Document:

Exhibit
10.1

 

AMENDMENT NO. 1 TO THE
SEVENTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

 

This AMENDMENT No. 1 TO
THE SEVENTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Amendment”)
is entered into this 28th day of April, 2003 by and among FLEET
CAPITAL CORPORATION (“Fleet”), a Rhode Island 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 institutions,
including Fleet, is referred to herinafter individually as a “Lender” and
collectively and 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, 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:

 

ARTICLE I

AMENDMENTS
TO LOAN AGREEMENT

 

1.1                                       Section 1.5
of the Loan Agreement is hereby amended by deleting the third sentence and
inserting the following in lieu thereof:

 

“No Letter of Credit or
LC Guaranty may have an expiration date that is after 30 days prior to the last
day of the Term, unless, on the date such Letter of Credit or LC Guaranty is
requested by Borrowers, (i) an amount equal to 110% of the face amount of such
Letter of Credit or LC Guaranty, in the case of a documentary Letter of Credit
or LC Guaranty with respect to a 
documentary Letter of Credit, is deposited with Agent to be held as cash
collateral, in a manner 

 

 

satisfactory to
Agent, and such later expiration date shall have been agreed to by Agent, Bank
or another Affiliate of Agent, as applicable or (ii) an amount equal to 110% of
the face amount of such Letter of Credit or LC Guaranty, in the case of a
standby Letter of Credit or LC Guaranty with respect to a standby Letter of
Credit, is deposited with the Agent to be held as cash collateral, in a manner
satisfactory to Agent, and such later expiration date shall not extend more
than 30 days beyond the last day of the Term.”

 

ARTICLE II

CONDITIONS PRECEDENT

 

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

 

2.1                               Execution and delivery
to the Agent of counterparts hereof by the Borrowers, the Lenders, the Agent
and the Co-Administrative Agent.

 

2.2                               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 First Amendment Effective Date by their
corporate secretaries or assistant secretaries as being in full force and
effect without modification or amendment.

 

ARTICLE III

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 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 

 

2

 

delivery of this
Amendment and the performance of the 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 hereof. 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, 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

 

3.8                               This Amendment may be
executed in counterparts, each of which shall be deemed and 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.

 

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/

  	
  Kevin Shahan

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
  Kevin Shahan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
  VP/CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE MICHAELS FURNITURE
  COMPANY,

  as a Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  Thomas Bazzone

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
  Thomas Bazzone

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
  Director

  	
   

  
	
   

  	
   

  
	
   

  	
  FLEET CAPITAL
  CORPORATION, a Rhode

  Island corporation, as Agent and as Lender

  
	
   

  	
   

  
	
   

  	
  By:  

  	
  /s/

  	
  Matthew R, Van
  Steenhuyse

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
  Matthew R, Van
  Steenhuys

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
  Senior Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE CIT GROUP/BUSINESS
  CREDIT,

  INC., as the Co-Administrative Agent and as a

  Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Adrian Avalus

  	
   

  
														

 

4

 

	
   

  	
  Name:

  	
   

  	
  Adrian Avalus

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
  VP

  	
   

  
								

 

 

Signature Pages to Amendment No. 1 to the Seventh
Amended and Restated

Loan and Security Agreement

 

5CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
                    -----------------------------------------

We consent to the use in this  registration  statement  of our report dated July
10, 2003 on the financial  statements for Rub A Dub Soap,  Inc. as of the period
from  inception  (September  28,  2001)  to May 31,  2003,  May 31,  2002 and to
references to our firm as accounting and auditing experts in the prospectus.

Denver, Colorado
September 9, 2003

                                                           /s/Comiskey & Company
                                                        PROFESSIONAL CORPORATION

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