Exhibit 3
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement") is dated as of
August 12, 2002 between TSAC Corp., a Delaware corporation (the
"Buyer"), on the one hand and Jewelcor Management, Inc., a Nevada
corporation ("Jewelcor"), Xxxxxxx Xxxxxxxx, an individual ("Xxxxxxxx")
and Xxxxxx Xxxxxxxx ("Family Member" and together with Xxxxxxxx and
Jewelcor, the "Sellers"), on the other hand.
RECITALS
A. The Buyer is an indirect wholly-owned subsidiary of Xxxxxxx &
Co., a Delaware corporation ("Tiffany"). Through its wholly-owned
subsidiary Xxxxxxx & Co. International, a Delaware corporation
("International"), Tiffany owns 7,410,000 shares of common stock, par
value $0.01 per share (the "Common Stock"), of Little Switzerland,
Inc., a Delaware corporation (the "Company").
B. The Sellers own beneficially and of record, 1,969,692 shares
of Common Stock, consisting of 1,688,692 shares of Common Stock owned
by Jewelcor, currently exercisable options to purchase 100,000 shares
of Common Stock owned by Jewelcor, currently exercisable options to
purchase 133,000 shares of Common Stock owned by Xxxxxxxx and 48,000
shares of Common Stock owned by Family Member. The shares of Common
Stock owned by the Sellers at the Closing Date (as defined below),
including any shares of Common Stock acquired by the exercise of
the Options between the date hereof and the Closing Date, are referred
to as the "Shares". The options to purchase shares of Common Stock
owned by the Sellers are referred to as the "Options".
C. The Buyer is willing to acquire the Shares from the Sellers
and to offer to purchase the remaining shares of Common Stock held by
the public stockholders of the Company, all upon the terms and subject
to the conditions set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained in this Agreement and for other valuable
consideration, the Buyer and the Sellers agree as follows:
ARTICLE ONE
TERMS OF THE TRANSACTION
SECTION 1.1 SALE AND PURCHASE. Subject to the conditions set
forth in Article Five, the Sellers, on the Closing Date, shall sell the
Shares to the Buyer by delivering certificates for the Shares to the
Buyer in proper form for transfer by delivery or with duly executed
stock powers attached thereto.
SECTION 1.2 PURCHASE PRICE. As consideration for the Shares, the
Buyer shall pay to the Sellers a purchase price of $2.40 per Share (the
"Purchase Price"); provided, however, that if the Tender Offer Price
(as defined below) is greater than $2.40 per share, the Purchase
1
Price shall be increased so as to be equal to the Tender Offer Price.
The Buyer shall pay the Sellers the Purchase Price by wire transfer of
immediately available funds on the Closing Date to the account(s)
designated by Sellers and communicated to the Buyer in writing prior to
the Closing Date.
SECTION 1.3 SURRENDER OF OPTIONS. The Sellers, on the Closing
Date, shall surrender to the Company for immediate cancellation, for no
additional consideration, any Options that have not been exercised at
or prior thereto.
SECTION 1.4 THE TENDER OFFER. (a) Provided that this Agreement
shall not have been terminated in accordance with Section 6.1 and
subject to the terms hereof, as promptly as practicable, but in no
event later than five business days after the public announcement of
the execution hereof by the parties (which announcement shall occur
within five days after the date hereof), the Buyer shall commence
(within the meaning of Rule 14d-2 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), a tender offer (the
"Tender Offer") to acquire all of the outstanding shares of Common
Stock at a price of $2.40 per share, net to the seller in cash, less
any required withholding taxes. Such price per share, or any greater
amount per share paid pursuant to the tender offer, is referred to as
the "Tender Offer Price"). The Buyer's obligation to accept for payment
and to pay for any shares of Common Stock in the Tender Offer shall be
subject only to (i) the condition that there shall have been validly
tendered a number of shares of Common Stock, which together with any
shares of Common Stock owned directly or indirectly by Tiffany,
including shares to be acquired under this Agreement, constitute at
least 90% of the outstanding shares of Common Stock on a fully-diluted
basis (including for the purposes of such calculation all shares of
Common Stock issuable upon exercise of all vested options or other
exercisable Convertible Securities (as defined below), not including
the Options to be surrendered under this Agreement) (the "Minimum
Condition"), (ii) the condition that there shall have been validly
tendered at least a majority of the Common Stock on a fully-diluted
basis, excluding shares owned by the Buyer, its Affiliates or the
Sellers (the "Majority of the Minority Condition") and (iii) the other
conditions set forth in Annex A. The Buyer expressly reserves the right
to increase the Tender Offer Price or to make any other changes in the
terms and conditions of the Tender Offer, but may not decrease the
Tender Offer Price, add any condition not set forth in Annex A except
as may be necessary or appropriate to comply with legal or regulatory
requirements, or increase the Minimum Condition or the Majority of
the Minority Condition or otherwise expand, or make more difficult the
satisfaction of, any condition set forth in Annex A. The conditions set
forth in Annex A are for the sole benefit of Tiffany and the Buyer and,
except as set forth in the Offer Documents, may be waived by Tiffany
and the Buyer, in whole or in part at any time and from time to time,
in their sole discretion. The failure by Tiffany and the Buyer at any
time to exercise any of the foregoing rights shall not be deemed a
waiver of any such right, and each such right shall be deemed an
ongoing right that may be asserted at any time and from time to
time.
