EXHIBIT 10.2
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AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
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BETWEEN
MAYOR'S JEWELERS, INC.
AND
▇▇▇▇▇ ▇▇▇▇▇ & SONS INC.
DATED AS OF FEBRUARY 25, 2003
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"),
dated as of February 25, 2003, between Mayor's Jewelers, Inc., a Delaware
corporation (the "SELLER"), and ▇▇▇▇▇ ▇▇▇▇▇ & Sons Inc., a Canadian corporation
(the "PURCHASER").
WHEREAS, subject to the terms and subject to the conditions set forth
in the Investment Agreement dated as of August 20, 2002 between the Seller and
the Purchaser, wherein the Purchaser subscribed for and purchased from the
Seller, and the Seller issued and sold to the Purchaser, a total of 15,050
shares of Series A Convertible Preferred Stock of the Seller (the "Shares")
convertible into 50,166,667 shares of, and warrants (the "Warrants") exercisable
to purchase 37,272,787 shares of, the Common Stock, par value $0.0001 (the
"Common Stock"), of the Seller;
WHEREAS, the Shares and the Warrants and the Common Stock issuable upon
conversion of the Shares or exercise of the Warrants have not been registered
under the Securities Act of 1993, as amended (the "Securities Act");
WHEREAS, subject to the terms and subject to the conditions set forth
in the Registration Rights Agreement (the "REGISTRATION RIGHTS AGREEMENT") dated
as of August 20, 2002 between the Seller and Purchaser, the Seller and the
Purchaser agreed to provide for certain rights and obligations with respect to
the registration under the Securities Act of the Common Stock issuable upon
conversion of the Shares or exercise of the Warrants;
WHEREAS, the Seller and the Purchaser wish to amend the terms and
conditions of the Registration Rights Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, the Seller and the Purchaser
hereby agree as follows:
SECTION 1. S-3 REGISTRATION STATEMENT. AT ANY TIME 72 DAYS FOLLOWING
THE DATE HEREOF, UPON THE WRITTEN REQUEST OF THE PURCHASER, THE SELLER SHALL BE
OBLIGATED TO:
(a) Prepare and file a registration statement with the SEC on Form S-3
under the Securities Act (or in the event that the Seller is ineligible to use
such form, such other form as the Seller is eligible to use under the Securities
Act) (the "Registration Statement") covering the resale of the Common Stock held
by the Purchaser following conversion of its Shares or upon exercise of its
Warrants (the "Registrable Securities"), which Registration Statement (including
any amendments or supplements thereto and prospectuses contained therein) shall
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein, or necessary to make the statements therein
not misleading. Such Registration Statement shall, in addition and without
limitation, register (pursuant to Rule 416 under the Securities Act, or
otherwise) such additional indeterminate number of Registrable Securities as
shall be necessary to prevent dilution resulting from stock splits, stock
dividends or similar transactions. Thereafter, the Seller shall use its
reasonable best efforts to cause such Registration Statement and other filings
to be declared effective as soon as practicable.
(b) Prepare and file with the SEC such amendments and supplements to
such Registration Statement and the prospectus used in connection with such
Registration Statement as may be necessary to keep the Registration Statement
effective and to comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such Registration Statement as
set forth in the Registration Statement and then on a continuous basis in
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accordance with Rule 415 under the Securities Act; and, notify the Purchaser of
the effectiveness of such Registration Statement and any amendments or
supplements thereto.
(c) Furnish to the Purchaser such numbers of copies of a current
prospectus conforming with the requirements of the Securities Act, copies of the
Registration Statement, any amendment or supplement thereto and any documents
incorporated by reference therein and such other documents as the Purchaser may
reasonably require in order to facilitate the disposition of Registrable
Securities owned by the Purchaser.
(d) Register and qualify, or obtain an appropriate exemption from
registration or qualification for, the securities covered by such Registration
Statement under such other securities or "Blue Sky" laws of each jurisdiction of
the United States as the Purchaser may reasonably request, (B) prepare and file
in those jurisdictions such supplements (including post-effective amendments)
and supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof, (C) take such other actions as may be
necessary to maintain such registrations and qualifications in effect at all
times, and (D) take all other actions reasonably necessary or advisable to
qualify the Registrable Securities for sale in such jurisdictions; provided that
the Seller shall not be required in connection therewith or as a condition
thereto to qualify to do business as a foreign corporation in any jurisdiction
in which it is not now qualified, or to file a general consent to service of
process in any jurisdiction with respect to matters unrelated to the issuance of
the Common Stock pursuant hereto.
