Document:

Unassociated Document

Exhibit 4.4

RESTRICTED STOCK AGREEMENT

THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is made and entered into as of the 23rd day of November, 2004 by and between Midway Games Inc., a Delaware corporation, having its principal executive offices at 2704 West Roscoe Street, Chicago, Illinois 60618 (the “Corporation”) and Christine Hsu residing at 14216 Oneida Court, Moorpark, California 93021 (“Employee”). 

 

W I T N E S S E T H:

 

WHEREAS, Employee, who has not previously been employed by the Corporation or its subsidiaries, is accepting an offer of employment to serve the Corporation as an employee at the Corporation’s wholly-owned subsidiary; and 

 

WHEREAS, simultaneously herewith Employee and Midway Studios-Los Angeles Inc., a California corporation, are entering into an Employment Agreement (the “Employment Agreement”); and

 

WHEREAS, simultaneously herewith Employee is entering into that certain Agreement and Plan of Reorganization (“Merger Agreement”) dated November 23, 2004 by and among Corporation, MCWSP Acquisition, Inc., CWS Entertainment Ltd. d/b/a Paradox Development and Employee (“Target”), whereby Employee is receiving shares of the Corporation’s common stock, $.01 par value (“Common Stock”) in exchange for her shares of Target. 

 

NOW, THEREFORE, in consideration of the foregoing, and the mutual agreements herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, as a material inducement for Corporation to enter into the Merger Agreement and, on the terms and conditions, and subject to the restrictions, herein set forth:

 

Section 1.  Definitions.

 

As used in this Agreement, the following terms shall have the following meanings:

 

A.  “Date of Award” means November 23, 2004.

 

B.  “Period of Restriction” means, with respect to Restricted Shares, the period of time between the Date of Award and the date of vesting as set forth in Section 4 hereof.

 

C.  “Restricted Shares” means 71,429 shares of Common Stock that Employee may forfeit pursuant to Section Sections 2 and 3 below.

 

Section 2.  Forfeiture of Shares upon Termination of Employment during Period of Restriction. If the services of Employee to the Corporation shall be terminated during the Period of Restriction for Cause (as such term is defined in the Employment Agreement), Employee shall immediately forfeit to the Corporation all Restricted Shares that have not previously vested as provided in Section 3 hereof, without any consideration paid to Employee, and, thereafter, Employee shall have no further rights with respect to such Restricted Shares. 

 

Section 3.  Lapse of the Period of Restriction. The Period of Restriction shall lapse, and the forfeiture provisions of Section 2 hereof shall no longer be applicable as to Restricted Shares held by or on behalf of Employee according to the following schedule, if Employee shall have been continuously employed by the Corporation from the Date of Award through the date of such lapse: as to 23,810 shares of the Restricted Shares, on or after the date which is twelve months after the Date of Award; as to 23,810 shares of the Restricted Shares, on or after the date which is
twenty-four months after the Date of Award; as to the remaining 23,809 shares of the Restricted Shares, on or after the date which is thirty-six months after the Date of Award. If earlier, the Period of Restriction will lapse with respect to Restricted Shares then held by Employee upon the termination by the Corporation of Employee’s services to the Corporation without cause (as such term is defined in the Employment Agreement), or (ii) the termination by the Employee of his or her services with the Corporation for “good reason” (as such term is defined in the Employment Agreement).

 

	 
	 	 	 
	

	 

Section 4.  Limitations on Transfer during Period of Restriction. Restricted Shares may not be sold, assigned, transferred, exchanged, pledged, hypothecated, or otherwise encumbered during the Period of Restriction, and no such sale, assignment, transfer, exchange, pledge, hypothecation, or encumbrance, whether made or created by voluntary act of Employee or of any agent of Employee or by operation of law, shall be recognized by, or be binding upon, or shall in any manner affect the rights of, the Corporation or any agent or any custodian holding certificates for such Restricted
Shares during the Period of Restriction.

 

Section 5.  Stockholder Rights during Period of Restriction. Unless and until the Restricted Shares are forfeited as set forth in Section 2 hereof, Employee shall have all of the rights of a stockholder of the Corporation with respect to Restricted Shares, including the right to vote and to receive dividends on the Restricted Shares, during the Period of Restriction. 

