Exhibit 10.47
Execution Copy
INTERCOMPANY SUBORDINATION AGREEMENT
          THIS INTERCOMPANY SUBORDINATION AGREEMENT (this “Agreement”), dated as
of February 29, 2008, is made among the Obligors (as defined below) and National
Amusements, Inc., a Maryland corporation (“Lender”).
          WHEREAS, Obligors and Lender are parties to that (i) certain Loan and
Security Agreement dated as of even date herewith (as amended, modified,
renewed, extended, or replaced from time to time, the “Senior Loan Agreement”),
(ii) that certain Unsecured Loan Agreement dated as of even date herewith (as
amended, modified, renewed, extended, or replaced from time to time, the
“Unsecured Loan Agreement”) and (iii) that certain Unsecured Subordinated Loan
Agreement dated as of even date herewith (as amended, modified, renewed,
extended, or replaced from time to time, the “Subordinated Loan Agreement”, and,
together with the Senior Loan Agreement and the Unsecured Loan Agreement, the
“Loan Agreements”), pursuant to which Lender has agreed to make certain
financial accommodations to one or more of the Obligors;
          WHEREAS, each Obligor has made or may make certain loans or advances
from time to time to one or more other Obligors;
          WHEREAS, each Obligor has agreed to the subordination of such
indebtedness of each other Obligor to such Obligor, upon the terms and subject
to the conditions set forth in this Agreement.
          NOW, THEREFORE, in consideration of the mutual promises, covenants,
conditions, representations, and warranties set forth herein and for other good
and valuable consideration, the parties hereto agree as follows:
SECTION 1. Definitions; Interpretation.
          (a) Terms Defined in Secured Loan Agreement. All capitalized terms
used in this Agreement and not otherwise defined herein shall have the meanings
assigned to them in the Secured Loan Agreement.
          (b) Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
          “Insolvency Event” has the meaning set forth in Section 3.
          “Lender” means National Amusements, Inc., a Maryland corporation, and
any other Person made a party thereto in accordance with the provisions of
Section 14.1 of the applicable Loan Agreement (together with their respective
successors and assigns).
          “Obligors” means, individually and collectively, jointly and
severally, Borrowers and the U.S. Credit Parties.

 

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          “Senior Debt” means the Obligations and other indebtedness and
liabilities of Obligors to Lender under or in connection with the Loan
Agreements and the other Loan Documents, including all unpaid principal of the
Advances (as defined in each of the Loan Agreements), all interest accrued
thereon, all fees due under the Loan Agreements and the other Loan Documents,
and all other amounts payable by Obligors to Lender thereunder or in connection
therewith, whether now existing or hereafter arising, and whether due or to
become due, absolute or contingent, liquidated or unliquidated, determined or
undetermined.
          “Subordinated Debt” means, with respect to each Obligor, all
indebtedness, liabilities, and other obligations of any other Obligor owing to
such Obligor in respect of any and all loans or advances made by such Obligor to
such other Obligor whether now existing or hereafter arising, and whether due or
to become due, absolute or contingent, liquidated or unliquidated, determined or
undetermined, including all fees and all other amounts payable by any other
Obligor to such Obligor under or in connection with any documents or instruments
related thereto.
          “Subordinated Debt Payment” means any payment or distribution by or on
behalf of Obligors, directly or indirectly, of assets of Obligors of any kind or
character, whether in cash, property, or securities, including on account of the
purchase, redemption, or other acquisition of Subordinated Debt, as a result of
any collection, sale, or other disposition of collateral, or by setoff,
exchange, or in any other manner, for or on account of the Subordinated Debt.
          (c) Interpretation. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural, the term “including” is not limiting, and the
term “or” has, except where otherwise indicated, the inclusive meaning
represented by the phrase “and/or.” The words “hereof,” “herein,” “hereby,”
“hereunder,” and similar terms in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. Section,
subsection, clause, schedule, and exhibit references are to this Agreement
unless otherwise specified. References to agreements and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications thereto. References to statutes or regulations are to be construed
as including all statutory and regulatory provisions consolidating, amending, or
replacing the statute or regulation referred to. The captions and headings are
for convenience of reference only and shall not affect the construction of this
Agreement.
SECTION 2. Subordination to Payment of Senior Debt.
          As to each Obligor, all payments on account of the Subordinated Debt
shall be subject, subordinate, and junior, in right of payment and exercise of
remedies, to the extent and in the manner set forth herein, to the prior payment
of the Senior Debt until the Senior Debt has been Paid in Full (as defined in
the Loan Agreements).

