Xxxxxx 00, 0000
Xxxxxx Xxxxxxxxxxx, Inc.
161-B Crown Bay
X.X. Xxx 000
Xx. Xxxxxx, X.X. Xxxxxx Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxxxx, President
Re: Extension to Standstill for Completion of Almod Transactions
Dear Xx. Xxxxxxxxxxx:
We have considered your request for an amendment to our July 28, 2000
letter agreement (the "July 28 Agreement") by and between the Chase Manhattan
Bank and the Bank of Nova Scotia (the "Lenders") and Little Switzerland, Inc.
(the "Company") regarding the proposed transactions of the Company and its
related entities with Almod Diamonds Limited ("ADL"), and, in our mutual
interest of the completion of such proposed transactions and in consideration of
the premises, the Lenders are willing to amend the July 28 Agreement as follows
and subject to the following terms and conditions:
1. The Lenders agree to extend the standstill until December 31,
2000 (the "Extended Standstill Period") with respect to the
outstanding indebtedness to the Lenders subject to the terms
and conditions of this letter agreement and the July 28
Agreement as amended hereby.
2. The terms, conditions and agreements of the July 28 Agreement
shall remain binding and in full force and effect, except as
specifically modified by this letter agreement, throughout the
term of the Extended Standstill Period. All capitalized terms
used by not defined herein shall have the meaning given in the
July 28 Agreement. This letter agreement may be signed in
counterparts. A signed facsimile copy shall be binding upon
and acceptable to all parties.
3. On or before October 15, 2000, the Company shall deliver to
the Lenders a copy of a binding commitment letter, accepted by
the Company, from a financial institution or other lender,
which commitment letter shall provide for the extension to the
Company of fully underwritten credit facilities to close on or
before December 31, 2000 pursuant to commercially reasonable
terms and conditions, including the payoff in full of the
outstanding indebtedness of the Company and its subsidiaries
to the Lenders.
4. On or before September 30, 2000, in lieu of the payment
required under paragraph 5 of the July 28 Agreement (50% of
the proceeds of realized by the Company from
Letter dated August 23, 2000
Page 2
the proposed sale to ADL of the newly issued shares of stock
of the Company), the Company shall deliver to the Lenders the
amount of $3,500,000 for application to amounts due the
Lenders by the Company or its subsidiaries.
5. During the Extended Standstill Period, the Company shall have
no obligation to make payments to the Lenders, other than (a)
regularly scheduled interest payments; (b) such payments
required under this letter agreement and under the July 28
Agreement, as modified by this letter agreement; and (c)
payments of all reasonable costs and expenses of the Lenders
incurred in connection with this letter agreement and all
costs and expenses of the Lenders as provided in the July 28
Agreement.
6. Notwithstanding the foregoing, the Extended Standstill Period
shall terminate prior to December 31, 2000, in the event of an
earlier Termination Event. Each of the following shall
constitute a Termination Event:
a. The Company shall fail to make any regularly
scheduled interest payment when due (subject to any
applicable notice and cure periods in the loan
documents evidencing and governing the indebtedness
of the Company and its subsidiaries to the Lenders),
time being of the essence with respect to any and all
of such payments.
b. The Company or any subsidiary otherwise shall fail to
comply with any term of this letter agreement, the
July 28 Agreement, the Security Agreement, the
mortgage over the St. Xxxxxx leasehold property or
any other document executed in connection with the
indebtedness of the Company or a related entity to
the Lenders or either of them (subject to any
applicable notice and cure periods therein).
c. The rendition by any court of a final judgment
against the Company or any subsidiary in a stated
amount in excess of $250,000.00 (or more than one
such judgment shall be entered against any one or
more of them in an aggregate stated amount in excess
of $250,000.00); or the attachment of any property of
the Company or any subsidiary not bonded or insured
against or remedied within sixty (60) days.
d. The filing of a tax lien against the Company or any
subsidiary by the Internal Revenue Service or the
taxing authority having authority over the
jurisdiction in which any such entity is located not
remedied within thirty (30) days.
e. The commencement of any action or proceeding against
any one or both of the Lenders by the Company or any
subsidiary or other entity affiliated with,
controlled by or under common control with the
Company.
