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EXHIBIT 10.32
March 27, 1997
FLEXTRONICS INTERNATIONAL LTD at Block 514, Chai Xxxx Xxxx. #00-00, Xxxxx
Xxxxxxxxxx Xxxxxx, Xxxxxxxxx 000000
ASTRON TECHNOLOGIES LIMITED at 6th Floor, Li Wan Po House, 12, Xxxx Xxxxxx
Street, Port Louis, Mauritius
CROTON TECHNOLOGY LTD at Xx Xxxxx Xxxxxxxx, Xx Xxxxxx, Xxxxxx XX0 0XX, Channel
Islands
Re: Termination of Services Agreement
Dear Sirs:
This letter, (i) unconditionally terminates that certain Services
Agreement (the "Service Agreement") made the 2nd February 1996 by and between
Flextronics International Ltd. a company incorporated in Singapore ("FIL"),
Astron Technologies Limited, a company incorporated in Mauritius (the
"Company"), and Croton Technology Ltd. a company incorporated in the Channel
Islands (the "Consultant") and (ii) provides for the payment by the Company of
certain amounts to the Consultant, in lieu of certain payment obligations
previously set forth in the Service Agreement. Capitalised terms not otherwise
defined in this letter shall have the same meanings that such capitalised terms
have in the Service Agreement.
1. Subject to the terms set out in this letter, FIL, the Company and
the Consultant each hereby agree effective March 27, 1997, to terminate the
Service Agreement. FIL, the Company and the Consultant each hereby
unconditionally release each other from all further liabilities and obligations
arising under and pursuant to the Service Agreement whether arising prior to or
after the said termination or whether or not expressed in the Agreement to
continue following termination thereof.
2. In consideration of the Consultant agreeing to the early
termination of the Service Agreement and the mutual convenants herein
contained, the Company hereby irrevocably and unconditionally agrees to pay to
the Consultant a lump sum payment of US$14,000,000 (the "Lump Sum Payment") on
June 30, 1998. The payment of the first US$5,000,000 of the Lump Sum Payment
shall be made in cash and the remainder amount of US$9,000,000 of the Lump Sum
Payment shall be made in cash or FIL Shares (as defined below) or in part in
cash and in part in FIL Shares, at the option of FIL, and if any portion
thereof is made in FIL Shares, such number of FIL Shares as shall be derived
from dividing the cash value of that portion to be made in FIL Shares by the
FIL Average Share Price (as defined below)
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during the 21 Trading Days immediately preceding the issue date of such FIL
Shares. Should such payment be made in FIL shares, FIL agrees to enter into a
Registration Rights Agreement with the Consultant substantially in the form
attached hereto. "FIL Shares" means ordinary shares of Singapore Dollar 0.01
each in the capital of FIL. "FIL Average Share Price" means the average of
the "closing price" per FIL Share on each of the 21 Trading Days referred to
herein. On any such Trading Day, the "closing price" per FIL share means last
sale price, as reported through the NASDAQ National Market, or if no sale
occurred on any such Trading Day, the average of the highest closing "bid"
price and the lowest closing "asked" price on such Trading Day as reported
through NASDAQ National Market. The Lump Sum Payment shall be made in
accordance with this paragraph 2 at such place and by such method of payment as
the Consultant shall direct in writing to the Company.
3. In consideration of the Company agreeing to the early termination
of the Service Agreement and the mutual covenants herein contained, FIL hereby
irrevocably and unconditionally covenants and agrees to:
(i) guarantee the due and punctual payment of the Lump Sum
Payment by the Company hereunder and to pay the Consultant within 14 days from
30 June 1998, being the date on which the Lump Sum Payment is due and payable
to the Consultant in accordance with the terms and conditions hereof, and
(ii) as a primary obligation, to indemnify the Consultant
against all costs, losses or damages incurred by it as a result of the failure
by the Company to pay the Lump Sum Payment in accordance with paragraph 2 above
together with all expenses which the Consultant may incur in proceeding against
the Company or FIL hereunder.
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By signing below, the undersigned parties agree to the foregoing
termination of the Service Agreement and to the other terms hereof, effective
as of March 27th, 1997.
ASTRON TECHNOLOGIES LIMITED
By: /s/ Tsui Xxxx Xxx
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Name: X.X. Xxxx
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Title: Director
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FLEXTRONICS INTERNATIONAL LTD.
By: /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
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Title: Senior Vice President
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CROTON TECHNOLOGY LTD
By: /s/ Xxxxxxx Xxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxx
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Title: Director
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