Exhibit 10.8


 


AMENDMENT NO. 5 TO THE SEVENTH AMENDED AND
RESTATED LOAN AND

SECURITY AGREEMENT


 


This AMENDMENT NO. 5 TO THE SEVENTH AMENDED
AND RESTATED LOAN AND SECURITY AGREEMENT (together with all exhibits and
schedules attached hereto, this “Amendment”)
is entered into this 3rd day of June, 2004 by and among FLEET RETAIL GROUP,
INC. (“Fleet”), a Delaware
corporation, individually as a Lender and as Agent (“Agent”) for itself and any other financial institution which
is or becomes a party thereto (each such financial institution, including
FLEET, is referred to hereinafter individually as a “Lender” and collectively as the “Lenders”), THE CIT GROUP/BUSINESS CREDIT, INC., individually
as a Lender and as Co-Administrative Agent, the other financial institutions
party thereto as Lenders, RESTORATION HARDWARE, INC., a Delaware corporation (“Lead Borrower”) and THE MICHAELS FURNITURE
COMPANY, INC., a California corporation (“Michaels,”
together with the Lead Borrower, the “Borrowers”)
(each, an “Amendment Party” and,
collectively, the “Amendment Parties”),
and is made with reference to the following facts:


 


RECITALS


 


A.                                   WHEREAS, Borrowers,
the Agent, the Co-Administrative Agent and the Lenders (each a “Party” and, collectively, the “Parties”) have previously entered into that
certain Seventh Amended and Restated Loan and Security Agreement dated as of
November 26, 2002, as amended by a First Amendment dated as of
April 28, 2003, an Amendment No. 2 dated as of September 12, 2003, an
Amendment No. 3 dated as of November 18, 2003, and as further amended by
an Amendment No. 4 dated as of March 15, 2004 (as amended, modified or
supplemented from time to time, the “Loan
Agreement”) and various agreements and instruments collateral
thereto (collectively with the Loan Agreement, the “Loan Documents”).  All
capitalized terms used herein, unless otherwise defined herein, shall have the
meanings set forth in the Loan Documents.


 


B.                                     WHEREAS, the
Amendment Parties desire to amend the Loan Agreement on the terms and subject
to the conditions of this Amendment.


 


NOW THEREFORE, in consideration of the
foregoing recitals and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Amendment Parties agree as
follows:


 


SECTION 1                               AMENDMENTS
TO LOAN AGREEMENT


 


1.1                                 The Loan Agreement is
hereby amended by deleting all references to “Fleet Capital Corporation, a
Rhode Island corporation” and by inserting “Fleet Retail Group, Inc., a
Delaware corporation” in lieu thereof; and


 


1.2                                 Section 1 of the
Loan Agreement is hereby amended by deleting the introductory paragraph thereto
in its entirety and by inserting the following in lieu thereof:


 


Subject to the terms and conditions of, and in reliance upon the
representations and warranties made in, this Agreement and the other Loan
Documents, Lenders agree to make a Total Credit Facility of up to $100,000,000
(or such greater amount as may be made available pursuant to Section 1.1A,
below) available upon Borrowers’ request therefor, as follows:


 


1

















 


1.3                                 Section 1 of the
Loan Agreement is hereby further amended by inserting the following text as a
new Section 1.1A, immediately below the text of Section 1.1 thereof:


 


1.1A                       Increase in Revolving Loan Commitments.


 


So long as no Default or Event of Default then exists, the Lead
Borrower shall have the right at any time, and from time to time, to request an
increase of the Revolving Credit Maximum Amount to an amount not to exceed
$150,000,000, as follows


 


1.1A.1.           Requests for Increase.  Any
requested increase of the Revolving Credit Maximum Amount shall be first made
to all existing Lenders on a pro rata basis. To the extent that any of the
existing Lenders (or all of them) decline to increase the aggregate Lenders’
Revolving Loan Commitment, or decline to increase such Lender’s Revolving Loan
Commitment to the amount requested by the Lead Borrower, the Agent may arrange
for other Persons to become a Lender hereunder and to issue commitments in an
amount equal to the amount of the increase in the Total Credit Facility
requested by the Lead Borrower and not accepted by any or all of the existing
Lenders (each such increase by either means, a “Commitment Increase,” and each such Person issuing, or
Lender increasing, its Revolving Loan Commitment, an “Additional Commitment Lender”),
provided, however, that (i) no Lender shall be obligated to provide a
Commitment Increase as a result of any such request by the Borrowers, and (ii)
any Additional Commitment Lender which is not an existing Lender shall be
subject to the approval of the Agent and the Lead Borrower  (each of whose approval shall not be
unreasonably withheld).  Each Commitment
Increase shall be in a minimum aggregate amount of at least $10,000,000 and in
integral multiples of $5,000,000 in excess thereof.


