SC 13D

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

__________

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO

RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)

Midway Games Inc.

(Name of Issuer)

Common Stock, par value $.01 per share

(Title of Class of Securities)

598-148-104

(CUSIP Number)

Peter Kolevzon, Esq.

Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, New York 10036

(212) 715-9100

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

November 28, 2008        

(Date of Event Which Requires Filing

of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box:  ¨

(Continued on following pages)

(Page 1 of 9 Pages)

CUSIP No. 670823103		13D		Page 1 of 9 Pages
1	NAMES OF REPORTING PERSONS Acquisition Holdings Subsidiary I LLC I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) 80-0308127
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP     (a) [  ]             (b) See Item 5
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [  ]
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 80,339,266
		8	SHARED VOTING POWER None
		9	SOLE DISPOSITIVE POWER 80,339,266
		10	SHARED DISPOSITIVE POWER None
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 80,339,266
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES               [   ]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 87.2%
14	TYPE OF REPORTING PERSON CO

CUSIP No. 670823103		13D		Page 2 of 9 Pages
1	NAMES OF REPORTING PERSONS MT Acquisition Holdings LLC I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) 80-0308124
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP         (a) [  ]             (b) See Item 5
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [  ]
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER None
		8	SHARED VOTING POWER 80,339,266
		9	SOLE DISPOSITIVE POWER None
		10	SHARED DISPOSITIVE POWER 80,339,266
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 80,339,266
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES              [   ]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 87.2%
14	TYPE OF REPORTING PERSON CO

CUSIP No. 670823103		13D		Page 3 of 9 Pages
1	NAMES OF REPORTING PERSONS Mark Thomas I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP    (a) [  ]             (b) See Item 5
3	SEC USE ONLY
4	SOURCE OF FUNDS PF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [  ]
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER None
		8	SHARED VOTING POWER 80,339,266
		9	SOLE DISPOSITIVE POWER None
		10	SHARED DISPOSITIVE POWER 80,339,266
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 80,339,266
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES              [   ]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 87.2%
14	TYPE OF REPORTING PERSON IN

Schedule 13D

Item 1.                         Security and Issuer.

This Statement on Schedule 13D (“the Statement”) relates to the common stock, par value $0.01 per share (the “Common Stock”), of Midway Games, Inc., a Delaware corporation (the “Issuer”).  The principal executive offices of the Issuer are located at 2704 W. Roscoe Street, Chicago, Illinois 60618.

Item 2.   Identity and Background.

(a)-(c) This Statement is being filed by Acquisition Holdings Subsidiary I LLC (“Acquisition Holdings”), MT Acquisition Holdings LLC (“MT Acquisition”) and Mark Thomas (“Mr. Thomas”).  Acquisition Holdings, MT Acquisition and Mr. Thomas are collectively referred to as the “Reporting Persons”.

Acquisition Holdings is a Delaware limited liability company whose principal business is investing in the Common Stock of the Issuer and owning all of National Amusements Inc.’s (“NAI”) right, title and interest in, to and under the Credit Agreements, including guarantees, collateral, pledges, distributions, claims and causes of action against the borrowers or any other entity that arise out of or are related to the Participation (as defined below). The address of the principal business and principal office of Acquisition Holdings is c/o Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of the Americas, New York, NY 10036, Attention: Peter Abruzzese.

MT Acquisition is a Delaware limited liability company and is the sole member of Acquisition Holdings.  The address of the principal business and principal office of MT Acquisition is c/o Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of the Americas, New York, NY 10036, Attention: Peter Abruzzese.

Mr. Thomas is the sole member of MT Acquisition.  The business address of Mr. Thomas is c/o Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of the Americas, New York, NY 10036, Attention: Peter Abruzzese.

Each of MT Acquisition and Acquisition Holdings is managed by its sole member which, in each case, is responsible for the supervision and conduct of its investment activities, including without limitation, in the case of Acquisition Holdings, for all investment decisions with respect to the shares of Common Stock held by Acquisition Holdings.

(d)-(e) During the last five years, none of the Reporting Persons has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction, and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibitions or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) Mr. Thomas is a citizen of the United States.

Item 3.   Source and Amount of Funds or Other Consideration.

The 80,339,226 shares of Common Stock (the “Shares”) reported to be owned by the Reporting Persons were acquired in a private transaction.  The purchase of the Shares by Acquisition Holdings was funded by capital contributions from MT Acquisition, which were in turn funded by capital contributions to MT Acquisition from the personal funds of Mr. Thomas.  The amount of the funds expended for such purchase of the Shares and the Participation (as defined below) by Acquisition Holdings was $100,000.

Item 4.   Purpose of Transaction.

The Reporting Persons acquired beneficial ownership of the Shares to which this Statement relates for investment purposes.  Except as disclosed in this Item 4, the Reporting Persons currently intend to be passive investors in the Issuer and have no current plans or proposals which relate to or would result in any of the events described in Items (a) through (j) of the instructions to Item 4 of Schedule 13D.

The Reporting Persons, however, reserve all rights to acquire additional shares of Common Stock or other securities of the Issuer or sell or otherwise dispose of any or all of the shares of Common Stock or other securities of the Issuer beneficially owned by them, depending on market conditions, the performance of the Issuer and other relevant factors. The Reporting Persons may take any other action with respect to the Issuer or any of its debt or equity securities in any manner permitted by law.

Item 5.   Interest in Securities of the Issuer.

(a)           As of the date hereof, the Acquisition Holdings beneficially own an aggregate of 80,339,266 shares of Common Stock, representing approximately 87.2% of the outstanding Common Stock, which percentage is based on 92,129,925 shares of common stock outstanding on October 31, 2008, as reported in the Issuer’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008 (the “Issued and Outstanding Stock”).

As sole member of Acquisition Holdings, MT Acquisition may be deemed to beneficially own the 80,339,266 shares of Common Stock owned by Acquisition Holdings, representing approximately 87.2% of the Issued and Outstanding Stock.

As the sole member of MT Acquisition, Mr. Thomas may be deemed to beneficially own the 80,339,266 shares of Common Stock owned by Acquisition Holdings, representing approximately 87.2% of the Issued and Outstanding Stock.

(b)           Acquisition Holdings may be deemed to have sole voting and sole dispositive power over the Common Stock. Each of MT Acquisition and Mr. Thomas may be deemed to have shared voting and shared dispositive power over the Common Stock. Except to the extent expressly stated herein, each Reporting Person disclaims beneficial ownership of any shares of Common Stock beneficially owned by any other Reporting Person.

