exv10w1



 








Exhibit 10.1




ELEVENTH AMENDMENT TO

LOAN AND SECURITY AGREEMENT




     THIS ELEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is entered into as
of April 26, 2005, by and among Lenders, WELLS FARGO FOOTHILL, INC., a California
corporation, as the arranger and administrative agent for the Lenders (“Agent”) and, on the
other hand, 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, 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. Amendment to Loan Agreement. Subject to the satisfaction of the conditions set
forth in Section 4 hereof, the Loan Agreement is amended as follows:



     (a) The definition of “Applicable Collection Rule Period” in Section 1.1 of the Loan Agreement
is hereby amended by deleting the word “and” at the end of clause (x) thereof, amending and
restated clause (xi) thereof as set forth below and adding a new clause (xii) thereto, as follows:



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     "(xi) 150 days, if such date of determination is in a month during calendar year 2005 and
(xii) if such date of determination is in a month after the end of calendar year 2005, such number
of days as is agreed to by Borrowers and Required Lenders based upon the Projections most recently
delivered to Agent pursuant to Section 6.3(c) and approved by Required Lenders or if Borrowers and
Required Lenders cannot agree, the number of days shall be 150.”



     (b) Section 7.18 of the Loan Agreement is hereby amended and restated as follows:



     7.18 Financial Covenants.



     (a) Fail to maintain the sum of Qualified Cash plus Excess Availability at all times during
each month of at least the applicable amount set forth in the following table for the applicable
month set forth opposite thereto:



	 	 	 
	Applicable Amount	 	Applicable Period
	$30,300,000

	 	January 2004
	$34,400,000

	 	February 2004
	$29,200,000

	 	March 2004
	$21,500,000

	 	April 2004
	$20,000,000

	 	May 2004
	$23,400,000

	 	June 2004
	$20,000,000

	 	July 2004
	$20,000,000

	 	August 2004
	$17,500,000

	 	September 2004
	$20,000,000

	 	October 2004
	$15,000,000

	 	November 2004
	$20,000,000

	 	December 2004
	$20,000,000

	 	January 2005
	$20,000,000

	 	February 2005
	$20,000,000

	 	March 2005






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	Applicable Amount	 	Applicable Period
	$20,000,000

	 	April 2005
	$20,000,000

	 	May 2005
	$20,000,000

	 	June 2005
	$20,000,000

	 	July 2005
	$20,000,000

	 	August 2005
	$20,000,000

	 	September 2005
	$20,000,000

	 	October 2005
	$20,000,000

	 	November 2005
	$20,000,000

	 	December 2005
	Such amount as is agreed to by
Borrowers and Required Lenders based upon
the Projections most recently delivered to
Agent pursuant to Section 6.3(c) and
approved by Required Lenders (but if not
approved by Required Lenders or if
Borrowers and Required Lenders cannot
agree, the applicable amount shall be
$20,000,000)

	 	Each month after December 2005






     (b) Make capital expenditures in any fiscal year in excess of the amount set forth in the
following table for the applicable period:



	 	 	 	 	 	 	 
	 	 	 	 	 	 	Fiscal Year 2006 and each
	Fiscal Year 2004	 	Fiscal Year 2005	 	subsequent Fiscal Year
	$4,000,000

	 	$	10,000,000	 	 	125% of the capital expenditure
plan delivered pursuant to Section
6.3 hereof.






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     3. 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.



     4. 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.



     5. 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.



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     6. 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.



     (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
	 

	 	 
	Name

	 	Thomas E. Powell
	 

	 	 
	Title

	 	Executive Vice President & Chief Financial Officer
	 

	 	 





 









 





	 	 	 
	WELLS FARGO FOOTHILL, INC.,
	 

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

	 	/s/ John Leonard
	 

	 	 
	Name

	 	John Leonard
	 

	 	 
	Title

	 	Vice President