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                                                                   EXHIBIT 10.21

                              TERM PROMISSORY NOTE

                                                         New York, New York
$4,000,000                                               March __, 2002

     FOR VALUE RECEIVED, L.S. HOLDING, INC., a United States Virgin Islands
corporation (the "Debtor"), hereby unconditionally promises to pay to the order
of CONGRESS FINANCIAL CORPORATION (FLORIDA), a Florida corporation ("Payee"), at
the offices of Payee at 777 Brickell Avenue, Miami, Florida 33131, or at such
other place as the Payee or any holder hereof may from time to time designate,
the principal sum of FOUR MILLION AND 00/100 DOLLARS ($4,000,000) in lawful
money of the United States of America and in immediately available funds, on
March __, 2005 or such date as may be extended as provided in the Loan Agreement
referred to below (or earlier as hereinafter provided).

     Debtor hereby further promises to pay interest to the order of Payee on the
unpaid principal balance hereof at the Interest Rate (as defined below). Such
interest shall be paid in like money at said office or place from the date
hereof, commencing April 1, 2002 and on the first day of each month thereafter
until the indebtedness evidenced by this Note is paid in full. Interest payable
upon and after an Event of Default or termination of the Loan Agreement shall be
payable upon demand.

     For purposes hereof, (a) subject to clauses (i) and (ii) below, the term
"Interest Rate" shall mean, as to Prime Rate Loans, a rate equal to
three-quarters (3/4%) percent per annum in excess of the Prime Rate (as defined
below), and as to Eurodollar Rate Loans (as defined below), a rate equal to two
and three-quarters (2 3/4%) percent per annum in excess of the Adjusted
Eurodollar Rate (as defined in the Loan Agreement referred to below); PROVIDED,
THAT, at Payee's option, without notice, the Interest Rate shall mean a rate of
two and three-quarters (2 3/4%) percent per annum in excess of the Prime Rate as
to Prime Rate Loans and a rate of four and three-quarters (4 3/4%) percent per
annum in excess of the Adjusted Eurodollar Rate as to Eurodollar Rate Loans, (i)
for the period (A) on and after the date of termination of the Loan Agreement
until such time as all Obligations are paid and satisfied in full in immediately
available funds or (B) from and after the date of the occurrence of an Event of
Default, and for so long as such Event of Default is continuing as determined by
Payee, and (ii) on Loans at any time outstanding in excess of the Borrowing Base
or the Maximum Credit (whether or not such excess(es) arise or are made with or
without Payee's knowledge or consent and whether made before or after an Event
of Default) following demand by Payee in accordance with the terms of the Loan
Agreement, (b) the term "Prime Rate" shall mean the rate from time to time
publicly announced by First Union National Bank, or its successors, from time to
time, as its prime rate, whether or not such announced rate is the best rate
available at such bank, (c) the term "Event of Default" shall mean an Event of
Default as such term is defined in the Loan Agreement, and (d) the term "Loan
Agreement" shall mean the Loan and Security Agreement, dated of even date
herewith, by and among Payee, Debtor, L.S. Holding (Florida), Inc., L.S.
Wholesale, Inc. and Little Switzerland, Inc., as the same now exists or may
hereafter be amended, modified, supplemented, extended,

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renewed, restated or replaced. Unless otherwise defined herein, all capitalized
terms used herein shall have the meaning assigned thereto in the Loan Agreement.

     The Interest Rate payable hereunder on non-contingent Obligations (other
than Eurodollar Rate Loans) shall increase or decrease by an amount equal to
each increase or decrease, respectively, in the Prime Rate, effective on the
first day of the month after any change in the Prime Rate is announced. The
increase or decrease shall be based on the Prime Rate in effect on the last day
of the month in which any such change occurs. Interest shall be calculated on
the basis of a three hundred sixty (360) day year and actual days elapsed. In no
event shall the interest charged hereunder exceed the maximum permitted under
the laws of the State of Florida or other applicable law.

     This Note is issued pursuant to the terms and provisions of the Loan
Agreement to evidence the Term Loan by Payee to Debtor. This Note is secured by
the Collateral described in the Loan Agreement (as such term is defined in the
Loan Agreement), and all notes, guarantees, security agreements and other
agreements, documents and instrument now or at any time hereafter executed
and/or delivered by Debtor or any other party in connection therewith (all of
the foregoing, together with the Loan Agreement, as the same now exist or may
hereafter be amended, modified, supplemented, renewed, extended, restated or
replaced, being collectively referred to herein as the "Financing Agreements"),
and is entitled to all of the benefits and rights thereof and of the other
Financing Agreements. At the time any payment is due hereunder, at its option,
Payee may charge the amount thereof to any account of Debtor maintained by
Payee.

