RESTORATION HARDWARE INC
EXHIBIT 10.40
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<BR></FONT><FONT SIZE=2><B>Exhibit 10.40    <BR>    </B></FONT></P>

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<BR></FONT><FONT SIZE=2><B>FULL RECOURSE PROMISSORY NOTE    <BR>    </B></FONT></P>

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200,000.00</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
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August&nbsp;15, 2001<BR>
Corte Madera, California</FONT></TD>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FOR
VALUE RECEIVED, the undersigned, Jason Camp ("Grantee"), promises to pay to Restoration Hardware,&nbsp;Inc., a Delaware corporation (the "Company"), at 15&nbsp;Koch Road,
Suite&nbsp;J, Corte Madera, California 94925, or at such other place or to such other party as Company may from time to time designate, the principal sum of Two Hundred Thousand Dollars
($200,000.00), plus interest from the date hereof as computed below. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B>Interest and Principal Payments; Term.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Interest on the principal balance outstanding
on this Note shall be computed from the date hereof at the per annum rate of eight percent (8%) compounded annually and shall continue to accrue until paid. The entire amount of accrued but unpaid
interest and all outstanding principal (the "Repayment Amount") shall be due and payable at the close of business
on August&nbsp;15, 2006 (the "Repayment Date"). Interest shall be computed on the basis of a year of 365&nbsp;days for the actual number of days elapsed. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B>Method and Application of Payment.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;All amounts payable under this Note are payable in
lawful money of the United States, without notice, demand, offset or deduction. Checks will constitute payment only when collected. Any amount paid on this Note shall be applied first, to payment of
accrued but unpaid interest on this Note, then toward the outstanding principal balance of this Note. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B>Prepayment Permitted.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Principal and interest may be prepaid in whole or in part by
Grantee without penalty or premium at any time. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B>Event of Default and Remedies.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Any one of the following occurrences shall constitute
an "Event of Default" under this Note: </FONT></P>

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<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD><FONT SIZE=2>Grantee
voluntarily ceases to be employed by the Company or the Company terminates Grantee's employment for Cause.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD><FONT SIZE=2>Grantee
shall fail to pay any payment of principal or interest, within thirty (30)&nbsp;days of the date when due in accordance with the terms hereof; </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
the occurrence of any Event of Default hereunder, the entire Repayment Amount shall, at the option of the Company and without notice or demand of any kind to Grantee or any other
person, immediately become due and payable, and the Company shall have and may exercise any and all rights and remedies available to it at law or in equity. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B>Governing Law.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Note shall be governed by and construed in accordance with the
laws of the State of California. This Note has been delivered to the Company and accepted by the Company in the State of California. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the undersigned authorized party has executed and delivered this Note as of the date first written above. </FONT></P>

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GRANTEE:</FONT></TD>
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&nbsp;</FONT></TD>
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/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>JASON CAMP</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> JASON CAMP</FONT></TD>
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