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EXECUTION COPY
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REGIS CORPORATION
AMENDED AND RESTATED PRIVATE SHELF AGREEMENT
6.94% $10,000,000 Series A Senior Notes due July 1, 2005
7.99% $5,000,000 Series B Senior Notes due July 1, 2003
7.80% $22,000,000 Series C Senior Notes due July 1, 2006
7.16% $5,000,000 Series D Senior Notes due January 2, 2002
8.18% $8,000,000 Series E Senior Notes due July 2, 2006
7.48% $2,000,000 Series F Senior Notes due July 2, 2006
7.14% $14,000,000 Series G Senior Notes due July 2, 2008
6.83% $10,000,000 Series H Senior Notes due December 31, 2005
8.39% $25,000,000 Series I Senior Notes due October 3, 2010
$40,000,000
Private Shelf Facility
Dated as of October 3, 2000
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TABLE OF CONTENTS
(not part of agreement)
Page
1. AMENDMENT AND RESTATEMENT; AUTHORIZATION OF
ISSUE OF SHELF NOTES.................................................1
1A. Amendment and Restatement............................1
1B. Authorization of Issue of Shelf Notes................2
2. PURCHASE AND SALE OF SHELF NOTES.....................................2
2A. Facility.............................................2
2B. Issuance Period......................................3
2C. Request for Purchase.................................3
2D. Rate Quotes..........................................3
2E. Acceptance...........................................3
2F. Market Disruption....................................4
2G. Facility Closings....................................4
2H. Fees.................................................5
2H(i). Structuring Fee......................................5
2H(ii). Issuance Fee.........................................5
2H(iii). Delayed Delivery Fee.................................5
2H(iv). Cancellation Fee.....................................6
3. CONDITIONS OF CLOSING................................................6
3A. Certain Documents....................................6
3B. Opinion of Purchaser's Special Counsel...............7
3C. Representations and Warranties; No Default...........8
3D. Purchase Permitted by Applicable Laws................8
3E. Payment of Fees......................................8
3F. Intercreditor Agreement..............................8
4. PREPAYMENTS..........................................................8
4A. Required Prepayments of Notes........................8
4B(1). Optional Prepayment With Yield-Maintenance Amount....8
4B(2). Prepayment with Yield-Maintenance Amount Pursuant to
Intercreditor Agreement..............................9
4C. Notice of Optional Prepayment........................9
4D. Application of Prepayments...........................9
4E. No Acquisition of Notes..............................9
5. AFFIRMATIVE COVENANTS................................................9
5A. Financial Statements; Notice of Defaults............10
5B. Information Required by Rule 144A...................13
5C. Inspection of Property..............................13
5D. Covenant to Secure Notes Equally....................13
5E. Payment of Taxes and Claims.........................14
5F. Compliance with Laws, Etc...........................14
5G. Maintenance of Properties; Insurance................14
5H. Affiliate Transactions, Keeping of Books, Bank
Accounts..........................................15
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5I. Additional Guaranties...............................15
6. NEGATIVE COVENANTS..................................................15
6A(1). Fixed Charge Coverage Ratio.........................15
6A(2). Leverage Ratio......................................15
6B. Restricted Payments.................................15
6C. Lien, Debt and Other Restrictions...................16
6C(1). Liens...............................................16
6C(2). Debt................................................16
6C(3). Investments.........................................16
6C(4). Sale of Stock and Debt of Subsidiaries..............17
6C(5). Merger and Consolidation ...........................18
6C(6). Transfer of Assets..................................18
6C(7). Sale or Discount of Receivables.....................18
6C(8). Transactions with Affiliates........................18
6C(9). Subsidiary Dividend Restrictions....................19
6C(10). Tax Consolidation...................................19
6D. Transactions by Subsidiaries........................19
7. EVENTS OF DEFAULT...................................................19
7A. Acceleration........................................19
7B. Rescission of Acceleration..........................22
7C. Notice of Acceleration or Rescission................22
7D. Other Remedies......................................22
8. REPRESENTATIONS, COVENANTS AND WARRANTIES...........................23
8A. Organization........................................23
8B. Financial Statements................................23
8C. Actions Pending.....................................24
8D. Outstanding Debt....................................24
8E. Title to Properties.................................24
8F. Taxes...............................................24
8G. Conflicting Agreements and Other Matters............24
8H. Offering of Notes...................................25
8I. Use of Proceeds.....................................25
8J. ERISA...............................................25
8K. Governmental Consent................................26
8L. Environmental Compliance............................26
8M. Disclosure..........................................26
8N. Hostile Tender Offers...............................26
8O. Rule 144A...........................................26
8P. Foreign Enemies and Regulations.....................26
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9. REPRESENTATIONS OF THE PURCHASERS...................................27
9A. Nature of Purchase..................................27
9B. Source of Funds.....................................27
10. DEFINITIONS; ACCOUNTING MATTERS.....................................27
10A. Yield-Maintenance Terms.............................27
10B. Other Terms.........................................29
10C. Accounting Principles, Terms and Determinations.....37
11. MISCELLANEOUS.......................................................38
11A. Note Payments.......................................38
11B. Expenses............................................38
11C. Consent to Amendments...............................38
11D. Form, Registration, Transfer and Exchange of Notes;
Lost Notes........................................39
11E. Persons Deemed Owners; Participations...............40
11F. Survival of Representations and Warranties;
Entire Agreement..................................40
11G. Successors and Assigns..............................40
11H. Independence of Covenants...........................40
11I. Notices.............................................41
11J. Payments Due on Non-Business Days...................41
11K. Severability........................................41
11L. Descriptive Headings................................42
11M. Satisfaction Requirement............................42
11N. Governing Law.......................................42
11O. Severalty of Obligations............................42
11P. Counterparts........................................42
11Q. Binding Agreement...................................43
Exhibits and Schedules
Information Schedule
Purchaser Schedule
Exhibit A --Form of Shelf Note
Exhibit B --Form of Request for Purchase
Exhibit C --Form of Confirmation of Acceptance
Exhibit D --Form of Opinion of Company's Counsel
Schedule 6C(1) --List of Existing Liens
Schedule 8A --Subsidiaries
Schedule 8G --Agreements Restricting Debt
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REGIS CORPORATION
7201 METRO BOULEVARD
MINNEAPOLIS, MINNESOTA 55439
As of October 3, 2000
The Prudential Insurance Company
of America ("PRUDENTIAL")
Pruco Life Insurance Company ("PRUCO AZ")
Pruco Life Insurance Company of New Jersey ("PRUCO NJ")
Each Prudential Affiliate (as hereinafter
defined) which becomes bound by certain
provisions of this Agreement as hereinafter
provided (together with Prudential, Pruco Az and
Pruco NJ collectively, the "PURCHASERS")
c/o Prudential Capital Group
Two Prudential Plaza
Suite 5600
Chicago, Illinois 60601
Ladies and Gentlemen:
The undersigned, Regis Corporation, a Minnesota corporation (herein
called the "Company"), hereby agrees with you as set forth below. Reference is
made to paragraph 10 hereof for definitions of capitalized terms used herein and
not otherwise defined herein.
1. AMENDMENT AND RESTATEMENT; AUTHORIZATION OF ISSUE OF SHELF
NOTES.
1A. AMENDMENT AND RESTATEMENT. Effective as of the date hereof,
the parties agree that this agreement (this "AGREEMENT") amends and restates in
its entirety that certain Private Shelf Agreement dated as of July 25, 1995 (as
amended from time to time prior to the date hereof, the "EXISTING 1995 SHELF
AGREEMENT") between the Company, Prudential and each Prudential Affiliate which
became bound by the terms thereof. After giving effect to the Series I Notes the
Available Facility Amount is $40,000,000 as described in greater detail in
paragraph 2A below. From and after the effectiveness of this Agreement, the
Existing 1995 Shelf Agreement shall be of no force or effect whatsoever except
to evidence the terms pursuant to which the Series A Notes, Series B Notes,
Series C Notes, Series D Notes, Series E Notes, Series F Notes, Series G Notes
and Series H Notes were originally issued.
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1B. AUTHORIZATION OF ISSUE OF SHELF NOTES. The Company will
authorize the issue of its additional senior promissory notes (the "SHELF
NOTES") in the aggregate principal amount of $40,000,000, to be dated the date
of issue thereof, to mature, in the case of each Shelf Note so issued, no more
than 12 years after the date of original issuance thereof, to have an average
life, in the case of each Shelf Note so issued, of no more than 10 years after
the date of original issuance thereof, to bear interest on the unpaid balance
thereof from the date thereof at the rate per annum, and to have such other
particular terms, as shall be set forth, in the case of each Shelf Note so
issued, in the Confirmation of Acceptance with respect to such Shelf Note
delivered pursuant to paragraph 2E, and to be substantially in the form of
Exhibit A attached hereto. The terms "SHELF NOTE" and "SHELF NOTES" as used
herein shall include each Shelf Note delivered pursuant to any provision of this
Agreement and each Shelf Note delivered in substitution or exchange for any such
Shelf Note pursuant to any such provision. The terms "NOTE" and "NOTES" as used
herein shall include each Series A Note, Series B Note, Series C Note, Series D
Note, Series E Note, Series F Note, Series G Note, Series H Note, Series I Note
and each Shelf Note delivered pursuant to any provision of this Agreement and
each Note delivered in substitution or exchange for any such Note pursuant to
any such provision. Notes which have (i) the same final maturity, (ii) the same
principal prepayment dates, (iii) the same principal prepayment amounts (as a
percentage of the original principal amount of each Note), (iv) the same
interest rate, (v) the same interest payment periods and (vi) the same date of
issuance (which, in the case of a Note issued in exchange for another Note,
shall be deemed for these purposes the date on which such Note's ultimate
predecessor Note was issued), are herein called a "SERIES" of Notes.
2. PURCHASE AND SALE OF SHELF NOTES.
2A. FACILITY. Prudential is willing to consider, in its sole
discretion and within limits which may be authorized for purchase by Prudential
from time to time, the purchase of Shelf Notes pursuant to this Agreement. The
willingness of Prudential to consider such purchase of Shelf Notes is herein
called the "FACILITY". At any time, the aggregate principal amount of Shelf
Notes stated in paragraph 1B, minus the aggregate principal amount of Shelf
Notes purchased and sold pursuant to this Agreement prior to such time, minus
the aggregate principal amount of Accepted Notes (as hereinafter defined) which
have not yet been purchased and sold hereunder prior to such time, is herein
called the "AVAILABLE FACILITY AMOUNT" at such time. The total outstanding
principal balance of the Company outstanding to Prudential and the Prudential
Affiliates shall not exceed $100,000,000 at any time, unless the Company shall
have received an investment grade "shadow rating" with respect to its unsecured
non-credit enhanced debt from a nationally recognized debt rating agency in
which case the limit on total outstandings owing to Prudential and the
Prudential Affiliates shall be $125,000,000. NOTWITHSTANDING THE WILLINGNESS OF
PRUDENTIAL TO CONSIDER PURCHASES OF SHELF NOTES, THIS AGREEMENT IS ENTERED INTO
ON THE EXPRESS UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY PRUDENTIAL
AFFILIATE SHALL BE OBLIGATED TO MAKE OR ACCEPT OFFERS TO PURCHASE SHELF NOTES,
OR TO QUOTE RATES, SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC PURCHASES OF
SHELF NOTES, AND THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A COMMITMENT BY
PRUDENTIAL OR ANY PRUDENTIAL
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AFFILIATE.
2B. ISSUANCE PERIOD. Shelf Notes may be issued and sold pursuant
to this Agreement until the earlier of (i) October 3, 2003 and (ii) the
thirtieth day after Prudential shall have given to the Company, or the Company
shall have given to Prudential, a written notice stating that it elects to
terminate the issuance and sale of Shelf Notes pursuant to this Agreement (or if
such thirtieth day is not a Business Day, the Business Day next preceding such
thirtieth day). The period during which Shelf Notes may be issued and sold
pursuant to this Agreement is herein called the "ISSUANCE PERIOD".
2C. REQUEST FOR PURCHASE. The Company may from time to time during
the Issuance Period make requests for purchases of Shelf Notes (each such
request being herein called a "REQUEST FOR PURCHASE"). Each Request for Purchase
shall be made to Prudential by telecopier or overnight delivery service, and
shall (i) specify the aggregate principal amount of Shelf Notes covered thereby,
which shall not be less than $5,000,000 and not be greater than the Available
Facility Amount at the time such Request for Purchase is made, (ii) specify the
principal amounts, final maturities, principal prepayment dates and amounts and
interest payment periods (quarterly or semi-annual in arrears) of the Shelf
Notes covered thereby, (iii) specify the use of proceeds of such Shelf Notes,
(iv) specify the proposed day for the closing of the purchase and sale of such
Shelf Notes, which shall be a Business Day during the Issuance Period not less
than 10 days and not more than 25 days after the making of such Request for
Purchase, (v) specify the number of the account and the name and address of the
depository institution to which the purchase prices of such Shelf Notes are to
be transferred on the Closing Day for such purchase and sale, (vi) certify that
the representations and warranties contained in paragraph 8 are true on and as
of the date of such Request for Purchase and that there exists on the date of
such Request for Purchase no Event of Default or Default, and (vii) be
substantially in the form of Exhibit B attached hereto. Each Request for
Purchase shall be in writing and shall be deemed made when received by
Prudential.
2D. RATE QUOTES. Not later than five Business Days after the
Company shall have given Prudential a Request for Purchase pursuant to paragraph
2C, Prudential may, but shall be under no obligation to, provide to the Company
by telephone or telecopier, in each case between 9:30 A.M. and 1:30 P.M. New
York City local time (or such later time as Prudential may elect) interest rate
quotes for the several principal amounts, maturities, principal prepayment
schedules, and interest payment periods of Shelf Notes specified in such Request
for Purchase. Each quote shall represent the interest rate per annum payable on
the outstanding principal balance of such Shelf Notes at which Prudential or a
Prudential Affiliate would be willing to purchase such Shelf Notes at 100% of
the principal amount thereof.
2E. ACCEPTANCE. Within the Acceptance Window, the Company may,
subject to paragraph 2F, elect to accept such interest rate quotes as to not
less than $5,000,000 aggregate principal amount of the Shelf Notes specified in
the related Request for Purchase. Such election shall be made by an Authorized
Officer of the Company notifying Prudential by telephone or telecopier within
the Acceptance Window that the Company elects to accept such interest rate
quotes, specifying the Shelf Notes (each such Shelf Note being herein called an
"ACCEPTED NOTE")
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as to which such acceptance (herein called an "ACCEPTANCE") relates. The day the
Company notifies Prudential of an Acceptance with respect to any Accepted Notes
is herein called the "ACCEPTANCE DAY" for such Accepted Notes. Any interest rate
quotes as to which Prudential does not receive an Acceptance within the
Acceptance Window shall expire, and no purchase or sale of Shelf Notes hereunder
shall be made based on such expired interest rate quotes. Subject to paragraph
2F and the other terms and conditions hereof, the Company agrees to sell to
Prudential or a Prudential Affiliate, and Prudential agrees to purchase, or to
cause the purchase by a Prudential Affiliate of, the Accepted Notes at 100% of
the principal amount of such Notes. As soon as practicable following the
Acceptance Day, the Company, Prudential and each Prudential Affiliate which is
to purchase any such Accepted Notes will execute a confirmation of such
Acceptance substantially in the form of Exhibit C attached hereto (herein called
a "CONFIRMATION OF ACCEPTANCE"). If the Company should fail to execute and
return to Prudential within three Business Days following receipt thereof a
Confirmation of Acceptance with respect to any Accepted Notes, Prudential may at
its election at any time prior to its receipt thereof cancel the closing with
respect to such Accepted Notes by so notifying the Company in writing.
