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EXHIBIT 10.10
DEED OF NONCOMPETITION
This Deed of NONCOMPETITION (this "DEED") is made as of November 30, 2000
by and between JIT Holdings Limited, a company incorporated in Singapore (the
"COMPANY"), and Goh Thiam Xxx Xxxxxx, a resident of Singapore ("COVENANTOR").
This Deed shall become effective immediately prior, and subject, to the Merger
Date (as defined below).
A. The Company and Covenantor desire to enter into this Deed in connection
with the transactions contemplated by the Merger Agreement dated as of August
10, 2000 (the "MERGER AGREEMENT") entered into between Flextronics International
Ltd. ("FLEXTRONICS"), the Company, Goh Thiam Xxx Xxxxxx and Xxx Xxx Xxxx
Xxxxxxx. Pursuant to the terms of the Merger Agreement, on the Merger Date, as
defined in the Merger Agreement (the "MERGER DATE"), Flextronics will acquire
all of the outstanding equity interests in the Company in exchange for new
ordinary shares of S$0.01 each in the capital of Flextronics ("ORDINARY SHARES")
calculated according to the Share Exchange Ratio (as defined in the Merger
Agreement). Capitalized terms used without definition herein shall have the same
meanings given them in the Merger Agreement.
B. As at the date hereof, Covenantor is a principal shareholder, officer
and key employee of the Company, and has been actively involved in the
development, marketing and sale of the Company's products and services and whose
talents and abilities have been critical to the Company's ability to
successfully carry on their respective businesses and accordingly, would remain
critical in the period following immediately after the Merger (as defined in the
Merger Agreement). To preserve and protect the intangible assets of the Company,
including their goodwill, customers and trade secrets of which Covenantor has
and will have knowledge, and in consideration for and as a material inducement
to Flextronics' willingness to enter into and perform under the Merger
Agreement, Covenantor has agreed to enter into this Deed.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the parties hereto agree as follows:
1. PROVISION OF SERVICES.
For a period of six months following the Merger Date, Covenantor
shall provide such services to JIT and its related corporations as deemed
necessary by JIT for the effective integration of business of both Flextronics
and the Company pursuant to the Merger Agreement and Covenantor shall be paid a
fair and reasonable salary every month, taking into account the last monthly
salary drawn by the Covenantor and the length of time spent by Covenantor in
performing such necessary services.
2. COVENANT NOT TO COMPETE.
(a) During the Noncompetition Period (as defined below), Covenantor
shall not, without the written consent of the Company, directly or indirectly,
individually or as an
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employee, partner, officer, director or shareholder or in any other capacity
whatsoever of or for any person, firm, partnership, company or corporation other
than the Company or its subsidiaries (other than as a holder of less than five
per cent. of the outstanding share capital of a publicly-traded company):
(i) own, manage, operate, sell, control or participate in the
ownership, management, operation or control of, or be connected in any similar
manner with, any Competitive Business. As used herein, the term "Competitive
Business" means any business that is engaged in printed circuit board design or
assembly or electronics contract manufacturing or that is otherwise
substantially similar to or competitive with any services or products created,
distributed or under development by the Company or any of the Company's
subsidiaries;
(ii) recruit, attempt to hire, solicit, assist others in
recruiting or hiring, or refer to others concerning employment, any person who
is, or was within the three months prior to such action, an employee of the
Company, any of its subsidiaries, or induce or attempt to induce any such
employee to terminate his employment with the Company, or any of the Company's
subsidiaries;
(iii) induce or attempt to induce any person or entity to
curtail or cancel any business or contracts that such person or entity had with
the Company, or any of its subsidiaries; or
(iv) contact, solicit or call upon any customer of the
Company, or any of its subsidiaries on behalf of any other person or entity for
the purpose of selling or providing any services or products of the type
normally sold or provided by the Company, or any of its subsidiaries.
"NONCOMPETITION PERIOD" means the period beginning on the Merger Date and ending
on the latter of (i) the first anniversary after the termination of Covenantor's
employment with the Company and (ii) the third anniversary of the Merger Date.
(b) The agreements set forth in this Section 2 include within their
scope (i) Singapore, Malaysia, Indonesia, Hungary and the People's Republic of
China (ii) all states of the United States, and all other countries, in which
the Company, any of its subsidiaries has engaged in manufacturing or sales or
otherwise conducted business or selling or licensing efforts at any time during
the period beginning one year prior to the Merger Date and ending at such time
as Covenantor is no longer an employee of the Company. Covenantor acknowledges
that the scope and period of restrictions and the geographical area to which the
restriction imposed in this Section 2 shall apply are fair and reasonable and
are reasonably required for the protection of the Company and that Section 2(a)
of this Deed accurately describes the business to which the restrictions are
intended to apply.
(c) It is the desire and intent of the parties that the provisions
of this Section 2 shall be enforced to the fullest extent permissible under
applicable law. If any particular provision or portion of this Section shall be
adjudicated to be invalid or unenforceable, this Deed shall be deemed amended to
revise those provisions or portions to the minimum extent necessary to render
them enforceable. Such amendment shall apply only with respect to the operation
of
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this paragraph in the particular jurisdiction in which such adjudication was
made.
