Exhibit 10.2
AMENDMENT AND EXCHANGE AGREEMENT
AMENDMENT AND EXCHANGE AGREEMENT (the "AGREEMENT"), dated as of
October 14, 2003, by and between Midway Games Inc., a Delaware corporation, with
headquarters located at 0000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 (the
"COMPANY"), and Portside Growth and Opportunity Fund (the "INVESTOR").
WHEREAS:
A. The Company, the Investor and certain other investors (the "OTHER
INVESTORS"; and collectively with the Investor, the "INVESTORS") are parties to
that certain Securities Purchase Agreement, dated as of May 16, 2003 (the
"SECURITIES PURCHASE AGREEMENT"), pursuant to which, among other things, the
Investor purchased from the Company (i) 1,750 shares of the Company's Series C
Convertible Preferred Stock (the "INITIAL SERIES C SHARES"), which are
convertible into shares of the Company's common stock, par value $0.01 per share
(the "COMMON STOCK") (as converted, the "INITIAL SERIES C CONVERSION SHARES"),
in accordance with the terms of the Company's Certificate of Designations,
Preferences and Rights of Series C Convertible Preferred Stock (the "SERIES C
CERTIFICATE OF DESIGNATIONS"), and (ii) warrants (the "WARRANTS") to acquire up
to 326 additional shares of Common Stock (as exercised collectively, the
"WARRANT SHARES") for each Initial Series C Share purchased by the Investor on
the Initial Closing Date (as defined in the Securities Purchase Agreement).
B. Subject to the terms and conditions set forth in the Securities
Purchase Agreement, the Investor has the right to purchase, and the Company is
required to sell, in the aggregate, up to an additional 625 shares of Preferred
Stock (the "ADDITIONAL SERIES C SHARES").
C. Contemporaneously with the execution and delivery of the Securities
Purchase Agreement, the Company and the Investors entered into a Registration
Rights Agreement, dated as of May 16, 2003 (the "REGISTRATION RIGHTS
AGREEMENT"), pursuant to which the Company agreed to provide certain
registration rights with respect to the Registrable Securities (as defined in
the Registration Rights Agreement) under the Securities Act of 1933, as amended
(the "1933 ACT"), and the rules and regulations promulgated thereunder, and
applicable state securities laws.
D. A registration statement on Form S-3 (Registration No. 333-106643)
filed by the Company covering the resale of all of the Initial Series C
Conversion Shares and the Warrant Shares has been declared effective by the SEC
(the "EFFECTIVE REGISTRATION STATEMENT").
E. The Company and the Investor desire to enter into this Agreement,
pursuant to which, among other things, (i) the Investor shall exchange all of
the Investor's Initial Series C Shares (the "INVESTOR SHARE EXCHANGE AMOUNT")
for an identical amount of shares of Series D Convertible Preferred Stock (the
"INITIAL SERIES D SHARES") which shall be convertible into Common Stock (as
converted, the "INITIAL SERIES D CONVERSION SHARES"), in accordance with the
terms of the Company's Certificate of Designations, Preferences and Rights of
Series D Convertible Preferred Stock (the "SERIES D CERTIFICATE OF
DESIGNATIONS") in the form attached hereto as EXHIBIT A, (ii) the Investor shall
exchange all of the Investor's right to purchase Additional Series C Shares for
the right to purchase an identical amount of Series D Convertible
Preferred Stock (the "ADDITIONAL SERIES D SHARES" and together with the Initial
Series D Shares, the "EXCHANGE SHARES") which shall be convertible into Common
Stock (as converted, the "ADDITIONAL SERIES D CONVERSION SHARES" and together
with the Initial Series D Conversion Shares, the "SERIES D CONVERSION SHARES")
and (iii) the Investor shall exchange all of the Warrants for amended and
restated warrants (the "EXCHANGE WARRANTS") in the form attached hereto as
EXHIBIT B, exercisable for Common Stock (the "EXCHANGE WARRANT SHARES").