 

Section 6.  Registration Rights. The Corporation, at its cost, shall promptly prepare and file a registration statement under the Securities Act of 1933, as amended (the “Act”) with respect to the resale of the Restricted Shares and shall cause such registration statement to become effective as promptly as practical and shall cause such registration statement to remain in effect (together with a resale prospectus at all times meeting the requirements of the Act) until such registration statement is no longer required for Employee to publicly offer and sell the
Restricted Shares.

 

Section 7.  Restricted Shares as Investment. Employee agrees that all Restricted Shares awarded hereunder are being acquired in good faith for investment purposes only and not for sale or distribution, except pursuant to a registration statement or an applicable exemption from registration under the Act. The Corporation may place a “stop transfer” order with respect to the Restricted Shares with its transfer agent unless the Restricted Shares are registered under the Act.

 

Section 8.  Legend. Each certificate evidencing the Restricted Shares shall bear a legend referring to this Agreement and to the fact that such Restricted Shares are subject to the forfeiture provisions of Section 2 hereof during the Period of Restriction. The Corporation shall cause certificates without such legend to be issued for any of the Restricted Shares as and when the Period of Restriction lapses. Each certificate may also bear a restrictive legend, in the discretion of the Corporation, until registered. The form of such legends shall be as follows:

 

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN A RESTRICTED STOCK AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE. 

 

THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION OR QUALIFICATION THEREOF UNDER SUCH ACT AND SUCH APPLICABLE STATE OR OTHER JURISDICTION'S SECURITIES LAWS OR AN OPINION OF COUNSEL, SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT REQUIRED.

 

	 
	 	2 	 
	

	 

Employee agrees to deliver to the Corporation for cancellation, upon request of the Corporation, any certificate representing Restricted Shares that have been forfeited.

 

Section 9.  Adjustment in Certain Events. If there is any change in the Common Stock by reason of stock dividends, split-ups, mergers, consolidations, reorganizations, combinations or exchanges of shares or the like, each Restricted Share under this Agreement shall be adjusted in the same manner as any other share of the Common Stock and the provisions of this Agreement shall extend not only to the number of Restricted Shares awarded hereunder, but also to all additional shares of Common Stock or other securities received by Employee pursuant to any such change with respect to
the Restricted Shares granted hereunder, which additional shares of Common Stock or other securities shall be deemed to be Restricted Shares for purposes of this Agreement.

 

Section 10.  Enforceability. Should a court of competent jurisdiction deem any of the provisions in this Agreement to be unenforceable in any respect, it is the intention of the parties to this Agreement that this Agreement be enforced to the greatest extent deemed to be enforceable. 

 

Section 11.  Governing Law. This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Illinois, without giving effect to any conflicts of law rule or principle that might require the application of the laws of another jurisdiction.

 

Section 12.  Withholding. The Corporation may withhold, and establish from time to time appropriate procedures to provide for payment or withholding of, such income or other taxes as may be required by law to be paid or withheld in connection with the Restricted Shares. Employee shall comply with any procedures established from time to time by the Corporation to ensure that the Corporation receives prompt notice of the occurrence of any event which may create, or affect the timing or amount of, any obligation to pay or withhold any such taxes or which may make available to the
Corporation any tax deduction resulting from the occurrence of such event.

 

Section 13.  Section 83(b) Tax Election. Employee understands that he may elect to be taxed at the time the Restricted Shares are acquired rather than when such shares cease to be subject to forfeiture restrictions by filing an election under Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”), with the Internal Revenue Service within thirty (30) days after the Date of Award. A form for making this election is attached as Exhibit 1 hereto. Employee understands that the failure to make this filing within the thirty (30) day period will result in
the recognition of ordinary income by Employee as the forfeiture restrictions on the Restricted Shares lapse measured by the value of the Restricted Shares at that time. Employee agrees that he is relying on his own tax advisors and is not relying on the Corporation with respect to any election that he may make under Section 83(b) of the Code.

 

	  
	 	 3	 
	

	 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day first written above.

	 	 	 
	 	MIDWAY GAMES INC.
	 