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SECTION 3. Subordination Upon Any Distribution of Assets of Obligors.
          As to each Obligor, in the event of any payment or distribution of
assets of any other Obligor of any kind or character, whether in cash, property,
or securities, upon the dissolution, winding up, or total or partial liquidation
or reorganization, readjustment, arrangement, or similar proceeding relating to
such other Obligor or its property, whether voluntary or involuntary, or in
bankruptcy, insolvency, receivership, arrangement, or similar proceedings or
upon an assignment for the benefit of creditors, or upon any other marshaling or
composition of the assets and liabilities of such other Obligor, or otherwise
(such events, collectively, the “Insolvency Events”): (i) all amounts owing on
account of the Senior Debt shall first be Paid in Full before any Subordinated
Debt Payment is made; and (ii) to the extent permitted by applicable law, any
Subordinated Debt Payment to which such Obligor would be entitled except for the
provisions hereof, shall be paid or delivered by the trustee in bankruptcy,
receiver, assignee for the benefit of creditors, or other liquidating agent
making such payment or distribution directly to Lender for application to the
payment of the Senior Debt in accordance with clause (i), after giving effect to
any concurrent payment or distribution or provision therefor to Lender in
respect of such Senior Debt.
SECTION 4. Payments on Subordinated Debt.
          (a) Permitted Payments. So long as no Event of Default has occurred
and is continuing, each Obligor may make, and each other Obligor shall be
entitled to accept and receive, payments on account of the Subordinated Debt in
the ordinary course of business only to the extent such payments are permitted
under the Loan Agreements.
          (b) No Payment Upon Senior Debt Defaults. Upon the occurrence of any
Event of Default (as defined in each of the Loan Agreements), and until such
Event of Default is cured or waived, each Obligor shall not make, and each other
Obligor shall not accept or receive, any Subordinated Debt Payment.
SECTION 5. Subordination of Remedies.
          As long as any Senior Debt shall remain outstanding and unpaid, no
Obligor shall, without the prior written consent of Lender:
          (a) accelerate, make demand, or otherwise make due and payable prior
to the original due date thereof any Subordinated Debt or bring suit or
institute any other actions or proceedings to enforce its rights or interests in
respect of the obligations of any other Obligor owing to such Obligor;
          (b) exercise any rights under or with respect to guaranties of the
Subordinated Debt, if any;
          (c) exercise any rights to set-offs and counterclaims in respect of
any indebtedness, liabilities, or obligations of such Obligor to any other
Obligor against any of the Subordinated Debt; or

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          (d) commence, or cause to be commenced, or join with any creditor
other than Lender in commencing, any bankruptcy, insolvency, or receivership
proceeding against the other Obligor.
SECTION 6. Payment Over to Lender.
          In the event that, notwithstanding the provisions of Sections 3, 4,
and 5, any Subordinated Debt Payments shall be received in contravention of such
Sections 3, 4, and 5 by any Obligor before all Senior Debt is Paid in Full, such
Subordinated Debt Payments shall be held for the benefit of Lender and shall be
paid over or delivered to Lender for application to the payment of all Senior
Debt remaining unpaid to the extent necessary to give effect to such Sections 3,
4, and 5, after giving effect to any concurrent payments or distributions to
Lender in respect of the Senior Debt until Senior Debt is Paid in Full.
SECTION 7. Authorization to Lender.
          If, while any Subordinated Debt is outstanding, any Insolvency Event
shall occur and be continuing with respect to another Obligor or its property
which is not otherwise permitted under the Loan Agreements: (i) Lender is hereby
irrevocably authorized and empowered (in the name of each Obligor or otherwise),
but shall have no obligation, to demand, sue for, collect, and receive every
payment or distribution in respect of the Subordinated Debt and give acquittance
therefor and to file claims and proofs of claim and take such other action
(including voting the Subordinated Debt) as it may deem necessary or advisable
for the exercise or enforcement of any of the rights or interests of Lender; and
(ii) each Obligor shall promptly take such action as Lender reasonably may
request (A) to collect the Subordinated Debt for the account of Lender and to
file appropriate claims or proofs of claim in respect of the Subordinated Debt,
(B) to execute and deliver to Lender such powers of attorney, assignments, and
other instruments as it may reasonably request to enable it to enforce any and
all claims with respect to the Subordinated Debt, and (C) to collect and receive
any and all Subordinated Debt Payments.
SECTION 8. Certain Agreements of Each Obligor.
          (a) No Benefits. Each Obligor understands that there may be various
agreements between Lender and any other Obligor evidencing and governing the
Senior Debt, and each Obligor acknowledges and agrees that such agreements are
not intended to confer any benefits on such Obligor and that Lender shall have
no obligation to such Obligor or any other Person to exercise any rights,
enforce any remedies, or take any actions which may be available to them under
such agreements.
          (b) No Interference. Each Obligor acknowledges that each other Obligor
has granted to Lender security interests in certain of such other Obligor’s
assets as set forth in the Loan Agreements and the other Loan Documents, and
agrees not to interfere with or in any manner oppose a disposition of any
Collateral by Lender in accordance with the Loan Documents and applicable law.

