SYMMETRICOM INC
8-K, 2000-04-13
TELEPHONE & TELEGRAPH APPARATUS
Previous: PUERTO RICAN CEMENT CO INC, DEF 14A, 2000-04-13
Next: ROLLINS TRUCK LEASING CORP, SC 13D, 2000-04-13



<PAGE>

================================================================================
                         UNITED STATES SECURITIES AND
                              EXCHANGE COMMISSION
                            Washington, D.C. 20549
- --------------------------------------------------------------------------------


                                    FORM 8-K


                               [X]  CURRENT REPORT

                       PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934


        Date of Report (Date of earliest event reported): March 29, 2000
                        _______________________________

                               SYMMETRICOM, INC.
             (Exact name of registrant as specified in its charter)


<TABLE>
<S>                                                <C>                       <C>
       California                                  0-2287                  No. 95-1906306
(State or other jurisdiction of           (Commission File Number)         (I.R.S. Employer
incorporation or organization)                                             Identification No.)

     2300 Orchard Parkway,
      San Jose, California                                                       95131-1017
(Address of principal executive offices)                                         (Zip Code)
</TABLE>

       Registrant's telephone number, including area code: (408) 943-9403


                                 Not Applicable
         (Former name or former address, if changed since last report)
                      ___________________________________
<PAGE>

     ITEM 2.  ACQUISITION OR DISPOSITION OF ASSETS

     Agreement for Disposition of Symmetricom, Inc.'s Global Positioning System
     ("GPS") technology division.

          On March 29, 2000 Symmetricom, Inc., ("Symmetricom") a California
     corporation, Symmetricom Limited, a subsidiary of Symmetricom, Inc.,
     registered in England and Wales, Silicon Systems Limited registered in
     Ireland ("SSL"), KPMG Shelf Company (No 16) Limited ("Shelf Co") (in the
     course of changing its name to Silicon Systems (UK) Limited) registered in
     Northern Ireland ("Purchaser") completed an agreement in which certain
     assets, operations and the business of the GPS technology division was sold
     to the Purchaser in accordance with the Business Sale Agreement.  SSL is
     the owner of the entire issued share capital of the Purchaser.

          The sale of the GPS technology division is in accordance with the
     Business Sale Agreement dated as of March 29, 2000 (the "Agreement") by and
     among Symmetricom, Symmetricom Limited, SSL, and Shelf Co, which is
     attached as Exhibit 99.1 hereto. Symmetricom issued a news release
     concerning the Business Sale Agreement, which is attached as Exhibit 99.2
     hereto.

          The consideration paid by the Purchaser to Symmetricom was $9,452,831
     in cash.  Additionally, on March 29, 2000 Symmetricom made an irrevocable
     application of subscription shares of SSL in the amount of $3,000,000.

          The sale was consummated pursuant to a Business Sale Agreement dated
     the 29/th/ day of March 2000.

     Item 7. Financial Statements and Exhibits.

     (a)  Financial Statements of Business Acquired.

          Not applicable.

     (b)  Pro Forma Financial Information.

          The pro forma financial information required by this Item 7(b) is not

          filed with this initial report and will be filed by amendment on or
          before June 12, 2000.

     (c)  Exhibits

          99.1    Business Sale Agreement between Symmetricom, Inc., Symmetricom
                  Limited, Silicon Systems Limited, and KPMG Shelf Company (No
                  16) Limited.

          99.2    News release dated March 30, 2000, relating to the sale
                  referenced in the Business Sale Agreement between Symmetricom,
                  Inc., Symmetricom Limited, Silicon Systems Limited, and KPMG
                  Shelf Company (No 16) Limited.
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.



                                             SYMMETRICOM, INC.
                                               (Registrant)

DATE:  April 12, 2000                        By: /s/ Maurice Austin

                                             /s/ Maurice Austin
                                             -----------------------------
                                             Maurice Austin
                                             Chief Financial Officer
                                             (for Registrant and as Principal
                                             Financial and Accounting Officer)

<PAGE>

                                                                    EXHIBIT 99.1

                    Dated the 29/th/ day of March, 2000


              (1)   SYMMETRICOM LIMITED AND

                    SYMMETRICOM INC.

              (3)   SILICON SYSTEMS LIMITED

              (4)   KPMG SHELF COMPANY (NO 16) LIMITED
                    (IN THE COURSE OF CHANGING ITS NAME
                    TO SILICON SYSTEMS (UK) LIMITED)



               -------------------------------------------------
                            BUSINESS SALE AGREEMENT

               -------------------------------------------------




                                L. K. SHIELDS,

                                  Solicitors,

                           39/40 Upper Mount Street,

                                   Dublin 2.
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<S>                                                                                    <C>
1.   DEFINITIONS AND INTERPRETATION..................................................   3

2.   AGREEMENT TO SELL AND PURCHASE..................................................  10

3.   ASSETS AND LIABILITIES NOT INCLUDED IN THE SALE.................................  12

4.   CONSIDERATION...................................................................  12

5.   COMPLETION......................................................................  13

6.   VALUE ADDED TAX.................................................................  13

7.   WARRANTIES......................................................................  14

8.   LIMITATIONS TO THE WARRANTIES...................................................  14

9.   THE PREMISES....................................................................  17

10.  RISK............................................................................  18

11.  THE EMPLOYEES...................................................................  19

12.  THE BUSINESS CONTRACTS..........................................................  22

13.  OBLIGATIONS OF THE PARTIES AFTER COMPLETION.....................................  24

14.  BOOK DEBTS AND OBLIGATIONS OF THE PURCHASER AFTER COMPLETION....................  24

15.  CONFIDENTIALITY.................................................................  26

16.  ANNOUNCEMENTS AND PUBLICITY.....................................................  27

17.  RESTRICTIVE COVENANTS...........................................................  27

18.  NOTICES.........................................................................  28

19.  SUCCESSORS AND ASSIGNS..........................................................  29

20.  VARIATION.......................................................................  29

21.  COSTS...........................................................................  29

22.  SEVERANCE.......................................................................  29

23.  FURTHER ASSURANCE...............................................................  29

24.  WAIVERS.........................................................................  30

25.  ENTIRE AGREEMENT................................................................  30

26.  COUNTERPARTS....................................................................  30

27.  COVENANTS OF SYMMETRICOM INC....................................................  31

28.  COVENANTS OF SSL................................................................  31
</TABLE>

                                       1
<PAGE>

<TABLE>
<S>                                                                                     <C>
29.  POST-COMPLETION EFFECT..........................................................   32

30. GOVERNING LAW AND JURISDICTION...................................................   32

SCHEDULE 1...........................................................................   34
- ----------

   COMPLETION REQUIREMENTS...........................................................   34

SCHEDULE 2...........................................................................   36
- ----------

   THE CUSTOMER CONTRACTS............................................................   36

SCHEDULE 3...........................................................................   39
- ----------

   THE EMPLOYEES.....................................................................   39

SCHEDULE 4...........................................................................   40
- ----------

   PART A............................................................................   40
      THE BUSINESS INTELLECTUAL PROPERTY.............................................   40
      Patents to be Transferred to SSL from Symmetricom..............................   40

SCHEDULE 4...........................................................................   40
- ----------

   PART B............................................................................   40
      IP LICENCES....................................................................   40
   PART C............................................................................   40
      REGISTERED TRADE MARKS.........................................................   40

SCHEDULE 5...........................................................................   41
- ----------

   PART A............................................................................   41
      THE PREMISES...................................................................   41
   PART B............................................................................   42
      (Terms and Conditions relating to the Assignment of the Premises)..............   42

SCHEDULE 6...........................................................................   51
- ----------

   THE SUPPLIER CONTRACTS............................................................   51

SCHEDULE 7...........................................................................   52
- ----------

   PART A............................................................................   52
   EQUIPMENT AND MACHINERY...........................................................   52

SCHEDULE 7...........................................................................   55
- ----------

   PART B............................................................................   55
   COMPUTER SYSTEM...................................................................   55

SCHEDULE 8...........................................................................   59
- ----------

   COMPUTER CONTRACTS................................................................   59

SCHEDULE 9...........................................................................   60
- ----------

   WARRANTIES........................................................................   60
      PART A.........................................................................   60
      GENERAL........................................................................   60

SCHEDULE 9...........................................................................   67
- ----------

   PART B............................................................................   67
      INTELLECTUAL PROPERTY..........................................................   67

SCHEDULE 9...........................................................................   70
- ----------

   PART C............................................................................   70
      COMPUTER SYSTEM................................................................   70
</TABLE>


THIS AGREEMENT is made the     day of       , 2000.

                                       2
<PAGE>

PARTIES:

(1)  SYMMETRICOM LIMITED (registered in England and Wales under company number:
     2605691) the registered office of which is at Mansard Close, Westgate,
     Northampton, NN5 5BH and SYMMETRICOM INC. (a corporation registered under
     the laws of the state of California in the United States of America) the
     registered office of which is at 2300 Orchard Parkway, San Jose, CA95131
     (hereinafter collectively called ("Vendor").

(2)  SILICON SYSTEMS LIMITED (registered in Ireland under company number:
     234615) the registered office of which is at 32-34 Harcourt Street, Dublin
     2 ("SSL").

