Document:

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                                  EXHIBIT 10.7

<PAGE>

April 7, 2000

Little Switzerland, Inc.
161-B Crown Bay
P.O. Box 930
St. Thomas, U.S. Virgin Islands 00804

Att:     Robert L. Baumgardner, President

         Re:      PROPOSED STANDSTILL THROUGH AUGUST 1, 2000

Dear Mr. Baumgardner:

      Thank you for your letter on behalf of Little Switzerland, Inc. (the
"Company") to The Chase Manhattan Bank dated March 5, 2000. The Chase Manhattan
Bank and the Bank of Nova Scotia (the "Lenders") are pleased to see the
Company's current efforts to address its financing requirements and welcome the
opportunity to review the Company's plans and progress toward achieving its
business plan and obtaining alternative financing from a credible lender. The
Company has represented in our recent discussions that it feels it is necessary
to obtain a fully underwritten commitment for financing by April 15, 2000 and is
diligently working toward meeting this deadline. Based on these representations,
the Lenders generally are amenable to the terms outlined in your March 5 letter
and will agree to standstill until August 1, 2000 (the "Standstill Period"),
subject to the following terms and conditions:

      1.    Upon receipt of this letter, please provide a copy of the letter
            from Investment Bank ("Investment Bank") dated February 15, 2000,
            which has been signed and accepted by the Company by February 15,
            2000 as required therein.

      2.    On or before April 14, 2000, the Company shall execute (or cause one
            or more of its subsidiaries, as appropriate, to execute) in
            recordable form the mortgages over the leasehold real estate in St.
            Thomas and the fee simple real property in St. Maarten owned by the
            Company or such subsidiary(ies) substantially in the form previously
            provided to the Company and its counsel for review. Please note that
            our Virgin Islands counsel has advised us that a recorded mortgage
            can be assigned and modified of record for nominal additional
            recording fees, unless the amount of the mortgage increases in which
            case the fee is based the amount of such increase. Similarly, our
            St. Maarten counsel has advised that the St. Maarten mortgage may

<PAGE>

            be assigned to a new lender relatively inexpensively. Therefore,
            Investment Bank or another lender may obtain and modify the St.
            Thomas and St. Maarten mortgages without causing substantial
            additional mortgage recording fees.

      3.    The Lenders agree that the Company may obtain a bridge loan from
            Investment Bank in an amount not exceeding $2,000,000 (the
            "Investment Bank Loan") for purposes of working capital needed for
            the period prior to the closing of the credit facility (as defined
            below), which bridge loan may be secured by a mortgage over the St.
            Maarten real property superior to the Lenders. Such superior
            mortgage in favor of Investment Bank shall be accomplished in a
            manner satisfactory to Investment Bank, the Lenders, and their
            respective St. Maarten counsel. Upon payment in full of the
            Investment Bank Loan, the mortgage in favor of Investment Bank shall
            be assigned to the Lenders.

      4.    The Company will provide a binding commitment letter, accepted by
            the Company, from Investment Bank or another lender on or before
            April 30, 2000, which commitment letter shall provide for the
            extension to the Company of fully underwritten credit facilities to
            close on or before August 1, 2000 pursuant to commercially
            reasonable terms and conditions, including the payoff of the
            Company's outstanding indebtedness to the Lenders (the "Credit
            Facility").

      5.    In connection with the sale of the Barbados inventory and other
            assets the Company will provide to and obtain from the Government of
            Barbados all documentation necessary to cause the discharge of the
            letters of credit from The Bank of Nova Scotia. As you may be aware,
            even if the Barbados store is sold or closed, the obligations of the
            Bank of Nova Scotia under the Barbados letters of credit remain
            outstanding until officially released by the applicable government
            authority. The Bank of Nova Scotia has the right to request the
            Government of Barbados to cancel the Barbados letters of credit upon
            the sale or closure of the Barbados store or upon the occurrence of
            a Termination Event as described in Paragraph 11 of this letter. All
            proceeds of the sale of the Barbados inventory, store and other
            assets shall be applied to repay the Bridge Loan, with the
            remainder, if any, to be used for working capital.

