Document:

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                                                                    EXHIBIT 10.4

                             EMPLOYMENT AGREEMENT
                             --------------------

     This EMPLOYMENT AGREEMENT (this "Agreement"), effective as of the 5th day
of July, 2001 (the "Effective Date"), by and between CellStar Ltd. (the
"Employer"), CellStar Corporation, a Delaware corporation and parent company of
Employer ("Parent"), and Terry S. Parker (the "Employee").

                                R E C I T A L S
                                ---------------

     WHEREAS, Employer desires to obtain the benefit of the services of Employee
as an employee of Employer for the period of time provided in this Agreement;
and

     WHEREAS, Employee desires to render services for Employer on the terms and
conditions hereinafter provided; and

     WHEREAS, Employer desires that Employee be able to participate in Parent's
stock option and incentive compensation plans; and

     WHEREAS, the Board of Directors of Parent deems it advisable and in the
best interests of Parent and Employer to enter into this Employment Agreement
with Employee;

                               A G R E E M E N T
                               -----------------

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereby agree as follows:

                                   ARTICLE I

                                  Employment

     1.1  Employment.  Effective on the Effective Date the Employer shall employ
          ----------
the Employee and the Employee shall accept employment by the Employer for the
period and upon the terms and conditions contained in this Agreement.

     1.2  Term.  The term of this Agreement shall commence on the Effective Date
          ----
and shall end on the four (4) year anniversary of the Effective Date (the
"Original Term"), unless earlier terminated as provided herein (the period from
the Effective Date to the four (4) year anniversary of the Effective Date, or to
the date of such earlier termination, as applicable, is hereinafter referred to
as the "Term"). At the expiration of the Original Term, this Agreement shall
automatically be renewed on a year to year basis unless notice of any decision
not to renew this Agreement is given by the Employer or the Employee at least
365 days prior to the expiration of the Original Term or any such one year term
or unless earlier terminated as provided herein.
<PAGE>

1.3  Position and Duties.
     -------------------

     (a)  Position.  During the Term, the Employee shall serve as Chief
          --------
Executive Officer of Employer, with authority, duties and responsibilities
consistent with such position, and shall perform such other services for
Employer, Parent and their affiliated entities consistent with such position as
may be reasonably assigned to him from time to time by the boards of directors
of Employer and/or Parent. During the Term, Employee shall, if so elected or
appointed, also accept election or appointment, and serve, as an officer and/or
director of Employer or any of its affiliated entities and perform the duties
appropriate thereto, without additional compensation other than as set forth
herein. Employee's actions hereunder shall at all times be subject to the
direction of the boards of directors of Employer and Parent.

     (b)  Commitment.  During the Term, the Employee shall devote
          ----------
substantially all of his business time, energy, skill and best efforts to the
performance of his duties hereunder in a manner that will faithfully and
diligently further the business and interests of Employer, Parent and their
affiliated entities. Subject to the foregoing, the Employee may serve in any
capacity with any civic, educational or charitable organization; provided that
such activities and services do not interfere or conflict with the performance
of his duties hereunder. Further subject to the foregoing, the Employee may
serve as a director of other corporations; provided, however, that such service
                                           --------  -------
or position is approved in advance by the Board of Directors of Parent and
further that such service or position does not at any time during the Term
interfere or conflict with the performance of his duties hereunder. Employee
shall comply with policies, standards and regulations established from time to
time by senior management and/or the boards of directors of Employer and Parent.

1.4  Compensation.
     ------------

     (a)  Base Salary.  Subject to Section 1.4(c) below, beginning on the
          -----------
Effective Date, Employer shall pay the Employee as compensation an aggregate
salary ("Base Salary") of $850,000 per year during the Term, or such greater
amount as shall be approved in accordance with the policies of Employer and/or
Parent, as applicable. The Base Salary for each year shall be paid by Employer
in accordance with the regular payroll practices of Employer.

     (b)  Annual Incentive Payment.  Each year during the Term, the Employee
          ------------------------
shall be eligible to participate in an annual incentive plan approved by the
Parent's Board of Directors; provided, however, that for the fiscal year ending
in November 2001, and subject to any required approvals of the Board of
Directors of Parent, Employer agrees to pay Employee a one-time bonus in the
amount of $200,000, which amount will be payable within 30 days following the
end of the 2001 fiscal year.

     (c)  Withholding.  With respect to any compensation received by Employee
          -----------
with respect to Employee's services for Employer or any of its affiliates,
Employer will deduct such withholding and other payroll taxes as are required to
be withheld by
<PAGE>

Employer under applicable law.

     (d)  Stock Options.  Parent will recommend to the Board of Directors of
          -------------
Parent that Employee be granted a stock option (th e "Option") entitling him to
purchase 1 million shares of Parent's common stock at the reported market
closing sales price thereof on the date of grant. The Option shall become
exercisable by the Employee at the rate of 25% of the shares covered thereby per
year, beginning on the Effective Date and continuing thereafter on each
anniversary of the Effective Date in accordance with the terms of the Parent's
1993 Amended and Restated Long Term Incentive Plan; provided, however, that
                                                    --------  -------
any unvested portion of the Option shall immediately vest if the Employee's
employment is terminated Without Cause (defined below) or for Company Breach
(defined below) or as a result of a Change in Control (defined below), and;
provided, further, that, Employee shall have twenty four (24) months following
--------  -------
a Change in Control (defined below) to exercise the Option, notwithstanding any
termination of Employee's employment. The Option shall contain such additional
terms as are set forth in Parent's 1993 Amended and Restated Long Term Incentive
Plan and as are established by the Board of Directors of Parent. Employee shall
be entitled to annual consideration for future grants in amounts (if any) and on
terms and conditions to be determined by the Board of Directors.

     (e)  Payment and Reimbursement of Expenses.  During the Term, Employer
          -------------------------------------
shall pay or reimburse the Employee for all reasonable travel and other expenses
incurred by the Employee in performing his obligations under this Agreement in
accordance with the policies and procedures of Employer or Parent, provided that
the Employee properly accounts therefor in accordance with the regular policies
of Employer or Parent, as applicable.

     (f)  Fringe Benefits and Perquisites.  During the Term, the Employee
          -------------------------------
shall be entitled to participate in or receive benefits under any stock
purchase, profit-sharing, pension, retirement, paid time off, life, medical,
dental, disability or other plan or arrangement made generally available by
Employer or Parent to employees, subject to and on a basis consistent with the
terms, conditions and overall administration of such plans and arrangements.
Employee shall be credited with 10 years of service with the Employer as of the
Effective Date for purposes of determining eligibility and vesting for paid time
off and short-term disability benefits.

     (g)  Relocation Expenses.  The Employee acknowledges and agrees that he
          -------------------
will relocate his primary residence to the Dallas/Fort Worth area in order to
perform his duties and responsibilities under this Agreement. In connection with
such relocation:

          (i)   The Employer agrees to reimburse the Employee for the
     reasonable costs of temporary corporate housing in the Dallas/Fort
     Worth area for up to 180 days from the Effective Date.

          (ii)  The Employer agrees to reimburse Employee for the cost of
     Employee's trips home to Indiana on a bi-weekly basis for up to 180
     days from
<PAGE>

     the Effective Date. Reimbursable expenses include round trip coach air fare
     and any reasonable out-of-pocket expenses (i.e., airport parking).

          (iii) The Employer shall reimburse Employee for the cost of two (2)
     house hunting trips for members of the Employee's immediate family.
     Reimbursable expenses include round trip coach air fare, automobile rental,
     reasonable costs for meals, lodging (if needed) and other reasonable out-
     of-pocket expenses.

          (iv)  The Employer shall reimburse Employee for all normal and
     customary costs associated with the sale of Employee's current residence,
     including broker's fees not to exceed 6%.

          (v)   The Employer shall reimburse Employee for all normal and
     customary costs associated with the purchase of a residence in the
     Dallas/Fort Worth area, including but not limited to survey fees, loan
     origination fees, title insurance and attorneys fees.

          (vi)  The Employer shall reimburse Employee for all normal and
     customary moving costs for household goods from Indiana to the Dallas/Fort
     Worth area for a period of 24 months following the Effective Date.

          (vii) The Employer shall reimburse Employee for all reasonable and
     customary out-of-pocket travel expenses incurred by Employee and his
     immediate family during the actual relocation from Indiana to the
     Dallas/Fort Worth area.

     All amounts reimbursed pursuant to this subsection shall be grossed up for
all applicable taxes.

1.5  Termination.
     -----------

     (a)  Disability.  Employer may terminate this Agreement for Disability.
          ----------
"Disability" shall exist if, because of ill health or physical or mental
disability, the Employee shall have been unable to perform his duties under
this Agreement, with reasonable accommodation by the Employer, as
determined in good faith by Parent's Board of Directors or a committee
thereof, for a period of 180 consecutive days, or if, in any 12-month
period, the Employee shall have been unable or shall have failed to perform
his duties for a period of 270 or more business days, irrespective of
whether or not such days are consecutive.

     (b)  Cause.  Employer may terminate the Employee's employment for
          -----
Cause. Termination for "Cause" shall mean termination because of the Employee's
(i) the willful failure by Employee to perform his duties, provided that no act,
or failure to act, on the Employee's part shall be considered "willful" unless
the Board of Directors, in the reasonable exercise of its business judgment,
determines that such act or failure
<PAGE>

to act was committed without good faith and without a reasonable belief that
such act or failure to act was in the best interests of the Employer, Parent or
their affiliated entities, (ii) misconduct that causes or is likely to cause
material economic harm to Employer, Parent or their affiliated entities or that
brings or is likely to bring material discredit to the reputation of Employer,
Parent or any of their affiliated entities, as determined by the Board of
Directors of Parent in good faith, (iii) failure to substantially follow
directions of the boards of directors of Employer or Parent that are consistent
with his duties under this Agreement, provided that no act, or failure to act,
on the Employee's part shall be deemed to constitute Cause unless done, or
omitted to be done, by the Employee not in good faith and without reasonable
belief that the Employee's act, or failure to act, was in or not opposed to the
best interest of Employer, (iv) conviction of, or entry of a pleading of guilty
or nolo contendre to, any felony involving moral turpitude or entry of an order
duly issued by any federal or state regulatory agency having jurisdiction in the
matter permanently prohibiting Employee from participating in the conduct of the
affairs of Employer, Parent or their affiliated entities, or (v) any other
material breach of any provision of this Agreement. Items (i), (ii), (iii) and
(v) of this subsection shall not constitute Cause unless Employer or Parent
notified the Employee thereof in writing, specifying in reasonable detail the
basis therefor and stating that it is grounds for Cause. Furthermore, if the
Employee's actions are curable, items (i), (ii), (iii) and (v) of this
subsection shall not constitute Cause unless the Employee fails to cure such
matter within 30 days after such notice is sent or given under this Agreement.
It is understood that "Cause" shall not include a failure to perform due to a
Disability.

     (c)  Without Cause.  During the Term, Employer may terminate the
          -------------
Employee's employment Without Cause, subject to the provisions of subsection
1.6(c) (Termination Without Cause or for Company Breach). Termination "Without
       -----------------------------------------------
Cause" shall mean termination of the Employee's employment by Employer other
than termination for Cause or for Disability.

