Deed
No
A. Record 5/2006
Today,
January ten, two thousand and six
appeared
before me, Etienne Petitpierre
Notary
public with official place of business in Basel, Switzerland
in
my
office premises located at Gerbergasse 1, 4001, Switzerland
residing
at Töpferweg 41,
acting
here not in his own name, but according to powers of attorney dated 9 January
2006 presented to the notary in the originals and taken to the files as
photocopy on behalf of
residing
at Alter Moorweg 11,
b) Mr.
Michael
Gauselmann,
residing
at Frotheimer Weg 54,
2. Dr.
Bernd
Meyer-Witting,
with
business address at Mainzer Landstrasse 46,
acting
here not in his own name, but according to power of attorney dated 8 December
2005 presented to the notary in the original and taken to the files as photocopy
as
representative
with sole power of representation for GTECH
Corporation,
55
Technology Way, West Greenwich, Rhode Island, 02817 USA,
The
persons present under Nos. 1 and 2 are personally known to the acting notary.
At
the
request of the persons appearing before me, I hereby certify the
following
2nd
SUPPLEMENTARY AGREEMENT
to
the
Purchase
Agreement of 5 December 2004
The
Parties notarially recorded on 5 December 2004 a Master Agreement (A. Record
294/2004 of Notary Etienne Petitpierre, with offices in Basel - "MA")
and a
Purchase Agreement (A. Record 293/2004 - "PA"),
as
well as a Supplementary Agreement to the PA (A. Record 64/2005) dated 4 March
2005, as a bundle of annexes. The aforementioned Purchase Agreement of 5
December 2004 shall now be amended and/or supplemented, with all other
provisions remaining in effect in their present form. The amendments and/or
supplements depend in part (but only where this is expressly indicated) on
the
occurrence of the circumstances defined in Annex 1 ("Circumstances").
In this
PA, all references to the MA are solely to the new version of the MA of today’s
date unless otherwise expressly provided herein:
I.
Conditions,
Effective Date (§3)
1.
The
following sentence shall be added at the end of § 3.1:
"In
the
preceding sentence, in the event of the occurrence of the Circumstances,
the
date "29 December 2006" shall be replaced by "29 December 2007"."
2.
The
following additional paragraph is to be added at the end of §
3.3.1:
"The
existence of a regulatory permit shall be evidenced by sending a copy of
the
permit or of the clearance statement. A temporary regulatory permit or clearance
statement, or one such having a fixed term, shall suffice.
Any
regulatory permit or clearance statement that has only been granted orally
must
be evidenced via a letter of confirmation to be sent to the relevant authority.
The writing must refer to the date of the discussion, contact person involved,
and the content of the discussion.
In
the
event of the occurrence of the Circumstances, and unless the Closing Conditions
have also been satisfied by 30 November 2007, any unissued regulatory permit
specified in Annex
§ 3.3.1 Parts B and
C
shall
not
be used for the calculation of the necessary regulatory permits whose absence
is
waived pursuant to § 3.3.1 sentence 3 unless net sales in the area for which a
regulatory permit was not issued ("Non-Critical
Area")
reached at least EUR 400,000.00 between 1 December 2006 and 30 November
2007.
The
relevant net sales shall be determined by adding all invoice amounts, for
the
actual value of the goods (excluding VAT, transportation costs, insurance
costs,
and the like, and less all returns of new devices), that were prepared for
goods
delivered in this period; the corresponding invoiced value of goods for orders
that exist in writing and are received by 30 November 2007 shall be added
to
that amount. In the case of rental, leasing, participation and WAP devices,
the
net sales or invoiced value of goods is calculated by multiplying the relevant
number of units by the net list price.
In
the
event that the goods are billed in a currency other than the euro, the euro
amount to be specified shall be determined by taking the average of the euro
rate vis-à-vis the respective currency (as quoted in the Wall Street Journal,
European edition) on 1 December 2006 and 30 November 2007.
This
exceptional provision shall apply to a maximum of 20 regulatory
permits."
3.
The
following paragraph is added to § 3.7:
"In
the
event of the occurrence of the Circumstances, the foregoing paragraph shall
not
apply."
4.