      6.    The Lenders agree to the reduced minimum inventory collateral
            position of two times the amount of the Company's funded
            indebtedness to the Lenders set forth in your March 5 letter
            provided that such inventory is located in the jurisdictions in
            which the Lenders have a perfected security interest, currently, the
            U.S. Virgin Islands, Alaska, St. Maarten, Aruba and Curacao.

      7.    The Security Agreement dated May 7, 1999 (the "Security Agreement")
            and all security instruments and other documents executed and/filed
            under the laws of any foreign jurisdiction to evidence and/or
            perfect the Lenders' security interest granted under the Security
            agreement shall continue in full force and effect.

<PAGE>

      8.    The Company shall cause its subsidiaries, upon full review of local
            counsel and in no event later than April 30, 2000, to promptly
            execute and deliver any security instrument or other document in
            commercially reasonable form as is provided by the Lenders or their
            counsel and as is necessary to evidence and/or perfect the Lenders'
            security interest in inventory located in any foreign jurisdiction
            in which the lien of the Lenders is not currently perfected.

      9.    The Company shall provide to the Lenders on a weekly basis a
            schedule of inventory by store location. The Company shall further
            provide to the Lenders on a monthly basis no later than the last day
            of the following month copies of its consolidated and consolidating
            reports of operations, including balance sheets, profit and loss
            statements and a narrative review of the monthly operations for the
            prior month. Preliminary year-end financial statements shall be
            provided on or before June 30, 2000.

      10.   During the Standstill Period, the Company shall have no obligation
            to make payments to the Lenders, other than (a) a regularly
            scheduled interest payments; (b) the payment of one-quarter of net
            cash proceeds of transactions as set forth in your March 5 letter,
            except that the transaction period shall cover not only the
            Company's fourth quarter but also so much of the first quarter of
            the following fiscal year that is part of the Standstill Period; and
            (c) payment of all reasonable costs and expenses of the Lenders
            incurred in connection with this letter agreement, the Mortgages,
            the Security Agreement and any collateral documentation filed in or
            executed pursuant to the laws of any jurisdiction in which the
            collateral pledged to the Lenders under the Security Agreement is
            located.

      11.   Notwithstanding the foregoing, the Standstill Period shall terminate
            prior to August 1, 2000, in the even 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 Mortgages or the
                  Security Agreement (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.

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            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 no 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.

            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 subparagraphs 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 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 loan documents evidencing and governing 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/ Roger Odell
                                          -------------------------------
                                          Roger Odell, Managing Director

                                 THE BANK OF NOVA SCOTIA

                                 By:      /s/ Robert Edwards
                                          -------------------------------
                                          Sr. Commercial Banking Manager

The foregoing is acknowledged and agreed to by:

LITTLE SWITZERLAND, INC., a Delaware corporation

By:      /s/ Robert L. Baumgardner
         -------------------------------------------------------------
         Robert L. Baumgardner, President

L.S. WHOLESALE, INC., a Massachusetts corporation

By:      /s/ Robert L. Baumgardner
         -------------------------------------------------------------
         Robert L. Baumgardner, President

<PAGE>

L.S. HOLDING, INC., a U.S. Virgin Islands corporation

By:      /s/ Robert L. Baumgardner
         ------------------------------------------------------------
         Robert L. Baumgardner, President

WORLD GIFT IMPORTS (BARBADOS) LIMITED, a Barbados company

By:      /s/ P.J. Hopper
         ----------------------------------------------------------------------
         Patrick J. Hopper, Director

WORLD GIFT IMPORTS, N.V., a St. Maarten Netherlands Antilles limited liability
company

By:      /s/ P.J. Hopper
         ----------------------------------------------------------------------
         Patrick J. Hopper, Director

S.A.R.L. MONTRES ET BIJOUX, a St. Martin company

By:      /s/ P.J. Hopper
         ----------------------------------------------------------------------

LITTLE SWITZERLAND, N.V., an Aruba limited liability company

By:      L.S. HOLDING (ARUBA), N.V., Managing Director

By:      /s/ Robert L. Baumgardner
         ----------------------------------------------------------------------
         Robert Lee Baumgardner, President of the Managing Board

L.S. HOLDING (ARUBA) N.V., an Aruba limited liability company

By:      /s/ Robert L. Baumgardner
         ----------------------------------------------------------------------
         Robert Lee Baumgardner, President of the Managing Board

