Prepared by MERRILL CORPORATION




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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 







 



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
	 	AMOUNT

	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
	 	AMOUNT

	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
	 	AMOUNT

	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
	 	RATIO

	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.   

	 	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   

	 	Name:	 	David A. Johanson
	 	Title:	 	Vice President
	

 	

ISSUING BANK
	

 	
BANK OF AMERICA, N.A., as Issuing Bank
	

 	

By:	
 	

/s/ THOMAS A. SMITH   

	 	Name:	 	Thomas A. Smith
	 	Title:	 	Vice President
	

 	

BANKS
	

 	
BANK OF AMERICA, N.A., as a Bank
	

 	

By:	
 	

/s/ THOMAS A. SMITH   

	 	Name:	 	Thomas A. Smith
	 	Title:	 	Vice President
	

 	
LASALLE BANK NATIONAL

ASSOCIATION as a Bank
	

 	

By:	
 	

/s/ DAVID A. CHAIKA   

	 	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