F. The parties hereto desire (i) to amend certain provisions of the
Securities Purchase Agreement and (ii) that the Company shall issue Exchange
Shares and Exchange Warrants in accordance with the Series D Certificate of
Designations and this Agreement.
G. Contemporaneously with the execution and delivery of this
Agreement, the Company and the Investors are executing and delivering a
Registration Rights Agreement in the form attached hereto as EXHIBIT C (the
"EXCHANGE REGISTRATION RIGHTS AGREEMENT"), pursuant to which the Company shall
provide certain registration rights under the 1933 Act and the rules and
regulations promulgated thereunder, and applicable state securities laws.
H. The exchange of the Initial Series C Shares for the Initial Series
D Shares, the Warrants for the Exchange Warrants and the right to purchase
Additional Series C Shares for the right to purchase Additional Series D Shares
is being made in reliance upon the exemption from registration provided by
Section 3(a)(9) of the 1933 Act.
I. Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings ascribed to them in the Securities Purchase
Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, the Company and the Investor hereby agree
as follows:
1. EXCHANGE OF INITIAL SERIES C SHARES AND WARRANTS.
(a) EXCHANGE OF INITIAL SERIES C SHARES AND WARRANTS. Subject to
satisfaction (or waiver) of the conditions set forth in Sections 5 and 6 below,
the Investor shall surrender to the Company at the closing contemplated by this
Agreement (the "CLOSING") the certificates representing its Initial Series C
Shares and its Warrants and the Company shall issue and deliver to the Investor
(i) a certificate for the Investor's Initial Series D Shares, in an amount of
one Initial Series D Share for each Initial Series C Share being so exchanged,
and (ii) the Exchange Warrants.
(b) CLOSING DATE. The date and time of the Closing (the "CLOSING
DATE") shall be 10:00 a.m., New York Time, on the date hereof, subject to
notification of satisfaction (or waiver) of the conditions to the Closing set
forth in Sections 5 and 6 below (or such later date as is mutually agreed to by
the Company and the Investor). The Closing shall occur on the Closing Date at
the offices of Xxxxxxx Xxxx & Xxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
(c) CLOSING MECHANICS. On the Closing Date, (i) the Company
shall issue and deliver to the Investor certificates representing the Initial
Series D Shares (in such
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denominations as the Investor shall request) and the Exchange Warrants, and (ii)
the Investor shall deliver to the Company the Investor's Initial Series C Shares
and Warrants for cancellation.
2. AMENDMENTS TO TRANSACTION DOCUMENTS.
(a) SECURITIES PURCHASE AGREEMENT. The Securities Purchase
Agreement is hereby amended as follows:
(i) All references to "Preferred Shares" shall mean, and
are hereby replaced with, the Exchange Shares;
(ii) All references to "Additional Preferred Shares"
shall mean, and are hereby replaced with, the Additional Series D Shares;
(iii) All references to "Conversion Shares" shall mean,
and are hereby replaced with, the "Series D Conversion Shares";
(iv) All references to "Warrant Shares" shall mean, and
are hereby replaced with, the Exchange Warrant Shares;
(v) The defined term "Transaction Documents" is hereby
amended to include this Agreement and each other similar amendment and
exchange agreement of even date herewith in connection with the
transactions contemplated by this Agreement (the "OTHER INVESTOR
DOCUMENTS");
(vi) The defined term "Securities" is hereby amended to
include the Dividend Shares (as defined in the Series D Certificate of
Designations);
(vii) All references to "Registration Rights Agreement"
shall mean, and are hereby replaced with, the Exchange Registration Rights
Agreement;
(viii) The defined term "Principal Market" is hereby amended
to mean any of "The New York Stock Exchange, the American Stock Exchange,
the Nasdaq National Market or The Nasdaq SmallCap Market" where the Common
Stock is then traded;
(ix) The reference to $7.58 in Section 1(a)(vii) of the
Securities Purchase Agreement is hereby deleted and replaced with "$6.00";
(x) The percentages referenced in Section 4(f) of the
Securities Purchase Agreement are hereby replaced by 130%;
(xi) The first sentence of Section 4(h) of the Securities
Purchase Agreement is deleted and replaced by Section 4(a) of this
Agreement; and
(xii) Section 4(i) of the Securities Purchase Agreement is
hereby deleted and replaced by Section 4(f) of this Agreement.
