AMENDMENT NO. 2 TO AMENDED AND RESTATED CREDIT AGREEMENT
AMENDMENT No. 2, dated as of February 1, 1999, among REGIS CORPORATION, a
Minnesota corporation ("Borrower"), the Lenders (as defined herein), and LASALLE
NATIONAL BANK, a national banking association ("LNB"), as agent for the Lenders
(LNB, in such capacity, together with its successors in such capacity, "Agent").
Borrower, Lenders and Agent are parties to an Amended and Restated Credit
Agreement, dated as of December 30, 1997, as amended by Amendment No.1 to
Amended and Restated Credit Agreement dated as of September 1, 1998 (the "Credit
Agreement"). Borrower, Lenders and Agent desire to amend the Credit Agreement in
certain respects and, accordingly, Borrower, Lenders and Agent agree as follows:
1. DEFINITIONS. Except as otherwise provided herein, the terms defined
in the Credit Agreement are used herein as defined therein.
2. AMENDMENTS. Effective as of the date hereof, but subject to the
satisfaction of the conditions precedent set forth in Section 4 hereof, the
Credit Agreement is hereby amended as follows:
A. The following definition is added to Paragraph lA:
"BORROWER'S U.K. SUBSIDIARY" means Regis Europe LTD.
B. The definition of "LNB Revolving Credit Commitment" in
Paragraph lA is amended and restated as follows:
"LNB REVOLVING CREDIT COMMITMENT" means the obligations
of LNB to make Revolving Credit Loans in an aggregate
amount at any one time outstanding up to but not
exceeding (a) $25,000,000 during the period from the
date of Amendment No.2 to this Agreement, to and
including December 30, 1999, and (b) $30,000,000 during
the period from December 31, 1999, to and including the
Revolving Credit Maturity Date.
C. The following Paragraph 2C is added following
Paragraph 2B:
2C. FOREIGN CURRENCY EXCHANGE. To facilitate loans in
British Pounds by Borrower to Borrower's U.K.
Subsidiary, subject to the availability to Agent of
British Pounds in the New York interbank foreign
currency market, at the request of Borrower, Agent shall
exchange
1
currency market, at the request Borrower, Agent shall
exchange the proceeds of any Revolving Credit Loan
hereunder for British Pounds at Agent's spot rate of
exchange, meaning the rate of exchange at which Agent
would sell British Pounds for U.S. dollars in the New
York interbank foreign currency market, and shall remit
such proceeds in British Pounds to Borrower's U.K.
Subsidiary; PROVIDED. HOWEVER, that the aggregate amount
of such loans outstanding at any time shall not exceed
$8,500,000.
D. Paragraph 3N is amended and restated as follows:
3N. USE OF PROCEEDS. Borrower shall apply the proceeds
of the Revolving Credit Loan to working capital, general
corporate purposes and, subject to the provisions of
Paragraphs 2C and 8C(3)(vii), loans to Borrower's U.K.
Subsidiary.
E. Paragraph SC(3)(vii) is amended and restated as
follows:
(vii) make or permit to remain outstanding Investments
to or in Unrestricted Subsidiaries, provided that (a)
the aggregate amount (at original cost) of all
Investments in Unrestricted Subsidiaries shall at no
time exceed 10% of Consolidated Net Worth, (b) any
Investment made in an Unrestricted Subsidiary subsequent
to June 30, 1995 shall only be deemed an Investment for
purposes of this PARAGRAPH 8C(3) to the extent it
involves a cash or other asset contribution or advance
(net of any return thereof), and (c) the aggregate
amount of all loans to Borrower's U.K. Subsidiary shall
at no time exceed $8,500,000; and
3. CONDITIONS PRECEDENT. This Amendment No. 2 shall become effective
upon the satisfaction of the following conditions precedent:
3.1 EXECUTION AND DELIVERY OF AMENDMENT NO. 2. This Amendment
No.2 or counterparts thereof shall have been duly executed and delivered to
Agent, Lenders and Borrower.
3.2 LEGAL OPINION OF BORROWER'S COUNSEL. Agent and Lenders shall
have received the legal opinion of Borrower's counsel in the form of Exhibit A
hereto.
4. CONFIRMATION OF REPRESENTATIONS AND WARRANTIES. Borrower
hereby confirms that the representations and warranties of Borrower contained in
the Credit Agreement were correct in all material respects on and as of
December 30, 1997, and that such representations and
2
warranties are correct on the date hereof, except (i) to the extent that any
such representation or warranty expressly relates to an earlier date, and (ii)
for changes resulting from transactions contemplated or permitted by the Credit
Agreement and changes occurring in the ordinary course of business that in the
aggregate are not materially adverse.
5. NO DEFAULT. Borrower represents and warrants that no default or
Event of Default exists as of the date hereof.
6. MISCELLANEOUS. The Credit Agreement is, and shall be, in full force
and effect and is hereby ratified and confirmed in all respects except that on
and after the date of this Amendment No. 2 (i) all references in the Credit
Agreement to this Agreement", "hereto", "hereof", "hereunder" or words of like
import referring to the Credit Agreement shall mean the Credit Agreement as
amended by this Amendment No. 2, and (ii) all references in the other loan
Documents to the "Credit Agreement", "thereto", "thereof", "thereunder" or words
of like import referring to the Credit Agreement shall mean the Credit Agreement
as amended by this Amendment No.2. The execution, delivery and effectiveness of
this Amendment No.2 shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of the Agent or any Lender under the Credit
Agreement or any other Loan Document, nor constitute a waiver of any provision
of the Credit Agreement or any other Loan Document. This Amendment No.2 and the
obligations arising hereunder shall be governed by, and construed and enforced
in accordance with, the laws of the State of Illinois applicable to contracts
made and performed in such state, without regard to the principles thereof
regarding conflict of laws, and any applicable laws of the United States of
America.