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          (c) Reliance by Lender. Each Obligor acknowledges and agrees that
Lender will have relied upon and will continue to rely upon the subordination
provisions provided for herein and the other provisions hereof in entering into
the Loan Documents and making or issuing the Term Loans and Advances thereunder.
          (d) Waivers. Except as provided under the Loan Agreements, each
Obligor hereby waives any and all notice of the incurrence of the Senior Debt or
any part thereof and any right to require marshaling of assets.
          (e) Obligations of Each Obligor Not Affected. Each Obligor hereby
agrees that at any time and from time to time, without notice to or the consent
of such Obligor except as otherwise provided in the Loan Documents, without
incurring responsibility to such Obligor, and without impairing or releasing the
subordination provided for herein or otherwise impairing the rights of Lender
hereunder: (i) the time for any other Obligor’s performance of or compliance
with any of its agreements contained in the Loan Documents may be extended or
such performance or compliance may be waived by Lender; (ii) the agreements of
any other Obligor with respect to the Loan Documents may from time to time be
modified by such other Obligor and Lender for the purpose of adding any
requirements thereto or changing in any manner the rights and obligations of
such other Obligor or Lender thereunder; (iii) the manner, place, or terms for
payment of Senior Debt or any portion thereof may be altered or the terms for
payment extended, or the Senior Debt may be renewed in whole or in part;
(iv) the maturity of the Senior Debt may be accelerated in accordance with the
terms of any present or future agreement by any other Obligor and Lender;
(v) any Collateral may be sold, exchanged, released, or substituted and any Lien
in favor of Lender may be terminated, subordinated, or fail to be perfected or
become unperfected; (vi) any Person liable in any manner for Senior Debt may be
discharged, released, or substituted; and (vii) all other rights against any
other Obligor, any other Person, or with respect to any Collateral may be
exercised (or Lender may waive or refrain from exercising such rights).
          (f) Rights of Lender Not to Be Impaired. No right of Lender to enforce
the subordination provided for herein or to exercise its other rights hereunder
shall at any time in any way be prejudiced or impaired by any act or failure to
act by any other Obligor or Lender hereunder or under or in connection with the
other Loan Documents or by any noncompliance by any other Obligor with the terms
and provisions and covenants herein or in any other Loan Document, regardless of
any knowledge thereof Lender may have or otherwise be charged with.
          (g) Financial Condition of Obligors. Except as provided under the Loan
Agreements, each Obligor shall not have any right to require Lender to obtain or
disclose any information with respect to: (i) the financial condition or
character of any other Obligor or the ability of the other Obligor to pay and
perform Senior Debt; (ii) the Senior Debt; (iii) the Collateral or other
security for any or all of the Senior Debt; (iv) the existence or nonexistence
of any guarantees of, or any other subordination agreements with respect to, all
or any part of the Senior Debt; (v) any action or inaction on the part of Lender
or any other Person; or (vi) any other matter, fact, or occurrence whatsoever.