(b) As soon as practicable on the date the Tender Offer is
commenced, the Buyer will file with the Securities and Exchange
Commission a Tender Offer Statement on Schedule TO (together with all
amendments and supplements thereto, and including all exhibits thereto,
the "Schedule TO") with respect to the Tender Offer. The Buyer will
cause the Schedule TO, the Offer to Purchase and all amendments or
supplements thereto (which together constitute the "Offer Documents")
to comply in all material respects with the Exchange Act and the rules
and regulations thereunder.
(c) In the event that this Agreement has been terminated
pursuant to Section 6.1, the Buyer promptly will terminate the Tender
Offer without accepting any shares of Common Stock for payment.
SECTION 1.5 THE CLOSING. The closing of the purchase and sale of
the Shares (the "Closing") shall be held at the offices of Xxxxxx, Xxxx
& Xxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx or at such other
place as the parties may agree upon, at 10:00 A.M., local time, on the
same date as the closing of the first purchase of shares of Common
Stock pursuant to the Tender Offer (the "Closing Date"). To the extent,
if any, required by Rule 14e-5 under the Exchange Act or other
applicable law, the Shares shall be accepted and purchased as part of
the Tender Offer.
ARTICLE TWO
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Sellers, jointly and severally, represents and
warrants to the Buyer, as of the date hereof and as of the Closing
Date, as follows:
SECTION 2.1 POWER AND CAPACITY. (a) Jewelcor is duly organized
and validly existing under the laws of the State of Nevada and has full
power and legal right to, and Xxxxxxxx and Family Member each have the
legal capacity to, execute and deliver this Agreement, to perform its
or his respective obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by the Sellers, constitutes the
legal, valid and binding agreement of the Sellers and is enforceable
against the Sellers in accordance with its terms.
(b) The execution and delivery by Jewelcor of this
Agreement do not, and the consummation of the transactions contemplated
hereby will not, (i) violate any provision of the articles of
incorporation or by-laws of Jewelcor, (ii) conflict with or result in a
breach of, create an event of default (or an event that, with the
giving of notice or lapse of time or both, would constitute
an event of default) under, or give any third party the right to
accelerate any obligation under, any agreement, mortgage, license,
lease, indenture, instrument, order, arbitration award, judgment or
decree to which Jewelcor is a party or by which Jewelcor or any asset
or property of Jewelcor is bound or affected.
SECTION 2.2 THE SHARES AND THE OPTIONS. As of the date hereof,
Jewelcor is the beneficial and record owner of 1,688,692 shares of
Common Stock and holds currently exercisable options to acquire an
additional 100,000 shares of Common Stock. As of the date hereof,
Xxxxxxxx holds currently exercisable options to acquire 133,000 shares
of Common Stock. As of the date hereof, Family Member is the beneficial
and record owner of 48,000 shares of Common Stock. None of the
Sellers owns any other shares of Common Stock or Convertible
Securities. The Shares owned by the Sellers as of the date hereof are
held, and the Shares held by the Sellers as of the Closing Date will be
held, by the Sellers as record owners thereof, free and clear of all
liens, charges, encumbrances, equities and claims whatsoever and
are not and will not be subject to any restriction with respect to
their transferability. No third party has a basis for any claim against
(or with respect to) the Shares. Upon the payment by the Buyer of the
Purchase Price as provided for herein and the delivery of the
certificates for the Shares by the Sellers, the Buyer will possess good
and marketable title to all of the Shares, free and clear of all liens,
charges, encumbrances, equities and claims whatsoever.
SECTION 2.3 FINDERS OR BROKERS. In connection with the
consummation of the transactions contemplated hereby, the Sellers have
not employed any investment banker, broker, finder or intermediary in
connection with the transactions contemplated hereby who might be
entitled to a fee or commission in connection with this Agreement and
the transactions contemplated hereby.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Sellers, as of the date
hereof and as of the Closing Date, that:
SECTION 3.1 POWER AND CAPACITY. (a) The Buyer is duly organized
and validly existing under the laws of the State of Delaware and has
full power and legal right to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly authorized, executed
and delivered by the Buyer, constitutes the legal, valid and binding
agreement of the Buyer and is enforceable against the Buyer in
accordance with its terms.
(b) The execution and delivery by the Buyer of this
Agreement do not, and the consummation of the transactions contemplated
hereby will not, (i) violate any provision of the articles of
incorporation or by-laws of the Buyer, (ii) conflict with or result in
a breach of, create an event of default (or an event that, with the
giving of notice or lapse of time or both, would constitute
an event of default) under, or give any third party the right to
accelerate any obligation under, any agreement, mortgage, license,
lease, indenture, instrument, order, arbitration award, judgment or
decree to which the Buyer is a party or by which the Buyer or any asset
or property of the Buyer is bound or affected.
ARTICLE FOUR
COVENANTS OF THE SELLERS AND THE BUYER
SECTION 4.1 RESIGNATION. As of the Closing Date, Xxxxxxxx shall
resign as a director, officer and employee of the Company and its
Affiliates.
SECTION 4.2 PUBLICITY; CONFIDENTIALITY. Except as required by
law, the Sellers may not, prior to the Closing Date, directly or
indirectly issue any press release or otherwise make any public
statement or disclosure with respect to the existence or terms of this
Agreement, the transactions contemplated hereby or the Tender Offer
without first consulting with the Buyer and obtaining the written
consent thereof.
SECTION 4.3 EXCLUSIVITY. Except as is required, such requirement
to be evidenced by a written opinion of counsel, for Xxxxxxxx to meet
his fiduciary obligations as a member of the board of directors of the
Company, from the date hereof until the Closing Date, the Sellers may
not, directly or indirectly, solicit, negotiate or encourage or provide
any information for the purpose of soliciting or negotiating any
proposal (whether or not such proposal shall constitute a binding offer
to purchase) for the acquisition of all or any portion of the
Common Stock other than this Agreement and the Tender Offer or any
challenge to the legality, fairness or attractiveness of the Tender
Offer.
SECTION 4.4 FURTHER ASSURANCES. The Buyer and the Sellers, at
their sole cost and expense and without expense to the other parties,
will do such further acts and execute and deliver such further
documents regarding their obligations hereunder as may be reasonably
required solely for the purpose of (i) accomplishing the purposes of
this Agreement or (ii) assuring and confirming unto the other party,
the validity of any documents of conveyance to be delivered at Closing.
ARTICLE FIVE
CONDITIONS TO THE BUYER'S AND SELLERS' OBLIGATIONS
The obligations of the Buyer and the Sellers hereunder shall be
subject to the satisfaction, as of the Closing Date, of certain
conditions as specifically set forth below (any of which may be waived
only by the party entitled to the benefit of such condition in its sole
discretion):
SECTION 5.1 TENDER OFFER. The obligations of the Buyer under this
Agreement shall be subject to the satisfaction or waiver, as of the
Closing Date, of the conditions set forth in Annex A.
SECTION 5.2 DELIVERY OF THE SHARES. The Sellers shall have
delivered to the Buyer certificates for all of the Shares in proper
form for transfer by delivery or with duly executed stock powers
attached thereto. The Buyer is not obligated to close or purchase any
Shares if less than all of the Shares are tendered at the Closing in
accordance with the terms hereof. The Buyer shall have paid to the
Sellers the Purchase Price as set forth in Section 1.2 hereof.
SECTION 5.3 SURRENDER OF THE OPTIONS. The Sellers shall have
surrendered to the Company for immediate cancellation any Options that
have not been validly exercised between the date hereof and the Closing
Date.