     (d)  Company Breach.  The Employee may terminate his employment hereunder
          --------------
for Company Breach. For purposes of this Agreement a "Company Breach" shall be
deemed to occur in the event of a material breach of this Agreement by Employer
or Parent; provided, however, that the Employee shall not be entitled to
           --------  -------
terminate for Company Breach unless the Employee notifies Employer thereof in
writing, specifying in reasonable detail the basis therefor and stating that it
is grounds for Company Breach, and unless Employer fails to cure such Company
Breach within 30 days after such notice is sent or given under this Agreement.
For purposes of this Agreement, a material breach by Employer or Parent shall
include, without limitation, (i) the material reduction without his consent of
the title, authority, duties or responsibilities that the Employee has on the
Effective Date, (ii) the reduction in the Employee's annual base salary as in
effect on the Effective Date, or (iii) the relocation of the Employer's
principal office, or the Employee's own office location as assigned to him by
Employer, to a location more than 50 miles from the present location of
Employer's principal office.

     (e)  Change in Control. The Employee may terminate his employment hereunder
          -----------------
within 12 months of a Change in Control (defined below):

          (i) "Change in Control" shall mean any of the following:
<PAGE>

               (1) any consolidation or merger of Parent in which Parent is not
          the continuing or surviving corporation or pursuant to which shares of
          Parent's common stock would be converted into cash, securities or
          other property, other than a merger of Parent in which the holders of
          Parent common stock immediately prior to the merger have the same
          proportionate ownership of common stock of the surviving corporation
          immediately after the merger;

               (2) any sale, lease, exchange or other transfer (in one
          transaction or a series of related transactions) of all or
          substantially all of the assets of Parent;

               (3) any approval by the stockholders of Parent of any plan or
          proposal for the liquidation or dissolution of Parent;

               (4) the cessation of control (by virtue of their not constituting
          a majority of directors) of Parent's Board of Directors by the
          individuals (the "Continuing Directors") who (x) at the date of this
          Agreement were directors or (y) become directors after the date of
          this Agreement and whose election or nomination for election by
          Parent's stockholders, was approved by a vote of at least two-thirds
          of the directors then in office who were directors at the date of this
          Agreement or whose election or nomination for election was previously
          so approved); or

               (5) subject to applicable law, in a Chapter 11 bankruptcy
          proceeding, the appointment of a trustee or the conversion of a case
          involving Parent to a case under Chapter 7.

     (f)  Without Good Reason.  During the Term, the Employee may terminate his
          -------------------
employment Without Good Reason upon 30 days prior written notice to Employer of
such termination, which notice may be waived by Employer in Employer's
discretion. Termination "Without Good Reason" shall mean termination of the
Employee's employment by the Employee other than termination for Company Breach.

     (g)  Explanation of Termination of Employment. Any party terminating this
          ----------------------------------------
Agreement shall give prompt written notice ("Notice of Termination") to the
other party hereto advising such other party of the termination of this
Agreement stating in reasonable detail the basis for such termination. The
Notice of Termination shall indicate whether termination is being made for
Cause, Without Cause or for Disability (if Employer has terminated the
Agreement) or for Company Breach, upon a Change in Control or Without Good
Reason (if the Employee has terminated the Agreement).

     (h)  Date of Termination.  "Date of Termination" shall mean the last day of
          -------------------
Employee's employment, as determined in accordance with this Section 1.5.
<PAGE>

1.6  Compensation Upon Termination.
     -----------------------------

     (a)  During Disability.  During any period that the Employee fails to
          -----------------
perform his duties hereunder because of ill health or physical or mental
disability, he shall continue to receive his full salary and benefits pursuant
to Section 1.4 (Compensation) through the Date of Termination, after giving
                ------------
effect to all disability benefits received by Employee under the terms of any
applicable disability policy.

     (b)  Termination for Cause or Without Good Reason.  If Employer shall
          --------------------------------------------
terminate the Employee's employment for Cause or if the Employee shall terminate
his employment Without Good Reason, then Employer's obligation to pay salary and
benefits pursuant to Section 1.4 (Compensation) shall terminate, except that
                                  ------------
Employer shall pay the Employee his accrued but unpaid salary and benefits
pursuant to Section 1.4 (Compensation) through the Date of Termination.
                         ------------

     (c)  Termination Without Cause or for Company Breach.   If Employer shall
          -----------------------------------------------
terminate the Employee's employment Without Cause or if the Employee shall
terminate his employment for Company Breach, then Employer shall pay to the
Employee, as severance pay in a lump sum on the 15th day following the Date of
Termination, the following amounts:

          (i)   his accrued but unpaid Base Salary through the Date of
     Termination at the rate in effect as of the Date of Termination; and

          (ii)  in lieu of any further Base Salary and Annual Incentive Payments
     for periods subsequent to the Date of Termination, an amount equal to the
     product of (A) the sum of Employee's Base Salary at the rate in effect as
     of the Date of Termination plus the amount of the Annual Incentive Payment
     paid to the Employee for the preceding year (or an annualized equivalent of
     the Annual Incentive Payment paid for any shorter period) divided by 365
     and (B) multiplied by the lesser of (y) 720, or (z) the number of days from
     the Date of Termination to the last day of the Original Term or the
     applicable renewal term, but in no event less than 365 days.

     In addition, the Employee will be entitled to a prorated portion of any
     annual incentive payment earned for the fiscal year in which his employment
     is terminated, if earned in accordance with the terms of its grant.

     Employee hereby acknowledges and agrees that the payments by the Employer
under this Section 1.6(c) shall be the sole and exclusive remedy of the Employee
for termination of Employee's employment Without Cause or by reason of a Company
Breach, and Employee hereby waives any and all other remedies under law or in
equity.

     If the Employee terminates his employment for Company Breach based upon a
<PAGE>

     material reduction by Employer of the Employee's Base Salary, then for
     purposes of this subsection 1.6(c) (Termination Without Cause or for
                                         --------------------------------
     Company Breach), the Employee's Base Salary as of the Date of Termination
     --------------
     shall be deemed to be the Employee's Base Salary immediately prior to the
     reduction that the Employee claims as grounds for Company Breach.

          (d)  Termination Upon a Change in Control.  If the Employee terminates
               ------------------------------------
     his employment after a Change in Control pursuant to subsection 1.5(e)
     (Change in Control), then Employer shall pay to the Employee as severance
      -----------------
     pay and as liquidated damages (because actual damages are difficult to
     ascertain), in a lump sum, in cash, within 15 days after termination, an
     amount which, when combined with all payments under Section 1.6(c), equals
     $100 less than three (3) times the Employee's "annualized includable
     compensation for the base period" (as defined in Section 280G of the
     Internal Revenue Code of 1986); provided, however, that if such lump sum
                                     --------  -------
     severance payment, either alone or together with other payments or
     benefits, either cash or non-cash, that the Employee has the right to
     receive from Employer, including, but not limited to, accelerated vesting
     or payment of any deferred compensation, options, stock appreciation rights
     or any benefits payable to the Employee under any plan for the benefit of
     employees, would constitute an "excess parachute payment" (as defined in
     Section 280G of the Internal Revenue Code of 1986), then such lump sum
     severance payment or other benefit shall be reduced to the largest amount
     that will not result in receipt by the Employee of a parachute payment. The
     determination of the amount of the payment described in this subsection
     shall be made by Parent's independent auditors.

          (e)  Termination for Disability.  If Employer shall terminate the
               --------------------------
     Employee's employment for Disability, Employer's obligation to pay salary
     and benefits pursuant to Section 1.4 (Compensation) shall terminate, except
                                           ------------
     that Employer shall pay the Employee accrued but unpaid salary and benefits
     pursuant to Section 1.4 (Compensation) through the Date of Termination,
                              ------------
     after giving effect to all disability benefits received by Employee under
     the terms of any applicable disability policy.

          (f)  Employee Benefits.   Employer shall maintain in full force and
               -----------------
     effect (to the extent consistent with past practice), for the continued
     benefit of Employee and, if applicable, his wife and children, the employee
     benefits set forth in subsections 1.4(f) (Fringe Benefits and Perquisites)
                                               -------------------------------
     through the Date of Termination (subject to the provisions of Section
     1.6(e)); provided that his continued participation or, if applicable, the
     participation of his wife and children, is possible under the general terms
     and conditions of such plans and programs. Following the Date of
     Termination, Employee and his eligible dependents shall be eligible for
     continued health coverage in accordance with the terms of applicable law.

     1.7  Death of Employee.  If Employee dies prior to the expiration of this
          -----------------
Agreement, Employee's employment and other obligations under this Agreement
shall automatically terminate and all compensation to which Employee is or would
have been entitled hereunder (including without limitation under subsections
1.4(a) (Base Salary) and 1.4(b) (Annual Incentive Payment)) shall terminate as
        -----------              ------------------------
of the end of the month in which Employee's death
<PAGE>

occurs; provided, however, that (i) Employer shall pay to Employee's estate,
        --------  -------
as soon as practicable, a prorated Annual Incentive Payment, if earned in
accordance with Parent's annual incentive plan; and (ii) for the balance of the
month in which Employee's death occurs, Employee's wife and children, if any,
shall be entitled to receive their benefits under Employer's group
hospitalization, medical and dental plans (if any), to the extent permitted
under the terms of such plans, and thereafter Employee's dependents shall have a
right to continued health coverage in accordance with the terms of applicable
law.

     1.8  Stock Ownership.  During the Term, Employee agrees not to sell or
          ---------------
transfer shares of Parent's common stock except as otherwise specifically
provided for herein, if immediately after such sale the Fair Market Value (as
defined under the Parent's 1993 Amended and Restated Long-Term Incentive Plan)
of all of the shares of Parent's common stock Employee beneficially owns is less
than three times Employee's Base Salary then in effect. Rule 13d-3 promulgated
under the Securities Exchange Act of 1934 shall be used to determine the amount
of shares of Parent's common stock Employee beneficially owns under this Section
1.8, with the modification that Employee shall not be deemed to beneficially own
the shares of Parent's common stock that Employee then has the right to acquire
under outstanding stock options unless and until such options are validly
exercised. For purposes hereof, transfers by Employee to Affiliates and sales
of stock in connection with cashless exercises of stock options of up to 50% of
the shares under Employee's vested stock options necessary to pay the exercise
price of such options and/or taxes associated with such exercise shall not be
deemed to violate this Section 1.8.

                                   ARTICLE 2

                      Non-Competition and Confidentiality

     2.1  Training/Confidential Information.  For purposes of this Article 2
          ---------------------------------
(Non-Competition and Confidentiality), the term "the Company" shall be construed
------------------------------------
also to include Employer, Parent and any and all Affiliates of Employer and
Parent. The Company agrees that it will provide Employee with specialized
knowledge and training regarding the business in which the Company is involved,
and will provide Employee with initial and ongoing confidential information and
trade secrets of the Company (hereinafter referred to as "Confidential
Information"). For purposes of this Agreement, Confidential Information
includes, but is not limited to:

          (a) Customer lists and prospect lists developed by the Company;

          (b) Information regarding the Company's customers which Employee
     acquired as a result of his employment with the Employer, including but not
     limited to, customer contracts, work performed for customers, customer
     contacts, customer requirements and needs, data used by the Company to
     formulate customer bids, customer financial information and other
     information regarding the customer's business;

          (c) Information regarding the Company's vendors which Employee
     acquired
<PAGE>

     as a result of his employment with the Employer, including but not limited
     to, product and service information and other information regarding the
     business activities of such vendors;

          (d)  Information related to the Company's business, including but not
     limited to marketing strategies and plans, sales procedures, operating
     policies and procedures, pricing and pricing strategies, business plans,
     sales, profits, and other business and financial information of the
     Company;

          (e)  Training materials developed by and utilized by the Company;

          (f)  Any other information which Employee acquired as a result of his
     employment with the Employer and which Employee has a reasonable basis to
     believe the Company would not want disclosed to a business competitor or to
     the general public.

