Document:

exv10w20

 

EXHIBIT 10.20

Trizec Properties, Inc.

2002 LONG TERM INCENTIVE PLAN

(Amended and Restated Effective February 6, 2006)

1.      Purpose of Plan

        The purpose of the Trizec Properties, Inc. 2002 Long Term Incentive Plan (the “Plan”) is to
secure for Trizec Properties, Inc. (the “Company”) and its shareholders the benefits arising from
capital ownership by those directors, officers, key employees and key advisors of the Company and
its Subsidiaries who are and will be responsible for its future growth and continued success. The
Plan provides those individuals the opportunity to acquire a proprietary interest in the Company
through the granting of Awards in the form of Incentive Stock Options, Non-Qualified Stock Options,
Stock Appreciation Rights, Restricted Stock, Restricted Stock Rights, Performance Awards and other
Share-based compensation, as set forth in this Plan.

        The Plan was initially adopted effective May 8, 2002 as the Trizec Properties, Inc. 2002 Stock
Option Plan and is amended and restated herein as the Trizec Properties, Inc. 2002 Long Term
Incentive Plan.

2.      Definitions

“Agreement” means a written agreement or certificate, executed by the Company, and, if so
required by the Committee, by the Participant, which sets forth the terms and conditions of
the Award.

“Award” means any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock
Right, Performance Award and other Share-based compensation award, rights, interests or
options or other securities of the Company granted pursuant to this Plan.

“Board” means the Board of Directors of the Company.

“Code” means the Internal Revenue Code of 1986, as amended and the applicable regulations
and rulings promulgated thereunder.

“Committee” means the Compensation Committee or such other committee appointed from time to
time by, and duly authorized to act on behalf of, the Board to administer this Plan.

“Company” means Trizec Properties, Inc., a Delaware corporation, and includes any successor
corporation thereof.

“Corporate Reorganization” means the plan of arrangement pursuant to Canadian law, pursuant
to which the Company became a publicly traded United States real estate

page 1 of 14

 

investment trust
which owned all of the United States assets owned by TrizecHahn Corporation and its
subsidiaries.

“Date of Grant” means the date on which an Award is granted as set forth in the applicable
Award Agreement.

“Disability” has the meaning set forth in Section 409A of the Code.

“Dividend Equivalent” means a payment with respect to an Award equal to the amount of
dividends paid on a Share.

“Employee” means any person who is an employee of the Company or one of its Subsidiaries,
including employees who are officers or members of the Board.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Fair Market Value” of a Share determined as of any date means (i) means the closing sale
price for a Share (or the closing bid, if no sales were reported), as quoted on the last
trading day immediately preceding the date of such determination, on any stock exchange, or
a national market quotation system including without limitation the Nasdaq National Market,
in which Shares of the Company are listed, as reported in The Wall Street Journal or such
other source as the Committee deems reliable, or (ii) if Shares are not listed on a
securities exchange or traded over the Nasdaq National Market, Fair Market Value will be
determined by such other method as the Committee determines in good faith.

“Former Employee” means an individual who is a former Employee as of the effective date of
the Corporate Reorganization.

“Incentive Stock Option” means an Option awarded to an Employee which is designated as an
incentive stock option and which satisfies all applicable requirements therefor under
Section 422 of the Code.

“Key Advisor” means an individual advisor (not an Employee or a Non-Employee Director) who
performs services for the Company or any of its Subsidiaries and is selected for an Award by
the Committee.

“Non-Employee Director” means a member of the Board who shall qualify as a “non-employee
director” as the term (or similar or successor term) is defined by Rule 16b-3 under the
Exchange Act.

“Non-Qualified Stock Option” means an Option awarded under the Plan which is not an
Incentive Stock Option.

“Option” means a right to purchase a Share under the terms and conditions of an Option
Agreement that is either an Incentive Stock Option or a Non-Qualified Stock Option.

“Option Price” means the price at which a Share may be purchased under an Option, as the
same may be adjusted from time to time in accordance with Section 11 hereof.

“Participant” means an Employee, Former Employee, Non-Employee Director or Key Advisor who
has been granted an Award and participates under the Plan.

page 2 of 14

 

“Performance Award” means a right to receive payment from the Company in cash, subject to
the terms and conditions of the Award pursuant to Section 8.

“Plan” means this Trizec Properties, Inc. 2002 Long Term Incentive Plan, as may be amended
from time to time.

“Restricted Stock” means Shares granted to a Participant which are subject to restrictions
on transferability pursuant to Section 7 of the Plan.

“Restricted Stock Right” means a right to receive payment from the Company in Shares
(including Restricted Stock) subject to the terms and conditions of an Award granted
pursuant to Section 7 of the Plan.

“Share” or “Shares” means the authorized shares of common stock, $.01 par value per share,
of the Company.

“Stock Appreciation Right” or “SAR” means the right to receive a payment from the Company in
cash, Shares, or any combination thereof, equal to the excess of the Fair Market Value of a
Share on the date of exercise over a specified price fixed by the Committee, but subject to
such maximum amounts as the Committee may impose.

“Subsidiary” means a corporation, partnership, limited liability company, trust or any other
form of business entity, domestic or foreign, of which not less than 10% of the equity
interest is held directly or indirectly by the Company or a Subsidiary, whether or not such
corporation, partnership, limited liability company, trust or any other form of business
entity now exists or is hereafter formed, created, organized or acquired by the Company or a
Subsidiary; provided, however, that for the purposes of determining the
Employees who are eligible to receive Awards of Incentive Stock Options, the term
“Subsidiary” shall be limited to a corporation or trust, domestic or foreign, of which not
less than 50% of the equity interest is held directly or indirectly by the Company or one or
more Subsidiaries that is a corporate or trust entity, whether or not such corporation or
trust now exists or is hereafter formed, created, organized or acquired by the Company or a
Subsidiary that is a corporate or trust entity.

          Unless the context requires otherwise, the use of masculine pronouns shall also refer to
feminine pronouns and the use of a singular noun shall also refer to the plural. Unless otherwise
stated, references to articles and sections refer to articles and sections of the Plan.