(c)           On November 28, 2008, pursuant to a Stock Purchase Agreement (described in further detail in Item 6), Acquisition Holdings purchased an aggregate of 80,339,266 shares of Common Stock from Mr. Sumner M. Redstone (“Redstone”), NAI and Sumco, Inc. (“Sumco”, and together with Redstone and NAI, the “Sellers”) (the “Share Purchase”). In exchange for the Shares and the Participation, Acquisition Holdings paid total consideration of $100,000 to the Sellers, with such purchase being effected in accordance with the terms of the Stock Purchase Agreement and the Participation Agreement described in Item 6 of this Statement.  The Stock Purchase Agreement described in Item 6 below did not allocate the consideration between the Shares and the Participation, however, assuming that the entire consideration is allocated to the Shares, the per share price with respect to the Share Purchase was $0.0012.  Except for the Share Purchase, none of the Reporting Persons identified in Item 2 has effected any other transactions in the Common Stock during the past 60 days.

(d)           Not applicable.

(e)           Not applicable.

Item 6.   Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

Stock Purchase Agreement

On November 28, 2008, Acquisition Holdings entered into a Stock Purchase Agreement with the Sellers, pursuant to which the Sellers sold to Acquisition Holdings, and Acquisition Holdings purchased from the Sellers, the Shares, representing approximately 87.2% of the Issued and Outstanding Stock.

The foregoing summary of the terms of the Stock Purchase Agreement is qualified in its entirety by reference to the Stock Purchase Agreement, a copy of which is included as Exhibit 99.2 to this Statement and is incorporated herein by reference.

Participation Agreement

On November 28, 2008, Acquisition Holdings and NAI entered into a Participation Agreement, pursuant to which NAI granted to Acquisition Holdings and Acquisition Holdings acquired from NAI, an undivided 100% participation interest in certain of the loans and advances made by NAI pursuant to the Credit Agreements (as defined in the Participation Agreement), including all of NAI’s right, title and interest in, to and under the Credit Agreements, including guarantees, collateral, pledges, distributions, claims and causes of action against the borrowers or any other entity that arise out of or are related to any of the foregoing (the “Participation”), all on the terms and conditions as set forth in such Participation Agreement. The foregoing summary of the terms of the Participation Agreement is qualified in its entirety by reference to the Participation Agreement, a copy of which is included as Exhibit 99.3 to this Statement and is incorporated herein by reference

Item 7.   Material to be Filed as Exhibits.

99.1   Agreement of joint filing pursuant to Rule 13d-1(f) promulgated under the Securities Exchange Act of 1934, as amended.

99.2   Stock Purchase Agreement

99.3   Participation Agreement

SIGNATURES

After reasonable inquiry and to the best knowledge and belief of the undersigned, the undersigned certifies that the information set forth in this Statement is true, complete and correct.

Date:  December 5, 2008

    ACQUISITION HOLDINGS SUBSIDIARY I LLC

    By:  MT Acquisition Holdings LLC

    By: /s/ MarkThomas                                                               

    Name: Mark Thomas

    Title:   President

    MT ACQUISITION HOLDINGS LLC

     By: /s/ Mark Thomas                                                                    

     Name: Mark Thomas

     Title:   Sole Member

 By: /s/ Mark Thomas                                                                    

     Name: Mark Thomas, as an individual

EX-99.1

EXHIBIT 99.1

Agreement of Joint Filing

Pursuant to Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned persons hereby agree to file with the Securities and Exchange Commission the Statement on Schedule 13D (the “Statement”) to which this Agreement is attached as an exhibit, and agree that such Statement, as so filed, is filed on behalf of each of them.

IN WITNESS WHEREOF, the undersigned have executed this Agreement.

Dated:   December 5, 2008

    ACQUISITION HOLDINGS SUBSIDIARY I LLC

    By:  MT Acquisition Holdings LLC

    By: /s/ MarkThomas                                                              

    Name: Mark Thomas

    Title:   President

    MT ACQUISITION HOLDINGS LLC

     By: /s/ Mark Thomas                                                                   

     Name: Mark Thomas

     Title:   Sole Member

 By: /s/ Mark Thomas                                                                    

     Name: Mark Thomas, as an individual

EX-99.2

Exhibit 99.2

STOCK PURCHASE AGREEMENT

dated as of November 28, 2008

among

NATIONAL AMUSEMENTS, INC.,

SUMCO, INC.,

SUMNER M. REDSTONE

and

ACQUISITION HOLDINGS SUBSIDIARY I LLC

STOCK PURCHASE AGREEMENT, dated as of November 28, 2008 (this “Agreement”),among NATIONAL AMUSEMENTS, INC., a Maryland corporation (the “NAI”), SUMCO, INC., a Delaware corporation (“Sumco”), SUMNER M. REDSTONE (“SMR” and, collectively with NAI and Sumco, the “Sellers”) and ACQUISITION HOLDINGS SUBSIDIARY I LLC, a Delaware limited liability company (the “Purchaser”).

RECITALS:

A.The Sellers, collectively, own approximately 87.2% of the total issued and outstanding shares of common stock, $0.01 par value per share (“Common Stock”), of Midway Games Inc., a Delaware corporation (the “Company”).

B.Each of the Sellers wishes to sell to the Purchaser, and the Purchaser wishes to purchase from the Sellers, the shares of Common Stock beneficially owned by the Sellers, upon the terms and subject to the conditions set forth herein.

C.Concurrently with the execution of this Agreement, NAI and the Purchaser have entered into a Participation Agreement substantially in the form attached as Exhibit A hereto (the “Participation Agreement”) for the participation by the Purchaser in the outstanding indebtedness owed by the Company to NAI pursuant to the NAI Loan Agreements (as hereinafter defined), and the future assignment of all of NAI’s right, title and interest in and to such NAI Loan Agreements to the Purchaser and the assumption by the Purchaser of certain of NAI’s obligations thereunder, in each case upon the terms and subject to the conditions set forth in the Participation Agreement.

NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements set forth herein, the parties agree as follows:

ARTICLE I

DEFINED TERMS

1.1 Certain Defined Terms.  For purposes of this Agreement, the following terms have the corresponding meanings set forth below:

“Affiliate”means, with respect to any person, any person directly or indirectly controlling, controlled by or under common control with, such other person.  For purposes of this definition, “control”(including, with correlative meanings, the terms “controlled by”and “under common control with”)when used with respect to any person, means the possession, directly or indirectly, of the power to cause the direction of management or policies of such person, whether through the ownership of voting securities, by contract or otherwise.

“business day”means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York generally are authorized or required by law or other governmental actions to close.

“Confidentiality Agreement” means the Confidentiality Agreement, dated November 18, 2008, between Estabrook Partners, LLC and NAI, as amended.

“Encumbrance” means any security interest, pledge, hypothecation, mortgage, lien or encumbrance.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Factoring Agreement” means the Factoring Agreement, dated as of September 15, 2008, among NAI, Midway Home Entertainment Inc. and Midway Amusement Games, LLC, as servicer.