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3. REPRESENTATIONS AND WARRANTIES
(a) INVESTOR BRING DOWN. The Investor hereby represents and
warrants as to itself only as set forth in Section 2(a)-(g), Section 2(h) as to
the Securities Purchase Agreement as amended by this Agreement and as to the
Exchange Registration Rights Agreement) and Section 2(i) of the Securities
Purchase Agreement as if such representations and warranties were made as of the
date hereof and set forth in their entirety in this Agreement.
(b) COMPANY BRING DOWN. The Company represents and warrants to
the Investor as set forth in Section 3 of the Securities Purchase Agreement as
if such representations and warranties were made as of the date hereof and set
forth in their entirety in this Agreement (except that all references to the
Securities Purchase Agreement shall be deemed to mean such Securities Purchase
Agreement as amended hereby, and references to the Registration Rights Agreement
shall be deemed to mean the Exchange Registration Rights Agreement); provided
that the Schedules to the Securities Purchase Agreement are replaced in their
entirety by the Schedules of even date herewith executed and delivered by the
Company concurrently herewith (the "NEW SCHEDULES"), the representations and
warranties in the Securities Purchase Agreement are qualified in their entirety
by the New Schedules (regardless of whether such representations and warranties
provide for a Schedule), and references to Quarterly Reports or Current Reports
are qualified by disclosures made in any more recent Quarterly Reports or
Current Reports filed by the Company with the SEC.
4. CERTAIN COVENANTS
(a) DISCLOSURE OF TRANSACTIONS AND OTHER MATERIAL INFORMATION.
On the Closing Date or such later time as shall be agreed between the Company
and the Investor, the Company shall issue a press release reasonably acceptable
to the Investor disclosing all material terms of the transactions contemplated
hereby. As promptly as practicable but in any event not later than 5:30 p.m.,
New York local time, on the first Trading Day following the Closing Date, the
Company shall file a Current Report on Form 8-K with the SEC describing the
terms of the transactions contemplated by the Transaction Documents and
including as exhibits to such Current Report on Form 8-K this Agreement, the
Other Investor Documents, the Series D Certificate of Designations, the Exchange
Registration Rights Agreement and the form of the Exchange Warrants and in the
form required by the 1934 Act (the "8-K FILING"). Notwithstanding the foregoing,
the preceding sentence is not intended to impose any greater disclosure
obligation on the Company than is imposed by the 1934 Act and the rules
promulgated thereunder. The Company shall provide the Investor with a draft copy
of the 8-K Filing as early as practicable prior to the filing. Thereafter, for a
period of two years the Company shall provide the Investor promptly after filing
with copies of all filings made by the Company with the SEC pursuant to Section
13 or 15 of the 0000 Xxx. The Company and the Investor shall consult with each
other in issuing any press releases or otherwise in making public statements or
filings with the SEC or any regulatory agency or Principal Market with respect
to the transactions contemplated hereby. Except as set forth above, neither the
Investor nor the Company shall issue any press release or otherwise make any
public statement, filing or other communication about the transactions
contemplated hereby without the prior consent of the other, except if such
disclosure is required by law or the rules and regulations of any Principal
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Market, in which case the disclosing party shall promptly provide the other
parties with prior notice of such public statement, filing or other
communication. The Company shall not, and shall use its reasonable best efforts
to cause each of its officers, directors, employees and agents not to, provide
the Investor with any material nonpublic information regarding the Company or
any of its Subsidiaries from and after the filing of the 8-K Filing without the
express written consent of the Investor.
(b) RIGHT OF PARTICIPATION.
(i) For purposes of this Section 4(b), the following
definitions shall apply.
(1) "COMMON STOCK EQUIVALENTS" means, collectively,
Options and Convertible Securities.
(2) "CONVERTIBLE SECURITIES" means any stock or
securities (other than Options) convertible into or exercisable or
exchangeable for Common Stock.