 	 
 	 
 
		By:  	/s/ Thomas E. Powell
	 	

 Name: Thomas E. Powell
	 	Title: Executive Vice President - Finance, CFO and Treasurer

 

AGREED AND ACCEPTED:

By: /s/ Christine Hsu            

Christine Hsu

 

 

 

 

 

 

 

	 
	 	 4Exhibit 10.1

                                Letter Of Intent

       This Letter Of Intent (the "LOI") sets forth our general understanding
through which Monterey Bay Tech, Inc. ("MBYI") shall acquire, either through the
purchase of stock or merger, a Delaware corporation ("SpaceLogic US") which will
own 100% of the equity interests of SpaceLogic Ltd. ("SpaceLogic"), an Israeli
corporation, with MBYI being the surviving corporation in a proposed reverse
merger arranged by Baytree Capital Associates, LLC ("Baytree"), in exchange for
the issuance of 68.8% of MBYI's common stock to SpaceLogic's stockholders.

       It is the intent of the parties that this LOI be binding upon the parties
hereto, subject to the provisions of Section 6 below. The following are the
material terms of the proposed reverse merger and the financing which MBYI shall
undertake as a condition of Closing:

1. The Transaction. MBYI and SpaceLogic desire and intend to enter into a
transaction by which MBYI will acquire 100% of the equity of SpaceLogic US which
will own 100% of the equity of SpaceLogic in exchange for SpaceLogic's
stockholders' receiving 68.8% of the issued and outstanding shares of MBYI on a
fully diluted basis (the "Reverse Acquisition"). SpaceLogic US shall become the
principal operating company in the United States. SpaceLogic shall continue to
operate as a wholly-owned subsidiary of SpaceLogic US and continue SpaceLogic's
current R&D and operations in Israel. Notwithstanding any provision in this
agreement, the precise structure of the Reverse Acquisition and the operations
to be conducted by each of the entities will be determined so as to provide the
most efficient operational structure for SpaceLogic from tax perspectives. At
the time of the Reverse Acquisition, MBYI (a) shall have not less than $1.9
million of cash in its bank account (the "Cash Balance"), provided, however,
that upon execution of definitive agreements regarding the Reverse Transaction,
Baytree or its designee, shall, within 10 days of a request by SpaceLogic, loan
to SpaceLogic $500,000 pursuant to terms to be negotiated, which shall reduce
the Cash Balance at the closing of the Reverse Acquisition by such amount and
extinguish any repayment obligation of SpaceLogic with respect thereto, provided
further, that if the definitive agreement governing the Reverse Acquisition is
terminated prior to closing, SpaceLogic shall repay such amount no later than on
the 180th day following such termination, and (b) shall be owed cash payments as
set forth in Schedule "A" hereto pursuant to binding and unconditional
commitments of third parties which will not result in any repayment obligation
or dilution to the equity holders of SpaceLogic (the "Owed Payments").

         As of the closing of the transaction, the assets of MBYI other than the
Cash Balance and the Owed Payments, as set forth on Schedule "B" hereto (the
"Excluded Assets") shall be distributed to the pre-closing stockholders of MBYI
as a dividend or pursuant to a mechanism to be determined by MBYI.
Nothwithstanding any provision in this Agreement, the parties agree to
consummate the transaction in such a manner so as not to alter the economic
benefits conferred upon SpaceLogic as contemplated hereunder.

<PAGE>

       2. Post-Closing Structure. The post-closing ownership shall be as
follows:

             ------------------------------------- --------------- ----------
                                                       Shares          %
             ------------------------------------- --------------- ----------
             MBYI's Existing Shareholders              11,019,267       20.8
             ------------------------------------- --------------- ----------
             New Investors                              2,203,852        4.1
             ------------------------------------- --------------- ----------
             SpaceLogic                                36,363,578       68.8
             ------------------------------------- --------------- ----------
             Baytree                                    3,305,780        6.3
             ------------------------------------- --------------- ----------
                  Total                                52,892,477      100.0
             ------------------------------------- --------------- ----------

         The foregoing is based on MBYI having no material liabilities and upon
consummation of the equity sale contemplated by Section 3.

         In the event that prior to the closing, MBYI shall desire not to
distribute any of the Excluded Assets to the pre-closing stockholders of MBYI,
the parties agree to negotiate, in good faith, an adjustment to the post-closing
ownership of MBYI, provided, however, that notwithstanding the foregoing,
SpaceLogic may, at its sole discretion, elect to consummate the transaction
without inclusion of any Excluded Assets.

         The post closing members of MBYI's Board of Directors shall be elected
or appointed by the post-closing equity holders which holders shall be entitled
to elect or appoint in accordance with their percentage equity interests.