“Governmental Authority” means any court, administrative agency or commission or other governmental authority or instrumentality, whether federal, state, local or foreign, and any applicable self-regulatory organization.

“NAI Loan Agreements” means, collectively, the Secured Loan Agreement and the Unsecured Loan Agreement.

“person”has the meaning given to it in Section 3(a)(9) of the Exchange Act.

“Secured Loan Agreement” means the Loan and Security Agreement, dated February 29, 2008, as amended as of September 15, 2008, among Midway Home Entertainment Inc. and Midway Amusement Games, LLC (as Borrowers thereunder) and the Company, Midway Games West Inc., Midway Interactive Inc., Midway Sales Company, LLC, Midway Home Studios, Inc., Surreal Software Inc., Midway Studios-Austin Inc. and Midway Studios-Los Angeles Inc. (as US Credit Parties thereunder) and NAI.

“Securities Act” means the Securities Act of 1933, as amended.

“Unsecured Loan Agreement” means the Unsecured Loan Agreement, dated February 29, 2008, as amended as of September 15, 2008, between the Company and NAI.

1.2 Definitions.  The following terms have the meanings set forth in the Sections set forth below:

Definition	Location
Agreement	Preamble
Closing	2.2(a)
Closing Date	2.2(a)
Common Stock	Recitals
Company	Recitals
NAI	Preamble
Participation Agreement	Recitals
Purchase Price	2.2(b)
Purchaser	Preamble
Rule 144	3.2(c)
Seller or Sellers	Preamble
Shares	2.1
SMR	Preamble
Sumco	Preamble

1.3 Interpretation and Rules of Construction.  In this Agreement, except to the extent otherwise provided or as the context otherwise requires:

(a) wherever required by the context of this Agreement, the singular shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa, and references to any agreement, document or instrument shall be deemed to refer to such agreement, document or instrument, as amended, supplemented or modified from time to time;

(b) the word “or”is not exclusive;

(c) the words “including,” “includes,” “included”and “include”are deemed to be followed by the words “without limitation”;

(d) the terms “herein,” “hereof”and “hereunder”and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision; and

(e) when reference is made in this Agreement to an Article or Section, such reference shall be to an Article or Section of this Agreement unless otherwise indicated.

ARTICLE II

PURCHASE; CLOSINGS

2.1 Purchase.  On the terms and subject to the conditions set forth herein, the Purchaser hereby purchases from the Sellers, and the Sellers hereby sell to the Purchaser, at the Closing (as hereinafter defined), the number of shares of Common Stock which appears opposite each Seller’s name on Schedule 2.1 to this Agreement (the “Shares”).

2.2 Closing.

(a) The closing of the purchase of the Shares by the Purchaser pursuant hereto and the closing of the transactions contemplated by the Participation Agreement (the “Closing”) shall occur simultaneously at the offices of Shearman & Sterling LLP located at 599 Lexington Avenue, New York, New York on the date hereof.  The date of the Closing is referred to as the “Closing Date.”

(b) At the Closing (i) the Purchaser shall deliver to the broker-dealer designated by the Sellers, by wire transfer of immediately available funds to an account or

accounts designated in writing by Sellers to the Purchaser, an aggregate purchase price of $100,000 (the “Purchase Price”) to be allocated among the Sellers in accordance with instructions from the Sellers, (ii) each Seller shall deliver to such broker-dealer irrevocable instructions to transfer the Shares to the account of the Purchaser at such broker-dealer, which shall effect the transfer of the Shares to the Purchaser free and clear of all Encumbrances and (iii) the Sellers shall instruct such broker-dealer to take such further action to cause the Depositary Trust Company, Inc. to further effectuate such transfer.

(c) At the Closing, the Participation Agreement shall be duly executed and delivered by each of the parties thereto and the transactions contemplated thereby shall be consummated.  It is the intention of the parties that the transactions contemplated by the Participation Agreement and this Agreement be treated as integrated transactions.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of the Sellers.  The Sellers severally and not jointly hereby represent and warrant to the Purchaser that:

(a) Organization and Authority.  Each Seller that is not a natural person is a corporation duly organized and validly existing under the laws of the jurisdiction of its organization, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified and has the corporate power and authority to own its properties and assets and to carry on its business as it is now being conducted, except, in each case, where failure to be so organized and existing, qualified or to have such corporate power and authority would be reasonably expected to materially adversely affect such Seller’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.

(b) Capitalization; Ownership of Shares.  (i) Schedule 2.1 sets forth, with respect to each Seller, the number of Shares owned by such Seller opposite such Seller’s name.  The Shares listed across from such Seller’s name on Schedule 2.1 represent all of the shares of Common Stock held by such Seller and, based on the number of shares of Common Stock reported as outstanding as of October 31, 2008 in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, constituted 87.2% of the total issued and outstanding shares of Common Stock as of such date.  The Sellers own all the Shares free and clear of all Encumbrances and upon the closing, assuming the Purchaser does not have “notice of any adverse claim”, the Purchaser will be a “protected purchaser” with respect to the Shares, as such terms are defined in Article 8 of the UCC in effect in New York.

(ii)As of the date of this Agreement, no Seller has or is bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of, or securities or rights convertible into or exchangeable for, any shares of Common Stock or any other equity securities of the

Company or any securities representing the right to purchase or otherwise receive any shares of capital stock of the Company (including any rights plan or agreement).  As of the date hereof, to the knowledge of the Sellers, the Company does not have in effect a “poison pill” or rights agreement.

(c) Authorization.

(i) SMR has full legal right and capacity to execute and deliver the Agreement and to carry out his obligations hereunder, and each of NAI and Sumco has the corporate power and authority to enter into this Agreement, and each of NAI and Sumco has the corporate power and authority to carry out their respective obligations hereunder.  The execution, delivery and performance by each Seller of this Agreement and the consummation by each Seller of the transactions contemplated hereby have been duly authorized by all requisite action on the part of each Seller and its stockholders, as the case may be.  This Agreement has been duly and validly executed and delivered by the Sellers and, assuming due authorization, execution and delivery by the Purchaser, this Agreement is a valid and binding obligation of each Seller party hereto enforceable against such Seller in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency (including all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting creditors’ rights generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in equity).  No other corporate proceedings are necessary for the execution and delivery by the Sellers of this Agreement, the performance by them of their obligations hereunder or the consummation by them of the transactions contemplated hereby.