L.S. HOLDING CURACAO, N.V., a Curacao limited liability company

By:      /s/ Robert L. Baumgardner
         ----------------------------------------------------------------------
         Robert L. Baumgardner, President and Managing Director

LITTLE SWITZERLAND (ST. LUCIA) LIMITED, a St. Lucia company

By:
         ----------------------------------------------------------------------

L.S. HOLDING (U.S.A.), INC., an Alaska corporation

By:      /s/ Robert L. Baumgardner
         ----------------------------------------------------------------------
         Robert L. Baumgardner, President<PAGE>

                                                                    EXHIBIT 10.3

                            NQO AGREEMENT - DIRECTOR

      THIS AGREEMENT, entered into as of the Grant Date (as defined in
paragraph 1), by and between the Participant and M-tron Industries, Inc. (the
"Company");

                                WITNESSETH THAT:

      WHEREAS, the Company maintains the 2000 Stock Option Plan (the "Plan"),
which is incorporated into and forms a part of this Agreement, and the
Participant is a non-employee Director of the Company who is receiving a
Non-Qualified Stock Option Award under the Plan;

      NOW, THEREFORE, IT IS AGREED, by and between the Company and the
Participant, as follows:

1.          Terms of Award. The following terms used in this Agreement shall
have the meanings set forth in this paragraph 1:

a.              The "Participant" is .

b.              The "Grant Date" is .

c.              The number of "Covered Shares" shall be ___________ shares of
                Class A Common Stock.

d.              The "Exercise Price" is $__ per share.

            Other terms used in this Agreement are defined pursuant to paragraph
9 or elsewhere in this Agreement.

2.          Award and Exercise Price. This Agreement specifies the terms of the
option (the "Option") granted to the Participant to purchase the number of
Covered Shares of Class A Common Stock at the Exercise Price per share as set
forth in paragraph 1. The Option is not intended to constitute an "incentive
stock option" as that term is used in Code section 422.

3.          Date of Exercise. Subject to the limitations of this Agreement, the
Option shall be exercisable according to the following schedule, with respect to
each installment shown in the schedule on and after the Vesting Date applicable
to such
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installment:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
INSTALLMENT             VESTING DATE APPLICABLE TO INSTALLMENT
--------------------------------------------------------------------------------
<S>                     <C>
75% of Covered Shares   [date]
--------------------------------------------------------------------------------
25% of Covered Shares   [date]
--------------------------------------------------------------------------------
</TABLE>

      An Installment shall not become exercisable on the otherwise applicable
Vesting Date if the date of Participant's Termination Directorship (as defined
in paragraph 9) occurs on or before such Vesting Date.

      The Option may be exercised on or after the Date of Termination only as to
that portion of the Covered Shares as to which it was exercisable immediately
prior to the date of Termination Directorship.

4.    Expiration. The Option shall not be exercisable after the Company's close
of business on the last business day that occurs prior to the Expiration Date.
The "Expiration Date" shall be earliest to occur of:

a.          the ten-year anniversary of the Grant Date;

b.          if the Participant's Termination of Directorship occurs by reason of
death, Disability or Retirement, the 180 day anniversary of the date of such
Termination; or

c.          if a Participant's Termination of Directorship occurs by reason of
involuntary termination without Cause, the 90-day anniversary of the date of
such Termination;

d.          if a Participant's Termination of Directorship occurs by reason
of Participant's voluntary resignation, the 30-day anniversary of the date of
such Termination;

e.          if the participant's Termination of Directorship is for any reason
other than clauses a. through c. above (including without limitation termination
for Cause), the date of such Termination.

5.          Change of Control. The provision of Article VIII of the Plan shall
be applicable

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in the case of a Change in Control of the Company as if the
Board of Directors was not exercised its discretion or provided otherwise.

6.          Method of Option Exercise. Subject to the terms of this Agreement
and the Plan, the Option may be exercised in whole or in part by filing a
written notice with the Secretary of the Company at its corporate headquarters
prior to the Company's close of business on the last business day that occurs
prior to the Expiration Date. Such notice shall specify the number of shares of
Class A Common Stock which the Participant elects to purchase, and shall be
accompanied by payment of the purchase price for such shares of Class A Common
Stock indicated by the Participant's election or such other arrangement for
the satisfaction of the purchase price as the Board may accept. Payment shall
be by cash or by check payable to the Company. Except as otherwise provided
by the Board before the Option is exercised: (i) all or a portion of the
Exercise Price may be paid by the Participant by delivery of shares of Class
A Common Stock owned unencumbered by the Participant for at least six months
and acceptable to the Board having an aggregate Fair Market Value (valued as
of the date of exercise) that is equal to the amount of cash that would
otherwise be required; and (ii) the Participant may pay the Exercise Price by
authorizing a third party to sell shares of Class A Common Stock (or a
sufficient portion of the shares) acquired upon exercise of the Option and
remit to the Company a sufficient portion of the sale proceeds to pay the
entire Exercise Price and any tax withholding resulting from such exercise.
The Option shall not be exercisable if and to the extent the Company
determines that such exercise would violate applicable state or Federal
securities laws or the rules and regulations of any securities exchange on
which the Stock is traded. If the Company makes such a determination, it
shall use all reasonable efforts to obtain compliance with such laws, rules
and regulations. In making any determination hereunder, the Company may rely
on the opinion of counsel for the Company.

7.          Withholding. All deliveries and distributions under this Agreement
are subject to withholding of all applicable taxes. At the election of the
Participant, and subject to such rules and limitations as may be established by
the Board of Directors from time to time, such withholding obligations may be
satisfied through the surrender

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<PAGE>

of shares of Class A Common Stock which the Participant already owns, or to
which the Participant is otherwise entitled under the Plan.

8.          Transferability. Except as otherwise provided in this paragraph 7,
the Option is not transferable other than as designated by the Participant by
will or by the laws of descent and distribution, and during the Participant's
life, may be exercised only by the Participant. However, the Participant, with
the approval of the Board of Directors, may transfer the Option for no
consideration to or for the benefit of the Participant's Immediate Family
(including, without limitation, to a trust for the benefit of the Participant's
Immediate Family or to a partnership or limited liability company for one or
more members of the Participant's Immediate Family), subject to such limits as
the Committee may establish, and the transferee shall remain subject to all
the terms and conditions applicable to the Option prior to such transfer. The
foregoing right to transfer the Option shall apply to the right to consent to
amendments to this Agreement and, in the discretion of the Board, shall also
apply to the right to transfer ancillary rights associated with the Option.
The term "Immediate Family" shall mean the Participant's spouse, parents,
children, stepchildren, adoptive relationships, sisters, brothers and
grandchildren (and, for this purpose, shall also include the Participant).

9.          Definitions. For purposes of this Agreement, the terms used in this
Agreement shall be subject to the following:

a.              "Cause" shall mean, an act or failure to act that constitutes
"cause" for removal of a director under applicable Delaware law.

b.              "Disability" shall mean total and permanent disability, as
defined in Section 22(e)(3) of the Code.

c.              "Retirement" with respect to a Participant's Termination of
Directorship, shall mean the failure to stand for reelection or the failure to
be reelected after a Participant has attained age sixty-five (65).

d.              "Termination of Directorship" shall mean, with respect to a
non-employee director, that the non-employee director has ceased to be a
director of the Company for any reason.

e.              Plan Definitions. Except where the context clearly implies or
indicates the contrary, a word, term, or phrase used in the Plan is similarly
used in this Agreement.

10.         Heirs and Successors. This Agreement shall be binding upon, and
inure to the benefit of, the Company and its successors and assigns, and upon
any

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<PAGE>

person acquiring, whether by merger, consolidation, purchase of assets or
otherwise, all or substantially all of the Company's assets and business. If any
rights exercisable by the Participant or benefits deliverable to the Participant
under this Agreement have not been exercised or delivered, respectively, at the
time of the Participant's death, such rights shall be exercisable by the
Designated Beneficiary, and such benefits shall be delivered to the Designated
Beneficiary, in accordance with the provisions of this Agreement and the Plan.
The "Designated Beneficiary" shall be the beneficiary or beneficiaries
designated by the Participant in a writing filed with the Board in such form
and at such time as the Board shall require. If a deceased Participant fails
to designate a beneficiary, or if the Designated Beneficiary does not survive
the Participant, any rights that would have been exercisable by the Participant
and any benefits distributable to the Participant shall be exercised by or
distributed to the legal representative of the estate of the Participant. If a
deceased Participant designates a beneficiary and the Designated Beneficiary
survives the Participant but dies before the Designated Beneficiary's exercise
of all rights under this Agreement or before the complete distribution of
benefits to the Designated Beneficiary under this Agreement, then any rights
that would have been exercisable by the Designated Beneficiary shall be
exercised by the legal representative of the estate of the Designated
Beneficiary, and any benefits distributable to the Designated Beneficiary shall
be distributed to the legal representative of the estate of the Designated
Beneficiary.