     If any payment of principal or interest is not made when due hereunder, or
if any other Event of Default shall occur for any reason, or if the Loan
Agreement shall be terminated for any reason whatsoever, then and in any such
event, in addition to all other rights and remedies of Payee under the other
Financing Agreements, applicable law or otherwise, all such rights and remedies
being cumulative, not exclusive and enforceable alternatively, successively and
concurrently, Payee may, at its option, declare any or all of Debtor's
obligations, liabilities and indebtedness owing to Payee under the Loan
Agreement and the other Financing Agreements (the "Obligations"), including,
without limitation, all amounts owing under this Note, to be due and payable,
whereupon the then unpaid principal balance hereof, together with all interest
accrued thereon, shall forthwith become due and payable, together with interest
accruing thereafter at the then applicable Interest Rate stated above until the
indebtedness evidenced by this Note is paid in full in immediately available
funds, plus the costs and expenses of collection hereof, including, but not
limited to, reasonable attorneys' fees and legal expenses.

     Debtor (i) waives diligence, demand, presentment, protest and notice of any
kind, (ii) agrees that it will not be necessary for Payee to first institute
suit in order to enforce payment of this Note and (iii) consents to any one or
more extensions or postponements of time of payment, release, surrender or
substitution of collateral security, or forbearance or other indulgence, without
notice or consent. The pleading of any statute of limitations as a defense to
any demand against Debtor is expressly hereby waived by Debtor. Upon any Event
of Default or termination of the Loan Agreement, Payee shall have the right, but
not the obligation to setoff against this Note all money owed by Payee to
Debtor.

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     Payee shall not be required to resort to any Collateral for payment, but
may proceed against Debtor and any guarantors or endorsers hereof in such order
and manner as Payee may choose. None of the rights of Payee shall be waived or
diminished by any failure or delay in the exercise thereof.

     The validity, interpretation and enforcement of this Note and the other
Financing Agreements and any dispute arising in connection herewith or therewith
shall be governed by the internal laws of the State of Florida, but excluding
any principals of conflicts of law or other rule of law that would cause
application of the law of any jurisdiction other than the laws of the State of
Florida.

     Debtor irrevocably consents and submits to the non-exclusive jurisdiction
of the Circuit Court of Miami-Dade County, Florida and the United States
District Court for the Southern District of Florida, whichever Payee may elect,
and waives any objection based on venue or FORUM NON CONVENIENS with respect to
any action instituted therein arising under this Note or any of the other
Financing Agreements or in any way connection with or related or incidental to
the dealings of Debtor and Payee in respect of this Note or any of the other
Financing Agreements or the transactions related hereto or thereto, in each case
whether now existing or hereafter arising, and whether in contract, tort, equity
or otherwise, and agrees that any dispute arising out of the relationship
between Debtor and Payee or the conduct of such persons in connection with this
Note or otherwise shall be heard only in the courts described above (except that
Payee shall have the right to bring any action or proceeding against Debtor or
its property in the courts of any other jurisdiction which Payee deems necessary
or appropriate in order to realize on the Collateral or to otherwise enforce its
rights against Debtor or its property).

     Debtor hereby waives personal service of any and all process upon it and
consents that all such service of process may be made by certified mail (return
receipt requested) directed to it and service so made shall be deemed to be
completed five (5) days after the same shall have been so deposited in the U.S.
mails, or, at Payee's option, by service upon Debtor in any other manner
provided under the rules of any such courts. Within thirty (30) days after such
service, Debtor shall appear in answer to such process, failing which Debtor
shall be deemed in default and judgment may be entered by Payee against Debtor
for the amount of the claim and other relief requested.

     DEBTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS NOTE OR (ii) IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS BETWEEN DEBTOR AND PAYEE
IN RESPECT OF THIS NOTE OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE
TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. DEBTOR
AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL
BE DECIDED BY COURT TRIAL WITHOUT A JURY.

     This Note is registered as to both principal and stated interest with the
Debtor, and notwithstanding any other provision hereof, transfer of the right to
the principal of and stated

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interest thereon may be effected only by the surrender of this Note and either
the reissuance by the Debtor of this Note to the new payee or issuance by the
Debtor of a new note to the new payee. The Debtor acknowledges that is has
received from Payee a completed Form W-8BEN, and that Payee is not a 10%
shareholder, as defined in Section 871(h) of the Code. For purposes of this
Note, the term "Code" means the Internal Revenue Code of the United States
Virgin Islands, as the same now exists or may from time to time hereafter be
amended, modified, recodified or supplemented, together with all rules,
regulations and interpretations thereunder or related thereto.