(ii) Neither the execution and delivery by the Sellers of this Agreement nor the consummation by the Sellers of the transactions contemplated hereby, nor compliance by the Sellers with any of the provisions hereof, will (A) with or without the giving of notice, the lapse of time, or both, violate, conflict with, or result in a breach of any provision of, or constitute a default under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any lien, security interest, charge or encumbrance upon any of the material properties or assets of the Sellers under any of the terms, conditions or provisions of (i) with respect to NAI and Sumco, the articles of incorporation, charter or bylaws or other governing document of such Seller or (ii) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which any Seller is a party or by which it may be bound, or to which any Seller or any of the properties or assets of any Seller may be subject, or (B) violate any law (including any fraudulent conveyance or similar law), statute, ordinance, rule, regulation, permit, concession, grant, franchise or any judgment, ruling, order, writ, injunction or decree applicable to any Seller or any of their respective properties or assets.

(d) Governmental Consents.  Other than the securities or blue sky laws of the various states, no material notice to, registration, declaration or filing with, exemption or review by, or authorization, order, consent or approval of, any Governmental Authority, nor expiration or termination of any statutory waiting periods, is necessary for the

consummation by the Sellers of the transactions contemplated by this Agreement or the Participation Agreement.

(e) Offering of Securities.  None of the Sellers or any person acting at their direction has taken any action which would subject the sale of any of the Shares to the Purchaser pursuant to this Agreement to the registration requirements of the Securities Act.

(f) Brokers and Finders.  Except for Citigroup Global Markets Inc., none of the Sellers or any of their respective officers or directors has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for any Seller, in connection with this Agreement or the Participation Agreement or the transactions contemplated hereby or thereby.  The Purchaser shall not be responsible for any brokerage, finder’s or other fee or commission to any broker, finder or investment banker in connection with the transactions contemplated by this Agreement and the Participation Agreement based upon arrangements made by or on behalf of the Sellers or their Affiliates.

(g)           Actions.  As of the date hereof, there are no claims, actions, suits, investigations or proceedings pending or, the knowledge of the Sellers, threatened against the Sellers or any of their Affiliates before any Governmental Authority that would or seeks to prevent or materially delay the consummation of any of the transactions contemplated by this Agreement or the Participation Agreement or otherwise prevent or materially delay the Sellers from performing their obligations hereunder or thereunder.

3.2 Representations and Warranties of the Purchaser.  The Purchaser hereby represents and warrants to the Sellers that:

(a) Organization and Authority.  The Purchaser is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified, and has the limited liability company power and authority and governmental authorizations to own its properties and assets and to carry on its business as it is now being conducted, except, in each case, where failure to be so organized and existing, qualified or to have the corporation power and authority would be reasonably expected to materially adversely affect the Purchaser’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.

(b) Authorization.

(i) The Purchaser has the limited liability company power and authority to enter into this Agreement and to carry out its obligations hereunder.  The execution, delivery and performance of this Agreement by the Purchaser and the consummation by the Purchaser of the transactions contemplated hereby have been duly authorized by the Purchaser’s sole member.  This Agreement has been duly and validly

executed and delivered by the Purchaser and assuming due authorization, execution and delivery by the Sellers, this Agreement will be a valid and binding obligation of the Purchaser enforceable against the Purchaser in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency (including all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting creditors’ rights generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in equity).  No other limited liability company proceedings are necessary for the execution and delivery by the Purchaser of this Agreement, the performance by it of its obligations hereunder or the consummation by it of the transactions contemplated hereby.

(ii) Neither the execution, delivery and performance by the Purchaser of this Agreement, nor the consummation by the Purchaser of the transactions contemplated hereby, nor compliance by the Purchaser with any of the provisions hereof, will (A) with or without the giving of notice, the lapse of time, or both, violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any lien, security interest, charge or encumbrance upon any of the properties or assets of the Purchaser under any of the terms, conditions or provisions of (i) its governing documents or (ii) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Purchaser is a party or by which it may be bound, or to which the Purchaser or any of the properties or assets of the Purchaser may be subject, or (B) subject to compliance with the statutes and regulations referred to in the next paragraph, violate any law, statute, ordinance, rule or regulation, permit, concession, grant, franchise or any judgment, ruling, order, writ, injunction or decree applicable to the Purchaser or any of its properties or assets except in the case of clauses (A)(ii) and (B) for such violations, conflicts and breaches as would not reasonably be expected to materially adversely affect the Purchaser’s ability to perform its obligations under this Agreement or the Participation Agreement or consummate the transactions contemplated hereby or thereby on a timely basis.

(iii) Other than the securities or blue sky laws of the various states, no notice to, registration, declaration or filing with, exemption or review by, or authorization, order, consent or approval of, any Governmental Authority, nor expiration or termination of any statutory waiting period, is necessary for the consummation by the Purchaser of the transactions contemplated by this Agreement.

(c) Purchase for Investment.  The Purchaser acknowledges that it is acquiring the Shares from “affiliates” of the Company as defined in Rule 144 promulgated under the Securities Act (“Rule 144”), and as such any future resales of the Shares shall be made subject to the limitations set forth in Rule 144 or otherwise in accordance with the registration requirements (or an exemption therefrom) of the Securities Act.  The Purchaser (1) will not sell or otherwise dispose of any of the Shares, except in compliance with the registration requirements (or an exemption therefrom) of the Securities Act and any other applicable securities laws, (2) has such knowledge and

experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Shares and of making an informed investment decision, (3) is an “accredited investor” (as that term is defined by Rule 501 of the Securities Act), (4) is able to fend for itself in the transactions contemplated by this Agreement and the Participation Agreement, and (5) has the ability to bear the economic risks of its investment in the Shares.

(d) No Recommendation, Representation or Liability.  The Purchaser acknowledges that except as expressly set forth in Section 3.1, none of the Sellers or any of their respective directors, officers, employees, representatives or controlling persons have recommended the Shares, have any responsibility for making any independent investigation of the Company, or make any representation or warranty to the Purchaser, express or implied, with respect to the Company, the Shares or the accuracy, completeness or adequacy of the Company’s information, or of any other information relating to the Company, nor shall any of the foregoing persons be liable for any loss or damages of any kind suffered or incurred by the Purchaser resulting from the use of any such information provided to the Purchaser or otherwise reviewed and/or utilized by the Purchaser.

(e) Independent Advice.  The Purchaser understands and acknowledges that nothing in this Agreement, in the Company’s public information or in any information provided or presented to the Purchaser by any Seller in connection with the purchase and sale of the Shares constitutes legal, tax or investment advice.  The Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the Shares and has made its own assessment and has satisfied itself concerning the relevant tax and other economic considerations relevant to its investment in the Shares.

(f) Brokers and Finders.  Neither the Purchaser nor any Affiliate of the Purchaser or any of their respective officers or directors has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Purchaser, in connection with this Agreement or the Participation Agreement or the transactions contemplated hereby and thereby.  No Seller shall be responsible for any brokerage, finder’s or other fee or commission to any broker, finder or investment banker in connection with the transactions contemplated by this Agreement and the Participation Agreement based upon arrangements made by or on behalf of the Purchaser or its Affiliates.

(g)           Actions.  There are no claims, actions, suits, investigations or proceedings pending or, the knowledge of the Purchaser, threatened against the Purchaser or any of its Affiliates before any Governmental Authority that would or seeks to prevent or materially delay the consummation of any of the transactions contemplated by this Agreement or the Participation Agreement or otherwise prevent or materially delay the Purchaser from performing its obligations hereunder or thereunder.

ARTICLE IV

COVENANTS

4.1 Confidentiality.  All information furnished prior to the Closing to a party or its advisor by a party or its advisor in connection with the transactions contemplated hereby shall be subject to, and the recipient of such information shall hold all such information in confidence in accordance with, and to the extent required by, the provisions of the Confidentiality Agreement.

ARTICLE V

MISCELLANEOUS

5.1 Expenses.  Except as otherwise provided herein, each of the parties will bear and pay all other costs and expenses incurred by it or on its behalf in connection with the transactions contemplated pursuant to this Agreement or the Participation Agreement.

5.2 Amendment.  No amendment or waiver of any provision of this Agreement will be effective with respect to any party unless made in writing and signed by an officer or a duly authorized representative of such party.  No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

5.3 Waivers.  No waiver of any party to this Agreement, as the case may be, will be effective unless it is in a writing signed by a duly authorized officer of the waiving party that makes express reference to the provision or provisions subject to such waiver.

5.4 Counterparts and Facsimile.  For the convenience of the parties hereto, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement.  Executed signature pages to this Agreement may be delivered by facsimile and such facsimiles will be deemed as sufficient as if actual signature pages had been delivered.

5.5 Governing Law.  This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within such State.  The parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the state and federal courts located in the Borough of Manhattan, State of New York for any actions, suits or proceedings arising out of or relating to this Agreement and the transactions contemplated hereby.  Each party agrees not to assert that such forum is inconvenient or that there is a more convenient forum for such action, suit or proceeding.  Each party further agrees that service of process or other papers in any such action, suit or proceeding may be made in accordance with the provisions of Section 5.7.

5.6 WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

5.7 Notices.  Any notice, request, instruction or other document to be given hereunder by any party to the other will be in writing and will be deemed to have been duly given (a) on the date of delivery if delivered personally or by telecopy or facsimile, upon confirmation of receipt, (b) on the first business day following the date of dispatch if delivered by a recognized next-day courier service, or (c) on the third business day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid.  All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice.

(a)If to any Seller, to:

National Amusements, Inc.

846 University Ave

Norwood, MA 02062

Facsimile:         (781) 461-1412

Attention:        Vice President and General Counsel

with a copy (which copy alone shall not constitute notice) to:

Shearman & Sterling LLP

599 Lexington Avenue

New York, NY 10022

Facsimile:          (212) 848-8179

Attention:         Creighton O’M. Condon, Esq.

 Scott Petepiece, Esq.

(b)If to the Purchaser, to:

Acquisition Holdings Subsidiary I LLC

c/o Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, NY  10036

Attention: Peter Abruzzese, Esq.

Facsimile:  (212) 715-8000

5.8 Entire Agreement, Etc.  (a) This Agreement (including the Exhibits and Schedules hereto), the Participation Agreement and the Confidentiality Agreement constitute the entire agreement, and supersede all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof; and (b) this Agreement will not be assignable by operation of law or otherwise (any attempted assignment in contravention hereof being null and void.

5.9 Captions.  The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.

5.10 Severability.  If any provision of this Agreement or the application thereof to any person (including, the officers and directors of any Seller and the Purchaser) or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.

5.11 No Third Party Beneficiaries.  Nothing contained in this Agreement, expressed or implied, is intended to confer upon any person or entity other than the parties hereto, any benefit, right or remedies.

5.12 Time of Essence.  Time is of the essence in the performance of each and every term of this Agreement.

5.13 Specific Performance.  The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms.  It is accordingly agreed that the parties shall be entitled to seek specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or equity, without proving that money damages would be inadequate and without posting any bond.

5.14 Further Assurances.  Each of the parties hereto shall execute and deliver all such other agreements, documents and instruments, and take such other further action, as the other parties may reasonably request to effect the transfer and delivery of the Shares to the Purchaser and otherwise to effect the transactions contemplated by, and fully carry out the intent of, this Agreement and the Participation Agreement.

5.15 Survival.  All representations and warranties of the parties hereto shall survive the Closing and the covenants and agreements of the parties hereto shall survive the Closing in accordance with their terms.

5.16 Loser Pays.  With respect to any dispute among the parties arising out of or relating to this Agreement or the Participation Agreement, the reasonable attorneys’ fees and costs incurred by the prevailing party in connection with such dispute shall be paid by the other party or parties to such dispute.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties hereto as of the date first herein above written.

    NATIONAL AMUSEMENTS, INC.

    By:________________________

  Name:

        Title:

    SUMCO, INC.

    By:________________________

  Name:

    Title:

    By:________________________                                                                                   

            SUMNER M. REDSTONE

    ACQUISITION HOLDINGS SUBSIDIARY I LLC

    By:   MT Acquisition Holdings LLC, its sole member

    By:________________________

    Name: Mark Thomas 

    Title:   President

Schedule 2.1

Seller	Number of Shares Held
National Amusements, Inc.	22,687,479
Sumco, Inc.	45,218,230
Sumner M. Redstone	12,433,557

EX-99.3

Exhibit 99.3

PARTICIPATION AGREEMENT (this “Agreement”), dated on November 28, 2008 by and between National Amusements, Inc. (“Grantor”) and Acquisition Holdings Subsidiary I LLC (“Participant”).

WHEREAS, reference is made to (i) the Loan and Security Agreement, dated as of February 29, 2008 (as the same may be amended, modified or otherwise supplemented from time to time, the “Secured Facility”), by and among Midway Home Entertainment Inc. (“Midway Home”) and Midway Amusement Games, LLC (“MAG”), as Borrowers, Midway Games Inc. (“Midway”, and together with Midway Home and MAG, collectively referred to herein as, the “Borrowers”), Midway Games West Inc., Midway Interactive Inc., Midway Sales Company, LLC, Midway Home Studios Inc., Surreal Software Inc., Midway Studios-Austin Inc. and Midway Studios-Los Angeles Inc., as U.S. Credit Parties, and Grantor, as Lender and (ii) the Unsecured Loan Agreement, dated as of February 29, 2008 (as the same may be amended, modified or otherwise supplemented from time to time, the “Unsecured Facility”, and together with the Secured Facility, the “Credit Agreements”), between Midway, as Borrower, and Grantor, as Lender, copies of each of the Credit Agreements have been furnished to Participant.  Pursuant to each of the Credit Agreements, Grantor, subject to the terms and conditions thereof, agreed to make advances and loans (the “Loans”) to the applicable Borrower or Borrowers under such Credit Agreement from time to time in an aggregate amount not to exceed at any time outstanding (i) $30,000,000 under the Secured Facility and (ii) $40,000,000 under the Unsecured Facility.  Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings assigned to them in the Secured Facility; and

