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Exhibit 10.3

AGREEMENT AND WAIVER

        THIS AGREEMENT AND WAIVER is made, entered into and effective as of the
12th day of April, 2004, by and among Midway Games Inc. (the "Corporation"),
Peconic Fund, Ltd., Smithfield Fiduciary LLC and Neil D. Nicastro (collectively,
the "Investors") each of whom own warrants (the "Series B Warrants") to purchase
shares of the Corporation's common stock, par value $0.01 per share (the "Common
Stock"). The Series B Warrants were acquired by the Investors pursuant to the
Securities Purchase Agreement, dated as of May 22, 2001, by and among the
Corporation and the Investors.

W I T N E S S E T H

        WHEREAS, Section 8(a) of the Series B Warrants grants the Investors,
under certain circumstances, anti-dilution rights (collectively, the
"Anti-Dilution Rights"); and

        WHEREAS, the Investors desire to waive irrevocably the Anti-Dilution
Rights set forth in the Series B Warrants with respect to the issuance and sale
of securities registered under the Corporation's registration statement on
Form S-3 (Reg. No. 333-113077) (the "Registration Statement") during the month
of April 2004.

        NOW, THEREFORE, in consideration of the mutual covenants and premises
contained herein, the parties hereby agree as follows:

        1.    Waiver.    Each Investor agrees to waive irrevocably the
Anti-Dilution Rights set forth in Section 8(a) of the Series B Warrants solely
with respect to the Corporation's issuance and sale during the month of
April 2004 of securities registered under the Registration Statement.

        2.    Miscellaneous.    This Waiver may be executed in any number of
counterparts, each of which shall be an original and all of which shall be
deemed one and the same instrument. This Waiver shall be governed by the laws of
the State of New York, without regard to its rules of conflicts of laws.

* * * * *

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement and Waiver
as of the day and year first above written.

  MIDWAY GAMES INC.
 
By:
 
/s/  DAVID F. ZUCKER      

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  Name:   David F. Zucker   Title:   President and Chief Executive Officer
 
PORTSIDE GROWTH AND OPPORTUNITY FUND (f/k/a PECONIC FUND LTD.)
 
By:
 
Ramius Capital Group, LLC   Its:   Investment Advisor
 
By:
 
/s/  JEFFREY SMITH      

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  Name:   Jeffrey Smith

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  Title:   Authorized Signatory

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SMITHFIELD FIDUCIARY LLC
 
By:
 
/s/  SCOTT WALLACE      

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  Name:   Scott Wallace

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  Title:   Authorized Signatory

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/s/  NEIL D. NICASTRO      

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Neil D. Nicastro

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Exhibit 10.3