exv10w39



 





 Exhibit 10.39 




WAIVER AND SECOND AMENDMENT TO AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT




          THIS WAIVER AND SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this
“Amendment”) is entered into as of January 2, 2008, 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
Amended and Restated Loan and Security Agreement dated as of June 29, 2007 (as amended, modified or
supplemented from time to time, the “Loan Agreement”);




          WHEREAS, an Event of Default may exist under Section 8.2(a) of the Loan Agreement for
Borrowers’ failure to comply with Section 7.18(a) of the Loan Agreement for the time period of
January 1 through January 2, 2008 (the “Potential Event of Default”);




          WHEREAS, Borrowers have requested that Agent and Lenders waive the Potential Event of Default
and Agent and Lenders have agreed to waive the Potential Event of Default (to the extent the
Potential Event of Default exists) subject to the terms and conditions contained 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. Waiver. Subject to the satisfaction of the conditions set forth in Section 5
hereof and in reliance upon the representations and warranties set forth in this


 









 







Amendment, if and to the extent the Potential Event of Default exists, Agent and Lenders
hereby waive the Potential Event of Default. Agent’s and Lenders’ waiver of the Potential Event of
Default shall not be deemed to be a waiver of any other existing or hereafter arising Events of
Default or any other deviation from the express terms of the Loan Agreement including without
limitation any further breach of Section 7.18(a).




          3. Amendments to Loan Agreement. Subject to the satisfaction of the conditions set
forth in Section 5 hereof, Section 7.18(a) of the Loan Agreement is hereby amended and restated in
its entirety as follows:





(a) Fail to maintain (i) at all times from the Closing Date through July 31, 2007,
Qualified Cash plus Excess Availability of at least $20,000,000, (ii) at all times
from August 1, 2007, through September 30, 2007, Qualified Cash plus Excess
Availability of at least $5,000,000, (iii) at all times from October 1, 2007 through
February 29, 2008, Liquidity of at least $10,000,000 and (iv) at all times
thereafter, Qualified Cash plus Excess Availability of at least $20,000,000.



          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 (as amended prior to the date hereof).




          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.




          6. 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


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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.




          7. 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, 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.




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          (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 Executive Vice President – Finance, Treasurer
	 

	 	     and Chief Financial Officer





Signature page to Waiver and Second Amendment to Amended and Restated Loan and Security Agreement



 









 







	 	 	 
	 

	 	WELLS FARGO FOOTHILL, INC.,
	 

	 	a California corporation, as Agent, as UK Security Trustee and as a Lender
	 
	 	 
	 

	 	By /s/ John Leonard                                        
	 

	 	Title SVP





Signature page to Waiver and Second Amendment to Amended and Restated Loan and Security Agreement