EXHIBIT 10.1

July 20, 2009

Ray Brunner

President and Chief Executive Officer

Design Within Reach, Inc.

225 Bush Street, 20th Floor

San Francisco, California 94104

Glenn J. Krevlin

Glenhill Special Opportunities Master Fund LLC

598 Madison Avenue, 12th Floor

New York, New York 10022

 

  Re: Securities Purchase Agreement

Ladies and Gentlemen:

This letter is to confirm our mutual agreements with regard to an extension to
the “Exclusivity” provisions of that certain Summary of Terms of Proposed
Private Placement (the “Term Sheet”), dated as of May 26, 2009, by and between
Design Within Reach, Inc. (the “Company”) and Glenhill Special Opportunities
Master Fund LLC (“Glenhill”). The “Exclusivity” provision of the Term Sheet
currently provides that, among other things, until that date which is forty-five
(45) days after the execution of the Term Sheet (the “Exclusivity Period”) the
Company will not solicit or encourage any offers, engage in any discussions
(other than to inform any initiating party (an “Initiating Party”) that it is
subject to the “Exclusivity” provision) or enter into any agreements or
commitments with respect to any financing or the purchase of, or the sale or
transfer or issuance (whether by merger, consolidation or otherwise) of, (i) any
shares of capital stock of the Company or another entity organized by affiliates
of the Company or any securities convertible into or exchangeable for any such
capital stock for the primary purpose of raising capital or (ii) all or
substantially all of the assets of the Company. In the event the Company
receives a bona fide offer which it deems superior to the terms in the Term
Sheet (a “Superior Offer”), Glenhill has the right of first refusal to enter
into an agreement with the Company upon the terms and conditions set forth in
the Superior Offer.

The parties have entered into a Securities Purchase Agreement (the “Purchase
Agreement”), dated as of July 20, 2009, by and between the Company and Glenhill.
The parties have agreed that, in order to provide additional time for the
parties to consummate the transactions contemplated by the Purchase Agreement,
the Exclusivity Period should be extended until August 15, 2009. As such,
notwithstanding anything to the contrary in the Term Sheet, by signing below,
the Company and Glenhill agree that the Exclusivity Period is hereby extended
until August 15, 2009. Except as set forth in this letter, the terms and
provisions of the Term Sheet shall remain unchanged and in full force and
effect.

--------------------------------------------------------------------------------

In connection with this letter agreement, the parties further agree that in the
event that the Company (i) receives a Superior Offer during the Exclusivity
Period; (ii) does not close the transactions contemplated by the Purchase
Agreement after satisfaction of the conditions to closing set forth in
Section 2.3(a) of the Purchase Agreement; (iii) enters into an agreement or
commitment regarding such Superior Offer during the Exclusivity Period with the
Initiating Party; and (iv) the transactions contemplated by such Superior Offer
are subsequently consummated with the Initiating Party, then the Company shall
promptly upon the closing of such transaction pay to Glenhill $500,000 through
the wire transfer of immediately available funds to an account specified by
Glenhill.

This letter agreement shall be binding upon and inure to the benefit of the
parties hereto. Nothing in this letter agreement, express or implied, is
intended to confer upon any party, other than the parties hereto, any rights,
remedies, obligations or liabilities under or by reason of this letter
agreement, except as expressly provided in this letter agreement. This letter
agreement shall be construed under and shall be governed by the internal laws of
the State of New York applicable to contracts and agreements made and to be
performed solely within the State of New York. The parties hereto shall have the
right to enforce this letter agreement and any of its provisions by injunction,
specific performance or other equitable relief, without bond and without
prejudice to any other rights and remedies that such party may have for a breach
of this letter agreement.

If any party to this letter agreement shall bring any action for any relief
against the other, declaratory or otherwise, arising out of this letter
agreement, the losing party shall pay to the prevailing party reasonable
attorneys’ fees and costs incurred in bringing such suit and/or enforcing any
judgment granted therein. Any judgment or order entered in such action shall
contain a specific provision providing for the recovery of attorneys’ fees and
costs incurred in enforcing such judgment.

Any term of this letter agreement may be amended and the observance of any term
of this letter agreement may be waived, only with the written consent of each of
the parties hereto.

[Remainder of page intentionally left blank]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each of the parties has executed this letter agreement as of
the date first above written.

 

DESIGN WITHIN REACH, INC. By:  

/s/    Ray Brunner

Name:   Ray Brunner Title:   President and Chief Executive Officer

GLENHILL SPECIAL OPPORTUNITIES

MASTER FUND LLC

By:  

/s/    Glenn J. Krevlin

Name:   Glenn J. Krevlin Title:   Managing Member