Unassociated Document


    Exhibit
      10-26

    


     

    PROMISSORY
      NOTE

     

    
      	$1,500,529.86	
              Dublin,
                Ireland

              March
                17, 2006

            


    

     

     

    On
      or
      before October 1, 2007 (herein called the “Maturity Date”), FOR VALUE RECEIVED,
      the undersigned, NEW
      MEDIA LOTTERY SERVICES INTERNATIONAL LTD, an Irish
      corporation
      (herein
      called “Maker”), promises to pay to the order of NEW
      MEDIA LOTTERY SERVICES, INC., a Delaware corporation
      (herein
      called “Payee”), in lawful currency of the United States of America, the
      principal sum of ONE MILLION FIVE HUNDRED THOUSAND FIVE HUNDRED TWENTY NINE
      AND
      86/100 DOLLARS ($1,500,529.86), together with interest thereon as hereinafter
      set forth.

     

    Subject
      to the terms and conditions of this Note, the unpaid principal balance from
      time
      to time outstanding under this Note during an applicable Monthly Period shall
      bear interest at a per annum rate equal to the Eurodollar Rate applicable to
      such Monthly Period. For purposes of this Note, the Eurodollar Rate for an
      applicable Monthly Period shall be determined as of the Interest Reset Date
      which is the first day of such Monthly Period, and (subject to the terms and
      conditions of this Note) such interest rate shall remain and continue as the
      Applicable Interest Rate for the entire unpaid principal balance from time
      to
      time outstanding under this Note at any time during such Monthly Period, until
      the next-occurring Interest Reset Date, at which time, the Eurodollar Rate
      shall
      again be determined and recalculated in accordance with the foregoing for the
      next-occurring Monthly Period.

     

    Accrued
      and unpaid interest hereunder shall be payable monthly, in arrears, on the
      first
      (1st) Business Day of each month, until maturity (whether as stated herein,
      by
      acceleration, or otherwise). Interest accruing hereunder shall be computed
      on
      the basis of a year of 360 days, and shall be assessed for the actual number
      of
      days elapsed, and in such computation, to the extent applicable, effect shall
      be
      given to any change in the Applicable Interest Rate as a result of any change
      in
      the Prime Rate on the date of each such change in the Prime Rate. A late payment
      charge equal to 5% of each late payment may be charged on any payment not
      received by the Payee within 10 calendar days after the payment due date, but
      acceptance of payment of this charge shall not waive any Default under this
      Note.

     

    The
      Applicable Interest Rate and the amount and date of any repayments shall be
      noted on Payee’s records, which records shall be conclusive evidence thereof,
      absent manifest error; provided, however, any failure by Payee to make any
      such
      notation, or any error in any such notation, shall not relieve Maker of its
      obligations to repay Payee all amounts payable by Maker to Payee under or
      pursuant to this Note, when due in accordance with the terms
      hereof.

     

    Maker
      may
      prepay all or part of the outstanding balance of this Note at any time without
      penalty or premium; provided, however, Maker shall not be permitted to reborrow
      any amounts so prepaid.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    In
      the
      event that any payment under this Note becomes due and payable on any day which
      is not a Business Day, the due date thereof shall be extended to the next
      succeeding Business Day, and, to the extent applicable, interest shall continue
      to accrue and be payable thereon during such extension at the rates set forth
      in
      this Note.

     

    All
      payments to be made by Maker to Payee under or pursuant to this Note shall
      be in
      immediately available funds, without setoff or counterclaim, and in the event
      that any payments submitted hereunder are in funds not available until
      collected, said payments shall continue to bear interest until collected. Maker
      hereby authorizes Payee to charge any account of Maker with Payee for all sums
      due hereunder when due in accordance with the terms hereof.

     

    If
      Payee
      determines that, (a) by reason of circumstances affecting the foreign exchange
      markets generally, deposits in eurodollars in the applicable amounts or for
      the
      relative maturities are not being offered to Payee, or (b) if the rate of
      interest referred to in the definition of "Eurodollar Rate" does not accurately
      or fairly cover or reflect the cost to Payee of making or maintaining the
      Indebtedness hereunder at the Eurodollar Rate, then Payee shall forthwith give
      notice thereof to the Maker. Thereafter, until Payee notifies Maker that such
      conditions or circumstances no longer exist, the Indebtedness from time to
      time
      outstanding hereunder shall bear interest at the Prime-based Rate.

