- Current report filing (8-K)
December 04 2008 - 5:26PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported):
November 28,
2008
MIDWAY GAMES INC.
(Exact Name of Registrant as Specified in Charter)
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Delaware
(State or Other Jurisdiction of
Incorporation)
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1-12367
(Commission File Number)
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22-2906244
(I.R.S. Employer Identification
Number)
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2704 West Roscoe Street, Chicago, Illinois 60618
(Address of Principal Executive Offices) (Zip Code)
Registrants
telephone number, including area code:
(773) 961-2222
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (
see
General
Instruction A.2. below):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement.
The change in control transaction described below in Item 5.01 of this Current Report on Form 8-K
and incorporated herein by reference (the Transaction), has certain consequences with respect to
the Registrants 6.0% Convertible Senior Notes due 2025 (the 6.0% Notes) and 7.125% Convertible
Senior Notes due 2026 (the 7.125% Notes, and together, the Notes). Specifically, the
Transaction constitutes a Fundamental Change for purposes of Section 3.09 of each of the Indenture,
dated as of September 19, 2005, between the Registrant and Wells
Fargo Bank, National Association (the Trustee),
relating to the 6.0% Notes, and the Indenture, dated as of May 30, 2006, between the Registrant and
Wells Fargo Bank, National Association, relating to the 7.125% Notes (together, the Indentures).
Pursuant to Section 3.09 of the Indentures, upon the occurrence of a Fundamental Change, the
Registrant is required, within 20 days of the occurrence of the Fundamental Change, to send to each
holder of the Notes a notice (the Fundamental Change Repurchase Notice) regarding the occurrence
of the Fundamental Change. The Registrant will be required to specify in the Fundamental Change
Repurchase Notice a date (the Fundamental Change Repurchase Date), not later than 30 days from
the delivery of the Fundamental Change Repurchase Notice, on which holders of the Notes will have
the option to require the Registrant to repurchase their Notes at a price, payable in cash, equal
to 100% of the principal amount of the Notes plus accrued and unpaid interest. Based on current
market conditions, the Registrant expects that all holders of the Notes will elect to require the Registrant to repurchase their Notes in accordance
with the procedures outlined above. The Registrant has already
received a notice from an investor in each of the 6.0% Notes and
7.125% Notes.
If all of the holders of the Notes exercise their repurchase right under the Indentures, the
Registrant would be required to purchase the Notes at a repurchase price of 100% of the principal
amount of the Notes, which would equal $150 million. If this were to occur, the Registrant does
not believe, on the basis of its current liquidity, that it would have the ability to satisfy its obligation with respect to the repurchase
of the Notes. A failure to satisfy its obligations with respect to the repurchase of any of the
Notes on a Fundamental Change Repurchase Date would constitute an Event of Default under the
Indentures, which would permit the Trustee under each Indenture or the holders of 25% of each
series of the Notes to declare all of the Notes of that series immediately due and payable.
A failure of the Registrant to satisfy its obligation to repurchase Notes on a Fundamental Change
Repurchase Date would also have consequences under (i) the Loan and Security Agreement, dated as of
February 29, 2008, between the Registrant and certain of its affiliates, as borrowers and National
Amusements, Inc. (NAI), as lender (the Loan and Security Agreement), (ii) the Unsecured Loan
Agreement, dated as of February 29, 2008, between the Registrant, as borrower and NAI as lender
(the Unsecured Loan Agreement) and (iii) the Unsecured Subordinated Loan Agreement, dated as of
February 29, 2008, between the Registrant, as borrower and NAI as lender ((i),(ii) and (iii),
collectively the NAI Agreements). Specifically, NAI would have the ability in such a
circumstance, under the terms of the NAI Agreements, to declare all amounts outstanding under the
NAI Agreements immediately due and payable. There is currently approximately $90,000,000 principal
amount outstanding under the NAI Agreements. If these amounts were declared immediately due and
payable, the Registrant does not believe, on the basis of its current
liquidity, that it would have the ability to satisfy its obligations
to repay these amounts.
Item 5.01 Changes in Control of Registrant.
The information disclosed in this Item 5.01 is based entirely on information contained in a
Schedule 13D/A, dated December 1, 2008, filed with the SEC by Mr. Sumner Redstone, NAI and Sumco,
Inc. and the exhibits thereto.
On November 28, 2008, each of Mr. Sumner M. Redstone, NAI and Sumco, Inc. (collectively, the
Sellers) entered into a Stock Purchase Agreement (the Stock Purchase Agreement) with
Acquisition Holdings Subsidiary I LLC (the Purchaser), pursuant to which the Sellers sold to the
Purchaser, and the Purchaser purchased from the Sellers, all of the shares of common stock, $0.01
par value (the Common Shares) of the Registrant beneficially owned by the Sellers immediately
prior to such sale, representing, collectively, approximately 87.2% of the total issued and
outstanding Common Shares of the Registrant. Concurrently with the execution of the Stock Purchase
Agreement, NAI and the Purchaser entered into a Participation Agreement (the Participation
Agreement), pursuant to which NAI granted to the Purchaser, and the Purchaser acquired from NAI,
(i) an undivided interest and participation in certain of the loans and advances made by NAI,
whether before or after the date of the Participation Agreement,
pursuant to the Loan and Security Agreement and the Unsecured Loan Agreement and (ii) all of NAIs
right, title and interest in, to and under the Loan and Security Agreement and the Unsecured Loan
Agreement including guarantees, collateral, pledges, distributions, claims and causes of actions
against the borrowers thereunder, all on the terms and conditions set forth in the Participation
Agreement. The consideration paid by the Purchaser for the interests acquired under the Stock
Purchase Agreement and the Participation Agreement was $100,000. The Registrant does not have
knowledge as to the Purchasers source of these funds. MT Acquisition Holdings LLC is the sole
member of the Purchaser. The President of MT Acquisition Holdings LLC is Mark Thomas.
Item 5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
On December 1, 2008, Mr. Robert J. Steele resigned as a director of the Registrant, effective
immediately.
Item 7.01
Regulation FD Disclosure.
On
November 20, 2008, a special committee of the Registrants
Board of Directors retained Lazard to assist it in the evaluation of strategic and
financial alternatives available to the Registrant.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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MIDWAY GAMES INC.
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December 4, 2008
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By:
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/s/ Matthew V. Booty
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Matthew V. Booty
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Chief Executive Officer
and President
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