Exhibit 2.3
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT, dated as of March 17, 2003, by and
between GTECH HOLDINGS CORPORATION, a Delaware corporation and its Subsidiaries
(collectively, the "Parent"), and L. ROGERS WELLS, JR. ("Wells").
WHEREAS, the Parent has agreed to acquire Interlott Technologies, Inc.,
a Delaware corporation (the "Company"), by merger upon satisfaction of certain
conditions, as provided in that certain Agreement and Plan of Merger dated of
even date herewith by and among Parent, Bengal Acquisition Co. ("Merger
Subsidiary") and the Company (the "Merger Agreement"); and
WHEREAS, Wells is the record holder of a majority of the Company Common
Stock; and
WHEREAS, the Parent is unwilling to close the Merger contemplated by
the Merger Agreement unless Wells enters into this Noncompetition Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto hereby covenant and agree as
follows:
1. TERM; NONCOMPETE.
(a) The terms of this Agreement shall be effective upon the date
which is the earlier of (i) if the Closing occurs, the date of the Effective
Time, or (ii) the date of the exercise of the Option by Merger Subsidiary
pursuant to (and as defined in) Article Two of the Stockholder Voting and Option
Agreement dated as of the date hereof among Parent, Merger Subsidiary and Wells,
and this Agreement shall have a term of five years from such date (the "Term").
If the Closing does not occur and (i) the Merger Agreement is terminated for any
reason and (ii) the Option terminates or expires without being exercised, this
Agreement shall terminate and be void and of no further force or effect.
(b) During the Term, Wells shall not engage or propose to engage,
directly or indirectly (which includes owning, managing, operating, controlling,
being employed by, acting as a consultant to, giving financial assistance to,
participating in or being connected in any material way with any business or
person so engaged) in any Lottery Business anywhere in the world, including
without limitation in any business which competes or proposes to compete with
any Lottery Business in which the Parent was engaged or proposed to be engaged
anywhere in the world; provided, that Wells' ownership as a passive investor of
less than one percent of the issued and outstanding stock or equity, or $100,000
principal amount of any debt securities, of any corporation, partnership or
other entity so engaged shall not by itself be deemed to constitute such
engagement by Wells. As used herein, the term "Lottery Business" shall mean the
provision of products, services or technology of every nature relating to the
operation of all manner of lotteries however and wherever conducted.
(c) Further, during the Term, Wells shall not (i) disturb or
interfere with any business relationship between the Parent and any of its
customers, suppliers or other business associates, or (ii) solicit or cause to
be solicited any officer, employee or customer of the Parent to terminate such
person's relationship with the Parent.
(d) Parent hereby agrees to pay Wells Two Hundred Fifty Thousand
Dollars ($250,000.00) each year during the Term. Such payments shall be the only
payments due to Wells as consideration for the noncompetition agreements
contained herein. Such payments shall be made by Parent to Wells quarterly in
advance. Such payments shall continue to be made to the estate of Wells in the
event of Wells' death.
2. CERTAIN ADDITIONAL OBLIGATIONS OF WELLS.
Wells further covenants with the Parent as follows and expressly agrees
that the provisions of this Section 2 are material obligations to the Parent and
the breach of those provisions will constitute material breaches of this
Agreement.
(a) Assistance in Litigation. During the Term, subject to
reasonable accommodation of Wells' then business and personal schedule, Wells,
upon reasonable notice, shall furnish such information and proper assistance to
the Parent as may reasonably be required in connection with any litigation in
which the Parent or the Company is, or may become, a party or in connection with
any investigation or review by any governmental agency of which the Parent or
the Company is or may become a subject. The Parent shall compensate Wells at a
reasonable hourly rate, plus reimburse all reasonable expenses incurred by
Wells.
(b) Confidential Information. Wells shall not knowingly use for his
own benefit or disclose or reveal to any person, at any time, any trade secret
or other confidential information relating to the Parent or the Company,
including any customer lists, customer needs, price and performance information,
processes, specifications, hardware, software, firmware, programs, devices,
supply sources and characteristics, business opportunities, marketing,
promotional, pricing and financing techniques, and other information relating to
the Parent or the Company; provided that such restriction on confidential
information shall not apply to information which is (i) proven to be generally
available in the industry, (ii) disclosed in published literature or (iii)
obtained by Wells from a third party without binder of secrecy. Wells agrees
that, except as otherwise agreed by the Parent, he will return to the Parent,
promptly upon the request of the Parent, any physical embodiment of such
confidential information. In the event Wells is requested by any legal process
to disclose Confidential Information, Wells shall immediately inform the Parent
and shall permit the Parent an opportunity to oppose such process, it being
understood that Wells' compliance with legal process, after the Parent's
reasonable opportunity to oppose such process, does not constitute a violation
of this Section 2(b).
3. TAX WITHHOLDING.
The Parent may withhold from any amounts payable under this Agreement
Taxes as shall be required pursuant to any law or governmental regulations or
ruling.
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4. EFFECT OF PRIOR AGREEMENTS.
This Agreement contains the entire understanding between the parties
hereto with respect to the matters covered herein and supersedes any prior
agreement, condition, practice, custom, usage and obligation with respect to
such matters insofar as any such prior agreement, condition, practice, custom,
usage or obligation might have given rise to any enforceable right.
