Town & Country corporation Letterhead
November 4, 1994
RE: EXCHANGEABLE PREFERRED, CUSIP NO. 892027 30 1
[FORMAL][FIRST_NAME][LAST_NAME]
[TITLE]
[COMPANY]
[ADDRESS]
[CITY],[STATE][ZIP]
RE: EXCHANGEABLE PREFERRED CUSIP NO. 892027 30 1
Dear [FORMAL.][LAST_NAME.]
Town & Country Corporation ("Town & Country" or the "Company") has reached
the conclusion that the demands of its business are such that it must
substantially reduce its involvement with Little Switzerland, Inc. ("Little
Switzerland"). In order to permit us to do this, however, it is necessary for
Twon & Country to reduce its exposure to the financial and market performance
of Little Switzerland.
In light of this, Town & Country has determined to make the following offer
to you and other accredited investors (the "Holders") who hold shares of Town
& Country's Exchangeable Preferred Stock (the "Exchangeable Preferred"),
CUSIP No. 892027 30 1, who Town & Country believes hold a majority of the
2,533,255 shares of Exchangeable Preferred outstanding. This offer supersedes
any and all previous offers.
The offer-To exchange one (1) share of Exchangeable Preferred for one (1)
share of Little Switzerland Common Stock (the "LS Common") and as an
inducement to participate in this offer, Town & country will also issue one
(1) share of New Convertible Preferred Stock ("the New Convertible
Preferred") for each share of Exchangeable Preferred tendered under the
following conditions:
a) At least 1,660,000 (subject to reduction if we determine it is in Town &
Country's best interest to proceed at a smaller number) shares of
Exchangeable Preferred must be committed for Exchange pursuant to the
procedures outlined below on November 4, 1994 (the "Minimum Exchange
Amount").
b) Each Holder must commit to exchange all shares of Exchangeable Preferred
held by such Holder.
The following is a description of the New Convertible Preferred:
> Maturity: Perpetual
> Stated Value: Variable:
*4 $6.00 per share, if Minimum Exchange Amount
*4 $6.50 per share, if maximum number of shares
is exchanged (2,075,000 shares)
*Variable value per share between $6.00 and
$6.50 when number of shares is between Minimum
Exchange Amount and maximum exchanged.
Page 2
>Dividend *6% Payable in cash, semi-annually, if allowed
by the Company's Indentures and Agreements
or P.I.K., if prohibited.
>Preference: Junior to existing Exchangeable Preferred
>Conversion *2 shares of Town & Country Class A Common
(the "T&C Common") for each share of New
Convertible Preferred.
*4 At option of the Company when the market
value of T&C Common is at least 50% of the
stated value of the New Convertible Preferred.
*Any time at the option of the Holder
>Voting Based on underlying T&C Common
>Redemption: At the option of the Company:
*During the second year @ 104% of stated value
*During the third year @ 102% of stated value
*Thereafter, @ 100% of stated value
>Registration
Rights: The Company will register the underlying T&C
Common.
Other No cash distribution or dividends payable to
T&C Common unless the New Convertible
Preferred has been redeemed or exchanged.
Holder will have the right to a similar position
in the new or surviving entity if the Company
is acquired or there is a merger in which the
Company is not the surviving entity (same
provision as in the existing Exchangeable
Preferred).
If you have not already received a package, under separate cover I will send
to you a copy of Town & Country's Annual Report to Stockholders for the
fiscal year ended February 27, 2994, a Form 10-K for such fiscal year, Form
10-Q's for the quarters ended May 29, 1994, and August 28, 1994, and a proxy
statement for its 1994 Annual Meeting of Stockholders which was held on July
21, 1994.
By signing this letter you represent and agree as follows:
1. You are an "accredited investor" as such term is defined in Rule 501(a)
under the Securities Act of 1933, as amended.
2. This offer has not been publicly made or disclosed. To the extent that its
existence constitutes material non-public information, you acknowledge
that you are aware of the obligations of a person having material
non-public information with respect to an issuer when purchasing or
selling securities of such issuer.
3. Upon your receipt from Town & country of written notification that the
Minimum Exchange Amount has been reached, you agree on November 4, 1994,
that you will cause the record holder of the shares of Exchangeable
Preferred of which you are the beneficial owner to comply with the
procedures for submitting your shares of Exchangeable Preferred to
Baybank, N.A. (the "Trustee") set forth in the certificate of designation
for the Exchangeable Preferred.
4. Set forth below is the number of shares of Exchangeable Preferred of which
you are the beneficial owner and, if different, the name and address of
the nominee holder of such shares.
Page 3
When Town & Country has received commitments from Holders aggregating to the
Minimum Exchange Amount, Town & Country will issue to you that number of
shares of New Convertible Preferred to which you may be entitled pursuant to
the terms of this letter on or before November 23, 1994.
We will advise you immediately upon our receiving commitments from Holders
aggregating to the Minimum Exchange Amount.
Please feel free to call me should you have any questions about this offer.
Please acknowledge your acceptance of the offer contained in this letter and
your acceptance of its terms and conditions by signing below and returning
the enclosed copy of this letter to my attention at Towne & Country
Corporation, 25 Union street, Chelsea, Massachusetts 02150, and transmitting
a facsimile copy hereof to 617-889-6707.
Very truly yours,
TOWN & COUNTRY CORPORATION
By:_______________________
Francis X. Correra
Senior Vice President
sdb
ACCEPTED AND AGREED:
By: ______________________
Name:
Title:
Organization:
We hold __________shares of Exchangeable Preferred which we
commit to exchange on the terms described herein. The name and address of the
nominee holder of such shares is:
_________________________________________________________________
_________________________________________________________________
Dated:,___________________________ 1994