          (g)  Information which:

               (i)    is proprietary to, about or created by the Company;

               (ii)   gives the Company some competitive advantage, the
          opportunity of obtaining such advantage or the disclosure of which
          could be detrimental to the interests of the Company;

               (iii)  is not typically disclosed to non-employees by the
          Company, or otherwise is treated as confidential by the Company; or

               (iv)   is designated as Confidential Information by the Company
          or from all the relevant circumstances should reasonably be assumed by
          the Employee to be confidential to the Company.

Notwithstanding the foregoing, Confidential Information shall not include any
information that is or has become public knowledge, other than by acts by the
Employee or representatives of the Employee in violation of this Agreement.

     2.2  Non-Disclosure.  The Employee acknowledges, understands and agrees
          --------------
that all Confidential Information, whether developed by the Company or others or
whether developed by the Employee while carrying out the terms and provisions of
this Agreement (or previously while serving as an officer of the Company), shall
be the exclusive and confidential property of the Company and (i) shall not be
disclosed to any person (except as otherwise required by law or legal process)
other than employees of the Company and professionals engaged on behalf of the
Company, and other than disclosure in the scope of the Company's business in
accordance with the Company's policies for disclosing information, (ii) shall be
safeguarded and kept from unintentional disclosure and (iii) shall not be used
for the Employee's personal benefit. Subject to the terms of the preceding
sentence, the Employee shall not use, copy or transfer Confidential Information
other than as is necessary in carrying out his duties under this Agreement.
<PAGE>

     2.3  Return of Company Property and Information.  Upon termination of
          ------------------------------------------
employment, or at any earlier time as directed by Company, Employee shall
immediately deliver to Company any and all Confidential Information in
Employee's possession, any other documents or information which Employee
acquired as a result of his employment with Employer, and any copies of such
documents/information. Employee shall not retain any originals or copies of such
documents or materials related to Company's business which Employee came into
possession of or created as a result of his employment at Company. Employee
acknowledges that such information, documents and materials are the exclusive
property of Company. Upon termination of employment, or at any earlier time as
directed by Company, Employee shall immediately deliver to Company any property
of Company in Employee's possession. Employee agrees that should he fail to
return any Company property, Company shall be entitled to deduct from any sums
otherwise due Employee (including, but not necessarily limited to wages and
expense reimbursements) the cost and/or value of any property which Employee
fails to return, up to the maximum amount allowed by law. Employee hereby
authorizes Company to deduct and/or withhold any such sums from Employee's wages
and/or other sums due Employee.

     2.4  Non-Competition.
          ---------------

          (a)  Description of Proscribed Actions.  During the Term and for a
               ---------------------------------
     period of 18 months thereafter (or 12 months thereafter in the event of
     Termination Without Cause or for Company Breach), in consideration for the
     obligations of Employer and Parent hereunder, including without limitation
     their disclosure (pursuant to subsection 2.1 (Training/Confidential
                                                   ---------------------
     Information) above) of Confidential Information, the Employee shall not:
     -----------

               (i)    directly or indirectly, engage or invest in, own, manage,
          operate, control or participate in the ownership, management,
          operation or control of, be employed by, associated or in any manner
          connected with, or render services or advice to, any Competing
          Business (defined below); provided, however, that the Employee may
                                    --------  -------
          invest in the securities of any enterprise (but without otherwise
          participating in the activities of such enterprise) if (x) such
          securities are listed on any national or regional securities exchange
          or have been registered under Section 12(g) of the Exchange Act and
          (y) the Employee does not beneficially own (as defined Rule 13d-3
          promulgated under the Exchange Act) in excess of 5% of the outstanding
          capital stock of such enterprise;

               (ii)   directly or indirectly, either as principal, agent,
          independent contractor, consultant, director, officer, employee,
          employer, advisor (whether paid or unpaid), stockholder, partner or in
          any other individual or representative capacity whatsoever, either for
          his own benefit or for the benefit of any other person or entity,
          solicit, divert or take away any suppliers, customers or clients of
          the Company or any of its Affiliates; or

               (iii)  directly or indirectly, either as principal, agent,
          independent contractor, consultant, director, officer, employee,
          employer, advisor (whether paid or unpaid), stockholder, partner or in
          any other individual or representative
<PAGE>

          capacity whatsoever, either for his own benefit or for the benefit of
          any other person or entity, either (i) hire, attempt to hire, contact
          or solicit with respect to hiring, any employee of Employer or Parent
          or any Affiliate thereof, (ii) induce or otherwise counsel, advise or
          encourage any employee of Employer, Parent or any Affiliate thereof to
          leave the employment of Employer, Parent or any Affiliate thereof, or
          (iii) induce any representative or agent of Employer, Parent or any
          Affiliate thereof to terminate or modify its relationship with
          Employer, Parent or such Affiliate.

          (b)  Judicial Modification.  The Employee agrees that if a court of
               ---------------------
     competent jurisdiction determines that the length of time or any other
     restriction, or portion thereof, set forth in this Section 2.4 (Non-
                                                                     ---
     Competition) is overly restrictive and unenforceable, the court may reduce
     -----------
     or modify such restrictions to those which it deems reasonable and
     enforceable under the circumstances, and as so reduced or modified, the
     parties hereto agree that the restrictions of this Section 2.4 (Non-
                                                                     ---
     Competition) shall remain in full force and effect. The Employee further
     -----------
     agrees that if a court of competent jurisdiction determines that any
     provision of this Section 2.4 (Non-Competition) is invalid or against
                                    ---------------
     public policy, the remaining provisions of this Section 2.4 (Non-
                                                                  ---
     Competition) and the remainder of this Agreement shall not be affected
     -----------
     thereby, and shall remain in full force and effect.

          (c)  Nature of Restrictions.  The Employee acknowledges that the
               ----------------------
     business of Employer and Parent and their Affiliates is international in
     scope and that the Restrictions imposed by this Agreement are legitimate,
     reasonable and necessary to protect Employer's, Parent's and their
     Affiliates' investment in their businesses and the goodwill thereof.  The
     Employee acknowledges that the scope and duration of the restrictions
     contained herein are reasonable in light of the time that the Employee has
     been or will be engaged in the business of Employer, Parent and/or their
     Affiliates, and the Employee's relationship with the suppliers, customers
     and clients of Employer, Parent and their Affiliates.  The Employee further
     acknowledges that the restrictions contained herein are not burdensome to
     the Employee in light of the consideration paid therefor and the other
     opportunities that remain open to the Employee.  Moreover, the Employee
     acknowledges that he has other means available to him for the pursuit of
     his livelihood.

          (d)  Competing Business.  "Competing Business" shall mean any
               ------------------
     individual, business, firm, company, partnership, joint venture,
     organization, or other entity engaged in the wholesale distribution or
     retail sales of wireless communication equipment in any domestic or
     international market area in which Employer, Parent or any of their
     Affiliates does business at any time during the Employee's employment with
     Employer or any of its Affiliates.

     2.5  Injunctive Relief.  Because of the Employee's experience and
          -----------------
reputation in the industries in which Employer, Parent and their Affiliates
operate, and because of the unique nature of the Confidential Information, the
Employee acknowledges, understands and agrees that Employer and Parent will
suffer immediate and irreparable harm if the Employee fails to comply with any
of his obligations under Article 2 (Non-Competition and Confidentiality) of this
                                    -----------------------------------
<PAGE>

Agreement, and that monetary damages will be inadequate to compensate Employer
and Parent for such breach. Accordingly, the Employee agrees that Employer and
Parent shall, in addition to any other remedies available to them at law or in
equity, be entitled to injunctive relief to enforce the terms of Article 2 (Non-
                                                                            ---
Competition and Confidentiality), without the necessity of proving inadequacy of
-------------------------------
legal remedies or irreparable harm.

                                   ARTICLE 3

                  Representations and Warranties by Employee

     Employee hereby represents and warrants, the same being part of the essence
of this Agreement, that, as of the Effective Date, he is not a party to any
agreement, contract or understanding, and that no facts or circumstances exist,
that would in any way restrict or prohibit him from undertaking or performing
any of his obligations under this Agreement.  The foregoing representation and
warranty shall remain in effect throughout the Term.

                                   ARTICLE 4

                                Indemnification

     Parent agrees to indemnify, and advance expenses to, the Employee to the
extent provided in the Certificate of Incorporation and Bylaws of Parent as of
the date of this Agreement. To the extent that a change in the Delaware General
Corporation Law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under Parent's
Certificate of Incorporation and Bylaws and this Agreement, it is the intent of
the parties hereto that the Employee shall enjoy by this Agreement the greater
benefits so afforded by such change.

                                   ARTICLE 5

                                 Miscellaneous

     5.1  Counterparts.   This Agreement may be executed in two or more
          ------------
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

     5.2  Indulgences, Etc.   Neither the failure nor any delay on the part of
          -----------------
either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any right, remedy, power or privilege, nor shall any
waiver of any right, remedy, power, or privilege with respect to any occurrence
be construed as a waiver of such right, remedy, power or privilege with respect
to any other occurrence.

     5.3  Employee's Sole Remedy.  The Employee's sole remedy shall be against
          ----------------------
Employer or Parent for any claim, liability or obligation of any nature
whatsoever arising out of or relating to this Agreement or an alleged breach of
this Agreement or for any other claim
<PAGE>

arising out of the termination of the Employee's employment hereunder
(collectively, "Employee Claims"). The Employee shall have no claim or right of
any nature whatsoever against any of Employer's or its Affiliates' directors,
former directors, officers, former officers, employees, former employees,
stockholders, former stockholders, agents, former agents or the independent
counsel in their individual capacities arising out of or relating to any
Employee Claim. The Employee hereby releases and covenants not to sue any person
other than Employer or Parent over any Employee Claim. The persons described in
this Section 5.3 (other than Employer, Parent and the Employee) shall be third-
party beneficiaries of this Agreement for purposes of enforcing the terms of
this Section 5.3 (Employee's Sole Remedy) against the Employee.
                  -----------------------

     5.4  Notices.   All notices, requests, demands and other communications
          -------
required or permitted under this Agreement and the transactions contemplated
herein shall be in writing and shall be deemed to have been duly given, made and
received when sent by telecopy (with a copy sent by mail) or when personally
delivered or one business day after it is sent by overnight service, addressed
as set forth below:

          If to the Employee:

               Terry S. Parker
               8463 North - 1175 West
               Monticello, Indiana 47960

          If to Employer or Parent:

               CellStar Corporation
               1730 Briercroft Court
               Carrollton, Texas  75006
               Attn:  General Counsel

Any party may alter the address to which communications or copies are to be sent
by giving notice of such change of address in conformity with the provisions of
this subsection for the giving of notice, which shall be effective only upon
receipt.

     5.5  Provisions Separable.  The provisions of this Agreement are
          --------------------
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.

     5.6  Entire Agreement.   This Agreement contains the entire understanding
          ----------------
between the parties hereto with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements and understandings,
inducements or conditions, express or implied, oral or written, except as herein
contained, which shall be deemed terminated effective immediately. The express
terms hereof control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof. This Agreement may not be
modified or amended other than by an agreement in writing.
<PAGE>

     5.7  Headings; Index.   The headings of paragraphs herein are included
          ---------------
solely for convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.