 


1.1A.2              Conditions Precedent to Commitment Increases.  No
Commitment Increase shall become effective unless and until each of the
following conditions have been satisfied:


 


(a)                                  the Borrowers, the Agent, and any Additional
Commitment Lender shall have executed and delivered a joinder to the Loan
Documents in such form as the Agent may reasonably require;


 


(b)                                 no Default or Event of Default exists as of
the Commitment Increase Date or would arise from the increase of the Revolving
Loan Commitment;


 


(c)                                  the Borrowers shall have paid such fees and
other reasonable compensation to the Additional Commitment Lenders as the Lead
Borrower and each such Additional Commitment Lenders may agree;


 


(d)                                 the Borrowers shall have paid such reasonable
arrangement fees to the Agent as the Lead Borrower and the Agent may agree but
in no event shall such arrangement fees be more than 7.5 basis points of such
Commitment Increase;


 


(e)                                  the Borrowers shall deliver to the Agent and
the Lenders an opinion or opinions, substantially in the form as delivered for
Amendment No. 5, from counsel to the Borrowers and dated such date;


 


(f)                                    Revolving Notes will be issued at the
Borrowers’ expense, to each such Additional Commitment Lender; and


 


(g)                                 the Borrowers and the Additional Commitment
Lenders shall have delivered such other instruments, documents and agreements
as the Agent may reasonably have requested.


 


2

















 


1.1A.3              Notice of Effectiveness of Commitment
Increase.  The Agent shall promptly notify each Lender
as to the effectiveness of each Commitment Increase (with each date of such
effectiveness being referred to herein as a “Commitment Increase Date”), and at such time (i) the
Revolving Loan Commitments, the Revolving Credit Maximum Amount and the Total
Credit Facility under, and for all purposes of, this Agreement shall be
increased by the aggregate amount of such Commitment Increases, (ii) this
Agreement shall be deemed amended, without further action, to the extent
necessary to reflect such increased Revolving Loan Commitments.


 


1.1A.4              Covenants and Agreements of Borrowers In
Connection with Commitment Increases.  In connection with Commitment
Increases hereunder, the Lenders and the Borrowers agree that, notwithstanding
anything to the contrary in this Agreement, (i) the Borrowers shall, in
coordination with the Agent, (x) repay outstanding Loans of certain Lenders,
and obtain Loans from certain other Lenders (including the Additional Commitment
Lenders), or (y) take such other actions as reasonably may be required by the
Agent, in each case to the extent necessary so that all of the Lenders
effectively participate in each of the outstanding Loans pro rata on the basis
of their Commitment Percentages (determined after giving effect to any increase
in the Revolving Credit Maximum Amount pursuant to this Section 1.1A), and
(ii) the Borrowers shall pay to the Lenders compensation of the type referred
to in Section 3.2.5 as actually incurred in connection with any repayment
of Loans required pursuant to preceding clause (i).


 


1.4                                 Section 1.5 of
the Loan Agreement is hereby amended by deleting the reference to the amount of
“$30,000,000” in the proviso to clause (ii) of the first sentence and inserting
a reference to the amount “$50,000,000” in its stead.


 


1.5                                 Section 1.6 of
the Loan Agreement is hereby amended by deleting the reference to the amount
“$2,000,000” where it appears therein and inserting a reference to the amount
“$5,000,000” in lieu thereof.


 


1.6                                 Section 2.2 of
the Loan Agreement is hereby amended be deleting the words “Atlanta, Georgia”
and substituting the words “Boston, Massachusetts” in their stead.


 


1.7                                 Section 8.2.1 of
the Loan Agreement is hereby amended by deleting clause (ii) in its entirety
and by inserting the following in lieu thereof:


 


(ii)                                  acquisitions of assets consisting of fixed
assets or real property that constitute Capital Expenditures.


 


1.8                                 Section 8.2.3 of
the Loan Agreement is hereby amended by (a) deleting the reference to the
amount of “$3,000,000” where it appears in clause (ix) therein and inserting a
reference to the amount “$10,000,000 in its stead, (b) deleting the period at
the end of such clause (ix) and inserting “and;”, and (c) inserting the
following new clause (x):


 


(x)                                   Indebtedness in respect of money borrowed, in
an aggregate amount not to exceed $100,000,000 (inclusive of the amounts
permitted under clause (ix) hereof) at any one time outstanding, and otherwise
on  terms and subject to documentation
acceptable to the Agent and, if secured by a Lien permitted under
Section 8.2.5 hereof, to the Lenders.


