EXHIBIT 1
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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.
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(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 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.
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(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.
(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
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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 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. (a) 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,
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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 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
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required to contribute any amount in excess of the gross proceeds received by
the Purchaser from securities sold pursuant to the Registration Statement.
(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.
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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.
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.
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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
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/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
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