     The execution and delivery of this Note has been authorized by the Board of
Directors and by any necessary vote or consent of the stockholders of Debtor.

     This Note shall be binding upon the successors and assigns of Debtor and
inure to the benefit of Payee and its successors, endorsees and permitted
assigns. Whenever used herein, the term "Debtor" shall be deemed to include its
successors and assigns and the term "Payee" shall be deemed to include its
successors, endorsees and permitted assigns. If any term or provision of this
Note shall be held invalid, illegal or unenforceable, the validity of all other
terms and provisions hereof shall in no way be affected thereby.

                                                  L.S. HOLDING, INC.

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

                                                  Title:
                                                        --------------------

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                                                                   EXHIBIT 10.22

                                                                     [EXECUTION]

                          PLEDGE AND SECURITY AGREEMENT

     THIS PLEDGE AND SECURITY AGREEMENT ("Pledge Agreement"), dated March 22,
2002, is by LITTLE SWITZERLAND, INC., a Delaware corporation ("Pledgor"), with
an office at 161-B Crown Bay, St. Thomas, United States Virgin Islands 00802, to
and in favor of CONGRESS FINANCIAL CORPORATION (FLORIDA), a Florida corporation
("Pledgee"), having an office at 777 Brickell Avenue, Miami, Florida 33131.

                              W I T N E S S E T H:

     WHEREAS, Pledgor is now the direct and beneficial owner of all of the
issued and outstanding shares of capital stock of L.S. Wholesale, Inc., a
Massachusetts corporation, LS Holding, Inc., a United States Virgin Islands
corporation and L.S. Holding (Florida), Inc., a Florida corporation (each an
"Issuer" and collectively "Issuers"), as described on Exhibit A annexed hereto
and made a part hereof (the "Pledged Securities");

     WHEREAS, Issuers and Pledgee have entered into or are about to enter into
financing arrangements pursuant to which Pledgee may make loans and advances and
provide other financial accommodations to Issuers as set forth in the Loan and
Security Agreement, dated of even date herewith, by and among Issuers, Pledgor
and Pledgee (as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, the "Loan Agreement"; all
capitalized terms used herein and not otherwise defined herein shall have their
meanings as set forth in the Loan Agreement), and other agreements, documents
and instruments referred to therein or at any time executed and/or delivered in
connection therewith or related thereto, including, but not limited to, the
Guarantee (as hereinafter defined) and this Pledge Agreement (all of the
foregoing, together with the Loan Agreement, as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, being collectively referred to herein as the "Financing Agreements");

     WHEREAS, Pledgor has absolutely and unconditionally guaranteed the payment
and performance of the Obligations (as hereinafter defined) as set forth in the
Guarantee, dated of even date herewith, by Pledgor in favor of Pledgee (as the
same now exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced, collectively, the "Guarantee"); and

     WHEREAS, in order to induce Pledgee to enter into the Loan Agreement and
the other Financing Agreements and to make loans and advances and provide other
financial accommodations to Issuers pursuant thereto, Pledgor has agreed to
secure the payment and performance of the Obligations and to accomplish same by
(i) executing and delivering to Pledgee this Pledge Agreement, (ii) delivering
to Pledgee the Pledged Securities which are registered in the name of Pledgor,
together with appropriate stock powers duly executed in blank by Pledgor, and
(iii) delivering to Pledgee any and all other documents which Pledgee deems

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necessary to protect Pledgee's interests hereunder.

     NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Pledgor hereby agrees as follows:

     1. GRANT OF SECURITY INTEREST

     As collateral security for the prompt performance, observance and
indefeasible payment in full of all of the Obligations, Pledgor hereby assigns,
pledges, hypothecates, transfers and sets over to Pledgee and grants to Pledgee
a security interest in and lien upon: (a) the Pledged Securities, together with
all cash dividends, stock dividends, interests, profits, redemptions, warrants,
subscription rights, stock, securities options, substitutions, exchanges and
other distributions now or hereafter distributed by any Issuer or which may
hereafter be delivered to the possession of Pledgor or Pledgee with respect
thereto, (b) Pledgor's records with respect to the foregoing, and (c) the
proceeds of all of the foregoing (all of the foregoing being collectively
referred to herein as the "Pledged Property").

