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EXHIBIT 10.4
MANAGEMENT AND CONSULTING AGREEMENT
TC MANAGEMENT L.L.C.
BROCKWAY MORAN & PARTNERS MANAGEMENT, L.P.
DECEMBER 11, 1998
Pacific Circuits, Inc.
17550 N.E. 67th Court
Redmond, WA 98052
RE: MANAGEMENT AND FINANCIAL ADVISORY SERVICES
Gentlemen:
This letter will confirm the agreement among TC Management L.L.C., a
Delaware limited liability company ("Thayer"), Brockway Moran & Partners
Management L.P., a Delaware limited partnership, ("Brockway Moran" and
together with Thayer, the "Consultants") and Pacific Circuits, Inc., a
Washington corporation (the "Company"), pursuant to which the Consultants
will render to the Company certain management and consulting services in
connection with corporate development activities and the operation and conduct
of the Company's business. Consultants shall commence providing these
services as of the date of this letter agreement (this "Agreement").
Consultants and the Company shall agree on the specific type and extent of
services to be provided pursuant to this Agreement.
1. As consideration for the management and consulting services to be
provided to the Consultants, the Company shall pay the Consultants a
quarterly fee of $75,000 payable on the first business day of each calendar
quarter. Such quarterly fee shall be paid 60% to Thayer and 40% to Brockway
Moran. The first such payment from the Company to the Consultants is to be
made on the first day of the first calendar quarter of 1999 and will include
an amount equal to a prorated portion of the quarterly fee to account for the
remainder of the month of December since the date of this Agreement. Fees for
future services shall be prorated for any partial calendar quarter during
which the Consultants perform services hereunder. Upon the completion of
future acquisitions of printed circuit board companies, the board of
Directors of the Company will determine an appropriate increase in the
management fee based upon the size, complexity and condition of the acquired
businesses.
2. In addition to the management and consulting services referenced
above, the Consultants shall provide financial advisory services in
connection with potential acquisitions by the Company and any transactions
relating to the refinancing, public or private offering or sale of all or any
part of the Company's assets or capital stock to any persons, in each case
whether by
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way of merger, consolidation, reorganization, recapitalization, offering,
partnership, joint venture or otherwise (collectively, "Transactions"). In
connection with any Transaction, the Company shall pay to the Consultants a
Transaction fee in the amount not to exceed to 1.00% of the proceeds of sale
(in case of a sale of assets or stock) or the value of the Transaction (as
customarily determined). Such Transaction fee shall be paid 60% to Thayer and
40% to Brockway Moran.
3. The Consultants shall also be entitled to receive (or be
reimbursed for) their reasonable out-of-pocket expenses incurred in
connection with services performed hereunder, upon submission of appropriate
receipts and documentation in support thereof.
4. The doing of any act or the failure to do any act by either
Consultant or any of its officers, directors, employees, partners, members or
affiliates, or any person who controls any of the foregoing, the effect of
which may or does cause or result in loss or damage to the Company or its
affiliates, shall not subject such Consultant, or any of such persons or
entities, to any liability to the Company, its affiliates or any of their
respective officers, directors, shareholders, employees or affiliates, or to
any other person whatsoever, except to the extent such loss or damage is
found in a final, nonappealable judgment by a court of competent jurisdiction
to have resulted from the willful misconduct of such Consultant.
In addition to its agreements and obligations under this Agreement,
the Company agrees to indemnify and hold harmless each Consultant and its
affiliates (including its and their respective officers, directors,
stockholders, partners, members, employees, affiliates and agent)(each
indemnitee is referred to herein as an "Indemnified Person") from and against
any and all claims, liabilities, losses and damages (or actions in respect
thereof), in any way related to or arising out of the performance by such
Indemnified Person of services under this Agreement, and to reimburse each
Indemnified Person for reasonable legal and other expenses incurred by it in
connection with or relating to investigating, preparing to defend, or
defending any actions, claims or other proceedings (including any
investigation or inquiry) arising in any manner out of or in connection with
such Indemnified Person's performance or non-performance under this Agreement
(whether or not such Indemnified Person is a named party in such
proceedings); PROVIDED, HOWEVER, that the Company shall not be responsible
under this paragraph for any claims, liabilities, losses, damages or
expenses to the extent that they are finally judicially determined to result
from actions taken by such Indemnified Person that constitute willful
misconduct.
5. The Consultants shall perform the services described herein until
the Consultants deliver a written letter of resignation signed by each
Consultant to the Company, which the Consultants may do in their sole
discretion, at any time, and for any reason or no reason.
6. This Agreement shall be binding upon and inure to the benefit of
the parties hereto, their legal representatives, successors and assigns. the
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the state of Washington applicable to agreements
made and entirely to be performed within such jurisdiction.
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If the foregoing is acceptable to you, please sign this letter n the
space provided below and return it to the undersigned.
Very truly yours,
TC MANAGEMENT L.L.C.
By: /s/ Jeffrey Goettman
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Jeffrey W. Goettman
An Authorized Representative
BROCKWAY MORAN & PARTNERS
MANAGEMENT, L.P.
By: Brockway Moran & Partners, Inc.
its general partner
By:
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Name:
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Title:
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ACCEPTED AND AGREED TO:
PACIFIC CIRCUITS, INC.
By: /s/ Jeffrey Goettman
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Name:
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Title:
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If the foregoing is acceptable to you, please sign this letter in the
space provided below and return it to the undersigned.
Very truly yours,
TC MANAGEMENT L.L.C.
By:
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Jeffrey W. Goettman
An Authorization Representative
BROCKWAY MORAN & PARTNERS
MANAGEMENT, L.P.
By: BROCKWAY MORAN & PARTNERS, INC.,
its general partner
By: /s/ Michael E. Moran
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Name:
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Title:
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ACCEPTED AND AGREED TO:
PACIFIC CIRCUITS, INC.
By:
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Name:
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Title:
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