     

    If,
      after
      the date hereof, the introduction of, or any change in, any applicable law,
      rule
      or regulation or in the interpretation or administration thereof by any
      governmental authority charged with the interpretation or administration
      thereof, or compliance by Payee with any request or directive (whether or not
      having the force of law) of any such authority, shall make it unlawful or
      impossible for the Payee to make or maintain any Indebtedness hereunder with
      interest at the Eurodollar Rate, Payee shall forthwith give notice thereof
      to
      Maker. Thereafter, until Payee notifies Maker that such conditions or
      circumstances no longer exist, the right of Maker to have the Indebtedness
      hereunder bear interest at the Eurodollar Rate shall be suspended, and the
      entire principal amount outstanding under this Note shall bear interest at
      the
      Prime-based Rate.

     

    If
      (a)
      Maker fail(s) to pay this Note, or any part thereof, or any of the Indebtedness
      when due, by maturity, acceleration or otherwise, or fail(s) to pay any
      Indebtedness owing on a demand basis upon demand; or (b) Maker fails to comply
      with any of the terms or provisions of any agreement between Maker and Payee;
      or
      (c) Maker becomes insolvent or the subject of a voluntary or involuntary
      proceeding in bankruptcy, or a reorganization, arrangement or creditor
      composition proceeding, ceases doing business as a going concern, dissolves
      or
      is the subject of a dissolution, merger or consolidation; or (d) any warranty
      or
      representation made by Maker or any guarantor in connection with this Note
      or
      any of the Indebtedness shall be discovered to be untrue or incomplete in any
      material respect; or (e) there is any termination, notice of termination, or
      breach of any guaranty, pledge, collateral assignment or subordination agreement
      relating to all or any part of the Indebtedness; or (f) there is any failure
      by
      Maker or any guarantor to pay, when due, any of its indebtedness (other than
      to
      Payee) or in the observance or performance of any term, covenant or condition
      in
      any document evidencing, securing or relating to such indebtedness; or (g)
      Payee
      deems itself insecure, believing in good faith that the prospect of payment
      or
      performance of this Note or any of the Indebtedness is materially impaired
      or
      shall fear deterioration, removal or waste of any of the Collateral; or (h)
      there is filed or issued a levy or writ of attachment or garnishment or other
      like judicial process upon Maker, then Payee, upon the occurrence and at any
      time during the continuance or existence of any of these conditions or events
      (each a “Default”), may at its option and without prior notice to Maker, declare
      any or all of the Indebtedness to be immediately due and payable
      (notwithstanding any provisions contained in the evidence of it to the
      contrary), charge interest at the default rate provided in the document
      evidencing the relevant Indebtedness, and exercise any one or more of the rights
      and remedies granted to Payee by any agreement with Maker or which are granted
      to Payee under applicable law, or otherwise.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    Notwithstanding
      anything to the contrary set forth in this Note, upon the occurrence and during
      the continuance or existence of any Default hereunder, the Indebtedness
      outstanding hereunder shall bear interest at a per annum rate equal to the
      rate
      of interest otherwise prevailing under this Note plus 3% per annum (but in
      no
      event in excess of the maximum rate permitted by law), which interest shall
      be
      payable upon demand.

     

    Maker
      waives presentment, demand, protest, notice of dishonor, notice of demand or
      intent to demand, notice of acceleration or intent to accelerate, and all other
      notices, and agrees that no extension or indulgence to Maker, or release,
      substitution or nonenforcement of any security, or release or substitution
      of
      any guarantor or any other party, whether with or without notice, shall affect
      the obligations of Maker. Maker waives all defenses or right to discharge
      available under Section 3-605 of the Uniform Commercial Code and waives all
      other suretyship defenses or right to discharge. Maker agrees that Payee has
      the
      right to sell, assign, or grant participations, or any interest, in any or
      all
      of the Indebtedness, and that, in connection with such right, but without
      limiting its ability to make other disclosures to the full extent allowable,
      Payee may disclose all documents and information which the Payee now or later
      has relating to Maker and the Indebtedness.

     

    Maker
      agrees to reimburse Payee, or any other holder or owner of this Note, for any
      and all costs and expenses (including, without limit, court costs, legal
      expenses and reasonable attorneys’ fees, whether or not suit is instituted, and,
      if suit is instituted, whether at the trial court level, appellate level, in
      a
      bankruptcy proceeding or otherwise) incurred in collecting or attempting to
      collect this Note or the Indebtedness or incurred in any other matter or
      proceeding relating to this Note or the Indebtedness.

     

    Maker
      acknowledges and agrees that there are no contrary agreements, oral or written,
      establishing a term of this Note and agrees that the terms and conditions of
      this Note may not be amended, waived or modified except in a writing signed
      by a
      duly authorized officer of Payee expressly stating that the writing constitutes
      an amendment, waiver or modification of the terms of this Note. If any provision
      of this Note is unenforceable in whole or part for any reason, the remaining
      provisions shall continue to be effective. THIS NOTE SHALL BE GOVERNED BY AND
      CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.