     2. OBLIGATIONS SECURED

     The security interest, lien and other interests granted to Pledgee pursuant
to this Pledge Agreement shall secure the prompt performance and payment in full
of any and all obligations, liabilities and indebtedness of every kind, nature
and description owing by any Issuer or Pledgor to Pledgee and/or its affiliates,
including principal, interest, charges, fees, costs and expenses, however
evidenced, whether as principal, surety, endorser, guarantor or otherwise,
arising under this Pledge Agreement, the Guarantee, the Loan Agreement or the
other Financing Agreements, whether now existing or hereafter arising, whether
arising before, during or after the initial or any renewal term of the Loan
Agreement or after the commencement of any case with respect to Pledgor or any
Issuer under the United States Bankruptcy Code or any similar statute or under
any insolvency, reorganization, receivership, readjustment of debt, dissolution
or liquidation law or statute of any jurisdiction now or hereafter in effect,
whether at law or in equity (including, without limitation, the payment of
interest and other amounts which would accrue and become due but for the
commencement of such case), whether direct or indirect, absolute or contingent,
joint or several, due or not due, primary or secondary, liquidated or
unliquidated, secured or unsecured, and however acquired by Pledgee (all of the
foregoing being collectively referred to herein as the "Obligations").

     3. REPRESENTATIONS, WARRANTIES AND COVENANTS

     Pledgor hereby represents, warrants and covenants with and to Pledgee the
following (all of such representations, warranties and covenants being
continuing so long as any of the Obligations are outstanding):

     (a) The Pledged Securities are duly authorized, validly issued, fully paid
and non-assessable capital stock of each Issuer and constitute Pledgor's entire
interest in LS

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Wholesale, Inc. and LS Holding (Florida), Inc. and approximately sixty-five
(65%) percent of Pledgor's entire interest in LS Holding, Inc. and are not
registered, nor has Pledgor authorized the registration thereof, in the name of
any person or entity other than Pledgor or Pledgee.

     (b) The Pledged Property is directly, legally and beneficially owned by
Pledgor, free and clear of all claims, liens, pledges and encumbrances of any
kind, nature or description, except for the pledge and security interest in
favor of Pledgee and the pledges and security interests permitted under the Loan
Agreement.

     (c) The Pledged Property is not subject to any restrictions relative to the
transfer thereof and Pledgor has the right to transfer and hypothecate the
Pledged Property free and clear of any liens, encumbrances or restrictions,
subject to pledges and security interests permitted under Section 9.8 of the
Loan Agreement.

     (d) The Pledged Property is duly and validly pledged to Pledgee and no
consent or approval of any governmental or regulatory authority or of any
securities exchange or the like, nor any consent or approval of any other third
party, was or is necessary to the validity and enforceability of this Pledge
Agreement.

     (e) Pledgor authorizes Pledgee to: (i) store, deposit and safeguard the
Pledged Property, (ii) perform any and all other acts which Pledgee in good
faith deems reasonable and/or necessary for the protection and preservation of
the Pledged Property or its value or Pledgee's security interest therein,
including, without limitation, from and after the occurrence of an Event of
Default transferring, registering or arranging for the transfer or registration
of the Pledged Property to or in Pledgee's own name and receiving the income
therefrom as additional security for the Obligations and (iii) pay any charges
or expenses which Pledgee in good faith deems necessary for the foregoing
purpose, but without any obligation to do so. Any obligation of Pledgee for
reasonable care for the Pledged Property in Pledgee's possession shall be
limited to the same degree of care which Pledgee uses for similar property
pledged to Pledgee by other persons.

     (f) If Pledgor shall become entitled to receive or acquire, or shall
receive any stock certificate, or option or right with respect to the stock of
any Issuer (including without limitation, any certificate representing a
dividend or a distribution or exchange of or in connection with reclassification
of the Pledged Securities) whether as an addition to, in substitution of, or in
exchange for any of the Pledged Property or otherwise, Pledgor agrees to accept
same as Pledgee's agent, to hold same in trust for Pledgee and to deliver same
forthwith to Pledgee or Pledgee's agent or bailee in the form received, with the
endorsement(s) of Pledgor where necessary and/or appropriate powers and/or
assignments duly executed to be held by Pledgee or Pledgee's agent or bailee
subject to the terms hereof, as further security for the Obligations.

