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CUSIP NO. 440506 10 3 13D Page 10 of 11 Pages
Westmark Holdings Limited
c/o Quadrant Management, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
March 26, 1997
Hanover Direct, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: President
Re: 1997 Rights Offering
Gentlemen:
Reference is made to the Standby Purchase Agreement, dated
March 26, 1997 (the "Standby Purchase Agreement"), between Richemont S.A. and
Hanover Direct, Inc. (the "Company"). The Standby Purchase Agreement
contemplates the distribution by the Company to the holders of its outstanding
common and preferred stock of transferable subscription rights ("Rights") to
subscribe for and purchase additional shares of common stock, par value $.66-2/3
per share (the "Common Stock"), for a price of $.90 per share (the "Subscription
Price"). The distribution of the Rights and the sale of the shares of Common
Stock upon the exercise of the Rights or pursuant to the Standby Purchase
Agreement is referred to herein as the "Rights Offering."
Subject to and upon the consummation of the Right Offering,
the undersigned hereby irrevocably agrees to exercise at the Subscription Price
that number of Rights distributed to it for the purchase of shares of Common
Stock having an aggregate purchase price of at least $10,000,000 (the "Shares").
The undersigned agrees to pay for and the Company agrees to accept as payment
for the aggregate purchase price of such Shares at the closing of the Rights
Offering the surrender by the undersigned's affiliate, Intercontinental Mining &
Resources Incorporated ("IMR"), of the Company's Promissory Note dated September
11, 1996 in the principal amount of $10,000,000 and the cancellation thereof.
Concurrently therewith, the Company shall pay to IMR or its designee interest on
the principal amount outstanding under such note as provided therein.
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CUSIP NO. 440506 10 3 13D Page 11 of 11 Pages
If the foregoing sets forth your understanding of our
agreement, please so indicate by signing your name in the space provided below
and returning a signed copy of this letter to the undersigned.
Very truly yours,
WESTMARK HOLDINGS LIMITED
By:/s/ Xxxxxx X. Xxxxx
------------------------
Name: Xxxxxx X. Xxxxx
Title: Attorney-In-Fact
Accepted and agreed to as of the date first above written.
HANOVER DIRECT, INC.
By:/s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President & CFO