WHEREAS, in connection with and as part of the transactions contemplated hereby, the parties have entered into a Stock Purchase Agreement of even date herewith (the “Stock Purchase Agreement”);

NOW, THEREFORE, with respect to each Credit Agreement, Grantor hereby sells, grants, conveys and transfers to Participant, and Participant hereby purchases, acquires and receives from Grantor, an undivided interest and participation in (a) 100% of all of the Loans made by Grantor which are outstanding on the date hereof under each Credit Agreement and as set forth on Schedule I hereto, (b) 100% of the Loans made by Grantor after the date hereof pursuant to any of the Credit Agreements, (c) any and all of Grantor’s right, title, and interest in, to and under the Credit Agreements, (d) any and all guarantees, collateral, pledges and security interest of any kind for or in respect of the foregoing, (e) all claims (including “claims” as defined in Bankruptcy Code §101(5)), suits, causes of action, and any other right of Grantor, whether known or unknown, against the Borrowers, any obligor, any guarantor, or any of their respective affiliates, agents, representatives, contractors, advisors, or any other entity that in any way is based upon, arises out of or is related to any of the foregoing, including, to the extent permitted to be assigned under applicable law, all claims (including contract claims, tort claims, malpractice claims, and claims under any law governing the purchase and sale of, or indentures for, securities), suits, causes of action, and any other right of Grantor against any attorney,

accountant, financial advisor, or other entity arising under or in connection with the Credit Agreements or the transactions related thereto or contemplated thereby, and (f) all distributions or proceeds related to the foregoing (“Distributions”) (clauses (a) through (f) above are hereinafter referred to as the “Participation”), on the following terms and conditions:

1. Purchase of Participation.  (a)  In consideration of Grantor’s sale, grant, conveyance and transfer to Participant of the Participation, Participant covenants and agrees to pay to Grantor, on the date hereof, by wire transfer of immediately available funds to an account designated by Grantor, the Purchase Price (as defined in the Stock Purchase Agreement).  The Purchase Price shall be paid in United States dollars.  For the avoidance of doubt, Participant hereby purchases, assumes and shall be responsible for the obligations and liabilities of Grantor relating to the Participation resulting from facts, events or circumstances arising or occurring on or after the date hereof, other than in respect of the Unfunded Commitments (as hereinafter defined).  Participant shall not be responsible for any obligations or liabilities of Grantor that (i) result from facts, events or circumstances arising or occurring prior to the date hereof, (ii) result from Grantor’s breach of its representations, warranties, covenants, or agreements under this Agreement or the Credit Agreements (except to the extent any such breach results from a breach by Participant of its obligations hereunder), (iii) result from Grantor’s bad faith, gross negligence, or willful misconduct or (iv) are attributable to Grantor’s actions or obligations in any capacity other than as a Lender under the Credit Agreements.  For purposes of this Agreement, “Unfunded Commitments” shall mean any unused Commitment (as defined in the applicable Credit Agreement) under each of the Credit Agreements on the date hereof as set forth on Schedule 1.

(b)Grantor shall, promptly upon receipt of notice of a proposed advance (a “Funding Advance”) under any Credit Agreement, notify Participant of the facility under which such proposed Funding Advance has been requested, the date and amount of such Funding Advance as well as the Interest Period (as defined in the applicable Credit Agreement) selected by the applicable Borrower and the interest rate basis and rate applicable to the Participation pursuant this Agreement.  Participant shall, on the date of such Funding Advance, pay to Grantor, by wire transfer in immediately available funds to an account designated by Grantor, cash in an amount equal to 100% of such Funding Advance in United States dollars; provided, however, that Participant shall have no obligation to pay any Funding Advance, except from funds on deposit in the Segregated Account or the Escrow Account (each as defined below).

(c)Each of Grantor and Participant hereby agree to establish an escrow account (the “Escrow Account”) pursuant to an escrow agreement, which shall be on terms and conditions to be mutually agreed, with an escrow agent (the “Escrow Agent”) to be mutually agreed, as promptly as reasonably practicable after the date hereof.  Grantor and Participant hereby agree that the escrow agreement shall provide that upon termination of any of the Credit Agreements (i) any amounts on deposit in the Escrow Account which relate to the Unfunded Commitments under such Credit Agreement shall be returned to Grantor and (ii) all other amounts on deposit in the Escrow Account relating to such Credit Agreement shall be returned to Participant.  From and after the date the Escrow Account has been established, all Distributions shall be deposited into the Escrow Account and such funds shall be applied to pay any Funding Advances required hereunder.  Grantor hereby agrees to deposit an amount equal to the aggregate Unfunded Commitments into the Escrow Account upon the establishment thereof.

Prior to the date the Escrow Account is established, Grantor and Participant hereby agree that all Distributions shall be deposited into a segregated account (the “Segregated Account”) to be held by Grantor in trust for Participant and all such funds shall be applied to pay any Funding Advances required hereunder.

(d)Grantor shall, promptly upon receipt of notice of the applicable Borrower’s selection of a new Interest Period (as defined in the applicable Credit Agreement) for any LIBOR Rate Loan (as defined in the applicable Credit Agreement), notify Participant of such Interest Period selected by the applicable Borrower(s) and of the interest rate basis and rate applicable to the Participation in such LIBOR Rate Loan.

(e)If, for any reason, Participant fails to make timely payment to Grantor with respect to any Funding Advance under any Credit Agreement pursuant to Section 1(b) above, Grantor shall be entitled to (i) collect interest from Participant on the amount of such Funding Advance for the period from the date when payment was due until payment is made at the overnight rate for Federal funds transactions between member banks of the Federal Reserve System, as published by the Federal Reserve Bank of New York (the “Federal Funds Rate”) for each day during that period, (ii) withhold or set-off any amounts received by Grantor, and to apply to such amounts to the payment of such Funding Advance and any related interest, (iii) withhold from Participant any right of consent provided to Participant pursuant to Section 8 of this Agreement and (iv) bring an action or suit against Participant in a court of competent jurisdiction to recover such Funding Advance and any related interest.

(e)           Grantor hereby authorizes Participant to file UCC financing statements naming Grantor as seller reflecting the sale, conveyance and transfer effected by this Agreement.

