EXHIBIT 10.9
GUARANTEE
This GUARANTEE ("Guarantee"), dated as of April 25, 2005, is made by each
of MGM MIRAGE and the undersigned Subsidiaries of MGM MIRAGE which are set forth
on Exhibit A attached hereto and incorporated herein by this reference, (each a
"Guarantor" and collectively, jointly and severally, as "Guarantors"), in favor
of The Bank of New York (the "Trustee"), as Trustee for the benefit of the
holders of Notes (as defined below) and to the Trustee pursuant to the Indenture
referred to below, with reference to the following facts:
RECITALS
A. Pursuant to the Agreement and Plan of Merger, dated June 15, 2004 (the
"Agreement"), among MGM MIRAGE, a Delaware corporation, Mandalay Resort Group, a
Nevada corporation ("Mandalay") and MGM MIRAGE Acquisition Co. #61, a Nevada
corporation and wholly owed subsidiary of MGM MIRAGE ("Merger Subsidiary").
B. Mandalay and its direct or indirect subsidiaries have become direct or
indirect subsidiaries of MGM MIRAGE.
C. Prior to the merger, Mandalay entered into that certain Indenture dated
as of February 1, 1996 and the Supplemental Indenture thereto dated as of the
same date (as amended, supplemented or otherwise modified from time to time and
collectively, the "Indenture"), with the Trustee pursuant to which Mandalay
issued its 7 5/8% Senior Subordinated Debentures due 2013 (the "Notes").
D. Each Guarantor expects to realize direct and indirect benefits as the
result of the availability of the Credit Facility (as defined) to Mandalay, as a
result of financial and business support which will be provided to the
Guarantors, and each Guarantor desires to guarantee Mandalay's obligations under
such Indenture pursuant to the terms hereof.
AGREEMENT
NOW, THEREFORE, in consideration of good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, each Guarantor hereby
jointly and severally represents, warrants, covenants, agrees and guaranties as
follows:
1. GUARANTEE.
(a) Each of the Guarantors, jointly and severally, hereby unconditionally
guarantees to each holder of a Note authenticated and delivered by the Trustee
and to the Trustee, irrespective of the validity and enforceability of the
Indenture, the Notes or the obligations of Mandalay under the Indenture or the
Notes, that: (i) the principal of and interest on the Notes will be paid in full
when due, whether at the maturity or interest payment date, by acceleration,
call for redemption, upon a purchase offer or otherwise, and interest on the
overdue principal and interest, if any, of the Notes, if lawful, and all other
obligations of Mandalay to the holders or the Trustee under the Indenture or the
Notes will be promptly paid in full or performed, all in accordance with the
terms of the Indenture and the Notes; and (ii) in case of any extension of time
of payment or renewal of any securities or any of such other obligations, they
will be paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at maturity, by
acceleration, call for redemption, upon a purchase offer or otherwise
(collectively, the "Guaranteed Obligations"). This Guarantee is a guarantee of
payment and not of collection.
Failing payment when due of any amount so guaranteed for whatever reason,
the Guarantors shall be jointly and severally obligated to pay the same before
failure to so pay becomes an Event of Default.
(b) Each Guarantor agrees that (i) its obligations with regard to this
Guarantee shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or the Indenture, any amendments to the Indenture or
the Notes, the absence of any action to enforce the same, any delays in
obtaining or realizing upon (or failures to obtain or realize upon) the recovery
of any judgment against Mandalay, any action to enforce the same or any other
circumstances that might otherwise constitute a legal or equitable discharge or
defense of a guarantor and (ii) this Guarantee will not be discharged except by
complete performance of the obligations contained in the Notes and the
Indenture. Each of the Guarantors hereby waives diligence, presentment, demand
of payment, filing of claims with a court in the event of insolvency or
bankruptcy of Mandalay, any right to require a proceeding first against Mandalay
or right to require the prior disposition of the assets of Mandalay to meet its
obligations, protest, notice and all demands whatsoever. Without limiting the
generality of the foregoing, each of the Guarantors hereby waives, to the extent
permitted under Nev. Rev. Stat. 40.495, any rights arising out of Nev. Rev.
Stat. 40.430.
(c) If any holder or the Trustee is required by any court or otherwise to
return to either Mandalay or any Guarantor, or any custodian, trustee, or
similar official acting in relation to either Mandalay or any Guarantor, any
amount paid by either Mandalay or any of the Guarantors to the Trustee or such
holder, this Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each of the Guarantors agrees that it will
not be entitled to any right of subrogation in relation to the holders in
respect of any obligations guaranteed hereby except as set forth in Section 5
hereof.
(d) Each of the Guarantors agrees that (i) the maturity of the obligations
guaranteed hereby may be accelerated as provided in the Indenture for the
purposes of this Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration as to Mandalay of the obligations
guaranteed hereby, and (ii) in the event of any declaration of acceleration of
those obligations as provided in the Indenture, those obligations (whether or
not due and payable) will forthwith become due and payable by each of the
Guarantors for the purpose of this Guarantee.
2. EXECUTION AND DELIVERY OF GUARANTEE.
To evidence its guarantee set forth in Section 1 of this Guarantee,
each of the Guarantors agrees that a notation of such guarantee substantially in
the form of the notation included in the Note annexed to the Indenture as
Exhibit A shall be endorsed on each Note authenticated and delivered by the
Trustee and that this Guarantee shall be executed on behalf of such Guarantor by
a duly authorized officer.
Each of the Guarantors agrees that its guarantee set forth in Section 1 of
this Guarantee shall remain in full force and effect and apply to all the Notes
notwithstanding any failure to endorse on each Note a notation of such
guarantee.
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If an Officer whose facsimile signature is on a Note no longer holds that
office at the time the Trustee authenticates the Note on which a guarantee is
endorsed, the guarantee shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of this Guarantee on behalf of the
Guarantors.
3. LIMITATION OF GUARANTOR'S LIABILITY.
Each Guarantor and by its acceptance hereof each holder hereby confirms
that it is the intention of all such parties that the guarantee by such
Guarantor pursuant to this Guarantee not constitute a fraudulent transfer or
conveyance for purposes of any federal or state law. To effectuate the foregoing
intention, the holders and each Guarantor hereby irrevocably agree that the
obligations of each such Guarantor under this Guarantee shall be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Guarantor and after giving effect to any collections from or
payments made by or on behalf of any other Guarantor (as defined in the
Indenture) in respect of the obligations of such other Guarantor (as defined in
the Indenture) under its Guarantee (as defined in the Indenture) or pursuant to
Section 4 of this Guarantee, result in the obligations of such Guarantor under
this Guarantee not constituting a fraudulent conveyance or fraudulent transfer
under federal or state law. This Section 3 is for the benefit of the creditors
of each Guarantor.
4. CONTRIBUTION.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under this
Guarantee, such Funding Guarantor shall be entitled to a contribution from each
other Guarantor in a pro rata amount based on the net worth of each Guarantor
(including the Funding Guarantor) for all payments, damages and expenses
incurred by that Funding Guarantor in discharging Mandalay's obligations with
respect to the Notes or any other Guarantor's obligations with respect to this
Guarantee.
5. RIGHTS UNDER THIS GUARANTEE.
(a) Each of the Guarantors waives notice of the issuance, sale and
purchase of the Notes and notice from the Trustee or the holders from time to
time of any of the Notes of their acceptance and reliance on this Guarantee.
(b) Notwithstanding any payment or payments made by the Guarantors by
reason of this Guarantee, the Guarantors shall not be subrogated to any rights
of the Trustee or any holder against Mandalay until all the Notes shall have
been paid or deemed to have been paid within the meaning of the Indenture. Any
payment made by the Guarantors by reason of this Guarantee shall be in all
respects subordinated to the full and complete payment or discharge under the
Indenture of all obligations guaranteed hereby, and no payment by the Guarantors
by reason of this Guarantee shall give rise to any claim of the Guarantors
against the Trustee or any holder of the Notes. Unless and until the Notes shall
have been paid or deemed to have been paid within the meaning of the
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Indenture, neither the Guarantors nor any of them will assign or otherwise
transfer any such claim against Mandalay to any other person.
(c) No set-off, counterclaim, reduction or diminution of any obligation or
any defense of any kind or nature (other than performance by the Guarantors of
their obligations hereunder) which any Guarantor may have or assert against the
Trustee or any holder of any Note shall be available hereunder to such Guarantor
against the Trustee.
(d) Each Guarantor agrees to pay all costs, expenses and fees, including
all reasonable attorneys' fees, which may be incurred by the Trustee in
enforcing or attempting to enforce this Guarantee or protecting the rights of
the Trustee or the holders of the Notes, if any, in accordance with the
Indenture.
6. PRIMARY OBLIGATIONS.
Each Guarantor agrees that it is directly liable to each holder hereunder,
that the obligations of each Guarantor hereunder are independent of the
obligations of Mandalay or any other Guarantor, and that a separate action may
be brought against each Guarantor, whether such action is brought against
Mandalay or any other guarantor or whether Mandalay or any other guarantor is
joined in such action. Each Guarantor agrees that its liability hereunder shall
be immediate and shall not be contingent upon the exercise or enforcement by the
Trustee or the holders of the Notes of whatever remedies they may have against
Mandalay or any other guarantor. Each Guarantor agrees that any release which
may be given by the Trustee or the holders of the Notes to Mandalay or any other
guarantor shall not release such Guarantor. Each Guarantor consents and agrees
that the Trustee shall be under no obligation to marshal any property or assets
of the Company or any other guarantor in favor of such Guarantor, or against or
in payment of any or all of the Guaranteed Obligations.
7. WAIVERS.
(a) Each Guarantor hereby waives any right to receive, or any claim or
defense based on failure to receive: (i) notice of the amount of the Guaranteed
Obligations; (ii) notice of any adverse change in the financial condition of
Mandalay or of any other fact that might increase such Guarantor's risk
hereunder; (iii) notice of a Default or Event of Default; and (iv) all other
notices (except if such notice is specifically required to be given to Mandalay
under the Indenture) and demands to which such Guarantor might otherwise be
entitled.
(b) Each Guarantor hereby waives the right by statute or otherwise to
require the Trustee or the holders to institute suit against Mandalay (or
against any other Person) or to exhaust any rights and remedies which the
Trustee or the holders have or may have against Mandalay (or against any other
Person). In this regard, each Guarantor agrees that it is bound to the payment
of each and all of the Guaranteed Obligations, whether now existing or hereafter
arising, as fully as if such Guaranteed Obligations were directly owing to the
Trustee and the holders by such Guarantor. Each Guarantor further waives any
defense arising by reason of any disability or other defense (other than the
defense that the Guaranteed Obligations shall have been fully and finally
performed and indefeasibly paid) of Mandalay or by reason of the cessation from
any cause whatsoever of the liability of Mandalay in respect thereof.
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(c) Each Guarantor hereby waives: (i) any claim or defense directly or
indirectly arising from or caused by any election of remedies by the Trustee or
holders of the Notes, whether or not such election of remedies directly or
indirectly results in impairment or loss of rights or claims of such Guarantor
against Mandalay or other Persons; and (ii) any defenses based on suretyship law
or impairment of collateral.
8. RELEASES.
Each Guarantor consents and agrees that, without notice to or by such
Guarantor and without affecting or impairing the obligations of such Guarantor
hereunder, the Trustee may, by action or inaction, compromise or settle, extend
the period of duration or the time for the payment, or discharge the performance
of, or may refuse to, or otherwise not enforce, or may, by action or inaction,
release all or any one or more parties to, any one or more of the terms and
provisions of the Indenture or may grant other indulgences to Mandalay in
respect thereof, or may, by action or inaction, release or substitute any other
guarantor, if any, of the Guaranteed Obligations, or may enforce, exchange,
release, or waive, by action or inaction, any security for the Guaranteed
Obligations or any other guaranty of the Guaranteed Obligations, or any portion
thereof.
9. NO ELECTION.
The Trustee shall have the right to seek recourse against each Guarantor
to the fullest extent provided for herein and no election by the Trustee to
proceed in one form of action or proceeding, or against any party, or on any
obligation, shall constitute a waiver of Trustee's right to proceed in any other
form of action or proceeding, or against other parties unless the Trustee has
expressly waived such right in writing.
10. FINANCIAL CONDITION OF THE MANDALAY.
Each Guarantor represents and warrants to the Trustee and holders that it
is currently informed of the financial condition of Mandalay and of all other
circumstances which a diligent inquiry would reveal and which bear upon the risk
of nonpayment of the Guaranteed Obligations. Each Guarantor further represents
and warrants to the Trustee and holders that it has read and understands the
terms and conditions of the Indenture and this Guarantee. Each Guarantor hereby
covenants that it will continue to keep itself informed of Mandalay's financial
condition, the financial condition of other guarantors, if any, and of all other
circumstances which bear upon the risk of nonpayment or nonperformance of the
Guaranteed Obligations.
11. SUBORDINATION OF SUBSIDIARY GUARANTEES.
The obligations of each Guarantor under this Guarantee are subordinated in
right of payment to the prior payment in full in cash of all Senior Debt (as
defined in the Indenture) of each Guarantor on the same basis as the Notes are
subordinated to Senior Debt of Mandalay. For the purposes of the foregoing
sentence, the Trustee and the holders of the Notes shall have the right to
receive and/or retain payments by any of the Guarantors only at such times as
they may receive and/or retain payments in respect of Notes pursuant to the
Indenture, including Article 3 thereof. In the event that the Trustee receives
any Subsidiary Guarantor payment at a time when the Trustee has actual knowledge
that such payment is prohibited by the foregoing sentence, such Guarantor
payment shall be paid over and delivered to the holders of the Senior Debt of
such Guarantor
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remaining unpaid, to the extent necessary to pay in full all such Senior Debt.
In the event that any holder of a Note receives any Guarantor payment at a time
when such payment is prohibited by the Indenture, such Guarantor payment shall
be paid over and delivered to the holders of the Senior Debt of such Guarantor
remaining unpaid, to the extent necessary to pay in full all such Senior Debt.
12. RELEASE UPON CERTAIN EVENTS.
(a) In the event that any Guarantor ceases to guarantee the obligations of
MGM MIRAGE under the Credit Facility, then such Guarantor will be released and
relieved of any and all obligations under this Guarantee without further action
by any of Mandalay or any of the Guarantors. The Trustee shall execute any
documents reasonably required in order to evidence the release of any Guarantor
from its obligations under this Guarantee. For the purposes of this Section 11,
the "Credit Facility" shall mean the Fourth Amended and Restated Loan Agreement,
as may be amended, restated or replaced from time to time, dated as of November
22, 2004, by and among MGM MIRAGE, MGM Grand Detroit, LLC, as co-borrower, Bank
of America, N.A., as the administrative agent, The Royal Bank of Scotland PLC,
as the syndication agent, a joint lead arranger, and a joint book manager, Bank
of America Securities LLC as a joint lead arranger and a joint book manager, XX
Xxxxxx Securities, Inc., Citibank North America, Inc., and Deutsche Bank
Securities Inc. as joint book managers, XX Xxxxxx Chase Bank, Citigroup USA
Inc., Deutsche Bank, Bank of Scotland PLC, Barclays Bank PLC, BNP Paribas,
Commerzbank, Sumitomo Mitsui Banking Corporation and Wachovia Bank, N.A., as
co-documentation agents, Societe Generale, as senior managing agent, Xxxxxxx
Xxxxx Bank USA and U.S. Bank National Association, as managing agents, and the
other lenders party thereto.
(b) In the event of a sale or other disposition of all of the assets of
any Guarantor, by way of merger, consolidation or otherwise, or a sale or other
disposition of all to the capital stock of any Guarantor, then such Guarantor
(in the event of a sale or other disposition, by way of merger, consolidation or
otherwise, of all of the capital stock of such Guarantor) or the corporation
acquiring the property (in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) will be released and relieved
of any obligations under this Guarantee.
(c) Any Guarantor not released from its obligations under this Guarantee
shall remain liable for the full amount of principal of and interest on the
Notes and for the other obligations of any Guarantor under the Indenture.
13. GOVERNING LAW.
This Guarantee shall be deemed to be a contract made and to be performed
entirely in the State of Nevada, and for all purposes shall be governed by and
construed in accordance with the internal laws of said State without regard to
the conflicts of law rules of said State.
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14. NON-INVOLVEMENT OF XXXX XXXXXXXXX AND TRACINDA CORPORATION.
By accepting the benefits of this Guarantee, the Trustee and the holders
of each Note acknowledge that neither Xxxx Xxxxxxxxx nor Tracinda Corporation,
individually or collectively, is a party to the Indenture or the Notes. In the
event (i) there is any alleged breach or default by any Guarantor under this
Guarantee or any such agreement, or (ii) any party hereto has any claim arising
from or relating to this Guarantee or any such agreement, the Trustee and the
holders of the Notes, nor any party claiming through them (to the extent
permitted by applicable law), shall commence any proceedings or otherwise seek
to impose any liability whatsoever against Xx. Xxxxxxxxx or Tracinda Corporation
by reason of such alleged breach, default or claim.
[Signature Page to Follow]
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IN WITNESS WHEREOF, each Guarantor has executed this Guarantee by its duly
authorized officer as of the date first written above.
By: /s/ XXXXX X. XXXXXX
-------------------------------------------------------
Xxxxx X. Xxxxxx
Assistant Secretary of each of the Guarantors listed on
Exhibit A hereto
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EXHIBIT A - GUARANTORS
1. AC Holding Corp., a Nevada corporation
2. AC Holding Corp. II, a Nevada corporation
3. The Xxxxx Xxxx Companies, a Nevada corporation
4. Beau Rivage Distribution Corp., a Mississippi corporation
5. Beau Rivage Resorts, Inc. a Mississippi corporation
6. Bellagio, LLC, a Nevada limited liability company
7. Bellagio II, LLC, a Nevada limited liability company
8. Boardwalk Casino, Inc., a Nevada corporation
9. Bungalow, Inc., a Mississippi corporation
10. Circus Circus Mississippi, Inc., a Mississippi corporation
11. Circus Circus Casinos, Inc., a Nevada corporation
12. Colorado Belle Corp., a Nevada corporation
13. Country Star Las Vegas, LLC, a Nevada limited liability company
14. Destron, Inc., a Nevada corporation
15. Diamond Gold, Inc., a Nevada corporation
16. Edgewater Hotel Corporation, a Nevada corporation
17. EGARIM, Inc., an Alabama corporation
18. Galleon, Inc., a Nevada corporation
19. Gold Strike Aviation, Incorporated, a Nevada corporation
20. Gold Strike Fuel Company, a Nevada partnership
21. Gold Strike L.V., a Nevada partnership
22. Goldstrike Finance Company, Inc., a Nevada corporation
23. Goldstrike Investments, Incorporated, a Nevada corporation
24. Grand Laundry, Inc., a Nevada corporation
25. Xxxx Development Company, a Nevada partnership
26. Xxxx Development West, a Nevada partnership
27. Xxxx Fuel Company West, a Nevada partnership
28. Last Chance Investments, Incorporated, a Nevada corporation
29. LV Concrete Corp., a Nevada corporation
30. MAC, Corp., a New Jersey corporation
31. Mandalay Corp., a Nevada corporation
32. Mandalay Development, a Nevada corporation
33. Mandalay Marketing and Events, a Nevada corporation
34. Mandalay Place (f.k.a. New Dirt, Inc.), a Nevada corporation
35. Mandalay Resort Group, a Nevada corporation
36. Metropolitan Marketing, LLC, a Nevada limited liability company
37. MGM Grand Atlantic City, Inc., a New Jersey corporation
38. MGM Grand Condominiums, LLC, a Nevada limited liability company
39. MGM Grand Condominiums II, LLC, a Nevada limited liability company
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40. MGM Grand Detroit, Inc., a Delaware corporation
41. MGM Grand Hotel, LLC, a Nevada limited liability company
42. MGM Grand New York, LLC, a Nevada limited liability company
43. MGM Grand Resorts, LLC, a Nevada limited liability company
44. MGM MIRAGE Advertising, Inc., a Nevada corporation
45. MGM MIRAGE Aircraft Holdings, LLC, a Nevada limited liability company
46. MGM MIRAGE Aviation Corp., a Nevada corporation
47. MGM MIRAGE Corporate Services, a Nevada corporation
48. MGM MIRAGE Design Group, a Nevada corporation
49. MGM MIRAGE Development, Inc., a Nevada corporation
50. MGM MIRAGE Entertainment and Sports, a Nevada corporation
51. MGM MIRAGE International, a Nevada corporation
52. MGM MIRAGE Manufacturing Corp., a Nevada corporation
53. MGM MIRAGE Operations, Inc., a Nevada corporation
54. MGM MIRAGE Retail, a Nevada corporation
55. MH, Inc., a Nevada corporation
56. M.I.R. Travel, a Nevada corporation
57. The Mirage Casino-Hotel, a Nevada corporation
58. Mirage Laundry Services Corp., a Nevada corporation
59. Mirage Leasing Corp., a Nevada corporation
60. Mirage Resorts, Incorporated, a Nevada corporation
61. MMNY Land Company, Inc., a New York corporation
62. MRG Vegas Portal, Inc., a Nevada corporation
63. MRGS Corp., a Nevada corporation
64. M.S.E. Investments, Incorporated, a Nevada corporation
65. New Castle Corp., a Nevada corporation
66. New PRMA Las Vegas, Inc., a Nevada corporation
67. New York-New York Hotel & Casino, LLC, a Nevada limited liability company
68. New York-New York Tower, LLC, a Nevada limited liability company
69. Oasis Development Company, Inc., a Nevada corporation
70. Plane Truth, LLC, a Nevada limited liability company
71. The Primadonna Company, LLC, a Nevada limited liability company
72. PRMA Land Development Company, a Nevada corporation
73. PRMA, LLC, a Nevada limited liability company
74. Project CC, LLC, a Nevada limited liability company
75. Railroad Pass Investment Group, a Nevada partnership
76. Ramparts International, a Nevada corporation
77. Ramparts, Inc., a Nevada corporation
78. Restaurant Ventures of Nevada, Inc., a Nevada corporation
79. Slots-A-Fun, Inc., a Nevada corporation
80. Treasure Island Corp., a Nevada corporation
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81. Victoria Partners, a Nevada partnership
82. VidiAd, a Nevada corporation
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