EXHIBIT 1.1
$300,000,000
MGM GRAND, INC.
(a Delaware corporation)
6.95 Senior Collateralized Notes Due 2005
PURCHASE AGREEMENT
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January 26, 1998
BancAmerica Xxxxxxxxx Xxxxxxxx
as Representative of the several Underwriters
000 X. XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Dear Sirs:
MGM Grand, Inc., a Delaware corporation (the "Company"), confirms its
agreement with BancAmerica Xxxxxxxxx Xxxxxxxx and each of the other Underwriters
named in Schedule A hereto (collectively, the "Underwriters", which term shall
also include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom BancAmerica Xxxxxxxxx Xxxxxxxx is acting as representative (in
such capacity, BancAmerica Xxxxxxxxx Xxxxxxxx shall hereinafter be referred to
as the "Representative"), with respect to the sale by the Company and the
purchase by the Underwriters, acting severally and not jointly, of $300,000,000
aggregate principal amount of the Company's 6.95% Senior Collateralized Notes
Due 2005(the "Securities"). The Securities are to be issued pursuant to an
indenture (the "Indenture") between the Company, certain subsidiaries of the
Company (the "Subsidiary Guarantors") who have guaranteed pursuant to guarantees
included in the Indenture (the "Subsidiary Guarantees"), the interest and other
amounts payable on the Securities and PNC Bank, N.A., as trustee (the
"Trustee"). The Securities and the Subsidiary Guarantees will be secured by
certain property and assets of the Company and the Subsidiary Guarantors to the
extent provided in the Collateral Documents (as defined in the Indenture). As
used herein, the term "Transaction Agreements" shall mean collectively, the
Indenture and the Collateral Documents.
Prior to the purchase and public offering of the Securities by the several
Underwriters, the Company and the
Representative, acting on behalf of the several Underwriters, shall enter into
an agreement substantially in the form of Exhibit A hereto (the "Pricing
Agreement"). The Pricing Agreement may take the form of an exchange of any
standard form of written telecommunication between the Company and the
Representative and shall specify such applicable information as is indicated in
Exhibit A hereto. The offering of the Securities will be governed by this
Agreement, as supplemented by the Pricing Agreement. From and after the date of
the execution and delivery of the Pricing Agreement, this Agreement shall be
deemed to incorporate the Pricing Agreement.
The Company and the Subsidiary Guarantors have filed with the Securities
and Exchange Commission (the "Commission") a registration statement (as amended
to the date of this Agreement, the "Registration Statement") on Form S-3 (No.
333-31845) including a prospectus relating to the registration of debt and
common stock of the Company, including the Securities and the Subsidiary
Guarantees (the "Registration Statement") pursuant to the Securities Act of
1933, as amended (the "1933 Act") and have filed with, mailed for filing to, or
shall promptly hereafter file with or transmit to the Commission a final
prospectus supplement specifically relating to the Securities and the Subsidiary
Guarantees pursuant to Rule 424 of the rules and regulations of the Commission
under the 1933 Act (the "1933 Act Regulations"). The term "Basic Prospectus"
means the prospectus (other than the prospectus supplement specifically relating
to the Securities and the Subsidiary Guarantees) included in the Registration
Statement. The term "Prospectus" means the Basic Prospectus together with the
final prospectus supplement specifically relating to the Securities and the
Subsidiary Guarantees. The term "preliminary prospectus" means a preliminary
prospectus supplement specifically relating to the Securities and the Subsidiary
Guarantees, together with the Basic Prospectus. All references in this
Agreement to financial statements and schedules and other information which is
"contained," "included" or "stated" in the Registration Statement, the Basic
Prospectus, the Prospectus or the preliminary prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed
to be incorporated by reference in the Registration Statement, the Basic
Prospectus, the Prospectus or the preliminary prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement, the Basic Prospectus, the Prospectus or the preliminary
prospectus shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), or the rules
and regulations of the Commission under the 1934 Act (the "1934 Act
Regulations") which is or is deemed to
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be incorporated by reference in the Registration Statement or the Prospectus, as
the case may be.
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representative deems advisable after
the Pricing Agreement has been executed and delivered and the Statement of
Eligibility of the Trustee on form T-1 has been filed under the Trust Indenture
Act of 1939, as amended (the "1939 Act").
SECTION 1. Representations and Warranties.
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(a) The Company and the Subsidiary Guarantors jointly and severally
represent and warrant to each Underwriter as of the date hereof and as of the
date of the Pricing Agreement (such latter date being hereinafter referred to as
the "Representation Date") as follows:
(i) At the time the Registration Statement became effective and at
the Representation Date, the Registration Statement and the Prospectus
complied or will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and the 1939 Act and the rules
and regulations of the Commission under the 1939 Act (the "1939 Act
Regulations"), and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus, at the Representation Date and at Closing Time referred to in
Section 2 hereof, will not include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the representations and warranties in
this subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through the Representative expressly for use in the
Registration Statement or Prospectus.
