EXHIBIT 10.17
SERVICES AGREEMENT
KNOW ALL MEN BY THESE PRESENTS:
This Services Agreement is hereby entered into this 17th day of November
2001 at Taguig, Metro Manila, by and between:
TEMIC TELEFUNKEN microelectronic (Philippines), Inc. a corporation
organized and existing under the laws of the Philippines, with
office and plant address at Bagsakan Road, FTI Estate, Taguig,
Metro Manila, represented herein by its Director for Corporate
Affairs, ATTY. XXXXXX X. XXXXX, and hereinafter referred to as
"TMP".
and
MICROTUNE RF-TECHNOLOGIES (PHILS.) INC., a corporation organized
and existing under the laws of the Philippines, with office and
plant address at 2nd Floor, TEMIC Building, Bagsakan Road, FTI
Estate, Taguig, Metro Manila, represented herein by its General
Manager, XX. XXXXXX X. XXXXXXX, and herein referred to as "MRFT".
WITNESSETH: That
WHEREAS, TMP was previously engaged in the business of manufacturing and
exporting semiconductor products and electronic devices in its plant located at
Bagsakan Road, FTI Estate, Taguig, Metro Manila and it continues to possess the
ownership of the lease rights as well as the building located thereon;
WHEREAS, MRFT has been organized and duly registered as a new and separate
corporation with its own distinct juridical personality in accordance with the
pertinent laws of the Philippines. MRFT is engaged in the manufacture,
production, design and export of devices in RF-Technologies including sub-
assemblies of these products and doing business in the Philippines under its own
name separate apart from TMP;
WHEREAS, in the conduct of its business MRFT does not have and possess the
necessary space and facilities for its business operations;
WHEREAS, TMP and MRFT (formerly TEMIC RF-Technologies (Phils.) Inc.)
entered into a Services Agreement on December 11, 1998 which will expire on
December 31, 2000. Supplementary Agreement Nos. 1 and 2 were also entered by
the parties on January 26, 1999 and September 8, 2000, respectively. The
parties intend to enter into a new Services Agreement with validity from January
1, 2001 until December 31, 2002.
NOW THEREFORE, for and in consideration of the foregoing premises and
their covenants herein stated, the parties enters into this SERVICES AGREEMENT
and agree as follows:
1. GENERAL SCOPE OF THE AGREEMENT
-----------------------------------
Under this SERVICES AGREEMENT, TMP shall be obliged to provide MRFT
with the support services as specified in this Agreement which are deemed
necessary for the maintenance and continued operations of MRFT's business
activities within the premises of TMP. It is, however, understood that
services may only be granted as far as available and practicable for TMP
itself and shall be limited to the same services rendered by TMP to MRFT
under the previous Agreements. Accordingly, should it be necessary to
remove, delete or suspend any of the services agreed upon, TMP shall be
allowed to do so provided MRFT is given a written notice of such removal,
deletion at least two (2) months in advance.
TMP guarantees to treat MRFT, insofar as the agreed services are
concerned, in the same manner as TMP's own business and shall promptly
inform MRFT about any relevant event, modification or disturbance in
respect to the supply or rendition of the services agreed upon.
II. COVERAGE OF THE AGREEMENT
------------------------------
Unless otherwise specified, modified or amended in a subsequent
Agreement, the coverage of this Service Agreement shall be as follows:
A. ADMINISTRATION SERVICES:
- General Facilities Services
- Canteen and related facilities
- Clinic and Medical Services
The contents, scope, nature and details of these services are outlined and
discussed below.
III. SCOPE OF SERVICE
---------------------
A. ADMINISTRATION SERVICES
1. GENERAL SERVICES FACILITIES
TMP shall provide and make available to MRFT facilities services and
support necessary to enable the latter to carry on and conduct its business
activities within the premises of TMP. The General Facilities Services shall
include the use of office and production space clearly delineated and discussed
in the General Facilities Services Coverage attached hereto as Annex "A" and
made an integral part hereof. The facilities services and support shall also
cover
specific services such as but not limited to installation, re-installation and
maintenance works in the areas directly related to MRFT. Such requests,
however, shall be duly supported with a Job Order Slip and the cost for the
same shall be directly charged to MRFT.
It is hereby understood that the requirements of MRFT for utilities such as
water, electricity, technical gases and telephone connections which are
presently provided shall continue to be provided by TMP and the necessary
separate metering devices for these utilities shall be installed for direct
charging of consumption.
TMP shall endeavor to provide adequate power supply to MRFT whenever there
is a power outage to minimize disruption of operations.