7. COUNTERPARTS. This Amendment No. 2 may be executed in any number
of separate counterparts, each of which shall, collectively and separately,
constitute one agreement.
[SIGNATURE PAGES FOLLOW)
3
IN WITNESS WHEREOF, this Amendment No. 2 has been duly executed as of the
date first above written.
REGIS CORPORATION
By: _______________________
Name:__________________
Title: ___________________
Address for Notices:
7201 Metro Boulevard
Minneapolis, Minnesota 55439
Telecopier No.: (612) 947-7900
Attention: Paul Finkelstein, President
S-1
LASALLE NATIONAL BANK, as Lender and as
Agent
By:__________________________
Name:____________________
Title: _____________________
Lending Office for all Loans:
135 South LaSalle Street
Chicago, Illinois 60603
Address for Notices:
135 South LaSalle Street
Chicago, Illinois 60603
Telecopier No.: (312) 904-6457
Attention: Mr. David G. Killpack
Vice President
PARIBAS, as Lender and as L/C Issuer
By:______________________________
Name: _______________________
Title: ________________________
By:______________________________
Name: _______________________
Title: ________________
227 West Monroe Street, Suite 3300
Chicago, Illinois 60606
Address for Notices:
227 West Monroe Street, Suite 3300
Chicago, Illinois 60606
Telecopier No.: (312) 853-6020
Attention: Ms. Karen E. Coons
Vice President
S-2
EXHIBIT A TO AMENDMENT NO. 2
FORM OF OPINION OF BORROWER'S COUNSEL
February __, 1999
Each of the Lenders under the
Credit Agreement referred to below
LaSalle National Bank, as Agent
for the Lenders under the
Credit Agreement referred to below
135 South LaSalle Street
Chicago, IL 60603
RE: REGIS CORPORATION
Ladies and Gentlemen:
I have acted as legal counsel to Regis Corporation (the "Borrower") in
connection with the preparation, execution and delivery of an Amendment No. 2
(the "Amendment"), dated as of February 1, 1999, to the Amended and Restated
Credit Agreement, dated as of December 30, 1997, by and between the Borrower,
the Lenders signatory thereto from time to time, and LaSalle National Bank, as
Agent for the Lenders (the "Agent"), as amended by Amendment No. 1 thereto dated
as of September 1,1998 (the "Credit Agreement"). In connection with that
representation, I have examined the Articles of Incorporation and Bylaws of the
Borrower and its Subsidiaries, the corporation records of the meetings of the
Board of Directors of said corporations, the Amendment, the Credit Agreement and
such other documents, records, instruments, laws and regulations, and have made
such inquiries, as I have deemed appropriate for purposes of this opinion.
Except for the signatures on behalf of the Borrower on the Amendment, I have
assumed and not independently verified that all signatures on all signed
documents are genuine. All defined terms used herein, except as otherwise
defined herein, are used with the same meaning as defined in or used in the
Credit Agreement.
Based on the foregoing, and relying thereon, I am of the opinion that
under current law:
I. Each of the Borrower and its Subsidiaries is a corporation duly
incorporated, validly existing and in good standing under the laws of its state
of incorporation, and is in good standing, duly licensed and qualified to
transact business in all jurisdictions where the character of the property owned
or leased by it or the nature of the business transacted by it makes such
licensing or qualification necessary. Each of the Borrower and its Subsidiaries
has all requisite
February __, 1999 Page 2
power and authority, corporate or otherwise, to conduct its business and to own
its properties, and to execute, deliver and perform all of its obligations under
the Credit Agreement as amended by the Amendment.
II. The execution, delivery and performance by the Borrower of the
Amendment and all documents relating to the Amendment have been duly authorized
by all necessary action and do not (i) require any consent or approval of the
stockholders of any entity, or any consent or approval by any governmental
entity, or any consent or approval of any party to any indenture, instrument or
agreement known to me to which the Borrower or any of its Subsidiaries is a
party or by which any of them or their property may be bound, (ii) violate any
provision of any law, rule or regulation, order or decree presently in effect
having applicability to the Borrower, (iii) to the best of my knowledge,
conflict with, result in a breach of or constitute a default under any indenture
or loan or credit agreement or any other agreement, lease or instrument to which
the Borrower or any of its Subsidiaries is a party or by which any of them or
their properties may be bound or affected, or (iv) result in or require the
creating or imposition of any mortgage, deed or trust, pledge, lien, security
interest, or other charge or encumbrance of any nature (other than in favor of
the Lenders) upon or with respect to any of the properties now owned or
hereafter acquired by the Borrower and its Subsidiaries.
III. The Credit Agreement as amended by the Amendment constitutes the
legal, valid and binding obligation of the Borrower and is enforceable against
the Borrower in accordance with its terms, subject only to the application of
bankruptcy, insolvency, moratorium, reorganization and other laws affecting
creditors' rights generally and to usual equity principles. The Amendment has
been duly executed and delivered by the Borrower.
IV. To the best of my knowledge, there are no actions, suits or
proceedings pending or threatened against the Borrower or any of its
Subsidiaries before any court or governmental entity which, if determined
adversely to the Borrower or any of its Subsidiaries, could have a material
adverse effect on the financial condition, properties or operations of the
Borrower or any of its Subsidiaries.
V. Borrower is not an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended, or, to our
knowledge, controlled by such a company.
February __, 1999 Page 3
VI. Borrower is not a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company" within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
Very truly yours,
Bert M. Gross