3.        Administration of the Plan 

          The Plan shall be administered by the Committee (comprised of two or more members, acting
through a majority thereof) who are appointed by the Board. Except as the Board may otherwise
determine in connection with a change in applicable law or other relevant circumstances, a person
may serve on the Committee only if he is a Non-Employee Director and satisfies the requirements of
an “outside director” for purposes of Section 162(m) of the Code and the regulations thereunder.
The Committee shall have the discretionary authority and power to administer the Plan, including,
without limitation, the authority to: (a) determine the individuals to whom Awards are granted,
the type and amounts of Awards to be granted and the time of all such Awards; (b) determine the
terms, conditions and provisions of, and restrictions relating to, each Award granted; (c)
interpret and construe the Plan and all Awards and any certificates, notices or agreements relating
thereto; (d) prescribe, amend and rescind rules, guidelines and regulations relating to the Plan;
(e) determine the content and form of all certificates, notices and agreements relating to Awards;
(f) determine all questions relating to

page 3 of 14

 

Awards under the Plan; (g) maintain accounts, records and
ledgers relating to Awards; (h) maintain records concerning its decisions and proceedings; (i)
employ agents, attorneys, accountants or other persons for such purposes as the Committee considers
necessary or desirable; and (j) do and perform all acts which it may deem necessary or appropriate
for the administration of the Plan and to carry out the objectives of the Plan. Determinations,
interpretations, or other actions made or taken by the Committee pursuant to the provisions of the
Plan shall be final and binding and conclusive for all purposes and upon all persons whomsoever.
To the extent deemed necessary or advisable for purposes of Rule 16b-3 of the Exchange Act or
otherwise, the Board may act as the Committee hereunder. No member of the Committee, or any
officer or employee of the Company acting on behalf of the Committee, shall be personally liable
for any action, determination or interpretation taken or made in good faith with respect to the
Plan, and shall, to the maximum extent permitted by the articles of incorporation and by-laws of
the Company and applicable law, be fully indemnified and protected by the Company with respect to
any such action, determination or interpretation.

4.      Shares Subject to the Plan

4.1 Aggregate Limit. Subject to Section 11, the aggregate number of Shares of which may be
delivered under the Plan pursuant to Awards hereunder shall not exceed 19,000,000 Shares. No
fractional Shares may be issued.

4.2 Reuse of Shares. If and to the extent that an Award under the Plan shall expire or
terminate for any reason without having been exercised in full or without all Shares subject to
such Award having been issued or distributed (including, without limitation, cancellation and
re-grant), the Shares subject thereto which have not become outstanding shall (unless the Plan
shall have terminated) become available for issuance under the Plan. If and to the extent that
Options granted under the Plan are exercised or Shares are distributed to a Participant pursuant to
an Award of Stock Appreciation Rights or Restricted Stock Rights, and Shares are tendered or
withheld for the payment of the Option Price upon Option exercise or to satisfy tax withholding
amounts, then such number of Shares tendered or withheld for the payment of the Option Price or to
satisfy tax withholding amounts shall (unless the Plan shall have terminated) become available for
issuance under the Plan. In any such event, Awards of such Shares shall be upon such terms and
conditions as the Committee may determine.

5.      Stock Options

5.1 Awards of Incentive Stock Options and Non-Qualified Stock Options. The Committee may
grant Awards of Incentive Stock Options to Employees and grant Awards of Non-Qualified Stock
Options to Employees, Non-Employee Directors, and Key Advisors. In no event shall the term of any
Option granted under the Plan exceed ten years from the Date of Grant.

5.2 Terms of Options. The number of Shares subject to each Option, the Option Price, the
expiration date of each Option, the extent to which each Option is exercisable from time to time
during the term of the Option and other terms and conditions for each such Option shall be
determined by the Committee and set forth in the Option Agreement, not inconsistent with the terms
of the Plan. If the Option Agreement does not provide for a term or vesting period, then each
Option shall, subject to any other specific provisions of the Plan, be subject to the following
terms and conditions:

	 	(a)	 	Options issued prior to May 29, 2003 (other than Options issued in connection
with the Corporate Reorganization) (i) shall be exercisable for a term of seven years
from the Date of Grant, and (ii) shall vest one-fourth on the first anniversary of the
Date of Grant and on each of the three subsequent anniversaries of the Date of Grant.

page 4 of 14

 

	 	(b)	 	With respect to Options granted in connection with the Corporate
Reorganization:

	 	(i)	 	The following terms shall be the same as the terms of the
options being replaced: number of Shares underlying each Option, the vesting
schedule and the exercise price, (converted from Canadian dollars into U.S.
dollars using the exchange rate prevailing on the effective date of the
Corporate Reorganization).
	 
	 	(ii)	 	The period during which such Options shall be exercisable shall
expire on the later of (x) the original expiration date of the replaced
options, determined by the date on which they were granted by TrizecHahn
Corporation and (y) 66 months from the effective date of the Corporate
Reorganization; provided, however, that this Section 5.2(b)(ii)
shall not apply to Participants who are Former Employees.
	 
	 	(iii)	 	Except as set forth in this Section 5.2(b) and Section 5.3,
such Options shall be subject to all provisions of the Plan, including without
limitation, Section 5.5.

	 	(c)	 	Options (other than Options granted pursuant to (a) or (b) of this Section 5.2)
shall be exercisable for a term of ten years from the Date of Grant and shall vest
one-third on the first anniversary of the Date of Grant and on each of the two
subsequent anniversaries of the Date of Grant.

5.3 Minimum Option Price. No Option granted pursuant to the Plan shall have an Option
Price that is less than the Fair Market Value of a Share on the Date of Grant; provided,
for any Employee owning stock representing more than 10% of the total combined voting power of all
classes of stock of the Company (or, under Section 424(d) of the Code, is deemed to own stock
representing more than 10% of the total combined voting power of all such classes of stock), the
Option Price for each Incentive Stock Option granted to such Employee shall not be less than 110%
of the Fair Market Value of a Share on the Date of Grant.

