Exhibit 10.6
WAIVER OF RIGHTS AND AMENDMENT
UNDER PURCHASE AGREEMENT
This Waiver of Rights and Amendment under Purchase Agreement ("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
Centennial Technologies, Inc. ("Centennial").
WHEREAS, the Company and Centennial are parties to that certain Series B
Convertible Preferred Stock Purchase Agreement dated as of February 4, 1998 (the
"Purchase Agreement"), which agreement provides 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 Centennial
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 Xxxxx Xx Park, Xxxx Xxxx Park and Xxxx Xxx 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 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 Centennial
waiving certain rights under the Purchase Agreement and the Company and
Centennial making certain amendments to the Purchase Agreement in order to
clarify the interrelationship between the respective registration rights
provisions contained in the Registration Rights Agreement and the Purchase
Agreement; and
WHEREAS, this Waiver of Rights meets the requirements for a valid waiver
or amendment of the provisions of the Purchase Agreement, 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 Agreement. Centennial hereby waives all
rights under Section 8.12 of the Purchase Agreement with respect to the
Registration Rights Agreement as in effect on the date hereof.
2. Amendments to Purchase Agreement.
(1) Section 8.2 of the Purchase Agreement, 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
[June ___, 1999], by and among the Company and Xxxxx Xx Park, Xxxx
Xxxx Park and Xxxx Xxx 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.
(a) The second paragraph of Section 8.5(b) of the Purchase Agreement
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 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 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 or 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."
(b) The portion of Section 8.6(b) of the Purchase Agreement, 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 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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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/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
Title: President
CENTENNIAL TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
Title: Secretary, Treasurer and General Counsel
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