Exhibit 10.35

MIDWAY GAMES INC.
2704 West Roscoe Street
Chicago, Illinois 60618
773.961.2222 fax 773.961.2099

September 26, 2001

Mr. Harold H. Bach, Jr.
1555 Astor St. - #24W
Chicago, Illinois 60610

    Re:  Termination of Employment

Dear Harold:

    This letter confirms the circumstances of the termination of your employment
by Midway Games Inc. (the "Company") and your agreement to resign your positions
as an officer of the Company and its affiliates. We have agreed as follows:

    1.  Such termination and resignations will be effective at the close of
business on September 28, 2001 (the "Effective Date"). Your position on the
Company's Board of Directors shall not be affected by such termination and
resignations.

    2.  Your Employment Agreement with the Company shall terminate upon the
Effective Date. In complete fulfillment of its obligations under your Employment
Agreement, the Company:

    (a) shall pay you through December 31, 2004, separation payments equal to
your base annual salary in effect as of the Effective Date less usual payroll
deductions (including participation in the Company's 401k plan, to the extent
permitted by law and the plan), in normal payroll intervals; provided, however,
that:

    (i)  in the event of your death, the separation payments will be made to
your wife, Margo P. Bach if she is not then deceased, or if she is then deceased
or in the event of her death thereafter, to your estate; and

    (ii) should there be a "Change of Control" as defined in Section 12.1 of
your Employment Agreement, and the payee of the separation payments so requests
in writing within sixty (60) days thereafter, the Company shall, within fifteen
(15) days of receipt of such request, make a lump sum payment to such payee
equal to all of the separation payments then not yet paid and no further amounts
shall be payable under this subparagraph (a) thereafter; and

    (b) shall continue through December 31, 2004 (or until your death, if
sooner) to provide you with the health care and life insurance benefits to which
you would otherwise have been entitled under the Employment Agreement (provided
that these benefits shall not be cumulative with the benefits provided by the
Company to non-employee members of its Board of Directors); and

    (c) agrees that the provisions of Section 12.1 of your Employment Agreement,
as they pertain to options to purchase the securities of the Company, shall
survive such termination and shall remain in effect through December 31, 2004.

You hereby remise, release and forever discharge the Company, its agents,
attorneys, servants, employees, officers, directors, shareholders, insurers,
parents, subsidiaries, other affiliates, successors and assigns, and each and
every one of them (hereafter referred to as "Releasees"), of and from all
claims, causes of action, and demands which you now have or claim to have, or
which may hereafter accrue against the said Releasees, or any one or more of
them, arising from the termination of your Employment Agreement prior to the
expiration of the "Term" thereof, including, without limitation, any failure of
the Company to give written notice of termination of your Employment Agreement
at least three years prior thereto.

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    3.  You will be entitled to receive the fees payable to a non-employee
Director of the Company commencing January 1, 2002. However, as described in
Section 2(b) above, you will not be entitled to the health care or life
insurance benefits of a non-employee Director until January 1, 2005, if you are
then still serving on the Company's Board of Directors.

    4.  Pursuant to Section 2 of Article XII of the Company's 1998 Stock
Incentive Plan, as amended, the Company hereby agrees that you may exercise your
options issued thereunder (to the extent exercisable as of the Effective Date),
at any time prior to the date that is three (3) months after you cease to be a
member of the Board of Directors of the Company.

    5.  This letter constitutes the entire agreement of the parties hereto with
respect to the matters set forth herein and no amendment or modification hereof
shall be valid or binding unless made in writing and signed by both parties
hereto. This letter may not be assigned by you. This letter shall be binding
upon you and inure to the benefit of your heirs, executors and administrators
and be binding upon the Company and inure to the benefit of its successors and
assigns. This letter shall be governed, interpreted and construed under the laws
of the State of Illinois without regard to its conflict of law principles. No
course of dealing nor any delay on the part of a party in exercising any of its
rights hereunder shall operate as a waiver of any such rights. No waiver of any
default or breach of this letter shall be deemed a continuing waiver or a waiver
of any other breach or default.

Kindly confirm that you are in agreement with the foregoing by signing the
enclosed copy of this letter in the space set forth below and returning it to
me.

Sincerely,

Midway Games Inc.

/s/ Neil D. Nicastro
Neil D. Nicastro
President and Chief Executive Officer

AGREED and ACCEPTED
this 26th day of September, 2001

/s/ HAROLD H. BACH, JR.   

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Harold H. Bach, Jr.    

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