5.4 Limit on Option Grants. The maximum number of Shares for which Options may be granted
to any Participant during each fiscal year of the Company shall be 4,000,000, which limit shall be
construed and applied consistent with Section 162(m) of the Code and the regulations thereunder and
subject to adjustment pursuant to Section 11. The aggregate Fair Market Value of Shares with
respect to which an Incentive Stock Option Award may be exercisable for the first time by any
individual during any calendar year under this Plan shall not exceed $100,000.

5.5 Termination of Employment or Services. Except as may otherwise be provided in the
Option Agreement, if the employment of an Employee or the services of a Non-Employee Director or
Key Advisor with the Company and all Subsidiaries shall terminate for any reason (other than death,
Disability or, excepting a Key Advisor and a holder of an Incentive Stock Option, retirement),
outstanding Options that are immediately exercisable at the date of termination may be exercised at
any time prior to the expiration date of the Option or three months after such date of such
termination, whichever first occurs. Except as may otherwise be provided in the Option Agreement,
in the event the employment of an Employee or the services of a Non-Employee Director or Key
Advisor is terminated by reason of death, Disability or (excepting a Key Advisor and a holder of an
Incentive Stock Option) retirement, outstanding Options that are immediately exercisable at the
date of termination may be exercised at any time prior to the expiration date of the Options or one
year after such date of termination, whichever occurs first.

5.6 Exercise of Options. Subject to the provisions of the Plan, an Option may be exercised
from time to time by the delivery of a written notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be exercised, accompanied by full

page 5 of 14

 

 payment
for the Shares. The Option Price upon exercise of any Option shall be payable to the Company in
full either:

	 	(a)	 	in cash or its equivalent (including, for this purpose, the proceeds from a
cashless exercise through a broker pursuant to Regulation T as promulgated by the
Federal Reserve Board, or other borrowed funds as permitted by the Option Agreement and
applicable law);
	 
	 	(b)	 	by tendering previously-acquired Shares (including, for this purpose, Shares
deemed tendered by affirmation of ownership), that (i) have an aggregate Fair Market
Value at the time of exercise equal to the total Option Price and (ii) if acquired from
the Company, have been owned by the Participant for at least six months prior to the
date of exercise (unless otherwise permitted by the Committee);
	 
	 	(c)	 	by any other means which the Committee determines to be consistent with the
Plan’s purpose and applicable law; or
	 
	 	(d)	 	by a combination of (a), (b), and (c).

As soon as practicable after receipt of each notice and full payment, the Company shall deliver to
the Participant a certificate or certificates, or other evidence of ownership, representing
acquired Shares.

6.      Stock Appreciation Rights

6.1 Awards of Stock Appreciation Rights. The Committee may grant Stock Appreciation Rights
to Employees, Non-Employee Directors and Key Advisors at such time or times as shall be determined
by the Committee and shall be subject to such terms and conditions as the Committee may decide, not
inconsistent with the terms of the Plan. SARs may be granted in tandem with or separately from an
Award of Options. An Award of an SAR shall be made pursuant to an SAR Agreement containing such
provisions not inconsistent with the Plan as the Committee shall determine. No SARs may be granted
in connection with an Incentive Stock Option in a manner that disqualifies the Incentive Stock
Option under Section 422 of the Code.

6.2 Exercise of SARs. SARs may be exercised at such times and subject to such conditions,
including the performance of a minimum period of continuous employment or services with the Company
or its Subsidiaries, as the Committee shall determine. SARs that are granted in tandem with an
Option may be exercised only upon the surrender of the right to exercise an equivalent number of
Shares under the related Option and may be exercised only with respect to the Shares for which the
related Option is then exercisable.

6.3 Payment of SAR Amount. Upon the exercise of an SAR, the Participant shall be entitled
to receive payment of an amount determined by multiplying:

	 	(a)	 	any increase in the Fair Market Value of a Share at the date of exercise over
the Fair Market Value of a Share at the Date of Grant, by
	 
	 	(b)	 	the number of Shares with respect to which the SAR is exercised;

provided, at the Date of Grant, the Committee may establish, in its sole discretion, a
maximum amount per Share that is payable upon the exercise of an SAR.

6.4 Method of Payment. Payment of an SAR shall be made in cash, Shares or any combination
thereof, as the Committee shall determine at the Date of Grant, the time of payment, or any other
time.

page 6 of 14

 

6.5 Termination. Except as may otherwise be provided in the SAR Agreement, if the
employment of an Employee or the services of a Non-Employee Director or Key Advisor with the
Company and all Subsidiaries shall terminate for any reason (other than death, Disability or,
excepting a Key Advisor, retirement), any outstanding SARs which were immediately exercisable at
the date of termination, may be exercised at any time prior to the expiration date of the SAR or
three months after such date of such termination, whichever first occurs. Except as may otherwise
be provided in the SAR Agreement, in the event the employment of an Employee or the services of a
Non-Employee Director or Key Advisor is terminated by reason of death, Disability or (other than a
Key Advisor) retirement, any outstanding SARs which are immediately exercisable at the date of
termination may be exercised at any time prior to the expiration date of the SARs or one year after
such date of termination, whichever occurs first.

7.      Restricted Stock Awards; Restricted Stock Rights

7.1 Eligibility. The Committee may grant Awards of Restricted Stock or Restricted Stock
Rights to Employees and Non-Employee Directors of the Company at such time or times as shall be
determined by the Committee. An Award of a Restricted Stock or Restricted Stock Rights shall be
made pursuant to an Agreement containing such provisions not inconsistent with the Plan as the
Committee shall determine.

7.2 Awards. Awards of Restricted Stock or Restricted Stock Rights shall be subject to a
vesting period of not less than three years of continuous employment with the Company or its
Subsidiaries, or service to the Company as a Non-Employee Director, as determined by the Committee
and shall be subject to such additional restrictions and terms as the Committee deems appropriate.
The Committee may, but need not, establish performance goals to be achieved within such vesting
period as may be selected by it, using such measures of individual performance or the performance
of the Company as the Committee determines. A Participant shall have all of the rights of a
shareholder with respect to Shares of Restricted Stock awarded in accordance with this Section 7.
A Participant who is awarded Restricted Stock Rights shall have no rights of a shareholder with
respect to the Shares underlying the Award, except the right to Dividend Equivalents as set forth
in Section 7.5.

