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Exhibit 10.32

THIRD AMENDMENT DATED AS OF AUGUST 15, 2001 TO CREDIT
AGREEMENT DATED AS OF SEPTEMBER 20, 2000

    This Third Amendment dated as of August 15, 2001 to Credit Agreement dated
as of September 20, 2000 (this "Amendment") is made by and among MIDWAY
GAMES INC., a Delaware corporation (the "Company"), the financial institutions
parties hereto (the "Banks"), and BANK OF AMERICA, N.A., as letter of credit
issuing bank and as agent for the Banks (in its capacity as agent, together with
any successors and assigns, the "Agent"). Terms used but not defined herein have
the meanings specified in the Credit Agreement referenced below.

W I T N E S S E T H:

    WHEREAS, the Company, the Banks, the Issuing Bank and the Agent are parties
to that certain Credit Agreement dated as of September 20, 2000 (as amended or
modified and in effect on the date hereof, the "Credit Agreement");

    WHEREAS, the Company has requested that the Banks, the Issuing Bank and the
Agent agree to amend or modify the Credit Agreement as set forth herein; and

    WHEREAS, the Agent, the Banks and the Issuing Bank are willing to amend and
modify the Credit Agreement, subject to the terms and conditions contained
herein.

    NOW, THEREFORE, in consideration of the premises, the mutual covenants
herein contained and other good and valuable consideration (the receipt,
adequacy and sufficiency of which are hereby acknowledged), the parties hereto,
intending legally to be bound, hereby agree as follows:

SECTION 1
AMENDMENTS TO THE CREDIT AGREEMENT

    The Credit Agreement is hereby amended as follows:

    (a) Section 1.1 of the Credit Agreement is amended so that definition of
"Applicable Margin" reads in its entirety as follows:

"Applicable Margin," as to any LIBO Rate Loan, means "3.00% per annum" and, as
to Base Rate Loan, means "0.25% per annum."

    (b) Section 1.1 of the Credit Agreement is amended so that the definition of
"Consolidated Net Worth" reads in its entirety as follows:

"Consolidated Net Worth" means as of any date of determination, shareholders'
equity for the Company and its Subsidiaries as of that date on a consolidated
basis determined in accordance with GAAP; provided, however, such shareholders'
equity shall be deemed to include all redeemable preferred stock of the Company
and its Subsidiaries.

    (c) Section 1.1 of the Credit Agreement is further amended so that
definition of "Revolving Termination Date" reads in its entirety as follows:

"Revolving Termination Date" means the earlier to occur of: (a) March 31, 2003
and (b) the date on which the Total Commitment terminates in accordance with the
provisions of this Agreement.

    (d) Section 1.1 of the Credit Agreement is further amended so that
definition of "L/C Commitment" reads in its entirety as follows:

"L/C Commitment" means the commitment of the Issuing Bank to Issue, and the
commitment of the Banks severally to participate in, Letters of Credit
(including the Existing Bank of

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America Letters of Credit) from time to time Issued or outstanding under
Article III, in an aggregate amount not to exceed the following amounts during
the following periods:

PERIOD

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  AMOUNT

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Prior to March 30, 2001   $ 40,000,000 March 31, 2001 through August 15, 2001  
$ 3,500,000 August 15, 2001 and thereafter   $ 15,000,000

as the same shall be reduced as a result of a reduction in the L/C Commitment
pursuant to Section 2.5; it being understood that the L/C Commitment is a part
of the Total Commitment, rather than a separate, independent commitment.

    (e) Section 2.1 of the Credit Agreement is amended to read in its entirety
as follows:

    2.1. Amounts and Terms of Commitments. Each Bank severally agrees, on the
terms and conditions set forth herein, to make loans to the Company (each such
loan, a "Revolving Loan") from time to time on any Business Day during the
period from the Closing Date to the Revolving Termination Date; provided,
however, that, after giving effect to any Borrowing of Revolving Loans, the
Effective Amount of all Revolving Loans plus the Effective Amount of all L/C
Obligations, shall not at any time exceed the following amounts during the
following periods (any such amount with respect to any such period, as the same
may be reduced pursuant to Section 2.5 or 2.7 being herein called, the "Total
Commitment"):

PERIOD

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  AMOUNT

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Closing Date through December 30, 2000   $ 55,000,000 December 31, 2000 through
March 30, 2001   $ 40,000,000 March 31, 2001 through June 30, 2002   $
15,000,000 July 1, 2002 through January 31, 2003   $ 40,000,000 February 1, 2003
and thereafter   $ 15,000,000

provided further, that the Effective Amount of the Revolving Loans of any Bank
plus the participation of such Bank in the Effective Amount of all L/C
Obligations shall not at any time exceed such Bank's Pro Rata Share of the Total
Commitment. Within the limits of each Bank's Commitment, and subject to the
other terms and conditions hereof, the Company may borrow under this
Section 2.1, prepay under Section 2.6 and reborrow under this Section 2.1.

