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Continuing Guaranty

This is an actual contract by Midway Games.

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Sectors: Computer Software and Services
Governing Law: Illinois, View Illinois State Laws
Effective Date: February 29, 2008
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Exhibit 10.46 Execution Copy CONTINUING GUARANTY THIS CONTINUING GUARANTY (" Guaranty" ), dated as of February 29, 2008, is executed and delivered by Midway Games Inc., a Delaware corporation (" Parent" ), 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 and Midway Studios Los Angeles Inc., a California corporation (collectively, the " Guarantors" , and each individually, a " Guarantor" ) in favor of National Amusements, Inc., a Maryland corporation (" Lender" ) and in light of the following: FACT ONE : Midway Home Entertainment Inc., a Delaware corporation, and Midway Amusement Games, LLC, a Delaware limited liability company (together, the " Borrowers" and each, individually, a " Borrower" ), the Guarantors as credit parties and Lender are, contemporaneously herewith, entering into the Secured Loan Documents (as hereinafter defined); and FACT TWO : In order to induce Lender to extend loans or other financial accommodations to Borrowers pursuant to the Secured Loan Documents, and in consideration thereof, each Guarantor has agreed to guarantee the Guaranteed Obligations. NOW, THEREFORE, in consideration of the foregoing, each Guarantor hereby agrees, in favor of Lender, as follows: 1. Definitions and Construction . (a) Definitions . The following terms, as used in this Guaranty, shall have the following meanings: " Bankruptcy Code" means The Bankruptcy Reform Act of 1978 (11 U.S.C. Sections 101-1330), as amended or supplemented from time to time, and any successor statute, and any and all rules issued or promulgated in connection therewith. " Guaranteed Obligations" means any and all obligations, indebtedness, or liabilities of any kind or character owed by any Borrower to Lender pursuant to the Secured Loan Documents (but, for the absence of doubt, expressly excluding any obligations under the Unsecured Loan Agreement and the Subordinated Loan Agreement and all documents and instruments entered into by the Parent in connection therewith), including all such obligations, indebtedness, or liabilities, whether for principal, interest (including any interest which, but for the application of the provisions of the Bankruptcy Code, would have accrued on such amounts), premium, reimbursement obligations, fees, costs, expenses (including, attorneys' fees), or indemnity obligations, whether heretofore, now, or hereafter made, incurred, or created, whether


voluntarily or involuntarily made, incurred, or created, whether secured or unsecured (and if secured, regardless of the nature or extent of the security), whether absolute or contingent, liquidated or unliquidated, determined or indeterminate, whether any Borrower is liable individually or jointly with others, and whether recovery is or hereafter becomes barred by any statute of limitations or otherwise becomes unenforceable for any reason whatsoever, including any act or failure to act by Lender. " Secured Loan Agreement" shall mean that certain Loan and Security Agreement dated as of February 29, 2008 by and among Lender, Borrowers and each of the Guarantors, as amended, restated, supplemented or otherwise modified and in effect from time to time. " Secured Loan Documents" shall mean the Secured Loan Agreement, any promissory notes issued by any Borrower in connection therewith, and any documents, instruments, and agreements made or issued by any Guarantor or any Borrower in connection therewith which either now or in the future exist, but expressly excluding the Unsecured Loan Agreement and the Subordinated Loan Agreement and all documents and instruments entered into by the Parent in connection therewith. " Subordinated Loan Agreement" shall mean that certain Unsecured Subordinated Loan Agreement dated as of February 29, 2008 by and among Parent and Lender, as amended, restated, supplemented or otherwise modified and in effect from time to time. " Unsecured Loan Agreement" shall mean that certain Unsecured Loan Agreement dated as of February 29, 2008 by and among Parent and Lender, as amended, restated, supplemented or otherwise modified and in effect from time to time. (b) Construction . Unless the context of this Guaranty clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, and the term " including" is not limiting. The words " hereof" , " herein" , " hereby" , " hereunder" , and other similar terms refer to this Guaranty as a whole and not to any particular provision of this Guaranty. Any reference herein to any of the Secured Loan Documents includes any and all alterations, amendments, extensions, modifications, renewals, or supplements thereto or thereof, as applicable. Neither this Guaranty nor any uncertainty or ambiguity herein shall be construed or resolved against Lender or any Guarantor, whether under any rule of construction or otherwise. On the contrary, this Guaranty has been reviewed by each Guarantor, Lender, and their respective counsel, and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of Lender and each Guarantor. 2. Guaranteed Obligations . Guarantors hereby irrevocably and unconditionally guarantee, on a joint and several basis, to Lender, as and for its own debt, until the Guaranteed Obligations have been Paid in Full (as defined in the Secured Loan Agreement), (a) payment of the Guaranteed Obligations, in each case when and as the same shall become due and payable, whether at maturity, pursuant to a mandatory prepayment requirement, by acceleration, or otherwise; it being the intent of each Guarantor that the guaranty set forth herein shall be a guaranty of payment and not a guaranty of collection; and (b) the punctual and faithful

