounts to be used in the immediately following fiscal year up to a mutually agreed-upon amount or (ii) the capital expenditure
limitation to be incrementally increased for the immediately following fiscal year by up to 25% of the current fiscal year excess cash flow. The
senior secured credit facility contains customary events of default.
The facility is fully amortizing with annual aggregate principal reductions payable in quarterly installments over the term of the loan as shown
in the table below. Through fiscal year 2011, payments of $225,000 are due on calendar quarter ends. However, due to the difference between our
fiscal
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EINSTEIN NOAH RESTAURANT GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
11. SENIOR NOTES AND OTHER LONG-TERM DEBT (Continued)
quarter ends and calendar quarter ends, there will only be three payments in the fiscal year ending 2008, and five payments in the fiscal year
ending 2011.
For the 2008 fiscal year ending December 30, 2008 $ 0.7 million
For the 2009 fiscal year ending December 29, 2009 $ 0.9 million
For the 2010 fiscal year ending December 28, 2010 $ 0.9 million
For the 2011 fiscal year ending January 3, 2012 $ 1.1 million
For the 2012 fiscal year ending January 1, 2013 $ 86.0 million
In addition, we obtained a commitment for an incremental term loan in an aggregate principal amount of up to $57.0 million to be used by us,
if needed, solely for the purpose of redeeming the zero coupon Series Z preferred stock due in June 2009. If we choose to draw down the
incremental term loan, the outstanding amount of the incremental term loan will be amortized on a quarterly basis by an amount equal to 0.25% of
the original principal amount of the incremental term loan. Borrowings under the incremental term loan, if any, bear interest at the same rate
schedule as the new senior secured credit facility. Any amounts remaining unpaid are due and payable on the maturity date of the term loans.
Availability of the incremental term loan is subject to customary borrowing conditions, including absence of any default or material adverse
change, and to a requirement of successful syndication of such incremental term loan.
We may prepay amounts outstanding under the senior secured credit facility and may terminate commitments in whole at any time without
penalty or premium upon prior written notice.
As of January 1, 2008, approximately $2.1 million and $0.5 million in debt issuance costs have been capitalized for the amended $90 Million
First Lien Term Loan and the revolving facility, respectively, net of amortization.
For the revolving facility, the capitalized debt issuance costs are being amortized on a straight-line basis while the capitalized debt issuance
costs for the first lien term loan are being amortized on the effective interest rate method.
February 2006 Debt Redemption and Refinancing
On February 28, 2006, we completed the refinancing of our AmSouth Revolver and $160 Million Notes. While our June 2007 offering of