1
EXHIBIT 10.17
AMENDMENT NUMBER THREE
This AMENDMENT TO LOAN AGREEMENT ("Amendment") dated as of this 19th day of
August, 1999, among FLEET CAPITAL CORPORATION, as Agent, the financial
institutions party to the Loan Agreement (as defined below) as Lenders, and
RESTORATION HARDWARE, INC. and THE MICHAELS FURNITURE COMPANY, INC. (each a
"Borrower" and collectively "Borrowers"), is made in reference to the following
facts:
A. Agent, Lenders and Borrowers have previously entered into that certain
Fourth Amended and Restated Loan and Security Agreement dated as of April 30,
1998 (as amended, 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. Without waiving any of Agent's or Lenders' rights and remedies, Agent
and Lenders are willing to amend the Loan Agreement on the terms and subject to
the conditions set forth in this Amendment. Borrowers are entering into this
Amendment with the understanding and agreement that, except as specifically
provided herein, none of Agent's or Lenders' rights or remedies as set forth in
the Loan Documents is being waived or modified by the terms of this Amendment.
NOW THEREFORE, in consideration of the foregoing agreed upon recitals and
the terms and conditions hereof, the parties do hereby agree as follows:
1. The provisions of subsection 8.3.6 of the Loan Agreement are deleted and
the following substituted in lieu thereof:
"8.3.6 Debt to Tangible Net Worth. With respect to Restoration,
maintain at all times a ratio of consolidated total debt (determined in
accordance with GAAP) to Tangible Net Worth of not more than the amount
shown below during the corresponding fiscal month, to be measured on a
monthly basis. Restoration shall deliver a monthly compliance certificate
to Agent in form and substance reasonably satisfactory to Agent.
Fiscal Month Amount
------------ ------
May 1999 1.45
June 1999 1.55
July 1999 1.85
August 1999 2.00
September 1999 2.35
October 1999 2.60
November 1999 2.90
1
2
Fiscal Month Amount
------------ ------
December 1999 2.20
January 2000 and 2.00"
thereafter
2. The provisions of subsection 8.3.7 of the Loan Agreement are deleted and
the following substituted in lieu thereof:
"8.3.7 Minimum Net Income. With respect to Restoration, maintain
consolidated net income before tax (determined in accordance with GAAP) of
not less than the amount shown below for the fiscal quarter ended on the
corresponding date, to be measured on a quarterly basis. Restoration shall
deliver a quarterly compliance certificate to Agent in form and substance
reasonably satisfactory to Agent.
Fiscal Quarter Ended Amount
-------------------- ------
July 31, 1999 <$4,400,000>
October 31, 1999 <$3,455,000>
January 31, 2000 $12,500,000
April 30, 2000 <$2,000,000>"
3. Except as amended by the terms herein, the Loan Documents remain in full
force and effect in accordance with their terms. If there is any conflict
between the terms and provisions of this Amendment and the terms and provisions
of the Loan Documents, the terms and provisions of this Amendment shall govern.
4. This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
5. This Amendment shall be governed by and construed according to the laws
of the State of California.
6. The Loan Documents, subject to the foregoing terms and conditions
provided by this Amendment, constitute the complete agreement of the parties
hereto 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.
7. Borrower agrees to pay, on demand, all reasonable 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 to this Amendment 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
2
3
attorneys' fees and costs in connection therewith, in addition to all other
relief to which the prevailing party or parties may be entitled.
FLEET CAPITAL CORPORATION,
as Agent and Lender
By: Xxxxxxx X. Xxx Xxxxxxxxxx
----------------------------
Its: Senior Vice President
----------------------------
BANKBOSTON, N.A.,
as Lender
By: Xxxxx Xxxxxxxx
----------------------------
Its: Director
----------------------------
RESTORATION HARDWARE, INC.
By: Xxxxxx Xxx
----------------------------
Its: CFO SVP
----------------------------
THE MICHAELS FURNITURE COMPANY, INC.
By: Xxxxxx Xxx
----------------------------
Its: CFO SVP
----------------------------
3