 


1.9                                 Section 8.2.5 of
the Loan Agreement is hereby amended by renumbering clause (ix) as clause (x)
and inserting the following new clause (ix):


 


3

















 


(ix)                                Liens to secure Indebtedness permitted under
Section 8.2.3(ix) hereof, provided that the Person holding such Liens
shall have entered into an intercreditor and subordination agreement reasonably
acceptable to the Agent and, the Lenders; and


 


1.10                           Section 8.2.8 of the
Loan Agreement is hereby deleted in its entirety and inserting the following in
lieu thereof:


 


8.2.8                        [Intentionally Omitted]


 


1.11                           Section 8.2.17
of the Loan Agreement is hereby amended by deleting clause (v) thereof in its
entirety.


 


1.12                           Section 12.8 of the
Loan Agreement is hereby amended by deleting the notice address for the Agent
and inserting the following in lieu thereof:


 


	
  If to the Agent:

  	
  Fleet Retail Group, Inc.

  
	
   

  	
  40 Broad Street

  
	
   

  	
  Boston, Massachusetts 02109

  
	
   

  	
  Attention: Mr. Keith Vercauteren

  
	
   

  	
  Facsimile No. (617) 434-4339

  
	
   

  	
   

  
	
  With a copy to:

  	
  Riemer & Braunstein LLP

  
	
   

  	
  Three Center Plaza

  
	
   

  	
  Boston, Massachusetts 02108

  
	
   

  	
  Attention:  David S. Berman,
  Esquire

  
	
   

  	
  Facsimile No. (617) 880-3456

  



 


1.13                           Appendix A of the
Loan Agreement is hereby amended as follows:


 


(a)                                  By
amending the definition of “Agent” by deleting the words “Fleet Capital
Corporation” and substituting the words “Fleet Retail Group, Inc” in their
stead.


 


(b)                                 By
amending the definition of “Applicable Margin” be deleting the table set forth
therein in its entirety and inserting the following in lieu thereof:


 


	
   

  	
  EBITDA and
  Fixed Charge Coverage

  Ratio for the Prior Twelve Months

  	
   

  	
  LIBOR
  Revolving Portion

  	
   

  	
  Base Rate
  Revolving Portion

  	
   

  
	
  Tier I

  	
  EBITDA >$35,000,000 and a Fixed Charge Coverage Ratio >1.1:1.0
  (If the Fixed Charge Coverage Ratio is less than 1.1:1.0, the rates in Tier
  II shall apply notwithstanding that EBITDA exceeds $35,000,000))

  	
   

  	
  1.50

  	
  %

  	
  0.00

  	
  %

  
	
  Tier II

  	
  EBITDA > $20,000,000 <= $35,000,000  (No applicable Fixed Charge Coverage Ratio)

  	
   

  	
  1.75

  	
  %

  	
  0.25

  	
  %

  
	
  Tier III

  	
  EBITDA > $12,000,000 <= $20,000,000 (No applicable Fixed Charge
  Coverage Ratio)

  	
   

  	
  2.00

  	
  %

  	
  0.50

  	
  %

  
	
  Tier IV

  	
  EBITDA <= $12,000,000 (No applicable Fixed Charge Coverage Ratio)

  	
   

  	
  2.25

  	
  %

  	
  0.75

  	
  %

  



 


4

















 


(c)                                  By amending the
definition of “Availability Reserves” to add the following at the end thereof:


 


In no event shall the Agent
establish an Availability Reserve under clauses (iv) or (v) of this definition
as long as the Loan Party’s cost structure for Import Landing Costs and Landing
Costs is consistent with its historical practices.