7.3 Lapse of Restrictions and Distribution.

	 	(a)	 	Upon satisfaction of vesting and other performance conditions set forth in the
Award of Restricted Stock, the restrictions so satisfied shall lapse as provided in the
Award. The restrictions may lapse separately or in combination at such times, under
such circumstances, in such installments, upon the satisfaction of performance goals or
otherwise, as set forth in the Award.
	 
	 	(b)	 	Upon satisfaction of vesting and other performance conditions set forth in the
Award of Restricted Stock Rights, the Participant shall receive a distribution, without
payment on his part, of the number of Shares satisfying such restrictions, subject to
such further restrictions as may be set forth in the Award.

7.4 Forfeitures. Except as provided herein, or except as otherwise determined by the
Committee, if an Employee’s employment or services of a Non-Employee Director with the Company and
all Subsidiaries is terminated for any reason (other than by reason of death, Disability or
retirement) prior to satisfaction of the vesting or performance restrictions, then such Restricted
Stock and Restricted Stock Rights failing to satisfy such restrictions shall be forfeited, together
with any accrued undistributed dividends. If an Employee’s employment or services of a
Non-Employee Director is terminated by reason of death, Disability or retirement, then all
restrictions with respect to all Restricted Stock and Restricted Stock Rights awarded to such
Employee or Non-Employee Director shall lapse and the Shares underlying the Award shall be

page 7 of 14

 

distributed to such individual or, in the event of such individual’s death, to the person or
persons entitled thereto by will or the laws of descent and distribution.

7.5 Dividends; Dividend Equivalents. On each date on which the Company pays a dividend
with respect to its Shares, (i) each Participant who holds Restricted Stock shall be entitled to
receive a dividend with respect to each Share and (ii) each Participant who holds a Restricted
Stock Right shall be entitled to receive a Dividend Equivalent with respect to each Restricted
Stock Right. Dividends and Dividend Equivalents shall be paid at such time or times, and may be
subject to such terms and conditions, as the Committee shall determine.

8.      Performance Awards 

8.1 Eligibility. The Committee may grant Performance Awards to officers and other key
Employees at such time or times as shall be determined by the Committee, and which may be awarded
in connection with an Award of Restricted Stock or Restricted Stock Rights. A Performance Award
shall be made pursuant to an Agreement containing such provisions not inconsistent with the Plan as
the Committee shall determine.

8.2 Awards. Each such Performance Award shall be earned based on the satisfaction of
performance goals during an applicable performance period, shall be denominated in performance
units, each such unit having a value equal to the Fair Market Value of a share on the Date of
Grant, in an aggregate amount valued on the Date of Grant not exceeding one hundred percent (100%)
of the Employee’s base salary, and shall be based on performance criteria selected from among the
following factors, or any combination of the following, applicable to the Company as a whole or to
any individual subsidiary as the Committee deems appropriate: return on equity, return on common
equity funds from operations, adjusted funds from operations, return on working capital, total
shareholder return, return on assets, return on investment, revenues, share price, earnings per
share or any similar earnings-based financial measure determined by the Committee. The Committee
may select the goals specified from Award to Award, which need not be the same for each Employee.
For each performance period, the Committee shall also establish appropriate criteria to determine
the basis upon which a Performance Award shall be made under the Plan with respect to that period.
The value of each such performance unit shall be increased by an amount equal to the dividend paid
from time to time on a Share representing each such performance unit which shall be deemed
reinvested in additional such performance units at the Fair Market Value of a Share on such date.

8.3 Payment and Amount. Upon the satisfaction of a performance goal or goals for a
performance period (which may include the satisfaction of any applicable performance restriction
set forth in an Award of Restricted Stock or Restricted Stock Rights), the Employee shall receive a
payment in cash, stock, or a combination of cash and stock, of the amount due under the Performance
Award, not exceeding an amount equal to the value of three times the number of performance units
credited to the Employee (including deemed reinvestment of dividends) at the end of the performance
period pursuant to the Award, each such performance unit having a value equal to the Fair Market
Value of a Share on the payment date.

8.4 Forfeiture. Except as determined by the Committee, if an Employee’s employment with
the Company and its Subsidiaries is terminated for any reason (other than by reason of the
Employee’s death, Disability or retirement) prior to the payment of any portion of a Performance
Award, the Employee shall forfeit all rights to receive any portion of the Performance Award
remaining unpaid at such termination. If an Employee’s employment is terminated by reason of the
Employee’s death, Disability or retirement, the Employee or, in the event of the Employee’s death,
the person or persons entitled thereto by will or the laws of descent and distribution, shall
receive payment of all Performance Awards for which the performance goals set forth under the
Performance Award (other than the lapse of time) have been met.

page 8 of 14

 

9.      Other Share-Based Awards

        The Committee may grant to Employees, non-Employee Directors and Key Advisors other Awards
that are valued in whole or in part by reference to or are otherwise based on Shares, consistent
with the terms of the Plan. Awards may include, without limitation, the grant of Shares based on
certain conditions, the payment of cash based on the performance of the Common Stock, and the
payment of Shares in lieu of cash under other Company incentive or bonus programs. Payment under
or settlement of any such Awards shall be made in such manner and at such times as the Committee
may determine.

10.      Vesting in Certain Events 

10.1 Special Acceleration. The Committee may accelerate the exercisability of any Option
or Stock Appreciation Right or waive any restrictions or performance goals (or both) with respect
to Awards of Restricted Stock, Restricted Stock Rights, Performance Awards and other Share-based
Awards, in whole or in part at any time.

