Supercuts 2011 Annual Report Download - page 69

Table of Contents
New Financing Arrangements
Fiscal Year 2011
On June 30, 2011, the Company entered into a Fifth Amended and Restated Credit Agreement, which amended and restated in its entirety,
the Company's existing Fourth Amended and Restated Credit Agreement. The Fifth Amended and Restated Credit Agreement provides for a
$400.0 million senior unsecured five-year revolving credit facility. The amendments included increasing the Company's minimum net worth
covenant from $800.0 to $850.0 million, and amending or adding certain definitions, including Change in Law, Defaulting Lender, EBITDA,
Fronting Exposure, Replacement Lender, and Accounting Principles. In addition, under the Fifth Amended and Restated Credit Agreement, the
Company may request an increase in revolving credit commitments under the facility of up to $200.0 million under certain circumstances. Under
the new agreement, indebtedness related to Capital Leases is limited to $50.0 million, and Restricted Payments are tiered based on Debt to
EBITDA. Events of default under the Credit Agreement include change of control of the Company and the Company's default of other debt
exceeding $10.0 million. We were in compliance with all covenants and other requirements of our credit agreement and senior notes as of
June 30, 2011.
Fiscal Year 2010
On July 8, 2009, the Company entered into an agreement to sell to underwriters $150 million aggregate principal amount of 5.0 percent
convertible senior notes due 2014, and 11,500,000 shares of its common stock at $12.37 per share, which was the closing price per share on
July 8, 2009. The Company completed the agreement on July 14, 2009. In addition, under the July 8, 2009 agreement, the Company granted the
underwriters an over-allotment option to purchase up to an additional $22.5 million aggregate principal amount of notes, and up to an additional
1,725,000 shares of common stock, on the same terms and conditions. The underwriters exercised such options in their entirety and, on July 21,
2009, the Company completed the issuance of the additional shares and notes for the exercise by the underwriters of the over-
allotment option of
$22.5 million aggregate principal amount of notes and an additional 1,725,000 shares of common stock.
The notes are unsecured, senior obligations of the Company and interest will be payable semi-annually at a rate of 5.0 percent per year. The
notes will mature on July 15, 2014. The notes will be convertible subject to certain conditions at an initial conversion rate of 64.6726 shares of
the Company's common stock per $1,000 principal amount of notes (representing an initial conversion price of approximately $15.46 per share
of the Company's common stock), subject to adjustment in certain circumstances, see further discussion within Note 8 to the Consolidated
Financial Statements.
The net proceeds to the Company from the offerings of convertible senior notes and common stock were approximately $323.8 million after
deducting underwriting discounts and before estimated offering expenses. The Company utilized the proceeds to repay $267.0 million of private
placement senior term notes of varying maturities and $30.0 million of senior term notes under the Private Shelf Agreement. As a result of the
repayment of a portion of the senior term notes during the twelve months ended June 30, 2010, the Company incurred $12.8 million in make-
whole payments and other fees along with $5.2 million in interest rate swap settlements, as discussed in Note 9 to the Consolidated Financial
Statements, totaling $18.0 million that was recorded as interest expense within the Consolidated Statement of Operations. The remaining
proceeds were used for general corporate purposes including the repayment of bank debt.
In connection with the offerings above, on July 14, 2009, the Company amended the Fourth Amended and Restated Credit Agreement, the
Term Loan Agreement and the Amended and Restated Private Shelf Agreement, all subject to the completion of the issuances of the convertible
senior notes and common stock discussed above. The amendments included increasing the Company's minimum net worth covenant from $675
to $800 million, lowering the fixed charge coverage ratio requirement
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