 


(d)                                 By
deleting the definition of “Borrowing Base” in its entirety and substituting
the following in its stead:


 


“Borrowing Base” - as at
any date of determination thereof, the result of the following:


 


(A) (1)  At all times that the provisions of clause
(2) hereof do not apply, the Cost of Eligible Inventory of the Lead Borrower
and the Canadian Affiliate (net of Inventory Reserves) multiplied by the
applicable Inventory Advance Rate, not to exceed the Inventory Appraisal Cap;
or (2) for the period from the date of Amendment 5 though the earlier of
December 15, 2004 or the occurrence of the Special Capital Event, the
Inventory Appraisal Cap for Eligible Inventory 
plus


 


(B)  The product of the Cost of Eligible Inventory of Michaels (net of
Inventory Reserves) multiplied by 25%, which together with the result of clause
(C) below shall not exceed $2,000,000; plus


 


(C)  The product of the face amount of Eligible Receivables of
Michaels (net of Receivables Reserves) multiplied by the applicable Receivables
Advance Rate, which together with the result of clause (B) above shall not
exceed $2,000,000; plus


 


(D)  The product of the amount of Eligible Credit Card Receivables of
the Lead Borrower and the Canadian Affiliate (net of Receivables Reserves)
multiplied by the applicable Receivables Advance Rate.


 


provided, however, that until the Agent
obtains a perfected security interest in the Canadian Assets and the Canadian
Inventory, the amounts set forth in clauses (A) and (D) attributable to the
Canadian Affiliate shall not be included in the Borrowing Base


 


5

















 


calculation; and provided further that
Eligible In-Transit Inventory shall not constitute more than ten percent (10%)
of the Borrowing Base at any time.


 


(e)                                  By
deleting clause (ii) of the definition of “Eligible In Transit Inventory” and
substituting the following in its stead:


 


The documents which relate to such shipment
reflects a Borrower or the Canadian Affiliate as consignee (along with delivery
to such Person of the documents of title with respect thereto) and the Agent
has control over the documents which evidence ownership of the subject
Inventory such as by providing a customs broker agreement reasonably
satisfactory to the Agent.


 


(f)                                    By
deleting clause (vii) of the definition of “Eligible Inventory” and adding the
following immediately after the dash and the defined term “Eligible Inventory
-” in the first line of the definition thereof:


 


Eligible In Transit Inventory,
Eligible Letter of Credit Inventory and other


 


(g)                                 By
deleting clause (ii) of the definition of “Eligible Letter of Credit Inventory”
and substituting the following in its stead:


 


The documents which relate to such shipment
reflects a Borrower or the Canadian Affiliate as consignee (along with delivery
to such Person of the documents of title with respect thereto) and the Agent
has control over the documents which evidence ownership of the subject
Inventory such as by providing a customs broker agreement reasonably
satisfactory to the Agent.


 


(h)                                 By
deleting the definitions of “Fiscal Year 2002”, “Fiscal Year 2003”, “Fiscal
Year 2004” and “Fiscal Year 2005” in their entirety.


 


(i)                                     By
deleting the definition of the term “Inventory Advance Rate” in its entirety
and inserting the following in lieu thereof:


 


“Inventory Advance Rate” – The following percentages during the
periods indicated in the chart below:


 


	
  Period

  	
   

  	
  Inventory
  Advance Rate

  	
   

  
	
  January through
  August of each year

  	
   

  	
  72

  	
  %

  
	
  September of each
  year

  	
   

  	
  75

  	
  %

  
	
  October through
  December of each year

  	
   

  	
  85

  	
  %

  



 


(j)                                     By
deleting the definition of the term “Inventory Appraisal Cap” in its entirety
and inserting the following in lieu thereof:


 


6

















 


“Inventory Appraisal Cap” – (i) 
for the period from the date of Amendment No. 5 through
December 15, 2004 (or sooner pursuant to clause (ii) below), ninety
percent (90%) of the Appraised Inventory Liquidation Value for Inventory of the
Lead Borrower and the Canadian Affiliate; and (ii) upon the earlier to occur of
December 15, 2004 or the Special Capital Event, and at all times
thereafter, eighty-five percent (85%) of the Appraised Inventory Liquidation
Value for Inventory of the Lead Borrower and the Canadian Affiliate.


 


(k)                                  By
deleting clause (iii) of the definition of “Receivables Advance Rate” and
adding the words “and the Canadian Affiliate” after the words “Lead Borrower”
in clause (ii) thereof.


 


(l)                                     By
deleting the definition of the term “Revolving Credit Maximum Amount” and
inserting the following in lieu thereof:


 


“Revolving Credit Maximum Amount” –  $100,000,000, as same may be increased from time to time pursuant
to Section 1.1A hereof.


 


(m)                               By
deleting the definition of the term “Revolving Loan Commitment” and inserting
the following in lieu thereof:


 


“Revolving Loan Commitment” – with respect to any Lender, the
amount of such Lender’s Revolving Loan Commitment pursuant to
subsection 1.1 of the Agreement, as set forth below such Lender’s name on
the signature page for Amendment No. 5 or the signature page to the joinder
agreement with respect to any Additional Commitment Lender, as same may be
increased from time to time pursuant to Section 1.1A hereof.