    (f)  Section 2.9(a) of the Credit Agreement is amended to read in its
entirety as follows:

    2.9 Interest.

    (a) Each Revolving Loan shall bear interest on the outstanding principal
amount thereof from the applicable Borrowing Date at a rate per annum equal to
the applicable LIBO Rate or the Base Rate, as the case may be (and subject to
the Company's right to convert to other Types of Loans under Section 2.4), plus
the Applicable Margin.

    (g) Section 2.10 of the Credit Agreement is amended by replacing "0.25%"
with "0.375%" in the first sentence thereof.

    (h) Article II is further amended by adding Section 2.15 thereto as follows:

    2.15 Termination Fee. If, pursuant to Section 2.5, the Total Commitment is
terminated prior to January 31, 2002 following the sale of all or substantially
all of the Company's assets or the sale of all or substantially all of the
Company's stock or a Change of Control, then, concurrently with such
termination, the Company shall pay to each Bank a termination fee equal to 0.25%
of the such Bank's Commitment then in effect (such fees being in addition to all
other amounts).

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    (i)  Section 3.8(a) of the Credit Agreement is amended to read in its
entirety as follows:

    3.8 Letter of Credit Fees.

    (a) The Company shall pay to the Agent for the ratable account of each of
the Banks a letter of credit fee with respect to the Letters of Credit, such fee
to be equal to (i) in the case of each standby Letter of Credit, 1.75% per annum
through August 15, 2001 and 3.00% per annum thereafter, in each instance on the
average daily maximum amount available to be drawn on such standby Letter of
Credit, and (ii) in the case of each commercial or trade Letter of Credit,
through August 15, 2001, such fees customarily charged by the Issuing Bank in
connection with the issuance, negotiation and payment of letters of credit and
drafts drawn thereunder, and after August 15, 2001, 0.60% per annum on the
average daily maximum amount available to be drawn on such commercial or trade
Letter of Credit. Such fees shall be computed on a quarterly basis in arrears on
the last Business Day of each calendar quarter based upon Letters of Credit
outstanding for that quarter, as calculated by the Agent. Such letter of credit
fees shall be due and payable quarterly in arrears on the last Business Day of
each calendar quarter during which Letters of Credit are outstanding, commencing
on the first such quarterly date to occur after the Closing Date, through the
Revolving Termination Date (or such later date upon which the outstanding
Letters of Credit shall expire), with the final payment to be made on the
Revolving Termination Date (or such later expiration date).

    (j)  Section 7.1(b) of the Credit Agreement is amended to read in its
entirety as follows:

    (b) as soon as available, but not later than 30 days after the end of each
calendar month (commencing with the calendar month ended July 31, 2001), a copy
of the unaudited consolidated and consolidating balance sheets of the Company
and its Subsidiaries as of the end of such calendar month and the related
consolidated statements of income for the period commencing on the first day of
the year and ending on the last day of such calendar month, and certified by a
Responsible Officer as fairly presenting, in accordance with GAAP (subject to
ordinary, good faith year-end audit adjustments and the absence of complete
footnotes), the financial position and the results of operations of the Company
and the Subsidiaries; and

    (k) Section 8.15 of the Credit Agreement is amended to read in its entirety
as follows:

    8.15 Clean-up/Clean Down Provisions. Notwithstanding any other provision
contained in this Agreement to the contrary, the Company agrees that from
March 1 of each Fiscal Year during the term of this Agreement, commencing
March 1, 2002, and for a period of ninety (90) consecutive days thereafter the
Effective Amount of all Revolving Loans shall be zero (0) and the Effective
Amount of the outstanding Letters of Credit that are not Cash Collateralized
shall be less than or equal to (i) $10,000,000 for such periods prior to
August 15, 2001 and (ii) $7,000,000 for such periods after August 15, 2001. The
Company agrees to make any prepayment of the Revolving Loans or the L/C
Obligations which may be necessary to comply with the terms of this
Section 8.15.

