EXHIBIT 4.9
PALLADIN CAPITAL IX, LLC
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DATED AS OF MARCH 21, 2001
To: Those Investors listed on the signature pages of this Amended and Restated
Letter Agreement (the "Agreement")
Re: Amended and Restated Series A and B Preferred Stock Purchase
Agreement
Ladies and Gentlemen:
Reference is made to that certain Series A and B Preferred Stock Purchase
Agreement (the "Original Purchase Agreement"), dated as of March 21, 2001, by
and among Restoration Hardware, Inc., a Delaware corporation (the "Company"),
each of the investors listed on the signature pages hereto (each an "Executing
Investor" and collectively, the "Executing Investors"), and other investors
named therein. Pursuant to Section 13.6 thereof, the parties to the Original
Purchase Agreement amended and restated such agreement to read in its entirety
as set forth in the Amended and Restated Series A and B Preferred Stock Purchase
Agreement, of even date therewith (the "New Purchase Agreement"), such that as
of the date thereof the Original Purchase Agreement was entirely superseded by
the New Purchase Agreement and the Original Purchase Agreement is of no further
force or effect. Capitalized terms not otherwise defined herein shall have the
same meanings ascribed to them in the New Purchase Agreement.
1. SHORT SALES.
(a) Pursuant to Section 7.2 of the New Purchase Agreement, if the
Executing Investors collectively engage in Short Sales in an aggregate amount
totaling, (i) on or before June 24, 2002, more than fifty percent (50%) of the
number of shares of Common Stock which the then current number of Series A
Preferred Stock held by all the Investors are convertible into, either directly
or through affiliates, at any time while holding any of the Series A Preferred
Stock, or (ii) after June 24, 2002, more than the greater of (A) the aggregate
outstanding amount of Short Sales of such Investors as of June 24, 2002 and (B)
twenty-five percent (25%) of the number of shares of Common Stock which the then
current number of Series A Preferred Stock held by the Investors are convertible
into, either directly or through affiliates, at any time while holding any of
the Series A Preferred Stock, any such excess shares shall be treated as a sale
of the Investors' equity interests as provided in Section 7.2 of the New
Purchase Agreement. Each of the Executing Investors hereby agrees that each such
Executing Investor, unless such Executing Investor obtains the prior written
consent of each other Executing Investor, shall be entitled to engage in Short
Sales transactions with respect to no more than their pro rata number of shares
based on the total number of shares of Common Stock into which the aggregate
Series A Preferred Stock held by each of the Executing Investors on the date
hereof are convertible.
(b) Any Executing Investor may transfer to any other Executing Investor
its right to enter into Short Sales.
2. AGREEMENT TO VOTE.
(a) For as long as (i) holders of Series A Preferred Shares are entitled
to (A) elect two directors of the Company as pursuant to the Certificate or (B)
nominate two directors of the Company pursuant to Section
10.3 of the New Purchase Agreement or (ii) Palladin has the right to elect one
director pursuant to the Certificate, each of Reservoir and Glenhill (as defined
below) agrees to vote all shares of Series A Preferred Stock and any Common
Stock issuable upon conversion thereof (hereinafter referred to as the "Voting
Shares"), now or hereafter owned by it, whether beneficially or otherwise, at
any regular or special meeting of shareholders of the Company, or, in lieu of
any such meeting, to give its written consent, in the election or removal of
directors of the Company to appoint and elect the designee of Palladin as a
director of the Company. "Glenhill" means Glenhill Capital LP and its
affiliates.
(b) For as long as (i) holders of Series A Preferred Shares are entitled
to (A) elect two directors of the Company pursuant to the Certificate or (B)
nominate two directors of the Company pursuant to Section 10.3 of the New
Purchase Agreement or (ii) Reservoir has the right to elect one director
pursuant to the Certificate, each of Palladin and Glenhill agrees to vote all of
the Voting Shares now or hereafter owned by it, whether beneficially or
otherwise, at any regular or special meeting of shareholders of the Company, or,
in lieu of any such meeting, to give its written consent, in the election or
removal of directors of the Company to appoint and elect the designee of
Reservoir as a director of the Company.
(c) In the event that the holders of Series A Preferred Stock are only
entitled to elect one Series A Director (as defined in the Certificate) or
nominate only one director of the Company pursuant to Section 10.3 of the New
Purchase Agreement and neither Palladin nor Reservoir has the right under the
Certificate to elect one director or the right under Section 10.3 of the New
Purchase Agreement to nominate one director, then each of Palladin, Reservoir
and Glenhill agrees to vote all of the Voting Shares then held by it, whether
beneficially or otherwise, at any regular or special meeting of shareholders of
the Company, or, in lieu of any such meeting, to give its written consent, in
the election or removal of directors of the Company to appoint and elect the
designee of the Larger Holder (as defined below) at the time of any such vote.
The "Larger Holder" at any time means Reservoir if at such time Reservoir and
Glenhill together hold a greater number of Voting Shares than Palladin and
Palladin if at such time Palladin holds a greater number of Voting Shares than
Reservoir and Glenhill.
