Exhibit 10.1

 

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January 23, 2006

 

Regis Corporation

7201 Metro Boulevard

Minneapolis, MN 55439

Attention:                                         Regis Corporation Board of
Directors

 

Re:                              
                                                Bridge Commitment Letter for
Project Pie

 

You have advised Banc of America Securities LLC (“BAS”) that you have entered
into a merger agreement (the “Merger Agreement”) pursuant to which all of the
shares of common stock of Sally Holdings, Inc. (“Spin Co.”), a wholly-owned
subsidiary of Alberto-Culver Company (“Alberto-Culver”), would be distributed
pro rata to the common stockholders of Alberto-Culver and, immediately after
consummation of the distribution, a wholly owned subsidiary of Regis Corporation
(“you”or the “Company”) would merge with and into Spin Co. (with Spin Co.
continuing as the surviving company), followed by the merger of Spin Co. with
and into another wholly owned subsidiary of the Company (“Newco”), with Newco
continuing as the surviving company, in each case subject to the terms and
conditions of the Merger Agreement.  As part of the merger transaction (“Merger
Transaction”), it is our understanding that you will issue approximately 55.6
million of your common shares to shareholders of Spin Co. (who are also
shareholders of Alberto-Culver) and that Spin Co. will distribute approximately
$400.0 million of cash to Alberto-Culver (the “Merger Financing”).  You have
also advised BAS that at this time you require a commitment for a senior loan of
$400.0 million which would be available to Spin Co. under a bridge credit
facility (the “Bridge Facility”).  To the extent Spin Co. requires debt
financing under the Bridge Facility for the Merger Financing, you anticipate
that Spin Co. would refinance the Bridge Facility with the proceeds from an
alternative debt financing in an amount up to $400.0 million (the “Alternative
Debt Financing”).  The Merger Financing, the entering into and funding of the
Bridge Facility, if required, the Alternative Debt Financing, and all related
transactions are hereinafter collectively referred to as the “Transaction.”

 

In connection with the foregoing, Banc of America Mezzanine Capital LLC (“BAMC”
and together with BAS, “BofA” or “us”) is pleased to advise you of its
commitment to provide 100% of the full principal amount of the Bridge Facility,
if required, all upon and subject to the conditions set forth in this Letter
Agreement and its willingness to act as the sole administrative agent through
itself or one of its affiliates (in such capacity, the “Administrative Agent”)
for the Bridge Facility upon and subject to the terms and conditions set forth
in this Letter Agreement and in the summary of terms attached as Appendix A
hereto (the “Summary of Terms” and, together with this letter agreement, the
“Letter Agreement”).

 

All capitalized terms used and not otherwise defined herein shall have the same
meanings as specified therefor in the Summary of Terms.

 

You hereby agree that, effective upon your acceptance of this Letter Agreement
and continuing through the earlier of (x) the date that the Bridge Facility is
repaid in full and terminated and (y) the Alternative Debt Financing is closed
and the proceeds thereof are used to repay any amounts outstanding under the

 

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Bridge Facility, you shall not solicit any other bank, investment bank,
financial institution, person or entity to provide, structure, arrange or
syndicate any credit facility, bridge loan, debt securities or other debt
financing similar to or as a replacement of the Bridge Facility and the
Alternative Debt Financing for the purposes of funding the Merger Transaction,
unless the Merger Financing does not proceed or is abandoned, or this Letter
Agreement is terminated or it expires.  Notwithstanding anything to the contrary
contained herein, the restrictions set forth in the preceding sentence shall
terminate if the Company is prepared to consummate the Merger Transaction and
BofA notifies the Company that, at such time, one or more conditions to BofA’s
obligation to make the Bridge Facility and the Alternative Debt Financing
available to the Borrower are not satisfied at such time, unless BofA agrees to
waive such conditions.