     5.8  Governing Law.   This Agreement shall be governed by and construed in
          -------------
accordance with the laws of the State of Texas, without giving effect to
principles of conflict of laws.

     5.9  Dispute Resolution.  Subject to Employer's and Parent's right to seek
          ------------------
injunctive relief in court as provided in Section 2.5 (Injunctive Relief) of
                                                       -----------------
this Agreement, any dispute, controversy or claim arising out of or in relation
to or connection to this Agreement, including without limitation any dispute as
to the construction, validity, interpretation, enforceability or breach of this
Agreement, shall be exclusively and finally settled by arbitration, and any
party may submit such dispute, controversy or claim, including a claim for
indemnification under this Section 5.9 (Dispute Resolution), to arbitration.
                                        ------------------

          (a)  Arbitrators.  The arbitration shall be heard and determined by
               -----------
     one arbitrator, who shall be impartial and who shall be selected by mutual
     agreement of the parties; provided, however, that if the dispute involves
                               --------  -------
     more than $2,000,000, then the arbitration shall be heard and determined by
     three (3) arbitrators. If three (3) arbitrators are necessary as provided
     above, then (i) each side shall appoint an arbitrator of its choice within
     thirty (30) days of the submission of a notice of arbitration and (ii) the
     party-appointed arbitrators shall in turn appoint a presiding arbitrator of
     the tribunal within thirty (30) days following the appointment of the last
     party-appointed arbitrator. If (x) the parties cannot agree on the sole
     arbitrator, (y) one party refuses to appoint its party-appointed arbitrator
     within said thirty (30) day period or (z) the party-appointed arbitrators
     cannot reach agreement on a presiding arbitrator of the tribunal, then the
     appointing authority for the implementation of such procedure shall be the
     Senior United States District Judge for the Northern District of Texas, who
     shall appoint an independent arbitrator who does not have any financial
     interest in the dispute, controversy or claim. If the Senior United States
     District Judge for the Northern District of Texas refuses or fails to act
     as the appointing authority within ninety (90) days after being requested
     to do so, then the appointing authority shall be the Chief Executive
     Officer of the American Arbitration Association, who shall appoint an
     independent arbitrator who does not have any financial interest in the
     dispute, controversy or claim. All decisions and awards by the arbitration
     tribunal shall be made by majority vote.

          (b)  Proceedings.  Unless otherwise expressly agreed in writing by the
               -----------
     parties to the arbitration proceedings:

               (i)    The arbitration proceedings shall be held in Dallas,
          Texas, at a site chosen by mutual agreement of the parties, or if the
          parties cannot reach agreement on a location within thirty (30) days
          of the appointment of the last arbitrator, then at a site chosen by
          the arbitrators;

               (ii)   The arbitrators shall be and remain at all times wholly
          independent
<PAGE>

          and impartial;

               (iii)  The arbitration proceedings shall be conducted in
          accordance with the Commercial Arbitration Rules of the American
          Arbitration Association, as amended from time to time;

               (iv)   Any procedural issues not determined under the arbitral
          rules selected pursuant to item (iii) above shall be determined by the
          law of the place of arbitration, other than those laws which would
          refer the matter to another jurisdiction;

               (v)    The costs of the arbitration proceedings (including
          attorneys' fees and costs) shall be borne in the manner determined by
          the arbitrators;

               (vi)   The decision of the arbitrators shall be reduced to
          writing; final and binding without the right of appeal; the sole and
          exclusive remedy regarding any claims, counterclaims, issues or
          accounting presented to the arbitrators; made and promptly paid in
          United States dollars free of any deduction or offset; and any costs
          or fees incident to enforcing the award shall, to the maximum extent
          permitted by law, be charged against the party resisting such
          enforcement;

               (vii)  The award shall include interest from the date of any
          breach or violation of this Agreement, as determined by the arbitral
          award, and from the date of the award until paid in full, at 6% per
          annum; and

               (viii) Judgment upon the award may be entered in any court having
          jurisdiction over the person or the assets of the party owing the
          judgment or application may be made to such court for a judicial
          acceptance of the award and an order of enforcement, as the case may
          be.

     5.10 Survival.  The covenants and agreements of the parties set forth in
          --------
Article 2 (Non-Competition and Confidentiality), and Article 5 (Miscellaneous)
           -----------------------------------                  -------------
are of a continuing nature and shall survive the expiration, termination or
cancellation of this Agreement, regardless of the reason therefor.

     5.11 Subrogation.  In the event of payment under this Agreement, Employer
          -----------
and Parent shall be subrogated to the extent of such payment to all of the
rights of recovery of the Employee, who shall execute all papers required and
shall do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable Employer or Parent effectively
to bring suit to enforce such rights.

     5.12 No Duplication of Payments.  Employer and Parent shall not be liable
          --------------------------
under this Agreement to make any payment in connection with any claim made
against  the Employee to the extent the Employee has otherwise actually received
payment (under any insurance policy, Bylaw or otherwise) of the amounts
otherwise indemnifiable hereunder.
<PAGE>

     5.13 Binding Effect, Etc.  This Agreement shall be binding upon and inure
          --------------------
to the benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
or assets of Employer, Parent, spouses, heirs, and personal and legal
representatives. Employer and Parent shall require and cause any successor
(whether direct or indirect by purchase, merger, consolidation or otherwise) to
all, substantially all, or a substantial part, of their business or assets, by
written agreement in form and substance satisfactory to the Employee, expressly
to assume and agree to perform this Agreement in the same manner and to the same
extent that Employer or Parent would be required to perform if no such
succession had taken place.

     5.14 Contribution.  If the indemnity contained in this Agreement is
          ------------
unavailable or insufficient to hold the Employee harmless in a Claim for an
Indemnifiable Event, then separate from and in addition to the indemnity
provided elsewhere herein, Parent shall contribute to Expenses, judgments,
penalties, fines and amounts paid in settlement actually and reasonably incurred
by or on behalf of the Employee in connection with such Claim in such proportion
as appropriately reflects the relative benefits received by, and fault of,
Parent on the one hand and the Employee on the other in the acts, transactions
or matters to which the Claim relates and other equitable considerations.

     5.15 Parent Guaranty.  Parent guarantees the payment and performance of all
          ---------------
obligations of Employer under this Agreement and agrees it will pay or perform
those obligations if for any reason Employer fails to do so. This guarantee is
absolute, continuing, irrevocable and not conditional or contingent. Any notice
given hereunder to either Employer or Parent will be deemed to be notice to
Parent for purposes of this guaranty.
<PAGE>

     IN WITNESS WHEREOF, Employer and Parent have caused this Agreement to be
executed by their officer/general partner thereunto duly authorized, and
Employee has signed this Agreement, as of the date first set forth above.

                              CELLSTAR LTD
                              By:   National Auto Center, Inc.
                                    General Partner

                              By:  /s/ ELAINE FLUD RODRIGUEZ
                                  --------------------------------------
                                  Elaine Flud Rodriguez
                                  Sr. Vice President and General Counsel

                              CELLSTAR CORPORATION

                              By: /s/ ELAINE FLUD RODRIGUEZ
                                  --------------------------------------
                                  Elaine Flud Rodriguez
                                  Sr. Vice President and General Counsel

                                 /s/ TERRY S. PARKER
                              ------------------------------------------
                              Terry S. Parker<PAGE>

                                                                   Exhibit 10.51
                                                                   -------------

                            MANUFACTURING AGREEMENT

          This Manufacturing Agreement (the "Agreement") is entered into as of
February 22 , 2001, by and between RF Monolithics, Inc., a corporation duly
organized under the laws of the State of Delaware, having its principal place of
business at 4347 Sigma Road, Dallas, TX, 75244, U.S.A. (hereinafter referred to
as "Company") and Automated Technology (Phil.) Inc. Electronics Corporation, a
corporation duly organized and existing under the laws of the Philippines with
its principal place of business at Light Industry & Science Park of the
Philippines, Cabuyao, Laguna, Philippines (hereinafter referred to as
"Contractor").

                                   RECITALS

          WHEREAS, Company desires to enter into an agreement with Contractor
for certain manufacturing and production services for Products (defined below),
whereby Contractor will Manufacture (as defined below) for Company certain
Products at the Factory (as defined below) in accordance with the Specifications
and instructions of Company; and

          WHEREAS, Contractor is willing to Manufacture the Products for Company
and provide such services under the terms and conditions set forth below.

          NOW THEREFORE, in consideration of the premises and mutual promises,
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:

          1.   General Definitions. The terms set forth below in this Section 1
shall have the meanings ascribed to them below:

          Allowable Assembly Yield: means the yield below which yield Contractor
may be required to pay Company for 50% of the standard cost of Materials
supplied by Company, not including Die, for the number of failed units below the
Allowable Assembly Yield. The circumstances determining when payment is required
are defined in Section 2.1(e)(ii). The Allowable Assembly Yield is determined by
the Assembly Yield monthly average for the first three months following
Production Start Up of a Generic Product Family.

          Affiliate:  with respect to any Person, means any Person that directly
or indirectly controls, is controlled by or is under common control with such
Person.

          Annual Review Process: means the process conducted by Company and
Contractor to review commitments for the coming year concerning Product pricing,
production levels, quality and service levels.  This process normally occurs
during Company's first fiscal quarter (the three months ended November 30), to
review the previous year's performance.

          Approved Vendor: shall have the meaning defined in Section 2.1(d)
hereof.

          Approved Vendor List: shall have the meaning defined in Section 2.1(d)
hereof.

          Assembly Final Visual Inspection: means an inspection immediately
prior to Final Lot Acceptance on the Process Flow Chart.  Reference Schedule B,
Typical Process Flow Chart.

          Assembly Outs: means the number of units, which pass from the last
operation of the assembly process, as depicted in the typical process flow
Schedule B, Typical Process Flow Chart, to the first operation of the test
portion of the manufacturing process, as depicted in Schedule C, Typical Test
Flow Chart.

          Assembly Yield: means the ratio, expressed as a percentage, of the
number of Products (Units) started in the assembly flow (typically at Die mount)
to the number of Assembly Outs minus the number of Product units found to be
defective at Test Final Visual Inspection. If Fine and Gross leak test is
performed after Electrical Test,

                                               Initials: Contractor___Company___

                                       1
<PAGE>

the number of Products (Units) found to be defective at Fine and Gross leak test
will also be subtracted from the number of Assembly Outs to determine Assembly
Yield.

          AY = (AO-FI)/AS

          Where:

          "AY" is the Assembly Yield;

          "AS" is the number of products started in the assembly flow;

          "AO" is the number of Assembly Outs;

          "FI" is equal to the number of Product units found to be defective at
the Test Final Visual Inspection. FI will also include the number of units found
to be defective at Fine and Gross Leak test if the Fine and Gross leak test is
part of the test flow, typically performed after Electrical Test.

          Best Efforts: means a party's efforts in accordance with reasonable
commercial practice and/or consistent with its past practice.

          Consignment: means property, including but not limited to equipment,
Die and Materials, that is owned by the Company that is used by the Contractor
to fulfill the purposes of this Agreement.

          Defective Unit: means Products returned from Company's customers that
do not meet specification due to assembly processing problems.  Reference
Section 2.2(b).

          Die:  means the chips that Company provides Contractor, either in
sliced or wafer form.  This includes Die and transistors and integrated circuits
that Company may provide on a Consignment basis to Contractor.