(ii) The accountants who certified the financial statements and
supporting schedules included in the Registration Statement are independent
public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(iii) The financial statements included in the Registration Statement
and the Prospectus present fairly the financial position of the Company and
its
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consolidated subsidiaries as at the dates indicated and the results of
their operations for the periods specified; except as otherwise stated in
the Registration Statement, said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis; the supporting schedules included in the Registration
Statement present fairly the information required to be stated therein; and
the Company's ratios of earnings to fixed charges (actual and, if any, pro
forma) included in the Prospectus have been calculated in compliance with
Item 503(d) of Regulation S-K of the Commission.
(iv) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, (B) there have
been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered as
one enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(v) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware
with corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and to enter
into and perform its obligations under this Agreement and the Pricing
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to
so qualify would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its Subsidiaries considered as one enterprise.
(vi) Except in connection with the operation of MGM Grand Australia
Pty, Ltd. ("MGM Australia") and MGM South Africa Pty, Ltd., the Company
does not own, lease or license any asset or property or conduct any
business outside the United States of America. Each of MGM Grand Hotel,
Inc. ("MGM Hotel"), MGM Grand Hotel Finance Corp.
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("MGM Finance"), Destron, Inc., MGM Australia, MGM Grand Merchandising,
Inc., MGMG Trading Co., MGM Grand Movieworld, Inc. ("MGM Movieworld"),
Grand Laundry, Inc. ("MGM Laundry"), MGM Grand Diamond, Inc. ("MGM
Diamond"), MGM Grand Monorail, Inc. ("MGM Monorail"), MGM Dist., Inc.,
Destron Marketing, Inc., Diamond Darwin Pty, Ltd., Diamond Leisure Pty,
Ltd., Fernbank Pty, Ltd. and MGM Grand Atlantic City, Inc. ("MGM Atlantic
City"), MGM Grand Development, Inc., MGM Grand South Africa, Inc., MGM
Grand South Africa PTY LTD., MGM Grand Detroit, Inc. and MGM Grand Detroit,
LLC ("Detroit LLC") (collectively, the "Subsidiaries" and individually a
"Subsidiary"), has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its state or other
jurisdiction of incorporation. Each Subsidiary is duly qualified and in
good standing as a foreign corporation in each jurisdiction in which the
character or location of its assets or property (owned, leased or licensed)
or the nature of its business makes such qualification necessary, except
for such jurisdictions where the failure to qualify would not have a
material adverse effect on the assets or properties, business, results of
operations or financial condition of the Company and its Subsidiaries
considered as one enterprise. Except through the Company's interest in New
York-New York, LLC and The MGM Grand-Bally's Monorail Limited Liability
Company, the Company does not control, directly or indirectly, any
corporation, partnership, joint venture, association or other business
organization other than the Subsidiaries. All of the issued and
outstanding capital stock of each Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity (except for
Liens securing the Facility, the Securities and the Subsidiary Guarantees
and Permitted Liens under the Indenture).
(vii) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under "Capitalization" (except
for subsequent issuances, if any, pursuant to this Agreement or pursuant to
reservations, agreements, employee benefit plans or the exercise of
convertible securities referred to in the Prospectus); and the shares of
issued and outstanding Common Stock have been duly authorized and validly
issued and are fully paid and non-assessable.
(viii) The Company and each of the Subsidiaries has all requisite
corporate power and authority, and all necessary authorizations, approvals,
consents, orders,
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licenses, certificates and permits of and from all governmental or
regulatory bodies or any other person or entity, including any and all
licenses, permits and approvals required under any foreign, federal, state
or local law (including the Nevada Gaming Control Act, the New Jersey
Casino Control Act, the Gaming Control Act of 1933 of the Northern
Territory and the rules and regulations thereunder and any similar laws and
regulations governing any aspect of legalized gaming in any foreign,
federal, state or local jurisdiction (collectively, the "Gaming Laws")), to
own, lease and license its assets and properties and to conduct its
business, but only to the extent the same are currently conducted and
operated as described in the Registration Statement and the Prospectus.