2F. MARKET DISRUPTION. Notwithstanding the provisions of paragraph
2E, if Prudential shall have provided interest rate quotes pursuant to paragraph
2D and thereafter prior to the time an Acceptance with respect to such quotes
shall have been notified to Prudential in accordance with paragraph 2E the
domestic market for U.S. Treasury securities or derivatives shall have closed or
there shall have occurred a general suspension, material limitation, or
significant disruption of trading in securities generally on the New York Stock
Exchange or in the domestic market for U.S. Treasury securities or derivatives,
then such interest rate quotes shall expire, and no purchase or sale of Shelf
Notes hereunder shall be made based on such expired interest rate quotes. If the
Company thereafter notifies Prudential of the Acceptance of any such interest
rate quotes, such Acceptance shall be ineffective for all purposes of this
Agreement, and Prudential shall promptly notify the Company that the provisions
of this paragraph 2F are applicable with respect to such Acceptance.
2G. FACILITY CLOSINGS. Not later than 11:30 A.M. (New York City
local time) on the Closing Day for any Accepted Notes, the Company will deliver
to each Purchaser listed in the Confirmation of Acceptance relating thereto at
the offices of the Prudential Capital Group, Two Prudential Plaza, Suite 5600,
Chicago, Illinois 60601, Attention: Law Department, the Accepted Notes to be
purchased by such Purchaser in the form of one or more Notes in authorized
denominations as such Purchaser may request for each Series of Accepted Notes to
be purchased on the Closing Day, dated the Closing Day and registered in such
Purchaser's name (or in the name of its nominee), against payment of the
purchase price thereof by transfer of immediately available funds for credit to
the Company's account specified in the Request for Purchase of such Notes. If
the Company fails to tender to any Purchaser the Accepted Notes to be purchased
by such Purchaser on the scheduled Closing Day for such Accepted Notes as
provided above in this paragraph 2G, or any of the conditions specified in
paragraph 3 shall not have been fulfilled by the time required on such scheduled
Closing Day, the Company shall, prior to 1:00 P.M., New York City local time, on
such scheduled Closing Day notify Prudential (which notification shall be deemed
received by each Purchaser) in writing whether (i) such closing is to be
rescheduled (such rescheduled date to be a Business Day during the Issuance
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Period not less than one Business Day and not more than 10 Business Days after
such scheduled Closing Day (the "RESCHEDULED CLOSING DAY")) and certify to
Prudential (which certification shall be for the benefit of each Purchaser) that
the Company reasonably believes that it will be able to comply with the
conditions set forth in paragraph 3 on such Rescheduled Closing Day and that the
Company will pay the Delayed Delivery Fee in accordance with paragraph 2H(iii)
or (ii) such closing is to be canceled. In the event that the Company shall fail
to give such notice referred to in the preceding sentence, Prudential (on behalf
of each Purchaser) may at its election, at any time after 1:00 P.M., New York
City local time, on such scheduled Closing Day, notify the Company in writing
that such closing is to be canceled. Notwithstanding anything to the contrary
appearing in this Agreement, the Company may not elect to reschedule a closing
with respect to any given Accepted Notes on more than one occasion, unless
Prudential shall have otherwise consented in writing.
2H. FEES.
2H(i). STRUCTURING FEE. At the time of the execution and delivery
of this Agreement by the Company and Prudential, the Company will pay to
Prudential in immediately available funds a fee (herein called the "STRUCTURING
FEE") in the amount of $25,000.
2H(ii). ISSUANCE FEE. On each Closing Day after October 3, 2000, the
Company will pay to Prudential in immediately available funds a fee (herein
called the "ISSUANCE FEE") in an amount equal to 0.15% of the aggregate
principal amount of Notes sold on such Closing Day. The Issuance Fees for the
Series A Notes, Series B Notes, Series C Notes, Series D Notes, Series E Notes,
Series F Notes, Series G Notes and Series H Notes have been paid in full. The
$37,500 Issuance Fee for the Series I Notes will be paid on October 3, 2000.
2H(iii). DELAYED DELIVERY FEE. If the closing of the purchase and sale
of any Accepted Note is delayed for any reason beyond the original Closing Day
for such Accepted Note, the Company will pay to Prudential (a) on the
Cancellation Date or actual closing date of such purchase and sale and (b) if
earlier, the next Business Day following 90 days after the Acceptance Day for
such Accepted Note and on each Business Day following 90 days after the prior
payment hereunder, a fee (herein called the "DELAYED DELIVERY FEE") calculated
as follows:
(BEY - MMY) X DTS/360 X PA
where "BEY" means Bond Equivalent Yield, i.e., the bond equivalent yield per
annum of such Accepted Note; "MMY" means Money Market Yield, i.e., the yield per
annum on a commercial paper investment of the highest quality selected by
Prudential on the date Prudential receives notice of the delay in the closing
for such Accepted Note having a maturity date or dates the same as, or closest
to, the Rescheduled Closing Day or Rescheduled Closing Days (a new alternative
investment being selected by Prudential each time such closing is delayed);
"DTS" means Days to Settlement, i.e., the number of actual days elapsed from and
including the original Closing Day with respect to such Accepted Note (in the
case of the first such payment with respect to such Accepted Note) or from and
including the date of the next preceding payment (in
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the case of any subsequent delayed delivery fee payment with respect to such
Accepted Note) to but excluding the date of such payment; and "PA" means
Principal Amount, i.e., the principal amount of the Accepted Note for which such
calculation is being made. In no case shall the Delayed Delivery Fee be less
than zero. Nothing contained herein shall obligate any Purchaser to purchase any
Accepted Note on any day other than the Closing Day for such Accepted Note, as
the same may be rescheduled from time to time in compliance with paragraph 2G.
2H(iv). CANCELLATION FEE. If the Company at any time notifies
Prudential in writing that the Company is canceling the closing of the purchase
and sale of any Accepted Note, or if Prudential notifies the Company in writing
under the circumstances set forth in the last sentence of paragraph 2G or the
penultimate sentence of paragraph 2G that the closing of the purchase and sale
of such Accepted Note is to be canceled, or if the closing of the purchase and
sale of such Accepted Note is not consummated on or prior to the last day of the
Issuance Period (the date of any such notification, or the last day of the
Issuance Period, as the case may be, being herein called the "CANCELLATION
DATE"), the Company will pay to Prudential in immediately available funds an
amount (the "CANCELLATION FEE") calculated as follows:
PI X PA
where "PI" means Price Increase, i.e., the quotient (expressed in decimals)
obtained by dividing (a) the excess of the ask price (as determined by
Prudential) of the Hedge Treasury Note(s) on the Cancellation Date over the bid
price (as determined by Prudential) of the Hedge Treasury Notes(s) on the
Acceptance Day for such Accepted Note by (b) such bid price; and "PA" has the
meaning ascribed to it in paragraph 2H(iii). The foregoing bid and ask prices
shall be as reported by Telerate Systems, Inc. (or, if such data for any reason
ceases to be available through Telerate Systems, Inc., any publicly available
source of similar market data). Each price shall be based on a U.S. Treasury
security having a par value of $100.00 and shall be rounded to the second
decimal place. In no case shall the Cancellation Fee be less than zero.
3. CONDITIONS OF CLOSING. The obligation of any Purchaser to
purchase and pay for any Notes is subject to the satisfaction, on or before the
Closing Day for such Notes, of the following conditions:
3A. CERTAIN DOCUMENTS. Such Purchaser shall have received the
following, each dated the date of the applicable Closing Day:
(i) This Agreement;
(ii) The Note(s) to be purchased by such Purchaser;
(iii) A favorable opinion of special counsel to the Company
(or such other counsel designated by the Company and acceptable to the
Purchaser(s)) satisfactory to such Purchaser and substantially in the
form of Exhibit D attached hereto and as to such other matters as such
Purchaser may
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reasonably request. The Company hereby directs each such counsel
to deliver such opinion, agrees that the issuance and sale of any
Notes will constitute a reconfirmation of such direction, and
understands and agrees that each Purchaser receiving such an opinion
will and is hereby authorized to rely on such opinion;
(iv) a Secretary's Certificate signed by the Secretary or an
Assistant Secretary and one other officer of the Company certifying,
among other things, (A) as to the names, titles and true signatures of
the officers of the Company authorized to sign this Agreement, the
Notes and the other documents to be delivered in connection with this
Agreement, (B) that attached as Exhibit A thereto is a true, accurate
and complete copy of the Articles of Incorporation of the Company,
certified by the Secretary of State of Minnesota as of a date not more
than ten Business Days from the Closing Day, (C) that attached as
Exhibit B thereto is a true, accurate and complete copy of the
Company's Bylaws which were duly adopted and are presently in effect
and have been in effect immediately prior to and at all times since
the adoption of the resolutions referred to in clause (D) below, (D)
that attached as Exhibit C thereto is a true, accurate and complete
copy of the resolutions of the Company's Board of Directors
(authorizing the issuance and sale of the Notes and the execution,
delivery and performance of this Agreement) duly adopted by written
action or at a meeting of the Company's Board of Directors, and such
resolutions have not been rescinded, amended or modified and (E) that
attached as Exhibit D thereto is a good standing certificate for the
Company from the Secretary of State of Minnesota;
(v) an Officer's Certificate certifying that (A) the
representations and warranties contained in paragraph 8 shall be true
on and as of the Closing Day, except to the extent of changes caused
by the transactions herein contemplated; and (B) on the date of
closing no Event of Default or Default exists;
(vi) certified copies of Requests for Information or Copies
(Form UCC-11) or equivalent reports listing all effective financing
statements which name the Company or any Subsidiary (under its present
name and previous names used in the last seven years) as debtor and
which are filed in the office of the Secretary of State of Minnesota
together with copies of such financing statements; and
(vii) additional documents or certificates with respect to
legal matters or corporate or other proceedings related to the
transactions contemplated hereby as may be reasonably requested by
such Purchaser.
3B. OPINION OF PURCHASER'S SPECIAL COUNSEL. Such Purchaser shall
have received from Wiley S. Adams, Assistant General Counsel of Prudential or
such other counsel who is acting as special counsel for it in connection with
this transaction, a favorable opinion satisfactory to such Purchaser as to such
matters incident to the matters herein contemplated as it
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may reasonably request.
3C. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The
representations and warranties contained in paragraph 8 shall be true on and as
of such Closing Day, except to the extent of changes caused by the transactions
herein contemplated; there shall exist on such Closing Day no Event of Default
or Default; and the Company shall have delivered to such Purchaser an Officer's
Certificate, dated such Closing Day, to both such effects.
3D. PURCHASE PERMITTED BY APPLICABLE LAWS. The purchase of and
payment for the Notes to be purchased by such Purchaser on the terms and
conditions herein provided (including the use of the proceeds of such Notes by
the Company) shall not violate any applicable law or governmental regulation
(including, without limitation, Section 5 of the Securities Act or Regulation U,
T or X of the Board of Governors of the Federal Reserve System) and shall not
subject such Purchaser to any tax, penalty, liability or other onerous condition
under or pursuant to any applicable law or governmental regulation, and such
Purchaser shall have received such certificates or other evidence as it may
request to establish compliance with this condition.
3E. PAYMENT OF FEES. The Company shall have paid to Prudential any
fees due it pursuant to or in connection with this Agreement, including any
Structuring Fee due pursuant to paragraph 2H, any Issuance Fee due pursuant to
paragraph 2H(ii) and any Delayed Delivery Fee due pursuant to paragraph 2H(iii).
3F. INTERCREDITOR AGREEMENT. The Intercreditor Agreement shall
have been executed and delivered by all holders of any Debt with respect to
which any Subsidiary of the Company has provided a Guarantee and shall be in
full force and effect.
4. PREPAYMENTS. The Series A Notes, the Series B Notes, the
Series C Notes, the Series D Notes, the Series E Notes, the Series F Notes, the
Series G Notes, the Series H Notes and Series I Notes shall be subject to
required prepayment as and to the extent provided in such Notes. The Notes shall
also be subject to prepayment under the circumstances set forth in paragraph
4B(1) and (2). Any prepayment made by the Company pursuant to any other
provision of this paragraph 4 shall not reduce or otherwise affect its
obligation to make any required prepayment as specified in paragraph 4A.
4A. REQUIRED PREPAYMENTS OF NOTES. Each Series of Notes shall be
subject to required prepayments, if any, set forth in the Notes of such Series.
4B(1). OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT. The Notes
of each Series shall be subject to prepayment, in whole at any time or from time
to time in part (in integral multiples of $500,000 and in a minimum amount of
$1,000,000), at the option of the Company, at 100% of the principal amount so
prepaid plus interest thereon to the prepayment date and the Yield-Maintenance
Amount, if any, with respect to each such Note. Any partial prepayment of a
Series of the Notes pursuant to this paragraph 4B(1) shall be applied in
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satisfaction of required payments of principal in inverse order of their
scheduled due dates.
4B(2). PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT PURSUANT TO
INTERCREDITOR AGREEMENT. If amounts are to be applied to the principal of the
Notes pursuant to the terms of an Intercreditor Agreement, interest owing
thereon to the prepayment date and the Yield-Maintenance Amount, if any, with
respect to each Note shall be due and payable on such date. Any partial
prepayment of the Notes pursuant to this paragraph 4B(2) shall be applied in
satisfaction of required payments of principal in inverse order of their
scheduled due dates.
4C. NOTICE OF OPTIONAL PREPAYMENT. The Company shall give the
holder of each Note of a Series to be prepaid pursuant to paragraph 4B(1)
irrevocable written notice of such prepayment not less than 10 Business Days
prior to the prepayment date, specifying such prepayment date, the aggregate
principal amount of the Notes of such Series to be prepaid on such date, the
principal amount of the Notes of such Series held by such holder to be prepaid
on that date and that such prepayment is to be made pursuant to paragraph 4B(1).
Notice of prepayment having been given as aforesaid, the principal amount of the
Notes specified in such notice, together with interest thereon to the prepayment
date and together with the Yield-Maintenance Amount, if any, herein provided,
shall become due and payable on such prepayment date. The Company shall, on or
before the day on which it gives written notice of any prepayment pursuant to
paragraph 4B(1), give telephonic notice of the principal amount of the Notes to
be prepaid and the prepayment date to each Significant Holder which shall have
designated a recipient for such notices in the Purchaser Schedule attached
hereto or the applicable Confirmation of Acceptance or by notice in writing to
the Company.
4D. APPLICATION OF PREPAYMENTS. In the case of each prepayment of
less than the entire unpaid principal amount of all outstanding Notes of any
Series pursuant to paragraphs 4A, 4B(1) or 4B(2), the amount to be prepaid shall
be applied pro rata to all outstanding Notes of such Series (including, for the
purpose of this paragraph 4D only, all Notes prepaid or otherwise retired or
purchased or otherwise acquired by the Company or any of its Subsidiaries or
Affiliates other than by prepayment pursuant to paragraph 4A, 4B or 4B(2))
according to the respective unpaid principal amounts thereof.