          Electrical Test: means a verification of the electrical functions of
Products.

          FCA: Shall mean Free Carrier as defined in Incoterms 2000 as published
by the International Chamber of Commerce.

          Factory:  means the Contractor's manufacturing facility for Products
located at Light Industry & Science Park of the Philippines, Cabuyao, Laguna,
Philippines.

          Finished Goods: means any Product that is 100% complete, tested, and
packed in a shipping carton awaiting shipment to Company.

          Finishing Materials: Tubes, tape-and-reel, labels, tickets and
shipping cartons used to ship Finished Goods per Company Specifications

          Generic Product Family: all Products assembled by the same  process
and test sequence , as depicted in the typical process flow of Schedule B and as
depicted in the typical test flow chart of Schedule C.

          Manufacture:  shall mean the complete process of assembly and test of
the Products into Finished Goods as required under this Agreement.

          Manufacture Defect: means any defect which is attributable to the
Manufacture of a Product by Contractor under this Agreement.

          Materials:  shall mean all raw materials, Finishing Materials and
Die/wafers required by Contractor to Manufacture the Products.

          New Products: means new items or variations of current Products that
the Company and the Contractor have agreed in writing to be covered by this
Agreement.

          Order: means purchase order issued by the Company.

          Other Support Services: shall have the meaning defined in Section 2.3
hereof.

                                               Initials: Contractor___Company___

                                       2
<PAGE>

          Person:  means any individual, firm, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization, government or agency or subdivision thereof or any other entity.

          Product: means the Products manufactured according to  process and
test flows provided from time-to-time by Company and similar to the typical
flows of Schedule B and Schedule C.  From time-to-time the description of
Products may be amended by change requests and New Products agreed to by Company
and Contractor in accordance with Section 2.1(c).

          Production Start Up: means the time of initial shipments of a Generic
Product Family as requested by the initial Weekly Start Schedule for that
Generic Product Family.

          Provided Equipment: means any equipment, including but not limited to,
manufacturing and test equipment; supplies, Materials, and documentation which
Company provides to Contractor for use in providing services under this
Agreement and for which Company retains title of ownership

          Quarterly Operations Reviews: means the process conducted by Company
and Contractor to review yields, cycle times, delivery performance, quality
metrics and cost reduction roadmaps. This process normally occurs within 3 weeks
of the end of the Company's fiscal quarter (Nov. 30, Feb. 28, May 31, Aug. 31).

          Shipping Date: means the date on which the finished Product is
delivered to the freight forwarder designated by Company.

          Specifications: shall mean drawings, criteria, and documented
specifications including but not limited to Process Flow Chart, Test Flow Chart
and mount-bond diagram. Additional Specifications will be issued by Company in
similar form as additional Products are added to this Agreement.

          Test Final Visual Inspection: means a quality control visual
inspection  that is part of the test flow, as depicted in the typical test flow
in Schedule C.

          Test Yield: means the ratio, expressed in percentage, of the number of
Products (Units) started at Electrical Test to the number meeting Specifications
after Electrical Test, as depicted in the typical test flow in Schedule C.

          Value Added: the price for Materials and assembly/test services for
the Product supplied by Contractor.

          Weekly Start Schedule: shall have the meaning defined in Section 2.6
hereof.

          WIP Inventory: means the work-in-progress inventory of Product at the
Contractor.

          Workweek:  shall be seven (7) calendar days beginning on Monday and
ending on Sunday.

          2.   Services.

          2.1  Manufacturing Services:

               (a)  General.  Contractor covenants and agrees to Manufacture the
Products that Company requests it to Manufacture at the Factory utilizing the
tools, machinery, equipment, fixtures and computer systems of Contractor and any
other Provided Equipment.  Contractor agrees that the Manufacture of Products
hereunder shall be carried out in a good and workmanlike manner in compliance
with the Specifications and instructions of Company provided to Contractor in
writing from time to time as specified herein.  Contractor shall have available
to Manufacture the Products all facilities, employees, equipment, spare parts,
computer systems and any other items required to Manufacture the Products.
Company shall provide to Contractor all Specifications, manuals and other
relevant documentation necessary to Manufacture the Products.

                    (i)  Contractor may use its standard processes, so long as
they conform to the Company's Specifications and quality requirements.

                                               Initials: Contractor___Company___

                                       3
<PAGE>

                    (ii)   Contractor shall assemble and test Product using
Material procured from suppliers on the Approved Vendor List or provided on a
Consignment basis, for an initial period, from Company and Die provided on a
Consignment basis from Company and under manufacturing processes approved by
Company. Any change to Manufacturing processes, Materials, or outsourcing
services directly affecting Products shall be approved in writing by Company
prior to implementation by Contractor.

                    (iii)  Contractor agrees to provide manufacturing and
production services to meet Company's Manufacturing requirements in accordance
with Section 2.6 and 2.7. Changes to forecast shall not affect Product pricing,
unless mutually agreed in writing by parties.

               (b)  Change Requests. Company shall have the right at any time to
make changes in drawings, designs, Specifications, Materials, packaging,
quantities, time and place of delivery and method of transportation. If any such
changes cause an increase or decrease in the cost or the time required for
performance of the order, Contractor shall notify Company in writing (stating
the amount of the increase or decrease), within five (5) days, after receipt of
such notice. There will be no change in manufacturing and production service
until accepted, in writing, by the Contractor. If such notice is timely given,
an equitable adjustment shall be made, and Schedule A shall be modified in
writing accordingly. Contractor agrees to accept any such changes and proceed
with the performance of this Agreement, subject to this paragraph.

                    (i)    Changes to Specifications by Company will be made
according to Company's Engineering Change Procedure (000-0101-001) (the "Change
Procedure"). The Contractor will approve all changes relating to Products
manufactured at Contractor according to the Change Procedure.

                    (ii)   If Contractor proposes to change the Specifications
with respect to any Product, it shall provide the Company written notice thereof
and shall implement such changes only upon written consent from the Company. In
no event shall the Contractor ship other than strictly in accordance with the
Specifications or amendments thereto, which the Company has approved in writing.

               (c)  New Products. Company may from time to time request
Contractor to Manufacture, and perform prototype and pilot testing for any
future versions of the Product developed after the date of this Agreement by
Company (each a "New Product"). Such request shall be accompanied by all
Specifications and other relevant documentation necessary to Manufacture the New
Product. Upon receipt of such information, Contractor shall provide to Company
the price to perform prototype and pilot assembly and test for such New Product
and the estimated time schedule required to implement the Manufacture of the New
Product. Contractor shall not be obligated to Manufacture or perform any
services hereunder with respect to such price and time schedule for
implementation. Company and Contractor agree to modify this Agreement by
amending Schedule A to reflect the New Product and the price of the New Product
agreed upon by Company and Contractor.

               (d)  Approved Vendor List.  With respect to each component part
comprising Materials, Contractor shall maintain a list of suppliers recommended
by Company to supply such part (the "Approved Vendor List").  Company may remove
any supplier from or add any supplier to the Approved Vendor List with respect
to any component part comprising Materials by giving notice thereof to
Contractor. A supplier or vendor not on the Approved Vendor List shall not
provide material or services for the Manufacture of the Product without the
Company's written authorization. Contractor may request removal or addition of
supplier to Approved Vendor List.

               (e)  Yields. Parties understand and agree that production yields
are a primary driver for Manufacturing cost effectiveness. Company shall provide
Die, which are consistent with Specifications established by Company, in
sufficient quantity to meet Manufacturing requirements. Both Company and
Contractor will work together to increase production yields. Yield improvement
and cost reduction goals will be established and evaluated at the Quarterly
Operations Reviews.

                    (i)    Company outgoing testing and inspection of Materials
supplied by Company and incoming test and inspection by Contractor will be in
place to ensure the Die, packages and assembly Materials are in Specification as
they are introduced to the Contractor's assembly Factory.

                                               Initials: Contractor___Company___

                                       4
<PAGE>

                    (ii)   The Assembly Yield is primarily the responsibility of
Contractor. The Contractor is liable for the Materials supplied by Company,
according to the definition of Allowable Assembly Yield, during the fourth
through sixth months following Production Start Up. Beginning month seven (7)
after Production Start Up, Contractor is responsible for procurement of all
Materials required to Manufacture the Product except Die unless a delay to
initiate procurement is approved, in writing, by Company.

                    (iii)  The Test Yield is a shared responsibility of
Contractor and Company. Contractor is responsible for yield loss at Electrical
Test due to assembly processing defects. Company is responsible for yield loss
at Electrical Test not due to assembly defects.

                    (iv)   The Test Final Visual Inspection Yield is the
responsibility of Contractor.

                    (v)    Should either party incur unacceptable yield loss,
based on monthly average yield, either party may request a failure analysis to
determine the cause of such failures. The requesting party shall bear the cost
of the analysis. However, if the analysis establishes that the unacceptable
yield loss is due primarily to the non-requesting party, the non-requesting
party shall reimburse the requesting party for the cost of the analysis.

               (f)  Annual Review Process. Company and Contractor shall meet
annually to review performance to the Agreement (Annual Review Process). Such
review shall include, but not be limited to, review of Contractor's performance
to Company's Specifications and quality and service standards, review of Product
pricing, and cost reductions.

               (g)  Quarterly Operations Review Process. Company and Contractor
shall conduct Quarterly Operations Reviews. Such meetings shall include, but not
be limited to, review of Contractor's Product yields, cycle times, delivery
performance, quality metrics and cost reduction roadmaps. The meeting may be
scheduled to combine with other reviews, such as the annual review, or may be
held via conference telephone call or video conference. Production yield
improvement and cost reduction goals will be established and progress toward
these goals will be reviewed quarterly.

          2.2  Return Services

               (a)  Company will be the recognized source for the Product and
will be the sole contact for third parties with Product problems related to
Company's customers. Company will issue all warranties to third parties for the
Product, but will be entitled to exercise its rights under paragraph 2.2.(b)
against Contractor as to any defects specified therein.

               (b)  Product returns will be authorized by Company which will
perform the initial failure analysis on the units. Those units indicating a
defect due to assembly processing (Defective Unit) will be transmitted to
Contractor (material review board) for confirmation of failure analysis at
Contractor's expense and corrective action by the Contractor. Contractor's sole
responsibility and liability as a result of any such defect shall be to provide
compensation to Company for the amount charged to Company for each Defective
Unit.

          2.3  Other Support Services. From time-to-time during the term of this
Agreement, Company may request Contractor to perform Other Support Services such
as but not limited to the purchase of assembly Materials, previously consigned
by Company, and the drop shipment of Product to Company customers. In connection
with the performance of any Other Support Services, Company shall specify the
services which Company desires Contractor to perform. Contractor shall notify
the Company within five (5) working days of their intent to provide the
requested service. If Contractor intends to provide the requested service,
Contractor shall furnish Company the estimated time schedule to implement or
complete the services and the estimated cost to the Company, which, if a
modification to the cost of the Product, will be a change to Schedule A. All
prices and deliverables to be furnished by the Contractor with respect to such
services shall be mutually agreed to in writing by Company and Contractor.

          2.4  Data.  Contractor will periodically supply the Company with
reasonably requested data including, but not limited to yields, inventories and
production status. The frequency and format of the reporting will be agreed upon
by the Company and Contractor. As a minimum, Contractor will supply the Company
with a detailed

                                               Initials: Contractor___Company___

                                       5
<PAGE>

inventory and/or a periodic physical inventory of all Consigned raw material and
Die inventory on hand as of the last day of the prior month on the first working
day of each month.