SECTION 5.4 LEGAL PROCEEDINGS. No action, suit, proceeding or
investigation shall be pending or threatened before or by any court or
governmental body or agency (i) challenging the transactions
contemplated by this Agreement or otherwise seeking damages or (ii)
seeking to restrain or prevent the carrying out of the transactions
contemplated by this Agreement or to prohibit or limit the ability of
the Buyer to exercise full rights of ownership of the Shares or the
ability of the Company to operate or control the assets, property and
business of the Company after the Closing Date.
SECTION 5.5 FIRPTA CERTIFICATE. The Sellers shall have furnished
the Buyer with a certificate of non-foreign status executed by each of
the Sellers and satisfying the requirements of Section 1.1445-
2(b)(2)(i) of the United States Treasury Regulations promulgated under
the Code.
5
SECTION 5.6 REPRESENTATION AND WARRANTIES. The representations
and warranties of the Sellers set forth in Article Two shall be true
and complete in all material respects as of the date hereof and the
Closing Date. The representations and warranties of the Buyer set forth
in Article Three shall be true and complete in all material respects as
of the date hereof and the Closing Date.
ARTICLE SIX
MISCELLANEOUS
SECTION 6.1 TERMINATION. (a)This Agreement and the transactions
contemplated hereby may be terminated at any time on or prior to the
Closing as follows:
(i) by the written consent of the Buyer and the
Sellers;
(ii) by the Buyer if (x) there is or occurs an
inaccuracy in any of the representations and warranties or the breach
of any covenant of the Sellers set forth in this Agreement, which
inaccuracy or breach is not capable of being cured before the
Closing Date; (y) the conditions to the Buyer's obligations under
this Agreement set forth in Article Five have not been satisfied or
waived by the Buyer as of the Closing Date; or (z) there has
occurred any material adverse change in the Company's financial
condition, results of operations, business or prospects; or
(iii) by the Sellers if (x) there is or occurs an
inaccuracy in any of the representations and warranties or the breach
of any covenant of the Buyer set forth in this Agreement, which
inaccuracy or breach is not capable of being cured before the Closing
Date; (y)the conditions to the Sellers' obligations under this
Agreement set forth in Article Five have not been satisfied or waived
by the Sellers as of the Closing Date; or (z) the Buyer shall not have
commenced the Tender Offer as provided in Section 1.4, shall have
terminated the Tender Offer, or shall not have effected the first
purchase of shares of Common Stock pursuant to the Tender Offer
within 60 days after the commencement thereof.
(b) Except for obligations set forth in Sections 4.2, 6.3
and 6.4, in the event that this Agreement is terminated pursuant to the
provisions of Section 6.1(a)(i), the Sellers shall have no obligation
to the Buyer and the Buyer shall have no obligation to the Sellers
under this Agreement. In the event that the Buyer terminates this
Agreement pursuant to Section 6.1(a)(ii) or the Sellers terminate this
Agreement pursuant to Section 6.1(a)(iii), the right of
the Buyer or the Sellers, as the case may be, to pursue any and all
rights it may have at law or equity or hereunder shall survive
unimpaired.
SECTION 6.2 NOTICE. All notices, requests and other
communications under this Agreement will be in writing and will be
deemed to have been duly given if delivered personally, or sent by
either certified or registered mail, return receipt requested, postage
prepaid, by overnight courier guaranteeing next day delivery or by
telecopier (with telephonic or machine confirmation by the sender),
addressed as follows:
(a) If to the Sellers:
Jewelcor Management, Inc.
000 X. Xxxxxx-Xxxxx Xxxx.
Xxxxx-Xxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
With a copy to:
Xxxxx X. Xxxxx, Esq.
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
email: xxxxxx@xxxxxxxxxxx.xxx
or at such other address or telecopy number as the Sellers
may have advised the Buyer in writing; and
(b) If to the Buyer:
Xxxxxxx & Co.
000 Xxxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
email: xxxxxxx@xxxxxxx.xxx
With a copy to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
email: xxxxxxx@xxxxxxxxxx.xxx
or at such other address or telecopy number as the Buyer
may have advised the Sellers in writing. All such notices, requests and
other communications shall be deemed to have been received on the date
of delivery thereof (if delivered by hand), on the third day after the
mailing thereof (if mailed), on the next day after the sending
thereof (if by overnight courier) and when receipt is confirmed as
provided above (if telecopied).