(3)  KPMG Shelf Company (No. 16) Limited (in the course of changing its name to
     Silicon Systems (UK) Limited) (registered in Northern Ireland under company
     number: NI37024) the registered office of which is at Stokes House, College
     Square East, Belfast, BT1 6DH ("Purchaser").

WHEREAS:

(A)  The Business is now and has for some time past been carried on by the
     Vendor as beneficial owner.

(B)  The Vendor wishes to sell and transfer or to procure the sale and transfer
     where necessary of certain assets of the Business and the Purchaser to
     purchase the Business as a going concern on the terms and conditions of
     this Agreement and in particular but without limitation on the basis of the
     Warranties.

(C)  SSL is the owner of the entire issued share capital of the Purchaser and is
     joining to this agreement for the purposes hereinafter appearing.

IT IS AGREED as follows:

1.   DEFINITIONS AND INTERPRETATION

1.1  In this Agreement, unless the context requires otherwise, the following
     words shall have the following meanings:

     "Agreed Form"       in the form agreed between the parties and initialled
                         by or on behalf of the parties.

                                       3


<PAGE>

     "Assets"                 means the assets of the Business agreed to be sold
                              and purchased pursuant to this Agreement as
                              described in Clause 2.1;

     "Book Debts"             means all trade and other debts owing to the
                              Vendor on the Transfer Date;

     "Business"               means the business of the design, development and
                              manufacture of GPS products as carried on by the
                              Vendor in Northampton but for the avoidance of
                              doubt excluding the sales and technical support
                              functions which are carried out by persons other
                              than the Employees;

     "Business Contracts"     means the Customer Contracts, Supplier Contracts,
                              Computer Contracts and IP Licences;

     "Business Day"           means any day which is not a Saturday, a Sunday or
                              a bank or public holiday in England and Wales;

     "Business Information"   means all information, know-how and techniques of
                              the Vendor at Completion (whether or not
                              confidential and in whatever form held) which
                              relates to: (i) all or any part of the Business
                              and Assets; (ii) any products manufactured and/or
                              sold or services rendered by the Business; (iii)
                              any formulae, designs, specifications, drawings,
                              data, manuals or instructions used in the
                              Business; (iv) the operations, management,
                              administration, or financial affairs of the
                              Business (including any books of account, records
                              or returns, business plans or forecasts,
                              information relating to future business
                              development or planning information relating to
                              litigation or legal advice); and (v) the sale or
                              marketing of any of the products manufactured
                              and/or sold or services rendered by the Business,
                              including, but without limiting the generality of
                              the foregoing words, all customer names and lists,
                              sales and marketing information (including but not
                              limited to targets, sales and market share
                              statistics, market surveys and reports on
                              research);

                                       4
<PAGE>

     "Business Intellectual
     Property"                means all Intellectual Property owned by the
                              Vendor or any member of the Vendor Group in
                              connection with the Business as carried on at the
                              Transfer Date (including, without limiting the
                              generality of the foregoing words, that specified
                              in Part A of Schedule 4);

     "Completion"             means the completion of the sale and purchase of
                              the Business and the Assets in accordance with
                              Clause 5 and Schedule 1;

     "Computer Contracts"     means all arrangements and agreements pursuant to
                              which any third party, including any member of the
                              Vendor Group, provides any element of the Computer
                              System to the Business including, without
                              limitation, the Agreements particulars of which
                              are set out in Part A of Schedule 8;

     "Computer System"        means all computer hardware, software and networks
                              owned or used by the Business including all
                              arrangements relating to the provision of
                              maintenance and support, security, disaster
                              recovery, facilities management, bureau and on-
                              line services to the Business the particulars of
                              which are set out in Part B of Schedule 8;

     "Connected"              means connected as defined in section 839, Income
                              and Corporation Taxes Act 1988;

     "Consideration"          means the total purchase price payable by the
                              Purchaser to the Vendor for the Business and
                              Assets as calculated in accordance with the
                              provisions of Clause 4;

     "Customer Contracts"     means all those contracts, engagements or orders
                              entered into on or prior to the Transfer Date by
                              or on behalf of the Vendor with customers for the
                              sale of goods or equipment or provision of
                              services by the Vendor in connection with the
                              Business which at the Transfer

                                       5
<PAGE>

                              Date remain to be performed in whole or in part by
                              the Vendor being those contracts, particulars of
                              which are set out in Schedule 2;

     "Disclosure Letter"      means a letter dated the date of this Agreement
                              from the Vendor to the Purchaser disclosing
                              exceptions to the Warranties;

     "Employees"              means the persons employed in the Business at the
                              date of this Agreement (whose names and addresses
                              are set out in Part A of Schedule 3 together with
                              certain particulars of their respective
                              employments);

     "Equipment and
     Machinery"               means all equipment and machinery (to include the
                              Computer System) used by the Vendor in connection
                              with the business as set out in Schedule 7;

     "Goodwill"               means the goodwill and custom of the Vendor in
                              relation to the Business together with the
                              exclusive right for the Purchaser and its
                              successors and assigns to carry on the Business in
                              particular using the business name "NAVSTAR" and
                              respectively to represent themselves as carrying
                              on the Business in succession to the Vendor;

     "Independent
     Contractor"              a person providing their services to the Business
                              under a contract for services;

     "Intellectual Property"  means patents, know-how, registered and
                              unregistered trade marks and service marks
                              (including any trade, brand or business names used
                              to differentiate the goods and services of the
                              Business (but for the avoidance of doubt excluding
                              "NAVSYMM" and "SYMMETRICOM" used alone or in
                              conjunction with any other term), registered
                              designs, design rights, utility models, copyright
                              (including all such rights in computer software,
                              the Business Information and any databases), moral
                              rights and topography rights (in each case for the
                              full period

                                       6
<PAGE>

                              thereof and all extensions and renewals thereof),
                              applications for any of the foregoing and the
                              right to apply for any of the foregoing in any
                              part of the world and any similar rights situated
                              in any country excluding domain names;

     "Intellectual Property
     Licence Agreement"       an agreement of even date between the Purchaser
                              and Symmetricom Inc in the Agreed Form for the
                              licencing of certain Intellectual Property rights
                              to Symmetricom Inc.;

     "IP Licences"            means any licences, authorisations and permissions
                              in any form whatsoever whether express or implied,
                              pertaining to the use, enjoyment and exploitation
                              by (i) the Vendor or any member of the Vendor
                              Group of any Intellectual Property or Business
                              Information in connection with the Business as
                              carried on at the Transfer Date, and (ii) any
                              third party of any Business Intellectual Property
                              or Business Information (including without
                              limiting the generality of the foregoing, those
                              specified in Part B of Schedule 4;

     "Liabilities"            means all trade and other debts, accrued charges
                              and all other amounts owing by the Vendor in
                              connection with the Business and any amounts due
                              or recoverable in respect of Tax relating to the
                              Business attributable to periods or transactions
                              completed on or before the Transfer Date;

     "Purchaser's Group"      means the Purchaser, its holding companies and all
                              companies and undertakings which now or in the
                              future become holding companies, subsidiaries or
                              subsidiary undertakings of the Purchaser or any
                              such holding company.

     "Purchaser's
     Solicitors"              means LK Shields, Solicitors, 39/40 Upper Mount
                              Street, Dublin 2;

     "Premises"               the premises more particularly described in
                              Schedule 5 Part A.

                                       7
<PAGE>

     "Records"                means the books, accounts, lists of customers,
                              credit reports, price lists, cost records, work
                              tickets, catalogues, advertising, all employee
                              records and all the other documents, papers and
                              records (however stored) (including VAT records)
                              of the Vendor relating to the Business or any of
                              the Assets;

     "Restricted Business"    the design, development and manufacture of GPS
                              Products as carried on by the Vendor in
                              Northampton and dealing in those products but
                              excluding the manufacture sale and dealing in of
                              finished products of which the above mentioned
                              products are components and excluding the
                              applications thereto on the timing and frequency
                              fields.

     "Security Interest"      means and includes an encumbrance, mortgage,
                              charge, assignment for the purpose of security,
                              pledge, lien, right of set-off, retention of title
                              or hypothecation for the purpose, or which has the
                              effect, of granting any security interest of any
                              kind whatsoever and any agreement, whether
                              conditional or otherwise, to create any of the
                              foregoing;

     "Stock"                  means the stock-in-trade of the Business at the
                              Transfer Date including (without limitation) raw
                              materials, goods and other assets purchased for
                              resale, stores, component parts, work in progress,
                              together with finished products and packaging and
                              promotional material, all of which is owned or
                              agreed to be bought by the Vendor in connection
                              with the Business at the Transfer Date (including
                              any items which, although subject to reservation
                              of title by the sellers, are under the control of
                              the Vendor);

     "Supplier Contracts"     means all those contracts, engagements or orders
                              entered into on or prior to the Transfer Date by
                              or on behalf of the Vendor for the supply or sale
                              of goods to the Vendor in connection with and in
                              the

                                       8
<PAGE>

                              ordinary course of the Business which at the
                              Transfer Date remain to be performed in whole or
                              in part including, without limiting the generality
                              of the foregoing words, all those contracts,
                              particulars of which are set out in Schedule 6;

     "Tax" or "Taxation"      means all taxes, levies, duties, imposts, charges
                              and withholdings of any nature whatsoever or
                              wheresoever imposed and all penalties, charges and
                              interest relating thereto;

     "Territory"              United Kingdom;

     "Transfer Date"          means the date hereof;

     "Transfer Regulations"   means the Transfer of Undertakings (Protection of
                              Employment) Regulations 1981 (as amended);

     "US$"                    United States dollars

     "VAT"                    means Value Added Tax or any similar tax from time
                              to time replacing it and performing a similar
                              fiscal function;

     "Vendor Group"           means the Vendorany holding company of either of
                              them and all companies and undertakings which are
                              from time to time subsidiaries or subsidiary
                              undertakings of the Vendor or of any such holding
                              company;

     "Vendor's Solicitors"    means Ashurst Morris Crisp of Broadwalk House, 5
                              Appold Street, London EC2A 2HA.