11.         Administration. The authority to manage and control the operation
and administration of this Agreement shall be vested in the Board, and the
Board shall have all powers with respect to this Agreement as it has with
respect to the Plan. Any interpretation of the Agreement by the Board and any
decision made by it with respect to the Agreement is final and binding on all
persons.

12.         Plan Governs. Notwithstanding anything in this Agreement to the
contrary, the terms of this Agreement shall be subject to the terms of the Plan,
a copy of which may be obtained by the Participant from the office of the
Secretary of he Company; and this Agreement is subject to all interpretations,
amendments, rules and regulations promulgated by the Board from time to time
pursuant to the Plan.

13.         Not A Directorship Contract. The Option will not confer on the
Participant any right with respect to continuance of service as a director of
the Company or any Subsidiary, nor will it interfere in any way with any right
the Company or any Subsidiary, or the shareholders of the Company or any
Subsidiary, would otherwise have to terminate or modify the terms of such
Participant's directorship or other service at any time.

                                       5
<PAGE>

14.         Notices. Any written notices provided for in this Agreement or the
Plan shall be in writing and shall be deemed sufficiently given if either hand
delivered or if sent by fax or overnight courier, or by postage paid first class
mail. Notices sent by mail shall be deemed received three business days after
mailing but in no event later than the date of actual receipt. Notices shall be
directed, if to the Participant, at the Participant's address indicated by the
Company's records, or if to the Company, at the Company's principal executive
office.

15.         Fractional Shares. In lieu of issuing a fraction of a share upon any
exercise of the Option, resulting from an adjustment of the Option pursuant to
Section 4.2 of the Plan or otherwise, the Company will be entitled to pay to the
Participant an amount equal to the fair market value of such fractional share.

16.         No Rights As Shareholder. The Participant shall not have any rights
of a shareholder with respect to the shares subject to the Option, until a stock
certificate has been duly issued following exercise of the Option as provided
herein.

17.         Adjustments for Pooling-of-Interests Accounting. If the Company
enters into a transaction which is intended to be accounted for using the
pooling-of-interests method of accounting, but it is determined by the Board
that the Option or any aspect thereof could reasonably be expected to preclude
such treatment, then the Board may modify (to the minimum extent required) or
revoke (if necessary) the Option or any of the provisions thereof to the extent
that the Board determines that such modification or revocation is necessary to
enable the transaction to be subject to pooling-of-interests accounting.

18.         Lock-Up Period. In the event that the Company files a registration
statement under the Securities Act with respect to an underwritten public
offering of any Common Stock, the Participant shall be prohibited from effecting
any public sale or distribution of any Stock (other than as part of such
underwritten public offering), including, but not limited to, pursuant to Rule
144 or Rule 144A under the Securities Act, during the "lock-up" period
established by the Board, which lock-up period shall be no shorter than that
required by the underwriters of such public offering.

19.         Amendment. This Agreement may be amended by written agreement of the
Participant and the Company, without the consent of any other person.

20.         Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware applicable to contracts

                                       6
<PAGE>

made and to be wholly performed therein. Should any provision of this Agreement
be determined by a court of law to be illegal or unenforceable, the other
provisions shall nevertheless remain effective and shall remain enforceable.

21.         Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof, and supersede all
previously written or oral negotiations, commitments, representations and
agreements with respect thereto.

                                       7
<PAGE>

      IN WITNESS WHEREOF, the Participant has executed this Agreement, and the
Company has caused these presents to be executed in its name and on its behalf,
all as of the Grant Date.

                                                Participant

                                                M-tron Industries, Inc.

                                                By:
                                                Its:

                                       8

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