10.2 Acceleration Upon a Change in Control. Any other provision of the Plan to the
contrary, upon the occurrence of a Change in Control (as hereinafter defined): (a) each
outstanding Option or SAR shall become immediately vested and exercisable with respect to the full
number of Shares subject to such Option or SAR; and (b) all restrictions shall lapse, and all
performance goals shall be deemed satisfied, with respect to all Awards of Restricted Stock and
Restricted Stock Rights and Performance Awards. In addition, the Committee in its discretion may,
but shall not be required to, provide for accelerated vesting of Awards upon the occurrence of
other events, including those relating to tender offers, threatened Changes in Control or other
similar circumstances. In addition, in the case of a Change in Control relating to a merger or
consolidation in which the Company is not the surviving entity and in which all the holders of
outstanding Shares shall receive all or substantially all the merger or consolidation consideration
in cash (or any other transaction with respect to which the Committee determines that the
assumption or other continuation of the Options would not be appropriate), the Committee may, but
shall not be obligated to, provide that any or all outstanding Options shall be cancelled upon, or
immediately prior to, the consummation of the relevant transaction, in exchange for a cash payment
to the relevant Participant with respect to each outstanding Option equal to the product of (x) the
number of Shares subject to such Option multiplied by (y) the excess, if any, of the Transaction
Value (as defined below) over the Option Price of such Option. As used herein, “Transaction Value”
means the value of the per Share consideration to be paid in connection with the consummation of
the relevant transaction, determined by calculating the sum of (i) the cash and (ii) the fair
market value (as determined in good faith by the Committee) of any non-cash consideration
comprising such per Share consideration.

10.3 Definition of Change in Control. A “Change in Control” shall be deemed to have
occurred if the conditions set forth in any one of the following paragraphs shall have been
satisfied:

	 	(a)	 	any person (as defined in Section 3(a)(9) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), as such term is modified in Sections 13(d) and
14(d) of the Exchange Act), other than (i) any employee plan established by the Company
or any Subsidiary, (ii) the Company or any of the Company’s affiliates (as defined in
Rule 12b-2 promulgated under the Exchange Act), including any PM Affiliate (as
hereinafter defined), (iii) an underwriter temporarily holding securities pursuant to
an offering of such securities, or (iv) a corporation owned, directly or indirectly, by
stockholders of the Company in substantially the same proportions as their ownership of
the Company, is or becomes the beneficial owner, directly or indirectly, of securities
of the Company (not including in the

page 9 of 14

 

	 	 	 	securities beneficially owned by such person any
securities acquired directly from the Company or its affiliates other than in
connection with the acquisition by the Company or its affiliates of a business)
representing 20% or more of either the then outstanding Shares or the combined voting
power of the Company’s then outstanding voting securities; provided,
however, that, notwithstanding the foregoing, a Change in Control shall not be
deemed to occur solely because any person becomes a beneficial owner of more than 20%
of the then outstanding Shares or combined voting power of the Company’s then
outstanding voting securities as the result of the acquisition of Shares by the Company
(a “Company Share Repurchase”); however if such person acquires any additional Shares
following such Company Share Repurchase, such acquisition of additional Shares shall
constitute a Change in Control unless, after giving effect to such acquisition, such
person will not beneficially own 20% or more of the then outstanding Shares or combined
voting power of the Company’s then outstanding voting securities; and provided,
further, that no Change in Control shall be deemed to occur hereunder so long as the
Company remains a PM Affiliate; 

	 	(b)	 	a change in the composition of the Board of the Company (the “Board”) such that
individuals who, as of May 29, 2003, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a member of the Board subsequent to the
May 29, 2003 whose election, or nomination for election by the Company’s stockholders,
was approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (including by prior application of this proviso) shall be considered as
though such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a result of
an actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by or on
behalf of a person other than the Board; 

	 
	 	(c)	 	the stockholders of the Company approve a merger or consolidation of the
Company with any other corporation or approve the issuance of voting securities in
connection with a merger or consolidation of the Company (or any direct or indirect
subsidiary of the Company) pursuant to applicable stock exchange requirements, other
than (i) a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the surviving
entity or any parent thereof), in combination with the ownership of any trustee or
other fiduciary holding securities under an employee benefit plan of the Company or any
Subsidiary, at least 50.1% of the combined voting power of the voting securities of the
Company or such surviving entity or any parent thereof outstanding immediately after
such merger or consolidation, (ii) a merger or consolidation with or into a PM
Affiliate or (iii) a merger or consolidation effected to implement a recapitalization
of the Company (or similar transaction) in which no person (determined pursuant to
clause (a) above) is or becomes the beneficial owner, directly or indirectly, of
securities of the Company (not including in the securities beneficially owned by such
person any securities acquired directly from the Company or its affiliates other than
in connection with the acquisition by the Company or its affiliates of a business)
representing 20% or more of either the then outstanding shares of Stock or the combined
voting power of the Company’s then outstanding voting securities;

page 10 of 14

 

	 	 	 	provided, however
that if, at any time on or prior to approval by stockholders of a merger or
consolidation, the Committee determines that the consummation of such merger or
consolidation is subject (whether for regulatory reasons or otherwise) to significant
uncertainty, the Committee may provide that a Change in Control that would otherwise be
deemed to occur hereunder upon such stockholder approval shall instead occur only upon
consummation of the relevant merger or consolidation (within a specified time period
following stockholder approval, if appropriate) or upon the occurrence of any other
event or events occurring prior to such consummation specified by the Committee; or 

	 	 	 	

	 
	 	(d)	 	the stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets, other than a sale or disposition by the
Company of all or substantially all of the Company’s assets to (i) a PM Affiliate, or
(ii) an entity, at least 50.1% of the combined voting power of the voting securities of
which are owned by persons in substantially the same proportions as their ownership of
the Company immediately prior to such sale.

Notwithstanding the foregoing, (i) no “Change in Control” shall be deemed to have occurred if there
is consummated any transaction or series of integrated transactions immediately following which the
record holders of Stock immediately prior to such transaction or series of transactions continue to
have substantially the same proportionate ownership in an entity which owns substantially all of
the assets of the Company immediately prior to such transaction or series of transactions and (ii)
with respect to an Award that is subject to Section 409A of the Code and payment or settlement of
the Award is to be accelerated in connection with the Change in Control, no event(s) set forth in
clauses (a), (b), (c) or (d) above shall constitute a Change in Control for purposes of the Plan
and any Agreement unless such event(s) also constitutes a “change in the ownership”, “change in the
effective control” or a “change in the ownership of a substantial portion of the assets” of the
Company as defined under Section 409A of the Code; provided, however, that clause
(ii) will only apply to the extent required by Section 409A of the Code.

