LITTLE SWITZERLAND, INC.
000-X XXXXX XXX XXXXXX XXXX XXXX
XX. XXXXXX, USVI 00804
July 11, 2000
Xx. Xxxxxx X. Xxxxx
Almod Diamonds Limited
000 Xxxxx Xxxxxx
Xxxxx 000
Xxx Xxxx, XX 00000
PRIVATE AND CONFIDENTIAL
Re: CONFIDENTIALITY AND STANDSTILL AGREEMENT
Dear Xx. Xxxxx:
In connection with your consideration of a possible transaction (the
"Transaction") with Little Switzerland, Inc. and/or its subsidiaries, affiliates
and divisions (collectively, with such subsidiaries, affiliates and divisions,
the "Company"), the Company is prepared to make available to you certain
information concerning the business, financial condition, operations, assets and
liabilities of the Company. As a condition to such information being furnished
to you and your directors, officers, shareholders, employees, agents or advisors
(including, without limitation, attorneys, accountants, consultants, bankers and
financial advisors) (collectively, the "Representatives"), you agree to treat
such information in accordance with the provisions of this letter agreement, and
to take or abstain from taking certain other actions hereinafter set forth.
1. DEFINITION OF EVALUATION MATERIAL. The term "Evaluation Material"
means any and all information concerning the Company (whether prepared by the
Company, its advisors or otherwise and irrespective of the form of
communication) that is furnished to you or to your Representatives now or in the
future by or on behalf of the Company. In addition, "Evaluation Material" shall
be deemed to include all notes, analyses, compilations, studies, interpretations
and other documents prepared by you or your Representatives which contain,
reflect or are based upon, in whole or in part, the information furnished to you
or your Representatives pursuant hereto. The term "Evaluation Material" does not
include information which (a) is or becomes available to the public generally
(other than as a result of a disclosure by you or one of your Representatives),
(b) was within your possession prior to the date hereof, provided that the
source of such information was not bound by a confidentiality agreement with or
other contractual, legal or fiduciary obligation of confidentiality to the
Company or any other party with respect to such information, or (c) becomes
available to you on a non-confidential basis from a source other than
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the Company or one of its Representatives, provided that such source is not
bound by a confidentiality agreement with or other contractual, legal or
fiduciary obligation of confidentiality to the Company or any other party with
respect to such information.
2. USE OF EVALUATION MATERIAL AND CONFIDENTIALITY.
(a) You hereby agree that neither you nor any of your
Representatives will use any of the Evaluation Material in any way that could be
detrimental to the Company or its stockholders. Without limiting the generality
of the foregoing, you hereby agree that you and your Representatives will use
the Evaluation Material solely for the purpose of evaluating the Transaction,
that the Evaluation Material will be kept confidential and that neither you nor
any of your Representatives will disclose any of the Evaluation Material in any
manner whatsoever; provided, however, that you may disclose the Evaluation
Material (i) to such of your Representatives who need such information for the
sole purpose of evaluating the Transaction, who agree to keep such information
confidential and who are provided with a copy of this letter agreement and agree
to be bound by the terms hereof to the same extent as if they were parties
hereto, and (ii) in all other cases, to the extent that the Company gives its
prior written consent to such disclosure. You agree that you will be responsible
for any breach of this letter agreement by any of your Representatives and you
agree to take, at your sole expense, all reasonably necessary measures to
restrain your Representatives from prohibited or unauthorized disclosure or use
of the Evaluation Material (including, without limitation, the initiation of
court proceedings).
(b) The Evaluation Material may contain material information
about the Company that has not been disclosed to the public generally. You
understand that you and your Representatives could be subject to fines,
penalties and other liabilities under applicable securities laws if you or any
of your Representatives trades in the Company's common stock while in possession
of any material, non-public information concerning the Company. You agree not to
trade, and not to allow any of your Representatives to trade, in the Company's
common stock, until such time as you are no longer prohibited from trading in
the Company's common stock under all applicable securities laws (whether because
the Company has publicly disclosed all material information in the Evaluation
Material, the Evaluation Material no longer contains material, nonpublic
information or otherwise).
(c) In addition, you agree that, without the prior written
consent of the Company, neither you nor any of your Representatives will (i)
attribute any materials or information provided to you or your Representatives
hereunder to the Company or its advisors in connection with any communications
with third parties or (ii) disclose to any other person the fact that the
materials or information provided to you or your Representatives hereunder have
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been made available to you, the fact that discussions or negotiations are taking
place concerning the Transaction, or any of the terms, conditions or other facts
with respect thereto (including the status thereof); provided, however, that you
may make such disclosure as is required by law (in which event, to the extent
practicable, you will consult with, and exercise in good faith all reasonable
efforts to mutually agree with, the Company regarding the nature, extent and
form of such disclosure). The term "person" as used in this letter agreement
shall be interpreted broadly to include the media and any corporation,
partnership, group, individual or other entity.
