Exhibit 3(i)(e)
COMPANIES ACTS 1963 TO 2001
COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION
OF
LOTTERY NETWORK SERVICES LIMITED
PRELIMINARY
1. (a) Subject as hereinafter provided, the regulations contained in parts 1 and
11 of Table A in the first schedule to the Companies Act 1963 (hereinafter
referred to as "Table A") shall apply to the Company.
(b) Regulations 5, 8, 24, 47, 51, 54, 75, 79, 84, 86, 91, 92, 93, 94 and 95 of
Table A part 1 and regulation 7 in Part 11 of Table A shall not apply.
2. The Company is a Private Company and accordingly:
(a) The right to transfer shares is restricted in the manner hereinafter
prescribed;
(b) The number of members of the Company (exclusive of persons who are in the
employment of the Company and of persons who, having been formerly in the
employment of the Company, were while in such employment, and have continued
after the termination of such employment to be, members of the Company) is
limited to fifty, so, however, that where two or more persons hold one or more
shares in the Company jointly, they shall, for the purpose of this regulation,
be treated as a single member;
(c) Any invitation to the public to subscribe for any shares or debentures of
the Company is prohibited;
(d) The Company shall not have power to issue share warrants to bearer.
SHARES
3. No share shall be offered at a discount.
4. (a) the Directors of the company are generally and unconditionally authorised
to exercise all powers of the company to allot relevant securities (within the
meaning of section 20 of the Companies (Amendment) Act 1983) up to an amount
equal to the authorised but as yet unissued share capital of the company on the
date of incorporation of the company. The authority hereby conferred shall
expire five years from the date of incorporation of the company, unless
previously renewed revoked or varied by the company in general meeting, save
that the company may before such expiry date make an offer or agreement which
would or might require relevant securities to be allotted after the authority
has expired and the Directors may allot relevant securities in pursuance of such
offer or agreement as if the authority hereby conferred had not expired.
(b) The pre-emption provisions of sub-sections (1), (7) and (8) of section 23 of
the Companies (Amendment) Act 1983 shall not apply to any allotment by the
Company of equity securities (within the meaning of the said Section 23).
5. The Directors may, in their absolute discretion and without assigning any
reason therefore, decline to register any transfer of any share, whether or not
it is a fully paid share.
6. Subject to the provisions of Part XI of the Companies Act 1990 the Company
may:-
(a) issue shares which are to be redeemed or are liable to be redeemed at the
option of the Company or the holder, on such terms and in such manner as shall
be provided by the Articles of Association of the Company provided always that
the nominal value of the issued share capital which is not redeemable shall not
at any time, be less than one tenth of the nominal value of the total issued
share capital of the Company.
(b) purchase its own shares.
(c) cancel any of its own shares following purchase.
(d) re-designate any of its own shares following purchase as treasury shares
provided always that the nominal value of treasury shares held by the Company,
may not, at any one time, exceed ten per cent of the nominal value of the issued
share capital of the Company.
For so long as the Company holds shares as treasury shares
(i) the Company shall not exercise any voting rights in respect of those shares
and any purported exercise of those rights shall be void; and
(ii) no dividend or other payment (including any payment in a winding up of the
Company) shall be payable to the Company in respect of those shares.
(e) cancel or re-issue as shares of any class any shares held by the Company as
treasury shares.
(f) not make a payment in respect of the redemption or purchase of its own
shares otherwise than out of distributable profits of the Company or the
proceeds of a fresh issue of shares.
(g) Notice of redemption in writing shall be given in accordance with this
sub-paragraph (g) to the holders of Ordinary Shares to be purchased or redeemed.
Any notice of purchase or redemption shall specify the number of shares to be
purchased or redeemed, the date fixed for purchase or redemption and the place
at which the certificates for such shares are to be presented for purchase or
redemption and upon such date each of the holders of the shares concerned shall
be bound to deliver to the Company at such place the Certificates for the shares
to be purchased or redeemed. If any certificate so delivered to the Company
includes any shares not to be purchased or redeemed on that occasions a fresh
certificate for such shares shall forthwith be issued to the holder delivering
such certificate to the Company.
7. When any shares have been forfeited an entry shall be made in the Register of
members of the Company recording the forfeiture and the terms and date thereof.