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          (h) Acquisition of Liens or Guaranties. Except as otherwise permitted
under the Loan Agreements, no Obligor shall, without the prior consent of
Lender, acquire any right or interest in or to any Collateral not owned by such
Obligor or accept any guaranties for the Subordinated Debt.
SECTION 9. Subrogation.
          (a) Subrogation. Until all Senior Debt is Paid in Full and the
termination of the Loan Agreements, no Obligor shall have, or shall directly or
indirectly exercise, any rights that it may acquire by way of subrogation under
this Agreement, by any payment or distribution to Lender hereunder or otherwise.
Upon the date all Senior Debt is Paid in Full, each Obligor shall be entitled to
exercise in full any subrogated rights it may possess with respect to the rights
of Lender to receive payments or distributions applicable to the Senior Debt
until the Subordinated Debt shall be paid in full. For the purposes of the
foregoing subrogation, no payments or distributions to Lender of any cash,
property, or securities to which any Obligor would be entitled except for the
provisions of Section 3, 4, or 5 shall, as among such Obligor, its creditors
(other than Lender), and the other Obligors, be deemed to be a payment by the
other Obligors to or on account of the Senior Debt.
          (b) Payments Over to Obligors. If any payment or distribution to which
any Obligor would otherwise have been entitled but for the provisions of
Section 3, 4, or 5 shall have been applied pursuant to the provisions of
Section 3, 4, or 5 to the payment of all amounts payable under the Senior Debt,
such Obligor shall be entitled to receive from Lender any payments or
distributions received by Lender in excess of the amount sufficient to pay in
full all amounts payable under or in respect of the Senior Debt. If any such
excess payment is made to Lender, Lender shall promptly remit such excess to
such Obligor and until so remitted shall hold such excess payment for the
benefit of such Obligor. If more than one Obligor is entitled to receive such
payments, payments shall be made to each Obligor, pro rata based upon the ratio
that the total amount to which such Obligor may be entitled to receive bears to
the total amount to which all Obligors are entitled to receive.
SECTION 10. Continuing Agreement; Reinstatement.
          (a) Continuing Agreement. This Agreement is a continuing agreement of
subordination and shall continue in effect and be binding upon each Obligor
until the Senior Debt is Paid in Full. The subordinations, agreements, and
priorities set forth herein shall remain in full force and effect regardless of
whether any party hereto in the future seeks to rescind, amend, terminate, or
reform, by litigation or otherwise, its respective agreements with the other
Obligors.
          (b) Reinstatement. This Agreement shall continue to be effective or
shall be reinstated, as the case may be, if, for any reason, any payment of the
Senior Debt by or on behalf of any Obligor shall be rescinded or must otherwise
be restored by Lender, whether as a result of an Insolvency Event or otherwise.

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SECTION 11. Transfer of Subordinated Debt.
          No Obligor may assign or transfer its rights and obligations in
respect of the Subordinated Debt without the prior written consent of Lender and
any such transferee or assignee, as a condition to acquiring an interest in the
Subordinated Debt shall agree to be bound hereby, in form reasonably
satisfactory to Lender.
SECTION 12. Obligations of Obligors Not Affected.
          The provisions of this Agreement are intended solely for the purpose
of defining the relative rights of each Obligor against the other Obligors, on
the one hand, and of Lender against the other Obligors, on the other hand.
Nothing contained in this Agreement shall (i) impair, as between each Obligor
and the other Obligors, the obligation of the other Obligors to pay their
respective obligations with respect to the Subordinated Debt as and when the
same shall become due and payable, or (ii) otherwise affect the relative rights
of each Obligor against the other Obligors, on the one hand, and of the
creditors (other than Lender) of the other Obligors against the other Obligors,
on the other hand.
SECTION 13. Endorsement of Obligor Documents; Further Assurances and Additional
Acts.
          (a) Endorsement of Obligor Documents. At the request of Lender, all
documents and instruments evidencing any of the Subordinated Debt, if any, shall
be endorsed with a legend noting that such documents and instruments are subject
to this Agreement, and each Obligor shall promptly deliver to Lender evidence of
the same.
          (b) Further Assurances and Additional Acts. Each Obligor shall
execute, acknowledge, deliver, file, notarize, and register at its own expense
all such further agreements, instruments, certificates, financing statements,
documents, and assurances, and perform such acts as Lender reasonably shall deem
necessary or appropriate to effectuate the purposes of this Agreement, and
promptly provide Lender with evidence of the foregoing reasonably satisfactory
in form and substance to Lender.
SECTION 14. Notices.
          All notices and other communications provided for hereunder shall,
unless otherwise stated herein, be in writing (including by facsimile
transmission) and shall be mailed, sent, or delivered in accordance with the
notice provisions contained in the Loan Agreements.
SECTION 15. No Waiver; Cumulative Remedies.
          No failure on the part of Lender to exercise, and no delay in
exercising, any right, remedy, power, or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
remedy, power, or privilege preclude any other or further exercise thereof or
the exercise of any other right, remedy, power, or privilege. The