     "Warranties"             means the warranties set out in Clause 8 and
                              Schedule 9.

     "Western Atlas Patent
     Licence Agreement"       means the Licence Agreement dated 1st March 2000
                              between Western Atlas International Inc. and
                              Symmetricom Inc.

     "(pounds)" and "p"       Sterling pounds and pence.

     "IR(pounds)" and "IRp"   Irish pounds and pence.

                                       9
<PAGE>

1.2    References to Clauses or Schedules are to Clauses or Schedules to this
       Agreement and references to sub-clauses are to sub-clauses of the
       relevant Clause, and the Schedules are deemed to be incorporated in this
       Agreement, and a reference to "this Agreement" includes a reference to
       the Schedules.

1.3    In this Agreement:

       1.3.1  the clause headings are included for convenience  only and shall
              not affect the construction of this Agreement;

       1.3.2  words denoting the singular shall include the plural and vice
              versa;

       1.3.3  words denoting any gender shall include a reference to each other
              gender;

       1.3.4  references to persons shall be deemed to include references to
              natural persons, firms, partnerships, companies, corporations,
              associations, organisations, foundations and trusts (in each case
              whether or not having separate legal personality); and

       1.3.5  words and expressions defined in the Companies Act 1985 shall,
              where the context so admits, bear the same meanings in this
              Agreement.

1.4    References in this Agreement to statutory provisions shall (where the
       context so admits and unless otherwise expressly provided) be construed
       as references to those provisions as respectively amended, consolidated,
       extended or re-enacted as at the date of this Agreement and to any
       orders, regulations, instruments or other subordinate legislation made
       under the relevant statutes at the date hereof.

1.5    Any statement qualified by the expression "to the best of the knowledge,
       information and belief of the Vendor" or "so far as the Vendor is aware"
       or any similar expression shall be deemed to include an additional
       statement that it has been made after the Vendor shall have made such
       enquiry as shall be reasonable in the circumstances having regard to the
       nature and subject matter of the statement.

2.     AGREEMENT TO SELL AND PURCHASE

2.1    The Vendor shall sell with full title guarantee and transfer or procure
       the sale and transfer (which expression shall where appropriate include
       an assignment or novation) and the Purchaser shall purchase with effect
       from the Transfer Date the Business as a going concern free from all
       claims, liens, equities, charges and encumbrances except as otherwise
       expressly and specifically herein provided together with the following
       assets:

                                      10
<PAGE>

       2.1.1      the Goodwill;

       2.1.2      the Stock;

       2.1.3      the benefit (subject to the burden) of the Business Contracts;

       2.1.4      the Business Intellectual Property;

       2.1.5      the Business Information;

       2.1.6      the Equipment and Machinery;

       2.1.7      the Vendor's leasehold interest in the Premises;

       2.1.8      the Records save to the extent that the Vendor is legally
                  required to retain them; and

       2.1.9      all the Vendor's rights against third parties including all
                  rights under any of the warranties, conditions, guarantees or
                  indemnities or under the Sale of Goods Act 1979 relating to
                  any of the Assets and the benefit of all sums to which the
                  Vendor is entitled from third parties other than insurers in
                  respect of damage to the Assets (save to the extent a
                  provision in respect of such damage is made in calculating the
                  Asset Value).

2.2    Title and risk in each of the Assets will pass to the Purchaser on
       Completion.

2.3    The sale and purchase of each of the Assets is interdependent and shall
       be completed simultaneously.

2.4    The asset value shall be apportioned between the Assets as follows:-

       2.4.1 Stock                                US$1,000,000

       2.4.2 Equipment and Machinery              US$1,000,000

       2.4.3 Business Contracts                   US$1

       2.4.4 Business Information                 US$1

       2.4.5 Goodwill                             US$352,828

       2.4.6 Business Intellectual Property       US$7,100,000

       2.4.7 Leasehold Interest in the Premises   US$1

2.5    For the avoidance of doubt the Purchaser shall be entitled to the benefit
       subject to the burden of all contracts placed upon the Business by any
       customer with the Vendor on or after Completion and any payment relating
       to or connected with any such contract that is

                                      11
<PAGE>

       hereafter received by the Vendor shall be paid to the Purchaser
       forthwith.

3.     ASSETS AND LIABILITIES NOT INCLUDED IN THE SALE

3.1    The following are expressly excluded from the sale and purchase of the
       Business and the Assets:

       3.1.1  the Book Debts;

       3.1.2  the Liabilities;

       3.1.3  the Vendor's accounts and accounting records which do not relate
              exclusively to the Business; and

       3.1.4  the benefit of any and all insurance claims and repayments arising
              prior to the Transfer Date in relation to the Business.

3.2    Nothing in this Agreement shall pass to the Purchaser, or shall be
       construed as acceptance by the Purchaser, of any liability, debt or other
       obligation of the Vendor, other than as expressly set out in this
       Agreement.

3.3    For the avoidance of doubt the Vendor shall discharge:

       3.3.1  all outstanding Security Interests relating to any Asset and
              subsisting at Completion; and

       3.3.2  all supplier accounts relating to any Asset acquired by or any
              service supplied to the Business (in each case prior to the date
              hereof) whether such accounts are rendered prior to or after the
              date hereof.

4.     CONSIDERATION

4.1    The Consideration payable by the Purchaser to the Vendor at Completion
       shall be US$9,452,831 discharged by the payment to Symmetricom Inc. by
       way of wire transfer in the sum of US$6,452,831 Bank of America Account
       #14840-04916, 1850 Gateway Blvd. Concord, CA 94526 ABA#121000358 and
       cheque in the sum of US$3,000,000.

4.2    Discharge of the consideration in the foregoing manner shall constitute
       a full discharge of the Purchaser's obligation hereunder with regard to
       the payment of the consideration and the Purchaser shall not be obliged
       to see to the further application of the consideration.

4.3    Each of the Purchaser and SSL warrant that they have full power and
       authority and have taken all necessary corporate action to enable them

                                      12
<PAGE>

       effectively to enter into and perform this Agreement and all agreements
       to be entered into pursuant to the terms of this Agreement and such
       agreements when executed will constitute valid, binding and enforceable
       obligations of the Purchaser and SSL in accordance with their respective
       terms.

5      COMPLETION

5.1    Completion will take place in accordance with Schedule 1 at the offices
       of the Purchaser's Solicitors immediately following the execution of
       this Agreement when the business described in Schedule 1 will be
       transacted.

6.     VALUE ADDED TAX

6.1    It is intended that the Business shall be transferred to the Purchaser as
       a going concern with effect from Completion and that the provisions of
       Article 5(i) of the Value Added Tax (Special Provisions) Order 1995 (SI
       1995/1268) and of Section 49 of the Value Added Tax Act, 1994 shall apply
       to such transfer and the sale and purchase of the Assets and each party
       shall use its reasonable endeavours to procure that the sale of the
       Business is treated as neither a supply of goods nor a supply of services
       under that Article.

6.2    The Vendor and the Purchaser shall within 30 days of Completion give
       notice of such transfer to the appropriate office of H.M. Commissioners
       of Customs and Excise in accordance with such regulations and
       requirements as may be applicable.

6.3    The Purchaser undertakes to the Vendor that:

       6.3.1  after Completion the Business will be carried on by it as a going
              concern and the Assets will be used by it in carrying on the
              Business or a business of the same kind; and

       6.3.2  the Purchaser is already or will as a result of such transfer of
              the Business immediately on Completion become a taxable person (as
              defined in section 3 of the Value Added Tax Act 1994).

6.4    The Consideration is exclusive of VAT and in the event that H.M.
       Commissioners of Customs and Excise determine that any VAT is payable on
       the sale of the Business or the Assets, following receipt of a valid VAT
       invoice, the Purchaser shall immediately pay to the Vendor an amount
       equal to the VAT payable.

6.5    VAT payable in respect of goods and services supplied or deemed to be
       supplied by the Vendor prior to the Transfer Date and all interest
       payable and penalties attributable to such VAT shall be paid to H.M.

                                      13
<PAGE>

       Commissioners of Customs and Excise by the Vendor and the Vendor shall be
       entitled to retain any reimbursements and credits in respect of over
       payment made prior to the Transfer Date.