5. GENERAL PROVISIONS.
(a) Certain Representations and Warranties of Wells. Wells
represents to the Parent that (i) the execution and performance of this
Agreement by Wells does not and will not constitute a breach of or violate any
contract, agreement, obligation or understanding, oral or written, or order of
any court or governmental authority to which he is a party or by which he is
bound and (ii) Wells has been represented by counsel selected by Wells in the
negotiation and preparation of this Agreement.
(b) Non-assignability and Inurement. Neither this Agreement nor any
rights or interest hereunder shall be assignable by Wells, his beneficiaries, or
legal representatives without the Parent's prior written consent (it being
understood that all payments to which Wells is entitled hereunder shall inure to
the benefit of his estate or legal heirs).
(c) Binding Agreement. This Agreement shall be binding upon, and
accrue to the benefit of, Wells and the Parent and their respective heirs,
executors, administrators, successors and permitted assigns, including, in the
case of the Parent, any person or entity acquiring all or substantially all of
the Parent's assets.
(d) Amendment of Agreement. This Agreement may not be modified or
amended except by an instrument in writing signed by the parties hereto.
(e) Remedies. Wells acknowledges and agrees that the possible
restrictions on his activities which may occur as a result of his performance of
his obligations under Sections 1 and 2 hereof are required for the reasonable
protection of the Parent, and Wells expressly acknowledges and agrees that such
restrictions are fair and reasonable for that purpose. Wells further expressly
acknowledges and agrees that damages alone will be an inadequate remedy for any
breach or violation by him of this Agreement and that the Parent, in addition to
all other remedies at law or in equity, shall be entitled as a matter of right
to injunctive relief, including specific performance, with respect to any such
breach or violation, in any court of competent jurisdiction including, without
limitation, any state or federal court in Delaware. If any of the provisions of
such Sections are held to be in any respect an unreasonable or unlawful
restriction upon Wells, then they shall be deemed to extend only over the
maximum period of time, geographic area, and/or range of activities as to which
they may be enforceable.
(f) Waiver. No term or condition of this Agreement shall be deemed
to have been waived, nor shall there be any estoppel against the enforcement of
any provision of this Agreement, except by written instrument of the party
charged with such waiver or estoppel.
(g) Severability. If, for any reason, any provision of this
Agreement is held invalid, such invalidity shall not affect any other provision
of this Agreement not so held invalid,
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and each such other provision shall to the full extent consistent with law
continue in full force and effect.
(h) Notices. For the purposes of this Agreement, notice and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when hand delivered or mailed by United
States certified or registered express mail, return receipt requested, postage
prepaid, if to Wells, addressed to the address set forth on the signature page
of this Agreement with a copy to his counsel, Taft, Stettinius & Hollister, LLP,
425 Walnut Street, Suite 1800, Cincinnati, Ohio 45202, Attention: John J. McCoy,
Esq.; if to the Parent, addressed to GTECH Holdings Corporation, 55 Technology
Way, West Greenwich, Rhode Island 02817 and directed to the attention of the
General Counsel of the Parent, with a copy to Edwards & Angell, LLP, 2800
Financial Plaza, Providence, Rhode Island 02903, Attention: Walter G.D. Reed,
Esq., or to such other address as either party may have furnished to the others
in writing in accordance herewith, except that notice of change of address shall
be effective only upon receipt.
(i) Counterparts. This Agreement may be executed by facsimile and
in several counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same instrument.
(j) Indulgences, Etc. Neither the failure nor any delay on the part
of either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence.
(k) Headings. The headings of Sections and paragraphs herein are
included solely for convenience of reference and shall not control the meaning
or interpretation of any of the provisions of this Agreement.
(l) Capitalized Terms. Capitalized terms used herein and not
otherwise defined shall have the same meaning as in the Merger Agreement.
(m) Governing Law; Forum. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof. In the event of any dispute hereunder, the prevailing party shall
be entitled to recover all costs, including reasonable attorneys' fees, incurred
in adjudicating such dispute. Each of the parties hereto hereby irrevocably and
unconditionally submits himself/itself to the exclusive jurisdiction of any
Delaware State court, or Federal court sitting in Delaware, in any action or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby or for recognition or enforcement of any judgment relating
thereto, and each of the parties hereby irrevocably and unconditionally (i)
agrees not to commence any such action or proceeding except in such courts, (ii)
agrees that any claim in respect of any such action or proceeding may be heard
and determined in such Delaware State court or, to the extent permitted by law,
in such Federal court,
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(iii) waives, to the fullest extent he/it may legally and effectively do so, any
objection which he/it may now or hereafter have to the laying of venue of any
such action or proceeding in any such Delaware State or Federal court, and (iv)
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such Delaware State
or Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Each party to this Agreement irrevocably consents to service of process in the
manner provided for notices in Section 8(h). Nothing in this Agreement shall
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.
(Signatures on Next Page)
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IN WITNESS WHEREOF, GTECH Holdings Corporation has caused this
Agreement to be executed by its duly authorized officers, and Wells has signed
this Agreement, all as of the day and year first above written.
GTECH HOLDINGS CORPORATION
Attest: /s/ Michael Prescott By: /s/ W. Bruce Turner
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Name: Michael Prescott Name: W. Bruce Turner
Title: Vice President and Title: President & Chief Executive Officer
Deputy General Counsel
Witness: L. ROGERS WELLS, JR.
/s/ Tracey A. Chriske /s/ L. Rogers Wells, Jr.
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Address:
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