(e) Promptly notify the Purchaser in writing of the happening of any
such event as a result of which the prospectus (including any supplements
thereto or thereof) included in such Registration Statement, as then in effect,
includes an untrue statement of material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and use its reasonable
best efforts to promptly update and/or correct such prospectus to correct such
untrue statement or omission, and deliver such number of copies of such
supplement or amendment to the Purchaser as the Purchaser may reasonably
request.
(f) Promptly notify the Purchaser of the issuance by the SEC or any
state securities commission or agency of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose. The Seller shall take all actions necessary to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible time.
(g) Permit counsel, designated by the Purchaser to review (A) the
Registration Statement and (B) all amendments and supplements thereto relating
to information concerning the Purchaser within a reasonable period of time prior
to filing thereof, to the extent practicable.
(h) List the Registrable Securities covered by such Registration
Statement with all securities exchange(s) and/or markets on which the Common
Stock is then listed and prepare and file any required filings with the National
Association of Securities Dealers, Inc. or any exchange or market where the
shares of Common Stock are traded.
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(i) If applicable, take all steps necessary to enable the Purchaser to
avail itself of the prospectus delivery mechanism set forth in Rule 153 (or
successor thereto) under the Securities Act.
(j) Provide a CUSIP number and a transfer agent and registrar, which
may be a single entity, for the Registrable Securities not later than the
effective date of the Registration Statement.
(k) At the reasonable request of the Purchaser, prepare and file with
the SEC such amendments (including post-effective amendments) and supplements to
the Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary in order to change the plan of
distribution set forth in such Registration Statement.
(l) Furnish to the Purchasers (i) a "10b-5 negative assurances letter"
from the Seller's counsel and (ii) an independent auditor's comfort letter, each
of which shall be addressed to the Purchaser and similar to such as would be
provided in an underwritten offering.
(m) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering.
SECTION 2. SUSPENSION OF REGISTRATION STATEMENT. Upon written notice to
the Purchaser, the Seller may suspend the use of any prospectus used in
connection with the Registration Statement if the Board of Directors of the
Seller determines in good faith based upon advice of counsel that the use of the
prospectus would be misleading because of material non-public information known
to the Seller and disclosure of which is determined by the Board of Directors to
be materially detrimental to the Seller and is not otherwise required by law;
provided, however, that the Seller may utilize this provision only once in any
twelve (12) month period and any such suspension shall not exceed forty-five
(45) calendar days. The Seller will use its reasonable best efforts to cause any
such suspension to terminate at the earliest possible date.
SECTION 3. EXPENSES. The Seller shall pay the expenses incurred by it
in complying with its obligations under this Agreement, including all
registration and filing fees, exchange listing fees, the fees and expenses of
counsel for the Seller, the reasonable fees and expenses of one counsel retained
by the Purchaser or the Purchasers, which counsel shall be reasonably
satisfactory to the Seller, and the fees and expenses of accountants for the
Seller, but excluding any brokerage fees, selling commissions or underwriting
discounts incurred by the Purchaser in connection with sales under the
Registration Statement.
SECTION 4. REGISTRATION OTHER THAN ON FORM S-3. The Seller shall seek
to continue to qualify for registration on Form S-3 or any comparable or
successor form or forms, or in the event that the Seller is ineligible to use
form, such form as the Seller is eligible to use under the Securities Act. If
the Seller is ineligible to use Form S-3, the Purchaser may, on demand (a
"Demand Right"), require the Seller to register the Registrable Securities under
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the Securities Act on such other form the Seller is eligible to use, and may
require the Seller to do so on up to three (3) separate registration statements
(each a "Demand Right Registration Statement"); in addition to other rights of
the Purchaser under this Agreement, the Purchaser may require the Seller to
register the Registrable Securities on any registration statement of the Seller
filed with the SEC for purposes of a public offering of the Seller's securities.
SECTION 5. EFFECTIVENESS OF REGISTRATION STATEMENT. In the case of the
registration effected by the Seller pursuant to this Agreement, the Seller will
use its reasonable best efforts to keep such registration effective until the
Purchaser has completed the sales or distribution described in the Registration
Statement relating thereto or, if earlier, until such Registrable Securities may
be sold under Rule 144(k) (provided that the Seller's transfer agent has
accepted an instruction from the Seller to such effect).