6.6    The Vendor and the Purchaser intend that section 49 of the Value Added
       Tax Act 1994 shall apply to the transfer of the Business under this
       Agreement and accordingly:

       6.6.1  on Completion the Vendor shall deliver to the Purchaser all
              records referred to in such section 49;

       6.6.2  the Vendor shall not make any request to H.M. Customs & Excise for
              the records referred to in Clause 6.6.1 to be preserved by the
              Vendor rather than the Purchaser; and

       6.6.3  the Purchaser shall preserve the records referred to in Clause
              6.6.1 for such period as may be required by law and during that
              period permit the Vendor reasonable access to such records for the
              purpose of inspection or copying (at the Vendor's expense).

6.7    The Vendor agrees to fully indemnify and keep indemnified the Purchaser
       (for itself and as trustee for all other persons allocated with the
       registration number previously allocated to the Vendor) in respect of any
       VAT payable in relation to goods and services supplied or deemed to be
       supplied prior to the Transfer Date and all interest payable and
       penalties attributable to such VAT.

7.     WARRANTIES

7.1    The Vendor warrants and undertakes to the Purchaser in the terms set out
       in Schedule 9 and acknowledges that the Purchaser is entering into this
       Agreement in reliance on the Warranties.

7.2    Save as otherwise expressly provided for in this Agreement and save as
       expressed as being exceptions to the Warranties the Vendor shall be under
       no liability in respect of an claim under the Warranties to the extent
       that the facts or circumstances giving rise thereto are fairly disclosed
       in the Disclosure Letter.

7.3    All sums payable by the Vendor to the Purchaser for breach of any of the
       Warranties shall be paid free and clear of all deductions or withholdings
       whatsoever, save only as may be required by law.

8.     LIMITATIONS TO THE WARRANTIES

8.1    The aggregate liability of the Vendor in respect of all breaches of the
       Warranties shall not exceed US$9,452,831.

8.2    Save in the case of fraud or wilful concealment the Vendor shall be

                                      14
<PAGE>

       under no liability in respect of breaches of the Warranties unless the
       aggregate liability of the Vendor in respect of all breaches of the
       Warranties exceeds US$120,000, provided that if such amount is exceeded,
       the Vendor shall (subject to Clause 8.1) be liable for the whole amount
       claimed in respect of breaches of the Warranties and not only for the
       excess.

8.3    The Purchaser shall not be entitled to make any claim against the Vendor
       in respect of any breach of the Warranties unless the Purchaser has
       served written notice of its intention to make such a claim (containing
       all such details as are then reasonably available to the Purchaser) to
       the Vendor at or before 5pm Greenwich Mean Time on the second anniversary
       of Completion.

8.4    Where in relation to a claim for damages on account of a breach of the
       Warranties which has been notified in writing prior to the date relevant
       thereto, pursuant to Clause 8.3 hereof, proceedings are not served within
       6 months of the service of the notice in question (unless previously
       satisfied, settled or withdrawn) the Vendor shall cease to be liable
       therefor.

8.5    The Vendor shall not be liable for breach of the Warranties for any claim
       or claims thereunder:-

       8.5.1  to the extent that the Purchaser actually recovers any loss or
              damage suffered by it arising out of such claim under the terms of
              any insurance policy for the time being in force less any costs
              incurred by the Purchaser in making any such recovery;

       8.5.2  to the extent that a claim or the event giving rise to the claim
              would not have arisen but for any act, omission or transaction of
              the Purchaser's Group otherwise than in the ordinary course of the
              Business which the Purchaser's Group knew, or ought reasonably to
              have known was likely to give rise to such claim;

       8.5.3  to the extent that the Purchaser has agreed to be liable for any
              defective products claim under Clause 10.4 which claim could
              otherwise have given rise to a claim under the Warranties.

8.6    The Purchaser shall take such actions as the Vendor may reasonably
       request to avoid, dispute, resist, appeal, delay, compromise, defend or
       mitigate any claim which could give rise to a claim under the Warranties
       or any matter which may give rise to such a claim on the basis that the
       Purchaser shall be fully indemnified and secured by the Vendor as to all
       costs and expenses which it may properly incur by reason of such action
       and provided that the Purchaser may not be

                                      15
<PAGE>

       obliged hereunder to do or to omit to do any act or thing which could
       reasonably be expected to result in material change to its goodwill,
       standing or reputation or to its relationship with customers, suppliers,
       employees or regulatory or taxation authorities.

8.7    Nothing in this Agreement shall in any way restrict or limit the general
       obligation of the Purchaser to mitigate any loss or damage which it may
       suffer in consequence of any matter giving rise to a claim against the
       Vendor under the Warranties.

8.8    The Purchaser has not formulated and is not in the process of formulating
       any claim under the Warranties.

8.9    Any payment made by the Vendor under the Warranties shall be a reduction
       to the Consideration.

8.10   No liability (whether in contract, tort or otherwise) shall attach to
       the Vendor in respect of any claim under the Warranties to the extent
       that the claim occurs wholly or partly out of or the amount thereof is
       increased as a result of:-

       (i)      any change in the accounting principles or practices of the
       Purchaser's Group introduced or having effect after the date hereof; or

       (ii)     any increase in the rates of taxation made after the date
       hereof; or

       (iii)    any change in law or regulation or in its interpretation or
       administration by the English courts, by the Inland Revenue or by any
       other fiscal, monetary or regulatory authority in each case having
       retrospective effect (whether or not having the force of law).


8.11   In the event that the Vendor at any time after the date hereof shall wish
       to take out insurance against its liability hereunder the Purchaser
       undertakes to provide such information as the prospective insurer may
       reasonably require before effecting such insurance.

8.12   The Purchaser hereby confirms that it has no knowledge of any fact which
       it is actually aware is likely to lead to claims against the Vendor under
       the Warranties.

8.13   The Purchaser shall endeavour to provide the Vendor with the amount and
       details of any claim arising out of the Warranties as soon as possible
       after the Purchaser becomes aware of the matter or circumstances giving
       rise to such claim and is aware that such matter or circumstances is
       likely to give rise to a warranty claim.

                                      16
<PAGE>

8.14   Without prejudice to the provisions of sub-clauses 8.1 and 8.2 above
       the aggregate liability of the Vendor in respect of all breaches of the
       Intellectual Property Warranties set out at Part B of Schedule 9 hereto
       shall not exceed US$6,000,000.

8.15   Without prejudice to the provisions of subclauses 8.1, 8.2 and 8.14 the
       aggregate liability of the Vendor in respect of all breaches of the
       Warranties in relation to each individual patent owned by the Vendor and
       assigned to the Purchaser hereunder or pursuant hereto shall not exceed
       US$1,000,000.

9.      THE PREMISES

9.1    The leasehold interest in the Premises is sold subject to the conditions
       and other provisions set out in Schedule 5 Part B.

9.2    Licence to Occupy

9.2.1  The Purchaser shall allow the Vendor to remain in occupation as Licensee
       of the agreed portion of the premises for a period commencing on the date
       hereof and continuing for up to 1 year and expiring not later than 31st
       March 2001.

9.2.2  The Vendor shall pay the licensee fee in the sum of seven thousand pounds
       ((pounds)7,000) per month of occupation together with any VAT thereon to
       the Purchaser.

9.2.3  Not to use the Premises for any use or purpose other than any use falling
       within Class B1 and/or Class B8 of the Town and Country Planning (Use
       Classes) Order 1987.

9.2.4  To maintain the Premises in no worse state of repair or condition than
       that existing at the date hereof and to return the same to the Purchaser
       in such condition on expiry or earlier determination of this Licence and
       not to cause or permit any damage to be caused to any accesses and other
       areas of the Premises from time to time designated by the Purchaser for
       common use by the Vendor and occupiers of the Premises ("Common Parts")
       at the Premises and forthwith to make good to the satisfaction of the
       Purchaser any such damage which may be caused by the Vendor, its
       employees, invitees or those under its control.

9.2.5  Not to use the Premises nor to permit to allow the same to be used so as
       to cause or suffer any annoyance, nuisance, damage or disturbance to the
       Premises or to the Purchaser or other occupiers and neighbouring
       premises.

9.2.6  To observe and perform the regulations that the Purchaser may from time
       to time impose.

                                             17
<PAGE>

9.2.7  This Licence is personal to the Vendor and shall not be capable of being
       assigned, sub-let or dealt with in any way either in whole or in part and
       not to share use or occupation of the Premises with any other person or
       company whatsoever nor to agree to do so.

9.2.8  The Purchaser gives no warranty that the Premises are fit for any use
       hereby permitted or any other use either as regards the physical state,
       condition or suitability thereof or as regards any legal right to use the
       same for any such purpose.

9.2.9  Not to obstruct the Common Parts or make them dirty or untidy or leave
       any rubbish on them.

9.2.10 The Vendor must not display any signs or notices at the Premises without
       the prior written consent of the Purchaser.

