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Exhibit 2
March 19, 2001
To the Investors party to
the Series A and B Preferred
Stock Purchase Agreement
referred to below
Ladies and Gentlemen:
Reference is made to the Series A and B Preferred Stock
Purchase Agreement by and among Restoration Hardware, Inc. ("Company") and
certain Investors dated March 19, 2001 (the "Agreement"), which provides for the
issuance of two series of preferred stock by the Company to the Investors. The
undersigned is the beneficial owner of and has power to vote __________________
common shares (the "Shares") of Company and has supported and encouraged the
decision by Company to execute the Agreement and to consummate the transactions
it contemplates.
In that connection, and as an inducement to, and in further
consideration of the Investors' entering into the Agreement, the undersigned
hereby grants the irrevocable proxy (such proxy being coupled with an interest)
and waiver provided in paragraph (i) and further covenants and agrees to the
matters set forth in paragraphs (ii) and (iii) below:
(i) In consideration of the Investors' entering into the
Agreement, the undersigned hereby irrevocably appoints and constitutes Xxxx
Xxxxxxxx and Xxx Xxxxx as proxies for the undersigned, with full power of
substitution, and authorizes and directs such proxies to vote such Shares, and
any other Shares which the undersigned has voting control over (other than
shares resulting from the exercise of options after the date hereof by Xxxxxxx
Xxxxxx) at the time by the undersigned, at any regular or special meeting of the
stockholders of the Company (and in any solicitation of written consents in lieu
of such a meeting) at which resolutions approving (i) the anti-dilution features
of the Series A Preferred Shares; and (ii) the issuance of the Series B
Preferred Shares as well as the conversion features thereof, are to be voted
upon, in favor of adoption of such resolutions (and in favor of any other
resolution presented at such meeting or in such solicitation necessary to
achieve the purposes of such resolutions) and against any inconsistent
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resolution. At the request of either Xx. Xxxxxxxx or Xx. Xxxxx the undersigned
will itself cause the shares to be present at any such meeting and to be so
voted. The undersigned hereby further waives Section 6.14(a) of that certain
Restated Investors Rights Agreement dated May 16, 1997 to the extent it
conflicts with or prohibits the Company from entering into the Agreement, the
investor rights agreement dated as of March 21, 2001 by and among the Company
and the Investors listed on Schedule A thereto, and the transactions
contemplated thereby.
(ii) The undersigned agrees, for the term of this agreement,
not to (and not to agree to) take any action which would result in the loss of
any voting rights with respect to any Shares or enter into any agreement or
understanding with any person the effect of which would be violative of the
provisions and agreements contained in this agreement. The undersigned retains
the right to enter into any and all transactions which reduce the undersigned's
economic interest in the Shares provided that such transactions do not affect
the undersigned's voting rights in the shares. In case of any transfer by
operation of law, this agreement shall be binding on the transferees.
(iii) The proxy provided hereby, and the covenants and
agreements contained herein, shall terminate on the earlier of the date (a) that
the Agreement is terminated; (b) the date of the shareholders meeting approving
the conversion of the Series B Preferred; or (c) August 31, 2001.
The provisions of this letter may be waived or amended only in
writing. The provisions with respect to specific performance, consent to
jurisdiction and waiver of jury trial in Section 13.13 of the Agreement are
incorporated by reference in this letter, with references to the "Company" being
deemed references to the undersigned.
Very truly yours,
SHAREHOLDER
_________________