SECTION 6. INDEMNIFICATION. i) The Seller will indemnify the Purchaser,
each of its directors, officers and partners, and each person controlling the
Purchaser within the meaning of Section 15 of the Securities Act and the rules
and regulations thereunder, against all claims, losses, damages and liabilities
(or actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any registration
statement, prospectus, offering circular or other document incident to any
registration, qualification or compliance effected by the Seller pursuant to
this Agreement, or based on any omission (or alleged omission) to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation by the Seller of the
Securities Act or any state securities law or in either case, any rule or
regulation thereunder applicable to the Seller and relating to action or
inaction required of the Seller in connection with any such registration,
qualification or compliance, and will reimburse the Purchaser, each of its
officers, directors and partners, and each person controlling the Purchaser, for
any legal and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action,
provided that the Seller will not be liable in any such case to the Purchaser to
the extent that any such claim, loss, damage, liability or expense arises out of
or is based on any untrue statement or omission based upon written information
furnished to the Seller by or on behalf of the Purchaser therefor and stated to
be specifically for use therein. The indemnity agreement contained in this
Agreement shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Seller (which consent will not be unreasonably withheld).
(a) The Purchaser (the "Indemnifying Purchaser") will severally
indemnify the Seller, each of its directors, officers and partners, each person
who controls the Seller within the meaning of Section 15 of the Securities Act
and the rules and regulations thereunder, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statement therein not
misleading, and will reimburse the Seller and its directors, officers and
partners, or control persons for any legal or any other expenses reasonably
incurred in connection with investigating and defending any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
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or other document in reliance upon and in conformity with written information
furnished to the Seller by such Indemnifying Purchaser and stated to be
specifically for use therein; provided, however, that the obligations of an
Indemnifying Purchaser hereunder shall be limited to an amount equal to the net
proceeds received by such Indemnifying Purchaser of securities sold pursuant to
the Registration Statement. The indemnity agreement contained in this Agreement
shall not apply to amounts paid in settlement of any such claims, losses,
damages or liabilities if such settlement is effected without the consent of the
Indemnifying Purchaser (which consent shall not be unreasonably withheld).
(b) Each party entitled to indemnification under this Agreement (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld) and the Indemnified Party may participate in such
defense at the Indemnified Party's expense (unless the Indemnified Party shall
have reasonably concluded that there may be a conflict of interest between the
Indemnifying Party and the Indemnified Party in such action, in which case the
fees and expenses of counsel shall be at the expense of the Indemnifying Party),
and provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Agreement unless, and only to the extent that, the Indemnifying Party
is materially prejudiced thereby. No Indemnifying Party, in the defense of any
such claim or litigation shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
(c) If the indemnification provided for in this Agreement is held by a
court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any loss, liability, claim, damage or expense referred to herein,
then the Indemnifying Party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, liability, claim, damage or expense in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and of the Indemnified Party on the other in connection
with the statements or omissions which resulted in such loss, liability, claim,
damage or expense, as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue (or alleged
untrue) statement of a material fact or the omission (or alleged omission) to
state a material fact relates to information supplied by the Indemnifying Party
or by the Indemnified Party and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
Notwithstanding the provisions of this Section, the Purchaser shall not be
required to contribute any amount in excess of the gross proceeds received by
the Purchaser from securities sold pursuant to the Registration Statement.
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(d) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with any underwritten public offering contemplated by this
Agreement are in conflict with the foregoing provisions, the provisions in such
underwriting agreement shall be controlling.
SECTION 7. AVAILABLE INFORMATION. With a view to making available the
benefits of certain rules and regulations of the SEC which may permit the sale
of restricted securities to the public without registration, the Seller agrees
to use its reasonable best efforts to (i) make and keep public information
available as those terms are understood and defined in Rule 144 under the
Securities Act, or any successor rule, at all times after the date hereof, (ii)
use its reasonable best efforts to file with the SEC in a timely manner all
reports and other documents required of the Seller under the Securities Act and
the Exchange Act at any time, and (iii) so long as the Purchaser owns any
Registrable Securities, furnish to the Purchaser upon request, a written
statement by the Seller as to its compliance with the reporting requirements of
Rule 144, and of the Securities Act and the Exchange Act, a copy of the most
recent annual or quarterly report of the Seller, and such other reports and
documents so filed as the Purchaser may reasonably request in availing itself of
any rule or regulation of the SEC allowing the Purchaser to sell any such
securities without registration.