10.    RISK

10.1   All profits and receipts of the Business earned or accrued prior to the
       Transfer Date (including profits earned or receivable in respect of work
       in progress invoiced prior to the Transfer Date or where a payment
       milestone has been reached which entitled the Vendor to issue an invoice
       prior to the Transfer Date) and all losses and outgoings (except to the
       extent that such outgoings are in respect of invoices received after the
       Transfer Date relating to Stock transferred to the Purchaser) incurred or
       payable by the Business up to the Transfer Date shall belong to, and be
       paid and discharged by, the Vendor.

10.2   All profits and receipts of the Business and all losses and outgoings
       incurred or subject to 10.1 payable by the Business as from the Transfer
       Date shall belong to, and be paid and discharged by, the Purchaser.

10.3   Nothing in this Agreement shall have the effect of making the Purchaser
       liable in any way under any guarantees or warranties given by the Vendor
       to any customer in relation to goods sold or services rendered by the
       Vendor prior to the Transfer Date, the liability for which shall remain
       absolutely with the Vendor.

10.4   Notwithstanding the provisions of Warranty 9 in Part A of schedule 9 and
       the fact that the Vendor is liable to third parties in respect thereof,
       the Purchaser agrees to deal with any product liability claims which may
       arise in relation to products sold by the Vendor in the Business prior to
       Completion, but only to the extent that the cost reasonably incurred the
       Purchaser of doing so shall not exceed Stg(pounds)30,000. To the extent
       that it becomes apparent that the reasonable cost to the Purchaser of
       continuing to do so shall cause the said cost to exceed Stg(pounds)30,000
       the parties shall consult together as to whether the

                                      18
<PAGE>

       Purchaser should continue to deal with such claims, provided that for the
       avoidance of doubt, the Purchaser shall not in any event have any
       responsibility to do so. The Vendor shall indemnify and hold harmless the
       Purchaser and its successors in title against all liabilities, actions,
       proceedings, costs, damages, claims and demands properly payable of
       whatever nature relating to and payable in respect of such claims in
       excess of the amount of Stg(pounds)30,000 referred to above. The
       Purchaser shall keep the Vendor informed on a regular basis as to the
       likelihood of such amount of Stg(pounds)30,000 being exceeded and shall
       not incur any cost for which the Vendor is liable under this Clause
       without the prior consent of the Vendor. In the event of there being
       product liability claim(s) in excess of Stg(pounds)30,000 the Purchaser
       shall be entitled to conduct the defence of such claims itself. The
       Vendor shall be entitled to request the Purchaser to provide reasonable
       assistance and the Purchaser will do so subject to the Vendor providing
       it with a satisfactory indemnity in respect of all costs, liabilities,
       claims, damages and expenses that it may suffer or incur including an
       award of costs.

10.5   To the extent that either party receives after the date hereof any
       payment to which the other party is entitled pursuant to the provisions
       of Clauses 10.1 or, 10.2 such party shall record such payment separately
       in its books and shall pay the same to the other party within seven
       Business Days of receipt.

11.    THE EMPLOYEES

11.1   The parties acknowledge and agree that the sale and purchase pursuant to
       this Agreement will constitute a relevant transfer for the purposes of
       the Transfer Regulations and that it will not operate so as to terminate
       any of the contracts of employment of the Employees and such contracts
       shall be transferred to the Purchaser pursuant to the Transfer
       Regulations with effect from the Transfer Date.

11.2   The Vendor undertakes to the Purchaser (for itself and as trustee for any
       Subsidiary or holding company of the Purchaser to which the whole or any
       part or parts of the Business is transferred):

       11.2.1     to pay to the Employees all sums to which they are entitled up
                  to and including the Transfer Date (whether arising under
                  common law, statute, equity or otherwise) including, without
                  limitation, all wages and salaries, sick pay, maternity pay,
                  any liability to taxation, accrued holiday pay, expenses,
                  accrued bonus, commission and other sums payable in respect of
                  any period up to the Transfer Date; and

       11.2.2     to comply in all respects with its obligations under
                  Regulation 10 of the Transfer Regulations (and to provide to
                  the Purchaser such information that the Purchaser may

                                      19



<PAGE>

                  request in writing in order to verify such compliance);

       11.2.3     fully to indemnify and keep fully indemnified the Purchaser
                  and all other owners referred to in Clause 11.2 against all
                  losses, damages, costs, actions, awards, penalties, fines,
                  proceedings, claims, demands, liabilities (including without
                  limitation any liability to Tax), and expenses (including,
                  without limitation, legal and other professional fees and
                  expenses) which the Purchaser or any of such owners may
                  suffer, sustain, incur, pay or be put to by reason or on
                  account of or arising from:

                  (a)    any failure by the Vendor to comply with its
                         obligations under Clause 11.2;

                  (b)    any claim or other legal recourse by all or any of the
                         Employees in respect of any fact or matter concerning
                         or arising from employment with the Vendor or any
                         omission of the Vendor prior to the Transfer Date;

                  (c)    any claim or other legal recourse by any trade union or
                         staff association recognised by the Vendor or employee
                         representatives in respect of all or any of the
                         Employees arising from or connected with the failure by
                         the Vendor to comply with its legal obligations to such
                         trade union or staff association or employee
                         representatives;

                  (d)    the employment or termination of employment by the
                         Purchaser following the Transfer Date of any agent or
                         contractor or employee of the Vendor (other than the
                         Employees) whose employment is transferred to the
                         Purchaser by the Transfer Regulations provided that the
                         Purchaser shall be required to terminate on such a
                         person within 7 days of becoming aware of the fact that
                         his or her employment has so transferred by operation
                         of the Transfer Regulations;

                  (e)    any act or omission done or omitted to be done by the
                         Vendor in relation to the Employees or any other
                         employee of the Vendor which by virtue of the Transfer
                         Regulations is deemed to be an act or omission of the
                         Purchaser; and

                  (f)    without prejudice to sub-clause (e) above, any claim or
                         demand or other legal recourse against the Purchaser by
                         any other person or agent or employee or contractor of
                         the Vendor who claims (whether correctly or not) that
                         the Purchaser has inherited liability from the Vendor
                         in respect of them by virtue

                                      20
<PAGE>

                         of the Transfer Regulations.

11.3   If any contract of employment or collective agreement not disclosed to
       the Purchaser in the Disclosure Letter shall have effect as if originally
       made between the Purchaser and any of the Employees or a trade union as a
       result of the provisions of the Transfer Regulations:

       11.3.1     the Purchaser may, upon becoming aware of the application of
                  the Transfer Regulations to any such contract of employment or
                  collective agreement, terminate such contract or agreement
                  forthwith; and

       11.3.2     in the event that the Purchaser terminates such agreement
                  pursuant with Clause 11.3.1 above the Vendor shall indemnify
                  and shall keep indemnified the Purchaser against all losses,
                  damages, costs, actions, proceedings, claims, demands,
                  liabilities (including, without limitation, any liability to
                  Taxation) and expenses (including, without limitation, legal
                  and other professional fees and expenses) which the Purchaser
                  may suffer, incur, sustain, pay or be put to by reason or on
                  account of or arising out of such termination or arising from
                  such contracts of employment or collective agreement before
                  and after Completion if such is not terminated by the
                  Purchaser.

11.4   Without prejudice to the other provisions of this Clause, the Vendor
       shall, at its own expense, give the Purchaser such assistance as the
       Purchaser may reasonably require to contest any claim by any person
       employed in the Business at or prior to Completion resulting from or in
       connection with this Agreement.

11.5   The Purchaser undertakes to the Vendor (in respect of itself and as
       trustee for the Vendor Group) to comply in all respects with its
       obligations under Regulation 10 of the Transfer Regulations.

11.6   The Purchaser shall indemnify and shall keep indemnified the Vendor and
       each member of the Vendor Group against all losses, damages, costs,
       actions, proceedings, claims, demands, liabilities (including, without
       limitation, any liability to Taxation) and expenses (including, without
       limitation, legal and other professional fees and expenses) which the
       Vendor or such member of the Vendor Group may suffer, incur, sustain, pay
       or be put to by reason or on account of or arising from or in respect
       of:.

         (a)   any failure by the Purchaser to comply with its obligations under
         Regulation 10 of the Transfer Regulations;

         (b)   any act or omission or proposed act or omission of the Purchaser
         in relation to the Employees after the Transfer Date.

                                      21
<PAGE>

12.    THE BUSINESS CONTRACTS

12.1   Subject to the provisions of Clauses 10.3 and 10.4 nothing in this
       Agreement shall make the Purchaser liable in respect of anything done
       prior to Completion in relation to the carrying on of the Business prior
       to Completion. The Vendor shall jointly and severally indemnify and hold
       harmless the Purchaser and its successors in title against all outgoings,
       debts, liabilities, obligations, actions, proceedings, costs, damages,
       claims and demands of whatever nature relating to and payable in respect
       of the Business or the Assets or any other liability (which liability
       shall include all losses, or costs, claims, expenses and damages and
       including but not limited to legal and other professional fees and
       expenses) which the Purchaser or its successors in title may incur or
       suffer as a result of anything so done or omitted to be done by the
       Vendor in relation to the Business or any defects or alleged defects in,
       goods supplied or services provided prior to the Transfer Date (including
       but not limited to and in particular any claim under any warranty or
       under the Sale of Goods Act, 1979 or the Sale and Supply of Goods Act,
       1994) and in particular (notwithstanding anything else contained in this
       Agreement) arising from:-

       12.1.1   any failure by the Vendor in the performance of any of the
                obligations of the Vendor falling due on or before Completion
                under any of the Business Contracts; and

       12.1.2   any act, default or transaction of the Vendor in respect of the
                Business before Completion and so that where there shall be any
                claims by any third parties in respect of products delivered or
                services rendered prior to Completion the same shall be met in
                full by the Vendor.

