Supplementary Agreement to Master Agreement of December 5, 2004


    EXHIBIT
      10.2

     

    Working
      Translation deed on 6/2006 as signed on 10 January 2006

    


    Deed
      No
      A. Record 6/2006

     

    Today,
      January ten, two thousand and six

     

    -
      January
      10, 2006 -

     

    appeared
      before me, Etienne Petitpierre

     

    Notary
      public with official place of business in Basel, Switzerland

     

    at
      my
      office premises located at Gerbergasse 1, 4001, Basel, Switzerland 

     

    1. 
Mr.
      Ulrich Wüseke,

     born
      8 December 1955,

     residing
      at Töpferweg 41, 

     32429
      Minden,  

     Germany

     

    acting
      here not in his own name, but under powers of attorney dated 9 January 2006,
      presented to the notary in the originals and submitted to the files as
      photocopies on behalf of

     

    a)  Mr.
      Paul
      Gauselmann,

            
      born 26 August 1934,

             residing
      at Alter Moorweg 11, 

             32339
      Espelkamp,

            
      Germany

     

    b)  Mr.
      Michael
      Gauselmann,

             
born
      28
      November 1955,

             
residing
      at Frotheimer Weg 54, 

             
32339
      Espelkamp, 

             
Germany

     

    2.  Dr. Bernd
      Meyer-Witting,

             born
      2
      July 1960,

            
      with
      business address at Mainzer Landstrasse 46

            
      60325
      Frankfurt am Main,

            
      Germany,

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    acting
      here not in his own name, but under power of attorney dated 8 December 2005,
      presented to the notary in the original and submitted to the files as photocopy
      as representative with sole power of representation for GTECH
      Corporation,
      55
      Technology Way, West Greenwich, Rhode Island, 02817 U.S.A.

     

     

    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

     

    SUPPLEMENTARY
      AGREEMENT

     

    to
      the

     

    Master
      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"),
      a
      Purchase Agreement (A. Record 293/2004 - "PA")
      and on
      4 March 2005 a Supplementary Agreement to the PA (A. Record 64/2005). The Master
      Agreement of 5 December 2004 shall now be amended and/or supplemented as shown
      in the following points, with all other provisions remaining unchanged. In
      part,
      however, only where expressly indicated these changes and/or amendments depend
      on the occurrence of the circumstances defined in Annex 1 ("Circumstances").
      In
      this Master Agreement, all references to the Purchase Agreement are solely
      to
      the new version of the PA of today’s date unless otherwise expressly provided
      herein:

     

    A.
      Unconditional Amendments

     

    I.

    1.

    A
      new
      article

     

    Security
      Interests (§ 3A)

     

    is
      added
      to the Master Agreement:

     

    "§
3A.1.
       The
      Buyer
      shall support AI through an additional financial commitment.

     

     

    
      
        
        

      

      
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          2 -

        
          

        

      

      
        
        

      

    

     

    §
      3A.1.1.      The
      Buyer
      shall secure both of the following bank obligations of AI by means of
      conventional security interests (selbstschuldnerische
      Bürgschaften
      or
      similar security):

     

    a)
       Steierm’rkische
      Bank under the agreements of 9 December 2003 and 5 January 2005 (status as
      of 30
      November 2005: EUR 3,000,000.00)

     

    b)
       Commerzbank
      Osnabrück under the agreements of 28 October 2003, 23 October 2004, and 1
      December 2003 (status as of 30 November 2005: EUR 6,251,728.01 in
      total).

     

    With
      the
      participation of the Central Finance Department of Gauselmann AG (Messrs. Ulrich
      Wüseke and Achim Dethlaff), the Buyer shall coordinate the required security
      interests with the respective creditor bank.

     

    §
      3A.1.2.      Furthermore,
      in the future, the Buyer shall in like fashion (§ 3A.1.1) secure, up to the
      amount of EUR 10,700,000.00 and without reviewing AI’s creditworthiness or need
      for credit, bank loans to be accepted by AI. This too must be done with the
      participation of the Finance Department of Gauselmann AG. Moreover, the granting
      of loans may be substituted for the security interests.

     

    §
      3A.1.3.      The
      loans
      described in the foregoing paragraphs shall be repaid at customary interest
      rates.

     

    §
      3A.1.4.      The
      security interests and/or loans granted under § 3A.1.1 and § 3A.1.2 must be
      redeemed or repaid within 60 days after the day on which it is established
      that
      a Consummation, as defined in § 17 of the PA, shall not occur.

     

    In
      the
      event of a Consummation, § 3.4 shall apply.

     

    §
      3A.1.5.      The
      Sellers must ensure that upon the Buyer establishing its right of redemption
      and/or repayment pursuant to § 3A.1.4, the Buyer can, notwithstanding its other
      rights, request all manner of merchandise deliveries from AI, Atronic Americas
      LLC, Atronic Australien GmbH and/or all of its subsidiaries and can settle
      the
      consideration for the same with loans that have been granted or apply such
      compensation directly to redeem security interests that have been provided.
      The
      Sellers shall have the same duty commencing with the establishment of the right
      of redemption and/or repayment concerning other current or future obligations
      of
      the Buyer vis-à-vis AI, Atronic Americas LLC, Atronic Australien GmbH and/or any
      of its subsidiaries.

     

     

     

    
      
        
        

      

      
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          3 -

        
          

        

      

      
        
        

      

    

     

     

    §
3A.1.6.
       The
      Sellers must ensure that the Buyer receives the following reports from AI for
      the Buyer itself and a consolidated version for its subsidiaries:

     

    a) 
a
      monthly
      management report including a forecast for the following three
      months,

     

    b)     
      each
      month, a liquidity plan for the following three months, and

     

    c)  at
      the
      beginning of each calendar quarter, an estimate of the course of the business
      and of the financial development of the business on a quarterly basis for the
      following 12 months."

     

    2.

    §
8.7
      sentence 1 is reworded as follows:

     

    "The
      Parties will consummate the Transfer of the Option Interests by notarial deed
      on
      the Consummation Date of the Option ("Option
      Transaction Date")."

     

    3.

           
      § 20 is amended as follows:

     

    "This
      document and all documents referred to herein, in particular the PA, the
      1st
      Supplementary Agreement to the PA, the MA and the two Supplementary Agreement
      to
      the PA and the MA of today's date contain all agreements made between the
      Parties regarding the respective subject-matter of such documents and supersede
      all prior oral and written covenants, agreements and arrangements made in this
      respect between the Parties."

     

    B.
      Amendments conditional upon the occurance of the Circumstances specified
      in

    Annex
      1

     

    I.

    Advisory
      Board (§ 5)

     

    The
      following new paragraph is inserted:

     

    "§
      5.6. The
      New
      Shareholder agrees already now to appoint Messrs. W. Bruce Turner, Jaymin Patel
      and Marc Crisafulli to the Advisory Board and agrees further that, provided
      and
      for so long as such individuals remain employees of the New Shareholder or
      one
      of its group companies, they shall not be removed from such office before 31
      December 2008."

     

     

     

    
      
        
        

      

      
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          4 -

        
          

        

      

      
        
        

      

    

    


    II.

    Selling
      Rights and Purchasing Rights (§ 8)

     

    1.

           
      The last sentence of § 8.1.1. shall be reworded as follows:

     

    "The
      Right to exercise this Option ends on 31 December 2011."

     

    2.

    In
§
      8.1.2, the period "until the fifth anniversary of the Transaction Date" is
      replaced by "until 31 December 2011".

     

    3.

    In
§
      8.1.3, the time "upon expiration of five (5) years" is amended to "starting
      with
      1 January 2012".

     

    4.

    §
8.2.1
      and § 8.2.2 (Purchase Options of the New Shareholder) shall cease to
      apply.

     

    5.

    §
8.2.3
      is reworded to read as follows:

     

    "Beginning
      with the Transaction Date without justification."

     

    6.

    §
8.4
      is
      reworded to read as follows:

     

    "§
8.4.
       The
      purchase price of the Option Interests is calculated:

     

    
      	·  	
              in
                the case of § 8.1.1 and § 8.1.2, according to the following formula
                ("Formula
                Purchase Price"):

            


    

     

    Enterprise
      value - net financial debt

    2

     

    
      	·  	
              in
                the case of § 8.1.3, according to the "fair value" ("Fair-Value
                Purchase Price")

            


    

     

    
      	·  	
              in
                the case of § 8.2.3, if the option is exercised on or before 31 December
                2011 pursuant to the provisions of §§ 4 through 8 of the PA, subject to
                the particulars specified in § 8.6A below ("Special-Option
                Price").
                The Special-Option Price consists of a purchase-price portion and
                an
                earn-out portion.

            


    

     

     

    
      
        
        

      

      
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          5 -

        
          

        

      

      
        
        

      

    

     

    
      	·  	
              in
                the case of § 8.2.3, if the option is exercised after 31 December 2011
                according to the "fair value"."

            


    

     

    7.

    The
      following new paragraph is inserted:

     

    "§
      8.4A:      Any
      Balance PA shall be set off against the purchase price of the Option Interests
      pursuant to § 8.4."

     

    8.

    The
      following § 8.6A is inserted after § 8.6:

     

    "§
      8.6A     
Calculation
      of the Special-Option Price

     

    §
      8.6A.1:      Pursuant
      to § 4 of the PA, the purchase-price portion of the Special-Option Price shall
      be calculated subject to the following:

     

    
      	·  	
              §
                4.3 PA shall not apply

            


    

     

    
      	·  	
              the
                12-month "Pre-Closing Phase" described in § 4.4 of the PA shall begin
                retroactively upon expiration of the calendar quarter that precedes
                the
                Option Exercise Date

            


    

     

    
      	·  	
              The
                basis for the EBITDA calculation pursuant to § 4.5.7 of the PA shall be
                two interim balance sheets for each of the four calendar quarters
                ending
                with the end of the Pre-Closing Phase "Pre-Closing
                Interim Balance Sheet"
                -
                and with the end of the following 12 month period ("Post-Closing
                Phase")
                - "Post-Closing
                Interim Balance Sheet."

            


    

     

    
      	·  	
              §
                4.5.8 PA shall not apply.

            


    

     

    
      	·  	
              the
                three (3) fiscal years that have closed immediately prior to the
                Option
                Exercise Date shall be controlling for purposes of determining the
                Working
                Capital Objective pursuant to § 4.7.8.
                PA.

            


    

     

    §
8.6A.2:
       The
      earn-out portion of the Special-Option Price shall be calculated pursuant to
§ 7
      of the PA, subject to the following:

     

    
      	·  	
              §
                7.1 par. 1 PA is reworded to read as
                follows:

            


    

     

    "The
      Buyer shall pay to the Sellers an earn-out, which shall be calculated according
      to the following formula:

     

     

     

    
      
        
        

      

      
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          6 -

        
          

        

      

      
        
        

      

    

     

    6
      x EBITDA of Post-Closing Phase - EBITDA of Pre-Closing
      Phase

    2"

     

    
      	·  	
              §
                7.1 par. 2 PA is reworded to read as
                follows:

            


    

     

    "If
      the
      incontestably established EBITDA value for the Pre-Closing Phase is less than
      the values indicated below, then instead of the actual EBITDA value, an EBITDA
      value, in the amount of the value indicated below, shall be deducted from the
      EBITDA value for the Post-Closing Phase:

     

    in
      case
      of an exercise 

    in
      2007:
      EUR 25,000,000.00,

    in
      2008:
      EUR 25,000,000.00,

    in
      2009:
      EUR 30,000,000.00,

    in
      2010:
      EUR 35,000,000.00, and

    in
      2011:
      EUR 40,000,000.00."

     

    
      	·  	
              §
                7.2 PA shall be replaced by the following:


            


    

     

    "A
      negative Earn-Out shall not be taken into account."

     

    
      	·  	
              in
                § 7.3 PA, the phrase "for fiscal year 2007" is replaced by "for the
                Post-Closing Phase."

            


    

     

    
      	·  	
              in
                § 7.4 PA Annex
                § 7.4
                is
                replaced by the new Annex
                § 7.4 NEW.

            


    

     

    §
8.6A.3
       The
      Special-Option Price shall be at least EUR 50,000,000.00.

     

    The
      Special-Option Price may only be reduced by any Balance PA.

     

    The
      provisions of § 8 of the PA, entitled "Balance Sheets," shall apply mutatis
      mutandis to
      the
      Pre-Closing Interim Balance Sheet and the Post-Closing Interim Balance Sheet,
      subject to the following:

     

    "§
8.2
      PA
      shall only apply if the Option Exercise Date falls before the end of the first
      calendar quarter of 2008; thereafter, both interim balance sheets must be
      prepared in accordance with US GAAP and subsequently transferred to the German
      commercial-law provisions for corporate groups (§§ 290 et seq. of the Commercial
      Code (HGB)). These transferred interim balance sheets shall be controlling
      for
      purposes of calculating the 

     

     

    
      
        
        

      

      
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          7 -

        
          

        

      

      
        
        

      

    

     

    Special-Option
      Price. In paragraph 2, the reference
      to fiscal year 2006 is replaced by "Pre-Closing Phase."

     

    §
8
      6A.4.
 §§
5
      and
      6 of the PA shall apply mutatis
      mutandis,
      subject
      to the following:

     

    
      	·  	
              §
                5.1 PA is reworded to read as
                follows:

            


    

     

    "On
      the
      Option Transaction Date, the Buyer shall pay to the Sellers a provisional
      special-option purchase price calculated pursuant to § 6 PA ("Provisional
      Special-Option Purchase Price"),
      provided however, that the payment shall not be less than (i) the greater of
      the
      Provisional Special-Option Purchase Price and EUR 50,000,000.00, minus (ii)
      the
      Balance PA, if any."

     

    
      	·  	
              The
                following sentence is added to § 5.2
                PA:

            


    

     

    "However,
      a duty of repayment on the part of the Sellers shall only exist for the amount
      exceeding the following sum: EUR 50,000,000.00 minus the Balance PA, if
      any.

     

    Any
      payment obligation of the Buyer shall be subject to a deduction of any Balance
      KV." 

     

    
      	·  	
              The
                following § 5.2 PA is inserted after § 5.2
                PA:

            


    

     

    "Any
      earn-out payment shall only be made if and to the extent that the sum consisting
      of the purchase-price portion and the earn-out portion of the Special-Option
      Price exceeds the amount of EUR 50,000,000.00.

     

    
      	·  	
              If
                the sum consisting of the purchase-price portion and the earn-out
                portion
                of the Special-Option Price is less than the amount of EUR 50,000,000.00,
                there shall be no repayment to the
                Buyer.

            


    

     

    
      	·  	
              Two
                sample calculations are presented in Annex
                § 7.4 NEW (PA)."

            


    

     

    
      	·  	
              §
                6.1 of the PA shall apply, subject to the
                following:

            


    

     

    "Provided
      the option is exercised by 31 March 2008, the Sellers shall appoint an auditing
      firm ("Auditors").
      Thereafter, the Buyer shall make the appointment.

     

    The
      Auditors shall conduct an auditor’s review of the summarized, consolidated
      monthly balance sheets for the Pre-Closing Phase. Subsequently, on this basis,
      the Auditors shall specify an estimated provisional special-option purchase
      price."

     

     

    
      
        
        

      

      
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          8 -

        
          

        

      

      
        
        

      

    

     

    §
      8.6A.5:      The
      Buyer
      undertakes as against the Sellers that, at the written request of the Sellers,
      it shall procure for the Sellers payment in satisfaction of the Special-Option
      Price in the form of shares up to a maximum value of EUR 50,000,000.00 in a
      parent company or another company that directs the main business of the company
      that is exercising the Special Option, which company in either case must be
      publicly listed. The Sellers shall have the right to determine the respective
      company ("Right
      of Determination").
      The
      number of shares to be procured (which may be by transfer or issuance) shall
      be
      calculated by reference to the market price for such shares on the Transaction
      Date of the Special Option.

     

    The
      company determined by the Sellers shall not be obliged to increase its
      authorized share capital.

     

    The
      Sellers may, however, in the alternative, require payment of the Special-Option
      Price in cash, in whole or in part. This right and the Right of Determination
      must be exercised in writing within one month of the exercise of the
      Special-Option Right.

     

    The
      aforementioned option of the Sellers to require payment of the Special-Option
      Price to be made in the form of shares shall, however, be subject to this being
      in accordance with the laws applicable to the company whose shares are at issue
      and also to the charter documents of such company. 

     

    §
      8.6A.6      The
      Consummation of the Special Option shall take place in accordance with the
      provisions of § 8.7 and § 8.8 of the MA."

     

    9.

    The
      period specified in § 9.2, i.e., "until the fifth anniversary of the Transaction
      Date," shall be replaced by "until 31 December 2011".

     

    10.

    §
10.3
      MA
      shall have the following additional sentence inserted at the end:

     

    "The
      provision in § 8.6A.5 shall apply to the Special Option." 

     

     

    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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