 

BAS reserves the right to engage the services of its affiliates to furnish the
services, or to perform the obligations, contemplated hereby and to allocate any
fees payable to us as we and our affiliates may agree in our sole discretion. 
The undertaking of BofA to provide the services described herein is subject to
the satisfaction of each of the following conditions precedent:  (a) the
accuracy and completeness in all material respects of all representations that
you and your affiliates make to BofA and your compliance in all material
respects with the terms of this Letter Agreement; (b) the negotiation, execution
and delivery of definitive documentation for the Bridge Facility consistent with
the Summary of Terms and otherwise reasonably satisfactory to BAMC and (c) no
change, occurrence or development shall have occurred or become known to BofA
which was not previously disclosed to BofA since September 30, 2005 that could
reasonably be expected to have a Material Adverse Effect.  As used herein,
“Material Adverse Effect” means, with respect to the Company, Spin Co. and their
respective subsidiaries, any effect, change, circumstance or development that,
individually or in the aggregate with other such effects, changes, circumstances
or developments, is both material and adverse to the business, financial
condition, operations, results of operations, properties, assets or liabilities
of the Company, Spin Co. and their respective subsidiaries, taken as a whole,
other than any effect, change, circumstance or development (A) resulting from
the announcement of the transactions contemplated by the Merger Agreement or any
action taken in connection with the transactions contemplated hereby pursuant to
the terms of the Merger Agreement, (B) relating to any actual or threatened
termination, cancellation or limitation of, or any modification or change in,
the business relationship of the Company, Spin Co. or any of their respective
subsidiaries with any supplier or group of suppliers, (C) relating in general to
the industries in which the Company, Spin Co. and their respective subsidiaries
operate (but only if the Company and its subsidiaries, taken as a whole, are not
disproportionately affected in any material respect as compared to other
comparable companies in their industry), (D) relating to changes after the date
hereof in United States GAAP or the accounting rules and regulations of the SEC
or (E) relating to changes in applicable laws.

 

You hereby represent and warrant that all information, other than the
Projections (defined below), that has been or is hereafter made available to
BofA by you or any of your representatives (on your behalf) in connection with
any aspect of the Merger Financing (the “Information”) is and will be complete
and correct in all material respects, taken as a whole, and does not and will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements contained therein not misleading in light
of the circumstances under which such statements were made, and (b) all
financial projections concerning the Company and Newco and their respective
subsidiaries that have been or are hereafter made available to BofA by you or
any of your representatives (on your behalf) (the “Projections”) have been or
will be prepared in good faith based upon assumptions that you believe to be
reasonable at the time made; it being recognized by BofA that the Projections to
future events are not to be viewed as facts and actual results may vary
significantly from projected results.  You agree to furnish us with such
Information and Projections as we may reasonably request and to supplement the

 

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Information and the Projections from time to time until the closing date for the
Bridge Facility or the Alternative Debt Financing (the “Closing Date”) so that
the representation and warranty in the preceding sentence is correct on the
Closing Date.  In issuing this commitment, BofA is and will be using and relying
on the Information and the Projections without independent verification
thereof.  The Information and Projections provided to BofA and the Information
Memorandum are hereinafter referred to as the “Transaction Materials.”

 

By executing this Letter Agreement, you agree to reimburse BofA on the Closing
Date for all reasonable out-of-pocket fees and expenses (including, but not
limited to, (a) the reasonable fees, disbursements and other charges of BofA,
one selected legal counsel to BAMC as the Administrative Agent on the Bridge
Facility, and (b) due diligence expenses) incurred in connection with the Bridge
Facility and Alternative Debt Financing, the preparation of the definitive
documentation therefore and the other transactions contemplated hereby.

 

You agree to indemnify and hold harmless BofA and its affiliates and their
respective officers, directors and employees (each an “Indemnified Party”) from
and against (and will reimburse each Indemnified Party as the same are incurred
for) any and all claims, damages, losses, liabilities and expenses (including,
without limitation, the reasonable fees, disbursements and other charges of
counsel (except the allocated costs of in-house counsel)) that may be incurred
by or asserted or awarded against any Indemnified Party, in each case arising
out of or in connection with or by reason of (including, without limitation, in
connection with any investigation, litigation or proceeding or preparation of a
defense in connection therewith) (a) any aspect of the Transaction or (b) the
Bridge Facility and the Alternative Debt Financing (if arranged by BofA) or any
use made or proposed to be made with the proceeds thereof, except (A) to the
extent such claim, damage, loss, liability or expense (i) is found in a final,
nonappealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party’s gross negligence or willful misconduct or directly
from a breach of our obligations hereunder or (ii) arises out of any claim that
does not involve an act or omission by you or your affiliates and that is
brought by an Indemnified Person against any other Indemnified Person and
(B) for any settlement consummated with any third party without your prior
written consent, provided that such consent shall not unreasonably be withheld
if the settlement constitutes a final and complete resolution to all such claims
and includes a release of the Company and its affiliates and their respective
officers, directors, employers and agents.  In the case of an investigation,
litigation or proceeding to which the indemnity in this paragraph applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by you, your equity holders or creditors or an Indemnified
Party, whether or not an Indemnified Party is otherwise a party thereto and
whether or not any aspect of the Transaction is consummated.  You also agree
that no Indemnified Party shall have any liability (whether direct or indirect,
in contract or tort or otherwise) to you or your subsidiaries or affiliates or
to your respective equity holders or creditors arising out of, related to or in
connection with any aspect of the Transaction, except to the extent of direct,
as opposed to special, indirect, consequential or punitive, damages determined
in a final non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party’s gross negligence or willful misconduct. 
Notwithstanding any other provision of this Letter Agreement, no Indemnified
Party shall be liable for any damages arising from the use by others of
information or other materials obtained through electronic telecommunications or
other information transmission systems except as a result of the gross
negligence or willful misconduct of any Indemnified Person.