     

    This
      Note
      shall bind Maker and Maker’s respective successors and assigns.

     

    For
      the
      purposes of this Note, the following terms shall have the following
      meanings:

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Applicable
      Interest Rate” shall mean, in respect of the Indebtedness outstanding under this
      Note at any time, the Eurodollar Rate or the Prime-based Rate, as determined
      in
      accordance with the terms and conditions of this Note.

     

    “Business
      Day” shall mean any day, other than a Saturday, Sunday or holiday, on which
      Payee is open for all or substantially all of its domestic and international
      business (including dealings in foreign exchange) in Harrisonburg, Virginia,
      and, in respect of notices and determinations relating to the Eurodollar Rate,
      also a day on which transactions in the eurodollar market are
      conducted.

     

    “Eurodollar
      Rate” shall mean, in respect of any applicable Monthly Period, a per annum
      interest rate, calculated as of the Interest Reset Date which is the first
      day
      of such Monthly Period, and which shall be the Applicable Interest Rate under
      this Note for such Monthly Period, which is equal to the sum of the Eurodollar
      Margin plus the quotient of the following (which amount shall be rounded
      upwards, if necessary, to the nearest 1/16th of 1%):

     

    
      	 	
              (a)

            	
              the
                per annum interest rate at which Comerica Bank’s Eurodollar Lending Office
                offers deposits to prime Payees in the eurodollar market for a period
                of
                time equal to such Monthly Period at or about 11:00 a.m. (Detroit,
                Michigan time) (or as soon thereafter as practical) on each such
                Interest
                Reset Date;

            


    

     

    divided
      by

     

    
      	 	
              (b)

            	
              a
                percentage (expressed as a decimal) equal to 1.00 minus the maximum
                rate
                during such Interest Period at which Comerica Bank is required to
                maintain
                reserves on "Euro-currency Liabilities" as defined in and pursuant
                to
                Regulation D of the Board of Governors of the Federal Reserve System
                or,
                if such regulation or definition is modified, and as long as Comerica
                Bank
                is required to maintain reserves against a category of liabilities
                which
                includes eurodollar deposits or includes a category of assets which
                includes eurodollar loans, the rate at which such reserves are required
                to
                be maintained on such category.

            


    

     

    “Eurodollar
      Lending Office” shall mean Comerica Bank’s office located in the Cayman Islands,
      British West Indies, or such other branch of said Bank, domestic or foreign,
      as
      said Bank may hereafter designate as its Eurodollar Lending Office by notice
      to
      Maker.

     

    “Eurodollar
      Margin” shall mean two and one half percent (250 basis points) per
      annum.

     

    “Interest
      Reset Date” shall mean the first (1st) Business Day of each succeeding calendar
      month.

     

    “Monthly
      Period” shall mean a period of time commencing on a respective Interest Reset
      Date (i.e., the first (1st) Business Day of a calendar month), and ending on
      the
      next-occurring Interest Reset Date (i.e., the first (1st) Business Day of the
      next calendar month).

     

    “Prime
      Rate” shall mean the per annum interest rate established by Comerica Bank as its
      prime rate for its Makers, as such rate may vary from time to time, which rate
      is not necessarily the lowest rate on loans made by Comerica Bank at any such
      time.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Prime-based
      Rate” shall mean a per annum interest rate equal to the Prime Rate.

     

    No
      delay
      or failure of Payee in exercising any right, power or privilege hereunder shall
      affect such right, power or privilege, nor shall any single or partial exercise
      thereof preclude any further exercise thereof, or the exercise of any other
      power, right or privilege. The rights of Payee under this Agreement are
      cumulative and not exclusive of any right or remedies which Payee would
      otherwise have, whether by other instruments or by law.

     

    MAKER
      AND
      PAYEE ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE,
      BUT
      THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE
      OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY,
      AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT
      OF
      LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED
      TO, THIS NOTE OR THE INDEBTEDNESS HEREUNDER.

     

     

    
      	 	NEW
              MEDIA LOTTERY SERVICES, INTERNATIONAL LTD, an Irish
              corporation
	 	 
	 	By:
              ________________________________________
	 	 
	 	Its:
              ________________________________________ 
	 	 
	 	 
	 	Address:	
              Newmarket
                Partnership
G9
                Calmount Park
Ballymount,
                Dublin 12
Ireland

            


    

     

    
      
        
        

      

      
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