As used in this Section 10.3, the term “PM Affiliates” means Peter Munk, the Company and any entity
or person affiliated with Peter Munk; provided, however, that Peter Munk and such
affiliates shall cease to be deemed PM Affiliates if, at any time following May 29, 2003, they
cease to have continually possessed control (within the meaning of Rule 405 under Regulation C
promulgated under the Securities Act of 1933, as amended) over the Company or any successor
thereto. In the event that Peter Munk and his affiliates cease to continuously possess control
over the Company (and thereby cease to constitute “PM Affiliates” hereunder), including, without
limitation, by reason of Mr. Munk’s death (such cessation of continuous control being hereinafter
referred to as a “PM Event”), (x) such PM Event shall not result automatically in a Change in
Control hereunder, even if any person (including, without limitation, Peter Munk or his affiliates
or any transferee of or successor to any of them) beneficially owns 20% of the then outstanding
Shares or combined voting power of the Company’s then outstanding securities, and (y) the Committee
(A) promptly shall make a determination whether to accelerate Awards upon or in connection with
such PM Event, taking into consideration, among other things, whether any person beneficially owns
more than 20% of the then outstanding Shares or combined voting power of the Company’s then
outstanding securities or otherwise possesses actual or potential control over the Company, and (B)
if it determines not to accelerate Awards upon or in connection with such PM Event, shall establish
rules and guidelines to determine the circumstances following a PM Event when a Change in Control
will be deemed to occur.

page 11 of 14

 

11.      Certain Adjustments

        Notwithstanding any provision of the Plan or any Agreement to the contrary, in the event of
any change in the outstanding Shares by reason of a stock dividend or stock split,
recapitalization, reorganization, merger, consolidation, combination, exchange of shares or
otherwise or any other event that may dilute or enlarge the rights of Participants with respect to
(i) the number of Shares covered by each outstanding Award of Options, SARs, Restricted Stock,
Restricted Stock Rights, Performance Awards or other Share-based Awards under the Plan or (ii) the
Option Prices (and SAR base value) in respect thereof, then, subject to Section 409A of the Code,
if applicable, (a) such proportionate adjustments or substitutions shall be made as may be
necessary to the aggregate limit set forth at Section 4.1 on Awards made under the Plan to prevent
dilution or enlargement of the rights of Participants with respect to any of the matters described
above, and (b) the Committee may make such other adjustments or substitutions, consistent with the
foregoing, as it deems appropriate in its sole discretion.

12.      Transferability

12.1 Restricted Stock. Shares subject to Restricted Stock Awards shall not be sold,
assigned, pledged or otherwise transferred, voluntarily or involuntarily, by the Participant, while
they are subject to the restrictions described in Section 7.2.

12.2 Options, Stock Appreciation Rights, Restricted Stock Rights, Performance Awards and Other
Share-Based Awards. Options, Stock Appreciation Rights, Restricted Stock Rights, Performance
Awards and other Share-based Awards granted under the Plan are personal to the Participant and no
such Award acquired directly or indirectly under the Plan may be transferred, assigned, pledged or
hypothecated (whether by operation of law or otherwise), except as provided by will, the applicable
laws of descent and distribution or as required by law, and no such Award shall be subject to
execution, attachment or similar process. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of such an Award not specifically permitted herein shall be
void. An Option or Stock Appreciation Right may be exercised only by the Participant during his
lifetime and, following the Participant’s death, may be exercised pursuant to Section 5 and Section
6, only by the legal representative of the Participant’s estate or by the person who acquires the
right to exercise such Award on his death by bequest or inheritance, unless the Committee
determines otherwise.

13.      Amendment or Termination of The Plan 

        Subject to applicable laws, policies, rules and regulations, the Board or the Committee may,
at any time and from time to time, amend, modify or terminate the Plan without shareholder
approval; provided, however that no amendment to increase the aggregate number of
Shares under Section 4.1 that may be Awarded under the Plan shall be effective until confirmed by
vote of the shareholders of the Company as may be required under applicable stock exchange rules;
and provided further that no termination, amendment, modification or suspension of
the Plan shall materially and adversely alter or impair the rights of a Participant in any Award
previously made under the Plan without the consent of the holder thereof.

14.      Section 409A of the Code.

        Notwithstanding any contrary provision in the Plan or an Agreement, if any provision of the
Plan or an Agreement contravenes Section 409A of the Code or could cause an Award to be subject to
the interest or penalties under Section 409A of the Code, such provision of the Plan or any Award
Agreement may be modified by the Company without consent of the Participant to maintain, to the
maximum extent practicable, the original intent of the applicable provision without violating the
provisions of Section 409A of the Code. Moreover, any discretionary authority that the Committee
may have pursuant to the Plan shall not be applicable to an Award

page 12 of 14

 

that is subject to Section 409A
of the Code, to the extent such discretionary authority will contravene Section 409A of the Code.
Nothing in this Section 14 will obligate the Company to make such modifications.

15.      Taxes 

        The Company shall have the authority to withhold, or require a Participant to remit to the
Company an amount sufficient to satisfy federal, state, and local withholding tax requirements on
any Award under the Plan, and the Company may defer payment of cash or issuance of Shares until
such requirements are satisfied. Unless otherwise determined by the Committee, a Participant may
elect, subject to such conditions as the Committee may require, to have Shares otherwise
deliverable under the Plan withheld by the Company and having a Fair Market Value sufficient to
satisfy all or part of such requirements or, if so determined by the Committee, the Participant’s
estimated total federal, state, and local tax obligation associated with the transaction.

16.      Rights as a Shareholder 

        The holder of an Option, SAR or Restricted Stock Rights shall not have any rights as a
shareholder of the Company with respect to any of the Shares covered by such Option, SAR or
Restricted Stock Rights until the issuance of Shares upon the exercise of such Option or SAR or the
satisfaction of vesting and performance conditions set forth in such Restricted Stock Rights Award.

17.      No Rights to Awards

        No Employee, Non-Employee Director or Key Advisor shall have any claim to be granted any Award
under the Plan, and neither the Company nor shall the Committee be obligated to treat eligible
Employees, Non-Employee Directors or Key Advisors uniformly.