The
following new paragraph is inserted:
"§
3.8. Effective
immediately, the Buyer shall be informed in full regarding all permit
proceedings initiated after 5 December 2004. The Buyer shall thereupon initiate
and conduct, to a reasonable extent and within a reasonable period of time,
the
Buyer’s own regulatory permit proceeding, insofar as such proceeding is
permissible for the Buyer and is not pointless, does not adversely affect
the
Buyer in another permit proceeding, or negatively affect a previously issued
permit.
The
outcome of such regulatory permit proceedings shall not be relevant to the
existence of the Closing Condition as defined in § 3.2.1. Such proceedings shall
also not be relevant for the purposes of § 3.3.1."
5.
The
following new paragraph is inserted:
"§
3.9 The
Parties shall, no later than 15 February 2006, review in good faith the content
of the lists of regulatory permits in terms of the continued necessity of
such
permits for the AI Group, and, if applicable, the shortening of the same,
and
the Parties shall make any relevant adjustment. However, no adjustment shall
be
made unless both Parties agree to the same.
The
foregoing provisions shall not apply in the event that the Circumstances
shall
occur."
II.
Purchase
Price (§ 4)
1.
An
additional paragraph is added at the end of § 4.5.8:
"If
regulatory permits have not been obtained but the corresponding Closing
Condition has nevertheless been satisfied pursuant to § 3.3.1, then in the event
of the occurrence of the Circumstances, the EBITDA value for fiscal year
2006
shall be adjusted as follows:
the
average gross profit or loss achieved in the non-licensed, Non-Critical Areas
described in § 3.3.1 in fiscal years 2006 and 2007 shall be added to the
EBITDA."
2.
§
4.6.1
is reworded to read as follows:
"The
term
"net financial debt" refers to the balance that results from the
interest-bearing assets, the book values of the rental, leasing, participation,
and WAP devices listed under plant, property, and equipment, and the
interest-bearing liabilities on the closing balance sheet. For purposes hereof,
the book value in the closing balance sheet for devices delivered by 31 December
2005 for the first time based on a corresponding agreement is to be accounted
for at 50% and at 75% for all other devices delivered in like
fashion."
3.
Annex
§ 4.6.5 shall
be
replaced by Annex
§ 4.6.5 NEW.
III.
Payment
and Due Date of
Purchase
Price (§ 5)
1.
§
5.1
is
reworded to read as follows:
"On
the
Transaction Date, the Buyer shall pay to the Sellers a provisional purchase
price in accordance with § 6 ("Provisional
Purchase Price"),
but
not less than EUR 20,000,000.00 in the event of the occurrence of the
Circumstances. The advance payment effected pursuant to § 16.4 shall be
credited towards this payment obligation."
2.
The
following sentence is added to § 5.2:
"The
Sellers shall have a duty of repayment in the event of the occurrence of
the
Circumstances, but only for the amount exceeding EUR 20,000,000.00 that was
paid
to the Sellers pursuant to § 5.1."
The
following paragraph is also be added to § 5.2:
"In
the
event of the occurrence of the Circumstances, if the Purchase Price should
be
less than the value of EUR 20,000,000.00 based on the closing balance sheet
to
be prepared pursuant to § 8, then the balance shall be retained without a duty
of repayment and interest-free by the Sellers ("Balance
I")."
3.
§
5.3
is
reworded to read as follows:
"Any
earn-out payment by the Buyer to the Sellers shall be due 15 banking days
after
it has been determined to be binding and incontestable pursuant to § 7, to the
extent that the payment duty is not discharged, whether in full or in part,
by a
set-off against Balance I, if any."
IV.
Earn-Out
(§ 7)
1.
The
following new paragraph is inserted in § 7.4:
"In
the
event of the occurrence of the Circumstances Annex
§ 7.4 NEW
shall
apply."
2.
The
following new paragraph is inserted as follows:
"§
7.5 The
Buyer
may set off Balance I, if any against any earn-out payment duty. Any then
remaining balance is described hereinafter as "Balance PA". Such Balance
PA may
be set off against claims of the Buyer under the MA."
V.
Balance
Sheets (§ 8)
1.