2. Payments.  (a)  Whenever Grantor receives a payment of principal, interest, commitment fee or premium (if any) or other payment, or whenever Grantor makes an application of funds, in connection with the Loans outstanding under a Credit Agreement (including, without limitation, any Distribution), Grantor shall promptly pay such Distribution to Participant to an account designated by Participant, in United States dollars (or, if another currency was received or applied by Grantor in such other currency) and in the kind of funds so received or applied by Grantor, an amount equal to such payment or application.  If, for any reason, Grantor fails to pay such Distribution to Participant within two business days of receipt of such Distribution (the “Delayed Payment Date”), Grantor shall pay interest to Participant on such amount thereof for the period from the Delayed Payment Date until the date such Distribution is received by Participant at the Federal Funds Rate.

(b)All computations of interest and fees shall be made on the basis of a 360-day year, for the actual number of days elapsed.  Any determination made by Grantor as to the allocation of payments received or amounts applied to the Participation in the Loans shall be conclusive and binding for all purposes, absent manifest error.

(c)If, for any reason, Grantor makes any Distribution to Participant before receipt of the corresponding Distribution (it being understood that Grantor is under no obligation to do so), and Grantor does not receive the corresponding Distribution within five business days of its payment to Participant, Participant shall, at Grantor’s request, promptly return such

Distribution to Grantor (together with interest on that Distribution at the Federal Funds Rate for each day from the making of that Distribution to Participant until its return to Grantor).

(d)If, after Grantor has paid to Participant any Distribution received by Grantor, Distribution is rescinded or must otherwise be returned or must be paid over by Grantor to any other person or entity, whether pursuant to any bankruptcy or insolvency law or otherwise, Participant shall, at Grantor’s request, promptly return such payment to Grantor (together with interest on that Distribution at the Federal Funds Rate for each day from the making of that Distribution to Participant until its return to Grantor).

3. Elevation.  Subject to the terms and provisions of the Credit Agreements, other than as permitted by an occurrence of an Event of Default (as defined in the applicable Credit Agreement) that is caused solely by the sale of Grantor’s equity interest in Midway pursuant to the Stock Purchase Agreement, at the request of Participant, each of Grantor and Participant shall use commercially reasonable efforts to, as soon as reasonably practicable, cause Participant to become a Lender under the Credit Agreements with respect to the Loans (the “Elevation”).  In connection with the Elevation, Grantor and Participant shall execute and deliver an Assignment and Acceptance Agreement, the form of which is attached as Exhibit A-1 to each of the Credit Agreements. Upon the effective date of an Elevation, this Agreement shall be deemed to be an agreement for the outright assignment of the Loans from Grantor to Participant, and the terms and conditions hereof shall be construed accordingly.

4. Responsibilities of Seller. Grantor shall exercise the same degree of care with respect to the administration of the Participationas it would exercise for the extension of credit in which it had not granted a participation interest; provided, that, Grantor will not be liable for any error of judgment, or for any Act (as defined in Section 8 below) or any action omitted to be taken by Grantor at the direction of Participant, except for as a result of Grantor’s gross negligence or willful misconduct.  Without limitation of the generality of the foregoing, Grantor (a) may consult with legal counsel (including counsel for the Borrowers), independent public accountants and other experts selected by Grantor and shall not be liable for any action taken or omitted to be taken in good faith by Grantor in accordance with the advice of such counsel, accountants or experts; (b) makes no warranty or representation and shall not be responsible for any statements, warranties or representations (whether written or oral) made in or in connection with any of the Credit Agreements or any document relating thereto or for the financial condition of any of the Borrowers or any guarantor or for the value of any collateral; (c) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of any of the Credit Agreements or any document relating thereto on the part of any of the Borrowers or to inspect the property (including the books and records) of any of the Borrowers; (d) shall not be responsible for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of any of the Credit Agreements or any document relating thereto or any collateral therefor; and (e) shall incur no liability under or in respect of any of the Credit Agreements or any such document or collateral by acting upon any notice, certificate or other instrument or writing (which may be by telecopier, telegram, cable or telex) believed by Grantor to be genuine and signed or sent by the proper party or parties.

5. Representations and Warranties.   (a) Grantor represents and warrants to Participant, and Participant represents and warrants to Grantor, as of the date hereof, that:

(i)           it has full power and authority and has taken all action necessary to execute and deliver this Agreement and to fulfill its obligations hereunder and to consummate the transactions contemplated hereby;

(ii)           the making and performance by it of this Agreement do not and will not violate any law or regulation of the jurisdiction under which it exists, any other law or regulation applicable to it or any other agreement to which it is a party or by which it is bound.

(iii)           this Agreement has been duly executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms (except to the extent that the enforceability thereof may be limited by bankruptcy, insolvency or other similar laws of general applicability affecting the enforcement of creditors’ rights generally and by a court’s discretion in relation to equitable remedies); and

(iv)           all approvals, authorizations or other actions by, or filings with, any governmental authority necessary for the validity or enforceability of its obligations under this Agreement have been obtained.

(b)           Grantor further represents and warrants to Participant, as of the date hereof, that:

(i)           it has not pledged, encumbered, assigned, transferred, participated, conveyed, disposed of, terminated or granted any security interest in, in whole or in part, any of its right, title and interest in and to the Loans and is not a party to any agreement (other than this Agreement) that would result in the foregoing; it is the sole legal and beneficial owner and holder of the Loans, free and clear of all liens, charges, encumbrances or other security interests;

(ii)           no litigation, arbitration or adversarial proceeding is pending against it or, to the best of its knowledge, threatened against it, that will have a material adverse effect on Participant’s rights or remedies hereunder; and

(iii) the outstanding principal amounts of each of the Loans under the Credit Agreements as of the date hereof are accurately set forth on Schedule 1 hereto and as of the date hereof, Grantor has Unfunded Commitments under the Credit Agreements as set forth on Schedule 1; and

(iv) Grantor is not a party to, or bound by, any document or agreement other than the Credit Agreements that could materially and adversely affect the Participation, the Loans or Participant’s rights and remedies under this Agreement.

(c)           Participant further represents and warrants to Grantor, as of the date hereof, that:

(i)           no litigation, arbitration or adversarial proceeding is pending against it or, to the best of its knowledge, threatened against it, that will have a material adverse effect on any action taken or to be taken by Participant under this Agreement.

6. Agreements of Seller.  (a) Grantor has furnished Participant with copies of each of the Credit Agreements and the financial statements and other documents delivered to Grantor in connection with each of the Credit Agreements and requested by Participant.  Upon Participant’s request, Grantor will furnish to Participant copies of the publicly-available financial statements and other publicly-available documents, and (subject to any duty of confidentiality to which Grantor is subject) such other documents as Grantor shall receive pursuant to any of the Credit Agreements, but Grantor assumes no responsibility with respect to the authenticity, validity, accuracy or completeness thereof.  Participant agrees to maintain the confidentiality of any confidential information included in this documentation.