12.2   Nothing in this Agreement shall make the Vendor liable in respect of
       anything done after Completion in relation to the carrying on of the
       Business after Completion. The Purchaser and SSL shall jointly and
       severally indemnify and hold harmless the Vendor and its successors in
       title against all outgoings, debts, liabilities, obligations, actions,
       proceedings, costs, damages, claims and demands of whatever nature
       relating to and payable in respect of the Business or the Assets or any
       other liability (which liability shall include all losses or costs,
       claims, expenses and damages and including but not limited to legal and
       other profession fees and expenses) which the Vendor or its successor in
       title may incur or suffer as a result of anything so done or omitted to
       be done by the Purchaser in relation to the Business or any defects or
       alleged defects in, goods supplied or services provided after the
       Transfer Date (including but not limited to and in particular any claim
       under any warranty or under the Sale of Goods Act, 1979 or the Sale and
       Supply of Goods Act, 1994) and in particular (notwithstanding anything
       else contained in this Agreement) arising

                                      22
<PAGE>

       from:-

       12.2.1 any failure by the Purchaser in performance of any of the
              obligations of the Purchaser after Completion under any of the
              Business Contracts; and

       12.2.2 any act, default or transaction of the Purchaser in respect of the
              Business after Completion and so that where there shall be claims
              by any third parties in respect of products delivered or services
              rendered after Completion the same shall be met in full by the
              Purchaser and/or SSL.

12.3   The Vendor undertakes with effect from the Transfer Date to assign to the
       Purchaser or to procure the assignment to the Purchaser of all the
       Business Contracts which are capable of assignment without the consent of
       other parties.

12.4   In so far as any of the Business Contracts are not assignable to the
       Purchaser without the agreement of or novation by or consent to the
       assignment from another party this Agreement shall not constitute an
       assignment or attempted assignment if such assignment or attempted
       assignment would constitute a breach of such Business Contracts. In the
       event that consent or novation is required to such assignment:

       12.4.1 the Vendor at the Purchaser's request shall use all reasonable
              endeavours with the co-operation of the Purchaser to procure such
              novation or assignment as aforesaid;

       12.4.2 unless and until any such Business Contract shall be novated or
              assigned as aforesaid the Vendor shall continue its corporate
              existence and shall hold such Business Contract in trust for the
              Purchaser and its successors in title absolutely and the Purchaser
              shall (if such sub-contracting is permissible and lawful under the
              Business Contract in question) as the Vendor's sub-contractor
              perform all the obligations of the Vendor under such Business
              Contract;

       12.4.3 unless and until any such Business Contract shall be novated or
              assigned the Vendor will (so far as it lawfully may) give all such
              assistance to the Purchaser as the Purchaser may reasonably
              require to enable the Purchaser to enforce its rights under such
              Business Contract and (without limitation) will provide access to
              all relevant books, documents and other information in relation to
              such Business Contract as the Purchaser may require from time to
              time.

12.5   If such consent or novation is refused or otherwise not obtained on terms
       reasonably satisfactory to the Purchaser within 60 Business Days of the
       Transfer Date the Vendor shall indemnify and keep indemnified the
       Purchaser from and against all damages, costs,

                                      23
<PAGE>

       actions, proceedings, claims, demands, liabilities and expenses
       (including, without limitation, legal and other professional fees and
       expenses) which the Purchaser may suffer, sustain, incur, pay or be put
       to by reason or on account of or arising from third party claims
       including claims by the other party or parties to such Business Contract.


13.    OBLIGATIONS OF THE PARTIES AFTER COMPLETION

13.1   The Vendor undertakes to pass to the Purchaser forthwith upon receipt any
       orders or enquiries in relation to the Business which it may receive at
       any time after Completion.

13.2   The Purchaser undertakes to pass to the Vendor forthwith upon receipt any
       order or enquiries in relation to the Retained Business which it may
       receive at any time after Completion.

13.3   Not later than two Business Days after the Transfer Date the Vendor shall
       send to each of the Employees a letter, in the Agreed Form, explaining
       that his employment has been transferred to the Purchaser pursuant to the
       Transfer Regulations.

13.4   During the period of six years after Completion (and without prejudice to
       any of the Warranties) if any Business Information is not in the
       possession of the Purchaser or readily discoverable by the Purchaser but
       is in the possession or under the control of or available to the Vendor
       or any another member of the Vendor Group the Vendor shall procure that
       such Business Information is provided to the Purchaser promptly on
       request.

13.5   During the period of six years after Completion the Purchaser shall allow
       the Vendor reasonable access to such Business Information as may be
       required by the Vendor to comply with its obligations under law and to
       any regulatory obligations applicable to it.


14     BOOK DEBTS AND OBLIGATIONS OF THE PURCHASER AFTER COMPLETION

14.1   The Vendor and the Purchaser shall cause to be prepared from the
       accounting records of the Business a list of the Book Debts showing
       (inter alia) the names of the debtors and the amounts owing to the Vendor
       by each of the relevant debtors.

14.2   Notwithstanding that the Book Debts are excluded from the Assets hereby
       agreed to be sold the Purchaser agrees that it will as agent for the
       Vendor use all reasonable endeavours at the Vendor's expense to collect
       the Book Debts (to the extent not so far collected) and will hold the
       sums of money representing the same upon trust for the

                                      24
<PAGE>

       Vendor subject to the following terms and conditions or such other terms
       conditions or arrangements as may be agreed from time to time in writing
       between the Vendor and the Purchaser:

       14.2.1  the Purchaser shall not without the prior written consent of the
               Vendor (not to be unreasonably withheld or delayed) effect any
               settlement compromise or release any claim in respect of any of
               the Book Debts nor without such consent institute, carry on,
               defend, compromise, abandon or submit to judgment in any legal
               proceedings or join in and submit to arbitration or give security
               or indemnities for costs, pay any sum of money into court or
               obtain payment of money lodged in court;

       14.2.2  the Purchaser, if so requested by the Vendor but only if so
               requested by the Vendor shall discharge as agent for and on
               behalf of the Vendor the debts incurred by the Vendor to its
               Creditors as at the Transfer Date as and when such debts fall due
               out of the proceeds of the Book Debts so collected in so far as
               the same are sufficient for such purposes;

       14.2.3  subject to sub-clause 14.2.2, the Purchaser shall report and
               account to the Vendor at the end of the calendar month following
               Completion and thereafter at monthly intervals for all sums of
               money received and discharged pursuant to sub-clause 14.2.2 by it
               as aforesaid up to a date not more than five Business Days
               earlier than the date of the report and shall concurrently with
               each such report submit written evidence in support of the
               receipts in such form as the Vendor may reasonably require
               together with a cheque for the balance (if any) of the money then
               held by the Purchaser upon trust as aforesaid;

       14.2.4  if it becomes apparent that recovery of any of the Book Debts is
               not likely to be possible within a reasonable period unless legal
               proceedings are instituted the Purchaser will advise the Vendor
               in writing and furnish the Vendor with particulars of the steps
               taken by the Purchaser to effect recovery. Where the debtor in
               question is a continuing debtor of the Business after the
               Transfer Date the Vendor shall consult fully with the Purchaser
               before instituting any legal proceedings;

       14.2.5  on the expiration of 12 months from the Transfer Date the
               Purchaser shall deliver to the Vendor a statement of the
               respective amount(s) of the Book Debts so collected net of any
               amounts expended by the Purchaser in discharging debts due to
               Creditors pursuant to sub-clause 14.2.2 and thereupon the
               Purchaser's obligations under the provisions of this Clause 14.2
               shall terminate absolutely save that the Purchaser shall account
               to the Vendor for any sum subsequently

                                      25
<PAGE>

               recovered in respect of any of the Book Debts remaining unpaid at
               the expiration of such period;

       14.2.6  the Purchaser shall for a period of 24 months from the Transfer
               Date give to the Vendor reasonable access to its books and
               records in relation to the collection of the Book Debts; and

       14.2.7  subject to any express intention to the contrary on the part of
               the debtor any money received by the Purchaser in the course of
               collecting any Book Debts from a person who is also indebted to
               the Purchaser shall be deemed to have been paid in or towards the
               discharge of the oldest debt.


15.    CONFIDENTIALITY

15.1   Each of the Vendor and Symmetricom Inc. shall keep confidential and shall
       not at any time disclose or make known to anyone whatsoever or use for
       their own or any other person's benefit all Business Information, except
       as may be required by any legal or regulatory authority to which the
       Vendor is subject.

15.2   The Purchaser shall and shall procure that every member of the
       Purchaser's Group shall keep confidential and not disclose or make known
       to any one whatsoever nor use for its or any other person's benefit any
       business information which may have been disclosed to the Purchaser or
       which may otherwise have come to the attention of the Purchaser and which
       relates to the business or affairs of the Vendor Group, except as may be
       required by any legal or regulatory authority to which the Purchaser is
       subject.