    (l)  Section 9.1 of the Credit Agreement is amended to read in its entirety
as follows:

    9.1 Minimum Net Worth. The Company shall not permit at any time its
Consolidated Net Worth to be less than the following amounts for the following
periods:

PERIOD

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  AMOUNT

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Prior to March 31, 2001   $ 130,000,000 April 1, 2001 through August 15, 2001  
$ 90,000,000 August 15, 2001 through December 30, 2002   $ 100,000,000 December
31, 2002 and thereafter   $ 150,000,000

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    (m) Section 9.2 of the Credit Agreement is amended to read in its entirety
as follows:

    9.2 Minimum Liquidity. The Company shall not permit at all times its
Liquidity to be less than (i) $5,000,000 through August 15, 2001, and
(ii) $10,000,000 thereafter. For purposes hereof, "Liquidity" means the sum of
(i) the aggregate unused Commitments under this Agreement to the extent then
available to the Company plus (ii) the aggregate of all nonrestricted and
unencumbered cash and cash equivalents of the Company and its Subsidiaries.

    (n) Section 9.3 of the Credit Agreement is amended to read in its entirety
as follows:

    9.3 Quick Ratio. As of the end of any month during the following periods,
the Company will not permit its Quick Ratio to be less than the ratio applicable
to such month as follows:

PERIOD

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  RATIO

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Prior to October 31, 2000   1.50 Month of November 2000   2.50 December 1, 2000
through June 30, 2001   10.00 July 1, 2001 through January 31, 2002   3.00
February 1, 2002 through June 30, 2002   5.00 July 1, 2002 through January 31,
2003   3.00 February 1, 2003 and thereafter   5.00

For purposes hereof, "Quick Ratio" means the ratio of (i) the aggregate accounts
receivable of the Company and its Subsidiaries net of reserves for doubtful
accounts consistent with the historical levels and past practices, to (ii) the
aggregate Effective Amount of Revolving Loans (and, prior to March 31, 2001, L/C
Obligations) under this Agreement.

    (o) Schedule I to the Credit Agreement is amended to read in its entirety as
set forth in Schedule I attached hereto. The Commitment and the Pro Rata Share
of each Bank is as set forth on Schedule I attached hereto. To effect the change
of the Pro Rata Share as set forth on Schedule I attached hereto, LaSalle Bank
National Association ("LaSalle") hereby confirms that concurrently with the
effectiveness of this Amendment, it shall be deemed to have purchased from Bank
of America, without recourse or warranty, an undivided interest and
participation, to the extent of LaSalle's Pro Rata Share, in each Letter of
Credit and the L/C Obligations with respect thereto.

SECTION 3

WARRANTIES

    The Company warrants to the Agent and the Banks as of the date hereof that:

    (a) After giving effect to this Amendment, all representations and
warranties contained in the Credit Agreement are true and correct in all
material respects on and as of the date hereof with the same effect as if made
on the date hereof (except to the extent such representations and warranties
expressly refer to an earlier date).

    (b) After giving effect to this Amendment, no Default or Event of Default
has occurred and is continuing or will result from this Amendment.

    (c) The execution, delivery and performance by the Company of this Amendment
and the New Notes (as defined below) have been duly authorized by all necessary
corporate and other action and do not and will not require any registration
with, consent or approval of, notice to or action by, any Person (including any
Governmental Authority) in order to be effective and enforceable.

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    (d) The Credit Agreement as modified by this Amendment and the New Notes
constitute the legal, valid and binding obligation of the Company, enforceable
against it in accordance with their terms as modified by the terms of this
Amendment, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditor's rights
generally or by equitable principles relating to enforceability.

