Exhibit 10.5
WAIVER OF RIGHTS AND AMENDMENT
UNDER PURCHASE AGREEMENTS
This Waiver of Rights and Amendment under Purchase Agreements ("Waiver of
Rights") is made and entered into as of July 30, 1999, by and among Century
Electronics Manufacturing, Inc., a Delaware corporation (the "Company"), and
HarbourVest Partners V- Direct Fund, L.P. ("HarbourVest").
WHEREAS, the Company and HarbourVest are parties to that certain Series A
Convertible Preferred Stock Purchase Agreement, dated as of December 1, 1998,
and that certain Series A Convertible Preferred Stock Purchase Agreement, dated
as of February 4, 1998 (the "Purchase Agreements"), which agreements provide
certain arrangements with respect to (among other matters) the registration of
shares of common stock, $.01 par value per share, of the Company ("Common
Stock") owned by HarbourVest and its assignees under the Securities Act of 1933,
as amended (the "Securities Act");
WHEREAS, the Company, Amitek Corporation, a Florida corporation
("Amitek"), and certain other persons are party to an Agreement and Plan of
Merger, dated as of July 30, 1999 (the "Merger Agreement"), pursuant to which,
as of the date hereof, Amitek is being merged with and into a wholly-owned
subsidiary of the Company and ▇▇▇▇▇ ▇▇ Park, ▇▇▇▇ ▇▇▇▇ Park and ▇▇▇▇ ▇▇▇ Kwon
(collectively, the "Amitek Investors") are being issued as partial consideration
therefor, and may be issued from time to time in the future as additional
consideration therefor, shares of the Common Stock of the Company;
WHEREAS, as of the date hereof, the Company and the Amitek Investors are
entering into a Registration Rights Agreement (the "Registration Rights
Agreement"), pursuant to which certain arrangements are being made with respect
to the registration of shares of Common Stock owned by the Amitek Investors and
their assignees under the Securities Act;
WHEREAS, the obligation of the Amitek Investors to consummate the
transactions contemplated by the Merger Agreement is conditioned upon
HarbourVest waiving certain rights under the Purchase Agreements and the Company
and HarbourVest making certain amendments to the Purchase Agreements in order to
clarify the interrelationship between the respective registration rights
provisions contained in the Registration Rights Agreement and the Purchase
Agreements; and
WHEREAS, this Waiver of Rights meets the requirements for a valid waiver
or amendment of the provisions of the Purchase Agreements, which requirements
are set forth in Section 9.4 thereof.
NOW, THEREFORE, the parties to this Waiver of Rights agree as follows:
1. Waiver of Rights under Purchase Agreements. HarbourVest hereby waives
all rights under Section 8.12 of each of the Purchase Agreements with respect to
the Registration Rights Agreement as in effect on the date hereof.
2. Amendments to Purchase Agreements.
(a) Section 8.2 of each of the Purchase Agreements, entitled
"Certain Definitions" is amended to include two additional definitions, as
follows:
"Amitek Securities" shall mean shares constituting "Registrable
Securities" under the Registration Rights Agreement, dated as of
July 30, 1999, by and among the Company and ▇▇▇▇▇ ▇▇ Park, ▇▇▇▇ ▇▇▇▇
Park and ▇▇▇▇ ▇▇▇ Kwon (the "Registration Rights Agreement"), which
are proposed to be included in a registration.
"Majority Participating Amitek Holders" shall have the meaning given
to such term in the Registration Rights Agreement.
