Exhibit 10.88
CONSENT AND FOURTEENTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT
          THIS CONSENT AND FOURTEENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
(this “Amendment”) is entered into as of October 3, 2005, by and among Lenders,
WELLS FARGO FOOTHILL, INC., a California corporation, as the arranger and
administrative agent for the Lenders (“Agent”) and MIDWAY HOME ENTERTAINMENT
INC., a Delaware corporation (“Midway”), MIDWAY AMUSEMENT GAMES, LLC, a Delaware
limited liability company (“MAG”; Midway and MAG are referred to hereinafter
each individually as a “Borrower”, and individually and collectively, jointly
and severally, as the “Borrowers”), MIDWAY GAMES INC., a Delaware corporation
(“Parent”), MIDWAY GAMES WEST INC., a California corporation (“MGW”), MIDWAY
INTERACTIVE INC., a Delaware corporation (“MI”), MIDWAY SALES COMPANY, LLC, a
Delaware limited liability company (“MSC”), MIDWAY HOME STUDIOS INC., a Delaware
corporation (“MHS”), SURREAL SOFTWARE INC., a Washington corporation
(“Surreal”), MIDWAY STUDIOS – AUSTIN INC., a Texas corporation (“MSA”), MIDWAY
STUDIOS – LOS ANGELES INC., a California corporation (“MSLA”; Parent, MGW, MI,
MSC, MHS, Surreal, MSA and MSLA, are referred to hereinafter each individually
as a “U.S. Credit Party” and individually and collectively, jointly and
severally, as the “U.S. Credit Parties”).
          WHEREAS, Borrowers, U.S. Credit Parties, Agent, and Lenders are
parties to that certain Loan and Security Agreement dated as of March 3, 2004
(as amended, modified or supplemented from time to time, the “Loan Agreement”);
          WHEREAS, Borrowers have advised Agent and Lenders that Parent desires
to acquire all of the equity of The Pitbull Syndicate Limited, an English
limited company (“Pitbull”), pursuant to the terms of an Agreement (the
“Acquisition Agreement”), among Parent and the shareholders of Pitbull in
substantially the form of the draft agreement delivered to Agent dated
September 30, 2005 (the “Pitbull Acquisition”);
          WHEREAS, Borrowers and U.S. Credit Parties desire for Agent and
Required Lenders to consent to the Pitbull Acquisition as set forth herein; and
          WHEREAS, Borrowers, U.S. Credit Parties, Agent and Lenders have agreed
to amend the Loan Agreement in certain respects, subject to the terms and
conditions contained herein.
          NOW THEREFORE, in consideration of the premises and mutual agreements
herein contained, the parties hereto agree as follows:
          1. Defined Terms. Unless otherwise defined herein, capitalized terms
used herein shall have the meanings ascribed to such terms in the Loan
Agreement.
          2. Consent. Subject to the satisfaction of the conditions set forth in
Section 5 below, Agent and Required Lenders hereby consent to the Pitbull
Acquisition in

 

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accordance with the terms of the Acquisition Agreement; provided that (i) the
closing of the Pitbull Acquisition is completed within five (5) days of the date
hereof and (ii) the net amount of Investments in Pitbull shall not at any time
exceed the applicable amounts set forth in the definition of Permitted
Investment in Section 1.1 of the Loan Agreement. This is a limited consent and
shall not be deemed to constitute a waiver of, or consent to, any other future
breach of the Loan Agreement (as amended by this Amendment).
          3. Amendment to Loan Agreement. Subject to the satisfaction of the
conditions set forth in Section 5 hereof, the Loan Agreement is amended as
follows:
          (a) The definition of “Bankruptcy Code” in Section 1.1 of the Loan
Agreement is hereby amended and restated as follows:
     “Bankruptcy Code” means title 11 of the United States Code, as applicable,
and as in effect from time to time, and, in respect of UK Company and Pitbull,
UK Insolvency Laws, in respect of German Company, German Insolvency Laws, in
respect of Japan Company, Japan Insolvency Laws and in respect of Australia
Companies, Australian Insolvency Laws.
          (b) The definition of “Loan Document” in Section 1.1 of the Loan
Agreement is amended by replacing the words “a Company, UK Company, German
Company Japan Company or an Australian Company” with “a Company or a Foreign
Company”.
          (c) The definition of “Permitted Investment” in Section 1.1 of the
Loan Agreement is hereby amended and restated as follows:
     “Permitted Investments” means (a) Investments in cash and Cash Equivalents,
(b) Investments in negotiable instruments for collection, (c) advances made in
connection with purchases of goods or services in the ordinary course of
business, (d) Investments received in settlement of amounts due to a Company
effected in the ordinary course of business or owing to a Company as a result of
Insolvency Proceedings involving an Account Debtor or upon the foreclosure or
enforcement of any Lien in favor of a Company, (e) acquisition of Stock of a
Target in connection with a Permitted Acquisition, (f) capital contribution (not
to exceed $1,000 in cash plus common stock of Parent sufficient to pay purchase
price of the applicable Permitted Acquisition) to a wholly owned Subsidiary of
Midway formed to acquire the Stock of a Target (so long as such wholly owned
Subsidiary is merged into such Target upon consummation of such Permitted
Acquisition), (g) loans among the Companies, (h) Investments in UK Company so
long as the net additional amount of such Investments made from and after the
date hereof does not exceed $3,350,000 at any time during the period from the
Closing Date through March 31, 2005, or $750,000 at any time thereafter,
(i) Investments in German Company so long as the net additional amount of such
Investments made does not exceed $2,500,000 at any time, (j) Investments in
Japan Company so long as the net additional amount of such Investments made does
not exceed $500,000 in any fiscal year, (k) Investments in

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Australia Companies equal to the purchase consideration for the Australia
Transactions plus additional Investments so long as the net additional amount of
such additional Investments made does not exceed (i) an amount equal to
$1,500,000 plus the ordinary course expenses of the Australia Companies at any
time prior to December 31, 2005 and (ii) an amount equal to the ordinary course
expenses of the Australia Companies at any time on or after December 31, 2005,
(l) Investments in Pitbull so long as the net amount of such Investments made
does not exceed (i) an amount equal to $1,500,000 plus the ordinary course
expenses of Pitbull at any time prior to December 31, 2005 and (ii) an amount
equal to the ordinary course expenses of Pitbull at any time on or after
December 31, 2005 and (m) Investments in the Investment Account.
          (d) The following definitions are added to Section 1.1 of the Loan
Agreement, each in their appropriate alphabetical order:
     “Foreign Companies” means collectively, the Australia Companies, UK
Company, German Company, Japan Company and Pitbull.
     “Pitbull” means The Pitbull Syndicate Limited, an English limited liability
private company, registered with company number 3292274
          (e) The preface to Article 7 of the Loan Agreement is hereby amended
and restated as follows:
     Each Company covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, Companies will not, and will
not permit any Foreign Company to, do any of the following:
          (f) Section 7.1(d) of the Loan Agreement shall be amended as follows:
     (i) The reference in clause (i) to “UK Company’s, German Company’s, Japan
Company’s, Australia Companies” shall be replaced with “any Foreign Company’s”;
     (ii) Both references in clause (ii) to “UK Company, German Company, Japan
Company, Australia Companies” shall be replaced with “Foreign Companies”; and
     (iii) The reference in clause (iii) to “UK Company, German Company, Japan
Company, Australia Companies” shall be replaced with “the applicable Foreign
Company”.
          (g) Section 7.4 of the Loan Agreement shall be amended by replacing
the reference to “UK Company, German Company, Japan Company, Australia
Companies” with “any Foreign Company”.
          (h) Section 7.5 of the Loan Agreement shall be amended and restated as
follows:

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     Change any Foreign Company’s name or any Company’s name, FEIN,
organizational identification number, state or nation of organization, or
organizational identity; provided, however, that (a) a Company (other than
German Company) may change its name upon at least 30 days prior written notice
by Administrative Borrower to Agent of such change and so long as, at the time
of such written notification, such Company provides any financing statements
necessary to perfect and continue perfected Agent’s Liens and (b) German Company
may change its name upon prior written notice by Administrative Borrower to
Agent of such change.
          (i) Section 7.10 of the Loan Agreement shall be amended by replacing
the reference to “UK Company, German Company, Japan Company, Australia
Companies” with “a Foreign Company” and replacing the reference to “UK
Company’s, German Company’s, Japan Company’s, Australia Companies’” and “any
Foreign Company’s”.
          (j) Section 7.11 of the Loan Agreement shall be amended by replacing
both references to “UK Company’s, German Company’s, Japan Company’s, Australia
Companies’” with “ Foreign Companies’” .
          (k) Section 7.13 of the Loan Agreement shall be amended by replacing
all references to “UK Company, German Company, Japan Company, Australia
Companies” with “any Foreign Company”.
          4. Ratification. This Amendment, subject to satisfaction of the
conditions provided below, shall constitute an amendment to the Loan Agreement
and all of the Loan Documents as appropriate to express the agreements contained
herein. In all other respects, the Loan Agreement and the Loan Documents shall
remain unchanged and in full force and effect in accordance with their original
terms.
          5. Conditions to Effectiveness. This Amendment shall become effective
as of the date hereof and upon the satisfaction of the following conditions
precedent:
          (a) Each party hereto shall have executed and delivered this Amendment
to Agent;
          (b) Companies shall have delivered to Agent such documents, agreements
and instruments as may be requested or required by Agent in connection with this
Amendment, each in form and content acceptable to Agent;
          (c) No Default or Event of Default shall have occurred and be
continuing on the date hereof or as of the date of the effectiveness of this
Amendment; and
          (d) All proceedings taken in connection with the transactions
contemplated by this Amendment and all documents, instruments and other legal
matters incident thereto shall be satisfactory to Agent and its legal counsel.