4E. NO ACQUISITION OF NOTES. The Company shall not, and shall not
permit any of its Subsidiaries or Affiliates to, prepay or otherwise retire in
whole or in part prior to their stated final maturity (other than by prepayment
pursuant to paragraphs 4A or 4B, or upon acceleration of such final maturity
pursuant to paragraph 7A), or purchase or otherwise acquire, directly or
indirectly, Notes held by any holder. Any notes so prepaid or otherwise retired
or purchased or otherwise acquired by the Company or any of its Subsidiaries or
Affiliates shall not be deemed to be outstanding for any purpose under this
Agreement, except as provided in paragraph 4D.
5. AFFIRMATIVE COVENANTS. During the Issuance Period and so long
thereafter as any Note is outstanding and unpaid, the Company covenants as
follows:
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5A. FINANCIAL STATEMENTS; NOTICE OF DEFAULTS. The Company
covenants that it will deliver to Prudential and each Significant Holder in
triplicate:
(i) as soon as practicable and in any event within 45 days
after the end of each quarterly period (other than the last quarterly
period) in each fiscal year, a consolidated balance sheet of the
Company and its Subsidiaries and of the Company and its Subsidiaries as
at the end of such quarterly period and the related consolidated
statements of income and cash flows of the Company and its Subsidiaries
and of the Company and its Subsidiaries for such period setting forth,
in each case in comparative form, figures for the corresponding period
in the preceding fiscal year, all in reasonable detail and certified by
the chief financial officer or chief accounting officer of the Company
as fairly presenting the consolidated financial position of the Company
and its Subsidiaries and of the Company and its Subsidiaries as at the
dates indicated and the consolidated results of their respective
operations and cash flows, in each case for the periods indicated, in
conformity with generally accepted accounting principles applied on a
basis consistent with prior periods (except as disclosed in such
certificate), subject to changes resulting from year-end adjustments;
(ii) as soon as practicable and in any event within 90 days
after the end of each fiscal year, a consolidated and consolidating
balance sheet of the Company and its Subsidiaries as at the end of such
year and the related consolidated and consolidating statements of
income and cash flows of the Company and its Subsidiaries for such
year, all in reasonable detail and satisfactory in scope to the
Required Holder(s), and (a) in the case of such consolidated financial
statements, setting forth in each case in comparative form
corresponding consolidated figures for the preceding fiscal year, and
accompanied by a report thereon of independent public accountants of
recognized national standing selected by the Company, which report
shall state that, subject only to standard qualifications and
limitations generally contained in an unqualified audit report, such
consolidated financial statements present fairly the consolidated
financial position of the Company and its Subsidiaries as at the dates
indicated and the consolidated results of their operations and cash
flows for the periods indicated in conformity with generally accepted
accounting principles applied on a basis consistent with prior years
(except as otherwise specified in such report) and that the audit by
such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing
standards, and (b) in the case of such consolidating financial
statements, (w) setting forth on supplemental schedules, in one column,
the total amounts for the Company and its Subsidiaries, and, in a
second column, the total amounts for the Company's other Subsidiaries,
and showing all eliminations and adjustments made in aggregating the
amounts of such columns to arrive at the Company's consolidated
financial
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statements, (x) setting forth in comparative form the
corresponding consolidated figures for the Company and its Subsidiaries
for the preceding fiscal year, (y) certified by the chief financial
officer or chief accounting officer of the Company as fairly presenting
the respective financial positions of the separate entities reported on
as at the dates indicated and the results of their respective
operations and cash flows for the period indicated, in conformity with
generally accepted accounting principles applied on a basis consistent
with prior periods (except as otherwise specified in such certificate),
and (z) accompanied by a report thereon of the independent public
accountants reporting on the consolidated financial statements of the
Company and its Subsidiaries for such fiscal year, which report shall
state that, subject to the qualifications and limitations contained in
their report on the consolidated financial statements of the Company
and its Subsidiaries, and to the further qualification that the
principles of consolidation followed in the preparation of such
consolidated figures for the Company and its Subsidiaries conform to
the provisions of this Agreement rather than to generally accepted
accounting principles, such consolidated figures for the Company and
its Subsidiaries present fairly the consolidated financial position of
the Company and its Subsidiaries as at the dates indicated and the
consolidated results of their operations and cash flows for the periods
indicated in conformity with generally accepted accounting principles
applied on a basis consistent with prior periods (except as otherwise
specified in such report);
(iii) together with each delivery of financial statements
pursuant to clauses (i) and (ii) of this paragraph 5A, an Officer's
Certificate (a) stating that the signer has reviewed the terms of this
Agreement and the Notes and has made, or caused to be made under his or
her supervision, a review in reasonable detail of the transactions and
condition of the Company and its Subsidiaries during the fiscal period
covered by such financial statements and that such review has not
disclosed the existence during or at the end of such fiscal period, and
that the signer does not have knowledge of the existence as at the date
of the Officer's Certificate, of any condition or event which
constitutes a Default or Event of Default or, if any such condition or
event existed or exists, specifying the nature and period of existence
thereof and what action the Company has taken or is taking or proposes
to take with respect thereto, and (b) demonstrating (with computations
in reasonable detail) compliance by the Company with the provisions of
paragraphs 6A, 6B, 6C(1), 6C(2), 6C(3), 6C(4), 6C(6) and 6C(8) of this
Agreement (herein called the "COMPUTATION PARAGRAPHS");
(iv) together with each delivery of financial statements of
the Company and its Subsidiaries pursuant to clause (ii) of this
paragraph 5A, a certificate by the Company's independent public
accountants stating (a) that their audit examination has included a
review of the terms of this Agreement and of the
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Notes as they relate to accounting matters and that such review is
sufficient to enable them to make the statement referred to in
subclause (c) of this clause (v), (b) whether in the course of their
audit examination there has been disclosed the existence during the
fiscal year covered by such financial statements (and whether they have
knowledge of the existence as of the date of such accountants'
certificate) of any condition or event which constitutes a Default or
Event of Default and if during their audit examination there has been
disclosed (or if they have knowledge of) such a condition or event,
specifying the nature and period of existence thereof (it being
understood, however, that such accountants shall not be liable to any
Person by reason of their failure to obtain knowledge of any Default or
Event of Default which would not be disclosed in the course of an audit
conducted in accordance with generally accepted auditing standards),
and (c) that based on their annual audit examination, including a
review of the Computation Paragraphs, nothing came to their attention
which causes them to believe that the information relating to the
Computation Paragraphs contained in the Officer's Certificate delivered
therewith pursuant to clause (iv) of this paragraph 5A is not correct
or that the matters set forth in such Officer's Certificate are not
stated in accordance with the terms of this Agreement;
(v) promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent or
made available generally by the Company and its Subsidiaries to its
security holders (other than the Company in the case of Subsidiaries),
of all regular and periodic reports and all registration statements and
prospectuses, if any, filed by the Company or any of its Subsidiaries
with any securities exchange or with the Securities and Exchange
Commission or with NASDAQ, and of all press releases and other written
statements made available generally by the Company or any of its
Subsidiaries to the public concerning material developments in the
business of the Company and its Subsidiaries;
(vi) promptly upon receipt thereof by the Company, copies of
all reports submitted to the Company by independent public accountants
in connection with each annual, interim or special audit of the books
of the Company or any of its Subsidiaries made by such accountants;
(vii) promptly upon any Responsible Officer obtaining
knowledge (a) that a condition or event exists that constitutes a
Default or Event of Default, (b) that the holder of any Note has given
any notice or taken any other action with respect to a claimed Default
or Event of Default under this Agreement, (c) of any condition or event
which could reasonably be expected to have a material adverse effect on
the business, condition (financial or other), assets, properties,
operations or prospects of the Company or the Company and its
Subsidiaries taken as a whole (other than matters of a general economic
or political nature which do not affect the Company or its Subsidiaries
uniquely), (d) that any Person has given any notice to the Company or
any Subsidiary or
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taken any other action with respect to a claimed default or event or
condition of the type referred to in clause (iii) of paragraph 7A, (e)
of the institution of any litigation involving claims against the
Company or any Subsidiary in excess of the coverage provided under the
Company's or such Subsidiary's insurance policies (treating any portion
of such coverage which is subject to self-insurance or deductibles as a
part of such excess) if the amount of the excess of such claims
individually exceeds $500,000, or, when aggregated with the excess over
insurance coverage of all other outstanding claims, exceeds $1,000,000,
(f) of the initiation by the Securities and Exchange Commission of any
proceeding against the Company or any Subsidiary or of any
investigation of the Company or any Subsidiary or (g) of the initiation
by any other governmental agency of any proceeding against the Company
or any Subsidiary or of any investigation of the Company or any
Subsidiary involving allegations (or which could reasonably be expected
to result in allegations) of material illegal activities or misconduct
on the part of the Company or any Subsidiary, an Officer's Certificate
specifying the nature and period of existence of any such condition or
event, or specifying the notice given or action taken by such holder or
Person and the nature of such claimed Default, Event of Default, event
or condition, or specifying the nature of such litigation, proceeding
or investigation, and what action the Company has taken, is taking or
proposes to take with respect thereto; and
(viii) with reasonable promptness, such other information and
data with respect to the Company or any of its Subsidiaries as from
time to time may be reasonably requested by such Significant Holder.
5B. INFORMATION REQUIRED BY RULE 144A. The Company covenants that
it will, upon the request of the holder of any Note, provide such holder, and
any qualified institutional buyer designated by such holder, such financial and
other information as such holder may reasonably determine to be necessary in
order to permit compliance with the information requirements of Rule 144A under
the Securities Act in connection with the resale of Notes, except at such times
as the Company is subject to and in compliance with the reporting requirements
of section 13 or 15(d) of the Exchange Act. For the purpose of this paragraph
5B, the term "QUALIFIED INSTITUTIONAL BUYER" shall have the meaning specified in
Rule 144A under the Securities Act.
5C. INSPECTION OF PROPERTY. The Company covenants that it will
permit any Person designated by any Significant Holder in writing, at such
Significant Holder's expense, to visit and inspect any of the properties of the
Company and its Subsidiaries, to examine the corporate books and financial
records of the Company and its Subsidiaries and make copies thereof or extracts
therefrom and to discuss the affairs, finances and accounts of any of such
corporations with the principal officers of the Company and its independent
public accountants, all at such reasonable times and as often as such
Significant Holder may reasonably request.
5D. COVENANT TO SECURE NOTES EQUALLY. The Company covenants that,
if it
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or any Subsidiary shall create or assume any Lien upon any of its property or
assets, whether now owned or hereafter acquired, other than Liens permitted by
the provisions of paragraph 6C(1) (unless prior written consent to the creation
or assumption thereof shall have been obtained pursuant to paragraph 11C), it
will make or cause to be made effective provision whereby the Notes will be
secured by such Lien equally and ratably with any and all other obligations
thereby secured so long as any such other obligations shall be so secured.
5E. PAYMENT OF TAXES AND CLAIMS. The Company covenants that it
will, and will cause each of its Subsidiaries to, pay all income taxes before
the same shall become delinquent, except where such income taxes are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted, if adequate reserves therefor have been established on the
books of the Company or its Subsidiaries in accordance with generally accepted
accounting principles. The Company covenants that it will, and will cause each
of its Subsidiaries to, pay all other taxes, assessments and other governmental
charges imposed upon it or any of its properties or assets or in respect of any
of its franchises, business, income or profits before any penalty accrues
thereon, and all claims (including, without limitation, claims for labor,
services, materials and supplies) for sums which have become due and payable and
which by law have or may become a Lien upon any of its properties or assets,
provided that no such tax, assessment, charge or claim need be paid if it is
being contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and if such accrual or other appropriate provision, if any,
as shall be required by generally accepted accounting principles shall have been
made therefor.
5F. COMPLIANCE WITH LAWS, ETC. The Company covenants that it will,
and will cause each of its Subsidiaries to, comply with the requirements of all
applicable laws, rules, regulations and orders of any governmental authority,
the noncompliance with which would materially adversely affect the business,
condition (financial or other), assets, properties, operations or prospects of
the Company or the Company and its Subsidiaries taken as a whole.
5G. MAINTENANCE OF PROPERTIES; INSURANCE. The Company covenants
that it will, and will cause each of its Subsidiaries to, maintain or cause to
be maintained in good repair, working order and condition all properties used or
useful in the business of the Company and its Subsidiaries and from time to time
make or cause to be made all appropriate repairs, renewals and replacements
thereof. The Company will maintain or cause to be maintained, with financially
sound and reputable insurers, (i) insurance with respect to its properties and
business and the properties and business of its Subsidiaries against loss or
damage of the kinds customarily insured against by corporations of established
reputation engaged in the same or similar business and similarly situated, of
such types and in such amounts as are customarily carried under similar
circumstances by such other corporations, and (ii) life insurance, with the
Company as the owner and named beneficiary, on the life of Myron Kunin in the
amount (net of any premium loans thereon and interest due in connection
therewith) of not less than $2,700,000, and on the life of Paul Finkelstein in
the amount (net of any premium loans thereon and interest due in connection
therewith) of not less than $2,400,000, each of which life insurance policies
shall be free of premium loans (except as specifically provided herein) and
other Liens on or
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offsets against proceeds payable to the Company.
5H. AFFILIATE TRANSACTIONS, KEEPING OF BOOKS, BANK ACCOUNTS. The
Company covenants that it will (i) keep and cause each of its Subsidiaries to
keep separate and proper books of record and account, in which full and correct
entries shall be made of all transactions including any transactions between the
Company or any Subsidiary and any Affiliate, all in accordance with generally
accepted accounting principles, and (ii) maintain and cause each of its
Subsidiaries to maintain bank accounts which are separate and segregated from
the bank accounts of any Affiliate.
5I. ADDITIONAL GUARANTIES. Concurrently with any Subsidiary of the
Company entering into or becoming liable under any Guarantee with respect to any
Debt of the Company, the Company will cause such Subsidiary to join as a
guarantor under the Subsidiary Guarantee, dated as of August 2, 1999, from
certain then Subsidiaries of the Company in favor of the holders of the Notes,
pursuant to an amendment thereto or joinder thereof in form and substance
acceptable to the Required Holder(s), and the Company shall promptly notify the
holders of the Notes at any time which, in accordance with this paragraph, any
Subsidiary shall be required to join as a guarantor under such Subsidiary
Guaranty.
6. NEGATIVE COVENANTS. During the Issuance Period and so long
thereafter as any Note or other amount due hereunder is outstanding and unpaid,
the Company covenants as follows:
6A(1). FIXED CHARGE COVERAGE RATIO. The Company shall not, as of the
last day of any fiscal quarter, permit the ratio of (i) EBITDAR for the period
of four fiscal quarters then ending to (ii) Fixed Charges for such four fiscal
quarter period to be less than (a) 1.5 to 1.0 through March 31, 2002 and (b)
1.65 to 1.00 at anytime thereafter.
6A(2). LEVERAGE RATIO. The Company shall not, as of the last day of
any fiscal quarter, permit its Leverage Ratio to be greater than 2.25 to 1.00.