         3. Initial Financing. In connection with the Reverse Acquisition, four
units of equity will be issued to a group of investors to be assembled by
Baytree (the "New Investors") in the amount of $250,000 for a total of $1.0
million. Each unit shall contain 550,963 common shares of MBYI representing a
price of $0.45 per share, and a warrant to purchase 550,963 common shares of
MBYI at a price of $1.50 per share. The warrant will expire four years from the
date of Closing.

       4. Use of Proceeds. The proceeds from the financings contemplated hereby
shall be used by SpaceLogic for working capital and no restrictions shall be
placed on the use of such funds.

       5. Agreement and Plan of Reorganization. Upon the acceptance of this
letter by SpaceLogic, MBYI and SpaceLogic will promptly negotiate, in good
faith, the terms of the agreement and plan of reorganization (the "Agreement").
The Agreement will be in a form customary for transactions of this type and will
include, in addition to those matters specifically set forth in this letter,
customary representations, warranties, indemnities, covenants and agreements of
both SpaceLogic and MBYI, customary conditions of closing and other customary
matters. MBYI and SpaceLogic and their respective representatives, agree to
cooperate and to use their best efforts to cause the Agreement to be executed
and delivered, and the Closing to occur within 60 days.

       6. Due Diligence Investigation. Each party will diligently pursue, and
will endeavor to complete an investigation of the legal, business, and financial
condition of the other party. Both parties will extend their full cooperation to
the other party and its lawyers, accountants and other representatives in

<PAGE>

connection with such investigation. Each party, its lawyers, accountants and
other representatives shall have full access to the other party's books and
records, facilities, accountants and key employees for purpose of conducting
such investigation, all subject to the signing of confidentiality undertakings
in a form to be acceptable to both parties. The consummation of the transaction
contemplated by this letter shall be conditional upon each party's complete
satisfaction with such investigation, including with respect to any legal
requirements for the completion of the transaction (e.g., SEC filings, SEC
investigation, restriction on stockholders following the transaction etc.).

       7. Public Announcements. Except as required by law, MBYI shall not make
any public announcements regarding the transaction contemplated herein without
the consent of SpaceLogic, not to be unreasonably withheld. Any press release or
other public disclosure, and any Form 8-K report prepared for filing by MBYI,
shall be reviewed and commented on by SpaceLogic prior to its publication.

       8. Filing and Applications. Subject to the confidentiality undertakings,
each party will cooperate fully with the other party in furnishing any necessary
information required in connection with any regulatory matters.

       9. Conduct of Business by SpaceLogic. Pending execution of the Agreement,
SpaceLogic shall conduct its business in the ordinary course and promptly inform
Baytree of any event outside the ordinary course of business.

       10. Expenses. Each party will bear its own expenses and costs of the
transaction contemplated hereby, including, but not limited to, the fees of
attorneys and financial advisers.

       11. Board Recommendation, No Solicitation and Exclusivity.

         (a) Recommendation of Board of Directors. The board of directors of
SpaceLogic has approved the transactions contemplated by this LOI or will
recommend the transactions to the stockholders of SpaceLogic. If, during the
Exclusivity Period (as set forth below), the board of directors of SpaceLogic
receives a Superior Proposal, which it must consider pursuant to Section 12(b),
and its board of directors is required by law to submit such Superior Proposal
to its stockholders, the board of directors shall submit such Superior Proposal
without recommendation.

         (b) No Solicitation. SpaceLogic agrees that during the Exclusivity
Period, neither it nor any of the officers and directors shall initiate, solicit
or encourage any inquiries, proposals or offers with respect to a merger,
reorganization, share exchange, consolidation, business combination,
recapitalization, sale of assets, or the like (any such proposal, other than
that made by MBYI, an "Acquisition Proposal"). SpaceLogic further agrees that,
during the Exclusivity Period, neither it nor any of its officers and directors
shall have any discussion with or provide any confidential information or data
to any person or entity (each a "Person") relating to an Acquisition Proposal.
SpaceLogic shall be permitted, solely to the extent necessary to fulfill its
fiduciary duties under law, to engage in any discussions or negotiations with,
or provide any information to, any Person in response to an unsolicited bona
fide written Acquisition Proposal, only to the extent that (x) SpaceLogic
concludes in good faith that such Acquisition Proposal constitutes a Superior
Proposal (or such Acquisition Proposal could likely result in a Superior
Proposal), (y) SpaceLogic receives from such Person an executed confidentiality
agreement containing terms at least as stringent as those contained in the
confidentiality agreement with MBYI, and (z) SpaceLogic (i) notifies MBYI
promptly of such inquiry, proposal, offer, information request, or discussion,
(ii) discloses to MBYI the name of such Person and the material terms and
conditions of any inquiry, proposal or offer, and (iii) prior to submitting such
Superior Proposal for consideration by its stockholders, SpaceLogic shall allow
MBYI (in its sole discretion) to prepare a revised proposal.