(b) The second paragraph of Section 8.5(b) of each of the Purchase
Agreements is amended and restated in its entirety as follows (with bold
double underlined and strikethrough fonts used for purposes of indicating
changes only):
"If officers or directors of the Company holding other
securities of the Company shall request inclusion in any
registration pursuant to Section 8.5, or if holders of the
securities of the Company who are entitled, by contract with the
Company, to have securities included in such a registration (the
"Other Shareholders") request such inclusion, the Initiating Holders
shall, on behalf of all Holders, offer to include the securities
(including Amitek Securities) of such officers, directors and Other
Shareholders in the underwriting and may condition such offer on
their acceptance of the further applicable provisions of this
Section 8. The Company shall (together with all Holders, officers,
directors and Other Shareholders proposing to distribute their
securities through such underwriting) enter into an underwriting
agreement in customary from (including, without limitation,
customary indemnification and contribution provisions on the part of
the Company) with the representative of the underwriter or
underwriters selected for such underwriting by a majority in
interest of the Initiating Holders and reasonably acceptable to the
Company; provided that such underwriting agreement shall not provide
for indemnification or contribution obligations on the part of
Holders or the holders of Amitek Securities greater than the
obligations of the Holders pursuant to Section 8.10(b).
Notwithstanding any other provision of this Section 8.5, if the
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representative advises the Initiating Holders in writing that
marketing factors require a limitation on the number of shares to be
underwritten, the securities of the Company held by officers or
directors of the Company (other than Registrable Securities or
Amitek Securities) and the securities held by Other Shareholders
(other than Registrable Securities or Amitek Securities) shall be
excluded from such registration to the extent so required by such
limitation and if a limitation of the number of shares is still
required, the Initiating Holders shall so advise all holders of
Registrable Securities and Amitek Securities whose securities would
otherwise be underwritten pursuant hereto, and the number of shares
of Registrable Securities and Amitek Securities that may be included
in the registration and underwriting shall be allocated among all
such holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities, Amitek Securities and
other securities which they held at the time of the request for
registration made by the Initiating Holders pursuant to Section
8.5(a). No Registrable Securities, Amitek Securities or any other
securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such
registration. If any holder of Registrable Securities or Amitek
Securities, officer, director or Other Shareholder who has requested
inclusion in such registration as provided above disapproves of the
terms of the underwriting, such person may elect to withdraw
therefrom by written notice to the Company, the underwriter and the
Initiating Holders. The securities so withdrawn shall also be
withdrawn from registration. If the underwriter has not limited the
number of Registrable Securities, Amitek Securities or other
securities to be underwritten, the Company may include its
securities for its own account in such registration if the
underwriter so agrees and if the number of Registrable Securities,
Amitek Securities and other securities which would otherwise have
been included in such registration and underwriting will not thereby
be limited."
(c) The portion of Section 8.6(b) of each of the Purchase
Agreements, which begins with the phrase "Notwithstanding any other
provision of this Section 8.6" and ends at the conclusion of Section
8.6(b), is amended and restated in its entirety as follows (with bold
double underlined and strikethrough fonts used for purposes of indicating
changes only):
"Notwithstanding any other provision of this Section 8.6, if the
underwriter determines that marketing factors require a limitation
on the number of shares to be underwritten, and (a) if such
registration is the first registered offering of the Company's
securities to the public and is for the Company's own account, the
underwriter may (subject to the allocation priority set forth below)
exclude from such registration and underwriting some or all of the
Registrable Securities which would otherwise be underwritten
pursuant hereto, and (b) if such
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registration is other than the first registered offering of the sale
of the Company's securities to the public for the Company's account,
the underwriter may limit the number of Registrable Securities and
Amitek Securities to be included in the registration and
underwriting to not less than 50% of the securities included therein
(based on aggregate market value). The Company shall so advise all
holders of securities requesting registration, and the number of
shares of securities that are entitled to be included in the
registration and underwriting shall be allocated in the following
manner. The securities of the Company held by officers and directors
of the Company (other than Registrable Securities and Amitek
Securities) shall be excluded from such registration and
underwriting to the extent required by such limitation, and, if a
limitation on the number of shares is still required, the number of
shares that may be included in the registration and underwriting
shall be allocated among all such Holders and Other Shareholders in
proportion, as nearly as practicable, to the respective amounts of
Registrable Securities, Amitek Securities and other securities which
they held at the time the Company gives the notice specified in
Section 8.6(a)(i), provided that if such registration is other than
the first registered offering of the sale of the Company's
securities to the public for the Company's account, the number or
Registrable Securities and Amitek Securities permitted to be
included therein shall in any event be at least 50% of the
securities included therein (based on aggregate market values). If
any holder of Registrable Securities or Amitek Securities or any
officer, director or Other Shareholder disapproves of the terms of
any such underwriting, he may elect to withdraw therefrom by written
notice to the Company and the underwriter. Any Registrable
Securities, Amitek Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such
registration.
