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Einstein Noah Restaurant Group Inc. Completes Review Of Strategic Alternatives

Einstein Noah Restaurant Group, Inc. (NASDAQ:BAGL), a leader in the quick-casual segment of the restaurant industry operating under the Einstein Bros.® Bagels, Noah's New York Bagels®, and Manhattan Bagel® brands, today announced that its Board of Directors has completed its comprehensive strategic alternatives review process to maximize shareholder value by recapitalizing the Company and declaring a one-time special dividend to shareholders of $4.00 per share. Piper Jaffray served as the Company’s financial advisor and Bryan Cave HRO served as the Company’s legal advisor in connection with the review of strategic alternatives.

The recapitalization includes the amendment and restatement of the Company’s existing Senior Credit Facility, which consists of a Term Loan A and a Revolver with a syndicate of banks (“Facility”). The amendment and restatement of the Facility increases the Company’s Term Loan A from $75 million to $100 million, increases the Revolver from $50 million to $75 million, and extends the maturity date from December 20, 2015 to December 6, 2017. The increase to $175 million will be used to fund the one-time special dividend, the ongoing quarterly dividend, working capital, capital expenditures, and other general corporate purposes. The loans under the Facility will bear interest equal to the Eurodollar Rate plus an applicable margin ranging from 2.5% to 4.0% or the Base Rate plus an applicable margin ranging from 1.5% to 3.0%.

Bank of America, N.A. serves as the Administrative Agent. Wells Fargo Bank, N.A. serves as the syndication agent, BBVA Compass served as the document agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Securities, LLC and BBVA Compass acted as Joint Lead Arrangers and Joint Bookrunners. Other participating lenders include GE Capital, Union Bank, Bank of the West, and Regions Bank.

The one-time special dividend of $4.00 per share is payable on December 27, 2012 to shareholders of record at the close of business on December 17, 2012 and will have an ex-dividend date of December 28, 2012. This is in addition to the previously disclosed Company’s regular quarterly dividend of $0.125 per share. The total cash outlay for the one-time special dividend will be approximately $68 million. Immediately following the payment of the special dividend, the Company expects the outstanding principal balance under the Facility to be approximately $140 million, comprised of $100 million under the Term Loan A and approximately $40 million under the Revolver.

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