<PAGE>

      (b) Exclusivity. For a period of 90 days following the date hereof (the
"Exclusivity Period"), SpaceLogic agrees that it will, and will cause its
officers, directors to, immediately cease and cause to be terminated any
activities, discussions or negotiations existing as of the date of this LOI with
any parties (other than MBYI) with respect to any Acquisition Proposal.
SpaceLogic agrees that it will promptly inform its directors, officers, key
employees, agents and representatives of the obligations undertaken in this
Section 11.

       12. Counterpart Execution. This letter may be executed by the parties in
counterparts, all of which shall constitute one and the same original.

       13. Amendment. The terms of this letter may be amended, modified or
waived only in writing by the parties hereto.

       14. Governing Law. This LOI will be governed by the laws of the State of
Delaware. If the foregoing correctly set forth the material terms of your
understanding of the proposed Reverse Acquisition and, if such terms are
acceptable to you, please execute two originals of this letter and return one
executed original to the undersigned. We look forward to a successful Closing
and business relationship.

ACKNOWLEDGED AND ACCEPTED

Monterey Bay Tech, Inc.

By: /s/ Jonathan Kahn                        Date: December 20, 2004
------------------------------
         Jonathan Kahn
         Chairman and CEO

SpaceLogic Ltd.

By: /s/ Gary Koren                           Date: December 20, 2004
------------------------------
         Authorized Signatory

Baytree Capital Associates, Inc.             Date: December 20, 2004

By: /s/ Michael Gardner
------------------------------
         Michael Gardner
         Chairman and CEO

<PAGE>

                                   Schedule A
                            Schedule of Owed Payments
                                    --------

 ---------------------- ------------------------------ -------------------------
 Date                   Source                         Approximate Payment Due
 ---------------------- ------------------------------ -------------------------
 February 1, 2005       IMSI Notes                     $263,955.00
 ---------------------- ------------------------------ -------------------------
 April 19, 2005         IMSI cash escrow                 $75,000.00
 ---------------------- ------------------------------ -------------------------
 May 1, 2005            IMSI Notes                     $263,955.00
 ---------------------- ------------------------------ -------------------------
 June 2, 2005           IMSI earn-out                  $666,667.00
 ---------------------- ------------------------------ -------------------------
 August 1, 2005         IMSI Notes                     $263,955.00
 ---------------------- ------------------------------ -------------------------
 October 19, 2005       IMSI cash escrow               $425,000.00
 ---------------------- ------------------------------ -------------------------
 November 1, 2005       IMSI Notes                     $263,955.00
 ---------------------- ------------------------------ -------------------------
 February 1, 2006       IMSI Notes                     $263,955.00
 ---------------------- ------------------------------ -------------------------
 May 1, 2006            IMSI Notes                     $263,955.00
 ---------------------- ------------------------------ -------------------------
 August 1, 2006         IMSI Notes                     $263,955.00
 ---------------------- ------------------------------ -------------------------
 November 1, 2006       IMSI Notes                     $263,955.00
 ---------------------- ------------------------------ -------------------------
 February 1, 2007       IMSI Notes                     $263,955.00
 ---------------------- ------------------------------ -------------------------
 May 1, 2007            AKS Settlement                 $130,000.00
 ---------------------- ------------------------------ -------------------------
 May 1, 2007            IMSI Notes                     $263,955.00
 ---------------------- ------------------------------ -------------------------

<PAGE>

                                   Schedule B
                                 Excluded Assets
                                    --------

         1. All common stock of International Microcomputer Software, Inc. owned
by MBYI.

         2. All common stock of AES Management Buyout Company owned by MBYI.

         3. All promissory notes made to MBYI by AES Management Buyout Company.

         4. Any potential claim of MBYI against St. Pauls Insurance for
reimbursement of legal fees pursuant to insurance policy.

         5. Miscellaneous computers and other equipment

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}]]