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EXHIBIT 10.18
AGREEMENT
AGREEMENT dated as of April 15, 1997 (the "Agreement"), between WARNER
COMMUNICATIONS INC., a Delaware corporation ("WCI"), and MIDWAY INTERACTIVE
INC., formerly known as Xxxxxxxx Interactive Inc., a Delaware corporation
("Midway").
W I T N E S S E T H :
WHEREAS, WCI and Midway are parties to a stock purchase agreement (the
"Purchase Agreement") dated as of February 23, 1996 pursuant to which WCI sold
and Midway purchased all of the outstanding capital stock of Atari Games
Corporation, a California corporation ("Atari") (capitalized terms used herein
and not otherwise defined shall have the same meaning ascribed to such terms in
the Purchase Agreement); and
WHEREAS, in accordance with the terms of the Purchase Agreement, Atari made
and delivered the Final Four Year Note to WCI in the principal amount of
$14,152,500 of which $8,953,500 remains unpaid and Midway made and delivered
the Final Two Year Note to WCI in the principal amount of $7,862,500, all of
which remains unpaid; and
WHEREAS, Midway is interested in purchasing and prepaying the Final Two Year
Note and Final Four Year Note (collectively the "Notes") from WCI and obtaining
the release of the "Collateral" under the Security Agreements in respect
thereto and WCI is willing to sell and accept prepayment of the Notes and
assign its rights under the Security Agreements on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual agreements and the payments
set forth herein, the parties hereto hereby agree as follows:
1. WCI hereby sells, assigns and transfers to Midway all of its right, title
and interest in and to the following: the Final Two Year Note, the Two Year
Security Agreement, the Final Four Year Note and the Final Four Year Security
Agreement. Concurrently herewith, WCI is delivering the original Notes to
Midway without representation or warranty except as set forth in this
Agreement.
2. In consideration of the transfers pursuant to Section 1, concurrently
herewith, Midway is paying to WCI by wire transfer in immediately available
funds to an account designated by WCI an aggregate of $11,771,200 plus accrued
and unpaid interest on the Notes through the date hereof of $743,740.
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3. Concurrently herewith, WCI is executing and delivering to Midway UCC
termination statements and assignments in recordable form (the "Release
Documents") with respect to all Intellectual Property (as defined in the Four
Year Security Agreement) to evidence the termination of all security interests
and liens held by WCI in any of the Collateral under the Security Agreements to
the same extent required by the Security Agreements upon payment in full of the
Secured Obligations as defined in the Security Agreements. From time to time
hereafter WCI shall execute such other documents and instruments that may
reasonably be requested by Midway to evidence the release and termination of
any such lien or security interest.
4. Representations and Warranties of WCI
4.1. WCI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
4.2. WCI possesses the power and authority, corporate or otherwise, to
enter into this Agreement and the documents and instruments contemplated
hereby, to assume and perform its obligations hereunder and thereunder, and to
comply with the terms, conditions and provisions hereof.
4.3. The execution and delivery of this Agreement and the consummation of
the transaction contemplated hereby have been duly and validly authorized by
all requisite corporate action on the part of WCI. This Agreement and the
Release Documents have been duly executed and delivered by WCI and constitute
the valid and binding obligation of WCI, enforceable in according with their
terms.
4.4. WCI is not subject to or bound by any provision of
4.4.1. any articles or certificate of incorporation or by-laws;
4.4.2. any law, statute, rule, regulation or judicial or
administrative decision;
4.4.3. any mortgage, deed of trust, lease, note, shareholders
agreement, bond, indenture, license, permit, trust; or
4.4.4. any judgment, order, writ, injunction or decree of any
court, governmental body, administrative agency or arbitrator;
that would prevent or be violated by, or under which there would be a default
as a result of, nor is the consent of any Person under any contract or
agreement which has not been obtained required for, the execution, delivery and
performance by WCI of this Agreement and the transactions contemplated hereby.
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4.5. WCI is selling the Two Year Note and Four Year Note for its own
account, has made its own determination of value, has had an opportunity to ask
questions and obtain information from Midway and Atari which it deems relevant
to enter into this Agreement and understands that in selling the Notes and
accepting payment hereunder it is not relying on any representations or
warranties made by any Person as to value.
4.6. WCI is the sole owner of the Two Year Note, the Four Year Note and
the Security Agreements, free and clear of all liens, claims and encumbrances.
4.7. Annexed hereto as Schedule 4 is a full and complete list of all
filings made by or on behalf of WCI with respect to the Collateral under the
Security Agreements.
5. Representations of Midway
5.1. Midway is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
5.2. Midway possesses the power and authority, corporate or otherwise, to
enter into this Agreement and the documents and instruments contemplated
hereby, to assume and perform its obligations hereunder and thereunder, and to
comply with the terms, conditions and provisions hereof.
5.3. The execution and delivery of this Agreement and the consummation of
the transaction contemplated hereby have been duly and validly authorized by
all requisite corporate action on the part of Midway. This Agreement has been
duly executed and delivered by Midway and constitutes the valid and binding
obligation of Midway, enforceable in according with its terms.
5.4. Midway is not subject to or bound by any provision of
5.4.1. any articles or certificate of incorporation or by-laws;
5.4.2. any law, statute, rule, regulation or judicial or
administrative decision;
5.4.3. any mortgage, deed of trust, lease, note, shareholders
agreement, bond, indenture, license, permit, trust; or
5.4.4. any judgment, order, writ, injunction or decree of any
court, governmental body, administrative agency or arbitrator;
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that would prevent or be violated by, or under which there would be a default
as a result of, nor is the consent of any Person under any contract or
agreement which has not been obtained required for, the execution, delivery and
performance by Midway of this Agreement and the transaction contemplated
hereby.
5.5. Midway is acquiring the Notes for its own account and not with a view
to resale or distribution of the Notes. Midway has made its own determination
of value, has had an opportunity to ask questions and obtain information from
WCI and Atari which it deems relevant to enter into this Agreement and
understands that in acquiring and paying the Notes it is not relying on any
representations or warranties made by any Person as to value.
6. Other Agreements.
6.1. The execution and delivery of this Agreement does not affect the
Purchase Price as that term is used in the Purchase Agreement and does not
purport to amend, modify or otherwise alter the obligations of the parties
under the Purchase Agreement.
6.2. Upon transfer of the Notes and Security Agreements and payment
therefor as provided herein, the obligations between WCI on the one hand and
Midway and Atari on the other shall be as if the Notes were paid in full and
WCI shall cease to have any rights under the Notes or the Security Agreements.
6.3. This Agreement shall be governed and construed in accordance with the
laws of the State of New York applicable to contracts executed, delivered and
performed entirely within this State.
6.4. This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof.
6.5. This Agreement may be executed in one or more counterparts and each
counterpart shall be deemed to be an original.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first written above.
WARNER COMMUNICATIONS INC.
By /s/ XXXXXXX X. XXXX
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Xxxxxxx X. Xxxx
Vice President
MIDWAY INTERACTIVE INC.
By /s/ XXXX X. XXXXXXXX
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Xxxx X. Xxxxxxxx,
President and Chief Executive Officer
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