Current assets

EX-10.6 2 p71436exv10w6.txt EXHIBIT 10.6 EXHIBIT 10.6 GUARANTEE This GUARANTEE ("GUARANTEE"), dated as of April 25, 2005, is made by each of the Subsidiaries of MGM MIRAGE, a Delaware corporation (the "COMPANY"), (each a "GUARANTOR" and collectively, jointly and severally, as "GUARANTORS") which are set forth on Exhibit A attached hereto and incorporated herein by this reference, in favor of The Bank of New York N.A. (the "TRUSTEE"), as Trustee for the benefit of the holders of Notes (as defined below) authenticated and delivered by the Trustee and to the Trustee pursuant to the Indenture referred to below, with reference to the following facts: RECITALS A. The Company, previously entered into an Indenture dated as of May 31, 2000, with the Trustee and the Guarantors referred to therein (as amended, supplemented or otherwise modified, the "INDENTURE") pursuant to which the Company issued its 9.75% Subordinated Senior Notes due 2007 (the "NOTES"). B. Each of the undersigned is a Restricted Subsidiary of the Company and as such is required to guarantee the obligations of the Company under the Indenture and the Notes. C. Each Guarantor expects to realize direct and indirect benefits as the result of the availability of the aforementioned credit facilities to the Company, as the result of financial and business support which will be provided to the Guarantors by the Company. 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. DEFINITIONS. This Guarantee is one of the Guarantees referred to in the Indenture. Terms defined in the Indenture and not otherwise defined in this Guarantee shall have the meanings given those terms in the Indenture when used herein and such definitions are incorporated herein as though set forth in full. 2. GUARANTEE. (a) Each of the Guarantors, jointly and severally, hereby unconditionally guarantees or reaffirms a previous guarantee, 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 the Company 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 the Company 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 (other than Article 15 of the Indenture), 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 the Company, 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 the Company, any right to require a proceeding first against the Company or right to require the prior disposition of the assets of the Company 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 the Company or any Guarantor, or any custodian, trustee, or similar official acting in relation to either the Company or any Guarantor, any amount paid by either the Company 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 6 hereof. (d) Each of the Guarantors agrees that (i) the maturity of the obligations guaranteed hereby may be accelerated as provided in Section 5.2 of the Indenture for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration as to the Company of the obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of those obligations as provided in Section 5.2 of 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 3. EXECUTION AND DELIVERY OF GUARANTEE. To evidence its guarantee set forth in Section 2 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 2 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. 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. 4. LIMITATION OF GUARANTORS' 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 5 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 4 is for the benefit of the creditors of each Guarantor. 5. 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 the Company's obligations with respect to the Notes or any other Guarantor's obligations with respect to this Guarantee. 3 6. 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 the Company 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 Indenture, neither the Guarantors nor any of them will assign or otherwise transfer any such claim against the Company 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. 7. 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 the Company or any other guarantor, and that a separate action may be brought against each Guarantor, whether such action is brought against the Company or any other guarantor or whether the Company 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 the Company or any other guarantor. Each Guarantor agrees that any release which may be given by the Trustee or the holders of the Notes to the Company 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. 4 8. 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 the Company 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 such Guarantor 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 the Company (or against any other Person) or to exhaust any rights and remedies which the Trustee or the holders have or may have against the Company (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 the Company or by reason of the cessation from any cause whatsoever of the liability of the Company in respect thereof. (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 the Company or other Persons; and (ii) any defenses based on suretyship law or impairment of collateral. 9. 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 the Company 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. 5 10. 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. 11. FINANCIAL CONDITION OF THE COMPANY. Each Guarantor represents and warrants to the Trustee and holders that it is currently informed of the financial condition of the Company 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 the Company'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. 12. 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 Indebtedness (as defined in the Indenture) of each Guarantor on the same basis as the Notes are subordinated to Senior Indebtedness of the Company. For the purposes of the foregoing sentence, (a) 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 16 thereof and (b) Section 16.2 of the Indenture shall apply as to each Guarantor and this Guarantee on the same basis as it applies to the Company and the Notes (except that, as to any Guarantor, the clauses in the last paragraph of Section 16.2 of the Indenture that read "the terms and conditions set forth in Article 10" and "comply with the conditions set forth in Article 10" shall be deemed to read, respectively, "the terms and conditions set forth in Section 15.11" and "comply with the conditions set forth in, or be released pursuant to the provisions set forth in, Section 15.11"). 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 Indebtedness of such Guarantor remaining unpaid, to the extent necessary to pay in full all such Senior Indebtedness. In the event that any holder of a Note receives any Guarantor payment at a time when such payment is prohibited by Section 15.12 of the Indenture, such Guarantor payment shall be paid over and delivered to the holders of the Senior Indebtedness of such Guarantor remaining unpaid, to the extent necessary to pay in full all such Senior Indebtedness. 6 13. BENEFITS OF THE INDENTURE. The provisions of Article 15 of the Indenture applicable to Guarantors (as defined therein) shall be binding upon, and shall inure to the benefit of, each Guarantor hereunder. 14. 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. 15. NON-INVOLVEMENT OF KIRK KERKORIAN AND TRACINDA CORPORATION. By accepting the benefits of this Guarantee, the Trustee and the holders of each Note acknowledge that neither Kirk Kerkorian 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 Mr. Kerkorian or Tracinda Corporation by reason of such alleged breach, default or claim. 7 IN WITNESS WHEREOF, each Guarantor has executed this Guarantee by its duly authorized officer as of the date first written above. By: /s/ BRYAN L. WRIGHT ---------------------------------------------------- Bryan L. Wright Assistant Secretary of each of the Guarantors listed on Exhibit A hereto 8 EXHIBIT A - GUARANTORS 1. AC Holding Corp., a Nevada corporation 2. AC Holding Corp. II, a Nevada corporation 3. The April Cook 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. Jean Development Company, a Nevada partnership 26. Jean Development West, a Nevada partnership 27. Jean 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 9 39. MGM Grand Condominiums II, LLC, a Nevada limited liability company 40. MGM Grand Detroit, Inc., a Delaware corporation 41. 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 10 79. Slots-A-Fun, Inc., a Nevada corporation 80. Treasure Island Corp., a Nevada corporation 81. Victoria Partners, a Nevada partnership 82. VidiAd, a Nevada corporation 11