(d) In the event that you or any of your Representatives is
requested or required (by oral questions, interrogatories, requests for
information or documents in legal proceedings, subpoena, civil investigative
demand or other similar process) to disclose any of the Evaluation Material, you
shall provide the Company with prompt written notice of any such request or
requirement so that the Company may seek a protective order or other appropriate
remedy or waive compliance with the provisions of this letter agreement. If the
Company waives compliance with the provisions of this letter agreement with
respect to a specific request or requirement, you and your Representatives shall
disclose only that portion of the Evaluation Material that is covered by such
waiver and which is necessary to disclose in order to comply with such request
or requirement. If, in the absence of a protective order or other remedy or a
waiver by the Company, you or one of your Representatives is nonetheless, in the
opinion of counsel, legally compelled to disclose Evaluation Material to any
tribunal or else stand liable for contempt or suffer other censure or penalty,
you or your Representative may, without liability hereunder, disclose to such
tribunal only that portion of the Evaluation Material which such counsel advises
you is legally required to be disclosed. Notwithstanding the foregoing, in the
event that you or one of your Representatives discloses Evaluation Material
under the terms of this subsection, you and your Representatives shall exercise
your best efforts to preserve the confidentiality of the Evaluation Material,
including, without limitation, by cooperating with the Company to obtain an
appropriate protective order or other reliable assurance that confidential
treatment will be accorded the Evaluation Material.
(e) At any time upon the request of the Company for any reason
whatsoever, you shall deliver promptly to the Company all materials furnished
hereunder to you or any of your Representatives by or on behalf of the Company,
together with all copies of such materials in your possession or control or in
the possession or control of any of your Representatives. In the event of such a
request by the Company, you also agree to destroy all Evaluation Material
prepared by you or any of your Representatives, together with all copies
thereof. Notwithstanding the return or destruction of the above materials and
the Evaluation Material, you and your Representatives will continue to be bound
by your obligations of confidentiality and other obligations hereunder.
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(f) It is understood that this Confidentiality Agreement and its
restrictions will include all information discovered concerning Little
Switzerland leases and lease properties.
3. ACCURACY OF EVALUATION MATERIAL. You understand and acknowledge
that neither the Company nor any of its officers, directors, employees, advisors
or agents makes any representation or warranty, express or implied, as to the
accuracy or completeness of the Evaluation Material. You agree that neither the
Company nor any of its officers, directors, employees, advisors or agents shall
have any liability to you or to any of your Representatives relating to or
resulting from the use of the Evaluation Material or any errors therein or
omissions therefrom. Only those representations and warranties that are made in
a final definitive agreement regarding the Transaction, when, as and if
executed, and subject to such limitations and restrictions as may be specified
therein, will have any legal effect.
4. ACCESS TO AND SOLICITATION OF EMPLOYEES. In consideration of the
Company's provision of the Evaluation Material to you, you agree not to initiate
or maintain contact with any officer, director, employee or agent of the Company
regarding its business, operations, prospects or finances, except with the
express written permission of the Company. You agree to submit or direct all (a
communications regarding the Transaction, (b) requests for additional
information, (c) requests for facility tours or management meetings and (d)
discussions or questions regarding procedures, only to the persons indicated by
the Company. You further agree that, for a period of two years from the date
hereof, you will not solicit for employment any individual currently serving as
a director, officer, employee or agent of the Company, without obtaining the
prior written consent of the Company.
5. STANDSTILL. You agree that, until eighteen months (18) months after
the Company and you have terminated discussions concerning the Transaction,
unless specifically requested by the Company in writing, neither you nor any of
your affiliates (as such term is defined under the Securities Exchange Act of
1934, as amended (the "1934 Act), but not including any person that beneficially
owns less than fifty percent (50%) of your equity if such person is deemed to be
your affiliate solely by reason of such ownership) nor any person serving at
such time as one of your directors, officers or employees will in any manner,
directly or indirectly, (a) effect or seek, offer or propose (whether publicly
or otherwise) to effect, or cause or participate in or in any way assist any
other person to effect or seek, offer or propose (whether publicly or otherwise)
to effect, or cause or participate in, (i) any acquisition of more than 5% of
any outstanding class of voting securities (or beneficial ownership thereof) or
of any material assets of the Company; (ii) any tender or exchange offer, merger
or other business combination involving the Company; (iii) any recapitalization,
restructuring, liquidation, dissolution or other extraordinary transaction with
respect to the Company; or (iv) any "solicitation" of "proxies" (as such terms
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are used in the proxy rules of the Securities and Exchange Commission) to vote
any voting securities of the Company; (b) form, join or in any way participate
in a "group" (as defined in the 0000 Xxx) or otherwise act, alone or in concert
with others, to seek to control or influence the management, Board of Directors
or policies of the Company; (c) take any action which might force the Company to
make a public announcement regarding any of the types of matters set forth in
subsection (a) above; or (d) enter into any discussions or arrangements with any
third party with respect to any of the foregoing. You also agree during such
period not to request that the Company or any of its Representatives, directly
or indirectly, amend or waive any provision of this paragraph (including this
sentence).