The
following sentence is inserted at the end of § 8.1 par. 2:
"Should
the Circumstances nevertheless occur, the Sellers shall also appoint the
balance-sheet auditor for the year 2007 if the Transaction Date falls within
calendar year 2007."
2.
The
following sentence is inserted at the end of § 8.2 par. 2:
"The
same
shall apply to the year 2007, provided that the Circumstances
occur."
VI.
Rights
of Cancellation and Standstill Premium (§ 16)
1.
The
following sentence is added at the end of § 16.1.2:
"The
Buyer shall be entitled, within the limits of § 3.3.1 and subject to these being
counted towards the limits set out therein, to withdraw any applications,
provided it has informed the Sellers in advance and in a comprehensive and
clear
manner."
2.
The
following sentence is added to § 16.1.3:
"In
the
event of the occurrence of the Circumstances, the foregoing basic deadline
(29
December 2006) shall be extended to 29 December 2007."
3.
A
new §
16.1A is inserted as follows:
"The
right of cancellation shall expire one (1) month after receipt of a written
notice from the Buyer regarding the occurrence of the grounds for
cancellation."
4.
The
following
sentence is added to § 16.2:
"In
the
event of the occurrence of the Circumstances, the standstill premium shall
increase to EUR 20,000,000.00. The provisions regarding the Extension Premium
in
§ 16A remain unaffected."
5.
A
new §
16.3 is inserted:
"If
the
Circumstances occur and if, in order to prevent an immediately imminent denial,
the Buyer is compelled to withdraw an application in the course of a permit
proceeding pursuant to Annex
§ 3.3.1 Part (A),
the
Agreement shall be terminated upon receipt of the statement of withdrawal,
and
the standstill premium shall fall due. This shall be considered an event
of
definite non-Consummation within the meaning of § 16A (i).
However,
this provision shall not apply unless the Buyer informs the Sellers in advance
and in a comprehensive and clear manner regarding the imminent denial, and
an
attorney who specializes in compliance issues and has been engaged by both
Parties confirms that the denial is imminent and that the cause for the denial
cannot be cured."
6.
A
new §
16.4 is inserted as follows:
"Within
15
banking days after the occurrence of the Circumstances, the Buyer must remit,
in
full, the standstill premium to the account indicated in § 5.4, in the form of
an interest-free advance payment, barring any regulatory/compliance-related
impediments to such payment.
In
the
event of such an impediment, the Buyer must make the advance payment to an
escrow account to be designated by the Sellers. The Parties shall jointly
strive
to reach an economically comparable alternative solution within a short period
of time.
If
the
right to the standstill premium fails to arise, and no Consummation occurs,
the
advance payment must be repaid to the Buyer without interest within 15 banking
days after it has been conclusively established that a Consummation cannot
take
place for reasons other than those indicated in § 16.1, but in any case no later
than 15 banking days after 31 December 2007. If after the expiration of the
aforementioned period of 15 banking days, the advance payment has not been
repaid to the Buyer, then from that date forward interest shall accrue on
the
advance payment at the rate of five (5) percentage points above the base
interest rate set by the European Central Bank (ECB)."
7.
A
new §
16A is inserted as follows:
"Extension
Premium (§ 16A)
Notwithstanding
and in addition to the standstill premium, in the event of the occurrence
of the
Circumstances, the Buyer must pay to the Sellers, on 1 July 2007 and 1 October
2007, an extension premium of EUR 5,000,000.00 in each case.
The
duty
to pay the respective extension premium shall not apply (i) if the existence
of
a definite non-Consummation (e.g. a denial of any of the antitrust clearances
required pursuant to § 3.4, § 3.5 or § 3.6, a denial of any Regulatory Approval
by a regulatory authority described in Annex
§ 3.3.1 Part (A)
and/or a
denial of any of the Regulatory Approvals described in § 3.3.2) has been
established prior to the relevant extension date and is known to the Parties,
or
(ii) if the Consummation has occurred prior to the relevant Extension
Date."
This
deed
together
with the Annexes was
read
aloud to the persons appearing and,
to the
extent that reading them aloud was not suitable, was submitted for review
and
signed individually by them,
was
approved by them and was signed together with the Notary as
follows:
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