6B. RESTRICTED PAYMENTS. The Company shall not, and shall not
suffer or permit any Subsidiary to, declare or make any dividend payment or
other distribution of assets, properties, cash, rights, obligations or
securities on account of any shares of any class of its capital stock, or
purchase, redeem or otherwise acquire for value any shares of its capital stock
or any warrants, rights, or options to acquire such shares, now or hereafter
outstanding, except that any Subsidiary may declare and make dividend payments
and other distributions to its shareholders on a pro rata basis and the Company
may:
(a) declare and make dividend payments of other distributions
payable solely in its common stock;
(b) purchase, redeem or otherwise acquire shares of its common
stock or warrants or options to acquire any such shares with the
proceeds received from the substantially concurrent issue of new shares
of its common stock; and
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(c) declare or pay cash dividends to its stockholders and
purchase, redeem or otherwise acquire shares of its capital stock or
warrants, rights or options to acquire any such shares for cash and
computed on a cumulative consolidated basis; provided, that, (i) all
such payments made in any period of four fiscal quarters (ending with
the fiscal quarter in which any such payment is made), other than
payments made in connection with any open market share repurchase
program approved by the Company's board of directors (a "REPURCHASE
PROGRAM") shall not exceed 25% of the Company's consolidated net income
for the period of four fiscal quarters ending with the second preceding
fiscal quarter prior to the fiscal quarter in which such payment is
made (if positive), (ii) the total consideration paid to repurchase the
Company's shares in connection with one or more Repurchase Programs
shall not exceed $50,000,000 in the aggregate after September 26, 2000
and (iii) immediately after giving effect to such proposed action, no
Default or Event of Default would exist (determined with respect to
paragraphs 6A and 6C(2) on a pro forma basis as of the last day of the
previous fiscal quarter).
6C. LIEN, DEBT AND OTHER RESTRICTIONS. The Company will not and
will not permit any Subsidiary to:
6C(1). LIENS. Create, assume or suffer to exist any Lien upon any of
its properties or assets, whether now owned or hereafter acquired (whether or
not provision is made for the equal and ratable securing of the Notes in
accordance with the provisions of paragraph 5D), except:
(i) Liens for taxes, assessments or governmental charges not
yet due or which are being actively contested in good faith by
appropriate proceedings,
(ii) Liens incidental to the conduct of its business or the
ownership of its property and assets which do not secure Debt and which
do not in the aggregate materially detract from the value of its
property or assets or materially impair the use thereof in the
operation of its business,
(iii) Liens on property or assets of a Subsidiary to secure
obligations of such Subsidiary to the Company or a Wholly-Owned
Subsidiary,
6C(2). DEBT. The Company shall not (i) as of the last day of any
fiscal quarter, permit the ratio of (a) the Company's Consolidated Indebtedness
to (b) the sum of (1) the Company's Consolidated Indebtedness plus (2) Net Worth
to be greater than .60 to 1.00 (the "DEBT RATIO"), or (ii) permit at any time
Priority Debt to exceed 15% of Net Worth; provided, however, there shall be a
period of at least ninety consecutive days during each fiscal year of the
Company during which the Debt Ratio does not exceed .55 to 1.00.
6C(3). INVESTMENTS. Make or permit to remain outstanding any loan or
advance to, or extend credit to, or own, purchase or acquire any stock,
obligations or securities of, or any
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other interest in, or make any capital contribution to, any Person (all of the
foregoing being referred to herein as "Investments"), except that the Company or
any Subsidiary may:
(i) make or permit to remain outstanding Investments to or in
any Subsidiary or any corporation which immediately following such
Investment will be a Subsidiary,
(ii) own, purchase or acquire marketable direct obligations
issued or unconditionally guaranteed by the United States of America or
any agency thereof and maturing within one year from the date of
acquisition thereof,
(iii) make demand deposits in banks in the ordinary course of
business, and make deposits or own certificates of deposit of United
States dollars maturing within one year from the date of acquisition
thereof issued by commercial banks chartered under the laws of the
United States of America or any state thereof or the District of
Columbia, each having as at any date of determination combined capital,
surplus and undivided profits of not less than $100,000,000 (determined
in accordance with generally accepted accounting principles),
(iv) own, purchase or acquire commercial paper maturing no
more than 270 days from the date of acquisition thereof and rated A-1
by Standard & Poor's Ratings Group or P-1 by Moody's Investors Service,
Inc.,
(v) make and own Investments in mutual funds which invest at
least 95% of their assets in instruments described in clauses (ii),
(iii) and (iv) of this paragraph 6C(3),
(vi) endorse negotiable instruments for collection in the
ordinary course of business, and
(vii) make or permit to remain outstanding other Investments,
provided that the aggregate amount thereof shall at no time
exceed 5% of Consolidated Net Worth.
6C(4). SALE OF STOCK AND DEBT OF SUBSIDIARIES. Sell or otherwise
dispose of, or part with control of, any shares of stock or Debt of any
Subsidiary, except to the Company or a Wholly-Owned Subsidiary, and except that
all shares of stock and Debt of any Subsidiary at the time owned by or owed to
the Company and all Subsidiaries may be sold as an entirety for a cash
consideration which represents the fair value (as determined in good faith by
the Board of Directors of the Company) at the time of sale of the shares of
stock and Debt so sold; provided that (i) such sale or other disposition, if
treated as a Transfer of assets of such Subsidiary, would be permitted by
paragraph 6C(6) and (ii) at the time of such sale, such Subsidiary shall not
own, directly or indirectly, any shares of stock or Debt of any other Subsidiary
(unless all of the shares of stock and Debt of such other Subsidiary owned,
directly or indirectly, by the Company
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and all Subsidiaries are simultaneously being sold as permitted by this
paragraph 6C(4));
6C(5). MERGER AND CONSOLIDATION. Merge or consolidate with or into
any other Person, except that:
(i) any Subsidiary may merge or consolidate with or into the
Company, provided that the Company is the continuing or surviving
corporation,
(ii) any Subsidiary may merge or consolidate with or into
another Subsidiary, provided that a Wholly-Owned Subsidiary shall be
the continuing or surviving corporation, and
(iii) the Company may merge or consolidate with any other
corporation, provided that (a) either (x) the Company shall be the
continuing or surviving corporation, or (y) the successor or acquiring
corporation shall be a corporation organized under the laws of any
state of the United States of America and shall expressly assume in
writing all of the obligations of the Company under this Agreement and
on the Notes, including all covenants herein and therein contained, and
such successor or acquiring corporation shall succeed to and be
substituted for the Company with the same effect as if it had been
named herein as a party hereto and (b) immediately after giving effect
to such transaction, no Default or Event of Default would exist
hereunder (including a Default or Event of Default under clause (iii)
of paragraph 6C(2));
6C(6). TRANSFER OF ASSETS. Transfer any of its assets except that:
(i) any Subsidiary may Transfer assets to the Company or a
Wholly-Owned Subsidiary,
(ii) the Company or any Subsidiary may sell inventory in the
ordinary course of business, and
(iii) the Company or any Subsidiary may otherwise Transfer
assets, provided that after giving effect thereto (a) the Aggregate
Percentage of Earnings Capacity Transferred pursuant to this clause
(iii) shall not exceed 10% and (b) the Aggregate Percentage of Total
Assets Transferred pursuant to this clause (iii) shall not exceed 10%;
6C(7). SALE OR DISCOUNT OF RECEIVABLES. Sell with recourse, or
discount or otherwise sell for less than the face value thereof, any of its
notes or accounts receivable;
6C(8). TRANSACTIONS WITH AFFILIATES. Directly or indirectly, engage
in any transaction (including, without limitation, the purchase, sale or
exchange of assets or the rendering of any service) with any Affiliate, unless
(i) such transaction is in the ordinary course
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of and pursuant to the reasonable requirements of the Company's or such
Subsidiary's business and upon fair and reasonable terms that are comparable to
those which might be obtained in an arm's-length transaction between
unaffiliated parties, and (ii) in the case of any such transaction in which the
aggregate value of the assets or services involved, or of the payments made,
exceeds $1,000,000, such transaction is authorized by a majority of the
independent members of the Board of Directors of the Company;
6C(9). SUBSIDIARY DIVIDEND RESTRICTIONS. Enter into, or otherwise be
subject to, any contract or agreement (including its certificate or articles of
incorporation), which limits the amount of, or otherwise imposes restrictions on
the payment of, dividends by any Subsidiary; or
6C(10). TAX CONSOLIDATION. Consent to or permit the filing of
or be a party to any consolidated income tax return with any Person, other than
a consolidated tax return of the Company and its Subsidiaries.
6D. TRANSACTIONS BY SUBSIDIARIES. The Company covenants that
it will not permit any Subsidiary (either directly, or indirectly by the
issuance of rights or options for, or securities convertible into, such shares)
to issue, sell or otherwise dispose of (i) any shares of any class of its stock
(other than Common Stock) except to the Company or another Subsidiary or (ii)
any shares of its Common Stock except (a) to the Company or another Subsidiary
and (b) concurrently with dispositions under (a) above, to any minority
shareholders of such Subsidiary to the extent necessary to maintain such
minority shareholders' percentage ownership of outstanding shares of Common
Stock of such Subsidiary.
7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events shall occur and
be continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise):
(i) the Company defaults in the payment of any principal of,
or Yield-Maintenance Amount payable with respect to, any Note when the
same shall become due, either by the terms thereof or otherwise as
herein provided; or
(ii) the Company defaults in the payment of any interest on
any Note for more than 10 days after the date due; or
(iii) the Company or any Subsidiary defaults (whether as
primary obligor or as guarantor or other surety) in any payment of
principal of or interest on any other obligation for money borrowed (or
any Capitalized Lease Obligation, any obligation under a conditional
sale or other title retention agreement, any obligation issued or
assumed as full or partial payment for property whether or not secured
by a purchase money
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mortgage or any obligation under notes payable or drafts accepted
representing extensions of credit) beyond any period of grace provided
with respect thereto, or the Company or any Subsidiary fails to perform
or observe any other agreement, term or condition contained in any
agreement under which any such obligation is created (or if any other
event thereunder or under any such agreement shall occur and be
continuing) and the effect of such failure or other event is to cause,
or to permit the holder or holders of such obligation (or a trustee on
behalf of such holder or holders) to cause, such obligation to become
due (or to be repurchased by the Company or any Subsidiary) prior to
any stated maturity, provided that the aggregate amount of all
obligations as to which such a payment default shall occur and be
continuing or such a failure or other event causing or permitting
acceleration (or resale to the Company or any Subsidiary) shall occur
and be continuing exceeds $500,000; or
(iv) any representation or warranty made by the Company herein
or by the Company or any of its officers in any writing furnished in
connection with or pursuant to this Agreement shall be false in any
material respect on the date as of which made; or
(v) the Company fails to perform or observe any agreement
contained in paragraph 6; or
(vi) the Company fails to perform or observe any other
agreement, term or condition contained herein and such failure shall
not be remedied within 30 days after any Responsible Officer obtains
actual knowledge thereof; or
(vii) the Company or any Subsidiary makes an assignment for
the benefit of creditors or is generally not paying its debts as such
debts become due; or
(viii) any decree or order for relief in respect of the
Company or any Subsidiary is entered under any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law, whether now or
hereafter in effect (herein called the "BANKRUPTCY LAW"), of any
jurisdiction; or
(ix) the Company or any Subsidiary petitions or applies to any
tribunal for, or consents to, the appointment of, or taking possession
by, a trustee, receiver, custodian, liquidator or similar official of
the Company or any Subsidiary, or of any substantial part of the assets
of the Company or any Subsidiary, or commences a voluntary case under
the Bankruptcy Law of the United States or any proceedings (other than
proceedings for the voluntary liquidation and dissolution of a
Subsidiary) relating to the Company or any
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Subsidiary under the Bankruptcy Law of any other jurisdiction; or
(x) any such petition or application is filed, or any such
proceedings are commenced, against the Company or any Subsidiary and
the Company or such Subsidiary by any act indicates its approval
thereof, consent thereto or acquiescence therein, or an order, judgment
or decree is entered appointing any such trustee, receiver, custodian,
liquidator or similar official, or approving the petition in any such
proceedings, and such order, judgment or decree remains unstayed and in
effect for more than 30 days; or
(xi) any order, judgment or decree is entered in any
proceedings against the Company decreeing the dissolution of the
Company and such order, judgment or decree remains unstayed and in
effect for more than 60 days: or
(xii) any order, judgment or decree is entered in any
proceedings against the Company or any Subsidiary decreeing a split-up
of the Company or such Subsidiary which requires the divestiture of
assets representing a substantial part, or the divestiture of the stock
of a Subsidiary whose assets represent a substantial part, of the
consolidated assets of the Company and its Subsidiaries (determined in
accordance with generally accepted accounting principles) or which
requires the divestiture of assets, or stock of a Subsidiary, which
shall have contributed a substantial part of the consolidated net
income of the Company and its Subsidiaries (determined in accordance
with generally accepted accounting principles) for any of the three
fiscal years then most recently ended, and such order, judgment or
decree remains unstayed and in effect for more than 60 days; or
(xiii) one or more final judgments in an aggregate amount in
excess of $500,000 is rendered against the Company or any Subsidiary
and, within 60 days after entry thereof, any such judgment is not
discharged or execution thereof stayed pending appeal, or within 60
days after the expiration of any such stay, such judgment is not
discharged; or
(xiv) the Company or any ERISA Affiliate, in its capacity as
an employer under a Multiemployer Plan, makes a complete or partial
withdrawal from such Multiemployer Plan resulting in the incurrence by
such withdrawing employer of a withdrawal liability in an amount
exceeding $500,000;
then (a) if such event is an Event of Default specified in clause (i) or (ii) of
this paragraph 7A, any holder of any Note may at its option during the
continuance of such Event of Default, by notice in writing to the Company,
declare all of the Notes held by such holder to be, and all of the Notes held by
such holder shall thereupon be and become, immediately due and payable at par
together with interest accrued thereon, without presentment, demand, protest or
notice of any kind, all of which are hereby waived by the Company, (b) if such
event is an Event of Default specified in clause (viii), (ix) or (x) of this
paragraph 7A with respect to the Company, all of the
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Notes at the time outstanding shall automatically become immediately due and
payable together with interest accrued thereon and together with the
Yield-Maintenance Amount, if any, with respect to each Note, without
presentment, demand, protest or notice of any kind, all of which are hereby
waived by the Company, and (c) with respect to any event constituting an Event
of Default, the Required Holder(s) of the Notes of any Series may at its or
their option during the continuance of such Event of Default, by notice in
writing to the Company, declare all of the Notes of such Series to be, and all
of the Notes of such Series shall thereupon be and become, immediately due and
payable together with interest accrued thereon and together with the
Yield-Maintenance Amount, if any, with respect to each Note of such Series,
without presentment, demand, protest or notice of any kind, all of which are
hereby waived by the Company.
7B. RESCISSION OF ACCELERATION. At any time after any or all of
the Notes of any Series shall have been declared immediately due and payable
pursuant to paragraph 7A, the Required Holder(s) of the Notes of such Series
may, by notice in writing to the Company, rescind and annul such declaration and
its consequences if (i) the Company shall have paid all overdue interest on the
Notes of such Series, the principal of and Yield-Maintenance Amount, if any,
payable with respect to any Notes of such Series which have become due otherwise
than by reason of such declaration, and interest on such overdue interest and
overdue principal and Yield-Maintenance Amount at the rate specified in the
Notes of such Series, (ii) the Company shall not have paid any amounts which
have become due solely by reason of such declaration, (iii) all Events of
Default and Defaults, other than non-payment of amounts which have become due
solely by reason of such declaration, shall have been cured or waived pursuant
to paragraph 11C, and (iv) no judgment or decree shall have been entered for the
payment of any amounts due pursuant to the Notes of such Series or this
Agreement. No such rescission or annulment shall extend to or affect any
subsequent Event of Default or Default or impair any right arising therefrom.
7C. NOTICE OF ACCELERATION OR RESCISSION. Whenever any Note shall
be declared immediately due and payable pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Company shall forthwith give written notice thereof to the holder of each Note
of each Series at the time outstanding.