          2.5  Purchase Orders. Company shall provide Contractor with a Purchase
Order for Manufacture of Product for six (6) month's requirement in advance.
Contractor agrees to acknowledge Company's Purchase Order within two (2)
business days from receipt by facsimile or other electronic means. Thereafter,
the Purchase Order shall come into force and effect from the date of such
acknowledgement. Contractor as well as Company, shall be bound by all terms and
conditions set forth in the Purchase Order by the Contractor consistent with the
terms and conditions herein agreed upon. However, the Weekly Start Schedule will
determine quantities and Shipping Dates. In the event of any disagreement
between the Purchase Order and the Agreement, the terms of the Agreement shall
prevail.

          2.6  Production and Shipping Dates. Four (4) days before the start of
the work week, Company shall provide Contractor with a Weekly Start Schedule and
Shipping Dates with a lead time reasonably acceptable to Contractor. The
estimated cycle time is two Workweeks after schedule start date of the Die. Each
Weekly Start Schedule will show start quantities by line, Shipping Dates, and
priorities. Contractor agrees to allocate sufficient Manufacturing capacity for
the Manufacture of Products to meet Company's Production and Shipping Dates, and
all Material acquired by Contractor to meet Company's Production and Shipping
Dates will be covered by the Buy-Back provisions of this Agreement. Company
agrees to supply Materials, including Die, a minimum of one day prior to the
associated starts at the Contractor. Contractor will not start more Product than
required by the Weekly Start Schedule without written approval from the Company.

          2.7  Forecast and Buy-Back Guarantee.  Company shall endeavor to
provide monthly a three (3) month rolling forecast and Quarterly a twelve (12)
months rolling forecast of Products to be Manufactured by Contractor under this
Agreement.  Contractor shall acknowledge in writing acceptance of Company's
three (3) month forecast or provide notice to Company of limited Factory
capacity. Company agrees to buyback, at cost, all Manufacturing related
Materials inventory purchased by Contractor should Company fail to Order
forecasted quantities based on 100% of forecasted Materials for the three month
period and such failure to Order is in no way attributable to Contractor.  The
Company will not be required to buy back any Materials beyond the third month of
the twelve (12) month forecast. Notwithstanding the above, Contractor will
attempt to divert Materials to other manufacturing uses so as to minimize this
excess inventory cost to Company.

<TABLE>
<CAPTION>
          -------------------------------------------------------------------------------------------------
          Schedules                         Purpose of Schedule                      Variations
          -------------------------------------------------------------------------------------------------
          <S>                       <C>                                  <C>

          Purchase Order            Authorizes Shipment (Contractor),    Only by changes, in writing, from
                                    Receiving (Company), Invoicing       Company
                                    (Contractor) and Payment (Company)
          -------------------------------------------------------------------------------------------------
          Weekly Start Schedule     Provide weekly start schedule with   The volume and line items are
                                    delivery dates and priorities.       firm.
          -------------------------------------------------------------------------------------------------
                                                                         Volume for first month is firm,
                                                                         but line items may change.
          Three Months Forecast     Provided for Material and labor      Second month may change from
                                    planning.                            previous forecast no more than +
                                                                                                        -
                                                                         25%. Third month may change from
                                                                         previous forecast no more than +
                                                                                                        -
                                                                         50%.
          -------------------------------------------------------------------------------------------------
          Twelve Month Forecast     Provided for space, equipment and    First three months are as above,
                                    labor planning.                      but all other is for planning
                                                                         purpose only.
          -------------------------------------------------------------------------------------------------
</TABLE>

                                               Initials: Contractor___Company___

                                       6
<PAGE>

          3.   Deliveries

          3.1  Deliveries. Contractor will Manufacture the Products as required
by this Agreement and the Order, in the priority sequence reasonably requested
by the Weekly Start Schedule and within the reasonably requested time frames. In
the event that Contractor cannot meet a Weekly Start Schedule or cannot deliver
the Products by the Shipping Date, Contractor will notify Company, a minimum of
one Workweek prior to the Shipping Date.

          3.2  Delivery Point. Once Manufacture of the Products has been
completed, Contractor shall be responsible for delivering the Finished Goods
FCA, (as defined in Incoterms (2000) published by the International Chamber of
Commerce) and to a freight forwarder specified by Company in its Order. Company
shall be responsible for freight and related costs. "Delivery Point" as used in
this Agreement shall mean the specific time and location that the Product is
delivered to the shipper specified on the Order.

          3.3  Time of Essence. Contractor acknowledges and agrees that time is
of the essence and delivery performance is crucial in Company's evaluation of
Contractor's performance. No partial shipments are allowed unless expressly
authorized in advance and in writing by the Company, on a case-by-case basis.
Late deliveries will be a subject of the Quarterly Review Process and may be
subject to compensation discussions.

          3.4  Risk of Loss. Company will insure Company assets against any risk
of loss during transit to and from Contractor and while located in Contractor's
facility.

          3.5  Delivery of Die. Company will properly pack all Die and Materials
provided by Company to facilitate safe transport to Contractor. Die shipments
shall be clearly labeled to identify part number, lot number and quantity.

          4.   Price and Payment.

          Price and Payment of Manufacturing Services. During the term of this
Agreement, Company shall pay for the services provided by Contractor under
Section 2.1 hereof for the Manufacture of Products in accordance with the test
price and assembly price listed on the schedule Products, Volumes, Assembly
Price, Test Price attached hereto as Schedule A provided that any modifications,
amendments and changes to the Specifications and the Manufacture of any New
Product shall be at such prices mutually agreed to by Contractor and Company in
Sections 2.1 (b) and Section 2.1 (c), respectively. Company will be charged for
all units tested at Final Electrical Test minus the units found defective at
Test Final Visual Inspection unless the Fine and Gross leak test is performed
after Final Electrical Test. If Fine and Gross leak test is performed after
Electrical Test, the number of Products (Units) to be found defective at Fine
and Gross leak test will also be subtracted from the units tested at Electrical
Test. Failures at Electrical Test will be subject to sample failure analysis on
a monthly basis and may result in credits to Company for assembly related
failures. The invoice amount shall be determined as follows:

               I=(AO - FI)(AP + TP)

          Where:

               "I" is equal to the invoice amount;
               "AO" is equal to the Assembly Outs;
               "FI" is equal to the number of Products (Units) found to be
               defective at the Test Final Visual Inspection; FI will also
               include the number of units found to be defective at Fine and
               Gross Leak test if the Fine and Gross leak test is part of the
               test flow, typically performed after Electrical Test.
               "AP" is equal to the assembly price; and
               "TP" is equal to the test price.

               With each shipment, Contractor will send Company an invoice for
all services provided by Contractor under Section 2.1 hereof for Products
Manufactured by Contractor and delivered to the Delivery Point. Company shall
pay Contractor the amount invoiced within thirty (30) days following the
issuance of such invoice.

                                               Initials: Contractor___Company___

                                       7
<PAGE>

          4.2  Payment for Other Support Services, as described in Section 2.3,
will be according to Section 4.1, if the cost of said Other Support Services has
been incorporated into the Product price in Schedule A, or will be invoiced
separately according to negotiated parameters as described in Section 2.3 if
they have not been incorporated into the Product price in Schedule A.

          4.3  General Payment Terms. All payments due hereunder shall be paid
in United States of America dollars by wire transfer and all bank fees for such
wire transfers shall be paid by the Company.

          5.   Inspection and Access by Company

          5.1  Inspection. Contractor hereby agrees to allow Company's personnel
access at any time to the Factory during regular business hours or other
facilities at which the Products are being Manufactured, in order for Company's
personnel to ascertain compliance on the part of Contractor with all of the
terms and conditions of this Agreement and Specifications provided by Company in
connection with the process of Manufacture. Contractor shall provide competent
personnel in the Factory to perform inventories of Materials, WIP Inventory and
Finished Goods located at the Factory.

          5.2  Contractor will provide office space for a maximum of one (1)
Company employee, with suitable office furniture at no additional cost to the
Company. Company will supply computer and a phone line for the employee and
assume all charges associated with Company employees' use of the phone line.
Space for additional employees will be reviewed on an as needed basis and will
not be unreasonably denied by Contractor.

          5.3  Acceptance. All shipments of Finished Goods are subject to
Company's workmanship inspection, agreed test procedures and quality audit upon
receipt of Finished Goods in accordance with Company's Quality Standards.
Acceptance of Products in no event constitutes a waiver of any of Company's
rights or remedies arising from or related to warranty requirements (Section
8.5) nonconforming Products or any other breach of this Agreement.

          6.   Rejection.

          6.1  Manner of Rejection: Company may reject any Product manufactured
by the Contractor if such Product fails to meet the Specifications or contain a
Manufacture Defect when inspected by the Company. The Company shall notify the
Contractor within five (5) days of receipt of the Product if the Product is
rejected. The Company may, at it's option, (i) return the Product to the
Contractor for rework,(ii) rework the Product, and charge any labor cost, not to
exceed Contractors Value Added, to the Contractor, or (iii) scrap the Product if
it cannot be reworked. If the Product is scrapped, the Contractor will reimburse
the Company for the amount charged to the Company for the Product so scrapped.

          6.2  Restrictions on Disposal of Rejected Products. Contractor may
not, under any circumstances or for any reason, sell or offer for sale any
Products rejected hereby, without the express written consent of Company. All
scrap emanating from the Manufacture of Product for Company by Contractor shall
be returned to Company for disposition unless Company notifies Contractor, in
writing, authorizing alternate disposition.

          7.   Representations, Warranties and Covenants of Company: The Company
represents and warrants to Contractor, and covenants as follow:

          7.1  Corporate Status and Good Standing. Company is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation with full corporate power and authority under its
articles of incorporation and bylaws to own and lease its properties and to
conduct its business as the same exists. Company is duly qualified to do
business as a foreign corporation in all states or jurisdictions in which the
nature of its business requires such qualification, except where the failure to
be so qualified would not have an adverse effect on such party.

          7.2  Authorization. Company has full corporate power and authority
under its articles of incorporation and bylaws and its managers and members have
taken all necessary action to authorize it, to execute and deliver this

                                               Initials: Contractor___Company___

                                       8
<PAGE>

Agreement and the exhibits and schedules hereto, to consummate the transactions
contemplated herein and to take all actions required to be taken by it pursuant
to the provisions hereof, and each of this Agreement and the exhibits hereto
constitutes the valid and binding obligations of Company, enforceable in
accordance with its terms, except as enforceability may be limited by general
equitable principles, bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally.

          7.3  Non-Contravention.  Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated herein or
therein, does or will violate, conflict with, result in breach of or require
notice or consent under any law, the articles of incorporation or bylaws of
Company or any provision of any agreement or instrument to which Company is a
party.

          7.4  Validity.  There are no pending or threatened judicial or
administrative actions, proceedings or investigations which question the
validity of this Agreement or any action taken or contemplated by Company or in
connection with this Agreement.

          8.   Representations and Warranties of Contractor. Contractor
represents and warrants to Company the following:

          8.1  Corporate Status and Good Standing. Contractor is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, with full corporate power and authority under its
certificate or articles of organization and regulations to own and lease its
properties and to conduct its business as the same exists. Contractor is duly
qualified to do business as a foreign corporation in all states or jurisdictions
in which the nature of its business requires such qualification, except where
the failure to be so qualified would not have an adverse effect on such party.

