Midway Games, subsidiaries enter design studio, share sale agreements

By Caroline Salls

Pittsburgh, Aug. 7 - Midway Games Inc. and U.S. subsidiaries Midway Home Entertainment Inc. and Midway Studios Los-Angeles Inc. entered into a $200,000 purchase agreement with THQ Inc. in connection with the proposed sale of substantially all of the assets of Midway's San Diego video game design and development studio, according to an 8-K filed with the Securities and Exchange Commission.

The assets being sold do not include Midway's TNA iMPACT! video game and some related third-party licenses.

Midway said THQ extended offers of at-will employment to at least 40 employees at the San Diego facility.

Midway Home Entertainment also entered into a stock purchase agreement with F+F Publishing GmbH for the sale all of the shares of Midway Home's wholly owned German subsidiary Midway Games GmbH and a stock purchase agreement with Spiess Media Holding UG for the sale of all of the shares of Midway Home's wholly owned Midway Games SAS and Midway Games Ltd. subsidiaries.

The total purchase price for the Midway Games Ltd. and Midway Games SAS shares will be €1, with half of the price allocated toward the purchase of the shares of each subsidiary. The purchase price for the Midway Games GmbH shares will also be €1.

In addition, under the share purchase agreements, Midway Home and its affiliates are required to enter into an intercompany agreement to resolve intercompany obligations.

Midway said the intercompany agreement will result in a payment of $1.7 million to Midway Home from Midway Games Ltd. at closing.

Midway Games, based in Chicago, is a developer and publisher of interactive entertainment software for video game systems and personal computers. The company filed for bankruptcy on Feb. 12 in the U.S. Bankruptcy Court for the District of Delaware, and its Chapter 11 case number is 09-10465.

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