 

This Letter Agreement and the contents hereof and thereof are confidential and,
except for the disclosure hereof or thereof on a confidential basis to your,
Alberto-Culver’s and Spin Co.’s respective accountants, attorneys, executive
officers and other professional advisors retained by you, Alberto-Culver and
Spin Co.

 

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in connection with the Transaction or as otherwise required by law or legal
process or in connection with the enforcement of rights hereunder or thereunder,
may not be disclosed in whole or in part to any person or entity without our
prior written consent; provided, however, it is understood and agreed that after
your acceptance of this Letter Agreement, you may disclose this Letter Agreement
in filings with the Securities and Exchange Commission and other applicable
regulatory authorities and stock exchanges.  Further, BofA and its affiliates
shall be permitted to use information related to the arrangement of the Bridge
Facility and the Alternative Debt Financing in connection with marketing, press
releases or other transactional announcements or updates provided to investor or
trade publications subject to your prior written consent (such consent not to be
unreasonably withheld).  BofA hereby notifies you that pursuant to the
requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into
law October 26, 2001) (the “Patriot Act”), it is required to obtain, verify and
record information that identifies you, which information includes your name and
address and other information that will allow BofA to identify you in accordance
with the Patriot Act.

 

You acknowledge that BofA or its affiliates may be providing financing or other
services to parties whose interests may conflict with yours.  BofA agrees that
(i) it will not furnish confidential information obtained from you to any of its
other customers, (ii) it will treat confidential information relating to you and
your and its respective affiliates with the same degree of care as they treat
their own confidential information and (iii) it shall use such information
solely for providing the services which are the subject of this Letter
Agreement.  BofA further advises you that it will not make available to you
confidential information that they have obtained or may obtain from any other
customer.  You agree that BofA is permitted, solely in connection with the
services and transactions contemplated hereby, to access, use and share with any
of its bank or non-bank affiliates, agents, advisors (legal or otherwise) or
representatives any information concerning you, or any of your or its respective
affiliates that is or may come into the possession of BofA or any of such
affiliates provided that such bank or non-bank affiliates, agents, advisors
(legal or otherwise) or representatives are subject to the confidentiality
provisions set forth above.

 

In connection with all aspects of each transaction contemplated by this Letter
Agreement, you acknowledge and agree that (i) the Bridge Facility, the
Alternative Debt Financing (if arranged by BofA) and any related arranging or
other services described in this Letter Agreement is an arm’s-length commercial
transaction between you and your affiliates, on the one hand, and BofA, on the
other hand, and you are capable of evaluating and understanding and understand
and accept the terms, risks and conditions of the transactions contemplated by
this Letter Agreement; (ii) in connection with the process leading to such
transaction, BofA is and has been acting solely as a principal and is not the
financial advisor, agent or fiduciary, for you or any of your affiliates,
stockholders, creditors or employees or any other party; (iii) BofA has not
assumed and will not assume an advisory, agency or fiduciary responsibility in
your or your affiliates’ favor with respect to any of the transactions
contemplated hereby or the process leading thereto (irrespective of whether BofA
has advised or is currently advising you or your affiliates on other matters)
and BofA has no any obligation to you or your affiliates with respect to the
transactions contemplated hereby except those obligations expressly set forth in
this Letter Agreement; (iv) BofA and its affiliates may be engaged in a broad
range of transactions that involve interests that differ from yours and your
affiliates and BofA and its affiliates have no obligation to disclose any of
such interests by virtue of any advisory, agency or fiduciary relationship; and
(v) BofA has not provided any legal, accounting, regulatory or tax advice with
respect to any of the transactions contemplated hereby and you have consulted
your own legal, accounting, regulatory and tax advisors to the extent you have
deemed appropriate.

