Exhibit 10.4
EXCECUTIONS COPY
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT ("Agreement") is entered into as of
September 30, 1997 by and among WMT Acquisition Corp., a California corporation,
Savoir Technology Group, Inc., a Delaware corporation, Star Management Services,
Inc., a Delaware corporation, Inet Systems, Inc., a Texas corporation, Star Data
International, a company organized under the laws of the Virgin Islands, Sirius
Investments, Inc., a Nevada corporation, and Star Data Systems, Inc., a Texas
corporation (each a "Guarantor," and collectively, the "Guarantors").
Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings ascribed to such terms in the Note Purchase Agreement
referred to below. The meanings ascribed to capitalized terms used herein shall
be applicable both to the singular and plural forms of the terms used.
W I T N E S S E T H:
WHEREAS, WESTERN MICRO TECHNOLOGY, INC., a Delaware corporation (the
"Issuer"), THE GUARANTORS from time to time party thereto, the PURCHASERS
referred to therein, and CANPARTNERS INVESTMENTS IV, LLC, a California limited
liability company, in its capacity as the Agent for the Purchasers, have entered
into that certain Note Purchase Agreement of even date herewith (as the same may
be amended, restated, supplemented or otherwise modified from time to time, the
"Note Purchase Agreement"), pursuant to which the Issuer will issue to the
Purchasers Notes;
WHEREAS, each of the Guarantors is a Wholly-Owned Subsidiary of the
Issuer and is engaged in businesses related to the businesses of the other
Guarantors, and each of the Guarantors will derive direct or indirect economic
benefit from the purchase of the Notes by the Purchasers pursuant to the Note
Purchase Agreement; and
WHEREAS, the Purchasers have required as a condition, among others, to
their purchase of the Notes that each Guarantor, jointly or several, irrevocably
and unconditionally guarantee the due and punctual payment in full of all
Obligations as provided in the Note Purchase Agreement;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, it is agreed as follows:
1. Defined Terms.
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(a) "Allocable Amount" of any Guarantor means, as of any date of
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determination, an amount equal to the maximum amount which could then be claimed
by the Holders against such Guarantor under the Note Purchase Agreement without
rendering such claim voidable or avoidable under Section 548 of Chapter 11 of
the United States Bankruptcy
Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law.
(b) "Proportionate Share" of any Guarantor means, as of any date of
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determination, the percentage obtained by dividing (i) such Guarantor's
Allocable Amount in effect immediately prior to the making of any "Guarantor
Payment" (as defined below) by (ii) the aggregate Allocable Amounts of all of
the Guarantors in effect immediately prior to the making of such Guarantor
Payment.
2. Contribution, Indemnification and Reimbursement. In the event
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any Guarantor shall, pursuant to the terms of the Note Purchase Agreement, make
a payment (a "Guarantor Payment") of all or any portion of the Obligations
which, taking into account all other Guarantor Payments then previously or
concurrently made by any of the other Guarantors, exceeds the amount which such
Guarantor would otherwise have paid if each Guarantor had paid its Proportionate
Share of the aggregate Obligations satisfied by such Guarantor Payment, such
Guarantor shall be entitled to contribution and indemnification from each of the
other Guarantors, and each of the other Guarantors hereby agrees to reimburse
such Guarantor, in an amount equal to such other Guarantor's respective
Proportionate Share of such Guarantor Payment.
3. No Impairment of Guarantors' Obligations. This Agreement is
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intended only to define the relative rights of the Guarantors with respect to
payments made by the Guarantors under the Note Purchase Agreement, and nothing
set forth in this Agreement is intended to or shall impair the obligations of
the Guarantors, jointly and severally, to pay any amounts to the Holders, as and
when the same shall become due and payable in accordance with the terms of the
Notes and the Note Purchase Agreement.
4. Assets of Guarantors. The parties hereto acknowledge that the
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rights of contribution and indemnification hereunder shall constitute an asset
in favor of any Guarantor to which such contribution and indemnification is
owing.
5. Effectiveness; Termination; Revocation.
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(a) This Agreement shall become effective upon its execution by each
of the Guarantors and shall continue in full force and effect and may not be
terminated or otherwise revoked by any Guarantor until the Obligations shall
have been paid in full (in cash) and discharged.
(b) Each Guarantor agrees that if, notwithstanding the foregoing,
such Guarantor shall have any non-waivable right under applicable law to
terminate or revoke this Agreement, and such Guarantor shall attempt to exercise
such right, then such termination or revocation shall not be effective until a
written notice of such revocation or termination, specifically referring hereto
and signed by such Guarantor, is actually received by each of the other
Guarantors and by the Holders at the address to which notices are required to be
sent
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under the Note Purchase Agreement. Such notice shall not affect the right
or power of any Guarantor to enforce rights arising prior to receipt of such
written notice by each of the other Guarantors and the Holders. If any Holder
takes any action giving rise to Obligations under the Note Purchase Agreement
after any Guarantor has exercised any right to terminate or revoke this
Agreement but before the Holders receive such written notice, the rights of each
other Guarantor to contribution and indemnification hereunder in connection with
any Guarantor Payments made with respect to such Obligations shall be the same
as if such termination or revocation had not occurred.
6. Governing Law. This Agreement shall be construed and enforced in
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accordance with, and the rights of the parties shall be governed by, the law of
the State of California excluding choice-of-law principles of the law of such
State that would require the application of the laws of a jurisdiction other
than such State.
* * *
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IN WITNESS WHEREOF, each of the Guarantors has executed and delivered
this Agreement as of the date first above written.
WMT ACQUISITION CORP., SAVOIR TECHNOLOGY GROUP, INC.,
a California corporation, a Delaware corporation,
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx Xxxxx X. Xxxxx
Chief Financial Officer Chief Financial Officer
STAR MANAGEMENT SERVICES, INC., INET SYSTEMS, INC.,
a Delaware corporation, a Texas corporation,
By: /s/ Carlton Xxxxxx Xxxxxxx XX By: /s/ Carlton Xxxxxx Xxxxxxx XX
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Carlton Xxxxxx Xxxxxxx XX Carlton Xxxxxx Xxxxxxx XX
President President
STAR DATA INTERNATIONAL, SIRIUS INVESTMENTS, INC.,
a company organized under the laws of a Nevada corporation,
the Virgin Islands
By: /s/ Carlton Xxxxxx Xxxxxxx XX By: /s/ Carlton Xxxxxx Xxxxxxx XX
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Carlton Xxxxxx Xxxxxxx XX Carlton Xxxxxx Xxxxxxx XX
President President
STAR DATA SYSTEMS, INC.,
a Texas corporation
By: /s/ Carlton Xxxxxx Xxxxxxx XX
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Carlton Xxxxxx Xxxxxxx XX
President
REVISED SIGNATURE PAGE 1