BORROWING POWERS
8. The Directors may exercise all powers of the Company to borrow money, and to
mortgage or charge its undertaking, property and uncalled capital, or any part
thereof and to issue debentures, debenture stock and other securities, whether
outright or as security for any debt, liability or obligation of the Company or
of any third party.
GENERAL MEETING
9. Regulation 6 of Table A Part 11 shall apply to the Company and subject to
Section 141 of the Act, a resolution in writing signed by all the members for
the time being entitled to attend and vote on such resolution at a General
Meeting (or being bodies corporate by their duly authorised representatives)
shall be as valid and effective for all purposes as if the resolution had been
passed at a General Meeting of the Company duly convened and held, and if
described as a Special Resolution shall be deemed to be a Special Resolution
within the meaning of the Act.
10. All Annual General Meetings of the Company shall be held in the State.
10A. Ordinary Shares:
The holders of the Ordinary shares shall be entitled to receive notice to
attend, speak and vote on all resolutions laid before the members for their
consideration at all duly convened meetings of the company. They shall also be
entitled to participate in the profits and gains of the company by way of
dividends properly declared in accordance with these articles. They shall also
be entitled to participate in the surplus assets (i.e. after all proper
allowances have been made for the company's liabilities and charges) on a
winding up.
"A" Ordinary Shares:
The holders of the "A" Ordinary shares shall not be entitled to receive notice
of or attend and speak at general meetings of the company nor shall they be
entitled to participate in the profits and gains of the company which may from
time to time be
declared as dividends or other form of distribution. On a winding up of the
company the holders shall only be entitled to participate in any surplus assets
(i.e. after all proper allowances have been made for the company's liabilities
and charges) to the extent that they shall only be liable to receive an amount
out of any such surplus up to an amount as is equal to the amount that was
treated as fully paid up on those shares. In all other respects the "A" Ordinary
shares shall rank pari passu with the Ordinary shares.
VOTES OF MEMBERS
11. No business shall be transacted at a General Meeting unless a quorum of
members is present at the time when the meeting proceeds to business; save as
herein otherwise provided, two members present in person or by proxy shall be a
quorum.
DIRECTORS
12. For the purposes of this Article, the term "Two Thirds Interest" shall have
the meaning ascribed to it in the Note Purchase Agreement dated in or around the
1st April, 2003 between the Company, the Investors signatory to and listed in
Schedule 1 thereto, and the persons signatory to and listed on Schedule 2
thereto relating to an investment in the Company. The Two Thirds Interest shall
be entitled at all times to appoint a majority of the Directors. The number of
Directors shall be not less than two and unless and until otherwise agreed by
the Two Thirds Interest shall not be more than seven. The Two Thirds Interest
shall be entitled to appoint up to four persons as Directors (each an Investor
Director) and to remove and replace any person so appointed. No additional
Director may be appointed to the Board without the prior written consent of the
Two Thirds Interest. In the event of a vacancy resulting from the removal or
resignation of an Investor Director, the Two Thirds Interest shall be entitled
to appoint another person as a Director in his stead.
13. In regulation 98 of Table A Part 1, the words "but shall" to the end shall
be omitted.
14. A resolution in writing signed by all the Directors for the time being
entitled to receive notice of a meeting of the Directors shall be as valid as if
it had been passed at a meeting of the Directors duly convened and held and may
consist of several documents in the like form each signed by one or more of the
Directors. For the purpose of this Article the signature of an alternate
director shall suffice in lieu of the signature of the Director appointing him.
15 (a) For the purpose of these Articles, the contemporaneous linking together
by telephone or other means of audio communication of a number of Directors not
less than the quorum shall be deemed to constitute a meeting of the Directors,
and all the provisions in these Articles as to meetings of the Directors shall
apply to such meetings.
(b) Each of the Directors taking part in the meeting must be able to hear each
of the other Directors taking part.
(c) At the commencement of the meeting each Director must acknowledge his
presence and that he accepts that the conversation shall be deemed to be a
meeting of the Directors.
(d) A Director may not cease to take part in the meeting by disconnecting his
telephone or other means of communication unless he has previously obtained the
express consent of the chairman of the meeting, and a Director shall be
conclusively presumed to have been present and to have formed part of the quorum
at all times during the meeting unless he has previously obtained the express
consent of the chairman of the meeting to leave the meeting as aforesaid.