2. CANTEEN AND RELATED FACILITIES
The employees of MRFT shall be allowed to avail and use the canteen and its
related facilities in the same manner that it is available to TMP and TAPI
employees. Inasmuch as the price of food in the canteen is partly subsidized
by TMP by way of free gas, water and electricity as well as a monthly lump sum
subsidy, MRFT shall proportionately share in the cost of this subsidy. The
meal tickets to be issued by MRFT to its employees shall be likewise be
accepted by the canteen concessionaire for the purpose of purchasing food items
from the canteen subject to the agreement entered into between TMP and the
canteen concessionaire, and shall be paid directly by MRFT to the Canteen
concessionaire.
3. CLINIC AND MEDICAL SERVICES
The Clinic and Medical Services of TMP which operates on a 24-hour-basis
shall be made available for MRFT employees in the same manner and extent that
it is made available to TMP/TAPI employees. The Clinic and Medical Services
shall include medical consultations, treatment and prevention of illness,
issuance of medicines/starter dosage, emergency treatments, dental check-up and
consultations, optometry services, as well as the use of its vehicle for
emergency purposes, and shall cover the services of the Physicians, Nurses,
Dentist and Optometrist who are employed or under contract by TMP/TAPI to
render the aforesaid services to its employees.
B. ADDITIONAL/COLLATERAL SERVICES
In the event that MRFT desires to expand or include in the Services
Agreement any other additional services, a written request therefore shall be
relayed to TMP for its consideration and the agreement to provide such
additional services shall be put in writing specifying the scope and coverage
of such additional service and the agreed fee or consideration, and the same
shall be treated as an Addendum to this Agreement.
Should MRFT wish to reduce, cancel or withdraw any of the services provided
in this Agreement, it should relay the same to TMP at least two (2) months
before the intended date for such cancellation or withdrawal.
It is understood that the services herein contemplated exclusive of the
General Facilities Services shall only be made available to MRFT during normal
and regular working days (i.e. excluding holidays, Sundays, etc.). Any
requirement for services outside of the normal and regular holidays, MRFT has
to make the necessary arrangement by giving advance notice regarding the same.
IV. SERVICES FEE/CONSIDERATION AND PAYMENT CONDITIONS
------------------------------------------------------
The monthly cost of services as referred to in this Services Agreement with
the exception of the service fee for the General Facilities Services which is
separately specified in the General Facilities Coverage (Annex "B" hereof"),
are as follows:
Canteen/Clinic & Medical Services 2001 P450.00/person
2002 P495.00/person
Attached as Annex "B" is the cost computation of the monthly fees.
The service fee shall be paid by MRFT to TMP on a monthly basis within
fourteen (14) calendar days from receipt of the billing. All applicable taxes,
which TMP will be required to pay by reason of the fees herein stated be charge
to MRFT.
It is understood that the above-stated service fees for the Canteen &
Related Facilities and Clinic & Medical Services has been computed on the basis
of MRFT's headcount of 876 as of August 31, 2000. Every quarter upon the
request of either party the service fees for the Canteen and Related Facilities
and Clinic & Medical Service with the exception of the General Facilities
Services Coverage (Annex "A" hereof), may be subject of a joint review for the
purpose of making the appropriate adjustments as may be bought about by changes
in the actual headcount figures.
V. INDEPENDENT RELATIONSHIP
-----------------------------
It is hereby understood that TMP is a corporate entity separate and
distinct from that of MRFT. The relationship between TMP and MRFT during the
term of this Agreement shall be solely that of a service provider and service
recipient, respectively. Neither party shall make any representation or incur
any obligation in the name of or on behalf of the other party. Nothing in this
Agreement shall be construed as appointing, or constitute an appointment of
either party as the agent of the other. Accordingly, the employees of MRFT
shall not be considered or in any way treated as employees of TMP and vice-
versa. For this purpose, MRFT shall indemnify and hold TMP free and harmless
from any claim, damages, awards, or costs which TMP may incur or be required to
pay for any damage or injury caused to the employees of MRFT and in the same
manner TMP shall indemnify and hold MRFT free and harmless from any claim,
damages, awards, or costs which MRFT may incur or be required to pay for any
damage or injury caused to the employees of TMP.
VI. ENVIRONMENTAL AND SAFETY REGULATIONS
-----------------------------------------
In the performance of its business operations, MRFT warrants to comply
and adhere to the applicable environmental and safety regulations imposed by
the duly constituted authority and as well the internal rules and regulations
promulgated by TMP. Any process modifications in MRFT's manufacturing
activities, which may affect the environment or safety have to be announced to
TMP immediately including all necessary information about the type and volume
involved (waste water, used air, noise, etc.)