SECTION 8. NOTICE TO THE SELLER. The Purchaser shall notify the Seller
in writing promptly after, and in no event later than five (5) business days
after, the sale or other disposition by the Purchaser of any of the Registrable
Securities.
SECTION 9. SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect for so long as the economic or
legal substance of the transactions contemplated by this Agreement is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated by
this Agreement are consummated as originally contemplated to the greatest extent
possible.
SECTION 10. NO THIRD PARTY BENEFICIARIES. Except for the provisions of
Section 1.06 relating to indemnified parties, this Agreement shall be binding
upon and inure solely to the benefit of the parties hereto and their permitted
assigns and nothing herein, express or implied, is intended to or shall confer
upon any other person, including, without limitation, any union or any employee
or former employee of the Seller, any legal or equitable right, benefit or
remedy of any nature whatsoever, including, without limitation, any rights of
employment for any specified period, under or by reason of this Agreement.
SECTION 11. CURRENCY. Unless otherwise specified in this Agreement, all
references to currency, monetary values and dollars set forth herein shall mean
United States (U.S.) dollars and all payments hereunder shall be made in United
States dollars.
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SECTION 12. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
contracts executed in and to be performed in that State. All actions and
proceedings arising out of or relating to this Agreement shall be heard and
determined exclusively in any New York state or federal court sitting in the
Borough of Manhattan of The City of New York. The parties hereto hereby (a)
submit to the exclusive jurisdiction of any state or federal court sitting in
the Borough of Manhattan of The City of New York for the purpose of any Action
arising out of or relating to this Agreement brought by any party hereto, and
(b) irrevocably waive, and agree not to assert by way of motion, defense, or
otherwise, in any such Action, any claim that it is not subject personally to
the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that the Action is brought in an
inconvenient forum, that the venue of the Action is improper, or that this
Agreement or the transactions contemplated by this Agreement may not be enforced
in or by any of the above-named courts.
SECTION 13. WAIVER OF JURY TRIAL. Each of the parties hereto hereby
waives to the fullest extent permitted by applicable law any right it may have
to a trial by jury with respect to any litigation directly or indirectly arising
out of, under or in connection with this Agreement or the transactions
contemplated by this Agreement. Each of the parties hereto (a) certifies that no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce that foregoing waiver and (b) acknowledges that it and the other
party hereto have been induced to enter into this Agreement and the transactions
contemplated by this Agreement, as applicable, by, among other things, the
mutual waivers and certifications in this Section 13.
SECTION 14. HEADINGS. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 15. COUNTERPARTS. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement.
SECTION 16. ASSIGNMENT. The Purchaser may assign its registration
rights under this Agreement in connection with a transfer of the Registrable
Securities to any person (an "Affiliate") that, directly or indirectly, controls
a majority of the voting securities of the Purchaser, provided each such
assignee agrees in a written instrument delivered to the Seller to be bound by
this Agreement; provided, however, that notwithstanding an assignment of the
registration rights under this Agreement by the Purchaser to one or more
Affiliates, the Purchaser and Affiliates shall together be entitled to no more
than three (3) Demand Rights in the aggregate and in no event shall the Seller
be required to register the Registrable Securities on more than three (3)
separate Demand Right Registration Statements.
SECTION 17. PIGGY-BACK RIGHTS. Each time the Seller files a
registration statement with the SEC in accordance with either Section 1 or
Section 4 of this Agreement, any person (a "Transferee") to whom the Purchaser
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has transferred Registrable Securities ("Transferred Registrable Securities"),
regardless of whether such Transferee is an Affiliate, shall be entitled to have
the resale of such Transferred Registrable Securities by the Transferee
registered under such registration statement.
SECTION 18. ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties with respect to the provision for certain rights
and obligations with respect to the registration under the Securities Act of the
Common Stock issuable upon conversion of the Shares or exercise of the Warrants.
This Agreement supersedes all prior agreements (including, but not limited to,
the Registration Rights Agreement), understandings and negotiations with respect
to the provision of the aforementioned rights and obligations.
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IN WITNESS WHEREOF, the Seller and the Purchaser have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
MAYOR'S JEWELERS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇, III
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇, III
Title: Chief Operating Officer
▇▇▇▇▇ ▇▇▇▇▇ & SONS INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: President & CEO
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