AGREEMENT (this
“Agreement”) dated as of August 19, 2009 by and among
the signatories hereto.
WHEREAS, the
parties hereto are Midway Games Inc. (“MGI”), its
wholly owned subsidiary Midway Home Entertainment Inc., a Delaware
corporation (“MHE”), and the following wholly owned
subsidiaries of MHE: Midway Games Limited, an English limited
liability private company, registered with company number 03801663
(“MGL”); Midway Games SAS, a French
société par actions simplifiée, registered
with company no. 484 780 333 R.C.S. Paris (“MGS”); and
Midway Games GmbH, a limited liability company registered with the
commercial registry of the Local Court (Amtsgericht) of Munich
under reg. no. 155321 (“MGG”); and
WHEREAS, MGL is
the sole stockholder of Midway Studios-Newcastle Limited
(“Newcastle”); and
WHEREAS, on
February 12, 2009 (“Petition Date”), MGI and
MGI’s U.S. subsidiaries (collectively, the
“Debtors”) concurrently commenced chapter 11 cases as
debtors-in-possession under Title 11 of the United States Code, 11
U.S.C. §101 et seq. (the “Bankruptcy Code”), by
filing their voluntary petitions for relief under chapter 11 of the
Bankruptcy Code, before the United States Bankruptcy Court for the
District of Delaware (“Bankruptcy Court”) and
thereafter, the Bankruptcy Court entered its order that such cases
be administered jointly in the presently pending chapter 11 case
no. 10565-KG (“Bankruptcy Case”); and
WHEREAS, MHE is
about to sell (a) all of the capital stock of both MGL and MGS
to Spiess Media Holding UG ( haftungsbeschränkt /
limited liability) and (b) all of the capital stock of MGG to
F+F Publishing GmbH (“F+F”) pursuant to an agreement
with F+F (“the F+F Agreement”), but prior to such
sales, the parties hereto wish to resolve some of the intercompany
accounts between and among them as of the closing date of such
sales (such sales are intended to close on the same date and the
closing and such date are referred to as the “Closing”
and the “Closing Date”, respectively) on the terms set
forth in this Agreement.
NOW, THEREFORE,
for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, intending to be legally bound, the
parties hereto agree as follows:
1.
Definitions . When used in this Agreement, the following
terms shall have the meanings assigned to them in this
Section 1:
“ MGG/MHE
Balance ” means the current intercompany balance from MGG
to MHE.
“ MGG/MGL
Initial Balance ” means the current intercompany balance
from MGG to MGL prior to the assignment and payment referenced in
Section 2(b) below.
“ MGG/MGL
Residual Balance ” means the intercompany balance from
MGG to MGL after the assignment and payment referenced in Section
2(b) below.
“ MGI
Loan ” means the secured loan obligation (including
principal and interest) currently owed by MGI to MGG, pursuant to
(i) the Credit Facility Agreement between MGG and MGI dated
August 29, 2008, and (ii) the Limited Liability Company
Collateral Assignment and Subordination Agreement between MGI, MGG
and National Amusements Inc. of August 29, 2008.
“ MGL/MHE
Initial Balance ” means the current intercompany balance
from MGL to MHE prior to (i) the assignments referenced in
Sections 2(c)(i) and 2(d) below and (ii) the diminution
referenced in Section 3(b) below.
“ MGL/MHE
Residual Balance ” means the intercompany balance from
MGL to MHE after (i) the assignments referenced in
Sections 2(c)(i) and 2(d) below and (ii) the diminution
referenced in Section 3(b) below.
“ MGS/MHE
Balance ” means the current intercompany balance from MGS
to MHE.
2.
Assignments . The parties hereto hereby agree to the
following assignments and transfers, all to occur simultaneously
but deemed to occur in the following order:
(a) MGS/MHE
Balance : MHE hereby assigns all of its right, title and
interest in and to the MGS/MHE Balance to MGL, and MGL hereby
accepts the same, in consideration of the payment by MGL to MHE
of €
1.
(b) MGG/MGL
Initial Balance : In partial settlement and satisfaction of the
MGG/MGL Initial Balance:
(i) MGG hereby
assigns all of its right, title and interest in and to the MGI Loan
to MGL, and MGL hereby accepts and assumes the MGI Loan and
MGG’s rights and obligations thereunder; and
(ii) MGG is
concurrently herewith paying to MGL Five Hundred Sixty-One Thousand
Dollars ($561,000).
(i) In partial
settlement and satisfaction of the MGL/MHE Initial Balance, MGL
hereby assigns to MHE, and MHE hereby accepts and assumes, the MGI
Loan.
(ii) MHE hereby
assigns to MGI, and MGI hereby accepts and assumes, the MGI Loan in
consideration of the payment by MGI to MHE of $1.
2
(d) MGG/MGL
Residual Balance : In partial settlement and satisfaction of
the MGL/MHE Initial Balance, MGL hereby assigns to MHE all of its
right title and interest in and to the MGG/MGL Residual Balance,
and MHE hereby accepts the same.
(e) MGL/MHE
Residual Balance : Concurrently herewith, the MGL/MHE Residual
Balance is being settled and compromised in full by the payment by
MGL to MHE of One Million Seven Hundred Thousand Dollars
($1,700,000).
3.
Ancillary Agreements .
(a) F+F
Agreement . Pursuant to the F+F Agreement: (i) MHE will
assign all of its right, title and interest in and to the MGG/MGL
Residual Balance to F+F in consideration of the payment by F+F
of €
1 to MHE; (ii) MHE will assign
all of its right, title and interest in and to the MGG/MHE Balance
to F+F in consideration of the payment by F+F of
€
1 to MHE; and (iii) MGI will
deliver to F+F a termination of the Abstract Acknowledgement of
Debt (Parallel Debt) among MGG, National Amusements Inc. and MGI
and certain of its subsidiaries dated August 8,
2008.
(b) Product
Development Arrangement . MHE represents that it terminated the
product development arrangement between itself and
Newcastle
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