18.      Unfunded Plan

        Insofar as the Plan provides for Awards of cash, Shares, rights or a combination thereof, the
Plan shall be unfunded. The Company may maintain bookkeeping accounts with respect to Participants
who are entitled to Awards under the Plan, but such accounts shall be used merely for
administrative convenience. The Company shall not be required to segregate any assets that may at
any time be represented by interests in Awards nor shall the Plan be construed as providing for any
such segregation. None of the Committee, the Company or the Board shall be deemed to be a trustee
of any cash, Shares or rights to Awards granted under the Plan. Any liability of the Company to
any Participant with respect to an Award or any rights thereunder shall be based solely upon any
contractual obligations that may be created by the Plan and any Agreement, and no obligation of the
Company under the Plan shall be deemed to be secured by any pledge or other encumbrance on any
property of the Company.

19.      Compliance With Applicable Law and Listing Requirements

        The Plan is intended to comply with Section 16 of the Exchange Act, the Sarbanes-Oxley Act of
2002, and other applicable law and listing requirements of any exchange or other market in which
Shares may be traded, and the Committee shall interpret and administer the provisions of the Plan
or any Award or Agreement under the Plan in a manner consistent therewith. To the extent any
provision of the Plan or Agreement or any action by the Committee fails to so comply, it shall be
deemed null and void. The Committee may, at any time, impose such conditions and limitations to
the exercise of an Option, Stock Appreciation Right or other Award as the Committee deems necessary
or desirable in order to comply with the requirements of Sections 16(a) and 16(b) of the Exchange
Act, the Sarbanes-Oxley Act of 2002, and the rules

page 13 of 14

 

and regulations thereunder, or to obtain
exemption therefrom. Moreover, in the event the Plan or an Award or Agreement under the Plan does
not include a provision required by Rule 16b-3 to be stated therein, such provision (other than one
relating to eligibility requirements, or the price and amount of Options) shall be deemed
automatically to be incorporated by reference into the Plan or such Award or Agreement insofar as
Participants subject to Section 16 of the Exchange Act are concerned. No Award requiring the
delivery of Shares shall be exercised or paid out unless at the time of such exercise or payout (i)
such Shares are covered by a currently effective registration statement filed under the Securities
Act of 1933, as amended, if one is then required, or in the sole opinion of the Company and its
counsel such issuance of Shares is otherwise exempt from the registration requirements of such act,
and (ii) such Shares are listed on any securities exchange (or traded on the Nasdaq National Market
or other national market quotation system) to the extent that shares of common stock of the
Company, generally, are so listed or traded.

20.      Avoidance of Liability 

        Notwithstanding anything contained in the Plan or any Agreement to the contrary, if the
consummation of any transaction under the Plan would result in the possible imposition of liability
on a Participant pursuant to Section 16(b) of the Exchange Act, the Committee shall have the right,
in its sole discretion, but shall not be obligated, to defer such transaction to the extent
necessary to avoid such liability, but in no event for a period in excess of 180 days.

21.      Shareholder Approval; Term of Plan 

        This amended and restated Plan shall become effective upon its approval by the shareholders of
the Company. The Plan shall expire May 29, 2013, no Awards may be granted after that date, and
Awards granted before that date shall remain outstanding in accordance with their terms.

22.      No Right to Employment 

        Nothing in the Plan or in any Agreement, nor the grant of any Award, shall confer upon any
individual any right to continue in the employ of the Company or to be entitled to any remuneration
or benefits not set forth in the Plan or such Agreement or interfere with or limit the right of the
Company to modify the terms of, or terminate, such individual’s employment at any time.

23.      Severability 

        In the event that any provision of the Plan shall be held illegal or invalid for any reason,
such illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall
be construed and enforced as if the illegal or invalid provision had not been included.

24.      Governing Law

      The Plan shall be governed by the laws of the State of Delaware (determined without regard to
the choice of law provisions thereof). Each Participant shall, by accepting an Award, consent to
the jurisdiction and venue of the federal and state courts located in Chicago, Illinois.

25.      Impact on Other Plans

        This Plan shall not be deemed to provide compensation to Employees for purposes of computing
benefits under any benefit plan of the Company and shall not affect any benefits now or
subsequently in effect under which the availability or amount of benefits is related to the level
of compensation.

page 14 of 14exv10w88

 

Exhibit 10.88

CONSENT AND FOURTEENTH AMENDMENT TO

LOAN AND SECURITY AGREEMENT

          THIS CONSENT AND FOURTEENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is
entered into as of October 3, 2005, 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 Loan
and Security Agreement dated as of March 3, 2004 (as amended, modified or supplemented from time to
time, the “Loan Agreement”);

          WHEREAS, Borrowers have advised Agent and Lenders that Parent desires to acquire all of the
equity of The Pitbull Syndicate Limited, an English limited company (“Pitbull”), pursuant
to the terms of an Agreement (the “Acquisition Agreement”), among Parent and the
shareholders of Pitbull in substantially the form of the draft agreement delivered to Agent dated
September 30, 2005 (the “Pitbull Acquisition”);

          WHEREAS, Borrowers and U.S. Credit Parties desire for Agent and Required Lenders to consent to
the Pitbull Acquisition as set forth 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. Consent. Subject to the satisfaction of the conditions set forth in Section 5
below, Agent and Required Lenders hereby consent to the Pitbull Acquisition in

 

 

accordance with the terms of the Acquisition Agreement; provided that (i) the closing of the
Pitbull Acquisition is completed within five (5) days of the date hereof and (ii) the net amount of
Investments in Pitbull shall not at any time exceed the applicable amounts set forth in the
definition of Permitted Investment in Section 1.1 of the Loan Agreement. This is a limited consent
and shall not be deemed to constitute a waiver of, or consent to, any other future breach of the
Loan Agreement (as amended by this Amendment).