 


(n)                                 By
deleting the definition of the term “Total Credit Facility” in its entirety and
inserting the following in lieu thereof:


 


“Total Credit Facility” – means, at any time, the sum of the
Revolving Loan Commitments at such time.


 


(o)                                 By
inserting the following definitions in their proper alphabetical sequence:


 


“Additional Commitment Lender” – as defined in
Section 1.1A.


 


“Amendment No. 5” – means that certain Amendment No. 5 to the
Seventh Amended and Restated Loan and Security Agreement dated June 3,
2004 among the Borrower, the Agent and the Lenders.


 


“Commitment Increase” – as defined in Section 1.1A.


 


“Commitment Increase Date” – as defined in Section 1.1A.


 


“Consolidated Fixed Charges” means for any period the sum of
(i)  all interest and amortization of
debt discount and expense (including commitment fees, letter of credit fees,
balance deficiency fees and similar expenses) on all Indebtedness of the
Borrowers on a Consolidated basis paid or required to be paid in accordance
with GAAP (including with respect to Capitalized Lease Obligations), plus (ii)
the aggregate amount of scheduled principal payments paid or required to be
paid by the Borrowers with


 


7

















 


respect to any Indebtedness (including
Capitalized Lease Obligations but excluding payments with respect to the
Revolving Credit Loans).


 


“Fixed Charge Coverage Ratio” – means the ratio of (i)
Consolidated EBITDA minus Consolidated Net Capital Expenditures minus current
taxes based on income of Borrowers and their Subsidiaries paid in cash with
respect to such period to (ii) Consolidated Fixed Charges, in each case, for
the twelve month period most recently ended for which financial statements have
been delivered to Agent.


 


 “Special Capital Event”
– means the Borrowers’ consummation of one or more capital transactions, from
and after the date of Amendment No. 5, pursuant to which the Borrowers shall
have obtained additional equity capital or incurred additional Indebtedness
permitted hereunder in an aggregate amount in excess of $50,000,000, upon terms
and conditions acceptable to the Majority Lenders.


 


SECTION 2                               CONDITIONS
PRECEDENT


 


2.1                                 This Amendment shall
become effective upon satisfaction of the following conditions (the date of
satisfaction of such conditions being referred to herein as the “Fifth Amendment Effective Date”):


 


(a)                                  Execution
and delivery to the Agent of this Amendment by the Borrowers, the Lenders, the
Agent and the Co-Administrative Agent.


 


(b)                                 Delivery
to the Agent of an opinion of counsel to the Borrowers in form and substance
satisfactory to the Agent and its counsel.


 


(c)                                  Delivery
to the Agent of resolutions of the Boards of Directors of the Borrowers,
approving and authorizing the execution, delivery and performance of this
Amendment, certified as of the Fifth Amendment Effective Date by their
corporate secretaries or assistant secretaries as being in full force and
effect without modification or amendment, in form an substance satisfactory to
the Agent.


 


(d)                                 Payment
to the Agent of (i) an amendment fee in the amount of $54,000 which shall be
payable to the Lenders based on their respective Revolving Loan Percentages
prior to the Fifth Amendment Effective Date, and (ii) and incremental exposure
increase fee in the amount of $49,000, which shall be payable to the Lenders
based on their respective Revolving Loan Percentages after the Fifth Amendment
Effective Date.  Such fees shall be
fully earned upon the execution hereof and shall not be subject to refund or
rebate under any circumstances.


 


(e)                                  No
Default or Event of Default shall then exist and be continuing.


 


(f)                                    Execution
and delivery of such other instruments, documents and agreements as the Agent
may reasonably require.


 


SECTION 3                               MISCELLANEOUS


 


3.1                                 Each of the Borrowers
reaffirms and restates the representations and warranties set forth in
Section 7 of the Loan Agreement, as amended by this Amendment (the
“Amended


 


8

















 


Agreement”), and, after giving effect to the transactions contemplated
herein, all such representations and warranties shall be true and correct in
all material respects on and as of the date hereof (except insofar as such
representations and warranties expressly relate to an earlier date).