(b) Grantor shall give Participant prompt notice of the occurrence of any Event of Default under any of the Credit Agreements of which Grantor has actual knowledge; but no failure to give Participant any such notice shall result in any liability on Grantor’s part to Participant.

7. Agreements of Purchaser.  Participant acknowledges that it has, independently and without reliance upon Grantor and based on the financial statements referred to in each of the Credit Agreements and such other documents and information as Participant has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Participant acknowledges that it will, independently and without reliance upon Grantor and based on such documents and information as Participant shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement.  Participant further acknowledges that except as expressly set forth in this Agreement, Grantor and its respective directors, officers, employees, representatives and controlling persons, make no representation or warranty to Participant, express or implied, with respect to the Borrowers or the accuracy, completeness or adequacy of the information disclosed by Grantor, or of any other information relating to the Borrowers, nor shall any of the foregoing persons be liable for any loss or damages of any kind suffered or incurred by Participant resulting from the use of any such information provided to Participant or otherwise reviewed and/or utilized by Participant.

8. Administration by Seller.   (a) Subject to any prohibition or restriction contained in any applicable law, regulation or court order or in the Credit Agreements, Grantor agrees that it shall act or refrain from acting in respect of any request, act, decision or vote with respect to the Participation (each such request, act, decision or vote, an “Act”) in accordance with Participant’s written directions; provided that if Grantor has requested direction from Participant with respect to any Act, and Participant has failed to provide such direction within five Business Days, Participant shall be deemed to have consented to such Act and Grantor may Act in its reasonable determination under the circumstances, subject in all respects to the terms of this Agreement.  Grantor shall promptly after its having actual notice thereof notify Participant in writing of any matter in respect of which Grantor may Act in connection with the Participation.

(b)Grantor shall not, without Participant’s prior written consent, agree to the amendment, modification or waiver of any of the terms of the Credit Agreements or any agreement or document relating thereto or any collateral therefor, consent to any action or failure to act by the Borrowers or any other party, or exercise any rights Grantor may have in respect thereof.  If Grantor shall request Participant’s written consent to any of the actions described in this paragraph (b), and shall not receive such consent or a denial thereof in writing within ten days of the making of such request, Participant shall be deemed to have given its consent.

(c)Participant shall indemnify, defend and hold Grantor harmless from and against all losses, damages, liabilities, claims, costs and reasonable attorneys fees and expenses incurred by Grantor arising out of or resulting from any action or failure to act by Grantor at Participant’s direction or on its behalf in connection with any Act, except for any losses, damages, liabilities, costs or expenses arising out of or relating to Grantor’s gross negligence or willful misconduct.

9. Reimbursement of Expenses.  From and after the date hereof, Participant shall reimburse Grantor for any and all reasonable out-of-pocket costs, expenses and disbursements which may be incurred by Grantor in connection with the Participation and the Credit Agreements.  Any costs and expenses incurred in connection with the establishment and maintenance of the Escrow Account, including, without limitation, any fees to be paid to the Escrow Agent, shall be paid by Participant and Grantor equally.

10. Taxes.  (a)  For all tax purposes from and after the date hereof, the parties agree to treat the Participant as the owner of the Loans, Credit Agreements and all of the rights, title and interests referred to in the Participation and not take any position that is inconsistent with such agreed tax treatment.

(b)Participant represents and warrants to Grantor, as of the date hereof, that Participant and, if Participant is a disregarded entity, its member, are U.S. persons as defined in Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended.  Participant covenants that it shall not assign or transfer the Participation or any portion thereof to a person other than a U.S. person as defined in Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended.

(c)Participant agrees to provide to Grantor, from time to time, completed and signed copies of any forms that may be required by the United States Internal Revenue Service in order to certify Participant’s exemption from United States withholding taxes with respect to payments to be made to Participant under this Agreement.

11. Assignments; Subparticipations.  Participant shall not, assign or transfer the Participation without the prior written consent of Grantor, which consent shall not be unreasonably withheld or delayed.  Participant may, upon prior written notice to Grantor, but without Grantor’s consent, subparticipate all or any part of the Participation, provided, that, (i) Participant’s obligations under this Agreement shall remain unchanged and Participant shall remain solely responsible for the performance of its obligations under this Agreement and (ii) Grantor shall continue to deal solely and directly with Participant in connection with Participant’s rights and obligations under this Agreement.

12. Termination.  This Agreement is a continuing agreement and shall remain in full force and effect until the later of (a) such time when all amounts under each Credit Agreement have been paid in full in cash and (b) such time when each of the Credit Agreements has been terminated or otherwise assigned to Participant pursuant to an Elevation in accordance with Section 3 hereof.

13. Notices and Payments.  All notices and other communications provided for under this Agreement shall be in writing (including telecopier or electronic mail communications, together with a copy delivered by certified mail), unless otherwise specified, and shall be sent to the parties hereto at the addresses set forth below (or such other address as Participant or Grantor may designate in writing).

14. Governing Law.  This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to any conflicts of law provisions thereof that would require the application of the laws of any other jurisdiction.

15. Jurisdiction. The parties irrevocably and unconditionally submit to and accept the exclusive jurisdiction of the United States District Court for the Southern District of New York located in the Borough of Manhattan or the courts of the State of New York located in the County of New York for any action, suit or proceeding arising out of or based upon this Agreement or any matter relating to it and waive any objection that they may have to the laying of venue in any such court or that any such court is an inconvenient forum or does not have personal jurisdiction over them.

16. Successors and Assigns.  The representations and warranties contained herein shall survive the execution of this Agreement.  The terms of this Agreement shall be binding upon, and shall inure to the benefit of, Participant and Grantor­ and their respective successors and permitted assigns.

17.            Participant Liability.  Notwithstanding anything contained in this Agreement to the contrary, Grantor and Participant agree that (i) no member of Participant shall be personally liable for any obligation or liability of Participant under this Agreement and (ii) all obligations and liabilities of Participant under this Agreement are enforceable solely against Participant and Participant’s assets and not against any member of Participant.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed and delivered as of the date first above stated.

            GRANTOR

            NATIONAL AMUSEMENTS, INC.

            By__________________ ___

            Name:

   Title:

            Address:

   PARTICIPANT

   ACQUISITION HOLDINGS SUBSIDIARY I LLC

   By: MT Acquisition Holdings LLC, its sole member

   By:_____________________                                                                

   Name: Mark Thomas

   Title: President

   Address:

SCHEDULE I

LOANS

Loan Name:	Secured Facility (Term)	Secured Facility (Revolver)	Unsecured Facility	Total
Availability:	$20,000,000	$10,000,000	$40,000,000	$70,000,000
Loans Outstanding:	$19,100,000	$9,852,381	$40,000,000	$68,952,380
L/C Usage:	$900,000	$147,619	$0	$1,047,619
Unfunded Commitment	$0	$0	$0	$0