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performance, keeping, observance, and fulfillment by Borrowers of all of the agreements, conditions, covenants, and obligations of Borrowers contained in the Secured Loan Documents. Notwithstanding any provision of this Guaranty to the contrary, it is intended that this Guaranty, and any Liens granted by each Guarantor to secure the obligations and liabilities arising pursuant to this Guaranty, not constitute a " Fraudulent Conveyance" (as defined below). Consequently, each Guarantor agrees that if this Guaranty, or any Liens securing the obligations and liabilities arising pursuant to this Guaranty, would, but for the application of this sentence, constitute a Fraudulent Conveyance, this Guaranty and each such Lien shall be valid and enforceable only to the maximum extent that would not cause this Guaranty or such Lien to constitute a Fraudulent Conveyance, and this Guaranty shall automatically be deemed to have been amended accordingly at all relevant times. For purposes hereof, " Fraudulent Conveyance" means a fraudulent conveyance or fraudulent transfer under Section 548 of the Bankruptcy Code or a fraudulent conveyance or fraudulent transfer under the provisions of any applicable fraudulent conveyance or fraudulent transfer law or similar law of any state, nation or other governmental unit, as in effect from time to time. 3. Continuing Guaranty . This Guaranty includes Guaranteed Obligations arising under successive transactions continuing, compromising, extending, increasing, modifying, releasing, or renewing the Guaranteed Obligations, changing the interest rate, payment terms, or other terms and conditions thereof, or creating new or additional Guaranteed Obligations after prior Guaranteed Obligations have been satisfied in whole or in part. To the maximum extent permitted by law, each Guarantor hereby waives any right to revoke this Guaranty as to future indebtedness under the Secured Loan Documents. If such a revocation is effective notwithstanding the foregoing waiver, each Guarantor acknowledges and agrees that (a) no such revocation shall be effective until written notice thereof has been received by Lender, (b) no such revocation shall apply to any Guaranteed Obligations in existence on such date (including, any subsequent continuation, extension, or renewal thereof, or change in the interest rate, payment terms, or other terms and conditions thereof), (c) no such revocation shall apply to any Guaranteed Obligations made or created after such date to the extent made or created pursuant to a legally binding commitment of Lenders in existence on the date of such revocation, (d) no payment by any Guarantor, any Borrower, or from any other source, prior to the date of such revocation shall reduce the maximum obligation of any Guarantor hereunder, and (e) any payment by any Borrower or from any source other than any Guarantor, subsequent to the date of such revocation, shall first be applied to that portion of the Guaranteed Obligations as to which the revocation is effective and which are not, therefore, guaranteed hereunder, and to the extent so applied shall not reduce the maximum obligation of any Guarantor hereunder. 4. Performance Under This Guaranty . In the event that any Borrower fails to make any payment of any Guaranteed Obligations on or before the due date thereof, or if any Borrower shall fail to perform, keep, observe, or fulfill any other obligation referred to in clause (b) of Section 2 hereof in the manner provided in the Secured Loan Documents, each Guarantor immediately shall cause such payment to be made or each of such obligations to be performed, kept, observed, or fulfilled. 5. Primary Obligations . This Guaranty is a primary and original obligation of each Guarantor, is not merely the creation of a surety relationship, and is an absolute,

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unconditional, and continuing guaranty of payment and performance which shall remain in full force and effect without respect to future changes in conditions, including any change of law or any invalidity or irregularity with re
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