Exhibit 99.2
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Richemont Finance S.A.
35 Boulevard Prince Henri
L 1724 Luxembourg
Chelsey Direct, LLC
712 Fifth Avenue
45th Floor
New York, NY 10019
May 19, 2003
Reference is made to that certain Purchase and Sale Agreement, of even date
herewith, between Chelsey Direct, LLC and Richemont Finance S.A. (the
"Agreement"). Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed thereto in the Agreement.
Notwithstanding Section 6(a) of the Agreement, the parties agree that this
letter agreement shall set forth certain understandings and agreements of the
parties with respect to Section 5 of the Agreement and shall form an integral
part of the consideration for, and as a material inducement for the parties to
enter into, the Agreement and the transactions contemplated thereby.
Chelsey hereby agrees that commencing at the time of the Closing and until the
fifth anniversary of the Closing (the "Support Period") it will, and will agree
to cause its affiliates to, maintain the record and beneficial ownership by
Chelsey, free and clear of any Lien, of (x) either the Shares purchased pursuant
to the Agreement or not less than US$40 million of any cash proceeds (or other
property having a value equal to at least US$40 million) recognized upon any
transfer, sale or other disposition of all or a portion of the Shares and (y) at
least US$10 million (the "Secured Amount") in a blocked account at a United
States bank that is a member of the Federal Reserve System having combined
capital and surplus and undivided profits of not less than $1 billion (a
"Qualified Bank") which Secured Amount in the blocked account, pursuant to the
terms of the account deposit, may not be accessed or released without the prior
written consent of Richemont. As soon as possible following the Closing, Chelsey
shall obtain for the benefit of Richemont an irrevocable letter of credit in the
amount of US$10 million issued by a Qualified Bank to secure Chelsey's
obligations pursuant to the Agreement (the "LC"), such LC having a term equal to
the Support Period. Upon delivery of the LC to Richemont and delivery by
Richemont of notice to Chelsey that the form and substance of such LC is
reasonably acceptable to Richemont, the obligations of Chelsey pursuant to
clause (y) of the second preceding sentence shall terminate. If such an
acceptable LC is not delivered to Richemont within 20 days of the Closing, the
Secured Amount shall be delivered to an escrow agent selected by Richemont to be
held by such escrow agent in an interest-bearing account for the duration of the
Support Period as security for Chelsey's obligations pursuant to the Agreement.
Notwithstanding anything to the contrary contained herein, in the event any
Indemnified Party has given Chelsey notice of any claim pursuant to Section 5(a)
of the Agreement prior to the fifth anniversary of the Closing, the
Support Period shall be extended, for all purposes, beyond the fifth anniversary
of the Closing until the final, non-appealable disposition of such claim.
Chelsey shall be notified promptly in writing of any loss, liability, claim,
damage, or expense of an Indemnified Party involving a third party claim and
subject to indemnification pursuant to Section 5(a) of the Agreement, provided
that any failure to notify Chelsey shall not relieve Chelsey from any liability
which it may have to any Indemnified Party pursuant to Section 5 of the
Agreement except and only to the extent Chelsey actually and materially has been
prejudiced by such failure. Chelsey shall be entitled to assume the joint
defense of any Indemnified Party in any action, claim or proceeding relating to
any such losses, liabilities, claims, damages, or expenses, and upon such
assumption Chelsey shall be liable hereunder for fees and disbursements of only
one counsel chosen by the Indemnified Parties (pursuant to the following
sentence) incurred subsequent to the date of such assumption. Any Indemnified
Party may jointly defend any such claim, action or proceeding with counsel of
its choice (subject to the preceding sentence) and, in such case, will
reasonably cooperate with Chelsey in such defense. Chelsey shall not effect any
settlement, compromise or consent to entry of any judgment with respect to any
such action, claim or proceeding without the prior written consent of any
Indemnified Party subject to such action, claim or proceeding, unless the
settlement, compromise or consent includes only monetary remedies and all such
remedies shall be fully indemnified by Chelsey pursuant to Section 5(a) of the
Agreement.
The terms of Sections 6(b), (c), (d), (e), (g), (h), (i), (k), (1), (m) and (n)
are incorporated herein by reference and shall apply to the terms of this letter
agreement.
It is expressly agreed that each of the Indemnified Parties (other than
Richemont) shall be third party beneficiaries of this letter agreement and shall
be entitled to enforce it in accordance with its terms.
IN WITNESS WHEREOF, Richemont and Chelsey have executed this Agreement as of the
date first above written.
RICHEMONT FINANCE S.A.
By: /s/ Morris J. Kramer
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Name: Morris J. Kramer
Title:Attorney-in-Fact
CHELSEY DIRECT, LLC
By: /s/ William B. Wachtel
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Name: William B. Wachtel
Title: Mgr.