<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported): April 20, 1998
GTECH Holdings Corporation
(Exact name of registrant as specified in its charter)
Delaware 1-11250 05-0450121
(State or other jurisdiction of Commission file number (I.R.S. Employer
incorporation or organization) Identification Number)
55 Technology Way, West Greenwich, Rhode Island 02817
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (401) 392-1000
<PAGE> 2
Item 2. Acquisition or Disposition of Assets
On May 25, 1994 Camelot Group plc ("Camelot"), a consortium of companies in
which the Company held a 22.5% interest, was selected as the result of a
competitive bid as the preferred applicant for a license to operate the
National Lottery of the United Kingdom, and on July 29, 1994 Camelot was
granted a license to operate all aspects of the National Lottery, with the
exception of proceeds allocation that is managed by agencies appointed by the
United Kingdom Government. The other members of Camelot are the following
British companies: De La Rue plc, Racal Electronics plc, Cadbury Schweppes plc
and International Computers Limited.
On April 20, 1998, pursuant to a series of related agreements, including the
Exit Agreement filed as Exhibit 10.5 to this Report which the parties have
undertaken to execute in the form attached hereto (the "Exit Agreement"), the
Company sold its 22.5% equity interest to Camelot for cash consideration of
51,000,000 pounds sterling, or approximately $84,904,000. The cash
consideration was based on arms-length negotiations between the Company and
Camelot.
The Exit Agreement provides that should the license held by Camelot be revoked
as a direct result of any act or omission of the Company, or otherwise as a
direct consequence of the Company being a supplier to Camelot (the "clawback
event"), then the Company is obligated to repay to Camelot a portion of the
cash consideration it received for its equity interest, not to exceed
20,400,000 pounds sterling (the "clawback amount") on a pro-rata basis over
the period April 20, 1998 through September 30, 2001. Accordingly, should the
Exit Agreement be executed in the form attached hereto, the clawback amount
will be deferred and amortized ratably over the period May 1998 through
September 30, 2001.
The sale of the equity interest will have no effect on the Company's position as
the principal supplier of goods and services to Camelot under the Lottery
Technology Support Services Agreement dated February 8, 1994.
Item 7. Financial Statements and Exhibits
(b)(1) Pro Forma financial information
Pro Forma Condensed Consolidated Balance Sheet as of February 28, 1998
Pro Forma Condensed Consolidated Income Statement for the fiscal year
ended February 28, 1998
(c) Exhibits - The exhibits to this report are as follows:
10.1 Letter dated March 31, 1998 to William Y. O'Connor, Chairman & Chief
Executive Officer of GTECH Corporation from Tim Holley, Chief
Executive of Camelot Group plc
10.2 Letter dated April 1, 1998 to William Y. O'Connor, Chairman & Chief
Executive Officer of GTECH Corporation from Tim Holley, Chief
Executive of Camelot Group plc
10.3 Agreement dated April 20, 1998, between Camelot Group plc and GTECH UK
Limited for the purchase by Camelot plc of 11,250,000 of its own
shares
10.4 Deed of variation, dated April 20, 1998, between De La Rue plc, Racal
Electronics plc, Cadbury Schweppes Public Limited Company,
International Computers Limited, GTECH UK Limited, GTECH Holdings
Corporation, Camelot Group plc, the Director General of the National
Lottery and the Secretary of State for Culture, Media & Sport
10.5 Exit Agreement between De La Rue plc, Racal Electronics plc, GTECH
U.K. Limited, Cadbury Schweppes Public Limited Company, International
Computers Limited, GTECH Corporation and Camelot Group plc
PRO FORMA CONDENSED FINANCIAL STATEMENTS
The following unaudited Pro Forma Condensed Consolidated Income Statement for
the fiscal year ended February 28, 1998 and the unaudited Pro Forma Condensed
Consolidated Balance Sheet at February 28, 1998 were prepared to illustrate the
estimated effects of the repurchase by Camelot Group plc ("Camelot") of the
Company's 22.5% equity interest in Camelot. The Pro Forma Condensed Consolidated
financial statements assume the repurchase occurred on February 23, 1997 (the
first day of the Company's most recently completed fiscal year) in the case of
the income statement and on February 28, 1998 in the case of the balance sheet.
The pro forma condensed financial statements have been presented for
informational purposes only and do not purport to indicate what the Company's
results of operations or financial position would have been if the transaction
had in fact occurred on the dates indicated or to project the Company's results
of operations for any future period or any future date.
The unaudited pro forma adjustments are based upon available information and
upon certain assumptions stated in the notes thereto that the Company believes
are reasonable. The pro forma condensed financial statements should be read in
conjunction with the fiscal 1998 Consolidated Financial Statements of the
Company and related notes that are expected to be filed with the Securities and
Exchange Commission on or about May 29, 1998.
<PAGE> 3
GTECH Holdings Corporation
Pro Forma Condensed Consolidated Balance Sheet-(Unaudited)
<TABLE>
<CAPTION>
February 28, 1998
---------------------------------------------------
Pro Forma Pro Forma
GTECH (a) Adjustments Consolidated
------------- ------------- --------------
(In thousands)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 8,250 $ --- $ 8,250
Accounts receivable 93,778 --- 93,778
Sales-type lease receivables 13,958 --- 13,958
Inventories 27,853 --- 27,853
Deferred income taxes 40,897 --- 40,897
Assets held for sale 14,178 --- 14,178
Other current assets 14,141 --- 14,141
--------------- ----------- ----------
Total current assets 213,055 --- 213,055
Systems, equipment and other assets relating to contracts 526,856 --- 526,856
Goodwill, net of accumulated amortization 118,537 --- 118,537
Investments in and advances to unconsolidated affiliates 64,808 (52,071)(c) 12,737
Other assets 100,556 --- 100,556
--------------- ----------- --------------
Total assets $1,023,812 $ (52,071) $ 971,741
=============== =========== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 39,451 $ --- $ 39,451
Accrued expenses 57,155 (516)(d) 56,639
Special charge 33,631 --- 33,631
Employee compensation 25,648 --- 25,648
Advance payments from customers 504 --- 504
Income taxes payable 25,392 14,922 (b) 40,314
Current portion of long-term debt 3,903 --- 3,903
--------------- ----------- --------------
Total current liabilities 185,684 14,406 200,090
Long-term debt, less current portion 453,587 (84,904)(c) 368,683
Other liabilities 19,171 (1,267)(d) 17,904
Deferred gain --- 35,337 (c) 35,337
Deferred income taxes 20,160 (14,922)(b)
749 (d) 5,987
Shareholders' equity 345,210 1,034 (d)
(2,504)(c) 343,740
--------------- ------------- --------------
Total liabilities and shareholders' equity $1,023,812 $ (52,071) $ 971,741
=============== ============= ==============
</TABLE>
GTECH Holdings Corporation
Notes to Pro Forma Condensed Consolidated Balance Sheet-(Unaudited)
(a) Derived from the Company's financial statements at February 28, 1998.
(b) Represents the adjustment made to income taxes associated with the gain on
the sale.
(c) In April 1998, the Company sold its 22.5% interest in Camelot for cash
consideration of $84,904,000. Proceeds from the sale were applied to long
term debt. The clawback amount was deferred and will be amortized ratably
over the period May 1998 through September 2001. Should the clawback event
occur, the Company would cease to amortize the clawback amount to income.
(d) Represents the elimination of deferred revenue and associated taxes relating
to product sales by the Company to Camelot.
<PAGE> 4
GTECH Holdings Corporation
Pro Forma Condensed Consolidated Income Statement-(Unaudited)
<TABLE>
<CAPTION>
Fiscal Year Ended February 28, 1998
---------------------------------------------------
Pro Forma Pro Forma
GTECH (a) Adjustments Consolidated
------------- ------------- --------------
(In thousands, except per share amounts)
<S> <C> <C> <C>
Service and product sales revenues $ 990,567 $ --- $ 990,567
Costs of services and sales 677,299 --- 677,299
------------- ------------- --------------
Gross Profit 313,268 --- 313,268
Operating expenses 169,782 --- 169,782
Special Charge 99,382 --- 99,382
------------- ------------- --------------
Operating income 44,104 --- 44,104
Interest income 5,733 --- 5,733
Equity in earnings of unconsolidated affiliates 24,376 (20,988)(b) 3,388
Other income 711 10,343 (c) 11,054
Interest expense (30,311) 4,882 (d) (25,429)
------------- ------------- --------------
Income before income taxes 44,613 (5,763) 38,850
Income taxes 17,399 (2,188)(e) 15,211
------------- ------------- --------------
Net income $ 27,214 $ (3,575) $ 23,639
============= ============= ==============
Basic earnings per share $ 0.65 $ 0.56
============= ==============
Diluted earnings per share $ 0.64 $ 0.56
============= ==============
Weighted average shares-basic 41,887 41,887
============= ==============
Weighted average shares-diluted 42,229 42,229
============= ==============
</TABLE>
GTECH Holdings Corporation
Notes to Pro Forma Condensed Consolidated Income Statement-(Unaudited)
(a) Derived from the Company's financial statements for the fiscal year ended
February 28, 1998.
(b) Represents the elimination of the Company's equity in the earnings of
Camelot.
(c) Represents the fiscal 1998 amortization of the clawback amount over a
period equal to the remaining license term (41 months). Should the clawback
event occur, the Company would cease to amortize the clawback amount to
income.
(d) Represents adjustments to interest expense at an assumed rate of 5.75%
resulting from the utilization of the cash proceeds to pay down outstanding
long term debt.
(e) Represents the income tax adjustment associated with the adjustments to
income before income taxes described above.
<PAGE> 5
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 thereunto duly authorized.
GTECH HOLDINGS CORPORATION
Date: May 5, 1998 By /s/ Robert J. Plourde
---------------------------------
Robert J. Plourde, Vice President
and Corporate Controller
(Principal Accounting Officer)
<PAGE> 6
EXHIBIT INDEX
-------------
Exhibit No. Description
- ----------- -----------
10.1 Letter dated March 31, 1998 to William Y. O'Connor, Chairman & Chief
Executive Officer of GTECH Corporation from Tim Holley, Chief
Executive of Camelot Group plc
10.2 Letter dated April 1, 1998 to William Y. O'Connor, Chairman & Chief
Executive Officer of GTECH Corporation from Tim Holley, Chief
Executive of Camelot Group plc
10.3 Agreement dated April 20, 1998, between Camelot Group plc and GTECH UK
Limited for the purchase by Camelot plc of 11,250,000 of its own
shares
10.4 Deed of variation, dated April 20, 1998, between De La Rue plc, Racal
Electronics plc, Cadbury Schweppes Public Limited Company,
International Computers Limited, GTECH UK Limited, GTECH Holdings
Corporation, Camelot Group plc, the Director General of the National
Lottery and the Secretary of State for Culture, Media & Sport
10.5 Exit Agreement between De La Rue plc, Racal Electronics plc, GTECH
U.K. Limited, Cadbury Schweppes Public Limited Company, International
Computers Limited, GTECH Corporation and Camelot Group plc
<PAGE> 1
[CAMELOT LETTERHEAD]
31 March 1998
William Y O'Connor
Chairman & Chief Executive Officer
GTECH Corporation
West Greenwich Corporate Headquarters
56 Technology Way
West Greenwich
RI 2817 USA
Dear Bill
I am writing to confirm the arrangements we have discussed in relation to the
supply after 30 September 2001 ("Second Licence Period") of goods and services
of the kind currently provided under the Lottery Technology Support Services
Agreement dated 8 February 1994 between Camelot Group plc and GTECH Corporation
("LTSS Agreement").
1. New LTSS Agreement
You have made it clear that it is your intention to work with Camelot for
the Second Licence Period and we agree both parties will re-negotiate in
good faith within the next eighteen months ("Negotiation Period") an
agreement to replace the LTSS Agreement to commence at the start of the
Second Licence Period. As agreed, we shall advise the Director General of
OFLOT of our intention.
Let me assure you that for Camelot, I will negotiate, and, if for any
reason I am unavailable, Sir George Russell will conduct the negotiations.
You have confirmed that for GTECH you will conduct negotiations or
alternatively Steve Norwick.
In the event that at the end of the Negotiation Period, we have not
executed an agreement to replace the LTSS Agreement for the Second Licence
Period, either of us may serve written notice on the other that the LTSS
Agreement shell not continue into the Second Licence Period. In such event
the rights of Camelot and obligations of GTECH pursuant to Clause 31 of
the LTSS Agreement shall thereupon terminate and the LTSS Agreement shall
terminate on 30 September 2001 unless earlier terminated on its terms.
2. Change in management or shareholders of Camelot
In the event that before the expiry of the deadline for the submission of
bids for a second Running Licence (as the same is defined in the LTSS
Agreement);
<PAGE> 2
(a) both Robert Victor Holley and Sir George Russell cease to be
Directors of Camelot, then upon the later such cessation of
directorship, or
(b) any of Automated Wagering International, Scientific Games
International, Essnet or any other recognised competitor of GTECH
shall become a shareholder of Camelot; or
(c) two persons or bodies corporate both of whom shall, in GETCH's sole
discretion, be unacceptable to it in that capacity shall become
shareholders of Camelot
then GTECH shall cease to be obliged to negotiate with Camelot as provided
in paragraph 1 above, and shall in all events cease to be obliged to
supply Camelot during any Second Licence Period.
The above condition will be null and void once bids are submitted and any
terms would be specified in the bid.
Please confirm your acceptance of these arrangements by signing below.
Yours sincerely,
/s/ Tim
Tim Holley
Chief Executive
Camelot Group plc
/s/ Bill O'Connor
William Y O'Connor
Chairman & Chief Executive Officer
GTECH Corporation
<PAGE> 1
[CAMELOT LETTERHEAD]
1st April 1998
Mr. William Y O'Connor
Chairman & Chief Executive
GTECH Corporation
West Greenwich Corporate Headquarters
55 Technology Way
West Greenwich
RI 2817 USA
Dear Bill,
Sale of Shares of GTECH UK Limited in Camelot Group plc
I am writing to confirm that Camelot agrees to secure the following by closing
of the sale of the shares of GTECH UK limited in Camelot Group plc:
a. In relation to events occurring after their release from the
Shareholders' Agreement, GTECH UK Limited and any group
undertakings (as defined in Section 259 of the Companies Act
1985) of GTECH UK Limited or any other undertaking controlling,
controlled by or under common control with GTECH UK Limited or
unconditionally released from all obligations under or in
connection with the Shareholders Agreement (in particular the
covenant not to compete in Clause 14 thereof and any
non-compete obligations or GTECH Corporation or GTECH UK
Limited under the Field Services Agreement or the Terminal
Supply Agreement as identified as Auxillary Agreements in the
Shareholders Agreement and under any guarantee, indemnity,
security or similar arrangement given or entered into by any of
them with respect to the obligations of Camelot Group plc or
its subsidiary undertakings relating to the Shareholders'
Agreement, including in particular the obligations and
guarantees under the revocation bond agreement dated 28th July
1994.
and that you receive:-
b. Evidence that the purchase will be effected lawfully in compliance with
the Companies Act 1985 and the Articles of Association entirely out of
distributable profits and in accordance with the Shareholders Agreement
and The National Lottery etc. Act 1993 and the Section 5 Licence.
<PAGE> 2
c. Evidence that all necessary consents have been obtained from governmental
or regulatory authorities and relevant third parties to allow the sale.
d. Evidence that each of the persons party to the Shareholders Agreement
(other than GTECH UK Limited and GTECH Corporation) has consented to the
execution by and performance of the company of the agreement for sale of
the shares.
e. Evidence that Camelot will not terminate any contract or agreement between
Camelot and GTECH UK Limited or GTECH Corporation by reason of the sale.
Yours sincerely,
/s/ Tim
Tim Holley
Chief Executive
/s/ wy o'connor
W. Y. O'CONNOR
GTECH-
<PAGE> 1
DATED 20 April 1998
(1) CAMELOT GROUP plc
(2) GTECH UK LIMITED
------------------------------------
AGREEMENT
for the purchase by
Camelot Group plc
of 11,250,000 of its own shares
------------------------------------
CAMERON MCKENNA
Mitre House
160 Aldersgate Street
London EC1A 4DD
Tel: 0171-367 3000
Fax: 0171-367 2000
<PAGE> 2
THIS AGREEMENT is made the 20 day of April 1998 BETWEEN:
(1) GTECH UK LIMITED whose registered office is at Rosebery House, 4 Farm
Street, London W1 (the "Seller"); and
(2) CAMELOT GROUP of Tolpits Lane, Watford, WD1 8RN a company registered in
England under No. 2822203 (the "Company").
RECITALS
(A) The Company is a public company incorporated in England on 27th May 1993
with limited liability under the Companies Act 1985.
(B) At the date hereof the Seller is the registered holders and beneficial
owners of an aggregate of 11.250,000 ordinary shares of P1 each in the
capital of the Company (the "Sale Shares").
(C) A draft of this agreement has been available for inspection by members of
the Company for not less than 15 days ending with the date of the meeting
at which the resolution referred to at (D) below will be proposed and at
the meeting itself.
(D) This agreement will only be effective if a special resolution approving
the terms of this agreement (and passed before its execution) is so passed
by special resolution by members of the Company entitled to attend and
vote at general meetings of the Company (other than that Shareholder to
which the resolution relates) at the EGM to be held on 15 April 1998.
(E) The Company is empowered under its articles of association to purchase its
own shares.
(F) The purchase consideration is to be provided by the Company out of the
distributable profits of the Company in accordance with section 160(1)(a)
Companies Act 1985.
(G) Following the purchase of the Sale Shares hereunder the Sale Shares are to
be treated as cancelled.
(H) The members of the Company have agreed to waive their rights of preemption
under article 33 of the articles of association of the Company in relation
to the sale by the Seller of the Sale Shares to the Company.
(I) The Company wishes to purchase and the Seller wishes to sell the Sale
Shares on the terms of this agreement.
<PAGE> 3
NOW IT IS HEREBY AGREED as follows:
1. Interpretation
1.1 A reference in this agreement to the singular includes a reference to the
plural and vice versa and a reference to the masculine includes a
reference to the feminine and neuter and a reference to a person includes
a reference to a company as well as any legal or natural person.
1 2 The construction of this agreement is not to be affected by any
heading.
1.3 References to this agreement include references to the schedule to this
agreement.
2. Sale of shares and purchase consideration
2.1 Subject to the terms of this agreement, the Seller as beneficial owner
shall sell the number of Sale Shares set opposite its name in column (2)
of the schedule and the Company shall buy such Sale Shares, free from all
options, liens, charges and incumbrances.
2.2 The aggregate consideration for the sale of the Sale Shares shall be the
sum of P51 million which shall be paid as set out in sub-clause 3.1(b).
2.3 With effect from the signing of this agreement, the Seller shall, for so
long as he remains the holder of any of the Sale Shares, hold the Sale
Shares as a bare trustee of the Company.
3. Completion
3.1 Completion of the purchase of the Sale Shares shall take place forthwith
upon the signing hereof and completion shall be effected by:
(a) the Seller delivering to the Company the share certificates
representing its holdings of the Sale Shares as set out in column
(2) of the schedule; and
(b) against such delivery by the Seller, the Company delivering to each
of the Seller a Company cheque or cash full settlement of purchase
price by wire transfer by close of business UK time on the
completion date (15 April 1998) for the amount of the purchase price
set out opposite his name in column (3) of the Schedule and made
payable, in the case of a Company cheque, to the Seller.
3.2 As soon as reasonably practicable after completion of the sale and
purchase of the Sale Shares in accordance with clause 3.1 the Company
shall procure that its register of members shall be altered so as to show:
(a) that the Seller has sold the Sale Shares registered in his name to
the Company and has thereby ceased to hold those Sale Shares; and
2
<PAGE> 4
(b) that the Sale Shares have been cancelled.
3.3 In the event of any failure by the Seller duly to deliver up at completion
the certificates in respect of the Sale Shares, the Company shall, that
notwithstanding but subject always to the Company complying with the
provisions of sub-clause 3.1(b) above, be authorised to cancel the Sale
Shares in respect of which certificates have not been delivered and
procure that its register of members is altered accordingly.
4. Costs
The Company shall pay all stamp duties falling due in respect of the
completion of the purchase of the Sale Shares in accordance with this
agreement.
Each of the parties shall bear their own costs and charges relating to
this agreement.
5. Governing Law
This agreement shall be construed and interpreted in all respects in
accordance with the law of England to the non-exclusive jurisdiction of
which the parties agree to submit.
6. Counterparts
This agreement may be executed in any number of counterparts and by the
several parties hereto on separate counterparts each of which when so
executed and delivered shall be an original, but all the counterparts
shall constitute one and the same instrument.
7. General
7.1 The Seller shall execute such documents and waivers and generally do
everything further reasonably required by the Company effectively to
transfer to the Company the Sale Shares and all the Seller's right and
title thereto and interest therein.
7.2 This agreement comprises the entire agreement between the parties in
relation to the matters referred to herein (none of the parties having
relied on any representation made by any other party which is not
contained in this agreement) and supersedes any previous agreement or
arrangement between the parties hereto in relation to the sale and
purchase of the Sale Shares and the parties acknowledge that no claim
shall arise in respect of any agreement or arrangement so superceded.
7.3 Any variation of this agreement shall be binding only if it is recorded in
a document signed by each of the parties hereto and approved by a special
3
<PAGE> 5
resolution passed by the members of the Company in accordance with section
164(7) Companies Act 1985.
AS WITNESS the hands of the parties hereto or their duly authorised
representatives the day first above written.
Signed by )
on behalf of [ILLEGIBLE]
Camelot Group plc )
Signed by )
on behalf of
GTECH UK Limited )
4
<PAGE> 6
AS WITNESS the hands of the parties hereto or their duly authorised
representatives the day first above written
Signed by )
on behalf of
Camelot Group plc )
Signed by /s/ W.Y. O'Connor )
on behalf of W.Y. O'CONNOR )
GTech UK Limited /s/ Cynthia A. Nebergall, Secretary
4
<PAGE> 7
<TABLE>
<CAPTION>
SCHEDULE
(1) (2) (3)
Names and addresses of the Number of Sale Shares Purchase
Seller --------------------- --------
------
<S> <C> <C>
GTECH UK Limited 11,250,000
Rosebery House
4 Farm Street
London W1X ________________ _______________
________________ _______________
</TABLE>
<PAGE> 1
Dated 20 April 1998
-------------------
DE LA RUE PLC (1)
RACAL ELECTRONICS PLC (2)
CADBURY SCHWEPPES PUBLIC LIMITED COMPANY (3)
INTERNATIONAL COMPUTERS LIMITED (4)
GTECH UK LIMITED (5)
GTECH HOLDINGS CORPORATION (6)
CAMELOT GROUP PLC (7)
THE DIRECTOR GENERAL OF THE
NATIONAL LOTTERY (8)
THE SECRETARY OF STATE FOR CULTURE,
MEDIA & SPORT (9)
------------------------------------------------------------
DEED OF VARIATION
------------------------------------------------------------
CERTIFIED TRUE COPY
/s/ Cameron McKenna
(cameron mcKenna)
MITRE HOUSE
160 ALDERSGATE STREET
LONDON EC1A 4DD
Solicitors
20/04 1995
Draft: 50274991.02/14 April 1998
<PAGE> 2
THIS AGREEMENT is made the 20 day of April 1998
BETWEEN:-
(1) DE LA RUE PLC, a company incorporated in England and Wales (registered No.
58026), the registered office of which is at 6 Agar Street, London WC2N
4DE ("DLR");
(2) RACAL ELECTRONICS PLC, a company incorporated in England and Wales
(registered No. 497098), the registered office of which is at Western
Road, Bracknell, Berkshire RG12 1RG ("Racal");
(3) CADBURYS SCHWEPPES PUBLIC LIMITED COMPANY, a company incorporated in
England and Wales (registered No. 52457), the registered office of which
is at 25 Berkeley Square, London W1X 6HT;
(4) INTERNATIONAL COMPUTERS LIMITED, a company incorporated in England and
Wales (registered No. 96056), the registered office of which is at 26
Finsbury Square. London EC2A 1DS ("ICL");
(3) GTECH UK LIMITED, a company incorporated in England and Wales (registered
No. 2796328), the registered office of which is at Rosenbury House, 4 Farm
Street, London W1X 7RA ("GTECH");
(6) GTECH HOLDINGS CORPORATION, a Delaware corporation, the principal office
of which is at Tolpits Lane, Watford, WD1 8RN ("GTECH Holdings");
(7) CAMELOT GROUP PLC, a company incorporated in England and Wales (registered
No. 2822203), the registered office of which is at Tolpits Lane, Watford,
WD1 8RN ("Camelot");
(8) THE DIRECTOR GENERAL OF THE NATIONAL LOTTERY of 2 Monck Street, London SW1
(the "Director General"); and
(9) THE SECRETARY OF STATE FOR CULTURE, MEDIA AND SPORT of 2-4 Cockspur
Street, London SW1Y 5DH (the "Secretary of State").
WHEREAS:-
(A) On 28th July 1994, the parties entered into a Revocation Bond Agreement
(the "Agreement").
(B) The parties now wish to record the variation of the Agreement in the
manner hereinafter described.
NOW IT IS HEREBY AGREED as follows:
<PAGE> 3
1. This agreement is supplemental to the Agreement. Words and expressions
defined in the Agreement shall have the same meaning herein.
2. Except as expressly varied by this agreement, the Agreement shall remain
in full force and effect.
3. Definitions in the Agreement shall have the same meaning in this
agreement.
4. The parties agree that with effect from the date hereof, the Agreement
shall be varied as follows:-
4.1 GTECH and GTECH Holdings shall cease to be parties to the Agreement and
shall be released and discharged from their respective obligations
thereunder, and shall be released and discharged from all liabilities,
claims and demands howsoever arising under the Agreement whether in
contract, tort or otherwise.
4.2 The Proportions of the remaining Obligors shall be as set out below and
shall replace the Proportions as set out in the Schedule to the
Agreement:-
<TABLE>
<CAPTION>
Obligors New Maximum Liabilities
--------------------------------
<S> <C> <C>
Name Maximum liability at the Percentage Shareholding
date of this Agreement at date of this Agreement
DLR P10,666,667 26 2/3%
Racal P10,666,667 26 2/3%
CS P10,666,666 26 2/3%
ICL P8,000,000 20%
</TABLE>
4.3 The Director General hereby consents in accordance with Clause 3.4 of the
Agreement to the Proportions of the remaining Obligors being as set out in
Clause 4.2 above.
5. This agreement shall be governed by and construed in accordance with
English law and each party hereby irrevocably submits to the jurisdiction
of the English Courts.
IN WITNESS whereof this agreement has been executed as a Deed and
unconditionally delivered by each of the parties hereto on the day and year
first above written.
-2-
<PAGE> 4
SIGNED as a Deed by )
DE LA RUE PLC )
in the presence of:- )
Director
Director/Secretary
SIGNED as a Deed by )
RACAL ELECTRONICS PLC )
in the presence of:- )
/s/ [Illegible]
Director [SEAL]
/s/ [ILLEGIBLE]
Director/Secretary
SIGNED as a Deed by )
CADBURYS SCHWEPPES )
PUBLIC LIMITED COMPANY )
in the presence of:- )
Director
Director/Secretary
-3-
<PAGE> 5
SIGNED as a Deed by )
INTERNATIONAL COMPUTERS )
LIMITED )
in the presence of:- )
Director
Director/Secretary
SIGNED as a Deed by )
GTECH UK LIMITED )
in the presence of:- )
Director
Director/Secretary
SIGNED as a Deed by )
GTECH HOLDINGS )
CORPORATION )
in the presence of:- )
Director
Director/Secretary
-4-
<PAGE> 6
SIGNED as a Deed by )
CAMELOT GROUP plc )
in the presence of:- )
Director
Director/Secretary
SIGNED as a Deed by )
THE DIRECTOR GENERAL )
OF THE NATIONAL LOTTERY )
in the presence of:- )
(witness)
SIGNED as a Deed by )
THE SECRETARY OF STATE )
FOR CULTURE, MEDIA & SPORT )
in the presence of:- )
(witness)
-5-
<PAGE> 7
SIGNED as a Deed by )
CAMELOT GROUP plc )
in the presence of:- )
Director
Director/Secretary
SIGNED as a Deed by )
THE DIRECTOR GENERAL ) /s/ [ILLEGIBLE]
OF THE NATIONAL LOTTERY )
in the presence of:- )
(witness)
/s/ [ILLEGIBLE]
SIGNED as a Deed by )
THE SECRETARY OF STATE )
FOR CULTURE, MEDIA & SPORT )
in the presence of:- )
(witness)
-5-
<PAGE> 8
SIGNED as a Deed by )
DE LA RUE PLC )
in the presence of:- )
Director
Director/Secretary
SIGNED as a Deed by )
RACAL ELECTRONICS PLC )
in the presence of:- )
Director
Director/Secretary
SIGNED as a Deed by )
CADBURYS SCHWEPPES )
PUBLIC LIMITED COMPANY )
in the presence of:- )
Director
/s/ [ILLEGIBLE]
Director/Secretary
/s/ [ILLEGIBLE]
-3-
<PAGE> 9
SIGNED as a Deed by )
DE LA RUE PLC )
in the presence of:- )
/s/ [ILLEGIBLE] Director
/s/ [ILLEGIBLE] Director/Secretary
SIGNED as a Deed by )
RACAL ELECTRONICS PLC )
in the presence of:- )
Director
Director/Secretary
SIGNED as a Deed by )
CADBURYS SCHWEPPES )
PUBLIC LIMITED COMPANY )
in the presence of:- )
Director
Director/Secretary
-3-
<PAGE> 10
SIGNED as a Deed by )
INTERNATIONAL COMPUTERS )
LIMITED )
in the presence of:- )
Director /s/ [ILLEGIBLE]
/s/ [ILLEGIBLE]
Director/Secretary
SIGNED as a Deed by )
GTECH UK LIMITED )
in the presence of:- )
Director
Director/Secretary
SIGNED as a Deed by )
GTECH HOLDINGS )
CORPORATION )
in the presence of:- )
Director
Director/Secretary
-4-
<PAGE> 11
SIGNED as a Deed by )
INTERNATIONAL COMPUTERS )
LIMITED )
in the presence of:- )
Director
Director/Secretary
SIGNED as a Deed by )
GTECH UK LIMITED )
in the presence of:- )
/s/ [ILLEGIBLE]
Director
/s/ [ILLEGIBLE]
/Secretary
SIGNED as a Deed by )
GTECH HOLDINGS )
CORPORATION )
in the presence of:- )
/s/ [ILLEGIBLE]
Director
Director/Secretary
DEED OF VARIATION
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<PAGE> 12
SIGNED as a Deed by )
CAMELOT GROUP plc )
in the presence of:- )
/s/ [ILLEGIBLE] Director
/s/ [ILLEGIBLE] /Secretary
SIGNED as a Deed by )
THE DIRECTOR GENERAL )
OF THE NATIONAL LOTTERY )
in the presence of:- )
(witness)
/s/ [ILLEGIBLE]
SIGNED as a Deed by )
THE SECRETARY OF STATE )
FOR CULTURE, MEDIA & SPORT )
in the presence of:- )
(witness)
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<PAGE> 13
SIGNED as a Deed by )
CAMELOT GROUP plc )
in the presence of:- )
Director
Director/Secretary
SIGNED as a Deed by )
THE DIRECTOR GENERAL )
OF THE NATIONAL LOTTERY )
in the presence of:- )
(witness)
SIGNED as a Deed by )
THE SECRETARY OF STATE ) A.C.S. Ramsey
FOR CULTURE, MEDIA & SPORT ) Group Head, D.C.M.S.
in the presence of:- ) on behalf of the
(witness) Faculty of State
/s/ Rob Hathlia
National Lottery Division
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<PAGE> 1
DATED 1998
(1) DE LA RUE PLC
(2) RACAL ELECTRONICS PLC
(3) GTECH U.K. LIMITED
(4) CADBURY SCHWEPPES PUBLIC LIMITED COMPANY
(5) INTERNATIONAL COMPUTERS LIMITED
(6) GTECH CORPORATION
(7) CAMELOT GROUP PLC
---------------------------------
GTECH EXIT AGREEMENT
relating to
CAMELOT GROUP PLC
---------------------------------
Cameron McKenna
Mitre House
160 Aldersgate Street
London EC1A 4DD
T +44(0)171 367 3000
F +44(0)171 367 2000
<PAGE> 2
Table of Contents
<TABLE>
<S> <C>
1. Interpretation ....................................................... 2
2. Release of the GTECH Parties from the Shareholders' Agreement,
Deed of Variation to the Revocation Bond Agreement and
the Replacement Lottery Technology Support Services Agreement ...... 5
3. GTECH Clawback Payment ............................................... 7
4. Covenants not to Compete ............................................. 9
5. General .............................................................. 14
6. Notices .............................................................. 15
7. Governing Law Jurisdiction and Agents for Service .................... 17
8. Counterparts ......................................................... 18
9. Guarantee ............................................................ 18
10. Competition .......................................................... 19
11. Further Assurances ................................................... 19
</TABLE>
<PAGE> 3
THIS AGREEMENT is made the day of 1998
BETWEEN
(1) DE LA RUE PLC, a company incorporated in England and Wales (registered no.
58026), the registered office of which is at 6 Agar Street, London, WC2N
4DE, England ("DLR");
(2) RACAL ELECTRONICS PLC, a company incorporated in England and Wales
(registered no. 497098). the registered office of which is at Western
Road, Bracknell, Berkshire, RGI2 1RG, England ("Racal");
(3) GTECH U.K. LIMITED, a company incorporated in England and Wales
(registered no. 2796326), the registered office of which is at Rosenbery
House, 4 Farm Street, London W1X 7RA ("GTECH");
(4) CADBURY SCHWEPPES PUBLIC LIMITED COMPANY, a company incorporated in
England and Wales (registered no. 52457). the registered office of which
is at 25 Berkeley Square, London, W1X 61-IT, England ("CS");
(5) INTERNATIONAL COMPUTERS LIMITED, a company incorporated in England and
Wales (registered no. 96056), the registered office of which is at 26
Finsbury Square, London EC2A 1DS, England ("ICL");
(6) GTECH CORPORATION, a Delaware corporation, the principal office of which
is at 55 Technology Way, West Greenwich, Rhode Island 02817, United States
of America, ("GTECH Corporation"); and
(7) CAMELOT GROUP PLC, a company incorporated in England and Wales (registered
no. 2822303), the registered office of which is at Tolpits Lane, Watford,
WD1 8RN England ("Camelot").
WHEREAS
(A) On 20 April, 1998 GTECH and Camelot entered into an agreement for the
purchase by Camelot of 11,250,000 of its own shares from GTECH for
P51,000,000. This Agreement is a variation of that agreement and is
entered into in accordance with the requirements of the Companies Act
1985. This Agreement supersedes the letters referred to in Clause 5.5
hereof and the deeds of release entered into by Camelot and the Remaining
Shareholders pursuant to such letters.
(B) Each of Camelot and the Remaining Shareholders (as hereafter defined) wish
to release each of the GTECH Parties (as hereafter defined) and each of
the GTECH Parties wish to release each of Camelot and the Remaining
Shareholders from their respective obligations to the GTECH Parties or
Camelot and the Remaining Shareholders (as appropriate) under certain
agreements on the terms set out in this Agreement.
(C) GTECH Corporation will continue to provide services to Camelot under
certain agreements and the parties hereto wish to regulate their ongoing
relationship following the sale of GTECH's shares to Camelot.
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(D) If the Running Licence (as hereafter defined) is revoked in certain
circumstances, GTECH has also agreed to pay Camelot for its loss arising
from such event on the terms contained herein.
IT IS AGREED as follows:-
1. Interpretation
1.1 In this Agreement-
"Application" means the application by Camelot for the grant to it of a
second Running Licence;
"Deed of Variation" the Deed of Variation to the Revocation Bond
Agreement,
"Event" means a revocation of the Running Licence held by Camelot at the
date hereof by reason of the Director General, OFLOT or the Secretary of
State exercising his/their powers under Section 10(1) or Section 10(3) and
Part I of Schedule 3 of the National Lottery Act 1993 (as at the date
hereof):
(a) as a direct result of any act or omission of GTECH Corporation, any
of its subsidiaries or officer; and/or
(b) otherwise as direct consequence of GTECH Corporation (or any of its
group undertakings) being a supplier to Camelot;
in either such case after and, in the case of sub-paragraph (a) above,
before the date hereof PROVIDED THAT, in relation to facts, events, acts,
omissions, matters or circumstances existing or occurring before the date
hereof, there shall be disregarded any fact, event, act, omission, matter,
or circumstance which had been expressly referred to in the submission of
the GTECH Parties to the Director General of the National Lottery (the
"Submission" (as hereafter defined)), (but for the avoidance of doubt, any
fact, event, act, omission, matter, or circumstance not referred to in
that Submission or any new fact, event, act, matter, omission or
circumstance (whether or not relating to any fact, event, act, omission,
matter, or circumstance referred to in that Submission) which becomes
known to the Director General after the date hereof, shall not for the
purposes of this definition be considered to be included in the
Submission).
"Field Services Agreement" means the Field Services Agreement dated 8
February 1994 between (1) Camelot (2) ICL and (3) GTECH Corporation;
"Group Company" means Camelot and any of its subsidiary undertakings for
the time being;
"group undertaking" means, in relation to a company, a company which is a
parent undertaking or subsidiary undertaking of that company or a
subsidiary undertaking of any parent undertaking of that company, for the
time being;
"GTECH Clawback Payment" means P20,400,000;
"GTECH Parties" means GTECH and GTECH Corporation;
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"Lottery Technology Support Services Agreement" means the Lottery
Technology Support Services Agreement dated 8 February 1994 between (1)
Camelot and (2) GTECH Corporation;
"National Lottery Act" means the National Lottery etc. Act 1993 as
modified or re-enacted or both from time to time thereafter and any
subordinate legislation made thereunder;
"Pro-Rated Amount" means x/y
where X = the number of days between the Event and 30 September 2001 and Y
= the number of days from the date hereof to 30 September 2001
"Relevant Proportion of the GTECH Clawback Payment" means the Pro-Rated
Amount of P20,400,000;
"Remaining Shareholders" means DLR, Racal, CS and ICL;
"Replacement Lottery Technology Support Services Agreement" means the
agreement (if any) entered into between Camelot and GTECH Corporation
pursuant to the provisions of Clause 2.5 hereof;
"Revocation Bond Agreement" means the agreement dated 29 July 1994 between
the parties hereto other than GTECH Corporation, but including GTECH
Holdings Corporation, the Director General and the Secretary of State for
National Heritage and described accordingly;
"Running Licence" means the licence of Camelot to run the National Lottery
pursuant to Section 5 of the National Lottery Act;
"Second Running Licence" means the second Running Licence to be granted
under the National Lottery Act;
"Second Licence Period" means the period from the date the Second Running
Licence is granted until such Second Running Licence is terminated;
"Shareholders' Agreement" means the Shareholders' Agreement dated 8
February 1994 between the parties hereto relating to Camelot;
"Submission" means any and all correspondence or other written
communication with the Director General of the National Lottery by or on
behalf of any GTECH Party or group undertaking of such GTECH Party
subsequent to 1 February 1998 but on or before 18 March 1998, including
all documentation submitted on 9 and 18 March 1998 to the Director General
which the Director General confirms that he has received, within the above
time frames, as part of the GTECH Submission and the contents of all oral
presentations given to the Director General as recorded in the written
transcript of such presentations provided that such documentation and
transcripts are delivered to Camelot within seven working days of the date
hereof;
"Surviving Agreements means the Shareholders' Agreement (subject to
Clauses 2.1 and 2.2) the Field Services Agreement (subject to Clause 4.5),
the
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Lottery Technology Support Services Agreement, the Terminals Supply
Agreement and the Purchase and Sale Agreement.
1.2 In this Agreement, a reference to:-
1.2.1 a document in the "agreed form" is a reference to a document in a
form approved and for the purposes of identification signed by or on
behalf of the parties to this agreement,
1.2.2 (subject to Clause 1.3) a statutory provision includes a reference
to:
(a) the statutory provision as modified or re-enacted or both from
time to time (whether before or after the date of this
Agreement); and
(b) any subordinate legislation made under the statutory provision
(whether before or after the date of this Agreement);
1.2.3 persons includes a reference to any body corporate, unincorporated
association or partnership;
1.2.4 a person includes a reference to that person's legal personal
representatives or successors;
1.2.5 a Clause, party or Schedule, unless the contrary is indicated, is a
reference to a clause of or a party or schedule to this Agreement.
1.3 Words and expressions contained in this Agreement which are not defined in
Clause 1.1 or elsewhere in this Agreement have, unless the contrary is
indicated, the same meaning as in the Companies Act 1985, but excluding
any statutory modification to the Companies Act 1985 not in force at the
date of this Agreement.
1.4 Save as otherwise expressly provided in this Agreement, in respect of any
obligation of a party under this Agreement to procure or ensure any matter
jointly with one or more of the other parties, such obligation shall be
limited to doing all such acts and things, or (if appropriate) refraining
from doing all such acts and things, as are within its power or control in
order to procure or ensure such matter.
1.5 Except to the extent the context requires otherwise, any reference in this
Agreement to this Agreement or any other agreement or document is a
reference to this Agreement or, as the case may be, the relevant agreement
or document as from time to time amended, supplemented or novated and
includes a reference to any document which amends, supplements or novates
this Agreement or, as the case may be, the relevant agreement or document
(but only in relation to the GTECH Parties if one or both of the GTECH
Parties are a party to such agreement or document).
1.6 The Interpretation Act 1978 shall apply to this Agreement in the same way
as it applies to an enactment.
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2. Release of the GTECH Parties from the Shareholders' Agreement, Deed of
Variation to the Revocation Bond Agreement and the Replacement Lottery
Technology Support Services Agreement
2.1 In respect of the rights and obligations of each of the GTECH Parties
only, each of the Remaining Shareholders and Camelot hereby acknowledge to
each of the GTECH Parties that, subject to Clause 2.3, the Shareholders'
Agreement shall be terminated on 20 April, 1998 (including, without
limitation, clause 14 thereof) and each of the Remaining Shareholders and
Camelot hereby release and waive each of the GTECH Parties from any
liabilities arising on or after 20 April, 1998 in respect of the
Shareholders' Agreement but it shall not affect any rights or liabilities
of the GTECH Parties to Camelot or the Remaining Shareholders accrued at
the 20 April, 1998.
2.2 In respect of the rights and obligations of each of the GTECH Parties
only, each of the GTECH Parties acknowledge to each of the Remaining
Shareholders and Camelot that, subject to Clause 2.3, the Shareholders'
Agreement shall be terminated on 20 April, 1998 and each of the GTECH
Parties hereby release and waive each of the Remaining Shareholders or
Camelot from any liabilities arising on or after 20 April, 1998 in respect
of the Shareholders' Agreement, but it shall not affect any rights or
liabilities of the Remaining Shareholders or Camelot to the GTECH Parties
accrued at 20 April, 1998.
2.3 The provisions of clause 17 (Group Relief) and clause 18 (Confidentiality)
and, to the extent relevant to the confidentiality obligations of either
of the GTECH Parties, clause 21.11 and clause 26 (in respect of the
obligations of each of the GTECH Parties only) of the Shareholders'
Agreement shall survive the termination of the Shareholders' Agreement as
between Camelot and the Remaining Shareholders and the GTECH Parties and
the Shareholders' Agreement shall be deemed to otherwise survive and
continue but varied in accordance with the terms of this Agreement.
2.4 For the avoidance of doubt, the obligations of the GTECH Parties, GTECH
Holdings Corporation and the Remaining Shareholders pursuant to the
Revocation Bond Agreement shall be in the case of the GTECH Parties and
GTECH Holdings Corporation released and in the case of the Remaining
Shareholders varied in accordance with the Deed of Variation signed on 20
April, 1998.
2.5 In relation to the Replacement Lottery Technology Support Services
Agreement, it is hereby agreed as follows:-
2.5.1 subject to Clause 2.5.3, Camelot and GTECH Corporation will, during
the period of 18 months following the date of this Agreement
("Negotiation Period"), in good faith negotiate the terms of the
Replacement Lottery Technology Support Services Agreement, being an
agreement to commence on the date of the Second Running Licence,
which will replace the Lottery Technology Support Services Agreement
with effect from such date. Camelot shall advise the Director
General of OFLOT that such negotiation shall occur.
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<PAGE> 8
2.5.2 In the event that, notwithstanding such good faith negotiations,
GTECH Corporation and Camelot do not enter into the Replacement
Lottery Technology Support Services Agreement within the Negotiation
Period being the period of 18 months referred to in Clause 2.5.1
above or such shorter period as may result from the operation of
Clause 2.5.3 (or by such later date as Camelot and GTECH Corporation
agree), the following consequences shall arise:-
(a) either GTECH Corporation or Camelot may serve a written notice
on the other that each of the Lottery Technology Support
Services Agreement, Field Services Agreement, Terminals Supply
Agreement and the Purchase and Sale Agreement shall terminate
on the expiry of Camelot's Running Licence and shall not
continue into the Second Licence Period, such notice being
without prejudice to any earlier termination in accordance
with the terms of the Lottery Technology Support Services
Agreement, Field Services Agreement, Terminals Supply
Agreement and the Purchase and Sale Agreement as the case may
be, provided always that such notice shall not constitute a
breach of any such agreement; and
(b) if either party serves a notice in accordance with paragraph
(a) above, the rights of Camelot and the obligations of GTECH
Corporation under clause 31.2 of the Lottery Technology
Support Services Agreement shall terminate PROVIDED ALWAYS in
order to assist Camelot with an orderly transition of the
operation of the National Lottery under the current Running
Licence to the operator of the National Lottery under the
Second Running Licence, GTECH Corporation shall, if requested
by Camelot, provide to Camelot such services for such period
(which shall be a minimum of 3 months and up to a maximum of 9
months) and on such terms, including as to scope and price, as
GTECH Corporation customarily provides to the generality of
its customers for such transitional arrangements.
2.5.3 GTECH Corporation's obligations to negotiate with Camelot and
Camelot's obligations to negotiate with GTECH Corporation as
envisaged in Clause 2.5.1 shall terminate on the happening of any of
the following:-
(a) both Robert Victor Holley and Sir George Russell cease to be
directors of Camelot; or
(b) Automated Wagering International, Scientific Games
International, Essnet, or any other recognized competitor of
GTECH Corporation becomes a shareholder of Camelot;
(c) two persons or bodies corporate, both of whom shall, in GTECH
Corporation's sole discretion, be unacceptable to it in that
capacity, shall become shareholders of Camelot; or
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<PAGE> 9
(d) the direct or indirect acquisition by or on behalf of Camelot
of any shareholding or other equity or similar interest in
Automated Wagering International, Scientific Games
International, Essnet or any other recognized competitor of
GTECH Corporation.
2.5.4 Subject in any event to the terms of Clause 4, each of Camelot and
GTECH Corporation agrees that it will not either directly or
indirectly, whilst Camelot and GTECH Corporation are negotiating in
relation to a Replacement Lottery Technology Support Services
Agreement in accordance with Clause 2.5.1 (as reduced, if
applicable, by the operation of clause 2.5.3) (the "relevant
period") enter into discussions with any third party for the supply
to Camelot and/or any Group Company of lottery technology support
services for the Second Running Licence which are the same as or
similar to those provided to Camelot under the Lottery Technology
Support Services Agreement but for the avoidance of doubt (and
notwithstanding any terms of the Lottery Technology Support Services
Agreement) Camelot shall be free to enter into such discussions (and
any agreement with any third party for the Second Running Licence)
in the event that such a Replacement Lottery Technology Support
Services Agreement is not entered into within the relevant period
and, GTECH shall not during the same period enter into discussions
with any third party for the supply to such any other party of
lottery technology support services for the Second Running Licence
which are the same as or similar to those provided to Camelot under
the Lottery Technology Support Services Agreement.
2.6 Nothing in this Agreement shall be construed as in anyway reducing or
increasing the standard of operational performance of GTECH Corporation's
obligations to Camelot (or any of its group undertakings' obligations to
Camelot) under any contract to supply including without limitation
pursuant to the terms of the Lottery Technology Support Services
Agreement, the Terminals Supply Agreement, the Field Services Agreement
and the Purchase and Sale Agreement during the period of the first Running
Licence granted to Camelot and existing at the date hereof.
3. GTECH Clawback Payment
3.1 If the Event occurs prior to 30 September 2001, then GTECH shall pay the
Relevant Proportion of the GTECH Clawback Payment to Camelot within 7 days
of the occurrence of the Event.
3.2 GTECH represents to the Company that the Event will not occur prior to the
30 September 2001, and in the event that the Event does occur, GTECH
agrees that the GTECH Clawback Payment is a reasonable and proper payment
and the amount of the GTECH Clawback Payment shall be an adjustment or
reduction to the price paid for the shares referred to in Recital (A).
Camelot acknowledges that the maximum GTECH Clawback Payment will be
P20,400,000.
3.3 Each of Camelot, the Remaining Shareholders and each of the GTECH Parties
hereby acknowledge and confirm that the GTECH Clawback Payment is a
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<PAGE> 10
reasonable payment for a breach of such representation in the event that
the Event occurs and that the Relevant Proportion of the GTECH Clawback
Payment is in full and final settlement of any and all liabilities which
GTECH, GTECH Corporation or any of its group undertakings may have arising
from or in connection with the Event, whether arising under this
Agreement, the Shareholders' Agreement or the agreement for the sale of
shares referred to in Recital A.
3.4 If any Relevant Proportion of the GTECH Clawback Payment is not paid on
the due date, being the seventh day after the Event, then the Relevant
Proportion of the GTECH Clawback Payment not paid shall bear interest
(which shall accrue from day to day after as well as before any judgment
for the same) at the rate of 4% per annum over the base rate from time to
time of The Royal Bank of Scotland plc or in the absence thereof at such
similar rate as Camelot shall select from the day following the due date
up to and including the day of actual payment of such sums such interest
to be compounded quarterly.
3.5 Any payment of the Relevant Proportion of the GTECH Clawback Payment shall
be made without set off or counterclaim and, except as otherwise required
by law, without deduction or withholding.
3.6 GTECH Corporation agrees that the GTECH Clawback Payment shall be a
separate payment obligation and shall not be taken into account whatsoever
in determining the cap on the liability of GTECH Corporation under the
Lottery Technology Supply Services Agreement or any other Surviving
Agreement.
3.7 If Camelot receives notice from the Director General of the National
Lottery pursuant to the National Lottery etc. Act 1993 that he proposes to
revoke the Running Licence Camelot shall forthwith notify GTECH
Corporation and Camelot shall use all reasonable endeavours to secure that
GTECH Corporation is afforded the opportunity and GTECH Corporation shall,
when given such opportunity, at its sole cost, and within such reasonable
period as the Director General of the National Lottery may be prepared to
allow, take all such action and do all such things necessary to remedy any
act or omission of GTECH Corporation or any of its group undertakings or
any fact, event, matter or circumstance giving rise to the proposed
revocation of the Running Licence PROVIDED THAT nothing in this clause
shall be deemed to limit Camelot's ability to make representations to the
Director General of the National Lottery which it, in its absolute
direction deems fit, to reach agreement with the Director General of the
National Lottery on any matter but Camelot recognizing and acknowledging
always that it is in the mutual interest of both Camelot and GTECH
Corporation as well as the Remaining Shareholders to seek to avoid a
revocation of the Running Licence and that Camelot will work with GTECH
Corporation (and at GTECH's cost) to address and remedy to the
satisfaction of the Director General any issues which might lead the
Director General to exercise his powers to do so.
3.8 In the event that the Running Licence held by Camelot is revoked, this
Agreement shall terminate, save for and such termination shall in no way
affect the parties' rights or remedies for any breach of this Agreement
prior to the date of such revocation, or Camelot's right to receive
payment of the GTECH Clawback Payment (including GTECH
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<PAGE> 11
Corporation's guarantee of the same) and it shall not preclude the
parties' rights or limit the parties' remedies under the Lottery
Technology Support Services Agreement, the Terminals Supply Agreement, the
Field Services Agreement, the Sale and Purchase Agreement or any future
agreement entered into by Camelot and GTECH Corporation or any of its
group undertakings, and, subject to clause 3.3, the Shareholders'
Agreement. In addition, and for the avoidance of doubt, Clauses 2.1, 2.2,
2.3 and 11.1 shall survive the termination of this Agreement, as shall the
surviving provisions of the Shareholders' Agreement specifically referred
to in Clause 2.3. Upon termination of this Agreement as aforesaid, Camelot
agrees to waive its rights under Clause 31.2 of the Lottery Technology
Support Services Agreement PROVIDED ALWAYS in order to assist Camelot with
an orderly transition of the operation of the National Lottery under the
current Running Licence to the operator of the National Lottery under the
Second Running Licence, GTECH Corporation shall, if requested by Camelot,
provide to Camelot such services for such period (which shall be a minimum
of 3 months and up to a maximum of 9 months) and on such terms, including
as to scope and price, as GTECH Corporation customarily provides to the
generality of its customers for such transitional arrangements.
4. Covenants not to Compete
4.1 For the purposes of this Clause 4:
4.1.1 "Competitive Business" means the promotion or operation in the
United Kingdom on a wide scale (though not necessarily nationally)
of lotteries or football pools or of any game of lot or chance
substantially similar to the national lottery.
4.1.2
(a) "Constraint Period 1" means:-
the period of 18 months from the date of this Agreement or if
one of the events in Clause 2.5.3 occur, to such date upon
which such event occurs; and
(b) "Constraint Period 2" means:-
the period commencing at the date of this agreement and ending
on the date on which the Running Licence granted to Camelot
expires or is terminated or revoked whether with or without a
new Running Licence being granted to any Group Company.
4.2 Subject to Clause 4.4 and the proviso in this Clause 4.2, GTECH
Corporation undertakes to the other parties hereto that during the
relevant Constraint Period set out below it shall not, and it shall
procure that its group undertakings will not, without the prior written
consent of all other parties hereto
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<PAGE> 12
(but in respect of the consent of a Remaining Shareholder, only for so
long as it is a shareholder of Camelot):-
4.2.1 during Constraint Periods 1 and 2:
4.2.1.1 directly or indirectly carry on or be engaged or concerned
or interested in (whether as a shareholder, partner, director,
manager, agent or otherwise alone or jointly with or on behalf
of another person) any Competitive Business;
4.2.1.2 solicit or contract with a view to engagement or employment
any employee, officer or manager of any Group Company (other
than any person who prior to being such an employee, officer
or manager, was GTECH Corporation's employee or an employee of
any of its subsidiary undertakings); and/or
4.2.1.3 supply any goods or services to any Competitive Business
including without limitation whether of a type referred to in
the Field Services Agreement or otherwise;
4.2.2 during the Constraint Period 1 (and, in the event that Camelot and
GTECH Corporation have entered into the Replacement Lottery
Technology Support Services Agreement Constraint Period 2): submit,
either alone or jointly with or on behalf of any person (other than
in relation to an application by Camelot) any application in respect
of the Second Running Licence or any Promotion Licence or enter into
any discussions with a third party with a view to doing so, or
directly or indirectly be interested in (whether as shareholder,
partner, director, manager, agent or otherwise alone or jointly with
or on behalf of another person) any person who submits any such
application;
PROVIDED ALWAYS THAT if GTECH Corporation (or any group undertaking of it)
and Camelot fail to enter into the Replacement Lottery Technology Support
Services Agreement within 18 months of the date hereof, then (unless the
parties otherwise agree) on and from the date that is the earlier of:
(a) 18 months from the date hereof; or
(b) the earliest date on which any of the events in Clause 2.5.3
occur,
GTECH Corporation and its group undertakings shall be free to undertake
any of the matters referred to in Clauses 4.2.1.1, 4.2.1.3 and 4.2.2 BUT
ONLY to the extent that such activities are necessary to enable GTECH
Corporation (and/or any of its group undertakings) alone or jointly with
or on behalf of any person to prepare for, and/or submit, an application
in respect of the Second Running Licence and only to the extent that such
activities are not revenue earning or otherwise effective so as to be able
to generate income (whether in any such case the income is paid on an
ongoing basis or on a deferred basis) during the period ending on the date
the first Running Licence granted to Camelot expires or is terminated or
revoked.
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4.3 Subject to the proviso in this Clause 4.3, Camelot and each of the
Remaining Shareholders undertakes to GTECH Corporation and to each other
that during the relevant Constraint Period set out below it shall not, and
it (and each of them) shall procure that its and their subsidiary
undertakings will not, without the prior written consent of GTECH
Corporation (but only for so long as GTECH is a supplier to Camelot):-
4.3.1 during Constraint Periods 1 and 2:
4.3.1.1 directly or indirectly carry on or be engaged or concerned
or interested in (whether as a shareholder, partner, director,
manager, agent or otherwise alone or jointly with or on behalf
of another person) any Competitive Business (other than the
business carried on by Camelot at the date hereof under its
Running Licence);
4.3.1.2 solicit or contract with a view to engagement or employment
any employee, officer or manager of GTECH Corporation (other
than any person who prior to being such an employee, officer
or manager, was the Group Company's employee or an employee of
any of its subsidiary undertakings); and/or
4.3.1.3 in the case of:
(a) Camelot, supply any goods or services to any Competitive
Business;
(b) Racal, supply to any Competitive Business goods or
services of a type similar to those supplied by Racal
Network Services to any Group Company;
(c) ICL, (that it will procure that the ICE Division will
not (and neither ICL nor any subsidiary undertaking of
ICL will on behalf of or as agent for the ICE Division
supply goods or services to any Competitive Business));
(d) DLR, sell instant or scratch-off lottery tickets to any
Competitive Business if DLR or any of its subsidiary
undertakings supplies similar goods to any Group
Company; and
(e) CS (and subject to Clause 4.7), supply any Competitive
Business any goods or services of a type similar to
those supplied by CS or its subsidiary undertakings to
any Group Company provided that nothing in this Clause 4
shall prevent or restrict CS from supplying
confectionery and/or beverages to any person;
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other than in each case of (a) - (e) inclusive (the
business carried on by Camelot at the date hereof under
its Running Licence);
4.3.2 during the Constraint Period 1 (and, in the event that Camelot and
GTECH Corporation have entered into the Replacement Lottery
Technology Support Services Agreement Constraint Period 2) submit,
either alone or jointly with or on behalf of any person (other than
in relation to an application by Camelot, with GTECH Corporation or
GTECH in respect of the Second Running Licence) any application in
respect of the Second Running Licence or any Promotion Licence or
enter into any discussions with a third party with a view to doing
so, or directly or indirectly be interested in (whether as
shareholder, partner, director, manager, agent or otherwise alone or
jointly with or on behalf of another person) any person who submits
any such application;
PROVIDED ALWAYS THAT if GTECH Corporation (or any group undertaking of it)
and Camelot fail to enter into the Replacement Lottery Technology Support
Services Agreement within 18 months of the date hereof, then (unless the
parties otherwise agree) on and from the date that is the earlier of:
(a) 18 months from the date hereof; or
(b) the earliest date on which any of the events in Clause 2.5.3
occur,
Camelot and the Remaining Shareholders and their subsidiary undertakings
shall be free to undertake any of the matters referred to in Clauses
4.3.1.1, 4.3.1.3 and 4.3.2 BUT ONLY to the extent that such activities are
necessary to Camelot and the Remaining Shareholders and their subsidiaries
undertakings) alone or jointly with or on behalf of any person prepare
for, and/or submit, an application in respect of the Second Running
Licence and only to the extent that such activities are not revenue
earning or otherwise effective so as to be able to generate income
(whether in any such case the income is paid on an ongoing basis or on a
deferred basis) during the period ending on the date the first Running
Licence granted to Camelot expires or is terminated or revoked.
4.4 Nothing in this Clause 4 shall preclude or restrict GTECH Corporation or
any of its group undertakings from operating and/or supplying goods and/or
services for any amusement with prizes (AWP) or similar video-type games,
bingo games or any track or off track wagering with respect to racing.
4.5 Camelot, GTECH Corporation and ICL agree that during Constraint Periods 1
and 2:
4.5.1 GTECH Corporation shall continue to be bound by the provisions of
Clause 15.3 of the Field Services Agreement:
4.5.2 the words "or GTECH Competitor" in line 3 of Clause 15.2 of the
Field Services Agreement shall not be deleted; and
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4.5.3 and the words "and/or GTECH" in the third line of Clause 15.1 shall
not be deleted from the Field Services Agreement
PROVIDED ALWAYS THAT if GTECH Corporation (or any group undertaking
of it) and Camelot fail to enter into the Replacement Lottery
Technology Support Services Agreement within 18 months of the date
hereof then (unless the parties otherwise agree) on and from the
date which is the earlier of:
(a) 18 months from the date hereof; or
(b) the earliest date on which any of the events in Clause 2.5.3
occur;
then:
GTECH Corporation shall cease to be bound by the provisions of
Clause 15.3 of the Field Services Agreement, but only to the extent
referred to below;
ICL shall cease to be bound by the provisions of Clause 15.3 of the
Field Services Agreement, in relation to its covenant to GTECH (viz
a viz supplying a GTECH Competitor ) (as such term is defined in the
Field Services Agreement)) but only to the extent referred to below;
Camelot shall cease to be bound by the provisions of Clause 15.1 of
the Field Services Agreement, in relation to its covenant to GTECH
(viz a viz obtaining services from a competitor of GTECH), but only
to the extent referred to below,
BUT SUCH release shall only be to the extent that any activities
undertaken by GTECH Corporation (or any of its group undertakings),
Camelot or ICL (as the case may be) shall be so as to enable GTECH
Corporation (or any of its group undertakings), Camelot or ICL alone
or jointly with or on behalf of any person to prepare for and/or
submit, an application in respect of the Second Running Licence and
only to the extent that such activities are not revenue earning or
otherwise effective so as to be able to generate income (whether in
any such case the income is paid on an ongoing basis or on a
deferred basis) during the period ending on the date the first
Running Licence granted to Camelot expires or is terminated or
revoked.
4.6 The obligations of GTECH Corporation and its group undertakings under this
Clause 4 to each Remaining Shareholder and its subsidiary undertakings
shall cease immediately upon such Remaining Shareholder ceasing to be a
shareholder of Camelot, The obligations of a Remaining Shareholder and its
subsidiary undertakings under this Clause 4 to GTECH Corporation and its
group undertakings shall cease immediately upon such Remaining Shareholder
ceasing to be a shareholder of Camelot. The obligations of Camelot shall
cease immediately upon GTECH ceasing to be a supplier to Camelot.
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4.7 Nothing in this Clause 4 shall preclude or restrict CS or any of its group
undertakings from carrying out sales promotion activities ancillary to its
normal business.
5. General
5.1 Except as otherwise expressly provided in this Agreement, each of the
parties shall pay its own costs and expenses of and incidental to the
negotiation, preparation, execution and implementation by it of this
Agreement and of all other documents referred to in it.
5.2 Save as otherwise expressly provided in this Agreement, no variation of
this Agreement shall be valid unless it is in writing and signed by or on
behalf of each of the parties.
5.3 The failure to exercise or delay in exercising a right or remedy under
this Agreement shall not constitute a waiver of the right or remedy or a
waiver of any other rights or remedies and no single or partial exercise
of any right or remedy under this Agreement shall prevent any further
exercise of the right or remedy or the exercise of any other right or
remedy.
5.4 Save as otherwise provided in this Agreement, the rights and remedies
contained in this Agreement are cumulative and not exclusive of any rights
or remedies provided by law and for the avoidance of doubt, the
obligations of GTECH Corporation, Camelot and the Remaining Shareholders
in Clauses 4 and 11 are material obligations and as such any breach will
be subject to the appropriate remedies including the remedies of
injunction, specific performance and other equitable relief for such a
breach.
5.5 This Agreement, the Surviving Agreements, the Agreement referred to in
Recital A and the Deed of Variation constitute the entire agreement
between each of the Remaining Shareholders and (where applicable) Camelot
on the one hand and each of the GTECH Parties on the other hand in
relation to Camelot and supersede all previous such agreements and
understandings between the parties with respect thereto (and, in
particular, without limitation, supersede the letter agreements dated 31
March 1998 and 1 April 1998 between Camelot and GTECH Corporation) and the
deeds of release provided by Camelot and the Remaining Shareholders to
GTECH and GTECH Corporation which shall have no force and effect) and each
of the parties acknowledges and confirms that it does not enter into this
Agreement in reliance upon any representation, warranty, condition or
undertaking not fully reflected in the provisions of this Agreement or any
of the agreements or documents referred to in or entered into under or in
connection with this Agreement.
5.6 In the event of any conflict or ambiguity between this Agreement and any
other agreements and documents referred to in or entered into under or in
connection with this Agreement, this Agreement shall prevail, save where
and to the extent expressly provided by reference to this Agreement or any
particular provisions hereof.
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5.7 Nothing in this Agreement shall be construed as creating a partnership
between any of the parties or as constituting any party as the agent of
any other party for any purpose whatsoever.
5.8 The parties acknowledge that the provisions contained in this Agreement
are required for the reasonable protection of the business interests of
the parties. The illegality, invalidity or unenforceability of any
provision of this Agreement under any applicable law shall not affect the
legality, validity or enforceability of such provision under any law of
any other jurisdiction or the legality, validity or enforceability of any
other provision and to this end the provisions of this Agreement are
declared to be severable.
5.9 No public announcement, communication or circular (other than as required
by law or any regulatory body or stock exchange to which a party or its
parent undertaking is subject) concerning the transactions referred to in
this Agreement or any agreement entered into under or in connection with
this Agreement shall be made or despatched by any of the Remaining
Shareholders or Camelot without the prior written consent of either of the
GTECH Parties on the one hand or by either of the GTECH Parties without
the prior written consent of Camelot and the Remaining Shareholders on the
other hand, in all cases such consent not to be unreasonably withheld or
delayed.
5.10 The negotiation, implementation and contents of this Agreement, the
Agreement referred to in Recital A and the Deed of Variation shall
constitute confidential information and shall as between each of the
Remaining Shareholders and Camelot on the one hand and each of the GTECH
Parties on the other hand be treated as such, save as required by law or
any regulatory body or stock exchange to which a party or its parent
undertaking is subject. The parties hereto agree and acknowledge that
Camelot shall notify the Director General of the National Lottery of the
contents of this Agreement.
5.11 The headings in this Agreement shall not affect the interpretation of this
Agreement.
6. Notices
6.1 Any notice or other communication under or in connection with this
Agreement shall be in writing and shall be delivered personally or by
courier or sent by registered post (air mail if overseas) or by telefax
(with a copy duly sent by registered post at the same time), to the party
due to receive the notice marked for the attention of the person or
persons and to the address or telefax number specified in Clause 6.2
(with, if applicable, a copy of such notice at the same time being
delivered or sent in accordance with this Clause to the person or persons
at the address or telefax number specified in Clause 6.2) or for the
attention of such other person or persons and/or to such other address or
telefax number and/or copied to such other person or persons as the
relevant party may from time to time specify by notice in writing to the
others.
6.2 The address and telefax number of each of the parties and the person or
persons for whose attention each notice or other communication should be
marked are as follows:-
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6.2.1 DLR
6 Agar Street
London WC2N 4DE England
Telefax: 0171 240 3553
For the attention of: Senior Legal Adviser
6.2.2 Racal
Richmond Court
309 Fleet Road
Fleet
Hampshire GU13 8BU England
Telefax: 01252 815 887
For the attention of: Company Secretary
with a copy to the Group Solicitor at the same address
Telefax: 01252 620 751
6.2.3 GTECH and GTECH Corporation
55 Technology Way
West Greenwich
Rhode Island 02817
United States of America
Telefax: 0101 401 392 1234
For the attention of: Chairman and General Counsel
Copied to:-
Clifford Chance
200 Aldersgate Street
London EC1A 4JJ England
Telefax: 0171 600 5555
For the attention of: Alex Nourry and Elizabeth Hiester
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6.2.4 CS
25 Berkeley Square
London W1X 6HT
Telefax: 0171 830 5200
For the attention of: Group Senior Legal Advisor
6.2.5 ICL
26 Finsbury Square
London EC2 1DS
England
Telefax: ICL to provide
For the attention of: Director of Commercial and Legal Affairs
Camelot
Tolpits Lane
Watford
WD1 8RN
Telefax:
For the attention of: Company Secretary
6.3 Any notice or other communication delivered or sent in accordance with
Clauses 6.1 and 6.2 shall be deemed to have been duly given
6.3.1 if delivered personally or by courier, at 10 am. local time in the
place of receipt on the first (1st) Business Day after being left at
the address or addresses referred to in Clause 6.2.
6.3.2 if sent by registered post other than air mail, on the third (3rd)
Business Day after posting it;
6.3.3 if sent by air mail, on the eighth (8th) Business Day after posting
it;
6.3.4 if sent by telefax, at 10 a.m. local time in the place of receipt on
the first (1st) Business Day after completion of its transmission.
7. Governing Law Jurisdiction and Agents for Service
7.1 This Agreement is governed by, and shall be construed in accordance with,
English law.
7.2 The courts of England shall have exclusive jurisdiction to hear and
determine any suit, action or proceedings, and to settle any disputes,
which may arise out of or in connection with this Agreement (respectively,
"Proceedings" and "Disputes") and, for such purposes, each party
irrevocably submits to the jurisdiction of the courts of England. For the
avoidance of doubt, nothing shall
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prevent a party enforcing a judgement obtained in the courts of England
against another party in any jurisdiction.
7.3 Each party irrevocably waives any objection which it might at any time
have to the courts of England being nominated as the forum to hear and
determine any Proceedings and to settle any Disputes and agrees not to
claim that the courts of England are not a convenient or appropriate
forum.
7.4 GTECH Corporation appoints Legibus Secretaries Limited the address of
which is at 200 Aldersgate Street, London, EC1A 4JJ (or such other person
resident in England or at such other address in England as GTECH
Corporation may from time to time notify to the other parties) as its
agents for the service of process in England in relation to any matter
arising out of this Agreement or any other agreement entered into by GTECH
Corporation under this Agreement, service upon which shall be deemed to be
completed when delivered to the specified address, whether or not
forwarded to or received by GTECH Corporation.
8. Counterparts
This Agreement may be executed in any number of counterparts each of which
when executed and delivered shall be an original, but all the counterparts
together shall constitute one and the same instrument.
9. Guarantee
9.1 GTECH Corporation irrevocably and unconditionally guarantees to each other
party hereto the due and punctual performance of all obligations of GTECH
under this Agreement.
9.2 GTECH Corporation shall be liable under Clause 9.1 as if it were sole
principal obligor and not merely a surety.
9.3 The guarantee given under this Clause 9 shall be a continuing guarantee
and shall remain in full force and effect until all the relevant
obligations, the due and punctual performance of which is guaranteed under
Clause 9.1, have been performed in full.
9.4 GTECH Corporation shall not be discharged, and its liabilities under this
Clause 9 shall not be prejudiced, affected or diminished, by anything
which would not discharge it or prejudice, affect or diminish its
liability if it were the sole principal obligor, including without
limitation:-
9.4.1 any time, waiver, concession, compromise, consent or other
indulgence at any time given to GTECH;
9.4.2 any amendment or variation of this Agreement;
9.4.3 the making or absence of demand on GTECH;
9.4.4 the dissolution, amalgamation or reconstruction of GTECH; or
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9.4.5 any legal limitation, disability or other incapacity or defect
relating to GTECH.
10. Competition
10.1 If this Agreement, whether taken alone or together with the Surviving
Agreements, (the "RTPA Agreement") is registerable under the Restrictive
Trade Practices Act 1976, the parties shall furnish particulars of the
RTPA Agreement to the Office of Fair Trading in accordance with section 24
of that Act within 3 months of the date of signature of this Agreement and
any restriction accepted hereunder and any variation, extension or
addition hereunder of or to any restriction will not take effect until
such particulars have been so furnished.
10.2 If any Remaining Shareholders and/or Camelot and/or any of the GTECH
Parties considers any provision contained in this Agreement whether taken
alone or together with the Surviving Agreements (the "EC Agreement")
causes the EC Agreement to be notifiable under Council Regulation 17/62
(the "Regulation"), the parties shall co-operate fully in notifying the EC
Agreement, as soon as practicable after the date of this Agreement, to the
European Commission for negative clearance or exemption pursuant to the
Regulation. If any substantive correspondence is entered into or meetings
held with any representative of the European Commission, all parties shall
be entitled to comment on such correspondence (but such correspondence
shall not for the avoidance of doubt require the approval of all parties)
and attend such meetings. Should the European Commission require any
variation or amendment or modification to the EC Agreement, each party
shall negotiate in good faith to agree any such amendments or
modifications as may be necessary to satisfy such requirements.
10.3 While the undertakings in this Agreement are considered by the parties to
be reasonable in all the circumstances, if one or more should be held
invalid as an unreasonable restraint of trade or for any other reason
whatsoever but would have been held valid if part of the wording thereof
had been deleted or the period thereof reduced or the range of activities
or area dealt with thereby reduced in scope, the said undertakings shall
apply with such modifications as may be necessary to make them valid and
effective.
11. Further Assurances
11.1 The Remaining Shareholders and GTECH will, after the date hereof, take all
or any such steps as any party to this agreement may reasonably request
(at that party's expense) (and will procure that Camelot will take all
such steps at that party's expense) so as to ensure that this Agreement,
the sale and purchase agreement for the shares in Camelot referred to in
Recital (A) are and continue to be valid, binding and enforceable in all
respects. The obligations shall include taking such steps (at that party's
expense) as may reasonably be necessary to ratify such arrangements to
effectively and lawfully remedy any failure to comply with any and all
provisions of company law in relation to the sale and purchase of GTECH's
shares as aforesaid.
11.2 Camelot confirms that no consent or authorisation is required, for the
entry in and performance of this Agreement by Camelot, from the Director
General of
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the National Lottery under the terms of the Section 5 Licence, The Law
Debenture Trust Corporation plc under the terms of the Security Trust Deed
of 12 November 1994 (as amended and restated by the terms of the Fourth
Supplemental Trust Deed), or the Royal Bank of Scotland (under the terms
of the Bank Agreement of 12 November 1994, as amended and restated between
Camelot Group plc, The Law Debenture Trust Company plc and The Royal Bank
of Scotland plc or the Deed of Charge of 12 November 1994 between Camelot
Group plc and The Royal Bank of Scotland plc), or from ICL, Racal, CS or
DLR under the terms of their supply agreements and there are no other
consents (the effect of not having obtained them would have a material
adverse impact on Camelot) that are necessary for the performance of this
Agreement which have not been obtained.
11.3 Camelot confirms that the entry into force and performance of this
Agreement will not constitute an "Event" for the purposes of Clause 3 or
otherwise.
IN WITNESS whereof this Agreement has been executed as a Deed on the day and
year first above written
Executed as a Deed by )
DE LA RUE PLC )
Director
Director/Secretary
Executed as a Deed by )
RACAL ELECTRONICS PLC )
Director
Director/Secretary
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Executed as a Deed by )
GTECH U.K. LIMITED )
Director
Director/Secretary
Executed as a Deed by )
CADBURY SCHWEPPES PUBLIC )
LIMITED COMPANY )
Director
Director/Secretary
Executed as a Deed by )
INTERNATIONAL )
COMPUTERS LIMITED )
Director
Director/Secretary
Executed as a Deed by )
GTECH CORPORATION )
Executed as a Deed by )
CAMELOT GROUP PLC )
Director
Director/Secretary
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