     (g) In the event that as a result of a change in law, a change in the
financial condition of the Issuers or Pledgor, as the case may be, or otherwise,
Issuers and/or Pledgor, as the case may be, shall not have any material tax
liability pursuant to any applicable statute in any applicable jurisdiction as a
direct result of pledging more than 65% of the voting stock in LS Holding, Inc.,

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Pledgor shall promptly take or cause to be taken all such further acts as are
necessary in order that 100% (or such lesser percentage as will not result in
any such material tax liability) of such voting stock in LS Holding, Inc. be
deemed Pledged Property hereunder and otherwise subject to a perfected lien in
favor of Pledgee.

     (h) Except as permitted by Section 9.7 of the Loan Agreement, Pledgor shall
not, without the prior consent of Pledgee, directly or indirectly, sell, assign,
transfer, or otherwise dispose of, or grant any option with respect to the
Pledged Property, nor shall Pledgor create, incur or permit any further pledge,
hypothecation, encumbrance, lien, mortgage or security interest with respect to
the Pledged Property.

     (i) So long as no Event of Default (as hereinafter defined) has occurred
and is continuing Pledgor shall have the right to vote and exercise all
corporate rights with respect to the Pledged Securities, except as expressly
prohibited herein, and to receive any cash dividends payable in respect of the
Pledged Securities.

     (j) Pledgor shall not permit any Issuer, directly or indirectly, to issue,
sell, grant, assign, transfer or otherwise dispose of, any additional shares of
capital stock of such Issuer or any option or warrant with respect to, or other
right or security convertible into, any additional shares of capital stock of
such Issuer, now or hereafter authorized, unless all such additional shares,
options, warrants, rights or other such securities are made and shall remain
part of the Pledged Property subject to the pledge and security interest granted
herein.

     (k) Pledgor shall pay all charges and assessments of any nature against the
Pledged Property or with respect thereto prior to said charges and/or
assessments being delinquent, except to the extent Pledgee is in good faith
contesting any such charges and/or assessments and with respect to which
adequate reserves have been set aside on Pledgor's books, PROVIDED, THAT, such
failure to pay such charges and/or assessments does not have, or is not
reasonably likely to result in, a Material Adverse Effect.

     (l) Pledgor shall promptly reimburse Pledgee on demand, together with
interest at the rate then applicable to the Obligations set forth in the Loan
Agreement, for any charges, assessments or expenses paid or incurred by Pledgee
in its good faith discretion for the protection, preservation and maintenance of
the Pledged Property and the enforcement of Pledgee's rights hereunder,
including, without limitation, reasonable attorneys' fees and legal expenses
incurred by Pledgee in seeking to protect, collect or enforce its rights in the
Pledged Property or otherwise hereunder.

     (m) Pledgor shall furnish, or cause to be furnished, to Pledgee such
information concerning Issuers and the Pledged Property as Pledgee may from time
to time reasonably request in good faith, including, without limitation, current
financial statements.

     (n) Pledgee may notify any Issuer or the appropriate transfer agent of the
Pledged Securities to register the security interest and pledge granted herein
and honor the rights of Pledgee with respect thereto.

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     (o) Pledgor waives: (i) all rights to require Pledgee to proceed against
any other person, entity or collateral or to exercise any remedy, (ii) the
defense of the statute of limitations in any action upon any of the Obligations,
(iii) any right of subrogation or interest in the Obligations or Pledged
Property until all Obligations have been paid in full, (iv) any rights to notice
of any kind or nature whatsoever, unless specifically required in this Pledge
Agreement or non-waivable under any applicable law, and (v) to the extent
permissible, its rights under Section 9-207 of the Uniform Commercial Code.
Pledgor agrees that the Pledged Property, other collateral, or any other
guarantor or endorser may be released, substituted or added with respect to the
Obligations, in whole or in part, without releasing or otherwise affecting the
liability of Pledgor, the pledge and security interests granted hereunder, or
this Pledge Agreement. Pledgee is entitled to all of the benefits of a secured
party set forth in Section 9-207 of the Uniform Commercial Code.

     4. EVENTS OF DEFAULT

     All Obligations shall become immediately due and payable, without notice or
demand, at the option of Pledgee, upon the occurrence of any Event of Default,
as such term is defined in the Loan Agreement (each an "Event of Default"
hereunder).