          3. Amendment to Loan Agreement. Subject to the satisfaction of the conditions set
forth in Section 5 hereof, the Loan Agreement is amended as follows:

          (a) The definition of “Bankruptcy Code” in Section 1.1 of the Loan Agreement is hereby amended
and restated as follows:

     “Bankruptcy Code” means title 11 of the United States Code, as
applicable, and as in effect from time to time, and, in respect of UK Company and
Pitbull, UK Insolvency Laws, in respect of German Company, German Insolvency Laws,
in respect of Japan Company, Japan Insolvency Laws and in respect of Australia
Companies, Australian Insolvency Laws.

          (b) The definition of “Loan Document” in Section 1.1 of the Loan Agreement is amended by
replacing the words “a Company, UK Company, German Company Japan Company or an Australian Company”
with “a Company or a Foreign Company”.

          (c) The definition of “Permitted Investment” in Section 1.1 of the Loan Agreement is hereby
amended and restated as follows:

     “Permitted Investments” means (a) Investments in cash and Cash Equivalents, (b)
Investments in negotiable instruments for collection, (c) advances made in connection with
purchases of goods or services in the ordinary course of business, (d) Investments received
in settlement of amounts due to a Company effected in the ordinary course of business or
owing to a Company as a result of Insolvency Proceedings involving an Account Debtor or upon
the foreclosure or enforcement of any Lien in favor of a Company, (e) acquisition of Stock
of a Target in connection with a Permitted Acquisition, (f) capital contribution (not to
exceed $1,000 in cash plus common stock of Parent sufficient to pay purchase price of the
applicable Permitted Acquisition) to a wholly owned Subsidiary of Midway formed to acquire
the Stock of a Target (so long as such wholly owned Subsidiary is merged into such Target
upon consummation of such Permitted Acquisition), (g) loans among the Companies, (h)
Investments in UK Company so long as the net additional amount of such Investments made from
and after the date hereof does not exceed $3,350,000 at any time during the period from the
Closing Date through March 31, 2005, or $750,000 at any time thereafter, (i) Investments in
German Company so long as the net additional amount of such Investments made does not exceed
$2,500,000 at any time, (j) Investments in Japan Company so long as the net additional
amount of such Investments made does not exceed $500,000 in any fiscal year, (k) Investments
in

-2-

 

Australia Companies equal to the purchase consideration for the Australia Transactions
plus additional Investments so long as the net additional amount of such additional
Investments made does not exceed (i) an amount equal to $1,500,000 plus the ordinary course
expenses of the Australia Companies at any time prior to December 31, 2005 and (ii) an
amount equal to the ordinary course expenses of the Australia Companies at any time on or
after December 31, 2005, (l) Investments in Pitbull so long as the net amount of such
Investments made does not exceed (i) an amount equal to $1,500,000 plus the ordinary course
expenses of Pitbull at any time prior to December 31, 2005 and (ii) an amount equal to the
ordinary course expenses of Pitbull at any time on or after December 31, 2005 and (m)
Investments in the Investment Account.

          (d) The following definitions are added to Section 1.1 of the Loan Agreement, each in their
appropriate alphabetical order:

     “Foreign Companies” means collectively, the Australia Companies, UK
Company, German Company, Japan Company and Pitbull.

     “Pitbull” means The Pitbull Syndicate Limited, an English limited
liability private company, registered with company number 3292274

          (e) The preface to Article 7 of the Loan Agreement is hereby amended and restated as follows:

     Each Company covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, Companies will not, and will not
permit any Foreign Company to, do any of the following:

          (f) Section 7.1(d) of the Loan Agreement shall be amended as follows:

     (i) The reference in clause (i) to “UK Company’s, German Company’s, Japan Company’s,
Australia Companies” shall be replaced with “any Foreign Company’s”;

     (ii) Both references in clause (ii) to “UK Company, German Company, Japan Company,
Australia Companies” shall be replaced with “Foreign Companies”; and

     (iii) The reference in clause (iii) to “UK Company, German Company, Japan Company,
Australia Companies” shall be replaced with “the applicable Foreign Company”.

          (g) Section 7.4 of the Loan Agreement shall be amended by replacing the reference to “UK
Company, German Company, Japan Company, Australia Companies” with “any Foreign Company”.

          (h) Section 7.5 of the Loan Agreement shall be amended and restated as follows:

-3-

 

     Change any Foreign Company’s name or any Company’s name, FEIN, organizational
identification number, state or nation of organization, or organizational identity;
provided, however, that (a) a Company (other than German Company)
may change its name upon at least 30 days prior written notice by Administrative
Borrower to Agent of such change and so long as, at the time of such written
notification, such Company provides any financing statements necessary to perfect
and continue perfected Agent’s Liens and (b) German Company may change its name upon
prior written notice by Administrative Borrower to Agent of such change.

          (i) Section 7.10 of the Loan Agreement shall be amended by replacing the reference to “UK
Company, German Company, Japan Company, Australia Companies” with “a Foreign Company” and replacing
the reference to “UK Company’s, German Company’s, Japan Company’s, Australia Companies’” and “any
Foreign Company’s”.

          (j) Section 7.11 of the Loan Agreement shall be amended by replacing both references to “UK
Company’s, German Company’s, Japan Company’s, Australia Companies’” with “ Foreign Companies’” .

          (k) Section 7.13 of the Loan Agreement shall be amended by replacing all references to “UK
Company, German Company, Japan Company, Australia Companies” with “any Foreign Company”.

          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.

          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.

-4-

 

          6. Additional Event of Default. An Event of Default shall exist if Borrowers fail to
deliver to Agent a perfected pledge of the equity interests of Pitbull, effective under United
Kingdom law, within 60 days of the date hereof, in form and substance satisfactory to Agent.

          7. 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.

          8. 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,

-5-

 

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.

-6-

 

          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 	EVP-Finance, CFO
	 

	 	 	 	 	 

Signature page to Consent and Fourteenth Amendment to Loan and Security Agreement

 

 

	 	 	 	 	 	 	 
	 	 	WELLS FARGO FOOTHILL, INC.,  
	 	 	a California corporation, as Agent, as UK Security Trustee and as a Lender
	 
	 	 	 	 	 	 
	 

	 	By
	 	John Leonard	 	 
	 

	 	 	 	 	 	 
	 	 	Title Vice President
	 

	 	 	 	 	 	 

Signature page to Consent and Fourteenth Amendment to Loan and Security Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}]]