 


3.2                                 Each of the Borrowers
warrants and represents (which warranty and representation shall survive the
execution and delivery hereof) that:


 


(a)                                  It
has the corporate power and authority to execute and deliver this Amendment,
and to carry out the terms and provisions of this Amendment and the Amended
Agreement and the transactions contemplated hereby and thereby, and has taken
or caused to be taken all necessary corporate action to authorize the execution
and delivery of this Amendment and the performance of this Amendment and the
Amended Agreement and the transactions contemplated hereby and thereby;


 


(b)                                 No
consent of any other person (including, without limitation, its shareholders or
creditors), and no action of, or filing with any governmental or public body or
authority is required to authorize, or is otherwise required in connection with
the execution and delivery of this Amendment and the performance of this
Amendment and the Amended Agreement;


 


(c)                                  The
execution and delivery of this Amendment and the performance of this Amendment
and the Amended Agreement will not violate any law, statute or regulation, or
any order or decree of any court or governmental instrumentality, or conflict
with, or result in the breach of, or constitute a default under any contractual
obligation; and


 


(d)                                 This
Amendment has been duly executed and delivered by a duly authorized officer,
and this Amendment and the Amended Agreement constitute a legal, valid and
binding obligation of it, enforceable in accordance with their terms, subject
to laws affecting the enforcement of creditors’ rights generally and the
exercise of judicial discretion in accordance with general principles of
equity.


 


3.3                                 The Loan Documents,
subject to the foregoing terms and conditions provided by this Amendment,
constitute the complete agreement of the Parties with respect to the subject
matters referred to herein and supersede all prior or contemporaneous
negotiations, promises, agreements, or representations, all of which have
become merged and finally integrated into the Loan Documents and this
Amendment.  No agreements or
undertakings varying, modifying, amending, extending, discharging or
terminating the same shall be binding upon any Party unless in writing signed
by a duly authorized official or agent thereof.  No waiver by any Party of any breach hereunder shall be deemed a
waiver of any other or subsequent breach.


 


3.4                                 Each Borrower agrees
to pay, on demand, all attorneys’ fees and costs incurred in connection with
the negotiation, documentation, and execution of this Amendment.  If any legal action or proceeding shall be
commenced at any time by any Party in connection with its interpretation or
enforcement, the prevailing Party or Parties in such action or proceeding shall
be entitled to reimbursement of its reasonable attorneys’ fees and costs in
connection therewith,


 


9

















 


in addition to all other relief to which the prevailing Party or
Parties may be entitled.  Each of the
Amendment Parties waives its right to a trial by jury in any action to enforce,
defend, or interpret, or otherwise concerning this Amendment.


 


3.5                                 Except as herein
expressly amended, the Loan Agreement is ratified and confirmed in all respects
and shall remain in full force and effect in accordance with its terms.


 


3.6                                 This Amendment and all
rights and obligations hereunder, including matters of construction, validity,
and performance, shall be governed by and construed under the laws of the State
of California and shall inure to the benefit of and shall be binding upon the
successors, heirs and assigns of the Parties.


 


3.7                                 All references to the
Loan Agreement contained in the Loan Agreement and the other Loan Documents and
the other documents and instruments delivered pursuant to or in connection
therewith shall mean the Loan Agreement, as amended hereby and as may in the
future be amended, restated, supplemented or modified from time to time.


 


3.8                                 This Amendment may be
executed in counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument.


 


3.9                                 Delivery of an
executed counterpart of a signature page to this Amendment by telecopier shall
be effective as delivery of a manually executed counterpart of this Amendment.


 


[remainder
of page intentionally left blank]


 


10

















 


IN WITNESS WHEREOF, the parties hereto have
executed this Amendment as of the date first above written.


 


	
   

  	
  RESTORATION
  HARDWARE, INC.,

  the Lead Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patricia McKay

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Patricia McKay

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  CFO

  	
   

  
	
   

  	
   

  
	
   

  	
  THE
  MICHAELS FURNITURE COMPANY,

  
	
   

  	
  as a Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patricia McKay

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Patricia McKay

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  CFO

  	
   

  
	
   

  	
   

  
	
   

  	
  FLEET
  RETAIL GROUP, INC., a Delaware 

  corporation, as Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Keith Vercauteren 

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Keith Vercauteren

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Amount:  $55,000,000.00

  
	
   

  	
   

  
	
   

  	
  THE CIT GROUP/BUSINESS CREDIT, INC.,

  as the Co-Administrative Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank Brown

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Frank Brown

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Amount:  $45,000,000.00

  
								



 


Signature Pages to Amendment No. 5 to the Seventh
Amended and Restated

Loan and Security Agreement


 


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