(3) "OPTIONS" means any rights, warrants or options
to subscribe for or purchase Common Stock or Convertible Securities.
(ii) From the date hereof until the date that is the 18th
month anniversary following the date on which the Initial Registration
Statement (as defined in the Exchange Registration Rights Agreement) is
declared effective (the "TRIGGER DATE"), the Company will not, directly or
indirectly, offer, sell, grant any option to purchase, or otherwise dispose
of (or announce any offer, sale, grant or any option to purchase or other
disposition of) any of its or its Subsidiaries' equity or equity equivalent
securities, including without limitation any debt, preferred stock or other
instrument or security that is, at any time during its life and under any
circumstances, convertible into or exchangeable or exercisable for Common
Stock or Common Stock Equivalents (any such offer, sale, grant, disposition
or announcement being referred to as a "SUBSEQUENT PLACEMENT") unless the
Company shall have first complied with this Section 4(b)(ii).
(1) The Company shall deliver to the Investor a
written notice (the "OFFER NOTICE") of any proposed or intended issuance or
sale or exchange (the "OFFER") of the securities being offered (the
"OFFERED SECURITIES") in a Subsequent Placement, which Offer Notice shall
(w) identify and describe the Offered Securities, (x) describe the price
and other terms upon which they are to be issued, sold or exchanged, and
the number or amount of the Offered Securities to be issued, sold or
exchanged, (y) identify the persons or entities (if known) to which or with
which the Offered Securities are to be offered, issued, sold or exchanged
and (z) advise the Investors that they have the right to participate in
one-third (1/3rd) of the Offered Securities, allocated among the Investors
(a) based on such Investor's pro rata portion of the aggregate number of
Initial Series D Shares acquired by such Investor on the date hereof (the
"BASIC AMOUNT"), and (b) if the Investor elects to purchase its Basic
Amount, any additional portion of the Offered Securities attributable to
the Basic Amounts of Other Investors as the Investor
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shall indicate it will purchase or acquire should the Other Investors
subscribe for less than their Basic Amounts (the "UNDERSUBSCRIPTION
AMOUNT"). The delivery of an Offer Notice shall not constitute an offer to
sell the Offered Securities, which offer and sale shall only be made to the
Investor in accordance with, or pursuant to an exemption from, the
requirements of the 1933 Act. Before delivery of any Offer Notice meeting
the requirements of this Agreement, the Investor shall be informed that
such an Offer Notice may be forthcoming, and if the Investor elects to
receive such Offer Notice, the Investor acknowledges that such Offer Notice
may contain material non-public information, and the Investor would thereby
be consenting to receipt of such information.
(2) To exercise its right to participate in an
Offer, in whole or in part, the Investor must deliver a written notice to
the Company prior to the end of the tenth (10th) Business Day after the
Investor's receipt of the Offer Notice (the "OFFER PERIOD"), setting forth
the portion of the Investor's Basic Amount that the Investor elects to
purchase and, if the Investor shall elect to purchase all of its Basic
Amount, the Undersubscription Amount, if any, that the Investor elects to
purchase (in either case, the "NOTICE OF ACCEPTANCE"). The Notice of
Acceptance shall not constitute an offer or commitment to purchase the
Offered Securities, which offer or commitment shall only be made in
compliance with, or pursuant to an exemption from, the requirements of the
1933 Act. If the Basic Amounts subscribed for by all the Investors are less
than the total of all of the Basic Amounts, then the Investor and any Other
Investors who have set forth an Undersubscription Amount in its Notice of
Acceptance shall be entitled to purchase, in addition to the Basic Amounts
subscribed for, the Undersubscription Amounts that they have subscribed
for; PROVIDED, HOWEVER, that if the Undersubscription Amounts subscribed
for exceed the difference between the total of all the Basic Amounts and
the Basic Amounts subscribed for (the "AVAILABLE UNDERSUBSCRIPTION
AMOUNT"), the Investor shall be entitled to purchase only that portion of
the Available Undersubscription Amount as the Basic Amount of the Investor
bears to the total Basic Amounts of all Investors that have subscribed for
Undersubscription Amounts, subject to rounding by the Company to the extent
its deems reasonably necessary.
(3) The Company shall have thirty (30) days from the
expiration of the Offer Period above to offer, issue, sell or exchange all
or any part of such Offered Securities as to which a Notice of Acceptance
has not been given by the Investors (the "REFUSED SECURITIES"), but only to
the offerees described in the Offer Notice (if so described therein) and
only upon terms and conditions (including, without limitation, unit prices
and interest rates) that are not more favorable to the acquiring person or
persons or less favorable to the Company than those set forth in the Offer
Notice.
(4) In the event the Company shall propose to sell
less than all the Refused Securities (any such sale to be in the manner and
on the terms specified in Section 4(b)(ii)(3) above), then the Investor
may, at its sole option and in its sole discretion, reduce the number or
amount of the Offered Securities specified in its Notice of Acceptance to
an amount that shall be not less than the number or amount of the Offered
Securities that the Investor elected to purchase pursuant to Section
4(b)(ii)(2) above multiplied by a fraction, (i) the numerator of which
shall be the number or amount
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of Offered Securities the Company actually proposes to issue, sell or
exchange (including Offered Securities to be issued or sold to Investors
pursuant to Section 4(b)(ii)(3) above prior to such reduction) and (ii) the
denominator of which shall be the original amount of the Offered
Securities. In the event that the Investor so elects to reduce the number
or amount of Offered Securities specified in its Notice of Acceptance, the
Company may not issue, sell or exchange more than the reduced number or
amount of the Offered Securities unless and until such securities have
again been offered to the Investors in accordance with Section 4(b)(ii)(1)
above.
(5) Upon the closing of the issuance, sale or
exchange of all or less than all of the Refused Securities, the Investors
shall acquire from the Company, and the Company shall issue to the
Investor, the number or amount of Offered Securities that the Investor
elected to purchase, as reduced pursuant to Section 4(b)(ii)(3) above if
the Investor has so elected, upon the same terms and conditions as all
other securities sold in the Subsequent Placement. The purchase by the
Investors of any Offered Securities is subject in all cases to the
preparation, execution and delivery by the Company and the Investors of a
purchase agreement relating to such Offered Securities reasonably
satisfactory in form and substance to the Company and the Investor and
their respective counsel and prepared in accordance with the 1933 Act.
(6) Any Offered Securities not acquired by the
Investors or other persons in accordance with Section 4(b)(ii)(3) above may
not be issued, sold or exchanged until they are again offered to the
Investors under the procedures specified in this Agreement.
(iii) The restrictions contained in subsection (ii) of this
Section 4(b) shall not apply in connection with any issuance or deemed
issuance of (A) any Excluded Securities (as defined in the Series D
Certificate of Designations), (B) any Strategic Financing (as defined in
the Series D Certificate of Designations but without regard to the proviso
in such definition limiting the number of shares issuable thereunder) or
(C) any underwritten offerings registered with the SEC.
(c) EXPENSES. The Company shall promptly reimburse the Investor
for reasonable legal fees and expenses, to the extent incurred, in connection
with the transaction contemplated hereby.
(d) THE COMPANY'S SERIES B WARRANTS.
(i) AMENDMENT. The Company and the Investor hereby agree
that the 14th line of the first paragraph of the Warrant issued to the
Investor (F/K/A "Peconic Fund, Ltd.") by the Company on May 22, 2001 (the
"SERIES B WARRANT") is hereby amended such that the number "9.99%" set
forth thereon is replaced with "4.99%".
(ii) The Investor hereby waives the provisions of Section
8(a) of the Series B Warrant solely with respect to the Company's issuance
and sale of 9,317,886 shares of Common Stock pursuant to the Securities
Purchase Agreement, dated
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as of October 14, 2003, by and among the Company and the purchasers set
forth on the signature pages thereto.
(e) CANCELLATION OF SERIES C PREFERRED. The Company covenants
and agrees that it will not issue any shares of Series C Convertible Preferred
Stock and will file a Certificate of Elimination with respect to the Series C
Certificate of Designation as promptly as practicable hereafter.