(d) It is agreed and understood that monetary damages would not
adequately compensate an injured party for the breach of this agreement by any
other party, that this agreement shall be specifically enforceable, and that any
breach or threatened breach of this agreement shall be the proper subject of a
temporary or permanent injunction or restraining order. Further, each party
hereto waives any claim or defense that there is an adequate remedy at law for
such breach or threatened breach.
(e) The voting of Voting Shares of the Company pursuant to this agreement
may be effected in person, by proxy, by written consent, or in any other manner
permitted by applicable law.
3. MISCELLANEOUS.
(a) This Agreement shall be governed in all respects by the laws of the
state of New York without regard to provisions regarding choice of laws.
(b) The provisions of this Agreement shall inure to the benefit of, and
shall be binding upon, the successors and permitted assigns of the Executing
Investors.
(c) This Agreement, together with the New Purchase Agreement and all
Schedules and Exhibits hereto and thereto, constitutes and contains the entire
agreement and understanding of the parties with respect to the subject matter
hereof and supersedes any and all prior negotiations, correspondence,
agreements, understandings, duties or obligations between the parties respecting
the subject matter hereof. Except as expressly modified and superseded by this
Agreement, the terms and provisions of the New Purchase Agreement and all
Exhibits, Schedule and Annexes thereto shall continue in full force and effect,
in accordance with their respective terms.
(d) Except as may be otherwise provided herein, all notices, requests,
waivers and other communications made pursuant to this Agreement shall be in
writing and shall be conclusively deemed to have been duly given (i) when hand
delivered to the other party; (ii) when received when sent by facsimile at the
address and number set forth below; (iii) when received after deposit in the
U.S. mail with first class or certified mail receipt requested postage prepaid
and addressed to the other party as set forth below; or (iv) when received after
deposit with a national overnight delivery service, postage prepaid, addressed
to the parties as set forth below with next-business-day delivery guaranteed,
provided that the sending party receives a confirmation of delivery from the
delivery service provider.
To Palladin:
Palladin Capital IX, LLC
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Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
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Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
To Reservoir:
Reservoir Capital Group, Inc.
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Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
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Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
To ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇:
C/o Arista Group, Inc.
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Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
To GB Retail Funding, LLC:
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Attn: ▇▇▇▇▇▇▇ ▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
To other Investors:
c/o Morrison & ▇▇▇▇▇▇▇▇ LLP
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Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax Number: ▇▇▇-▇▇▇-▇▇▇▇
Each person making a communication hereunder by facsimile shall promptly
confirm by telephone to the person to whom such communication was addressed each
communication made by it by facsimile pursuant hereto but the absence of such
confirmation shall not affect the validity of any such communication. A party
may change or supplement the addresses given above, or designate additional
addresses, for purposes of this Section 3(d) by giving the other parties written
notice of the new address in the manner set forth above.
(e) Section 1 of this Agreement may be amended only with the written
consent of the Executing Investors who hold at least two thirds of the Series A
Preferred Stock purchased pursuant to the New Purchase Agreement; provided,
however, that any amendment shall apply equally to all Executing Investors.
Section 2 of this Agreement may be amended only with the written consent of each
of Palladin, Reservoir and Glenhill.
(f) If one or more provisions of this Agreement are held to be
unenforceable under applicable law, then such provision(s) shall be excluded
from this Agreement and the balance of this Agreement shall be interpreted as if
such provision(s) were so excluded and shall be enforceable in accordance with
its terms.
(g) This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument.
(h) Each of the parties hereto agree (i) to execute and deliver to each
other such other documents and (ii) to do such other acts, all as the other
parties hereto may reasonably request for the purpose of carrying out this
Agreement.
(i) The captions to sections of this Agreement have been inserted for
identification and reference purposes only and shall not be used to construe or
interpret this Agreement.
(j) Pursuant to Section 3(e) of the Letter Agreement, erroneously dated
March 22, 2001, between the parties hereto (the "Original Letter Agreement"),
the parties hereto hereby amend and restate the Original Letter Agreement to
read in its entirety as set forth in this Agreement, such that as of the date
hereof the Original Letter Agreement is entirely superseded by this Agreement
and the Original Letter Agreement shall be of no further force or effect;
provided, however, that, so long as the Executing Investors who hold at least
two thirds of the Series A Preferred Stock purchased pursuant to the New
Purchase Agreement and Palladin, Reservoir and Glenhill have executed this
Agreement, all other parties to the Original Letter Agreement, whether or not
they have executed this Agreement, shall be deemed to have executed this
Agreement and to have received the benefits and the obligations hereunder.
If the foregoing is acceptable, please acknowledge your acceptance by
countersigning below.
PALLADIN CAPITAL IX, LLC, A DELAWARE LIMITED
LIABILITY COMPANY
By: Palladin Investments, LLC, Manager
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Member
AGREED AND ACCEPTED:
RESERVOIR CAPITAL PARTNERS, L.P.
By: Reservoir Capital Group, L.L.C., its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
RESERVOIR CAPITAL ASSOCIATES, L.P.
By: Reservoir Capital Group, L.L.C., its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
RESERVOIR CAPITAL MASTER FUND, L.P.
By: Reservoir Capital Group, L.L.C., its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
GLENHILL CAPITAL LP
By: GJK Capital Management, LLC, its general partner
By: Krevlin Advisors, LLC, its managing member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Member
GB RETAIL FUNDING, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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