7D. OTHER REMEDIES. If any Event of Default or Default shall occur
and be continuing, the holder of any Note may proceed to protect and enforce its
rights under this Agreement and such Note by exercising such remedies as are
available to such holder in respect thereof under applicable law, either by suit
in equity or by action at law, or both, whether for specific performance of any
covenant or other agreement contained in this Agreement or in aid of the
exercise of any power granted in this Agreement. No remedy conferred in this
Agreement upon the holder of any Note is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter existing at
law or in equity or by statute or otherwise.
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8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company
represents, covenants and warrants as follows (all references to "Subsidiary"
and "Subsidiaries" in this paragraph 8 shall be deemed omitted if the Company
has no Subsidiaries at the time the representations herein are made or
repeated):
8A. ORGANIZATION. The Company is a corporation duly organized and
existing in good standing under the laws of the State of Minnesota, each
Subsidiary is duly organized and existing in good standing under the laws of the
jurisdiction in which it is incorporated, and the Company has and each
Subsidiary has the corporate power to own its respective property and to carry
on its respective business as now being conducted. This Agreement and the Notes
have been duly authorized by all necessary corporate action on the part of the
Company and, when executed and delivered by the Company, will constitute legal,
valid and binding obligations of the Company. Schedule 8A attached hereto lists
all Subsidiaries. All of the outstanding stock (and all outstanding warrants,
options and similar rights to acquire stock) of each Subsidiary is owned by the
Company or a Subsidiary, except as otherwise disclosed in Schedule 8A.
8B. FINANCIAL STATEMENTS. The Company has furnished each Purchaser
of any Accepted Notes with the following financial statements, identified by a
principal financial officer of the Company: (i) consolidating and consolidated
balance sheets of the Company and its Subsidiaries as at June 30 in each of the
three fiscal years of the Company most recently completed prior to the date as
of which this representation is made or repeated to such Purchaser (other than
fiscal years completed within 90 days prior to such date for which audited
financial statements have not been released) and consolidating and consolidated
statements of income, cash flows and a consolidated statement of shareholders'
equity of the Company and its Subsidiaries for each such year, all reported on
by PricewaterhouseCoopers or its predecessors and (ii) a consolidated balance
sheet of the Company and its Subsidiaries and of the Company and its
Subsidiaries as at the end of the quarterly period (if any) most recently
completed prior to such date and after the end of such fiscal year (other than
quarterly periods completed within 45 days prior to such date for which
financial statements have not been released) and the comparable quarterly period
in the preceding fiscal year and consolidated statements of income and cash
flows of the Company and Subsidiaries and of the Company and its Subsidiaries
for the periods from the beginning of the fiscal years in which such quarterly
periods are included to the end of such quarterly periods, prepared by the
Company. Such financial statements (including any related schedules and/or
notes) are true and correct in all material respects (subject, as to interim
statements, to changes resulting from audits and year-end adjustments), have
been prepared in accordance with generally accepted accounting principles
consistently followed throughout the periods involved and show all liabilities,
direct and contingent, of the Company and its Subsidiaries or the Company and
its Subsidiaries (as the case may be) required to be shown in accordance with
such principles. The balance sheets fairly present the condition of the Company
and its Subsidiaries or the Company and its Subsidiaries (as the case may be) as
at the dates thereof, and the statements of income, stockholders' equity and
cash flows fairly present the results of the operations of the Company and its
Subsidiaries or the Company and its Subsidiaries (as the case may be) and their
cash flows for the periods indicated. There has been no material adverse change
in the business, property or assets, condition (financial or otherwise),
operations or prospects of the Company and its
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<PAGE> 28
Subsidiaries or the Company and its Subsidiaries, in each case taken as a whole,
since the end of the most recent fiscal year for which such audited financial
statements have been furnished.
8C. ACTIONS PENDING. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against the
Company or any of its Subsidiaries, or any properties or rights of the Company
or any of its Subsidiaries, by or before any court, arbitrator or administrative
or governmental body which might result in any material adverse change in the
business, property or assets, condition (financial or otherwise) or operations
of the Company and its Subsidiaries taken as a whole.
8D. OUTSTANDING DEBT. Neither the Company nor any of its
Subsidiaries has outstanding any Debt except as permitted by paragraph 6C(2).
There exists no default under the provisions of any instrument evidencing such
Debt or of any agreement relating thereto.
8E. TITLE TO PROPERTIES. The Company has and each of its
Subsidiaries has good and indefeasible title to its respective real properties
(other than properties which it leases) and good title to all of its other
respective properties and assets, including the properties and assets reflected
in the most recent audited balance sheet referred to in paragraph 8B (other than
properties and assets disposed of in the ordinary course of business), subject
to no Lien of any kind except Liens permitted by paragraph 6C(1). All leases
necessary in any material respect for the conduct of the respective businesses
of the Company and its Subsidiaries are valid and subsisting and are in full
force and effect.
8F. TAXES. The Company has and each of its Subsidiaries has filed
all federal, state and other income tax returns which are required to be filed,
and each has paid all taxes as shown on such returns and on all assessments
received by it to the extent that such taxes have become due, except such taxes
as are being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with generally accepted
accounting principles.
8G. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the Company
nor any of its Subsidiaries is a party to any contract or agreement or subject
to any charter or other corporate restriction which materially and adversely
affects its business, property or assets, condition (financial or otherwise) or
operations. Neither the execution nor delivery of this Agreement or the Notes,
nor the offering, issuance and sale of the Notes, nor fulfillment of nor
compliance with the terms and provisions hereof and of the Notes will conflict
with, or result in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or result in the
creation of any Lien upon any of the properties or assets of the Company or any
of its Subsidiaries pursuant to, the charter or by-laws of the Company or any of
its Subsidiaries, any award of any arbitrator or any agreement (including any
agreement with stockholders), instrument, order, judgment, decree, statute, law,
rule or regulation to which the Company or any of its Subsidiaries is subject.
Neither the Company nor any of its Subsidiaries is a party to, or otherwise
subject to any provision contained in, any instrument evidencing Debt of the
Company or such Subsidiary, any agreement relating thereto or any other contract
or agreement (including its charter) which limits the amount of, or otherwise
imposes restrictions
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<PAGE> 29
on the incurring of, Debt of the Company of the type to be evidenced by the
Notes except as set forth in the agreements listed in Schedule 8G attached
hereto. The Company is not party to any agreement evidencing or pertaining to
Debt of the Company which includes any operational or financial covenant which
is more favorable to a lender or other beneficiary than those set forth in
paragraph 6 hereof. For purposes of the preceding sentence, no effect shall be
given to paragraph 5F hereof.
8H. OFFERING OF NOTES. Neither the Company nor any agent acting on
its behalf has, directly or indirectly, offered the Notes or any similar
security of the Company for sale to, or solicited any offers to buy the Notes or
any similar security of the Company from, or otherwise approached or negotiated
with respect thereto with, any Person other than institutional investors, and
neither the Company nor any agent acting on its behalf has taken or will take
any action which would subject the issuance or sale of the Notes to the
provisions of Section 5 of the Securities Act or to the provisions of any
securities or Blue Sky law of any applicable jurisdiction.
8I. USE OF PROCEEDS. None of the proceeds of the sale of any Notes
will be used, directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of purchasing or carrying any "margin stock" as defined
in Regulation U of the Board of Governors of the Federal Reserve System (herein
called "MARGIN STOCK") or for the purpose of maintaining, reducing or retiring
any indebtedness which was originally incurred to purchase or carry any stock
that is then currently a margin stock or for any other purpose which might
constitute the purchase of such Notes a "purpose credit" within the meaning of
such Regulation U, unless the Company shall have delivered to the Purchaser
which is purchasing such Notes, on the Closing Day for such Notes, an opinion of
counsel satisfactory to such Purchaser stating that the purchase of such Notes
does not constitute a violation of such Regulation U. Neither the Company nor
any agent acting on its behalf has taken or will take any action which might
cause this Agreement or the Notes to violate Regulation U, Regulation T or any
other regulation of the Board of Governors of the Federal Reserve System or to
violate the Exchange Act, in each case as in effect now or as the same may
hereafter be in effect.
8J. ERISA. No accumulated funding deficiency (as defined in
section 302 of ERISA and section 412 of the Code), whether or not waived, exists
with respect to any Plan (other than a Multiemployer Plan). No liability to the
Pension Benefit Guaranty Corporation has been or is expected by the Company or
any ERISA Affiliate to be incurred with respect to any Plan (other than a
Multiemployer Plan) by the Company, any Subsidiary or any ERISA Affiliate which
is or would be materially adverse to the business, property or assets, condition
(financial or otherwise) or operations of the Company and its Subsidiaries taken
as a whole. Neither the Company, any Subsidiary nor any ERISA Affiliate has
incurred or presently expects to incur any withdrawal liability under Title IV
of ERISA with respect to any Multiemployer Plan which is or would be materially
adverse to the business, property or assets, condition (financial or otherwise)
or operations of the Company and its Subsidiaries taken as a whole. The
execution and delivery of this Agreement and the issuance and sale of the Notes
will be exempt from or will not involve any transaction which is subject to the
prohibitions of section 406 of ERISA and will not involve any transaction in
connection with which a penalty could be imposed under section 502(i) of
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<PAGE> 30
ERISA or a tax could be imposed pursuant to section 4975 of the Code. The
representation by the Company in the next preceding sentence is made in reliance
upon and subject to the accuracy of the representation of each Purchaser in
paragraph 9B as to the source of funds to be used by it to purchase any Notes.
8K. GOVERNMENTAL CONSENT. Neither the nature of the Company or of
any Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or delivery of the
Notes is such as to require any authorization, consent, approval, exemption or
any action by or notice to or filing with any court or administrative or
governmental body (other than routine filings after the Closing Day for any
Notes with the Securities and Exchange Commission and/or state Blue Sky
authorities) in connection with the execution and delivery of this Agreement,
the offering, issuance, sale or delivery of the Notes or fulfillment of or
compliance with the terms and provisions hereof or of the Notes.
8L. ENVIRONMENTAL COMPLIANCE. The Company and its Subsidiaries and
all of their respective properties and facilities have complied at all times and
in all respects with all foreign, federal, state, local and regional statutes,
laws, ordinances and judicial or administrative orders, judgments, rulings and
regulations relating to protection of the environment except, in any such case,
where failure to comply would not result in a material adverse effect on the
business, condition (financial or otherwise) or operations of the Company and
its Subsidiaries taken as a whole.
8M. DISCLOSURE. Neither this Agreement nor any other document,
certificate or statement furnished to any Purchaser by or on behalf of the
Company in connection herewith contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained herein and therein not misleading. There is no fact peculiar to the
Company or any of its Subsidiaries which materially adversely affects or in the
future may (so far as the Company can now foresee) materially adversely affect
the business, property or assets, condition (financial or otherwise) or
operations of the Company or any of its Subsidiaries and which has not been set
forth in this Agreement.
8N. HOSTILE TENDER OFFERS. None of the proceeds of the sale of any
Notes will be used to finance a Hostile Tender Offer.
8O. RULE 144A. The Notes are not of the same class as securities
of the Company, if any, listed on a national securities exchange registered
under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer
quotation system.
8P. FOREIGN ENEMIES AND REGULATIONS. Neither the issue and sale of
the Notes by the Company, its use of the proceeds thereof nor any of the
transactions contemplated by this Agreement will violate (i) any regulations
promulgated or administered by the Office of Foreign Assets Control, United
States Department of the Treasury, including, without limitation, the Foreign
Assets Control Regulations, the Transaction Control Regulations, the Cuban
Assets Control Regulations, the Foreign Funds Control Regulations, the Iranian
Assets Control
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<PAGE> 31
Regulations, the Nicaraguan Trade Control Regulations, the South African
Transaction Regulations, the Iranian Transactions Regulations, the Iraqi
Sanctions Regulations, the Soviet Gold Coin Regulations, the Panamanian
Transaction Regulations or the Libyan Sanctions Regulations of the United States
Treasury Department, 31 C.F.R., Subtitle B, Chapter V, as amended, (ii) the
Trading with the Enemy Act, as amended, (iii) Executive Orders 8389, 9095, 9193,
12543 (Libya), 12544 (Libya), 12722 (Iraq) or 12724 (Iraq), 12775 (Haiti) or
12779 (Haiti), as amended, of the President of the United States, (iv) the
Comprehensive Anti-Apartheid Act of 1986 or (v) any rule, regulation or
executive order issued or promulgated pursuant to the laws or regulations
described in the foregoing clauses (i) through (iv).
9. REPRESENTATIONS OF THE PURCHASERS.
Each Purchaser represents as follows:
9A. NATURE OF PURCHASE. Such Purchaser is not acquiring the Notes
purchased by it hereunder with a view to or for sale in connection with any
distribution thereof within the meaning of the Securities Act, provided that the
disposition of such Purchaser's property shall at all times be and remain within
its control.
9B. SOURCE OF FUNDS. The source of the funds being used by such
Purchaser to pay the purchase price of the Notes being purchased by such
Purchaser hereunder constitutes assets allocated to: (i) the "insurance company
general account" of such Purchaser (as such term is defined under Section V of
the United States Department of Labor's Prohibited Transaction Class Exemption
("PTCE") 95-60), and as of the date of the purchase of the Notes such Purchaser
satisfies all of the applicable requirements for relief under Sections I and IV
of PTCE 95-60, (ii) a separate account maintained by such Purchaser in which no
employee benefit plan, other than employee benefit plans identified on a list
which has been furnished by such Purchaser to the Company, participates to the
extent of 10% or more or (iii) an investment fund, the assets of which do not
include any assets of any employee benefit plan. For the purpose of this
paragraph 9B, the terms "SEPARATE ACCOUNT" and "EMPLOYEE BENEFIT PLAN" shall
have the respective meanings specified in section 3 of ERISA.
10. DEFINITIONS; ACCOUNTING MATTERS. For the purpose of this
Agreement, the terms defined in paragraphs 10A and 10B (or within the text of
any other paragraph) shall have the respective meanings specified therein and
all accounting matters shall be subject to determination as provided in
paragraph 10C.
10A. YIELD-MAINTENANCE TERMS.
"CALLED PRINCIPAL" shall mean, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to paragraph 4B or is
declared to be immediately due and payable pursuant to paragraph 7A, as the
context requires.
"DISCOUNTED VALUE" shall mean, with respect to the Called
Principal of any Note, the amount obtained by discounting all Remaining
Scheduled Payments with respect
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<PAGE> 32
to such Called Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (as converted to reflect
the periodic basis on which interest on such Note is payable, if payable other
than on a semi-annual basis) equal to the Reinvestment Yield with respect to
such Called Principal.
"REINVESTMENT YIELD" shall mean, with respect to the Called
Principal of any Note, the yield to maturity implied by (i) the yields reported,
as of 10:00 A.M. (New York City local time) on the Business Day next preceding
the Settlement Date with respect to such Called Principal, on the display
designated as "Page 678" on the Telerate Service (or such other display as may
replace page 678 on the Telerate Service) for actively traded U.S. Treasury
securities having a maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date, or if such yields shall not be reported as
of such time or the yields reported as of such time shall not be ascertainable,
(ii) the Treasury Constant Maturity Series yields reported, for the latest day
for which such yields shall have been so reported as of the Business Day next
preceding the Settlement Date with respect to such Called Principal, in Federal
Reserve Statistical Release H.15 (519) (or any comparable successor publication)
for actively traded U.S. Treasury securities having a constant maturity equal to
the Remaining Average Life of such Called Principal as of such Settlement Date.
Such implied yield shall be determined, if necessary, by (a) converting U.S.