The Company and each of the Subsidiaries have fulfilled and performed in
all material respects all of their obligations with respect to such
authorizations, approvals, consents, orders, licenses, certificates and
permits, and neither the Company nor any Subsidiary is in violation of any
term or provision of any such authorizations, approvals, consents, orders,
licenses, certificates or permits, nor has any event occurred which allows,
or after notice or lapse of time would allow, revocation or termination
thereof or which could result in any material impairment of the rights of
the holder thereof. Neither the Company nor any of the Subsidiaries has
any reason to believe that any governmental or regulatory body is
considering modifying, limiting, conditioning, suspending, revoking or not
renewing any such authorizations, approvals, consents, orders, licenses,
certificates or permits of the Company or any of the Subsidiaries or that
such governmental or regulatory bodies are investigating the Company or any
of the Subsidiaries or related parties (other than normal overseeing
reviews by such bodies incident to the gaming activities and casino
management activities of the Company and the Subsidiaries).
(ix) Neither the Company nor any Subsidiary is in violation of its
charter or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Company or any Subsidiary is a party or by which it or any of
them may be bound, or to which any of the property or assets of the Company
or any Subsidiary is subject except for any violation or default which,
individually or in the aggregate, would not have a material adverse effect
on the Company and its subsidiaries considered as one enterprise; and the
execution, delivery and performance of this Agreement, the Pricing
Agreement, the Indenture, the Collateral
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Documents and the Securities and the consummation of the transactions
contemplated herein and therein and compliance by the Company and the
Subsidiary Guarantors with their obligations hereunder and thereunder have
been duly authorized by all necessary corporate action and will not
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any Subsidiary pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Company or any Subsidiary is a party or by which it or any of
them may be bound, or to which any of the property or assets of the Company
or any Subsidiary is subject (except for Liens securing the Securities or
the collateral Guarantees), nor will such action result in any violation of
the provisions of the charter or by-laws of the Company or any Subsidiary
or any applicable law, administrative regulation or administrative or court
decree.
(x) No labor dispute with the employees of the Company or any
Subsidiary exists or, to the knowledge of the Company, is imminent; and the
Company is not aware of any existing or imminent labor disturbance by the
employees of any of its principal suppliers, manufacturers or contractors
which might be expected to result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its Subsidiaries considered as one
enterprise.
(xi) There is no action, suit or proceeding before or by any court
or governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the Company
or any Subsidiary, which is required to be disclosed in the Registration
Statement or the Prospectus (other than as disclosed therein), or which
might result in any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and its Subsidiaries considered as one enterprise, or which
might materially and adversely affect the properties or assets thereof or
which might materially and adversely affect the consummation of this
Agreement; all pending legal or governmental proceedings to which the
Company or any Subsidiary is a party or of which any of their respective
property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental to
the business, are, considered in the aggregate, not material; and there are
no contracts
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or documents of the Company or any Subsidiary which are required to be
filed as exhibits to the Registration Statement or otherwise included by
the 1933 Act or by the 1933 Act Regulations which have not been so filed or
included.
(xii) The Company and the Subsidiaries own, have incidental rights to
or possess, or can acquire on reasonable terms, the patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and trade
names (collectively, "patent and proprietary rights") presently employed by
them in connection with the business now operated by them, and neither the
Company nor any Subsidiary has received any notice or is otherwise aware of
any infringement of or conflict with asserted rights of others with respect
to any patent or proprietary rights, or of any facts which would render any
patent and proprietary rights invalid or inadequate to protect the interest
of the Company or any Subsidiary therein, and which failure, infringement
or conflict (if the subject of any unfavorable decision, ruling or finding)
or invalidity or inadequacy, singly or in the aggregate, would result in
any material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and its
Subsidiaries considered as one enterprise.
(xiii) No authorization, approval or consent of any court or
governmental authority or agency is necessary in connection with the
offering, issuance or sale of the Securities hereunder, other than as
required under the Nevada Gaming Laws, as herein after defined, which have
been obtained and, except such as may be required under the 1933 Act or the
1933 Act Regulations or state securities laws or the qualification of the
Indenture under the 1939 Act.
(xiv) This Agreement has been, and, at the Representation Date, the
Pricing Agreement will have been, duly executed and delivered by the
Company and the Subsidiary Guarantors.
(xv) The Indenture has been duly authorized by the Company and the
Subsidiary Guarantors and, at the Closing Time, will have been duly
qualified under the 1939 Act and duly executed and delivered by the Company
and the Subsidiary Guarantors and will constitute a valid and binding
agreement of the Company and the Subsidiary Guarantors, enforceable against
them in accordance with
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its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles.
(xvi) The Securities have been duly authorized and, at the Closing
Time, will have been duly executed by the Company and, when authenticated
in the manner provided for in the Indenture and delivered against payment
of the Purchase Price therefor specified in the Pricing Agreement, will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles, and will be
in the form contemplated by, and entitled to the benefits of, the
Indenture.
