EXHIBIT 10.1
EXCHANGE AGREEMENT
This Exchange Agreement is entered into as of this 20th day of
February, 2004 (the "Agreement"), by and between Mayor's Jewelers, Inc., a
Delaware corporation (the "Company"), with an address at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇ ▇▇▇▇▇ & Sons Inc., a Canadian
corporation ("Birks"), with an address at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇.
RECITALS
WHEREAS, Birks has purchased shares of the Series A Convertible
Preferred Stock, $.0001 par value per share, of the Company ("Series A Stock")
issued pursuant to that certain Investment Agreement (as defined below).
WHEREAS, the Company and Birks have agreed to enter into this Agreement
whereby the Company will issue to Birks shares of the Series A-1 Convertible
Preferred Stock, $.0001 par value per share, of the Company ("Series A-1 Stock")
having the terms and provisions set forth in the Certificate of Designation
attached hereto as Exhibit A (the "Certificate of Designation"), in exchange for
the shares of the Series A Stock owned by Birks, on a one-share for one-share
basis (the "Transaction").
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises herein contained the parties agree as follows:
AGREEMENT
ARTICLE I
DEFINITIONS
The following definitions shall apply for purposes of this Agreement:
"Amendment to Amended and Restated Registration Rights Agreement" means
the Amendment to Amended and Restated Registration Rights Agreement in the form
attached hereto as Exhibit B, which amends the Amended and Restated Registration
Rights Agreement by and between the Company and Birks dated February 25, 2003.
"Investment Agreement" means the Investment Agreement by and among the
Company and Birks dated July 30, 2002. All terms used but not defined herein
shall have the respective meanings accorded to those terms in the Investment
Agreement.
ARTICLE II
EFFECTIVE DATE OF AGREEMENT
This Agreement shall be effective as of February 20, 2004 (the
"Effective Date").
ARTICLE III
EXCHANGE; PURCHASE OF SECURITIES
Section 3.01 EXCHANGE. As of the Effective Date, Birks agrees to
exchange and surrender to the Company, and the Company will cancel, the 15,050
shares of Series A Stock held by it, in exchange for the issuance to Birks by
the Company of 15,050 shares of Series A-1 Stock. The Series A-1 Stock issued to
Birks in such exchange shall have substantially identical rights, preferences
and privileges to the Series A Stock, with the exception of certain changes to
the provisions regarding the payment of dividends and future dividend rates.
Section 3.02 CANCELLATION AND ISSUANCE. Immediately following receipt
by the Company and Birks of the items set forth in Section 3.03, and upon
notation in the Company's stock ledger that the Series A Stock is cancelled and
the Series A-1 Stock is issued, the stock certificate representing the Series A
Stock shall be deemed to represent and evidence the number of shares of the
Series A-1 Stock as Birks shall receive pursuant to Section 3.01 above until
such time that the Company issues a new stock certificate representing the
Series A-1 Stock, and delivers it to Birks in exchange for and upon surrender to
the Company by Birks of the stock certificate formerly representing the 15,050
shares of Series A Stock cancelled on the Effective Date.
Section 3.03 DELIVERIES.
(a) On the Effective Date, subject to the terms of this
Agreement, Birks shall deliver to the Company:
(i) an original duly executed stock power or other
authorization authorizing the transfer of the 15,050 shares of Series A Stock to
the Company;
(ii) the Amendment to Registration Rights Agreement
duly executed by an authorized officer of Birks; and
(iii) a copy of this Agreement duly executed by an
authorized officer of Birks.
(b) On the Effective Date, subject to the terms of this
Agreement, the Company shall deliver to Birks:
(i) a copy of the Certificate of Designation as filed
with the Secretary of State of the State of Delaware;
(ii) the Amendment to Registration Rights Agreement
duly executed by an authorized officer of the Company; and
(iii) a copy of this Agreement duly executed by an
authorized officer of the Company.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.01 ORGANIZATION. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power and authority to carry on its business as
it is now being conducted.
Section 4.02 DUE AUTHORIZATION. The Company has all right, corporate
power and authority to enter into this Agreement and each of the other documents
set forth in Section 3.03 (the "Transaction Documents") to which it is a party
and to consummate the Transaction. The execution and delivery by the Company of
this Agreement and the Transaction Documents, the exchange and issuance of the
Series A-1 Stock by the Company and the compliance by the Company with each of
the provisions of this Agreement and each of the Transaction Documents, and the
consummation by the Company of the Transaction, (a) are within the corporate
power and authority of the Company, and (b) have been duly authorized by all
requisite corporate proceedings on the part of the Board of Directors of the
Company. This Agreement and the Transaction Documents have been duly and validly
executed and delivered by the Company, and this Agreement and the Transaction
Documents constitute a valid and binding agreement of the Company, enforceable
against the Company in accordance with their terms, except as enforceability
against the Company may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to the rights of creditors generally and by legal and equitable limitations on
the enforceability of specific remedies (regardless of whether enforcement is
considered in a proceeding in equity or at law). The shares of Series A-1 Stock
and all Common Stock issuable upon conversion of the Series A-1 Stock shall be
reserved for issuance upon the stockholders approval of an increase in
authorized shares of the Company's Common Stock. Upon exchange of the Series A
Stock (in the case of the Series A-1 Stock) and upon conversion of the Series
A-1 Stock (in the case of the Common Stock) such shares of Series A-1 Stock and
Common Stock, as the case may be, will be duly and validly issued and
outstanding, fully paid, and nonassessable and issued free of preemptive rights
or Liens (as defined below).
Section 4.3 CONSENTS AND APPROVALS; NON-CONTRAVENTION. Neither the
execution, delivery or performance of this Agreement, nor the consummation by
the Company of the Transaction will (a) require any consent, approval or
authorization under any contract, lease or other agreement entered into by the
Company, (b) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Company, or (c) result in a violation or breach of,
or constitute (with or without notice or lapse of time or both) a default (or
give rise to any right of termination, amendment, cancellation or acceleration
or any loss of a material benefit) under, or result in the creation or
imposition of (or the obligation to create or impose) any liens, claims,
mortgages, encumbrances, pledges, security interests, equities and charges of
any kind ("Liens") upon any of the Series A-1 Stock under any note, bond,
mortgage, indenture, lease, license, contract, agreement or other instrument or
obligation to which the Company is a party or by which the Company or any of its
properties or assets may be bound.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BIRKS; LIMITATIONS ON DISPOSITION
Birks hereby represents and warrants to the Company that as of the
Effective Date:
Section 5.01 ORGANIZATION. Birks is a corporation duly organized,
validly existing and in good standing under the laws of Canada and has the
requisite power and authority to carry on its business as it is now being
conducted.
Section 5.02 DUE AUTHORIZATION. Birks has all right, power and
authority to enter into this Agreement and the other Transaction Documents to
which it is a party and to consummate the Transaction. The execution and
delivery by Birks of this Agreement and the Transaction Documents, the exchange
and surrender of the Series A Stock by it, the compliance by it with each of the
provisions of this Agreement and each of the Transaction Documents, and the
consummation by it of the Transaction, (a) are within its power and authority,
and (b) have been duly authorized by all necessary action on the part of such
entity. This Agreement and each of the other Transaction Documents to which it
is a party constitute a valid and binding agreement of such entity enforceable
against such entity in accordance with their respective terms, except as
enforceability against Birks may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect relating to the rights of creditors generally and by legal and equitable
limitations on the enforceability of specific remedies (regardless of whether
enforcement is considered in a proceeding in equity or at law).
Section 5.03 OWNERSHIP OF STOCK. Birks has, and upon delivery to the
Company of the Series A Stock and the delivery to Birks of the Series A-1 Stock,
the Company will acquire, good and valid title to the Series A Stock, free and
clear of any Liens.
Section 5.04 CONSENTS AND APPROVALS; NON-CONTRAVENTION. Neither the
execution, delivery or performance of this Agreement, nor the consummation by
Birks of the Transaction will (a) require any consent, approval or authorization
under any contract, lease or other agreement entered into by Birks, (b) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
Birks, or (c) result in a violation or breach of, or constitute (with or without
notice or lapse of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration or any loss of a material
benefit) under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of the Series A Stock under any note, bond,
mortgage, indenture, lease, license, contract, agreement or other instrument or
obligation to which Birks is a party or by which Birks or any of its properties
or assets may be bound.
Section 5.05 RESTRICTED SECURITIES. Birks understands that the
securities it is acquiring are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in exchange for restricted securities in a transaction exempt from registration
under Section 3(a)(9) of the Securities Act of 1933, as amended (the "Act"), and
that under such laws and applicable regulations, such securities may be resold
without registration under the Act only in certain limited circumstances. In
this connection, Birks represents that it is familiar with Rule 144, promulgated
under the Act, as presently in effect, and understands the resale limitations
imposed hereby and by the Act.