(e) A minute of the proceedings at such meeting by telephone or other means of
communication shall be sufficient evidence of such proceedings and of the
observance of all necessary formalities if certified as a correct minute by the
chairman of the meeting.
16. The quorum necessary for the transaction of the business of the Directors
may be fixed by the Directors, and unless so fixed shall be two.
17. Provided that he shall have declared the nature of his interest in
accordance with Regulation 83 of Table A Part 1, a Director may vote in respect
of any contract, appointment or arrangement in which he is interested, and he
shall be counted in the quorum present at the meeting.
DISQUALIFICATION OF DIRECTORS
18. The office of Director shall be vacated if the Director:
(a) Ceases to be a Director by virtue of Section 180 of the Act; or
(b) Is adjudged bankrupt in the State or in Northern Ireland or Great Britain or
makes any arrangement or composition with his creditors generally; or
(c) Becomes prohibited from being a Director by reason of any order made under
Section 184 of the Act; or
(d) Becomes of unsound mind; or
(e) Resigns his office by notice in writing to the Company; or
(f) Is convicted of an indictable offence unless the Directors otherwise
determine; or
(g) Is for more than six months absent without permission of the Directors from
meetings of the Directors held during that period.
19. Where a notice is sent by post, it shall be deemed to have been served at
the expiration of forty-eight hours after it was posted; and regulation 133 of
Table A shall be modified accordingly.
20. A member who has no Registered Address in the Republic of Ireland, Northern
Ireland or Great Britain and has not supplied to the Company an address within
the Republic of Ireland, Northern Ireland or Great Britain for the giving of
notices to him shall not be entitled to receive any notices from the Company.
INDEMNITY
21. In addition to the indemnity contained in regulation 138 of Table A Part 1,
the Company shall indemnify every Director, Secretary or other officer against
all costs and expenses incurred in or about the execution and discharge of the
duties of his office.
SECRETARY
22. The first Secretary of the Company shall be the person named as the first
Secretary of the Company in the statement delivered under Section 3 of the
Companies (Amendment) Act 1982.
TRANSFER OF SHARES
23 (a) No share shall be transferred to any person save in accordance with the
provisions of this Article.
(b) Except in the case of a transfer made pursuant to paragraphs (j) and (k) of
this Article a Member or other person (hereinafter called "the Vendor")
proposing to transfer shares shall give a notice in writing (hereinafter called
"a transfer notice") to the Company that he desires to transfer the same, and
shall at the same time deposit with the Company the share certificate in respect
of such shares. Such transfer notice may specify the price at which the Vendor
proposes to sell the said shares and, subject to the right of revocation
hereinafter conferred upon the Vendor, shall appoint the Company his agent for
the sale of the whole (but not a part) of the shares comprised therein to any
Member or Members of the Company or to any person or persons selected by the
Directors as a person or persons whom it is desirable in the interests of the
Company to admit to membership (hereinafter in these Articles called "selected
persons") at whichever shall be the lower of the price (if any) so specified or
the fair value to be fixed by the Auditors of the Company for the time being in
accordance with this Article (such lower price or value being hereinafter
referred to as "the sale price").
(c) The Company shall forthwith after the receipt of a transfer notice instruct
the Auditors to certify in writing the sum which in their opinion is the fair
value of the shares, and such sum shall be deemed to be the fair value, and in
so certifying the Auditors shall be considered to be acting as experts and not
as arbitrators, and accordingly the Arbitration Act, 1954, shall not apply and
the costs incurred by the Auditors in so certifying shall be borne equally by
the Vendor and the transferee of such shares.
(d) Forthwith after the fair value shall have been certified by the Auditors as
aforesaid the Company shall give notice in writing to the Vendor of the sum so
certified.
(e) Within a period of seven days after notice of the fair value as so certified
being given to the Vendor, the Vendor may by further notice in writing to the
Company revoke the transfer notice as to the whole of the shares comprised
therein and thereupon the
share certificate in respect of the shares shall be returned to him. After the
expiration of such period of seven days a transfer notice shall not be revocable
except with the sanction of the Directors.