Treasury bill quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between yields reported for
various maturities. The Reinvestment Yield will be rounded to that number of
decimal places as appears in the coupon for the Notes.
"REMAINING AVERAGE LIFE" shall mean, with respect to the
Called Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the
sum of the products obtained by multiplying (a) each Remaining Scheduled Payment
of such Called Principal (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the
Called Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date.
"SETTLEMENT DATE" shall mean, with respect to the Called
Principal of any Note, the date on which such Called Principal is to be prepaid
pursuant to paragraph 4B or is declared to be immediately due and payable
pursuant to paragraph 7A, as the context requires.
"YIELD-MAINTENANCE AMOUNT" shall mean, with respect to any
Note, an amount equal to the excess, if any, of the Discounted Value of the
Called Principal of such Note over the sum of (i) such Called Principal plus
(ii) interest accrued thereon as of (including interest due on) the Settlement
Date with respect to such Called Principal. The
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Yield-Maintenance Amount shall in no event be less than zero.
10B. OTHER TERMS.
"ACCEPTANCE" shall have the meaning specified in paragraph 2E.
"ACCEPTANCE DAY" shall have the meaning specified in paragraph
2E.
"ACCEPTANCE WINDOW" shall mean, with respect to any interest
rate quote made by Prudential pursuant to paragraph 2D, the time period
designated by Prudential during which the Company may elect to accept such
interest rate quote as to not less than $5,000,000 in aggregate principal amount
of Shelf Notes specified in the related Request for Purchase.
"ACCEPTED NOTE" shall have the meaning specified in paragraph
2E.
"ACQUISITION" means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly, in (a) the
acquisition of all or substantially all of the assets of a Person, or of any
business or division of a Person, (b) the acquisition of in excess of 50% of the
capital stock, partnership interests, membership interests or equity of any
Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger
or consolidation or any other combination with another Person (other than a
Person that is a Subsidiary) provided that the Company or the Subsidiary is the
surviving entity.
"AFFILIATE" shall mean (i) any Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with such
Person (except, with respect to the Company, a Subsidiary) and (ii) with respect
to Prudential, any investment fund or vehicle for which Prudential or any
Prudential Affiliate acts as investment advisor or portfolio manager. A Person
shall be deemed to control a corporation if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"AGGREGATE PERCENTAGE OF EARNINGS CAPACITY TRANSFERRED" shall
mean, with respect to any eight consecutive fiscal quarter period, the sum of
the Percentages of Earnings Capacity Transferred for each asset of the Company
and its Subsidiaries that is Transferred during such period.
"AGGREGATE PERCENTAGE OF TOTAL ASSETS TRANSFERRED" shall mean,
with respect to any eight consecutive fiscal quarter period, the sum of the
Percentages of Total Assets Transferred for each asset of the Company and its
Subsidiaries that is Transferred during such period.
"AUTHORIZED OFFICER" shall mean (i) in the case of the
Company, its chief executive officer, its chief financial officer, any vice
president of the Company designated as an "Authorized Officer" of the Company in
the Information Schedule attached hereto or any vice president of the Company
designated as an "Authorized Officer" of the Company for the purpose
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of this Agreement in an Officer's Certificate executed by the Company's chief
executive officer or chief financial officer and delivered to Prudential, and
(ii) in the case of Prudential, any officer of Prudential designated as its
"Authorized Officer" in the Information Schedule or any officer of Prudential
designated as its "Authorized Officer" for the purpose of this Agreement in a
certificate executed by one of its Authorized Officers or a lawyer in its law
department. Any action taken under this Agreement on behalf of the Company by
any individual who on or after the date of this Agreement shall have been an
Authorized Officer of the Company and whom Prudential in good faith believes to
be an Authorized Officer of the Company at the time of such action shall be
binding on the Company even though such individual shall have ceased to be an
Authorized Officer of the Company, and any action taken under this Agreement on
behalf of Prudential by any individual who on or after the date of this
Agreement shall have been an Authorized Officer of Prudential and whom the
Company in good faith believes to be an Authorized Officer of Prudential at the
time of such action shall be binding on Prudential even though such individual
shall have ceased to be an Authorized Officer of Prudential.
"AVAILABLE FACILITY AMOUNT" shall have the meaning specified
in paragraph 2A.
"AVERAGE CONSOLIDATED NET INCOME" shall mean, as of any time
of determination thereof, the average Consolidated Net Income of the Company and
Subsidiaries for the three complete fiscal years of the Company then most
recently ended.
"BANKRUPTCY LAW" shall have the meaning specified in clause
(viii) of paragraph 7A.
"BUSINESS DAY" shall mean any day other than (i) a Saturday or
a Sunday, (ii) a day on which commercial banks in New York City are required or
authorized to be closed and (iii) for purposes of paragraph 2C hereof only, a
day on which The Prudential Insurance Company of America is not open for
business.
"CANCELLATION DATE" shall have the meaning specified in
paragraph 2H(iv).
"CANCELLATION FEE" shall have the meaning specified in
paragraph 2H(iv).
"CAPITAL LEASE OBLIGATION" and "CAPITALIZED LEASE OBLIGATION"
shall mean all monetary obligations of the Company or any of its Subsidiaries
under any leasing or similar arrangement which, in accordance with generally
accepted accounting principles, is classified as a capital lease.
"CLOSING DAY" shall mean, with respect to any Accepted Note,
the Business Day specified for the closing of the purchase and sale of such
Accepted Note in the Request for Purchase of such Accepted Note, provided that
(i) if the Company and the Purchaser which is obligated to purchase such
Accepted Note agree on an earlier Business Day for such closing, the "CLOSING
DAY" for such Accepted Note shall be such earlier Business Day, and (ii) if
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the closing of the purchase and sale of such Accepted Note is rescheduled
pursuant to paragraph 2G, the Closing Day for such Accepted Note, for all
purposes of this Agreement except references to "original Closing Day" in
paragraph 2H(iii), shall mean the Rescheduled Closing Day with respect to such
Accepted Note.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
"CONFIRMATION OF ACCEPTANCE" shall have the meaning specified
in paragraph 2E.
"CONSOLIDATED" shall mean the consolidation of the accounts of
the Company and its Subsidiaries in accordance with generally accepted
accounting principles including principles of consolidation.
"CONSOLIDATED NET INCOME" shall mean, with respect to any
period, the net income of the Company and its Subsidiaries determined on a
consolidated basis in accordance with generally accepted accounting principles.
"CREDIT AGREEMENT" shall mean the Credit Agreement, dated as
of August 2, 1999, among the Company, Bank of America, National Association, as
Administrative Agent, LaSalle Bank, N.A., as Co-Administrative Agent, and the
other financial institutions parties thereto, as amended, supplemented or
modified from time to time.
"DEBT" shall mean Indebtedness.
"DELAYED DELIVERY FEE" shall have the meaning specified in
paragraph 2H(iii).
"EBITDA" means, for any period, for the Company and its
Subsidiaries on a consolidated basis, determined in accordance with generally
accepted accounting principles, the sum of (a) the net income (or net loss) for
such period, plus (b) all amounts treated as expenses for depreciation and
interest and the amortization of intangibles of any kind to the extent included
in the determination of such net income (or loss), plus (c) all cash taxes paid
or accrued and unpaid on or measured by income to the extent included in the
determination of such net income (or net loss), plus (d) the amount of any other
charge in respect of non-recurring expenses arising in connection with
acquisitions, to the extent approved by the Required Holder(s); provided, that
if the Company or any Subsidiary makes any acquisition in any such period, then
all of the acquired Person's EBITDA in such period shall be added to EBITDA, and
if the Company or any Subsidiary sells all or substantially all of the stock or
assets of any Subsidiary in any such period, then all the EBITDA of such
Subsidiary shall be deducted from EBITDA.
"EBITDAR" means, for any period, for the Company and its
Subsidiaries on a consolidated basis, determined in accordance with generally
accepted accounting principles, the sum of (a) the net income (or net loss) for
such period, plus (b) all amounts treated as
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expenses for depreciation and interest and the amortization of intangibles of
any kind to the extent included in the determination of such net income (or
loss), plus (c) all accrued taxes on or measured by income to the extent
included in the determination of such net income (or net loss), plus (d) all
Rental Expense for such period, plus (e) to the extent applicable, the amount of
the charge in respect of non-recurring expenses taken in the fourth quarter of
the Company's 1999 fiscal year with respect to the Company's Acquisition of The
Barbers, Hairstylists for Men & Women, Inc. and the restructuring of
international operations, in an aggregate amount not to exceed $14,000,000, plus
(f) the amount of any other charge in respect of non-recurring expenses arising
in connection with the Acquisitions, to the extent approved by the Required
Holders.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
"ERISA AFFILIATE" shall mean any corporation which is a
member of the same controlled group of corporations as the Company within the
meaning of section 414(b) of the Code, or any trade or business which is under
common control with the Company within the meaning of section 414(c) of the
Code.
"EVENT OF DEFAULT" shall mean any of the events specified in
paragraph 7A, provided that there has been satisfied any requirement in
connection with such event for the giving of notice, or the lapse of time, or
the happening of any further condition, event or act, and "DEFAULT" shall mean
any of such events, whether or not any such requirement has been satisfied.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
"FACILITY" shall have the meaning specified in paragraph 2A.
"FIXED CHARGES" means, with respect to the Company and its
Subsidiaries on a consolidated basis, as of any date of determination, (a)
interest expense paid on outstanding Indebtedness for the period of four fiscal
quarters ending on the date of determination, and (b) Rental Expense paid in
such period.
"GUARANTEE" shall mean, with respect to any Person, any direct
or indirect liability, contingent or otherwise, of such Person with respect to
any indebtedness, lease, dividend or other obligation of another, including,
without limitation, any such obligation directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the ordinary course of
business) or discounted or sold with recourse by such Person, or in respect of
which such Person is otherwise directly or indirectly liable, including, without
limitation, any such obligation in effect guaranteed by such Person through any
agreement (contingent or otherwise) to purchase, repurchase or otherwise acquire
such obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain the solvency or
any balance sheet or other financial condition of the obligor of such
obligation, or to make
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payment for any products, materials or supplies or for any transportation or
service, regardless of the non-delivery or non-furnishing thereof, in any such
case if the purpose or intent of such agreement is to provide assurance that
such obligation will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such obligation will be
protected against loss in respect thereof. The amount of any Guarantee shall be
equal to the outstanding principal amount of the obligation guaranteed or such
lesser amount to which the maximum exposure of the guarantor shall have been
specifically limited.
"GUARANTY OBLIGATION" means, as to any Person, any direct or
indirect liability of that Person, whether or not contingent, with or without
recourse, with respect to any Indebtedness, lease, dividend, letter of credit or
other obligation (the "primary obligations") of another Person (the "primary
obligor"), including any obligation of that Person (i) to purchase, repurchase
or otherwise acquire such primary obligations or any security therefor, (ii) to
advance or provide funds for the payment or discharge of any such primary
obligation, or to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency or any balance sheet
item, level of income or financial condition of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation, or (iv) otherwise to assure or hold
harmless the holder of any such primary obligation against loss in respect
thereof.
"HEDGE TREASURY NOTE(S)" shall mean, with respect to any
Accepted Note, the United States Treasury Note or Notes whose duration (as
determined by Prudential) most closely matches the duration of such Accepted
Note.
"HOSTILE TENDER OFFER" shall mean, with respect to the use of
proceeds of any Note, any offer to purchase, or any purchase of, shares of
capital stock of any corporation or equity interests in any other entity, or
securities convertible into or representing the beneficial ownership of, or
rights to acquire, any such shares or equity interests, if such shares, equity
interests, securities or rights are of a class which is publicly traded on any
securities exchange or in any over-the-counter market, other than purchases of
such shares, equity interests, securities or rights representing less than 5% of
the equity interests or beneficial ownership of such corporation or other entity
for portfolio investment purposes, and such offer or purchase has not been duly
approved by the board of directors of such corporation or the equivalent
governing body of such other entity prior to the date on which the Company makes
the Request for Purchase of such Note.
"INCLUDING" shall mean, unless the context clearly requires
otherwise, "including without limitation".
"INDEBTEDNESS" of any Person means, without duplication, (a)
all indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than trade
payables entered into in the ordinary course of business on ordinary terms); (c)
all reimbursement or payment obligations with respect to Surety Instruments and
all L/C Obligations; (d) all obligations evidenced by
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notes, bonds, debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of property, assets or
businesses; (e) all indebtedness created or arising under any conditional sale
or other title retention agreement, or incurred as financing, in either case
with respect to property acquired by the Person (even though the rights and
remedies of the seller or bank under such agreement in the event of default are
limited to repossession or sale of such property); (f) all Capital Lease
Obligations; (g) the principal balance outstanding under any synthetic lease,
tax retention operating lease, off-balance sheet loan or similar off-balance
sheet financing product to which such Person is a party, where such transaction
is considered borrowed money indebtedness for tax purposes but is classified as
an operating lease in accordance with generally accepted accounting principles;
(h) all indebtedness referred to in clauses (a) through (g) above secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property (including accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness; and (i) all
Guaranty Obligations in respect of indebtedness or obligations of others of the
kinds referred to in clauses (a) through (h) above. For all purposes of this
Agreement, the Indebtedness of any Person shall include all recourse
Indebtedness of any partnership or joint venture or limited liability company in
which such Person is a general partner or a joint venturer or a member and as to
which such Person is or may become directly liable.
"INTERCREDITOR AGREEMENT" shall mean the Intercreditor
Agreement, dated as of August 2, 1999, among the holders of the Notes and
certain other lenders to the Company, or any other intercreditor agreement,
substantially in the form of such Intercreditor Agreement, which may be entered
into by the holders of the Notes and other lenders to the Company, each, as
amended supplemented or modified from time to time.
"ISSUANCE PERIOD" shall have the meaning specified in
paragraph 2B.
"L/C BORROWING" means an extension of credit resulting
from a drawing under any Letter of Credit which shall not have been reimbursed
on the date when made nor converted into a borrowing of loans under subsection
3.03(d) of the Credit Agreement.
"L/C OBLIGATIONS" means at any time the sum of (a) the
aggregate undrawn amount of all Letters of Credit then outstanding, plus (b) the
amount of all unreimbursed drawings under all Letters of Credit, including all
outstanding L/C Borrowings.
"LETTERS OF CREDIT" means (a) each of the outstanding standby
letters of credit issued by LaSalle Bank, N.A. and described on Schedule 1.01 to
the Credit Agreement, and (b) any standby letter of credit issued pursuant to
Article III of the Credit Agreement on or after the date of the Credit
Agreement.
"LEVERAGE RATIO" means, as of any date of determination, the
ratio of (a) all Indebtedness of the Company and its Subsidiaries determined on
a consolidated basis as of such date, to (b) EBITDA for the period of four
fiscal quarters ending on such date.
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"LIEN" shall mean any mortgage, pledge, security interest,
encumbrance, lien (statutory or otherwise) or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction) or any other type of preferential arrangement for the purpose,
or having the effect, of protecting a creditor against loss or securing the
payment or performance of an obligation.
"MULTIEMPLOYER PLAN" shall mean any Plan which is a
"multiemployer plan" (as such term is defined in section 4001(a)(3) of ERISA.
"NET WORTH" shall mean the shareholders' equity of the
Company as determined in accordance with generally accepted accounting
principles.
"NOTES" shall have the meaning specified in paragraph 1B.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the
name of the Company by an Authorized Officer of the Company.
"PBGC" shall mean the Pension Benefit Guaranty Corporation,
or any successor or replacement entity thereto under ERISA.
"PERCENTAGE(S) OF EARNINGS CAPACITY TRANSFERRED" shall mean,
with respect to each asset Transferred pursuant to clause (iii) of paragraph
6C(6), the ratio (expressed as a percentage) of (i) Consolidated Net Income
produced by, or attributable to, such asset during the four fiscal quarter
period most recently ended prior to the effective date of such Transfer to (ii)
Average Consolidated Net Income.
"PERCENTAGE(S) OF TOTAL ASSETS TRANSFERRED" shall mean, with
respect to each asset Transferred pursuant to clause (iii) of paragraph 6C(6),
the ratio (expressed as a percentage) of (i) the greater of such asset's fair
market value or net book value on the date of Transfer to (ii) the book value of
the consolidated assets of the Company and its Subsidiaries as of the last day
of the fiscal quarter immediately preceding the day of Transfer.
"PERSON" shall mean and include an individual, a partnership,
a joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
"PLAN" shall mean any employee pension benefit plan (as such
term is defined in section 3 of ERISA) which is or has been established or
maintained, or to which contributions are or have been made, by the Company or
any ERISA Affiliate.
"PRIORITY DEBT" shall mean the sum of (i) Debt of the Company
which is secured by a Lien and (ii) Debt of any Subsidiary (including, but not
limited to, any Debt of a Subsidiary which consists of a Guarantee of Debt of
the Company), excluding however Debt of
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Subsidiaries owing to the Company or any Wholly-Owned Subsidiary, but excluding
Debt of any Subsidiary consisting of a Guarantee so long as such Guarantee and
the Debt guaranteed thereby is subject to the Intercreditor Agreement.
"PRUDENTIAL" shall mean The Prudential Insurance Company of
America.
"PRUDENTIAL AFFILIATE" shall mean any Affiliate of Prudential.
"PURCHASERS" shall mean Prudential, Pruco Az and Pruco NJ, as
the case may be, with respect to the Series A Notes, Series B Notes, Series C
Notes, Series D Notes, Series E Notes, Series F Notes, Series G Notes, Series H
Notes and Series I Notes and, with respect to any Accepted Notes, Prudential
and/or the Prudential Affiliate(s), which are purchasing such Accepted Notes.
"RENTAL EXPENSE" means, for any period, the sum of (a) all
store rental payments, (b) all common area maintenance payments and (c) all real
estate taxes paid by the Company and its Subsidiaries.
"REQUEST FOR PURCHASE" shall have the meaning specified in
paragraph 2C.
"REQUIRED HOLDER(S)" shall mean the holder or holders of at
least 51% of the aggregate principal amount of the Notes or of a Series of
Notes, as the context may require, from time to time outstanding.
"RESCHEDULED CLOSING DAY" shall have the meaning specified in
paragraph 2G.
"RESPONSIBLE OFFICER" shall mean the chief executive officer,
chief operating officer, chief financial officer or chief accounting officer of
the Company, general counsel of the Company or any other officer of the Company
involved principally in its financial administration or its controllership
function.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SERIES" shall have the meaning specified in paragraph 1B.
"SHELF NOTES" shall have the meaning specified in paragraph
1B.
"SIGNIFICANT HOLDER" shall mean (i) Prudential, so long as
Prudential or any Prudential Affiliate shall hold (or be committed under this
Agreement to purchase) any Note, and (ii) any other holder of at least 5% of the
aggregate principal amount of the Notes from time to time outstanding.
"SIGNIFICANT STOCKHOLDER" shall mean and include any Person
who owns,
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beneficially or of record, directly or indirectly, at any time during any year
with respect to which a computation is being made, either individually or
together with all persons to whom such Person is related by blood, adoption or
marriage, 5% or more of the Voting Stock of the Company.
"STRUCTURING FEE" shall have the meaning specified in
paragraph 2H(i).
"SUBSIDIARY" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business entity
which is required to be consolidated in the financial statements of such Person
in accordance with generally accepted accounting principles. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of the Company.
"SURETY INSTRUMENTS" means all letters of credit (including
standby and commercial), banker's acceptances, bank guaranties, shipside bonds,
performance bonds, surety bonds and similar instruments.
"TRANSFER" shall mean, with respect to any item, the sale,
exchange, conveyance, lease, transfer or other disposition of such item.
"TRANSFEREE" shall mean any direct or indirect transferee of
all or any part of any Note purchased by any Purchaser under this Agreement.
"VOTING STOCK" shall mean, with respect to any corporation,
any shares of stock of such corporation whose holders are entitled under
ordinary circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).
"WHOLLY-OWNED SUBSIDIARY" shall mean any Subsidiary all of the
stock of every class of which is, at the time as of which any determination is
being made, owned by the Company either directly or through a wholly-owned
Subsidiary.
10C. ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS. All
references in this Agreement to "generally accepted accounting principles" shall
be deemed to refer to generally accepted accounting principles in effect in the
United States at the time of application thereof. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all unaudited financial statements and certificates and reports as to financial
matters required to be furnished hereunder shall be prepared, in accordance with
generally accepted accounting principles applied on a basis consistent with the
most recent audited financial statements delivered pursuant to clause (ii) of
paragraph 5A or, if no such statements have been so delivered, the most recent
audited financial statements referred to in clause (i) of paragraph 8B. Any
reference herein to any specific law, statute, rule or regulation shall refer to
such law, statute, rule or regulation as the same may be may be
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modified, amended or replaced from time to time.
11. MISCELLANEOUS.
11A. NOTE PAYMENTS. The Company agrees that, so long as any
Purchaser shall hold any Note, it will make payments of principal of, interest
on, and any Yield-Maintenance Amount payable with respect to, such Note, which
comply with the terms of this Agreement, by wire transfer of immediately
available funds for credit (not later than 12:00 noon, New York City local time,
on the date due) to (i) the account or accounts of such Purchaser specified in
the Purchaser Schedule attached hereto in the case of any Series A Note, (ii)
the account or accounts of such Purchaser specified in the Confirmation of
Acceptance with respect to such Note in the case of any Shelf Note or (iii) such
other account or accounts in the United States as such Purchaser may from time
to time designate in writing, notwithstanding any contrary provision herein or
in any Note with respect to the place of payment. Each Purchaser agrees that,
before disposing of any Note, it will make a notation thereon (or on a schedule
attached thereto) of all principal payments previously made thereon and of the
date to which interest thereon has been paid. The Company agrees to afford the
benefits of this paragraph 11A to any Transferee which shall have made the same
agreement as the Purchasers have made in this paragraph 11A.
11B. EXPENSES. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save Prudential, each
Purchaser and any Transferee harmless against liability for the payment of, all
out-of-pocket expenses arising in connection with such transactions, including
(i) all document production and duplication charges and the fees and expenses of
any special counsel engaged by the Purchasers or any Transferee in connection
with this Agreement, the transactions contemplated hereby and any subsequent
proposed modification of, or proposed consent under, this Agreement, whether or
not such proposed modification shall be effected or proposed consent granted,
and (ii) the costs and expenses, including attorneys' fees, incurred by any
Purchaser or any Transferee in enforcing (or determining whether or how to
enforce) any rights under this Agreement or the Notes or in responding to any
subpoena or other legal process or informal investigative demand issued in
connection with this Agreement or the transactions contemplated hereby or by
reason of any Purchaser's or any Transferee's having acquired any Note,
including without limitation costs and expenses incurred in any bankruptcy case.
The obligations of the Company under this paragraph 11B shall survive the
transfer of any Note or portion thereof or interest therein by any Purchaser or
any Transferee and the payment of any Note.
11C. CONSENT TO AMENDMENTS. This Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if the Company shall obtain the written consent
to such amendment, action or omission to act, of the Required Holder(s) of the
Notes of each Series except that, (i) with the written consent of the holders of
all Notes of a particular Series, and if an Event of Default shall have occurred
and be continuing, of the holders of all Notes of all Series, at the time
outstanding (and such written consents), the Notes of such Series
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may be amended or the provisions thereof waived to change the maturity thereof,
to change or affect the principal thereof, or to change or affect the rate or
time of payment of interest on or any Yield-Maintenance Amount payable with
respect to the Notes of such Series, (ii) without the written consent of the
holder or holders of all Notes at the time outstanding, no amendment to or
waiver of the provisions of this Agreement shall change or affect the provisions
of paragraph 7A or this paragraph 11C insofar as such provisions relate to
proportions of the principal amount of the Notes of any Series, or the rights of
any individual holder of Notes, required with respect to any declaration of
Notes to be due and payable or with respect to any consent, amendment, waiver or
declaration, (iii) with the written consent of Prudential (and without the
consent of any other holder of the Notes) the provisions of paragraph 2B may be
amended or waived (except insofar as any such amendment or waiver would affect
any rights or obligations with respect to the purchase and sale of Notes which
shall have become Accepted Notes prior to such amendment or waiver), and (iv)
with the written consent of all of the Purchasers which shall have become
obligated to purchase Accepted Notes of any Series (and not without the written
consent of all such Purchasers), any of the provisions of paragraphs 2B and 3
may be amended or waived insofar as such amendment or waiver would affect only
rights or obligations with respect to the purchase and sale of the Accepted
Notes of such Series or the terms and provisions of such Accepted Notes. Each
holder of any Note at the time or thereafter outstanding shall be bound by any
consent authorized by this paragraph 11C, whether or not such Note shall have
been marked to indicate such consent, but any Notes issued thereafter may bear a
notation referring to any such consent. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein and in the Notes, the term "THIS AGREEMENT" and references
thereto shall mean this Agreement as it may from time to time be amended or
supplemented.
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST
NOTES. The Notes are issuable as registered notes without coupons in
denominations of at least $1,000,000, except as may be necessary to reflect any
principal amount not evenly divisible by $1,000,000; provided, however, that no
such minimum denomination shall apply to Notes issued upon transfer by any
holder of the Notes to Prudential or Prudential Affiliates or to any other
entity or group of affiliates with respect to which the Notes so issued or
transferred shall be managed by a single entity. The Company shall keep at its
principal office a register in which the Company shall provide for the
registration of Notes and of transfers of Notes. Upon surrender for registration
of transfer of any Note at the principal office of the Company, the Company
shall, at its expense, execute and deliver one or more new Notes of like tenor
and of a like aggregate principal amount, registered in the name of such
transferee or transferees. At the option of the holder of any Note, such Note
may be exchanged for other Notes of like tenor and of any authorized
denominations, of a like aggregate principal amount, upon surrender of the Note
to be exchanged at the principal office of the Company. Whenever any Notes are
so surrendered for exchange, the Company shall, at its expense, execute and
deliver the Notes which the holder making the exchange is entitled to receive.
Each prepayment of principal payable on each prepayment date upon each new Note
issued upon any such transfer or exchange shall be in the same
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proportion to the unpaid principal amount of such new Note as the prepayment of
principal payable on such date on the Note surrendered for registration of
transfer or exchange bore to the unpaid principal amount of such Note. No
reference need be made in any such new Note to any prepayment or prepayments of
principal previously due and paid upon the Note surrendered for registration of
transfer or exchange. Every Note surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer duly executed, by the holder of such Note or such holder's attorney
duly authorized in writing. Any Note or Notes issued in exchange for any Note or
upon transfer thereof shall carry the rights to unpaid interest and interest to
accrue which were carried by the Note so exchanged or transferred, so that
neither gain nor loss of interest shall result from any such transfer or
exchange. Upon receipt of written notice from the holder of any Note of the
loss, theft, destruction or mutilation of such Note and, in the case of any such
loss, theft or destruction, upon receipt of such holder's unsecured indemnity
agreement, or in the case of any such mutilation upon surrender and cancellation
of such Note, the Company will make and deliver a new Note, of like tenor, in
lieu of the lost, stolen, destroyed or mutilated Note.
11E. PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to due
presentment for registration of transfer, the Company may treat the Person in
whose name any Note is registered as the owner and holder of such Note for the
purpose of receiving payment of principal of and interest on, and any
Yield-Maintenance Amount payable with respect to, such Note and for all other
purposes whatsoever, whether or not such Note shall be overdue, and the Company
shall not be affected by notice to the contrary. Subject to the preceding
sentence, the holder of any Note may from time to time grant participations in
all or any part of such Note to any Person on such terms and conditions as may
be determined by such holder in its sole and absolute discretion.
11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Notes, the transfer by any Purchaser of any
Note or portion thereof or interest therein and the payment of any Note, and may
be relied upon by any Transferee, regardless of any investigation made at any
time by or on behalf of any Purchaser or any Transferee. Subject to the
preceding sentence, this Agreement and the Notes embody the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and understandings relating to such
subject matter.
11G. SUCCESSORS AND ASSIGNS. All covenants and other agreements in
this Agreement contained by or on behalf of any of the parties hereto shall bind
and inure to the benefit of the respective successors and assigns of the parties
hereto (including, without limitation, any Transferee) whether so expressed or
not.
11H. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be
given independent effect so that if a particular action or condition is
prohibited by any one of such
40
<PAGE> 45
covenants, the fact that it would be permitted by an exception to, or otherwise
be in compliance within the limitations of, another covenant shall not avoid (i)
the occurrence of a Default or Event of Default if such action is taken or such
condition exists or (ii) in any way prejudice an attempt by the holder of any
Note to prohibit through equitable action or otherwise the taking of any action
by the Company or any Subsidiary which would result in a Default or Event of
Default.
11I. NOTICES. All written communications provided for hereunder
(other than communications provided for under paragraph 2) shall be sent by
first class mail or nationwide overnight delivery service (with charges prepaid)
and (i) if to any Purchaser, addressed as specified for such communications in
the Purchaser Schedule attached hereto (in the case of the Series A Notes) or
the Purchaser Schedule attached to the applicable Confirmation of Acceptance (in
the case of any Shelf Notes) or at such other address as any such Purchaser
shall have specified to the Company in writing, (ii) if to any other holder of
any Note, addressed to it at such address as it shall have specified in writing
to the Company or, if any such holder shall not have so specified an address,
then addressed to such holder in care of the last holder of such Note which
shall have so specified an address to the Company and (iii) if to the Company,
addressed to it at 7201 Metro Boulevard, Minneapolis, Minnesota 55439,
Attention: Chief Financial Officer, provided, however, that any such
communication to the Company may also, at the option of the Person sending such
communication, be delivered by any other means either to the Company at its
address specified above or to any Authorized Officer of the Company. Any
communication pursuant to paragraph 2 shall be made by the method specified for
such communication in paragraph 2, and shall be effective to create any rights
or obligations under this Agreement only if, in the case of a telephone
communication, an Authorized Officer of the party conveying the information and
of the party receiving the information are parties to the telephone call, and in
the case of a telecopier communication, the communication is signed by an
Authorized Officer of the party conveying the information, addressed to the
attention of an Authorized Officer of the party receiving the information, and
in fact received at the telecopier terminal the number of which is listed for
the party receiving the communication in the Information Schedule or at such
other telecopier terminal as the party receiving the information shall have
specified in writing to the party sending such information.
11J. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement
or the Notes to the contrary notwithstanding, any payment of principal of or
interest on, or Yield-Maintenance Amount payable with respect to, any Note that
is due on a date other than a Business Day shall be made on the next succeeding
Business Day. If the date for any payment is extended to the next succeeding
Business Day by reason of the preceding sentence, the period of such extension
shall be included in the computation of the interest payable on such Business
Day.
11K. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate
41
<PAGE> 46
or render unenforceable such provision in any other jurisdiction.
11L. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11M. SATISFACTION REQUIREMENT. If any agreement, certificate or
other writing, or any action taken or to be taken, is by the terms of this
Agreement required to be satisfactory to any Purchaser, to any holder of Notes
or to the Required Holder(s), the determination of such satisfaction shall be
made by such Purchaser, such holder or the Required Holder(s), as the case may
be, in the sole and exclusive judgment (exercised in good faith) of the Person
or Persons making such determination.
11N. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS
OF THE STATE OF ILLINOIS.
11O. SEVERALTY OF OBLIGATIONS. The sales of Notes to the Purchasers
are to be several sales, and the obligations of Prudential and the Purchasers
under this Agreement are several obligations. No failure by Prudential or any
Purchaser to perform its obligations under this Agreement shall relieve any
other Purchaser or the Company of any of its obligations hereunder, and neither
Prudential nor any Purchaser shall be responsible for the obligations of, or any
action taken or omitted by, any other such Person hereunder.
11P. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
42
<PAGE> 47
11Q. BINDING AGREEMENT. When this Agreement is executed and
delivered by the Company and Prudential, it shall become a binding agreement
between the Company and Prudential. This Agreement shall also inure to and each
such Purchaser shall be bound by this Agreement to the extent provided in such
Confirmation of Acceptance.
Very truly yours,
REGIS CORPORATION
By:
--------------------------------------
Name:
Title:
The foregoing Agreement is hereby accepted as of the date first above written.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:
--------------------------------------
Vice President
PRUCO LIFE INSURANCE COMPANY
By:
--------------------------------------
Vice President
PRUCO LIFE INSURANCE COMPANY
OF NEW JERSEY
By:
--------------------------------------
Vice President
43
<PAGE> 48
INFORMATION SCHEDULE
Authorized Officers for Prudential
Allen A. Weaver P. Scott von Fischer
Senior Managing Director Managing Director
Prudential Capital Group Prudential Capital Group
Two Prudential Plaza Two Prudential Plaza
Suite 5600 Suite 5600
Chicago, Illinois 60601 Chicago, Illinois 60601
Telephone: (312) 540-4211 Telephone: (312) 540-4225
Facsimile: (312) 540-4222 Facsimile: (312) 540-4222
Paul Meiring
Marie L. Fioramonti Managing Director
Managing Director Central Credit
Prudential Capital Group Prudential Capital Group
Two Prudential Plaza Four Gateway Center
Suite 5600 100 Mulberry Street
Chicago, Illinois 60601 Newark, New Jersey 07102
Telephone: (312) 540-4233 Telephone: (973) 802-2815
Facsimile: (312) 540-4222 Facsimile: (973) 624-6432
William S. Engelking Alfred D. Sharp
Vice President Vice President
Prudential Capital Group Prudential Capital Group
Two Prudential Plaza Two Prudential Plaza
Suite 5600 Suite 5600
Chicago, Illinois 60601 Chicago, Illinois 60601
Telephone: (312) 540-4214 Telephone: (312) 540-4230
Facsimile: (312) 540-4222 Facsimile: (312) 540-4222
Julia Buthman
Vice President
Prudential Capital Group
Two Prudential Plaza
Suite 5600
Chicago, Illinois 60601
Telephone: (312) 540-4013
Facsimile: (312) 540-4222
<PAGE> 49
PURCHASER SCHEDULE
SERIES I NOTES
REGIS CORPORATION
<TABLE>
<CAPTION>
AGGREGATE PRINCIPAL
AMOUNT OF NOTES NOTE
TO BE PURCHASED DENOMINATION(S)
-------------------- ---------------
<S> <C> <C>
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA $25,000,000 $25,000,000
(1) All payments on account of Notes held by such purchaser shall
be made by wire transfer of immediately available funds for
credit to:
Account No. 890-0304-391
The Bank of New York
New York, New York
(ABA No.: 021-000-018)
Each such wire transfer shall set forth the name of the Company, a
reference to "8.39% Series I Notes due October 3, 2010, Security
No. !INV7200!" and the due date and application (as among principal,
interest and Yield-Maintenance Amount) of the payment being made.
(2) Address for all notices relating to payments:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Gateway Center Three
100 Mulberry Street
Newark, New Jersey 07102
Attention: Manager, Investment Operations Group
Telephone: (973) 802-5260
Telecopy: (973) 802-8055
(3) Address for all other communications and notices:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Two Prudential Plaza
180 N. Stetson Street - Suite 5600
Chicago, IL 60601-6716
Attention: Managing Director
Telecopy: (312) 540-4222
(4) Recipient of telephonic prepayment notices:
Manager, Investment Structure and Pricing
Telephone: (973) 802-7398
Telecopy: (973) 802-9425
(5) Tax Identification No.: 22-1211670
</TABLE>
<PAGE> 50
EXHIBIT A
[FORM OF SHELF NOTE]
REGIS CORPORATION
SENIOR SERIES I NOTE
No.
----
ORIGINAL PRINCIPAL AMOUNT:
ORIGINAL ISSUE DATE:
INTEREST RATE:
INTEREST PAYMENT DATES:
FINAL MATURITY DATE:
PRINCIPAL PREPAYMENT DATES AND AMOUNTS:
FOR VALUE RECEIVED, the undersigned, Regis Corporation herein called
the "Company"), a corporation organized and existing under the laws of the State
of Minnesota, hereby promises to pay to ________________________, or registered
assigns, the principal sum of ________________________ DOLLARS [on the Final
Maturity Date specified above], [payable on the Principal Prepayment Dates and
in the amounts specified above, and on the Final Maturity Date specified above
in an amount equal to the unpaid balance of the principal hereof,] with interest
(computed on the basis of a 360-day year--30-day month) (a) on the unpaid
balance thereof at the Interest Rate per annum specified above, payable on each
Interest Payment Date specified above and on the Final Maturity Date specified
above, commencing with the Interest Payment Date next succeeding the date
hereof, until the principal hereof shall have become due and payable, and (b) on
any overdue payment (including any overdue prepayment) of principal, any overdue
payment of Yield Maintenance Amount and any overdue payment of interest, payable
on each Interest Payment Date as aforesaid (or, at the option of the registered
holder hereof, on demand), at a rate per annum from time to time equal to the
greater of (i) 2% over the Interest Rate specified above or (ii) 2% over the
rate of interest publicly announced by Morgan Guaranty Trust Company of New York
from time to time in New York City as its Prime Rate.
Payments of principal, Yield Maintenance Amount, if any, and interest
are to be made at the main office of Bank of New York in New York City or at
such other place as the holder hereof shall designate to the Company in writing,
in lawful money of the United States of America.
<PAGE> 51
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to the Amended and Restated Private Shelf Agreement,
dated as of October 3, 2000 (herein called the "Agreement"), between the
Company, on the one hand, and The Prudential Insurance Company of America and
each Prudential Affiliate (as defined in the Agreement) which becomes party
thereto, on the other hand, and is entitled to the benefits thereof.
This Note is subject to optional prepayment, in whole or from time to
time in part, on the terms specified in the Agreement.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for the then outstanding principal amount will be issued to, and registered in
the name of, the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note is registered
as the owner hereof for the purpose of receiving payment and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
In case an Event of Default shall occur and be continuing, the
principal of this Note may be declared or otherwise become due and payable in
the manner and with the effect provided in the Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings (if any) provided in the Agreement.
This Note is intended to be performed in the State of Illinois and
shall be construed and enforced in accordance with the laws and decisions of
such State.
REGIS CORPORATION
By:
-------------------------------------
Title:
-------------------------------------
<PAGE> 52
EXHIBIT B
[FORM OF REQUEST FOR PURCHASE]
REGIS CORPORATION
Reference is made to the Amended and Restated Private Shelf Agreement
(the "Agreement"), dated as of October 3, 2000, between Regis Corporation, a
Minnesota corporation (the "Company"), on the one hand, and The Prudential
Insurance Company of America ("Prudential") and each Prudential Affiliate which
becomes party thereto, on the other hand. Capitalized terms used and not
otherwise defined herein shall have the respective meanings specified in the
Agreement.
Pursuant to Paragraph 2C of the Agreement, the Company hereby makes the
following Request for Purchase:
1. Aggregate principal amount of
the Notes covered hereby
(the "Notes") ................... $__________(1)
2. Individual specifications of the Notes:
Principal
Final Prepayment Interest
Principal Maturity Dates and Payment
Amount Date Amounts Period
--------- -------- ---------- --------
3. Use of proceeds of the Notes:
4. Proposed day for the closing of the purchase and sale of the
Notes:
5. The purchase price of the Notes is to be transferred to:
Name and Address
and ABA Routing Number of
Number of Bank Account
----------------- ---------
--------------
(1) Minimum principal amount of $5,000,000.
<PAGE> 53
6. The Company certifies (a) that the representations and
warranties contained in paragraph 8 of the Agreement are true
on and as of the date of this Request for Purchase except to
the extent of changes caused by the transactions contemplated
in the Agreement and (b) that there exists on the date of this
Request for Purchase no Event of Default or Default.
7. The Issuance Fee to be paid pursuant to the Agreement will be
paid by the Company on the closing date.
Dated: REGIS CORPORATION
By:
-------------------------------------
Authorized Officer
B-2
<PAGE> 54
EXHIBIT C
[FORM OF CONFIRMATION OF ACCEPTANCE]
REGIS CORPORATION
Reference is made to the Amended and Restated Private Shelf Agreement (the
"Agreement"), dated as of October 3, 2000 between Regis Corporation, a Minnesota
corporation (the "Company"), on the one hand, and The Prudential Insurance
Company of America ("Prudential") and each Prudential Affiliate which becomes
party thereto, on the other hand. All terms used herein that are defined in the
Agreement have the respective meanings specified in the Agreement.
Prudential or the Prudential Affiliate which is named below as a Purchaser
of Notes hereby confirms the representations as to such Notes set forth in
paragraph 9 of the Agreement, and agrees to be bound by the provisions of
paragraphs 2E and 2G of the Agreement relating to the purchase and sale of such
Notes and by the provisions of the penultimate sentence of paragraph 11A of the
Agreement.
Pursuant to paragraph 2E of the Agreement, an Acceptance with respect to
the following Accepted Notes is hereby confirmed:
I. Accepted Notes: Aggregate principal
amount $__________________
(A) (a) Name of Purchaser:
(b) Principal amount:
(c) Final maturity date:
(d) Principal prepayment dates and amounts:
(e) Interest rate:
(f) Interest payment period:
(g) Payment and notice instructions: As setforth on
attached Purchaser Schedule
(B) (a) Name of Purchaser:
(b) Principal amount:
(c) Final maturity date:
(d) Principal prepayment dates and amounts:
(e) Interest rate:
(f) Interest payment period:
(g) Payment and notice instructions: As setforth on
attached Purchaser Schedule
[(C), (D)..... same information as above.]
<PAGE> 55
II. Closing Day:
III. Fee payable at closing: $_________.
Dated: REGIS CORPORATION
By:
-------------------------------------
Title:
-------------------------------------
[THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA]
By:
-------------------------------------
Vice President
[PRUDENTIAL AFFILIATE]
By:
-------------------------------------
Vice President
<PAGE> 56
EXHIBIT D
[FORM OF OPINION OF COMPANY'S COUNSEL]
[Letterhead of SPECIAL COUNSEL]
[Date of Closing]
[List Purchasers]
c/o Prudential Capital Group
Two Prudential Plaza
Suite 5600
Chicago, Illinois 60601
Ladies and Gentlemen:
We have acted as special counsel for Regis Corporation, a Minnesota
corporation (the "Company"), in connection with the Amended and Restated Private
Shelf Agreement, dated as October 3, 2000 (the "Agreement") between the Company,
on the one hand, and The Prudential Insurance Company of America and each
Prudential Affiliate which becomes a party thereto, on the other hand, pursuant
to which the Company has issued to you today Senior Series ___ Notes of the
Company in the aggregate principal amount of $_________ (the "Notes").
Capitalized terms used and not otherwise defined herein shall have the meanings
provided in the Agreement. This letter is being delivered to you in satisfaction
of the condition set forth in paragraph 3A(iii) of the Agreement and with the
understanding that you are purchasing the Notes in reliance on the opinions
expressed herein.
In this connection, we have examined such certificates of public
officials, certificates of officers of the Company and copies certified to our
satisfaction of corporate documents and records of the Company and of other
papers, and have made such other investigations, as we have deemed relevant and
necessary as a basis for our opinion hereinafter set forth. We have relied upon
such certificates of public officials and of officers of the Company with
respect to the accuracy of material factual matters contained therein which were
not independently established. With respect to the opinion expressed in
paragraph 3 below, we have also relied upon the representation made by you in
paragraph 9A of the Agreement. For purposes of this opinion, we have assumed
that you have all requisite power and authority and have taken all necessary
action to execute and deliver the Agreement and to effect the transactions
contemplated thereby.
Based on the foregoing, it is our opinion that:
<PAGE> 57
1. The Company is a corporation duly organized and validly existing and
in good standing under the laws of the State of __________. The Company has the
corporate power to carry on its business as now being conducted. [The Company
has no Subsidiaries.]
2. The Agreement and the Notes have been duly authorized by all
requisite corporate action and duly executed and delivered by authorized
officers of the Company, and are valid obligations of the Company, legally
binding upon and enforceable against the Company in accordance with their
respective terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and (b) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
3. It is not necessary in connection with the offering, issuance, sale
and delivery of the Notes under the circumstances contemplated by the Agreement
to register the Notes under the Securities Act or to qualify an indenture in
respect of the Notes under the Trust Indenture Act of 1939, as amended.
4. The extension, arranging and obtaining of the credit represented by
the Notes do not result in any violation of regulation U, T or X of the Board of
Governors of the Federal Reserve System.
5. The execution and delivery of the Agreement and the Notes, the
offering, issuance and sale of the Notes and fulfillment of and compliance with
the respective provisions of the Agreement and the Notes do not conflict with,
or result in a breach of the terms, conditions or provisions of, or constitute a
default under, or result in any violation of, or result in the creation of any
Lien upon any of the properties or assets of the Company pursuant to, or require
any authorization, consent, approval, exemption, or other action by or notice to
or filing with any court, administrative or governmental body or other Person
(other than routine filings after the date hereof with the Securities and
Exchange Commission and/or state Blue Sky authorities) pursuant to, the Articles
of Incorporation or by-laws of the Company, any applicable law (including any
securities or Blue Sky law), statute, rule or regulation or to our knowledge any
agreement (including, without limitation, any agreement listed in Schedule 8G to
the Agreement), instrument, order, judgment or decree to which the Company is a
party or otherwise subject.
We are members of the Bar of the State of _________, and the opinions
expressed herein are based upon and are limited exclusively to the laws of that
state and the Federal laws of the United States of America. [For purposes of the
opinion given in paragraph 2, we have assumed with your permission that the laws
of the State of Illinois are the same in all material respects as the laws of
the State of _________.] The foregoing opinion is for the benefit of and may be
relied upon only by you and Transferees permitted by the Agreement.
Very truly yours,
<PAGE> 58
SCHEDULE 6B(1)
LIST OF EXISTING LIENS
[TO BE COMPLETED BY THE COMPANY]
<PAGE> 59
SCHEDULE 8A
SUBSIDIARIES
[TO BE COMPLETED BY THE COMPANY]
<PAGE> 60
SCHEDULE 8G
AGREEMENTS RESTRICTING DEBT
[TO BE COMPLETED BY THE COMPANY]
