Exhibit 3
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REGISTRATION RIGHTS AGREEMENT
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Between
MAYOR'S JEWELERS, INC.
and
▇▇▇▇▇ ▇▇▇▇▇ & SONS INC.
Dated as of August 20, 2002
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
August 20, 2002, 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 an Investment Agreement dated the date hereof between the Seller
and the Purchaser, wherein the Purchaser has subscribed for and purchased from
the Seller, and the Seller has issued and sold to the Purchaser, a total of
15,000 shares of Series A Convertible Preferred Stock of the Seller (the
"Shares") convertible into 50,000,000 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 the Seller and the Purchaser are entering into this
Agreement 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.
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:
5.1 S-3 Registration Statement. At any time six months
following the date hereof, upon the written request of the Purchaser, the Seller
shall be obligated to:
5.1.1 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.
5.1.2 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.
5.1.3 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.
5.1.4 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.
5.1.5 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.
5.1.6 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.
5.1.7 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.
5.1.8 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.
5.1.9 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.
5.1.10 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.
5.1.11 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.
5.1.12 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.
5.1.13 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.
5.2 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.
5.3 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.
5.4 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, 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; in addition to other
rights of the Purchasers 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.
5.5 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).
5.6 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).
5.6.1 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 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).
5.6.2 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.
5.6.3 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.
5.6.4 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.
5.7 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.
5.8 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.
5.9 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.
5.10 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.
5.11 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.
5.12 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.
5.13 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.
5.14 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.
5.15 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.
5.16 Assignment. The Purchaser may assign its registration
rights under this Agreement in connection with a transfer of the Registrable
Securities, prior to the date of the initial filing of the Registration
Statement with the SEC, to an affiliate of the Purchaser, provided
each such transferee agrees in a written instrument delivered to the Seller to
be bound by this Agreement.
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:
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Name:
Title:
▇▇▇▇▇ ▇▇▇▇▇ & SONS INC.
By:
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Name:
Title: