My near death experience in Shanghai 2007

So, I was catching up with some friends' blogs, and my buddy Sean recounts the time we almost died in Shanghai, much more eloquently than I could have. It's even a cliffhanger in two parts!

Part 1 and Part 2 

Here's the SPOILER:

"Because this woman, as gleeful and enthusiastic as she was to be motoring us about, was a lunatic. We would squeeze into lanes that did not exist, squished in between a bus and an enbankment, and she was just smile away. She'd put the car in park and scoot up on top of the steering wheel to wipe away a leprechaun-hand sized corridor of visibility through the fogged up windshield. And I gotta tell ya, there's a part of me that was really charmed by all the effort.

Until she skidded into an intersection like she was performing the stunt routine for a Goodyear Aqua-tread commercial and Froggered us halfway through ten lanes of terrifying cross traffic. That we are, ass-a-kilter pointed at a forty five degree angle inside of the far-easts largest intersection. And traffic is just racing by. Well, that is until one car wasn't as agile as the others in swimming right around us. And slammed on his own breaks and fucking hit us.

So what does she do? "Oh no, I've been in a car accident, I hope my patrons and the other vehicle are all right!" That's what a sane person would think. She fucking  giggles. Yep, a shrill little giggle and then she slowly drags our car out of the intersection like some sort of retarded four-wheeled sloth. And away we went.

So that's how we almost died."

BTW, Sean screamed like a girl... actually, so did I.

Mark Thomas is... LEX LUTHOR?

Now I think that maybe he's an evil mastermind genius.

Let's review:

1) Mark Thomas buys 87.2% of Midway for $100k. 
    2008-12-01 Form SC 13D/A - Stock Purchase Agreement 

STOCK PURCHASE AGREEMENT, dated as of November 28, 2008 (this "Agreement"), among NATIONAL AMUSEMENTS, INC., a Maryland corporation (the "NAI"), SUMCO, INC., a Delaware corporation ("Sumco"), SUMNER M. REDSTONE ("SMR" and, collectively with NAI and Sumco, the "Sellers") and ACQUISITION HOLDINGS SUBSIDIARY I LLC, a Delaware limited liability company (the "Purchaser"). 

A.           The Sellers, collectively, own approximately 87.2% of the total issued and outstanding shares of common stock, $0.01 par value per share ("Common Stock"), of Midway Games Inc., a Delaware corporation (the "Company").

B.           Each of the Sellers wishes to sell to the Purchaser, and the Purchaser wishes to purchase from the Sellers, the shares of Common Stock beneficially owned by the Sellers, upon the terms and subject to the conditions set forth herein.

...an aggregate purchase price of $100,000 (the "Purchase Price") to be allocated among the Sellers...

2) Mark Thomas' newly formed company - AHSI, LLC, receives a $70M IOU from Midway from NAI, Inc.
    2008-12-01 Form SC 13D/A - Participation Agreement 

PARTICIPATION AGREEMENT (this "Agreement"), dated on November 28, 2008 by and between National Amusements, Inc. ("Grantor") and Acquisition Holdings Subsidiary I LLC ("Participant").

... Grantor, subject to the terms and conditions thereof, agreed to make advances and loans (the "Loans") to the applicable Borrower or Borrowers under such Credit Agreement from time to time in an aggregate amount not to exceed at any time outstanding (i) $30,000,000 under the Secured Facility and (ii) $40,000,000 under the Unsecured Facility.  Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings assigned to them in the Secured Facility...

... Grantor hereby sells, grants, conveys and transfers to Participant, and Participant hereby purchases, acquires and receives from Grantor, an undivided interest and participation in (a) 100% of all of the Loans made by Grantor..." etc.

3) This triggers an EVENT.
    2008-12-04 Form 8K - Current Report 

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 Registrant's 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 NAI's 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 Purchaser's 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.

---
Summary
Mark Thomas buys shares in MWY for $100k.
Today's MWY chart:

MWY  - Midway Games Inc. (NYSE)


0.28 -0.02 (-6.67%)  Dec 4 4:03pm ET
Open:  0.34
High:  0.34
Low:  0.22
 
Volume:  409,164
Avg Vol:  152,000
Mkt Cap:  25.80M
Disclaimer

After Hours: 0.25 -0.03 (-10.71%)  Dec 4 4:07pm ET
As of right now, with a market cap of 25.80M, 87.2% is worth $21.34 MILLION ...
He is also now owed $70 Million in loans by Midway ...
This triggers an EVENT which sets in motion the following:
1) Midway now has 30 days to buy back $150M in Notes, money which it does not have right now.
2) If it doesn't, these Notes become immediately due and payable. (Not sure exactly what that means... and if that means it's more than $150M... ?? )
2) This further triggers an event that allows NAI to collect on $90M in debt, immediately due and payable. Of this $90M in debt, Mark Thomas controls $70M of this.
This seems to give Mark Thomas quite a bit of leverage, and puts quite a bit of pressure on Midway now, but I'm not quite sure how it all works out... Definitely seems like evil genius material though.

January will be an interesting month, eh?
Lex

Midway's Batman or Underpants Gnomes?

"Wanted: Information on Mark Thomas, head of Acquisition Holdings Subsidiary I LLC.

His identity is like Batman's: unknown. Everyone in the gaming metropolis is buzzing about who Thomas, the man who Friday agreed to pay $100,000 for an 87% stake in Midway, the publisher of Mortal Kombat vs. DC Universe, actually is. Here are some bare-bones facts:

  • Thomas wants to be a passive investor, said Peter Kolevzon, an attorney with Kramer Levin Naftalis & Frankel, the New York law firm that is representing Thomas in the transaction.
  • Thomas is the primary investor and beneficiary of the generically named Acquisition Holdings Subsidiary.
  • He does not intend to be on Midway's board. Nor does he plan to get involved in the management of Midway despite his huge stake in the Chicago company, Kolevzon said.
  • He is a U.S. citizen, city unknown.
  • He is not granting interviews.

Bruce Wayne may be the Dark Knight, but is this Thomas character Midway's white knight?

...

On the credit side of the ledger, he gets 87% of a video game publisher that owns the Mortal Kombat franchise. Midway also had $10.5 million in cash and $21.6 million in receivables as of its last quarter, ended Sept. 30. He also gets a $70-million I.O.U. that Midway once owed to National Amusements -- Midway's payments on that loan will now go to Thomas.

On the debit column, Midway has $150 million in outstanding loans, not including the $70 million it will owe Thomas. It also has a payroll of about 900 employees that it is struggling to meet. Last quarter, the company lost nearly $76 million on $51.4 million in revenue."

--------

This all seems kind of bizarre. 

Phase 1) Buy company that is saddled with debt, bleeding cash for $100k and "Be a passive investor" i.e., "Don't do anything"
Phase 2) ???
Phase 3) PROFIT!

http://en.wikipedia.org/wiki/Gnomes_(South_Park_episode)

Mortal_kombat_batman

Guy Kawasaki is cool

Bunch of great tweets today:

RT @guykawasaki This guy is really going to hate my next blog post: "How to Use Twitter as a Tool" http://adjix.com/i7um

RT @guykawasaki How to Use Twitter as a Twool: I may get more value out of Twitter than anyone else on the planet bec.. http://snipr.com/71yew

I found the Twitter stuff pretty interesting, even though I don't use Twitter for marketing... I use it to control or feed my ADD, not sure which. Mostly, I was following trends on Tweetsville, but after reading Guy's article, I used it tonight to do some research for some of my projects. It's like a pseudo tech savvy skewed survey, maybe. Also installed Tweetdeck and am trying it out as a replacement for Twirl.

BTW, I discovered Posterous, which I'm using to post this - from his http://www.holykaw.com/ site.

I just ordered Reality Check on my Kindle:

Going to go read it in bed now before I sleep.