Letter dated August 23, 2000
Page 3
f. The commencement of any bankruptcy or insolvency
proceeding by or against the Company or any
subsidiary.
At any time five (5) days after either of the Lenders shall
have made written demand on the Company following the
occurrence of a Termination Event described in subparagraph a,
b, c or d above, and immediately upon the occurrence of a
Termination Event described in subparagraphs e or f above,
each Lender may, at its option, acting alone or together with
the other Lender: (i) terminate the Standstill Period
described above; (ii) declare all amounts outstanding to be
due and payable forthwith, whereupon the same shall be
immediately due and payable; and (iii) take any other action
which the Lenders or either of them deems necessary or
appropriate to collect the outstanding obligations and to
enforce the rights and remedies under the documents
evidencing, governing and/or securing the indebtedness of the
Company and its subsidiaries to the Lenders, the Security
Agreement, any document executed or filed in connection with
or pursuant to the Security Agreement, and under applicable
law.
If the Company and its subsidiaries are in agreement with the
foregoing, please sign as indicated below and return a signed original of this
letter to the Lenders.
THE CHASE MANHATTAN BANK
By: /s/ X. Xxxxx
---------------------------------------
---------------------------------------
THE BANK OF NOVA SCOTIA
By: /s/ X. Xxxxxxx
---------------------------------------
---------------------------------------
The foregoing is acknowledged and agreed to by:
LITTLE SWITZERLAND, INC., a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxxxxxx,
----------------------------------------
Xxxxxx X. Xxxxxxxxxxx, President
L.S. WHOLESALE, INC., a Massachusetts corporation
By: /s/ Xxxxxx X. Xxxxxxxxxxx,
----------------------------------------
Xxxxxx X. Xxxxxxxxxxx, President
Letter dated August 23, 2000
Page 4
L.S. HOLDING, INC., a U.S. Virgin Islands corporation
By: /s/ Xxxxxx X. Xxxxxxxxxxx,
----------------------------------------
Xxxxxx X. Xxxxxxxxxxx, President
WORLD GIFT IMPORTS (BARBADOS) LIMITED, a Barbados company
By: /s/ X.X. Xxxxxx
-------------------------------------------------
Xxxxxxx X. Xxxxxx, Director
WORLD GIFT IMPORTS, N.V., a St. Maarten Netherlands Antilles limited liability
company
By: /s/ X.X. Xxxxxx
-------------------------------------------------
Xxxxx X. Xxxxxx, Managing Director
S.A.R.L. MONTRES ET BIJOUX, a St. Xxxxxx company
By: /s/ X.X. Xxxxxx
-------------------------------------------------
-------------------------------------------------
LITTLE SWITZERLAND, N.V., an Aruba limited liability company
By: L.S. HOLDING (ARUBA), N.V., Managing Director
By: /s/ Xxxxxx X. Xxxxxxxxxxx
-------------------------------------------------
Xxxxxx Xxx Xxxxxxxxxxx, President of the Managing Board
L.S. HOLDING (ARUBA), N.V., an Aruba limited liability company
By: /s/ Xxxxxx X. Xxxxxxxxxxx
-------------------------------------------------
Xxxxxx Xxx Xxxxxxxxxxx, President of the Managing Board
L.S. HOLDING CURACAO, N.V., a Curacao limited liability company
By: /s/ Xxxxxx X. Xxxxxxxxxxx
-------------------------------------------------
Xxxxxx X. Xxxxxxxxxxx, President and Managing Director
L.S. HOLDING (USA), INC., an Alaska corporation
By: /s/ Xxxxxx X. Xxxxxxxxxxx
-------------------------------------------------
Xxxxxx X. Xxxxxxxxxxx, President