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          6. Additional Event of Default. An Event of Default shall exist if
Borrowers fail to deliver to Agent a perfected pledge of the equity interests of
Pitbull, effective under United Kingdom law, within 60 days of the date hereof,
in form and substance satisfactory to Agent.
          7. Miscellaneous.
          (a) Warranties and Absence of Defaults. In order to induce Agent to
enter into this Amendment, each Company hereby warrants to Agent, as of the date
hereof, that the representations and warranties of Companies contained in the
Loan Agreement are true and correct as of the date hereof as if made on the date
hereof (other than those which, by their terms, specifically are made as of
certain dates prior to the date hereof).
          (b) Expenses. Companies, jointly and severally, agree to pay on demand
all costs and expenses of Agent (including the reasonable fees and expenses of
outside counsel for Agent) in connection with the preparation, negotiation,
execution, delivery and administration of this Amendment and all other
instruments or documents provided for herein or delivered or to be delivered
hereunder or in connection herewith. All obligations provided herein shall
survive any termination of this Amendment and the Loan Agreement as amended
hereby.
          (c) Governing Law. This Amendment shall be a contract made under and
governed by the internal laws of the State of Illinois.
          (d) Counterparts. This Amendment may be executed in any number of
counterparts, and by the parties hereto on the same or separate counterparts,
and each such counterpart, when executed and delivered, shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same Amendment.
          8. Release.
          (a) In consideration of the agreements of Agent and Lenders contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each Company, on behalf of itself
and its successors, assigns, and other legal representatives, hereby absolutely,
unconditionally and irrevocably releases, remises and forever discharges Agent
and Lenders, and their successors and assigns, and their present and former
shareholders, affiliates, subsidiaries, divisions, predecessors, directors,
officers, attorneys, employees, agents and other representatives (Agent, each
Lender and all such other Persons being hereinafter referred to collectively as
the “Releasees” and individually as a “Releasee”), of and from all demands,
actions, causes of action, suits, covenants, contracts, controversies,
agreements, promises, sums of money, accounts, bills, reckonings, damages and
any and all other claims, counterclaims, defenses, rights of set-off, demands
and liabilities whatsoever (individually, a “Claim” and collectively, “Claims”)
of every name and nature, known or unknown, suspected or unsuspected, both at
law and in equity, which such Company or any of its successors, assigns, or
other legal representatives may now or hereafter own, hold, have or claim to
have against the Releasees or any of them for, upon, or by reason of any
circumstance, action,

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cause or thing whatsoever which arises at any time on or prior to the day and
date of this Amendment, including, without limitation, for or on account of, or
in relation to, or in any way in connection with any of the Loan Agreement, or
any of the other Loan Documents or transactions thereunder or related thereto.
          (b) Each Company understands, acknowledges and agrees that the release
set forth above may be pleaded as a full and complete defense and may be used as
a basis for an injunction against any action, suit or other proceeding which may
be instituted, prosecuted or attempted in breach of the provisions of such
release.
          (c) Each Company agrees that no fact, event, circumstance, evidence or
transaction which could now be asserted or which may hereafter be discovered
shall affect in any manner the final, absolute and unconditional nature of the
release set forth above.

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized and delivered
as of the date first above written.

                  MIDWAY HOME ENTERTAINMENT INC.,       a Delaware corporation
 
                MIDWAY AMUSEMENT GAMES, LLC,     a Delaware limited liability
company
 
                MIDWAY GAMES INC.,     a Delaware corporation
 
                MIDWAY GAMES WEST INC.,     a California corporation
 
                MIDWAY INTERACTIVE INC.,     a Delaware corporation
 
                MIDWAY SALES COMPANY, LLC,     a Delaware limited liability
company
 
                MIDWAY HOME STUDIOS INC.,     a Delaware corporation
 
                SURREAL SOFTWARE INC.,     a Washington corporation
 
                MIDWAY STUDIOS — AUSTIN INC.,     a Texas corporation
 
                MIDWAY STUDIOS — LOS ANGELES INC.,     a California corporation
 
           
 
  Each By   /s/ Thomas E. Powell    
 
                Title  EVP-Finance, CFO
 
         

Signature page to Consent and Fourteenth Amendment to Loan and Security
Agreement

 

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                  WELLS FARGO FOOTHILL, INC.,       a California corporation, as
Agent, as UK Security Trustee and as a Lender
 
           
 
  By   John Leonard    
 
                Title Vice President
 
           

Signature page to Consent and Fourteenth Amendment to Loan and Security
Agreement