(f) [Intentionally Omitted.]
(g) PROXY STATEMENT. The Company shall provide each stockholder
entitled to vote at a special meeting of stockholders of the Company, which
meeting shall occur on or before December 15, 2003 (the "STOCKHOLDER MEETING
DEADLINE"), a proxy statement or amendment or addendum thereto, which has been
previously reviewed by the Investors and a counsel of their choice, soliciting
each such stockholder's affirmative vote at such stockholder meeting for
approval of the Company's issuance of all of the Securities in accordance with
applicable law and the rules and regulations of the Principal Market (such
affirmative approval being referred to herein as the "STOCKHOLDER APPROVAL"),
and the Company shall use its best efforts to solicit its stockholders' approval
of such issuance of the Securities and to cause the Board of Directors of the
Company to recommend to the stockholders that they approve such proposal. If the
Company fails to hold a meeting of its stockholders by the Stockholder Meeting
Deadline, then, as partial relief (which remedy shall not be exclusive of any
other remedies available at law or in equity), the Company shall pay to each
holder of Series D Preferred Shares an amount in cash per Series D Preferred
Share convertible into Series D Conversion Shares that would violate the
provisions of the 19.99% Rule equal to the product of (i) $10,000; multiplied by
(ii) .02; multiplied by (iii) the quotient of (x) the number of days after the
Stockholder Meeting Deadline that a meeting of the Company's stockholders is not
held, divided by (y) 30. The Company shall make the payments referred to in the
immediately preceding sentence within five days of the earlier of (I) the
holding of the meeting of the Company's stockholders, the failure of which
resulted in the requirement to make such payments, and (II) the last day of each
30-day period beginning on the Stockholder Meeting Deadline. In the event the
Company fails to make such payments in a timely manner, such payments shall bear
interest at the rate of 1.5% per month (pro rated for partial months) until paid
in full.
5. CONDITIONS TO COMPANY'S OBLIGATIONS HEREUNDER.
The obligations of the Company hereunder are subject to the
satisfaction of each of the following conditions, provided that these conditions
are for the Company's sole benefit and may be waived by the Company at any time
in its sole discretion by providing the Investor with prior written notice
thereof:
(a) The Investor shall have executed this Agreement and the
Exchange Registration Rights Agreement and delivered the same to the Company.
(b) The Series D Certificate of Designations shall have been
filed with the Secretary of State of the State of Delaware.
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(c) The Investor shall have delivered to the Company the stock
certificate for the Investor's Initial Series C Shares and the Warrants for
cancellation.
(d) The representations and warranties of the Investor shall be
true and correct as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a
specific date), and the Investor shall have performed, satisfied and complied
with the covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by the Investor at or
prior to the Closing Date.
(e) The Company shall have entered into separate but
substantially identical amendment and exchange agreements with each of the Other
Investors and all conditions to the closings contemplated by such agreements
shall have been satisfied or waived.
6. CONDITIONS TO INVESTOR'S OBLIGATIONS HEREUNDER.
The obligations of the Investor hereunder are subject to the
satisfaction of each of the following conditions, provided that these conditions
are for the Investor's sole benefit and may be waived by the Investor at any
time in its sole discretion by providing the Company with prior written notice
thereof:
(a) The Company shall have executed each of this Agreement, the
Exchange Registration Rights Agreement and the Exchange Warrants and delivered
the same to such Investor.
(b) The Series D Certificate of Designations shall have been
filed with the Secretary of State of the State of Delaware, and a copy thereof
certified by the Secretary of State of the State of Delaware shall have been
made available to such Investor.
(c) The Common Stock (x) shall be designated for quotation or
listed on the Principal Market and (y) shall not have been suspended by the SEC
or the Principal Market from trading on the Principal Market nor shall
suspension by the SEC or the Principal Market have been threatened either (A) in
writing by the SEC or the Principal Market or (B) by falling below the minimum
listing maintenance requirements of the Principal Market; and the Series D
Conversion Shares issuable upon conversion of the Initial Series D Shares
(without regard to any limitations on conversions) and the Exchange Warrant
Shares issuable upon exercise of the Exchange Warrants (without regard to any
limitations on exercises) shall be listed (subject to official notice of
issuance) upon the Principal Market.
(d) The representations and warranties of the Company shall be
true and correct as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a
specific date), and the Company shall have performed, satisfied and complied
with the covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by the Company at or prior
to the Closing Date. Such Investor shall have received a certificate, executed
by the Chief Executive Officer of the Company, dated as of the Closing Date, to
the foregoing effect and as to such other matters as may be reasonably requested
by such Buyer.
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(e) Such Buyer shall have received the opinion of Shack Xxxxxx
Xxxx & Xxxxxxxx P.C., dated as of the Closing Date, in the form of EXHIBIT D-1,
attached hereto, and an opinion of the General Counsel to the Company, in the
form of EXHIBIT D-2, attached hereto.
(f) The Company shall have executed and delivered to the
Investor the Certificates and Exchange Warrants (in such denominations as such
Investor shall request) for the Initial Series D Shares and the Exchange
Warrants being issued to the Investor at the Closing.
(g) The Board of Directors of the Company shall have adopted
resolutions consistent with the transactions contemplated hereby and in a form
reasonably acceptable to the Investor (the "RESOLUTIONS").
(h) The Company shall have reserved out of its authorized and
unissued Common Stock, solely for the purpose of effecting the conversion of the
Exchange Shares, and the exercise of the Exchange Warrants, at least 17,954,503
shares of Common Stock.
(i) The Company shall have delivered to the Investor a letter
from the Company that is acknowledged and agreed to by the Company's transfer
agent acknowledging that the Irrevocable Transfer Agent Instructions dated May
16, 2003 shall also apply to the Series D Conversion Shares and the Exchange
Warrant Shares.
(j) The Company shall have delivered to the Investor a
certificate evidencing the incorporation and good standing of the Company and
each U.S. Subsidiary in such entity's state of incorporation or organization
issued by the Secretary of State of such state of incorporation or organization
as of a date within ten days of the Closing Date.
(k) The Company shall have delivered a good standing certificate
to the Investor, certifying the Company's qualification to do business and the
good standing of the Company in the State of Illinois as certified by the
Secretary of State of the State of Illinois as of a date within ten days of the
Closing Date.
(l) The Company shall have delivered to the Investor a certified
copy of the Certificate of Incorporation as certified by the Secretary of State
of the State of Delaware as of a date within ten days of the Closing Date.
(m) The Company shall have delivered to the Investor a
secretary's certificate, dated as of the Closing Date, certifying as to (A) the
Resolutions, (B) the Certificate of Incorporation and (C) the By-laws, each as
in effect at the Closing.
(n) The Company shall have made all filings under all applicable
federal and state securities laws necessary to consummate the issuance of the
Securities pursuant to this Agreement in compliance with such laws.
(o) The Company shall have delivered to the Investor a letter
from the Company's transfer agent certifying the number of shares of Common
Stock outstanding as of a date within five days of the Closing Date.
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(p) The Company shall have delivered to the Investor such other
documents relating to the transactions contemplated hereby as the Investor or
their counsel may reasonably request.
(q) The Company (and its rights agent) shall have executed an
amendment to its Amended and Restated Rights Agreement in the form of EXHIBIT E
attached hereto.
7. MISCELLANEOUS.
(a) GOVERNING LAW; JURISDICTION; JURY TRIAL. All questions
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of New
York. Each party hereby irrevocably submits to the non-exclusive jurisdiction of
the state and federal courts sitting in The City of New York, Borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
(b) COUNTERPARTS. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.
(c) HEADINGS. The headings of this Agreement are for convenience
of reference and shall not form part of, or affect the interpretation of, this
Agreement.
(d) SEVERABILITY. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
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(e) ENTIRE AGREEMENT; EFFECT ON PRIOR AGREEMENTS; AMENDMENTS.