 

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The provisions of the immediately preceding five paragraphs shall remain in full
force and effect regardless of whether any definitive documentation for the
Bridge Facility or the Alternative Debt Financing shall be executed and
delivered, and notwithstanding the termination of this Letter Agreement or any
commitment or undertaking of BofA hereunder provided that such obligations shall
be superseded by the definitive documentation for the Bridge Facility or
Alternative Debt Financing, as applicable.

 

This Letter Agreement may be executed in multiple counterparts and by different
parties hereto in separate counterparts, all of which, taken together, shall
constitute an original.  Delivery of an executed counterpart of a signature
page to this Letter Agreement by telecopier or facsimile shall be effective as
delivery of a manually executed counterpart thereof.

 

This Letter Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.  Each of you and BofA hereby irrevocably
waives any and all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to this Letter Agreement, the Transaction and the other transactions
contemplated hereby or the actions of BofA and its affiliates in the
negotiation, performance or enforcement hereof.

 

This Letter Agreement, together with the Summary of Terms, embodies the entire
agreement and understanding among BofA and you with respect to the Transaction
and supersedes all prior agreements and understandings relating to the subject
matter hereof.  However, please note that the terms and conditions of the
undertaking of BofA hereunder are not limited to those set forth herein.  Those
matters that are not covered or made clear herein or the Summary of Terms are
subject to mutual agreement of the parties.  No party has been authorized by
BofA to make any oral or written statements that are inconsistent with this
Letter Agreement.

 

This Letter Agreement is not assignable by you without our prior written consent
and is intended to be solely for the benefit of you, your successors, Spin Co.,
the parties hereto and the Indemnified Parties.

 

This Letter Agreement and all commitments and undertakings of BofA hereunder
will expire at 4:00 p.m. (New York City time) on January 24, 2006, unless you
execute this Letter Agreement and return it to us prior to that time. 
Thereafter, this Letter Agreement will terminate on the earliest of (a) the
Termination Date (as defined in the Merger Agreement), (b) the termination of
the Merger Agreement and (c) the closing of the Merger Financing without the use
of the proceeds of the Bridge Facility.

 

[signature blocks on following page]

 

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We are pleased to have the opportunity to work with you in connection with this
important financing.

 

 

Very truly yours,

 

 

 

BANC OF AMERICA MEZZANINE CAPITAL LLC

 

 

 

    By:

/s/ Stephen T. Monahan

 

 

Name: Stephen T. Monahan

 

 

Title:   Managing Director

 

 

 

 

 

BANC OF AMERICA SECURITIES LLC

 

 

 

By:

/s/ Scott Dolgoff

 

 

Name: Scott Dolgoff

 

 

Title:   Principal

 

THE PROVISIONS OF THIS COMMITMENT
LETTER ARE ACCEPTED AND AGREED TO
AS OF THE DATE FIRST ABOVE WRITTEN:

 

Regis Corporation

 

 

 

 

 

By:

/s/ Kyle Didier

 

 

Name:   Kyle Didier

 

Title:     Vice President – Finance

 

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Project Pie

 

Confidential

 

ANNEX

 

Conditions Precedent

 

Capitalized terms not otherwise defined herein have the same meanings

as specified therefor in the Letter Agreement to which this is attached

 

CONDITIONS PRECEDENT

 

 

TO CLOSING:

The obligations of BAMC under the Letter Agreement to provide the Bridge
Facility, if required, will be subject to the satisfaction of the following:

 

 

 

 

(i)

The Bridge Facility will be funded, if at all, contemporaneously with the
closing of the Merger Financing. The final terms and conditions of each aspect
of the Merger Transaction, including, without limitation, all tax aspects
thereof, shall be as set forth in the Merger Agreement.

 

 

 

 

(ii)

BAS shall have received reasonably satisfactory opinions of counsel to the
Company (which shall cover, among other things, authority, legality, validity,
binding effect and enforceability of the documents for the Bridge Facility) and
of appropriate local counsel and such corporate resolutions, certificates and
other documents as BAS shall reasonably require.

 

 

 

 

(iii)

Subject to the limitations in the Commitment Letter, all accrued fees and
out-of-pocket expenses of BofA (including the fees and expenses of counsel for
BofA) to the extent invoiced to the Company shall have been paid.

 

Banc of America Securities LLC

 

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