In the event that (i) the holders of "Registrable Securities"
under the Registration Rights Agreement (as defined therein)
exercise their registration rights under Section 2.1 or 2.2 thereof
and (ii) any holders of Registrable Securities hereunder exercise
their registration rights in respect of such registration pursuant
to Section 8.6 hereof and request inclusion therein, then (X) the
second paragraph of Section 5.1 of the Registration Rights Agreement
shall govern any so-called "cutbacks," notwithstanding anything to
the contrary in this Agreement and (Y) the Majority Participating
Amitek Holders may condition such inclusion upon the holders of
Registrable Securities seeking such inclusion agreeing to be treated
in respect of such registration as an "Amitek Holder," a "holder of
Registrable Securities," and a "seller of Registrable Securities"
under Sections 5.1, 5.3, and 7 of the Registration Rights Agreement,
as in effect on the date hereof, without regard to any inconsistency
between such provisions and this Agreement."
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3. Authority; Effect. Each party hereto represents and warrants to and
agrees with each other party that the execution and delivery of this Waiver of
Rights and the consummation of the transactions contemplated hereby have been
duly authorized on behalf of such party and do not violate any agreement or
other instrument applicable to such party or by which its assets are bound.
Except to the extent specifically amended hereby, the provisions of the Purchase
Agreements shall remain unmodified and the provisions of the Purchase Agreements
are hereby confirmed as being in full force and effect.
4. Third Party Beneficiaries. The Amitek Investors are intended to be
third-party beneficiaries of this Waiver of Rights.
5. Binding Effect, etc. This Waiver of Rights, together with the Purchase
Agreements and the Registration Rights Agreement, constitutes the entire
agreement of the parties with respect to its subject matter, supersedes all
prior or contemporaneous oral or written agreements or discussions with respect
to such subject matter, and shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, representatives, successors and
assigns.
6. Descriptive Headings. The descriptive headings of this Waiver of Rights
are for convenience of reference only, are not to be considered a part hereof
and shall not be construed to define or limit any of the terms or provisions
hereof.
7. Counterparts. This Waiver of Rights may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one instrument.
8. Severability. If in any judicial proceedings a court shall refuse to
enforce any provision of this Waiver of Rights, then such unenforceable
provision shall be deemed eliminated from this Waiver of Rights for the purpose
of such proceedings to the extent necessary to permit the remaining provisions
to be enforced. To the full extent, however, that the provisions of any
applicable law may be waived, they are hereby waived to the end that this Waiver
of Rights be deemed to be valid and binding agreement enforceable in accordance
with its terms, and in the event that any provision hereof shall be found to be
invalid or unenforceable, such provision shall be construed by limiting it so as
to be valid and enforceable to the maximum extent consistent with and possible
under applicable law.
9. Governing Law. This Waiver of Rights shall be governed by and construed
in accordance with the domestic substantive laws of The Commonwealth of
Massachusetts without giving effect to any choice or conflict of laws provision
or rule that would cause the application of the domestic substantive laws of any
other jurisdiction.
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IN WITNESS WHEREOF, each of the undersigned has duly executed this Waiver
of Rights (or caused this Waiver of Rights to be executed on its behalf by its
officer or representative thereunto duly authorized) under seal as of the date
first above written.
CENTURY ELECTRONICS MANUFACTURING,
INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
HARBOURVEST VENTURE PARTNERS V -
DIRECT FUND L.P.
By: HVP V - Direct Associates, L.L.C.
Its General Partner
By: HarbourVest Partners, L.L.C.
Its Managing Member
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Title: Managing Director