          8.2  Authorization.  Contractor has full corporate power and authority
under its certificate or articles of organization and regulations and its board
of directors and stockholders have taken all necessary action to authorize it,
to execute and deliver this Agreement and the exhibits and schedules hereto, to
consummate the transactions contemplated herein and to take all actions required
to be taken by it pursuant to the provisions hereof or thereof, and each of this
Agreement and exhibits hereto constitutes the valid and binding obligation of
Contractor, enforceable in accordance with its terms, except as enforceability
may be limited by general equitable principles, bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally.

          8.3  Non Contravention.  Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated herein or
therein, does or will violate, conflict with or result in breach of, or require
notice or consent under any law, the certificate or article or regulations of
Contractor or any provision of any agreement or instrument to which Contractor
is a party.

          8.4  Validity.  There are no pending or threatened judicial or
administrative actions, proceedings or investigations which question the
validity of this Agreement or any action taken or contemplated by Contractor in
connection with this Agreement.

          8.5  Warranty: Contractor warrants that (i) for a period of twelve
(12) months after the date of delivery to the Delivery Point, the Products will
not contain any Manufacture Defect; and (ii) Contractor has complied in all
material respects with all applicable local, foreign, domestic and other laws,
rules, regulations and requirements. THE FOREGOING WARRANTIES ARE EXCLUSIVE AND
IN LIEU OF ALL OTHER EXPRESS AND IMPLIED WARRANTIES WHATSOEVER, INCLUDING BUT
NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR PARTICULAR
PURPOSE. In the event of any breach by Contractor of the warranties contained
herein, Contractor's liability shall be limited to an amount equal to the Value
Added by Contractor to the devices assembled pursuant to this Agreement.

          Notwithstanding the foregoing, the parties recognize that Die will be
supplied by Company for use in the Manufacture of products.  Contractor makes no
warranty to Company as to the quality of functionality of the Die supplied by
Company.

                                               Initials: Contractor___Company___

                                       9
<PAGE>

          9.   Labor

               During the term of this Agreement, Contractor agrees that it
shall be solely responsible for the payment of all wages, fringe benefits,
social security, unemployment and similar expenses and taxes in respect of
Contractor's employees and applicable to the Manufacture of the Products and the
performance of any procurement services and support services contemplated under
this Agreement. As required by any applicable law, Contractor warrants and
agrees that it has produced and shall maintain in effect full statutory coverage
for workers' compensation, employers' liability and disability insurance for all
of its employees. Contractor further agrees and warrants that it has and shall
comply with all applicable Philippine national and local labor laws and other
applicable wage and hour and other labor laws, including without limitation, all
child labor, minimum wage, overtime and safety related laws.

          10.  Ownership of Materials, Provided Equipment and Supplies.

          10.1 Ownership.  Contractor understands and acknowledges that it shall
under no circumstances be considered to have any ownership or proprietary
interest in Provided Equipment. Contractor agrees to segregate and label such
Provided Equipment. Contractor will not mortgage, pledge, assign or borrow
against such Provided Equipment.

          10.2 Storage/Use. Contractor shall: (a) take delivery, store and use
at the Factory the Provided Equipment using the same degree of care as
Contractor exercises in respect of its own similar property; and (b) inform
Company of the exact location of the Provided Equipment, if it is located
outside the Contractor's principal manufacturing or storage facilities, as well
as the location of all Finished Goods and WIP Inventory stored outside of
Contractor's principal manufacturing or storage facilities. Contractor agrees to
comply with Company's reasonable instructions as to the performance of any
preventive maintenance on any Provided Equipment, said Preventive Maintenance
shall be at Contractor's sole expense. All repairs will be the responsibility of
Contractor, with the exception of test equipment that is Provided Equipment.
Company shall maintain insurance, at his sole discretion, for all Provided
Equipment owned by or paid for by Company, while in Contractor's Factory. The
Parties shall under separate agreement, agree on the lease/purchase price for
the Provided Equipment to be charged to Contractor by Company prior to delivery
of Provided Equipment by Company to Contractor's Factory.

          11.  Indemnification.

          11.1 Contractor's Indemnification. Contractor shall indemnify Company
and its Affiliates (including their officers, directors, employees and agents)
against, and hold harmless from and against, any and all claims, actions, causes
of action, arbitrations, proceedings, losses, damages, liabilities, judgments
and expenses (including without limitation, reasonable attorneys' fees)
("Indemnified Amounts") incurred by Company or any of its Affiliates as a result
of (i) any material error, inaccuracy, breach or misrepresentation in any of the
representations and warranties made by Contractor in this Agreement; (ii) any
claim or allegation that Contractor or any of its contractors, representatives
and agents, have not fully discharged all obligations under labor laws as set
forth in Section 9.1; (iii) any dispute with a subcontractor, employee,
independent contractor, manufacturer, agent or supplier; (iv) the operation by
Contractor of the Factory during the term of this Agreement; and; and (v) any
Manufacture Defect. Company shall be entitled to recover its reasonable and
necessary attorneys' fees and litigation expenses incurred in connection with
successful enforcement of its rights under this Section 11.1. Any liability
under this Section 11.1 of the Contractor shall be limited in the aggregate to a
maximum amount equal to (i) with respect to claims based on a Manufacture
Defect, the price paid by Company for the Finished Goods (Value Added) subject
to such claim and (ii) with respect to claims based on the performance of any
services hereunder, the price paid by Company for such services.

          11.2 Company's Indemnification. Company shall indemnify Contractor and
its Affiliates (including their officers, directors, employees and agents)
against, and hold harmless from and against, any and all Indemnified Amounts
incurred by Contractor or any of its Affiliates as a result of; (i) any material
error, inaccuracy, breach or misrepresentation in any of the representations and
warranties made by Company in this Agreement; (ii) any dispute with a
subcontractor, employee, independent contractor, agent or supplier (including
Approved Vendors) related in any way to this Agreement; and (iii) any of the
Products and its design (other than a Manufacture Defect).

                                               Initials: Contractor___Company___

                                       10
<PAGE>

Contractor shall be entitled to recover its reasonable and necessary attorneys'
fees and litigation expenses incurred in connection with successful enforcement
of its rights under this Section 11.2.

          12.  Termination

          This AGREEMENT shall take effect on February 22, 2001 and shall
continue in force until February 21, 2004, thereafter renewable yearly at
mutually agreeable terms and reviewed yearly unless terminated earlier per
Section 12.1 of this Agreement.

          12.1 Subject to the provision of Section 12.3, this Agreement may be
terminated in accordance with the following provisions:

               (a)  Either party may terminate this Agreement by giving notice
     in writing to the other party in the event the other party is in material
     breach of this Agreement and shall have failed to cure such breach within
     ninety (90) days of receipt of written notice thereof from the first party.

               (b)  Either party may terminate this Agreement at any time by
     giving notice in writing to the other party, which shall be effective upon
     dispatch, should the other party file a petition at any time as to its
     bankruptcy, be declared bankrupt, become insolvent, make an assignment for
     the benefit of creditors, go into liquidation or receivership or otherwise
     lose control of its business.

          (c)  Company may terminate this Agreement without cause upon 180 days
     written notice to Contractor.

          (d)  Contractor may terminate this Agreement without cause upon 365
     days written notice to Company.

          (e)  Company may terminate, if the Contractor at any time has a change
     in control.

     12.2 For purposes of Section 12.1(c) above, a "change in control" shall be
deemed to have occurred at such time ownership of not less than 50% of the
equity securities of Contractor undergo a change in ownership during the term of
this Agreement, excluding from such calculation transfers that do not change the
Person in ultimate control of Contractor.

     12.3 Rights and Obligations on Termination. In the event of termination of
this Agreement pursuant to Section 12.1 above, the parties shall have the
following rights and obligations:

          (a)  Termination of this Agreement shall not release either party from
     the obligation to make payment of all amounts then due and payable.

          (b)  In the event of termination under Section 12.1(c), Company will
     purchase from Contractor all scheduled Finished Goods and Materials
     inventory affected by termination. Contractor agrees, in the event of
     termination under Section 12.1 (c) to, (i) immediately terminate all open
     purchase orders for Materials, (ii) pursue the return for refund or credit
     of Materials already received but not in Manufacture, and (iii) follow all
     reasonable instructions to minimize the cost of such termination to
     Company.

          (c)  In the event of termination under Section 12.1, Contractor shall
     return all of Company's Materials, documents, Provided Equipment and
     supplies via ship method requested by Company. The shipping cost will be at
     the expense of the Company.

          (d)  Contractor's obligation under Section 8 will still be enforced
     notwithstanding termination of this Agreement.

     12.4 Remedies.

                                               Initials: Contractor___Company___

                                       11
<PAGE>

          In the event either party breaches in any material respect any
representations, warranties or covenants hereunder or fails to comply in any
material respect with any term or requirement of this Agreement, in addition to
any other remedies the non-breaching party shall be entitled to (a) terminate
this Agreement in accordance with Section 12.1; (b) recover any and all actual
costs, expenses and damages, (including reasonable attorneys' fees); and/or (c)
offset any amounts due to the non-breaching party by any actual costs and
expenses incurred by the non-breaching party as a result of such breach or
failure to comply.  Remedies herein shall not be exclusive but shall be
cumulative of any other remedy herein or under any other statute or law. Upon
such termination, none of the parties nor any other Person shall have any
liability or further obligation arising out of this Agreement except for any
liability resulting from its breach of this Agreement prior to termination,
except that the provisions of Sections 13, 14, 15, 16.1 and 16.15 shall continue
to apply.

          13.  Confidentiality.

          13.1 Neither Contractor nor its Affiliates will, directly or
indirectly, disclose or provide to any other Person any non-public information
of a confidential nature concerning the business or operations of Company or its
Affiliates, including without limitation, any trade secrets or other proprietary
information of Company or its Affiliates, known or which becomes known to
Contractor or Affiliates thereof as a result of the transactions contemplated
hereby or Contractor's operation of the Factory, except as is required in
governmental filings or judicial, administrative or arbitration proceedings. In
the event that Contractor or any Affiliate becomes legally required to disclose
any such information in any governmental filings or judicial, administrative or
arbitration proceedings, Contractor shall, and shall cause any Affiliate to,
provide Company with prompt notice of such requirements so that Company may seek
a protective order or other appropriate remedy. In the event that such
protective order or other remedy is not obtained, Contractor shall, and shall
cause any Affiliate to, furnish only that portion of the information that
Contractor or its Affiliate, as the case may be, is advised by its counsel as
legally required, and such disclosure shall not result in any liability
hereunder unless such disclosure was caused by or resulted from a previous
disclosure by Contractor or any Affiliate that was not permitted by this
Agreement.

          13.2 During the term of this Agreement and for a period of two years
thereafter, Contractor agrees not to market products competitive with the
Products.

          14.  Intellectual Property/Data Rights.

          14.1 All Contractor intellectual property owned by Contractor before
the date of this agreement shall remain the sole property of Contractor and any
intellectual property developed solely by the Contractor during the term of this
agreement shall be the sole property of Contractor.

          14.2 All Company intellectual property owned by Company before the
date of this agreement shall remain the sole property of Company and any
intellectual property developed solely by the Company during the term of this
agreement shall be the sole property of Company.