SECTION 6.3 FEES AND EXPENSES. The Sellers will pay the fees and
expenses of counsel, accountants, financial advisors or other experts
retained by the Sellers and all expenses incurred by the Sellers
incident to the negotiation, preparation, execution, consummation, and
performance of this Agreement and the transactions contemplated hereby.
The Buyer will pay the fees and expenses of counsel, accountants,
financial advisors or other experts retained by the Buyer
and all expenses incurred by the Buyer incident to the negotiation,
preparation, execution, consummation, and performance of this Agreement
and the transactions contemplated hereby.
SECTION 6.4 GOVERNING LAW. This Agreement and all disputes
arising hereunder or controversies related hereto shall be governed by
and construed and enforced in accordance with the internal, substantive
laws of the State of New York, without giving effect to the conflict of
laws rules thereof that would apply the law of any other jurisdiction.
Legal proceedings commenced by the Sellers or the Buyer arising out of
any of the transactions or obligations contemplated by this Agreement
shall be brought exclusively in the federal courts, or in the absence
of federal jurisdiction in state courts, in either case in New York,
New York. The Buyer and the Sellers irrevocably and unconditionally
submit to the jurisdiction of such courts and agree to take any
and all future action necessary to submit to the jurisdiction of such
courts. The Buyer and the Sellers irrevocably waive any objection that
they now have or hereafter may have to the laying of venue of any suit,
action or proceeding brought in any such court and further irrevocably
waive any claim that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum. Final judgment
against the Sellers or the Buyer in any such suit shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment, a
certified or true copy of which shall be conclusive evidence of
the fact and the amount of any indebtedness or liability of the Sellers
or the Buyer therein described.
SECTION 6.5 ENTIRE AGREEMENT; AMENDMENTS; WAIVERS. This Agreement
represents the entire agreement between the parties as to the subject
matter hereof and supersedes and cancels any prior oral or written
agreement, letter of intent or understanding related to the subject
matter hereof. No provision of this Agreement may be terminated,
amended, supplemented, waived or modified other than by an instrument
in writing signed by the party against whom the enforcement of the
termination, amendment, supplement, waiver or modification is
sought.
SECTION 6.6 BINDING EFFECT; ASSIGNMENT. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. The
Buyer and the Sellers may not assign or transfer any right hereunder
without the prior written consent of the other parties, and any
assignment without such consent shall be void and without
effect; provided, however, that the Buyer may assign its rights and
obligations hereunder to any wholly-owned Affiliate of the Buyer.
SECTION 6.7 SPECIFIC PERFORMANCE. The parties agree that
irreparable damage would occur in the event that any of the provisions
of this Agreement were not performed in accordance with their specific
terms or were otherwise breached. Accordingly, the parties shall be
entitled to specific performance of the terms hereof, including an
injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement, this
being in addition to any other remedy to which they are entitled
at law or in equity.
SECTION 6.8 NO THIRD PARTY BENEFICIARIES. Nothing contained
herein, express or implied, is intended to confer upon any person or
entity other than the parties hereto and their successors in interest
and permitted assignees any rights or remedies under or by reason of
this Agreement.
SECTION 6.9 COUNTERPARTS; HEADINGS. This Agreement may be
executed in two or more counterparts, each of which shall be deemed to
be an original and all of which together shall be deemed to be one and
the same instrument, and shall become effective when one or more
counterparts have been signed by each of the parties. The headings of
the Articles and Sections of this Agreement have been inserted for
convenience of reference only, are not to be considered a part of
this Agreement, and shall in no way modify or restrict any of the terms
or provisions of this Agreement.
SECTION 6.10 CERTAIN DEFINITIONS.
(a) "Affiliate" shall have the meaning ascribed to such
term under Rule 144 of the Securities Act of 1933, as amended.
(b) "Convertible Securities" shall mean any securities of
the Company convertible into, exercisable for or exchangeable for, or
any rights, warrants or options to acquire, any shares of Common Stock.
[The remainder of this page has intentionally been left
blank.]
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the day and year first above written.
TSAC CORP., a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
JEWELCOR MANAGEMENT, INC., a Nevada
corporation
By: /s/ Xxxxxxx Xxxxxxxx
---------------------
Name: Xxxxxxx Xxxxxxxx
Title:
/s/ Xxxxxxx Xxxxxxxx
-------------------------
XXXXXXX XXXXXXXX
/s/ Xxxxxx Xxxxxxxx
-------------------------
XXXXXX XXXXXXXX