15.3   The obligations imposed by the provisions of sub-clauses 15.1 and 15.3
       shall not apply to the extent that the business information in question:

       15.3.1  is or comes into the public domain without fault on the part of
               the party to whom the same was disclosed, or to whose attention
               the same has come;

       15.3.2  was already known to the relevant party at the time the same, was
               disclosed to it or came to its attention; or

       15.3.3  has been lawfully disclosed to the relevant party by a third
               party.

       15.3.4  to the extent that disclosure of any such information is
               necessary to be included in documentation required to be issued
               by the Purchaser to comply with regulatory obligations applicable
               to it.

                                      26
<PAGE>

16.  ANNOUNCEMENTS AND PUBLICITY

     No announcement or circular or other publicity in connection with the
     subject matter of this Agreement (save as required to enforce the parties
     obligations hereunder or by law or the rules and regulations of the any
     relevant stock exchange or other regulatory authority and in such
     circumstances the disclosing party shall consult with the other as to
     content) shall be made by the Vendor or the Purchaser except with the prior
     written approval of the Vendor and the Purchaser such approval not to be
     unreasonably withheld or delayed.


17.  RESTRICTIVE COVENANTS

17.1 The Vendor covenants with the Purchaser that neither it nor any member of
     the Vendor Group will either on its or their own account or in conjunction
     with or on behalf of any person or persons whether directly or indirectly
     for the period of:

     17.1.1    2 years from Completion, supply products or provide services for
               any person, firm or company who or which was either at Completion
               or during the period of 12 months prior to Completion a client or
               customer of the Business where the supply of such product or
               provision of such services forms part of the Restricted Business;

     17.1.2    2 years from Completion, solicit or endeavour to solicit the
               custom of any person, firm or company who or which was either at
               Completion or during the period of 12 months prior to Completion
               had been a client or customer of the Business, for the supply of
               products or the provision of services that form part of the
               Restricted Business;

     17.1.3    2 years from Completion, solicit or entice away or endeavour to
               solicit or entice away from the Purchaser any officer, manager,
               servant or other employee who was either at Completion or during
               the period of six months prior to Completion engaged in the
               Business whether or not such person would commit a breach of his
               contract of employment or contract for services by reason of
               leaving service or engagement with the Purchaser; or

     17.1.4    2 years from Completion, carry on or be engaged, concerned or
               interested in the Territory in the Restricted Business (other
               than as a holder of securities listed on a recognised stock
               exchange or provided that such holding shall not exceed five per
               cent of the class of securities of which the said holding forms
               part).

                                      27
<PAGE>

       Provided that nothing in this Clause shall preclude or restrict:-

       (i)   investment of any member of the Vendor Group in SSL; or

       (ii)  the trading by any member of the Vendor Group in any goods or
             services purchased from the Purchaser hereafter; or

       (iii) the conduct by the any member of the Vendor Group of such business
             as may be permitted by the terms of the Intellectual Property
             Licence Agreement


18.    NOTICES

18.1   Any notice required to be given under this Agreement shall be in writing
       signed by (or by some person duly authorised by) the person giving it and
       may be served by leaving it or sending it by facsimile, pre-paid recorded
       delivery to the address of the relevant party set out in sub-clause 18.2.
       Any notice so served shall be deemed to have been received:

       18.1.1   if delivered personally, at the time of delivery;

       18.1.2   in the case of a notice sent by pre-paid recorded delivery, 48
                hours after the date or posting; or

       18.1.3   in the case of a notice sent by facsimile copier or other
                electronic means of communication, if the notice was sent during
                the business hours of the addressee then on the day of
                transmission, and otherwise on the next following Business Day.

       For the purposes of this Clause "business hours" means the hours of 9.00
       a.m. to 5.30 p.m. local time in the country of the addressee.

18.2   Any notice required to be given under this Agreement shall be sent:

       18.2.1   to the Vendor at both: 2 The Billings, Walnut Tree Close,
                Guilford, Surrey, GU1 4UL

                             Facsimile No: 0044 1483 510319

                             For the attention of: Malcolm Carter

                to Symmetricom Inc at: 2300 Orchard Parkway, San Jose, CA 95131,
                USA

                             Facsimile No: 408 428 7896

                             For the attention of:  CFO

                                      28
<PAGE>

       18.2.2  to SSL and/or the Purchaser at:     32-34 Harcourt Street,
               Dublin 2, Ireland

                                  Facsimile No: 00 353 1 402 5711

                                  For the attention of: Chief Operations Officer

       or to such other address or facsimile number as is notified in writing
       from time to time by the Vendor or the Purchaser or SSL (as the case may
       be) to the other parties to this Agreement.


19.    SUCCESSORS AND ASSIGNS

       This Agreement shall be assignable by the Purchaser to any member of the
       Purchaser's Group for so long as it so remains and on any assignee
       ceasing to be a member of the Purchaser's Group shall be assigned to such
       a member. Save as aforesaid this Agreement shall not be assignable.


20.    VARIATION

       No variation of this Agreement shall be effective unless made in writing
       and signed by or on behalf of each of the parties.

21.    COSTS

       The parties shall pay their own costs and expenses in relation to the
       preparation, execution and carrying into effect of this Agreement.


22.    SEVERANCE

       If at any time any provision of this Agreement is or becomes invalid or
       illegal in any respect, such provision shall be deemed to be severed from
       this Agreement but the validity, legality and enforceability of the
       remaining provisions of this Agreement shall not be affected or impaired
       thereby.


23.    FURTHER ASSURANCE

       The Vendor shall do, execute and perform and shall procure to be done,
       executed and performed all such further acts, deeds, documents and things
       as the Purchaser may reasonably require from time to time to give full
       effect to the terms of this Agreement, including but not limited to duly
       executed written assignments to the Purchaser in respect of all the
       Business Intellectual Property.

                                      29
<PAGE>

24.  WAIVERS

     A failure by any party to exercise and any delay, forbearance or indulgence
     by any party in exercising any right, power or remedy under this Agreement
     shall not operate as a waiver of that right, power or remedy or preclude
     its exercise at any subsequent time or on any subsequent occasion. The
     single or partial exercise of any right, power or remedy shall not preclude
     any other or further exercise of that right, power or remedy. No custom or
     practice of the parties at variance with the terms of this Agreement shall
     constitute a waiver of the rights of any party under this Agreement. The
     rights, powers and remedies provided in this Agreement are cumulative and
     not exclusive of any rights, powers or remedies provided by law.


25.  ENTIRE AGREEMENT

25.1 This Agreement, the Disclosure Letter, the documents in the Agreed Form and
     all agreements entered, or to be entered into, pursuant to the terms of
     this Agreement or entered into between the parties in writing and expressly
     referring to this Agreement:

     25.1.1    together constitute the entire agreement and understanding
               between the parties with respect to the subject matter of this
               Agreement; and

     25.1.2    (in relation to such subject matter) supersede all prior
               discussions, understandings and agreements between the parties
               and their agents (or any of them) and all prior representations
               and expressions of opinion by any party (or its agent) to any
               other party (or its agent).

25.2 Each of the parties acknowledges that it is not relying on any statements,
     warranties or representations given or made by any of them in relation to
     the subject matter hereof, save those expressly set out in this Agreement,
     and that it shall have no rights or remedies with respect to such subject
     matter otherwise than under this Agreement save to the extent that they
     arise out of the fraud or fraudulent misrepresentation of any party.

26.  COUNTERPARTS

     This Agreement may be executed in counterparts, each of which shall be
     deemed to be an original, and which together shall constitute one and the
     same Agreement. Unless otherwise provided in this Agreement, this Agreement
     shall become effective and be dated (and each counterpart shall be dated)
     on the date on which this Agreement (or a counterpart of this Agreement) is
     signed by the last of the parties

                                      30
<PAGE>

     to execute this Agreement or, as the case may be, a counterpart thereof.

27.  OBLIGATIONS JOINT AND SEVERAL.

27.1 The obligations of Symmetricom Limited and Symmetricom Inc. as the Vendor
     under this Agreement are joint and several in all respects.

28.  COVENANTS OF SSL

28.1 As further consideration for the Vendor entering into the Agreement and
     without prejudice to any of the other obligations specifically undertaken
     by SSL under this Agreement, SSL hereby unconditionally and irrevocably
     guarantees to the Vendor, its successors and assigns the due, complete and
     punctual performance by the Purchaser (which term shall in this clause 28.1
     and clauses 28.2 to 28.7 inclusive mean and include each and every
     assignee, purported assignee and subsequent generation of assignee and
     purported assignee of the whole or any part or parts of the Agreement from
     time to time) of its obligations under this Agreement and any
     documentation, agreement or obligation executed or entered into by the
     Purchaser thereunder (the "Agreements"). If the Purchaser shall fail
     punctually and completely to perform any of its obligations under the
     Agreements, SSL shall forthwith procure the same to be performed.