TMP reserves the right to require MRFT to execute any modification,
adaption or replacement which is or becomes due for safety and environmental
reasons, law or imposition by a competent authority within a reasonable period.
VII. CONFIDENTIALITY
--------------------
During the course of this Agreement, each party may obtain possession of
information of the other party, which may contain confidential or secret
information (e.g. inventions, know-how, trade secrets, future product plans).
As far as such information is disclosed by one party to the other, it must be
clearly labeled with the word "confidential" or the like. This includes
information obtained by TMP for processing even if not so labeled as
"confidential" if the nature of such information requires confidentiality such
as Financial Statements and Reports, Price Calculations and similar documents.
The party which obtained possession of a confidential information shall
maintain and keep all such information in confidence and shall not disclose it
to a third party-with the exception of agents and representatives who shall
likewise be bound by corresponding obligations-without the prior consent of the
other party. It is understood, however, that a party shall not have any non-
disclosure obligations with respect to any obtained information which: (a) now
hereafter through no act or omission on the part of the obtaining party becomes
generally known or available; (b) is known to the party at the time of
obtaining it from the other party; (c) is finished to third parties by the
party without restriction on disclosure; (d) is independently developed by the
obtaining party; or (e) is finished to the obtaining party by a third party as
a matter or right and without restriction on disclosure.
The obligations imposed in the preceding paragraph shall survive the
expiration or any termination of this Agreement.
VIII. EFFECTIVITY OF THE AGREEMENT
----------------------------------
A. TERM OF THE AGREEMENT
This Services Agreement shall come into force and effect on January 1, 2001
and shall continue to be in effect until December 31, 2002 unless earlier
terminated in accordance with the provision hereof, and may be renewed for
another term subject to the mutual agreement of the parties. Excluded from
this provision shall be the General Facilities Service coverage which shall be
covered by a different term as specified in Annex "A" hereof.
B. TERMINATION
Either party shall have the right to terminate this Services Agreement upon
giving the other party a written notice thereof at least three (3) months in
advance to afford such party ample time to make the necessary adjustments and
preparation for transition.
IX. APPLICABLE LAWS
--------------------
This Services Agreement shall be governed by and construed in accordance
with the laws of the Republic of the Philippines.
X. NON-ASSIGNABILITY
----------------------
This Services Agreement shall not be assigned by either party to a third
party without the prior written consent of the other party, however, TMP shall
be allowed to assign this Services Agreement to TAPI without the consent of
MRFT as soon as the transfer of the Lease rights over the land is
approved/finalized by the FTI.
XI. ENTIRE AGREEMENT
---------------------
This Services Agreement shall constitute the entire agreement of the
parties and no other writing or conversation shall be deemed as part of this
Agreement unless evidenced by a written agreement by both parties subsequent to
the execution of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Services Agreement
to be executed by their respective duly authorized signatories this 17th day of
November 2000 at Taguig, Metro Manila.
TEMIC TELEFUNKEN microelectronic MICROTUNE RF-TECHNOLOGIES
(Phils.), Inc. (Phils.) Inc.
By: /s/ Xxxxxx X. Xxxxx By: /s/ Androx X. Xxxxxxx
ATTY. XXXXXX X. XXXXX XX. XXXXXX X. XXXXXXX
Director for Corporate Affairs General Manager
Signed in the presence of:
_________________________________ ________________________
ACKNOWLEDGEMENT
REPUBLIC OF THE PHILIPPINES )
MAKATI CITY, METRO MANILA) S.S.
BEFORE ME, a Notary Public and for Makati City, personally appeared:
TEMIC TELEFUNKEN microelectronics (Phils.) Inc.
Xxxxxx X. Xxxxx CTC No. 10261169
Issued on Xxxxx 00, 0000
Xx Xxxxxx, Xxxxx Xxxxxx
Xxxxxxxxxxx
MICROTUNE RF TECHNOLOGIES (PHILS.) INC.
Xx. Xxxxxx X. Xxxxxxx Passport No.: 000000000
Issued on October 28, 1997
At the United States of America
known to me and to me known to be the same persons who executed the foregoing
instruments and they acknowledge to me that the same is their free and
voluntary act and deed of the companies they respectively represented.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my notarial
seal this _____ day of November 2000 at Taguig, Metro Manila, Philippines.
Doc. No. _____
Page No. _____
Book No. ____
Series of 2000
ANNEX "A"
GENERAL FACILITIES SERVICES COVERAGE
1. BUILDING FACILITIES
Pursuant to the Service Agreement entered into by and between TMP and MRFT,
TMP agrees to provide MRFT with the needed General Facilities Services which
shall include the use and access to the portion of the Xxxxxx Xxxxx, 0xx
Xxxxx xxx 0xx Xxxxx of its building including the partitions and other
improvements existing thereon located at Bagsakan Road, FTI Estate, Taguig,
Metro Manila consisting of a total of 2,605 square meters, more particularly
described and illustrated in the Floor Layout and Building Area Allocation
which are attached hereto as Annexes "1-A" to "1-C" and made an integral part
of this Agreement and hereinafter referred to as the "Premises" (including
proportionate areas in the parking space in the front area of the building
and other common areas).
The MRFT and its employees shall also be given the right of way to the common
areas of the property owned by TMP as may be necessary and beneficial in the
pursuit of the MRFT business operations. Access to and through the Premises
shall be allowed by MRFT to TMP/TAPI for the purpose of transferring or
moving any equipment or machinery of the latter whenever necessary.
Similarly, TMP shall allow access to MRFT to and through any of its areas for
the same purpose. The party requesting such access shall shoulder all the
cost incurred for such transfers or movement s including damages caused to
the premises and production losses.
It is understood that in case MRFT decides to vacate or return some areas and
consequently, reduce the total area as specified herein, the corresponding
fees shall be adjusted to reflect such change provided MRFT gives TMP notice
thereof at least three (3) months before the intended date except for the SMD
Front Line 2 at the ground floor which will require at least thirty (30) days
notice only. The adjustment in fees shall then be implemented only after the
lapse of the said three (3) months requirement.
2. DURATION
This use and access to the premises by MRFT shall commence on January 1, 2001
and shall be valid until December 31, 2002. However, in case either party
desires to terminate the General Facilities Services, the party desiring to
terminate the services shall formally inform the other party about such
termination at least twelve (12) months before the intended effectivity date
of the termination.
Upon the termination of the General Facilities Services, all improvements
made thereon shall automatically inure to the benefit of TMP. The term
"improvement" as mentioned in this section shall refer to improvements,
alterations, installations or additions made by TMP or MRFT on the
Premises except machineries and equipment as well as movable furniture and
fixtures which may be removed without defacing or injuring the Premises.
3. GENERAL FACILITIES SERVICE FEE
In consideration of the General Facilities Services, MRFT agrees to pay the
service fees in accordance with the following schedule:
January 1, 2000 to December 31, 2001 - P642.99/sq.meter
January 1, 2001 to December 31, 2002 - P680.11/sq.meter
The service fee shall be paid by MRFT in advance every last Monday of the
preceding month. Attached as Annex "2" hereof is the Cost computation of
fees for the General Facilities Services. It is hereby understood that the 3%
xxxx-up is intended to cover MRFT's proportionate share in the minor
expenses/costs which may be incurred by TMP during the term of this
Agreement.
It is herein understood that TMP shall not be held liable for any damages or
losses, which may be incurred by MRFT arising from the use of the building
facilities. MRFT, if it so desires, may however request TMP to secure the
appropriate insurance coverage for such risks and the premiums therefore
shall be shouldered by MRFT.
4. USE AND SUPPLY OF UTILITIES/OTHER SERVICES
The use, supply and consumption by the MRFT of utilities such as, but not
limited to electricity, water, telephone services, security, janitorial
services, air-conditioning and ventilation, etc. shall be considered as part
of the service fee specified in Item No. 3 hereof. Other utilities/services
which can be directly attributed to MRFT shall be charged directly to its
account. Insofar as practicable and possible, separate metering devices shall
be installed for the accurate monitoring of MRFT's utilities consumption.
However, it is hereby understood and agreed upon that certain utilities
consumption shall be incurred by TMP which are partly attributable to MRFT
such as utilities consumption in the common areas (e.g. comfort rooms,
corridors, perimeter areas, etc.). Insofar as these utilities consumption, it
is hereby agreed that MRFT shall shoulder a proportionate share thereof and
that such share is already incorporated in the service fee specified in Item
No. 3 hereof.
TMP shall not, except in cases of gross negligence, be liable nor responsible
for the failure of electric current, water supply, telephone lines or other
utilities and services.
5. MAINTENANCE OF THE PREMISES
TMP shall provide necessary services for the maintenance of the Premises to
render it suitable for the purpose and to enable the latter to carry on and
conduct its business activities within the said premises. The maintenance
services shall include the necessary facilities services, janitorial services
and security services.
FACILITIES SERVICES. It is hereby understood that the General Service
-------------------
Agreement shall include the obligation on the part of TMP to ensure that
needed repairs and maintenance of the Premises are regularly undertaken. The
repair and maintenance services referred to in this paragraph shall however
be limited to those services which are normally needed to render the Premises
as well as the common areas suitable for the use of MRFT, such as
repair or maintenance of the air-conditioning, general repair or maintenance
of the building facilities and similar services.
JANITORIAL SERVICES. It is likewise agreed and understood that TMP shall
-------------------
provide the necessary janitorial services which is deemed necessary and
normal to keep and maintain the cleanliness in the Premises as well as the
common areas.
SECURITY SERVICES. TMP shall include the Premises in its Security Planning
-----------------
and guard posting for the purpose of securing the safety and welfare of
MRFT's employees as well as the properties of MRFT located within the
premises of the TMP. It is however understood that MRFT, its employees and
visitors shall obey and comply with the security and safety procedures and
practices being implemented by TMP. Furthermore, any special or additional
security arrangements with MRFT would like to introduce or outside the
Premises should be officially relayed and requested from TMP and in case such
request for special or additional security arrangements is favorably acted
upon, the cost or fee for such service shall be mutually agreed upon.
It is hereby understood that the aforesaid services with the exception of
Security services shall be available to MRFT during normal and regular
working days (i.e. excluding holidays, Sundays, etc.). Any requirement for
services outside of the normal and regular holidays, MRFT has to make the
necessary arrangement by giving advance notice regarding the same.
6. CARE OF THE PREMISES
MRFT shall at all times and at its expense, maintain the Premises in a clean
and sanitary condition free from noxious odors, disturbing noises and other
nuisances, and shall take immediate steps to hinder and/or prevent the
existence of all water and other pollution within the vicinity of the
Premises and its environs. TMP shall not be liable nor responsible for the
presence of bugs, vermins, ants, termites or other insects in the Premises.
7. LIABILITIES
MRFT shall be liable for any and all damages sustained by the Premises due to
causes directly or indirectly attributable to MRFT or its employees or
representatives. In case MRFT defaults in making good in any of its
obligation specified herein including default in the payment of the
applicable service fee, TMP shall have the right, among others, to hold, take
possession of and sell the assets, properties or accounts of MRFT in
satisfaction of MRFT's obligation/s.
TMP shall not be liable for loss, including theft, robbery and disappearance
of, and damage or injury to goods, wares, products or property of any kind,
including without limitation to properties or MRFT and its employees and
guests or any or all other persons on the Premises, and for injury to or
death of any person arising from or in connection with the use of the
Premises, except where the cause is due to TMP or that of its agents or
employees' unlawful act in the performance of their function or gross
negligence. Consequently, MRFT agrees to hold TMP free and harmless from and
against any and all losses, liabilities, actions, suits, proceedings, or
claims, including attorney's fees or other related expenses incurred in
connection therewith, directly or indirectly resulting from or arising out of
or in connection with any such
loss or damage to property, offense or crime, or injury to or death of
persons, except, in the case of gross negligence of the latter.
This General Facilities Services Coverage shall be considered as
supplementary to the Services Agreement entered into by TMP and MRFT and
shall therefore bind and inure to the benefit of the permitted successors and
permitted assigns of MRFT.
TEMIC TELEFUNKEN microelectronics MICROTUNE RF-TECHNOLOGIES
(Phils.), Inc. (Phils.), Inc.
By: /s/ Xxxxxx X. Xxxxx By: /s/ Andros X. Xxxxxxx
ATTY. XXXXXX X. XXXXX ANDROS X. XXXXXXX
Director for Corporate Affairs General Manager
ANNEX "B"
Canteen and Medical
MRFT - 2000
------------------------------------
Canteen Medical Total
------------------------------------
Total Charges 4,389,405 4,928,022 9,317,427
====================================
------------------------------------
+ 10% increase (Y2001) 4,828,346 5,420,824 10,249,170
====================================
------------------------------------
+ 10% increase (Y2002) 5,311,181 5,962,906 11,274,087
====================================
Headcount:
Automotive 1,007 53.06%
TRFT 876 46.94%
DEBIS 15 0.79%
----------------------
Total headcount 1,898 100.00%
======================
Share of TRFT PER YEAR 4,730,386.03
============
Share of TRFT PER MONTH 394,198.84
============
Share of TRFT PER HEAD (Y2001) 450.00
============
Share of TRFT PER YEAR 5,203,424.63
============
Share of TRFT PER MONTH 433,618.72
============
Share of TRFT PER HEAD (Y2002) 495.00
============