     5. RIGHTS AND REMEDIES

     At any time an Event of Default exists or has occurred and is continuing,
in addition to all other rights and remedies of Pledgee, whether provided under
this Pledge Agreement, the Loan Agreement, the other Financing Agreements,
applicable law or otherwise, Pledgee shall have the following rights and
remedies which may be exercised without notice to, or consent by, Pledgor except
as such notice or consent is expressly provided for hereunder:

     (a) Pledgee, at its option, shall be empowered to exercise its continuing
right to instruct the Issuers (or the appropriate transfer agent of the Pledged
Securities) to register any or all of the Pledged Securities in the name of
Pledgee or in the name of Pledgee's nominee and Pledgee may complete, in any
manner Pledgee may deem expedient, any and all stock powers, assignments or
other documents heretofore or hereafter executed in blank by Pledgor and
delivered to Pledgee. After said instruction, and without further notice,
Pledgee shall have the exclusive right to exercise all voting and corporate
rights with respect to the Pledged Securities and other Pledged Property, and
exercise any and all rights of conversion, redemption, exchange, subscription or
any other rights, privileges, or options pertaining to any shares of the Pledged
Securities or other Pledged Property as if Pledgee were the absolute owner
thereof, including, without limitation, the right to exchange, in its
discretion, any and all of the Pledged Securities and other Pledged Property
upon any merger, consolidation, reorganization, recapitalization or other
readjustment with respect thereto. Upon the exercise of any such rights,
privileges or options by Pledgee, Pledgee shall have the right to deposit and
deliver any and all of the Pledged Securities and other Pledged Property to any
committee, depository, transfer agent, registrar or other designated agency upon
such terms and conditions as Pledgee may determine, all without liability,
except to account for property actually received by Pledgee. However, Pledgee
shall have no duty to exercise any of the aforesaid rights, privileges or
options (all of which are exercisable in the sole discretion of Pledgee) and
shall not be responsible for any failure to do so or delay in doing so.

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     (b) In addition to all the rights and remedies of a secured party under the
Uniform Commercial Code or other applicable law, Pledgee shall have the right,
at any time and without demand of performance or other demand, advertisement or
notice of any kind (except the notice specified below of time and place of
public or private sale) to or upon Pledgor or any other person (all and each of
which demands, advertisements and/or notices are hereby expressly waived to the
extent permitted by applicable law), to proceed forthwith to collect, redeem,
recover, receive, appropriate, realize, sell, or otherwise dispose of and
deliver said Pledged Property or any part thereof in one or more lots at public
or private sale or sales at any exchange, broker's board or at any of Pledgee's
offices or elsewhere at such prices and on such terms as Pledgee may deem best.
The foregoing disposition(s) may be for cash or on credit or for future delivery
without assumption of any credit risk, with Pledgee having the right to purchase
all or any part of said Pledged Property so sold at any such sale or sales,
public or private, free of any right or equity of redemption in Pledgor, which
right or equity is hereby expressly waived or released by Pledgor. The proceeds
of any such collection, redemption, recovery, receipt, appropriation,
realization, sale or other disposition, after deducting all costs and expenses
of every kind incurred relative thereto or incidental to the care, safekeeping
or otherwise of any and all Pledged Property or in any way relating to the
rights of Pledgee hereunder, including reasonable attorneys' fees and legal
expenses, shall be applied first to the satisfaction of the Obligations (in such
order as Pledgee may elect and whether or not due) and then to the payment of
any other amounts required by applicable law, including Section 9-615(a)(3) of
the Uniform Commercial Code, with Pledgor to be and remain liable for any
deficiency. Pledgor shall be liable to Pledgee for the payment on demand of all
such costs and expenses, together with interest at the then applicable rate set
forth in the Loan Agreement, and any reasonable attorneys' fees and legal
expenses. Pledgor agrees that five (5) days prior written notice by Pledgee
designating the place and time of any public sale or of the time after which any
private sale or other intended disposition of any or all of the Pledged Property
is to be made, is reasonable notification of such matters.

     (c) Pledgor recognizes that Pledgee may be unable to effect a public sale
of all or part of the Pledged Property by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, as now or hereafter in
effect or in applicable Blue Sky or other state securities law, as now or
hereafter in effect, but may be compelled to resort to one or more private sales
to a restricted group of purchasers who will be obliged to agree, among other
things, to acquire such Pledged Property for their own account for investment
and not with a view to the distribution or resale thereof. If at the time of any
sale of the Pledged Property or any part thereof, the same shall not, for any
reason whatsoever, be effectively registered (if required) under the Securities
Act of 1933 (or other applicable state securities law), as then in effect,
Pledgee in its sole and absolute discretion is authorized to sell such Pledged
Property or such part thereof by private sale in such manner and under such
circumstances as Pledgee or its counsel may deem necessary or advisable in order
that such sale may legally be effected without registration. Pledgor agrees that
private sales so made may be at prices and other terms less favorable to the
seller than if such Pledged Property were sold at public sale, and that Pledgee
has no obligation to delay the sale of any such Pledged Property for the period
of time necessary to permit any Issuer, even if such Issuer would agree, to
register such Pledged Property for public sale under such applicable securities
laws. Pledgor agrees that any private sales made under the foregoing
circumstances

                                       -6-
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shall be deemed to have been in a commercially reasonable manner.