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ARTICLE VI
MISCELLANEOUS
Section 6.01 FURTHER ASSURANCES; BIRKS ACKNOWLEDGEMENT. At any time or
from time to time after the Effective Date, Birks agrees to cooperate with the
Company, and at the request of the Company, to execute and deliver any further
instruments or documents and to take all such further action as the Company may
reasonably request in order to evidence or effectuate the consummation of the
Transaction. In addition, Birks acknowledges that upon the Effective Date, Birks
will have no further right, title or interest in or to the Series A Stock
(including, without limitation, any and all cumulative dividends accrued but
unpaid thereon), that the Series A Stock held by Birks shall be deemed cancelled
and of no further force or effect and that Birks shall only have the right to
receive the Series A-1 Stock for the Series A Stock, respectively, in addition
to such other rights set forth in this Agreement, the Transaction Documents, or
the Certificate of Designation.
Section 6.02 EXPENSES. Birks will pay the reasonable legal and
accounting fees and expenses of the Company in connection with this Agreement
promptly following the consummation of the transactions contemplated hereby.
Section 6.03 REMEDIES CUMULATIVE. Except as herein provided, the
remedies provided herein shall be cumulative and shall not preclude assertion by
any party hereto of any other rights or the seeking of any other remedies
against the other party hereto.
Section 6.04 BROKERAGE. Each party hereto will indemnify and hold
harmless the others against and in respect of any claim for brokerage or other
commission relative to this Agreement or to the transaction contemplated hereby,
based in any way on agreements, arrangements or understandings made or claimed
to have been made by such party with any third party.
Section 6.05 SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provisions shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
Section 6.06 PARTIES IN INTEREST. All covenants and agreements
contained in this Agreement by or on behalf of any of the parties hereto shall
bind and inure to the benefit of the respective legal representatives,
successors and assigns of the parties hereto whether so expressed or not.
Section 6.07 NOTICES. Notices required under this Agreement shall be
deemed to have been adequately given if delivered personally or by commercial
messenger or courier service, or mailed by registered or certified mail (return
receipt requested) or sent via facsimile (with acknowledgement of complete
transmission), to Birks or to the Company at the address set forth in the first
paragraph of this Agreement or such other address as such party may from time to
time designate in writing.
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Section 6.08 NO WAIVER. No failure to exercise and no delay in
exercising any right, power or privilege granted under this Agreement shall
operate as a waiver of such right, power or privilege. No single or partial
exercise of any right, power or privilege granted under this Agreement shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies provided in this Agreement
are cumulative and are not exclusive of any rights or remedies provided by law.
Section 6.09 AMENDMENTS. Except as herein provided, this Agreement may
be modified or amended only by a writing signed by the Company and by Birks.
Section 6.10 SURVIVAL OF AGREEMENTS, ETC. All agreements,
representations and warranties contained in this Agreement or made in writing by
or on behalf of the Company or Birks in connection with the Transaction
contemplated by this Agreement shall survive the execution and delivery of this
Agreement.
Section 6.11 CONSTRUCTION. This Agreement shall be governed by and
construed in accordance with the procedural and substantive laws of the State of
New York without regard for its conflicts-of-laws rules. The Company and Birks
agree that it may be served with process in the State of New York and any action
for breach of this Agreement prosecuted against it in the courts of that State.
Section 6.12 WAIVER OF JURY TRIAL. THE COMPANY AND BIRKS HEREBY WAIVE
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT.
Section 6.13 ENTIRE UNDERSTANDING. This Agreement expresses the entire
understanding of the parties and supersedes all prior and contemporaneous
agreements and undertakings of the parties with respect to the subject matter of
this Agreement.
Section 6.14 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which taken together shall constitute one agreement, and facsimile signatures
shall have the same effect as original signatures.
Section 6.15 SUCCESSORS AND ASSIGNS. This Agreement shall bind and
inure to the benefit of the Company and Birks and the respective successors,
permitted assigns, heirs and personal representatives of the Company and Birks,
provided that the Company may not assign its rights or obligations under this
Agreement to any person without the prior written consent of Birks, and provided
further that Birks may not assign their rights or obligations under this
Agreement to any person without the prior written consent of the Company.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officer or person as of the Effective
Date.
MAYOR'S JEWELERS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: SVP and CAO
▇▇▇▇▇ ▇▇▇▇▇ & SONS INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
Title: Group VP, Finance CFO
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