SEC Form 17-A: Annual Report - the solid group inc website

- 72 -
27.2 Distributorship Agreement with Sony Corporation of Hong Kong
Limited (Sony HK)
SVC has a non-exclusive Distributorship Agreement (the Agreement) with Sony HK, a
corporation organized and existing under and by virtue of the laws of Hong Kong. Under
the Agreement, SVC was designated by Sony HK as its non-exclusive distributor of
Sony products in the Philippines. In addition, SVC shall provide the customers in the
Philippines with repair and parts replacement services, including but not limited to repair and
parts replacement services rendered by SVC which are covered under the 12 month-warranty
period at its own costs and expenses. Management believes that the Agreement continuous
to be effective although no formal renewal has been made since 2007.
27.3 Sale of SBC’s Assets
(a) Agreement on Sale of Assets
On May 11, 2012, SBC entered into an agreement with Sky Cable Corporation (SCC)
covering the sale, assignment and transfer of its assets, equipment, contracts, permits, licenses
and subscriber base (the “Assets”) of SBC used in the operation of its television, broadcasting
and broadband business [see Note 27.3 (d)].
In addition, SCC assumes to pay SBC all costs and expenses in connection with use and
operation of the assets, until the Company's operation is transferred to SCC.
(b) Management Agreement
For continuity of services to subscribers, SBC and SCC agreed that the management and
administration of the Assets be entrusted to SCC pending the approval of the NTC of the
assignment of the Assets.
SCC, as the manager of the Assets, was given the overall power and responsibilities to handle
all aspects necessary to carry out the administration and operations of the Assets and SBC, to
accord the necessary additional authorizations, should the need arise.
The Management Agreement shall remain in effect until December 31, 2013. If NTC’s
approval is not obtained by December 31, 2013, the terms of the Management Agreement
shall be automatically renewed for two years from such date and thereafter automatically
renewed for another two years from the end of term of its renewal, until the Management
Agreement is terminated.
The Management Agreement shall be automatically terminated on the date NTC approves
the transfer of the Assets in favor of SCC.
(c) Option Agreement
On the same date, SGI entered into an Option Agreement (the Option) with SCC to
purchase its shares of stocks in the Company which option must be exercised not later than
December 31, 2013. As of December 31, 2012, SCC has not exercised the option
(see Note 28.8).