     (d) All of Pledgee's rights and remedies, including, but not limited to,
the foregoing and those otherwise arising under this Pledge Agreement, the Loan
Agreement and the other Financing Agreements, the instruments comprising the
Pledged Property, applicable law or otherwise, shall be cumulative and not
exclusive and shall be enforceable alternatively, successively or concurrently
as Pledgee may deem expedient. No failure or delay on the part of Pledgee in
exercising any of its options, powers or rights or partial or single exercise
thereof, shall constitute a waiver of such option, power or right.

     6. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW

     (a) The validity, interpretation and enforcement of this Pledge Agreement
and the other Financing Agreements and any dispute arising out of the
relationship between the parties hereto, whether in contract, tort, equity or
otherwise, shall be governed by the internal laws of the State of Florida
(without giving effect to principles of conflicts of law).

     (b) Pledgor irrevocably consents and submits to the non-exclusive
jurisdiction of the Circuit Court of Miami-Dade County, Florida and the United
States District Court for the Southern District of Florida, as Pledgee may
elect, and waives any objection based on venue or FORUM NON CONVENIENS with
respect to any action instituted therein arising under this Pledge Agreement or
any of the other Financing Agreements or in any way connected with or related or
incidental to the dealings of the parties hereto in respect of this Pledge
Agreement or any of the other Financing Agreements or the transactions related
hereto or thereto, in each case whether now existing or hereafter arising, and
whether in contract, tort, equity or otherwise, and agrees that any dispute with
respect to any such matters shall be heard only in the courts described above
(except that Pledgee shall have the right to bring any action or proceeding
against Pledgor or its property in the courts of any other jurisdiction which
Pledgee deems necessary or appropriate in order to realize on the Pledged
Property or to otherwise enforce its rights against Pledgor or its property).

     (c) Pledgor hereby waives personal service of any and all process upon it
and consents that all such service of process may be made by certified mail
(return receipt requested) directed to its address set forth herein and service
so made shall be deemed to be completed five (5) days after the same shall have
been so deposited in the U.S. mails, or, at Pledgee's option, by service upon
Pledgor in any other manner provided under the rules of any such courts. Within
thirty (30) days after such service, Pledgor shall appear in answer to such
process, failing which Pledgor shall be deemed in default and judgment may be
entered by Pledgee against Pledgor for the amount of the claim and other relief
requested.

     (d) PLEDGOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS PLEDGE AGREEMENT OR ANY OF THE
OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF

                                       -7-
<Page>

PLEDGOR AND PLEDGEE IN RESPECT OF THIS PLEDGE AGREEMENT OR ANY OF THE OTHER
FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY
OR OTHERWISE. PLEDGOR HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND
THAT PLEDGOR OR PLEDGEE MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS
PLEDGE AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

     (e) Pledgee shall not have any liability to Pledgor (whether in tort,
contract, equity or otherwise) for losses suffered by Pledgor in connection
with, arising out of, or in any way related to the transactions or relationships
contemplated by this Pledge Agreement, or any act, omission or event occurring
in connection herewith, unless it is determined by a final and non-appealable
judgment or court order binding on Pledgee, that the losses were the result of
acts or omissions constituting gross negligence or willful misconduct. In any
such litigation, Pledgee shall be entitled to the benefit of the rebuttable
presumption that it acted in good faith and with the exercise of ordinary care
in the performance by it of the terms of this Pledge Agreement.

     7. MISCELLANEOUS

     (a) Pledgor agrees that at any time and from time to time upon the written
request of Pledgee, Pledgor shall execute and deliver such further documents,
including, but not limited to, irrevocable proxies or stock powers, in form
satisfactory to counsel for Pledgee, and will take or cause to be taken such
further acts as Pledgee may in good faith request in order to effect the
purposes of this Pledge Agreement and perfect or continue the perfection of the
security interest in the Pledged Property granted to Pledgee hereunder.