(f) Not earlier than eight days after the Company shall have given notice to the
Vendor of the sum certified as the fair value of the shares the Directors shall
(unless the Vendor shall have revoked the transfer notice within the period
specified in paragraph (e) hereof) give notice of the receipt of the transfer
notice to all Members (other than the Vendor) and any selected persons and shall
invite applications from such members and selected persons (hereinafter in this
paragraph called "applicants") to purchase the shares comprised therein or any
of them at the sale price or proportionate price according to the number of
shares applied for. If more than one applicant shall apply to purchase the
shares comprised in a transfer notice, they shall (subject to the right of the
Directors to allocate to selected persons such number of the shares as they
shall consider it in the interests of the Company so to do) be allocated by the
Directors to the applicants in proportion (as nearly as may be) to the number of
shares already held by each such applicant. Each applicant shall be deemed to
have applied for the number of shares allocated to him but so that no applicant
shall be bound to accept a greater number of shares than the number for which he
shall have applied.
(g) If the Company shall within the period of two calender months after the
service of a transfer notice find a Member or Members and/or selected persons
willing to purchase the whole of the shares comprised therein and shall give
notice thereof to the Vendor he shall be bound upon payment of the sale price to
transfer the shares to such Member or Members and/or selected persons.
(h) If in any case the Vendor, after having become bound as aforesaid, makes
default in transferring any of the said shares, the Company may receive the
purchase money and thereupon the Directors shall nominate some person to execute
a transfer of the share in the name and on behalf of the Vendor, and shall cause
the name or names of the purchasing member or members and/or selected persons to
be entered in the register as the holder or holders of the shares, and the
Company shall hold the purchase money in trust for the Vendor. The receipt of
the Company for the purchase money shall be a good discharge to the purchasing
Member or Members and/or selected persons and after such name or names have been
entered in the register in purported exercise of the aforesaid power the
validity of the proceedings shall not be questioned by any person.
(i) If the Company shall not within the aforesaid period of two calendar months
find a Member or Members and/or selected persons willing to purchase the whole
of the said shares and shall not give notice in manner aforesaid the Vendor
shall at any time within three calendar months after the expiration of such
period be at liberty, subject to Regulations 2 and 3 in Part II of Table A, to
sell and transfer the shares or any part thereof to any person and at any price,
not being less than the sale price such minimum price in the case of a sale of a
part of the shares being calculated rateably according to the number of shares
sold.
(j) With the consent in writing of all the members for the time being the
provisions of this Article may be waived in whole or in part in any particular
case.
(k) Notwithstanding the foregoing provisions of this Article but subject to
Regulations 2 and 3 in Part II of Table A:
(i) Any share may be transferred by a member to any child (including any legally
adopted child) of such member to his or her father or mother, or to any lineal
descendant of his or her father or mother, or to his or her wife or husband.
(ii) Any share may be transferred by a member to the trustees of any settlement
or trust for the benefit of such member or of any person to whom shares may be
transferred under sub-paragraph (i) of this paragraph.
(iii) Any share may be transferred by a member to any company incorporated in
the State, the majority of the issued shares whereof are held by the trustees of
any settlement or trust for the benefit of such member or of any person to whom
shares may be transferred under sub-paragraph (i) of this paragraph.
(iv) Any share of a deceased member may be transferred to the widow or widower
or any other such relative as aforesaid of such deceased member or may be
transferred to or placed in the names of his or her executors, administrators or
trustees.
(v) Any share standing in the name of the trustees of the Will of any deceased
member or of any settlement or trust may be transferred upon any change of
trustees to the trustees for the time being of such Will, settlement or trust.
(vi) Any share(s) issued to William O. Winsaeur, Milton Dresner or Joseph S.
Dresner or to any other person on conversion of any Promissory Note (as defined
in the Note Purchase Agreement dated in or around 1st April, 2003 between the
Company, the Investors (as defined therein) and certain of the Company's
shareholders) may be freely transferred at any time to any other person and
subsequently by any person to whom such share(s) is/are transferred to any other
person.
24. An instrument of transfer of a share (other than a partly paid share) need
not be executed on behalf of the transferee and need not be attested and
Regulation 22 in Part I of Table A shall be modified accordingly.
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NAMES, ADDRESSES AND DESCRIPTION OF SUBSCRIBERS
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For and on behalf of
STEMBRIDGE LIMITED
First Floor,
14-15, Parliament Street,
Dublin 2
Corporate Body
For and on behalf of
POREMA LIMITED
First Floor,
14-15, Parliament Street,
Dublin 2
Corporate Body
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Dated this 16th day of May, 2000
Witness to above signatures:
Joanne Browne,
Castle River House,
14/15, Parliament Street,
Dublin 2.