          14.3 All intellectual property that is jointly developed by Contractor
and Company during the term of this agreement shall be jointly owned (the "Joint
Intellectual Property"). Contractor and Company agree to take such actions and
sign such agreements as may be necessary to protect or perfect the other's
individual intellectual property or its joint interest in Joint Intellectual
Property and to allow the other party to exploit the Joint Intellectual Property
in a manner not inconsistent with this Agreement.

          14.4 Contractor agrees to execute all papers and provide requested
assistance, at Company's request and expense during and subsequent to its work
for Company, to enable Company or its nominees to obtain patents, copyrights,
and legal protection for Joint Intellectual Property in any country.

          14.5 Company agrees to execute all papers and provide requested
assistance, at Contractor's request and expense during and subsequent to its
work for Contractor, to enable Contractor or its nominees to obtain patents,
copyrights, and legal protection for Joint Intellectual Property in any country.

                                               Initials: Contractor___Company___

                                       12
<PAGE>

          14.6 Contractor hereby assigns to Company all rights in data prepared
in connection with the performance of services under this Agreement, including,
but not limited to, any reports, drawings, sketches, formulas, designs,
analyses, graphs, notes and notebooks. Contractor agrees that all rights, title
and interest to such data, including all related copyright and other
intellectual property rights, shall vest immediately with Company upon
preparation.

          14.7 Contractor agrees that all notes, drawings, designs, analyses,
memoranda, and other data prepared or produced in the performance of services
under this Agreement or at Company's request shall be the sole and exclusive
property of Company, that Contractor shall not disclose such property to anyone
outside of Company, and that Contractor shall mark such property "RFM
Proprietary Confidential."

          14.8 Upon termination of this Agreement, whether by expiration,
cancellation, or otherwise, Contractor agrees to promptly deliver to a proper
Company representative all data, documents, and other records which relate to
the business activities of Company, and all other Materials and badges which are
the property of Company.

          14.9 Contractor hereby grants and agrees to grant to Company a
worldwide, non-exclusive right and license to use financial data, manufacturing
data, sales data, tracking data, reports, and other information transferred to
or otherwise provided to or for Company for its business purposes. Company
agrees that all right, title and interest in such data shall remain the property
of Contractor.

          15.  Intellectual Property Infringement and Indemnification

          Company shall hold Contractor harmless against any expense or loss
resulting from a claim of infringement of patents, trademarks, copyrights or
other intellectual property rights arising from compliance with Company's
designs, Specifications or instructions and Contractor shall hold Company
harmless against any expense or loss resulting from infringement of patents,
trademarks, copyrights or other intellectual property rights arising from
Contractor's actions not necessitated by Company's designs, Specifications or
instructions.

          16.  General Provisions.

          16.1 Expenses. Each party shall pay its own expenses, including the
fees and disbursements of its counsel in connection with the negotiation,
preparation and execution of this Agreement and the consummation of the
transactions contemplated herein, except as otherwise provided herein.

          16.2 Entire Agreement.  This Agreement, including all schedules and
exhibits hereto, constitutes the entire agreement of the parties and supersedes
all previous proposals, oral or written, and all negotiations, conversation or
discussions heretofore and between the parties with respect to the subject
matter hereof, and may not be modified, amended or terminated except by a
written instrument specifically referring to this Agreement signed by all the
parties hereto.

          16.3 Waivers and Consents.  All waivers and consents given hereunder
shall be in writing. No waiver by any party hereto of any breach or anticipated
breach of any provision hereof by any other party shall be deemed a waiver of
any other contemporaneous, preceding or succeeding breach or anticipated breach,
whether or not similar.

          16.4 Notices.  All notices, requests, demands, claims, and other
communications hereunder will be in writing.  Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
two business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:

          If to Contractor, to:    Antonio B Villaruel
                                   Automated Technology (Phil.) Inc.
                                   Light Industry & Science Park of the
                                   Philippines
                                   Cabuyao, Laguna, Philippines
                                   Facsimile: (6349) 543-0334
                                   E-Mail: tvillaruel@atecphil.com

                                               Initials: Contractor___Company___

                                       13
<PAGE>

     If to Company, to:  David T. Somerville
                         R F Monolithics
                         4347 Sigma Road
                         Dallas, TX 75244
                         USA
                         Facsimile: (972) 404-9476
                         E-Mail: somerville@rfm.com

     Any party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication shall be deemed to have
been duly given unless and until it actually is received by the intended
recipient. Any party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving the
other party notice in the manner herein set forth.

     16.5   Successors and Assigns.  This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors, legal representatives and assigns.  No third party shall have any
rights hereunder.  No assignment shall release the assigning party.

     16.6   Choice of Law; Section Heading.  This Agreement is performable, in
part, in Dallas County, Texas and, in part, in the Philippines, and shall be
governed by and construed in accordance with laws of the State of Texas, U.S.A.,
without giving effect to any choice or conflict of law provision or rule
(whether of the State of Texas or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the  State of Texas. The
United Nations Convention On Contracts For The International Sale Of Goods shall
not apply to this Agreement. The section headings contained in this Agreement
are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.

     16.7   Severability: If any term or provision of this Agreement or the
application thereof to any Person or circumstance shall be deemed invalid,
illegal or unenforceable to any extent or for any reason, such provision shall
be severed from this Agreement and the remainder of this Agreement and the
application thereof shall not be affected and shall be enforceable to the
fullest extent permitted by law.  A provision which is valid, legal and
enforceable shall be substituted for the severed provision.

     16.8   Construction:  The parties have participated jointly in the
negotiation and drafting of this Agreement.  In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this agreement.  Any reference to any federal, state, local,
or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.

     16.9   Force Majeure:  Neither party shall be liable for loss or damage or
deemed to be in breach of this Agreement if its failure to perform its
obligations results from (i) compliance with any law, ruling, order, regulation,
requirement, or instruction of any federal, state, foreign, or municipal
government or any department or agency thereof; (ii) acts of God; or (iii)
fires, strikes, embargoes, war, or riot.  The party experiencing such cause or
delay shall immediately notify the other party of the circumstances which may
prevent or significantly delay its performance hereunder and shall use its best
efforts to alleviate the effects of such cause or delay.  Any delay resulting
from any of these causes shall extend performance accordingly or excuse
performance, in whole or in part, as may be reasonable.

     16.10  Counterparts.  This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.

     16.11  Agency.  Contractor is an independent contractor.  Nothing in this
Agreement shall be construed to constitute either party the agent of the other
party and neither party shall represent to any third party that it has any right
or authority to act as the agent for or otherwise to represent the other party.

                                               Initials: Contractor___Company___

                                       14
<PAGE>

     16.12  Bankruptcy.  If during the term of this Agreement a petition in
bankruptcy is filed by or against Contractor, or if Contractor, as a debtor,
seeks or takes the benefit of any insolvency or debtor's relief proceeding, or
if Contractor shall file or attempt to file an assignment for the benefit of
creditors, or if Contractor shall apply to its creditors to compound its debts,
then in any such event, Company shall have the right to decline to take further
deliveries hereunder or Company may, without prejudice to any other lawful
remedy, cancel this Agreement, and in either case, Contractor shall upon demand
deliver to Company all Provided Equipment, Materials, WIP Inventory, Finished
Goods, tooling and other property of Company in Contractor's custody.  If during
the term of this Agreement a petition in bankruptcy is filed by or against
Company, or if Company, as a debtor, seeks or takes the benefit of any
insolvency or debtor's relief proceeding, or if Company shall file an assignment
for the benefit of creditors, or if Company applies to its creditors to compound
its debts, then in any such event, Contractor may without prejudice to any other
lawful remedy, cancel this Agreement.

     16.13  Assignment of Obligations.  Neither party may assign this Agreement
without the prior written consent of the other party; provided that Company may
assign this Agreement to any Person acquiring all or substantially all of
Company's assets.

     16.14  Export & Import Laws/Regulations.  The parties shall comply with all
applicable Philippines and International Export and Import laws and regulations
in the execution of this Agreement.  Contractor shall execute such other
agreements and documents as Company requests, from time to time, in order to
ensure compliance with said laws.

     16.15  Dispute Resolution.

            (a)  Negotiation.  In the event of any dispute or disagreement
between parties as to the interpretation of any provision of this Agreement (or
the performance of obligations hereunder), the matter, upon written request of
either party, shall be referred to representatives of the parties for decision,
each party being represented by a senior executive officer who has no direct
operational responsibility for the matters contemplated by this Agreement. The
representatives shall promptly meet in a good faith effort to resolve the
dispute. If the representatives do not agree upon a decision within 30 calendar
days after reference of the matter to them, each of the parties shall be free to
exercise all other remedies available to it.

            (b) Arbitration.  Any controversy, dispute or claim arising out of
or relating in any way to this Agreement or the other agreements contemplated
hereby or the transactions arising hereunder or thereunder that cannot be
resolved by negotiation pursuant to paragraph (a) above shall, be settled
exclusively by binding arbitration in Hong Kong and in accordance with the
current Commercial Arbitration Rules of the International Chamber of Commerce.
The parties shall endeavor to select a mutually acceptable arbitrator
knowledgeable about issues relating to the subject matter of this contract. In
the event the parties are unable to agree upon an arbitrator, each party will
select an arbitrator and the arbitrators in turn shall select a third
arbitrator. The language of the arbitration will be in English. The fees and
expenses of the arbitrator shall be shared equally by the parties and advanced
by them from time to time as required; provided that at the conclusion of the
arbitration, the arbitrator may award costs and expenses (including the costs of
the arbitration previously advanced and the fees and expenses of attorneys,
accountant and other experts) plus interest, to the prevailing party to the
extent that in the judgment of the arbitrator it is fair to do so. No pre-
arbitration discovery shall be permitted, except that the arbitrator shall have
the power in his or her sole discretion, on application by any party, to order
pre-arbitration examination solely of those witnesses and documents that any
other party intends to introduce in its case-in-chief at the arbitration
hearing. The arbitrator shall render his or her award within 90 days of the
conclusion of the arbitration hearing. Notwithstanding anything to the contrary
provided in this Section 16.15 and without prejudice to the above procedures,
either party may apply to any court of competent jurisdiction for temporary
injunctive or other provisional judicial relief if such action is necessary to
avoid irreparable damage or to preserve the status quo until such time as the
arbitration panel is convened and available to hear such party's request for
temporary relief. The award rendered by the arbitrator shall be final and not
subject to judicial review and judgment thereon may be entered in any court of
competent jurisdiction. Any monetary award will be made and payable in U.S.
dollars free of any tax or other deduction.

     16.16  English Controlling.  For purposes of convenience, this Agreement
may be translated but it is understood that the English version of this
Agreement (and the schedules and exhibits) will control for all purposes.

                                               Initials: Contractor___Company___

                                       15
<PAGE>

In case of a conflict in meaning between the two versions, the parties are
responsible for performing in accordance with the English version hereof.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.

RF MONOLITHICS, INC.                    AUTOMATED TECHNOLOGY (PHIL.) INC.

     David T. Somerville                     Antonio B Villaruel
---------------------------------       ---------------------------------------
     (Printed Name)                          (Printed Name)

     /s/ David T. Somerville                 /s/ Antonio Villaruel
---------------------------------       ---------------------------------------
     (Signature)                             (Signature)

VP QA and Corporate Development              President
---------------------------------       ---------------------------------------
     (Title)                                 (Title)

     March 23,2001                           February 23, 2001
---------------------------------       ---------------------------------------
     (Date)                                  (Date)

                                               Initials: Contractor___Company___

                                       16

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