     (b) Beyond the exercise of reasonable care to assure the safe custody of
the Pledged Property (whether such custody is exercised by Pledgee, or Pledgee's
nominee, agent or bailee) Pledgee or Pledgee's nominee agent or bailee shall
have no duty or liability to protect or preserve any rights pertaining thereto
and shall be relieved of all responsibility for the Pledged Property upon
surrendering it to Pledgor or foreclosure with respect thereto.

     (c) All notices, requests and demands to or upon the respective parties
hereto shall be in writing and shall be deemed to have been duly given or made:
if delivered in person, immediately upon delivery; if by telex, telegram or
facsimile transmission, immediately upon sending and upon confirmation of
receipt; if by nationally recognized overnight courier service with instructions
to deliver the next business day, two (2) business days after sending; and if by
registered or certified mail, return receipt requested, five (5) days after
mailing. All notices, requests and demands upon the parties are to be given to
the following addresses (or to such other address as any party may designate by
notice in accordance with this Section):

         If to Pledgor:        Little Switzerland, Inc.

                                       -8-
<Page>

                               161-B Crown Bay
                               St. Thomas, United States Virgin Islands 00802
                               Attention: Chief Financial Officer
                               Telephone No.: 340-776-2010
                               Telecopy No.: 340-774-9900

         If to Pledgee         Congress Financial Corporation (Florida)
                               777 Brickell Avenue
                               Miami, Florida 33131
                               Attention: Portfolio Manager - Little Switzerland
                               Telephone No.: 305-371-6671
                               Telecopy No.: 305-371-9456

     (d) All references to the plural herein shall also mean the singular and to
the singular shall also mean the plural. All references to Pledgor, Pledgee and
Issuers pursuant to the definitions set forth in the recitals hereto, or to any
other person herein, shall include their respective successors and assigns. The
words "hereof," "herein," "hereunder," "this Pledge Agreement" and words of
similar import when used in this Pledge Agreement shall refer to this Pledge
Agreement as a whole and not any particular provision of this Pledge Agreement
and as this Pledge Agreement now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced. An Event of Default shall
exist or continue or be continuing until such Event of Default is waived in
accordance with Section 7(g) hereof. All references to the term "Person" or
"Persons" herein shall mean any individual, sole proprietorship, partnership,
corporation (including, without limitation, any corporation which elects
subchapter S status under the Internal Revenue Code of 1986, as amended),
limited liability corporation, limited liability partnership, business trust,
unincorporated association, joint stock company, trust, joint venture or other
entity or any government or any agency, instrumentality or political subdivision
thereof.

     (e) This Pledge Agreement, the other Financing Agreements and any other
document referred to herein or therein shall be binding upon Pledgor and its
successors and assigns and inure to the benefit of and be enforceable by Pledgee
and its successors and assigns.

     (f) If any provision of this Pledge Agreement is held to be invalid or
unenforceable, such invalidity or unenforceability shall not invalidate this
Pledge Agreement as a whole, but this Pledge Agreement shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.

     (g) Neither this Pledge Agreement nor any provision hereof shall be
amended, modified, waived or discharged orally or by course of conduct, but only
by a written agreement signed by an authorized officer of Pledgee. Pledgee shall
not, by any act, delay, omission or otherwise be deemed to have expressly or
impliedly waived any of its rights, powers and/or remedies unless such waiver
shall be in writing and signed by an authorized officer of Pledgee. Any such
waiver shall be enforceable only to the extent specifically set forth therein. A
waiver by Pledgee of any

                                       -9-
<Page>

right, power and/or remedy on any one occasion shall not be construed as a bar
to or waiver of any such right, power and/or remedy which Pledgee would
otherwise have on any future occasion, whether similar in kind or otherwise.

     (h) This Pledge Agreement (i) may be executed in separate counterparts,
each of which taken together shall constitute one and the same instrument and
(ii) may be executed and delivered by telecopier with the same force and effect
as if it were as a manually executed and delivered counterpart.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -10-
<Page>

     IN WITNESS WHEREOF, Pledgor has executed this Pledge Agreement as of the
day and year first above written.

                                              LITTLE SWITZERLAND, INC.

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

                                              Title: Chief Financial Officer

<Page>

                                    EXHIBIT A
                                       TO
                          PLEDGE AND SECURITY AGREEMENT

<Table>
<Caption>
     ISSUER                    CERTIFICATE NO.   NO. OF SHARES   PERCENTAGE
<S>                                  <C>                 <C>     <C>
L.S. Wholesale, Inc.                 2                   1,000   100%

LS Holding, Inc.                     2                      65    65%

L.S. Holding (Florida), Inc.         1                     100   100%
</Table>

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