6. NO DEFINITIVE AGREEMENT/FREEDOM TO CHANGE PROCESS. You understand
and agree that no contract or agreement providing for the Transaction shall be
deemed to exist between you and the Company unless and until a final definitive
agreement with respect thereto has been executed and delivered by you and the
Company, and you hereby waive, in advance, any claims (including, without
limitation, breach of contract) in connection with the Transaction unless and
until you and the Company shall have entered into such a final definitive
agreement. You also agree that, except for the matters specifically agreed to in
this letter agreement, unless and until such a final definitive agreement
regarding the Transaction has been executed and delivered, neither the Company
nor you will be under any legal obligation of any kind whatsoever with respect
to the Transaction. You further acknowledge and agree that the Company reserves
the right, in its sole discretion, to reject any and all proposals made by you
or any of your Representatives with regard to the Transaction, and to terminate
discussions and negotiations with you at any time. You further understand that,
until a final definitive agreement regarding the Transaction has been executed
and delivered, (a) the Company and its Representatives shall be free to conduct
any process for any transaction involving the Company, if and as they in their
sole discretion shall determine (including, without limitation, negotiating with
any other interested parties and entering into a definitive agreement without
prior notice to you or any other person) and (b) you shall have no claims
whatsoever against the Company, its Representatives or any of their respective
directors, officers, stockholders, owners, affiliates or agents arising out of
or relating to any such transaction involving the Company.
7. REMEDIES. It is understood and agreed that money damages would not
be a sufficient remedy for any breach of this letter agreement by you or any of
your Representatives and that the Company shall be entitled to equitable relief,
including injunction and specific performance, as a remedy for any such breach.
Such remedies shall not be deemed to be the exclusive remedies for a breach by
you of this letter agreement, but shall be in addition to all other remedies
available at law or equity to the Company. In the event of litigation relating
to this letter agreement, if a court of competent jurisdiction determines that
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you or any of your Representatives has breached this letter agreement, you shall
be liable for and pay to the Company on demand the reasonable legal fees and
expenses incurred by the Company in connection with such litigation, including
any appeal therefrom.
8. WAIVERS AND AMENDMENTS. No failure or delay by the Company in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
future exercise thereof or the exercise of any other right, power or privilege
hereunder. No provision of this letter agreement can be amended without the
specific written consent of the Company and you.
9. CHOICE OF LAW/CONSENT TO JURISDICTION. The validity,
interpretation, performance and enforcement of this letter agreement shall be
governed by the laws of the State of Delaware. You hereby irrevocably and
unconditionally consent to the sole and exclusive jurisdiction of the courts of
the State of Delaware and the United States District Court for the District of
Delaware for any action, suit or proceeding arising out of or relating to this
letter agreement or the Transaction, and you agree not to commence any action,
suit or proceeding related thereto except in such courts. You further hereby
irrevocably and unconditionally waive any objection to the laying of venue of
any lawsuit, claim or other proceeding arising out of or relating to this letter
agreement in the courts of the State of Delaware or the United States District
Court for the District of Delaware, and hereby further irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such lawsuit, claim or other proceeding brought in any such court has been
brought in an inconvenient forum. You further agree that service of any process,
summons, notice or document by U.S. registered mail to your address set forth
above shall be effective service of process for any action, suit or proceeding
brought against you in any such court.
10. SURVIVAL. The terms of this letter agreement shall survive the
termination of discussions concerning the Transaction and any definitive
agreement entered into with respect to any such Transaction.
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Please confirm your agreement with the foregoing by signing and
returning one copy of this letter agreement to the undersigned, whereupon this
letter agreement shall become a binding agreement between you and the Company.
Very truly yours,
LITTLE SWITZERLAND, INC.
By: ___________________________
Name: Xxxxxx X. Xxxxxxxxxxx
Title: President and
Chief Executive Officer
Accepted and agreed as of the 11th
day of July, 2000.
Xxxxxx Xxxxx
By: /s/ XXXXXX XXXXX
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Name: Xxxxxx Xxxxx
Title: CFO
