Supercuts 2010 Annual Report Download - page 68

Table of Contents
facility. We were in compliance with all covenants and other requirements of our credit agreement and senior notes as of June 30, 2009.
Fiscal Year 2008
During fiscal year 2008, we refinanced our $350.0 million revolving credit facility. Among other changes, this amendment extended the
credit facility's expiration date to July 2012, reduced the interest rate on borrowings under the credit facility and modified certain financial
covenants. Additionally, we borrowed $125.0 million, and amended the fixed charge coverage ratio under our Private Shelf Agreement.
Under the terms of the July 12, 2007 revolving credit agreement, our ratio of earnings before interest, taxes, depreciation, amortization,
and rent expense (EBITDAR) to fixed charges (which includes rent and interest expenses) may not drop below 1.5 on a rolling four quarter
basis. We were in compliance with all covenants and other requirements of our credit agreement and senior notes as of June 30, 2008.
Additionally, the credit agreements do not include rating triggers or subjective clauses that would accelerate maturity dates.
Other Financing Arrangements
Private Shelf Agreement
At June 30, 2010 and 2009, we had $174.1 and $239.6 million, respectively, in unsecured, fixed rate, senior term notes outstanding under
a Private Shelf Agreement. The notes require quarterly payments, and final maturity dates range from October 2010 through December 2017.
The interest rates on the notes range from 5.65 to 8.39 percent as of June 30, 2010, and range from 4.65 to 8.39 percent as of June 30, 2009.
The Private Shelf Agreement includes financial covenants including debt to earnings before interest, taxes, depreciation and amortization
(EBITDA) ratios, fixed charge coverage ratios and minimum net equity tests (as defined within the Private Shelf Agreement), as well as other
customary terms and conditions. The maturity date for the debt may be accelerated upon the occurrence of various Events of Default, including
breaches of the agreement, certain cross-default situations, certain bankruptcy related situations, and other customary events of default.
In July 2009, the Company amended the Restated Private Shelf Agreement. The amendments included increasing the Company's
minimum net worth covenant from $675 to $800 million, lowering the fixed charge coverage ratio requirement from 1.5x to 1.3x, amending
certain definitions, including EBITDA and Fixed Charges, limiting the Company's Restricted Payments to $20 million if the Company's
Leverage Ratio is greater than 2.0x and the addition of a risk based capital fee calculated on the daily average outstanding principal amount
equal to an annual rate of 1.0 percent that commences one year after the amendment date. During fiscal year 2010, the net proceeds from the
convertible senior notes and common stock issuances in July 2009 were utilized in part to repay $30.0 million of senior term notes under the
Private Shelf Agreement.
Private Placement Senior Term Notes
At June 30, 2010 and 2009, we had $0.0 and $267.0 million, respectively, in private placement senior term notes. On June 29, 2009, the
Company entered into a prepayment amendment on the private placement senior term notes whereby the Company negotiated to prepay the
notes with a premium over the principal amount that is less than the make-whole premium that is otherwise payable upon redemption. During
fiscal year 2010, the net proceeds from the convertible senior notes and common stock issuances in July 2009 were utilized to repay the
$267.0 million of private placement senior term notes.
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