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rights and remedies under this Agreement are cumulative and not exclusive of any
rights, remedies, powers, and privileges that may otherwise be available to
Lender.
SECTION 16. [Intentionally Omitted]
SECTION 17. Survival.
          All covenants, agreements, representations and warranties made in this
Agreement shall, except to the extent otherwise provided herein, survive the
execution and delivery of this Agreement, and shall continue in full force and
effect so long as any Senior Debt remains unpaid.
SECTION 18. Benefits of Agreement.
          This Agreement is entered into for the sole protection and benefit of
the parties hereto and their successors and assigns, and no other Person shall
be a direct or indirect beneficiary of, or shall have any direct or indirect
cause of action or claim in connection with, this Agreement.
SECTION 19. Binding Effect.
          This Agreement shall be binding upon, inure to the benefit of and be
enforceable by each Obligor and Lender and their respective successors and
permitted assigns.
SECTION 20. GOVERNING LAW.
          THIS AGREEMENT ITS CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT, AND
THE RIGHTS OF ANY OBLIGOR AND LENDER SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
SECTION 21. SUBMISSION TO JURISDICTION.
          EACH PARTY TO THIS AGREEMENT SUBMITS TO THE NONEXCLUSIVE JURISDICTION
OF (1) THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF COOK, STATE OF
ILLINOIS AND (2) THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK (OR TO
THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT), FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR BY THE OTHER LOAN DOCUMENTS. EACH PARTY TO
THIS AGREEMENT IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO
SO, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE
OF ANY SUCH PROCEEDING BROUGHT IN SUCH A

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COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN IN
AN INCONVENIENT FORUM.
SECTION 22. Entire Agreement; Amendments and Waivers.
          (a) Entire Agreement. This Agreement and the other Loan Documents
constitutes the entire agreement of each of the Obligors and Lender with respect
to the matters set forth herein and supersedes any prior agreements,
commitments, drafts, communications, discussions, and understandings, oral or
written, with respect thereto.
          (b) Amendments and Waivers. No amendment to any provision of this
Agreement shall in any event be effective unless the same shall be in writing
and signed by each of the Obligors and Lender; and no waiver of any provision of
this Agreement, or consent to any departure by any Obligor therefrom, shall in
any event be effective unless the same shall be in writing and signed by Lender.
Any such amendment, waiver, or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 23. Conflicts.
          In case of any conflict or inconsistency between any terms of this
Agreement, on the one hand, and any documents or instruments in respect of the
Subordinated Debt, on the other hand, then the terms of this Agreement shall
control.
SECTION 24. Severability.
          Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under all applicable
laws and regulations. If, however, any provision of this Agreement shall be
prohibited by or invalid under any such law or regulation in any jurisdiction,
it shall, as to such jurisdiction, be deemed modified to conform to the minimum
requirements of such law or regulation, or, if for any reason it is not deemed
so modified, it shall be ineffective and invalid only to the extent of such
prohibition or invalidity without affecting the remaining provisions of this
Agreement or the validity or effectiveness of such provision in any other
jurisdiction.
SECTION 25. Interpretation.
          This Agreement is the result of negotiations between, and have been
reviewed by the respective counsel to, Obligors and Lender and is the product of
all parties hereto. Accordingly, this Agreement shall not be construed against
Lender merely because of Lender’s involvement in the preparation hereof.
SECTION 26. Counterparts.
          This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement.

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SECTION 27. Termination of Agreement.
          Upon the date the Senior Debt is Paid in Full and the termination of
the Loan Agreements, this Agreement shall terminate and Lender shall promptly
execute and deliver to each Obligor such documents and instruments as shall be
necessary to evidence such termination.
[Signature pages follow]

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     IN WITNESS WHEREOF, the undersigned has duly executed and delivered this
Agreement as of the date first written above.

     
 
  OBLIGORS:
 
   
 
  MIDWAY HOME ENTERTAINMENT INC.,
 
  a Delaware corporation
 
   
 
  MIDWAY AMUSEMENT GAMES, LLC,
 
  a Delaware limited liability company
 
   
 
  MIDWAY GAMES INC.,
 
  a Delaware corporation
 
   
 
  MIDWAY GAMES WEST INC.,
 
  a California corporation
 
   
 
  MIDWAY INTERACTIVE INC.,
 
  a Delaware corporation
 
   
 
  MIDWAY SALES COMPANY, LLC,
 
  a Delaware limited liability company
 
   
 
  MIDWAY HOME STUDIOS INC.,
 
  a Delaware corporation
 
   
 
  SURREAL SOFTWARE INC. ,
 
  a Washington corporation
 
   
 
  MIDWAY STUDIOS — AUSTIN INC. ,
 
  a Texas corporation
 
   
 
  MIDWAY STUDIOS — LOS ANGELES INC. ,
 
  a California corporation       Each By /s/ Ryan O’Desky
 
 
  Title Interim CFO

Intercompany Subordination Agreement
Signature Page

 

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  LENDER:        
 
                NATIONAL AMUSEMENTS, INC.,         a Maryland corporation    
 
           
 
  By
Name   /s/ Richard J. Sherman
 
Richard J. Sherman    
 
  Title   Vice President    

Intercompany Subordination Agreement
Signature Page