28.2 SSL agrees that the Vendor shall be entitled to enforce this clause 28 as
     if SSL were a primary obligor and without making any demand on or taking
     proceedings against the Purchaser and shall not be required before
     enforcing this clause 28 to pursue, execute, utilise or exhaust any other
     right, remedy or security which it may have. This clause 28 shall continue
     in full force and effect until all the liabilities and obligations of the
     Purchaser hereunder have been fully performed and discharged.

28.3 This clause 28 shall not be affected in any way by any time or indulgence
     granted to the Purchaser or by any variation, postponement, waiver,
     compromise or release of any of its obligations under the Agreements.

28.4 This clause 28 shall not be affected by the bankruptcy, liquidation or
     dissolution of the Purchaser, the appointment of a receiver over the
     undertaking, property or assets of the Purchaser, the appointment of an
     administrator in respect of the Purchaser or by any alteration in any
     constitution of the Purchaser or by reason of any change in the interest of
     SSL in the Purchaser. In the event of any such matters or other act or
     event in consequence of which the Purchaser loses its separate legal
     identity, SSL shall become liable for the obligations of

                                      31
<PAGE>

     the Purchaser under the Agreements as if it were a primary obligor.

28.5 This clause 28 shall be of continuing nature and shall not be considered as
     wholly or partially satisfied by the payment or liquidation at any time or
     times hereafter of any sum or sums of money for the time being due to the
     Vendor but shall extend to cover and be a security for all future sums of
     money at any time owing to the Vendor under the Agreements notwithstanding
     any such payment or liquidation.

28.6 This clause 28 shall not be affected or impaired by reason of any fact or
     event (whether similar to any of the foregoing or not) which in the absence
     of this provision would or might constitute or afford a legal or equitable
     discharge or release of or a defence to a guarantee (other than an express
     written release by the Vendor of SSL's obligations).

28.7 As a separate and independent obligation SSL agrees that any sum or sums of
     money intended to be covered by this clause 28 which may not be recoverable
     from the Purchaser whether by reason of any legal limitation, disability or
     incapacity, liquidation, bankruptcy or administration of the Purchaser or
     any other fact or circumstance and whether known (actually or
     constructively) to the Vendor or not, but which would have been recoverable
     from SSL if SSL was the sole or principal debtor in respect thereof in
     place of the Purchaser shall be recoverable from SSL as sole or principal
     debtor in respect thereof.

29.  POST-COMPLETION EFFECT

     This Agreement shall remain in full force and effect after and
     notwithstanding Completion in respect of all obligations, contained in this
     Agreement which have not been done, observed or performed at or prior to
     Completion and all warranties, and indemnities contained in this Agreement
     (including the Warranties) shall continue in full force and effect after
     and notwithstanding Completion and the parties may take action for any
     breach or non-fulfilment of any of them after Completion.


30.  GOVERNING LAW AND JURISDICTION

30.1 This Agreement (and any dispute, controversy, proceedings or claim whatever
     nature arising out of or in any way relating to his Agreement or its
     formation) shall be governed by and construed in all respects in accordance
     with English law exclusively.

30.2 Each of the parties to this Agreement irrevocably agrees that the courts of
     England shall have non-exclusive jurisdiction to hear and decide any suit
     action or proceedings.

30.3 Each party irrevocably waives any objection which it might at any

                                      32
<PAGE>

     time have to the courts of England being as the forum to hear and decide
     any proceedings and to settle any disputes and agrees not to claim that the
     courts of England are not a convenient or appropriate forum for any such
     proceedings or disputes and further irrevocably agrees that a judgement in
     any proceedings or disputes brought in any referred to in this Clause 30
     shall be conclusive and binding upon the parties and may be enforced in the
     courts of any other jurisdiction.

30.4 Without prejudice to any other permitted mode of service the parties agree
     that service of any writ, notice or other document ("Documents") for the
     purpose of any proceedings begun in England shall be duly served upon it if
     delivered personally or sent by registered post, in the case of:-

(a)  Symmetricom Inc. to the address in Clause 18.2.1 for the Vendor;

(b)  the Purchaser at Mansard Close, Westgate, Northampton, NN5 5BH;

(c)  to SSL at the address at paragraph (b) above with a copy of such Documents
     being sent simultaneously to its address set out in Clause 18.2.3 but
     without prejudice to the validity and effectiveness of the service of the
     Documents on SSL at the address set out in paragraph (b) above.

     or such other person and address in England and/or Wales as a party shall
     notify the others in writing from time to time.

AS WITNESS the hands of the parties to this Agreement or their duly authorised
representatives on the date hereinbefore written.

                                      33
<PAGE>

SIGNED by /s/ Maury Austin                          )

for and on behalf of                                )

SYMMETRICOM LIMITED                                 )

in the presence of:                                 )

/s/ Gregory Chin



SIGNED by /s/ Maury Austin                          )

for and on behalf of                                )

SYMMETRICOM INC.                                    )

in the presence of                                  )

/s/ Gregory Chin



SIGNED by                                            )

for and on behalf of                                 )

SILICON SYSTEMS LIMITED                              )

in the presence of:                                  )




SIGNED by                                           )

for and on behalf of                                )

KPMG SHELF COMPANY (NO.16) LIMITED                  )

in the presence of                                  )

                                      34

<PAGE>

EXHIBIT 2


Thursday March 30, 3:46 pm Eastern Time

Company Press Release

Symmetricom Announces Sale of its GPS Business to Silicon Systems, Ltd.

SAN JOSE, Calif. - March 30, 2000 - Symmetricom, Inc. (NASDAQ:SYMM), the leading
supplier of network synchronization and timing solutions for the global
telecommunications industry, today announced the sale of its Global Positioning
System "GPS" technology division to Silicon Systems Ltd., Inc.("SSL") in a
transaction valued at approximately US$ 9.5 million in cash and other
consideration. Based in Dublin, Ireland, SSL is a leading supplier of
application-level intellectual property (IP) for next-generation mobile Internet
and mobile multimedia appliances.

Commenting on the transaction, Thomas Steipp, Chief Executive Officer of
Symmetricom, said, "At the beginning of this fiscal year, Symmetricom announced
three key strategic initiatives: strengthen our position in our existing markets
to accelerate near term revenue growth, streamline the company to improve
operating results, and focus product development resources to address larger and
faster growing new markets in the network infrastructure."

"With the completion of this transaction, we are pleased to report continued
progress on each of these initiatives: The sale of the GPS technology division
will have a significant benefit to our operating results going forward.
Additionally, the acquisition of the Communications Synchronization division of
Hewlett-Packard in September 1999 has already contributed to the company's
revenue and bookings, driven in large part by strong orders from our wireless
CDMA base station timing business. Finally, we have begun to deploy key market
and product development resources to address significant new opportunities for
the company in the telecommunications network infrastructure. We intend to
officially launch these new initiatives in the summer of this year."

Symmetricom will continue to use GPS technology within its BesTime(R) and
SmartClock technologies to provide timing and synchronization solutions to
equipment manufacturers and service providers in telecommunications,
networking and broadcast markets worldwide. Symmetricom's European
operations will continue to be headquartered in the UK and the sale has been
structured to ensure a seamless transfer of customer support functions.

Note to editors:

The Heartbeat of the Net(TM), Symmetricom, Inc. (NASDAQ:SYMM) is the
worldwide market leader in providing synchronization and timing solutions to
service providers, including ILECs, CLECs, ISPs, cable operators and wireless
carriers. With atomic clock, quartz and GPS synchronization solutions installed
in more than 1,000 communications networks in more than 60 countries,
Symmetricom provides traditional
<PAGE>

wireline and wireless carriers and IP-based network operators with solutions
that help them improve service quality while reducing operational costs. For
more information, see Symmetricom on the Web at www.symmetricom.com.

This press release contains forward-looking information within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and is subject to the safe harbor
created by those Sections. These forward-looking statements include statements
concerning additional payments as assets are transferred to Symmetricom, market
share and market demand. Symmetricom's actual results could differ materially
from those projected or suggested in these forward-looking statements. Factors
that could cause future actual results to differ materially from the results
projected in or suggested by such forward-looking statements include: reduced
rates of growth of telecommunication services and high-bandwidth applications;
timing, cancellation or delay of customer orders; delays in new product
development, introduction and production startup; increased competition;
customer acceptance of new products, customer delays in qualification of key new
products, and the risk factors listed from time to time in Symmetricom's reports
filed with the Securities and Exchange Commission, including but not limited to,
the report on Form 10-K for the year ended June 30, 1999, and the report on Form
10-Q for the quarter ended December 31, 1999.

For more information, please contact:

In Europe, Asia, Africa: Symmetricom Limited, 2 The Billings, Walnut Tree Close,
Guildford, Surrey, GU1 4UL, England. Phone +44 1483-510300, email
[email protected] or fax +44 1483-510319. On the web: www.symmetricom.com.

In the USA: Symmetricom, 2300 Orchard Parkway, San Jose, CA 95131-1017
Phone: 408/433-0910, email: [email protected], web:
www.symmetricom.com.
- -----------------
Ed Lockwood
Investor Relations Manager
Symmetricom Inc.
Main:   (408) 943.9403
Direct: (408) 428.7845
FAX:    (408) 428.7896


© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission