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[LETTERHEAD]
January 22, 1998
Regis Corporation
7201 Metro Boulevard
Minneapolis, Minnesota 55439
Attention: Kyle Didier, Manager, Finance
RE: AMENDMENT TO PRIVATE SHELF AGREEMENT DATED AS OF JULY 25, 1995 (AS
AMENDED AS OF JULY 11, 1997, AND AS OTHERWISE AMENDED FROM TIME TO
TIME, THE "AGREEMENT"), BY AND BETWEEN REGIS CORPORATION (THE
"COMPANY") AND THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
("PRUDENTIAL")
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Ladies and Gentlemen:
Reference is made to the above-captioned Agreement, pursuant to which
the Company issued and sold and Prudential purchased the Company's:
(i) 6.94% $10,000,000 Series A Senior Notes due July 1, 2005;
(ii) 7.99% $5,000,000 Series B Senior Notes due July 1, 2003;
(iii)7.80% $22,000,000 Series C Senior Notes due July 1, 2006;
(iv) 7.16% $5,000,000 Series D Senior Notes due January 2, 2002;
(v) 8.18% $8,000,000 Series E Senior Notes due July 2, 2006; and
(vi) 7.48% $2,000,000 Series F Senior Notes due July 2, 2006.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to such terms in the Agreement.
Pursuant to the request of the Company and in accordance with the
provisions of paragraph 11C of the Agreement, the parties hereto agree as
follows:
SECTION 1. AMENDMENT. From and after the date this letter becomes
effective in accordance with its terms, the Agreement is amended as follows:
1.1 Paragraph 5K of the Agreement is deleted hereby.
Regis Corporation
January 22, 1998
Page 2
1.2 Paragraph 6C(2)(iii) of the Agreement is amended hereby by deleting
it in its entirety and substituting it with the following:
"(iii) Current Debt, PROVIDED that any holder of such Current
Debt (other than a holder of Permitted Seller Current Debt) is
party to an Offset Sharing Agreement, and".
1.3 Paragraph 6C(3)(vii)(a) of the Agreement is amended hereby by deleting
the following parenthetical phrase "(excluding up to a $4,000,000 equity
contribution to a single United Kingdom based corporation if made after June
23, 1995 and prior to October 1, 1995)".
1.4 Paragraphs 7A(iii), 7A(xiii), 8F, 8J, 8L, and 8M of the Agreement
are amended hereby by inserting the term "Restricted" prior to the term
"Subsidiary" each time such term appears therein.
1.5 Paragraph 10B of the Agreement is amended hereby by deleting
therefrom the definition of "Consolidated Net Income", "Consolidated Net
Worth", "Tangible Net Worth" and "Total Debt" and substituting therefor the
following:
"'CONSOLIDATED NET INCOME' shall mean, as to any period, the net
income of the Company and Restricted Subsidiaries on a consolidated
basis."
"'CONSOLIDATED NET WORTH' shall mean, as of any time of
determination thereof, (i) the shareholders' equity (or deficit) of the
Company and its Restricted Subsidiaries, as the same would be shown on a
consolidated balance sheet of the Company and its Restricted
Subsidiaries, MINUS (ii) the aggregate amount of Investments in
Unrestricted Subsidiaries which are deemed not to be Investments for
purposes of paragraph 6C(3) as a result of clause (vii)(b) thereof."
"'TANGIBLE NET WORTH' shall mean, as of any time of
determination thereof, the net worth of the Company and its Restricted
Subsidiaries determined on a consolidated basis in accordance with
generally accepted accounting principles, plus, to the extent not
included in the assets of the Company and its Restricted Subsidiaries
used in determining such net worth, the amount of the cash surrender
value of life insurance policies maintained by the Company on the lives
of executive officers, plus any amount of Funded Debt of the Company
that is subordinated to the Notes and to all of the Company's
obligations under this Agreement in a manner and form satisfactory to
Prudential in its sole discretion as to the right to and time of payment
of such Funded Debt, and
Regis Corporation
January 22, 1998
Page 3
as to any rights and remedies of Prudential and other holders of any
Notes with respect to such Funded Debt, minus the sum of (i) the amount
of any General Intangibles, (ii) amounts due from Affiliates and (iii)
the amount of investments in Unrestricted Subsidiaries."
"'TOTAL DEBT' shall mean, as of any time of determination
thereof, the aggregate amount of (i) all Funded Debt of the Company and
Restricted Subsidiaries PLUS (ii) the average outstanding daily balance
of all Current Debt of the Company and Restricted Subsidiaries during
the twelve calendar month period most recently ended as of any time of
determination, MINUS (iii) Debt of Restricted Subsidiaries owed to the
Company or a Wholly-Owned Subsidiary."
1.6 Paragraph 10B of the Agreement is amended further hereby by adding
thereto the following definitions, which shall be inserted in proper
alphabetical order:
"'PERMITTED SELLER CURRENT DEBT' shall mean Seller Current Debt
that (i) does not exceed $5,000,000 in aggregate outstanding principal
amount, either individually or collectively with all other Seller
Current Debt incurred in connection with the same purchase of an
operating business, and (ii) does not collectively with all other
outstanding Seller Current Debt exceed $10,000,000 in aggregate
outstanding principal amount."
"'SELLER CURRENT DEBT' shall mean Current Debt of the Company or
a Restricted Subsidiary that is (i) incurred in connection with the
purchase through asset purchase, stock purchase, merger, or
consolidation, of any operating business, (ii) is payable to the
seller(s) of such business or to the shareholders or other equity
holders of the seller(s) of such business, and (iii) represents deferred
purchase price for the purchased business."
1.7 Paragraph 10B of the Agreement is amended further hereby by deleting
the definition of "Subordinated Debt".
SECTION 2. REPRESENTATION AND WARRANTY. The Company hereby represents
and warrants that no Default or Event of Default exists under the Agreement
as of the date hereof.
Regis Corporation
January 22, 1998
Page 4
SECTION 3. CONDITIONS PRECEDENT. This letter shall become effective as
of October 1, 1997 upon the return by the Company to Prudential of a
counterpart hereof duly executed by the Company and Prudential. Such
counterpart should be returned to: Prudential Capital Group, Two Prudential
Plaza, Suite 5600, Chicago, Illinois 60601-6716, Attention: Marianne
Grabowski.
SECTION 4. REFERENCE TO AND EFFECT ON AGREEMENT. Upon the effectiveness
of this letter, each reference to the Agreement in any other document,
instrument or agreement shall mean and be a reference to the Agreement as
modified by this letter. Except as specifically set forth in Section 1
hereof, the Agreement shall remain in full force and effect and is hereby
ratified and confirmed in all respects.
SECTION 5. GOVERNING LAW. THIS LETTER SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS OF SUCH STATE.
SECTION 6. COUNTERPARTS; SECTION TITLES. This letter may be executed in
any number of counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which taken together shall
constitute but one and the same instrument. The section titles contained in
this letter are and shall be without substance, meaning or content of any
kind whatsoever and are not a part of the agreement between the parties
hereto.
Very truly yours,
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/ Illegible
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Vice President
Agreed and accepted:
REGIS CORPORATION
By: /s/ Randy L. Pearce
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RANDY L. PEARCE
Title: SENIOR VICE PRESIDENT-FINANCE
CHIEF FINANCIAL OFFICER
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