(d) Covenantor acknowledges that any breach of the covenants of
Section 2 will result in immediate and irreparable injury to the Company and,
accordingly, consents to the application of injunctive relief and such other
equitable remedies for the benefit of the Company as may be appropriate in the
event such a breach occurs or is threatened. The foregoing remedies shall be in
addition to all other legal remedies to which the Company may be entitled
hereunder, including, without limitation, monetary damages.
3. MISCELLANEOUS.
(a) Notices. Any and all notices permitted or required under this
Deed must be in writing. Notices will be delivered personally, by mail or
express delivery, postage prepaid, or by facsimile, and will be deemed given
upon actual delivery or, if mailed by registered or certified mail, on the third
business day following deposit in the mails, or, if by facsimile, against
confirmation of receipt thereof, addressed as follows:
If to the Company:
0 Xxxxxx Xxxxx Xxxx
Xxxxxxxxx 000000
Attention: Tong Choo Cherng
Fax: (00) 000 0000
With a copy to:
Flextronics International (USA), Inc.
0000 Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxx Xxxxx
If to Covenantor:
GOH THIAM XXX XXXXXX
0 Xxxxxx Xxxxxxxx
Xxxxxxxxx 000000
(b) Amendments. This Deed contains the entire agreement between the
Company and Covenantor with respect to the Noncompetition covenants to the
Company, and supersedes all prior agreements between the Company and Covenantor
concerning any such covenants, and may not be changed or modified in whole or in
part except by a writing signed by the party against whom enforcement of the
change or modification is sought.
(c) Successors and Assigns; Beneficiaries. This Deed shall extend to
and be binding upon Covenantor, Covenantor's legal representatives, heirs and
distributees, and upon the Company, its successors and assigns. This Deed is not
assignable by either Covenantor or the Company, except that the rights and
obligations of the Company under this Deed may be
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assigned to a corporation which becomes the successor to the Company as the
result of a merger or other corporate reorganization and which continues the
business of the Company, or to any subsidiary of the Company.
(d) Governing Law. This Deed shall be governed by and construed in
accordance with the laws of Singapore without regard to conflicts of law
principles.
(e) No Waiver. The failure of either party to insist on strict
compliance with any of the terms of this Deed will not be deemed to be a waiver
of any term of this Deed or of that party's right to require strict compliance
with the terms of this Deed in any other instance.
(f) Severability. Covenantor and the Company each recognise that the
limitations contained herein are reasonably and properly required for the
adequate protection of the interests of the Company. If for any reason a court
of competent jurisdiction or binding arbitration proceeding finds any provision
of this Deed, or the application thereof, to be unenforceable, the remaining
provisions of this Deed will be interpreted so as best to reasonably effect the
intent of the parties. The parties further agree to replace any such invalid or
unenforceable provisions with valid and enforceable provisions designed to
achieve, to the extent possible, the business purposes and intent of such
unenforceable provisions.
(g) Counterparts. This Deed may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one instrument.
(h) Independent Review. Covenantor acknowledges that Covenantor has
had an opportunity to consult with independent legal counsel of Covenantor's own
choosing with regard to terms of this Deed, and enters into this Deed
voluntarily and with a full understanding of its terms.
(i) Arbitration. Any disputes or controversy between the parties to
this Deed, including allegations of fraud, misrepresentation or violation of any
federal, state or local statute, regulation, ordinance or law including those
pertaining to employment discrimination, arising from or as a result of this
Deed, or the resulting business dealings between the Company and Covenantor
shall be resolved, after the parties attempt informal resolution, exclusively by
arbitration in accordance with the Rules of Conciliation and Arbitration of the
International Chamber of Commerce. All arbitration hearings shall be held in
Singapore within one hundred twenty (120) days from the date arbitration is
demanded by any of the parties and the arbitrator shall render his/her written
decision within thirty (30) days after the Arbitration hearing has concluded.
The decision of the arbitrator shall be final and binding on all parties, and
may be entered as a judgment by any party with any federal or state court of
competent jurisdiction. The parties to the arbitration hearing shall share any
filing fees and arbitrator's fees which must be paid in advance of the hearing
equally; however, as set forth below the prevailing party shall be entitled to
recover from the losing party all costs that it has incurred as a result of the
arbitration hearing, including fees paid to the arbitrator, travel costs and
attorney's fees. This provision shall not alter the rights of the parties to
seek and obtain the provisional equitable remedies provided under any applicable
state or federal law.
(j) Jurisdiction; Venue; Attorney's Fees. Subject to the provisions
of Section 3(i) hereof, the parties do hereby agree and submit to personal
jurisdiction in Singapore for the
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purposes of any proceedings brought to enforce or construe the terms of this
Deed or to resolve any dispute or controversy arising under, as a result of, or
in connection with this Deed, and do hereby agree and stipulate that any such
proceedings shall be venued and held in Singapore. The prevailing party in any
such proceeding shall be entitled to recover from the losing party all costs
that it has incurred as a result of such proceeding including but not limited to
all travel costs and attorney's fees.
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IN WITNESS WHEREOF, this Deed has been executed by the Covenantor and is
intended to be and is hereby delivered on the date first above written.
JIT HOLDINGS LIMITED COVENANTOR
By:
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Name: Signed, sealed and delivered by Goh Thiam
Title: Xxxxxx in the presence of:
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