SECTION 4

CONDITIONS PRECEDENT TO EFFECTIVENESS

    This Amendment shall become effective as of August 15, 2001 (the "Effective
Date"), provided, however, that the effectiveness of this Amendment is subject
to the receipt by the Agent of the following, each appropriately completed and
duly executed as required and otherwise in form and substance reasonably
satisfactory to the Agent:

    (a) counterparts of this Amendment, executed by the Company and the Banks;

    (b) an opinion of Deborah K. Fulton, in her capacity as Vice President,
Secretary and General Counsel of the Company and addressed to the Agent and the
Banks, in form and substance satisfactory to the Agent;

    (c) evidence of the payment of (i) upfront fee to be shared by each Bank in
proportion of such Bank's Pro Rata Share of $50,000, and (ii) all legal fees and
expenses of the Agent and the Banks heretofore billed to the Company;

    (d) a certificate of the Secretary or Assistant Secretary of the Company
certifying as to (A) resolutions of the board of directors or members, as the
case may be, of the Company authorizing the execution, delivery and performance
of this Amendment, and (B) the name(s) of the officer(s) of the Company
authorized to sign this Amendment and the documents related hereto on behalf of
the Company and each Guarantor;

    (e) the Notes in the form of Exhibit A-1, A-2 attached hereto (collectively,
"New Notes").

    (f)  such other instruments, agreements and documents as the Agent may
reasonably request, in each case duly executed as required and otherwise in form
and substance reasonably satisfactory to the Agent;

    Forthwith upon the effectiveness of this Amendment, the Company shall make a
combination of borrowings and/or prepayments so that after giving there effect
thereto, the proportion of the aggregate outstanding principal amount of the
Revolving Loans of each Bank to the aggregate outstanding principal amount of
all Revolving Loans of all Banks shall be equal to such Bank's Pro Rata Share.

SECTION 5

GENERAL

    (a) As hereby modified, the Credit Agreement and the other Loan Documents
shall remain in full force and effect and are hereby ratified, approved and
confirmed in all respects.

    (b) The Company acknowledges and agrees that the execution and delivery by
the Agent and the Banks of this Amendment shall not be deemed to create a course
of dealing or otherwise obligate the Agent or the Banks to execute similar
modifications under the same or similar circumstances in the future.

    (c) Upon execution and delivery of this Amendment, this Amendment shall be
binding upon and shall inure to the benefit of the Company, the Agent and the
Banks and their respective successors and assigns.

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    (d) The Company agrees to pay all fees and out-of-pocket costs and expenses
of the Agent (including reasonable attorneys' fees and expenses of counsel to
the Agent and the Banks) in connection with the preparation and execution of
this Amendment.

    (e) This Amendment may be executed in any number of counterparts and by the
different parties on separate counterparts, and each such counterpart shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same Amendment.

    Delivered at Chicago, Illinois, as of the date and year first above written.

[SIGNATURES ON THE FOLLOWING PAGE]

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    IN WITNESS WHEREOF, the parties hereto have caused the execution and
delivery hereof by their respective representatives thereunto duly authorized as
of this 15th day of August, 2001.

 
COMPANY
 
MIDWAY GAMES INC.
 
By:
 
/s/ HAROLD H. BACH, JR.   

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  Name:   Harold H. Bach, Jr.   Title:   Executive Vice President—Chief
Financial Officer
 
AGENT
 
BANK OF AMERICA, N.A., as Agent
 
By:
 
/s/ DAVID A. JOHANSON   

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  Name:   David A. Johanson   Title:   Vice President
 
ISSUING BANK
 
BANK OF AMERICA, N.A., as Issuing Bank
 
By:
 
/s/ THOMAS A. SMITH   

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  Name:   Thomas A. Smith   Title:   Vice President
 
BANKS
 
BANK OF AMERICA, N.A., as a Bank
 
By:
 
/s/ THOMAS A. SMITH   

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  Name:   Thomas A. Smith   Title:   Vice President
 
LASALLE BANK NATIONAL
ASSOCIATION as a Bank
 
By:
 
/s/ DAVID A. CHAIKA   

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  Name:   David A. Chaika   Title:   Assistant Vice President

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List of Schedules and Exhibits

 
   
Schedule 1   Prorata Shares of Total Commitment
Exhibit A-1
 
Amended and Restated Promissory Note
Exhibit A-2
 
Amended and Restated Promissory Note

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Exhibit 10.32

THIRD AMENDMENT DATED AS OF AUGUST 15, 2001 TO CREDIT AGREEMENT DATED AS OF
SEPTEMBER 20, 2000
SECTION 1 AMENDMENTS TO THE CREDIT AGREEMENT
SECTION 3 WARRANTIES
SECTION 4 CONDITIONS PRECEDENT TO EFFECTIVENESS
SECTION 5 GENERAL
List of Schedules and Exhibits