Except for the Transaction Documents (to the extent any such Transaction
Document is not amended by this Agreement), this Agreement supersedes all other
prior oral or written agreements among the Investor, the Company, their
affiliates and Persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor the Investor makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of
this Agreement may be amended or waived other than by an instrument in writing
signed by the Company and the Investor and to the extent that Other Investors
may be affected thereby, by holders of at least 80% of the Exchange Shares then
outstanding. No such amendment shall be effective to the extent that it applies
to less than all of the holders of the Exchange Shares then outstanding. No
provision hereof may be waived other than by an instrument in writing signed by
the party against whom enforcement is sought. No consideration shall be offered
or paid to any person to amend or consent to a waiver or modification of any
provision of any of the Transaction Documents or the Series D Certificate of
Designations unless the same consideration also is offered to all of the parties
to the Transaction Documents or holders of Exchange Shares, as the case may be.
The Company has not, directly or indirectly, made any agreements with any of the
Investors relating to the terms or conditions of the transactions contemplated
by the Transaction Documents except as set forth in the Transaction Documents.
(f) NOTICES. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one Business Day
after deposit with an overnight courier service, in each case properly addressed
to the party to receive the same. The addresses and facsimile numbers for such
communications shall be:
If to the Company:
12
Midway Games Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: General Counsel
with a copy to:
Shack Xxxxxx Xxxx & Xxxxxxxx P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
If to the Investor:
Portside Growth and Opportunity Fund
c/o Ramius Capital Group, L.L.C.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
Xxxxxxx Xxxxx
with a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxx, Esq.
or to such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (C)
provided by an overnight courier service shall be rebuttable evidence of
personal service, receipt by facsimile or receipt from an overnight courier
service in accordance with clause (i), (ii) or (iii) above, respectively.
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(g) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
assigns, including any purchasers of the Exchange Shares or the Exchange
Warrants. The Company shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of holders of at least
80% of the Exchange Shares then outstanding, including by merger or
consolidation, except pursuant to a Change of Control (as defined in Section
4(b) of the Series D Certificate of Designations) with respect to which the
Company is in compliance with Section 4 of the Series D Certificate of
Designations and Section 4(b) of the Exchange Warrants. The Investor may assign
some or all of its rights hereunder without the consent of the Company, in which
event such assignee shall be deemed to be a Investor hereunder with respect to
such assigned rights.
(h) NO THIRD PARTY BENEFICIARIES. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
(i) SURVIVAL. The representations and warranties of the Company
and the Investor contained herein, and the agreements and covenants set forth
herein, shall survive the Closing.
(j) FURTHER ASSURANCES. Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(k) NO STRICT CONSTRUCTION. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
(l) REMEDIES. The Investor and each holder of the Securities
shall have all rights and remedies set forth in the Transaction Documents and
all rights and remedies which such holders have been granted at any time under
any other agreement or contract and all of the rights which such holders have
under any law. Any Person having any rights under any provision of this
Agreement shall be entitled to enforce such rights specifically (without posting
a bond or other security), to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law.
Furthermore, the Company recognizes that in the event that it fails to perform,
observe, or discharge any or all of its obligations under this Agreement, any
remedy at law may prove to be inadequate relief to the Investor. The Company
therefore agrees that the Investor shall be entitled to seek temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages and without posting a bond or other security.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Investor and the Company have caused this
Amendment and Exchange Agreement to be duly executed as of the date first
written above.
COMPANY: INVESTOR:
MIDWAY GAMES INC. PORTSIDE GROWTH AND OPPORTUNITY FUND
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx Xxxxx
------------------------------------ --------------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxxxx Xxxxx
Title: President and Chief Executive Title: Authorized Signatory
Officer
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LIST OF EXHIBITS
Exhibit A Series D Certificate of Designations
Exhibit B Form of Exchange Warrant
Exhibit C Form of Exchange Registration Rights Agreement
Exhibit D-1 Opinion of Shack Xxxxxx Xxxx & Xxxxxxxx P.C.
Exhibit D-2 General Counsel Legal Opinion
Exhibit E Amended and Restated Rights Agreement
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