(xvii) The Company and each Subsidiary Guarantor have all requisite
power and authority to enter into the respective Transaction Agreements to
which it is a party and to carry out the provisions and conditions thereof
including, without limitation, the power and authority to grant and perfect
the liens in the Collateral pursuant to the Collateral Documents.
(xviii) The Securities and the Indenture will conform in all material
respects to the respective statements relating thereto contained in the
Prospectus and will be in substantially the respective forms filed or
incorporated by reference, as the case may be, as exhibits to the
Registration Statement.
(xix) The Securities rank and will rank on a parity with all
indebtedness of the Company outstanding under the Facility (as defined
under "Credit Facility" in the Basic Prospectus) that is outstanding on the
date hereof or that may be incurred hereafter, and are secured equally and
ratably with the Facility, on a first priority basis (subject to Permitted
Liens), by a pledge of all of the assets securing the Facility except as
set forth in the Prospectus. The description of the Collateral in the
Collateral Documents is identical to the Collateral securing the Facility
except for the Conditional Collateral.
(xx) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed
with the Commission,
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complied and will comply in all material respects with the requirements of
the 1934 Act and the 1934 Act Regulations, and, when read together with the
other information in the Prospectus, at the time the Registration Statement
and any amendments thereto become effective and at the Closing Time, will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(b) Any certificate signed by any officer of the Company and delivered to
the Representative or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
SECTION 2. Sale and Delivery to Underwriters:
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Closing.
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(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company agrees to
sell to each Underwriter, severally and not jointly, and each Underwriter,
severally and not jointly, agrees to purchase from the Company, at the price set
forth in the Pricing Agreement, the aggregate principal amount of Securities set
forth in Schedule A opposite the name of such Underwriter (except as otherwise
provided in the Pricing Agreement), plus any additional principal amount of
Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof.
The initial public offering price of the Securities shall be a fixed price
to be determined by agreement between the Representative and the Company. The
interest rate on the Securities likewise shall be determined by agreement
between the Company and the Representative. The initial public offering price,
the interest rate and the purchase price, when so determined, shall be set forth
in the Pricing Agreement. In the event that such prices and interest rate have
not been agreed upon and the Pricing Agreement has not been executed and
delivered by the parties thereto by the close of business on the fourth business
day following the date of this Agreement, this Agreement shall terminate
forthwith, without liability of any party to any other party, unless otherwise
agreed to by the Company and the Representative.
(b) Payment of the purchase price for, and delivery of certificates for,
the Securities shall be made at the office of Xxxxxx, Xxxx & Xxxxxxxx, 000 Xxxxx
Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx, or at such other place as shall be agreed
upon by
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the Representative and the Company, at 10:00 A.M. on the third business day
(unless postponed in accordance with the provisions of Section 10) following the
execution of the Pricing Agreement, or such other time not later than five
business days after such date as shall be agreed upon by the Representative and
the Company (such time and date of payment and delivery being herein called
"Closing Time"). Payment shall be made to the Company by certified or official
bank check or checks drawn in Los Angeles Clearing House (same day) funds
payable to the order of the Company, against delivery to the Representative for
the respective accounts of the Underwriters of the Securities to be purchased by
them. One or more global certificates representing the Securities shall be
delivered to The Depository Trust Company ("DTC"). Interests in the
Underwriters' Securities will be represented by book entries on the records of
DTC as the Representative may request not less than two full business days in
advance of the Closing Date. The Company agrees to have the global
certificate(s), if any, available for inspection by the Representatives in New
York, New York, not later than 1:00 p.m. on the business day prior to the
Closing Date.
SECTION 3. Covenants of the Company. The Company covenants with each
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Underwriter as follows:
(a) The Company will notify the Representative immediately, and
confirm the notice in writing, (i) of the effectiveness of the Registration
Statement and any amendment thereto (including any post-effective
amendment), (ii) of the receipt of any comments from the Commission, (iii)
of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose. The Company will make
every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) The Company will give the Representative notice of its intention
to file or prepare any amendment to the Registration Statement (including
any post-effective amendment) or any amendment or supplement to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise,
will furnish the Representative with copies of any such amendment or
supplement a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file any such amendment or supplement
or use any such Prospectus to which the
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Representative or counsel for the Underwriters shall object.
(c) The Company will deliver to the Representative as many signed
copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated
by reference therein) as the Representative may reasonably request and will
also deliver to the Representative a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the Underwriters.
(d) The Company will furnish to each Underwriter, from time to time
during the period when the Prospectus is required to be delivered under the
1933 Act or the 1934 Act, such number of copies of the Prospectus (as
amended or supplemented) as such Underwriter may reasonably request for the
purposes contemplated by the 1933 Act or the 1934 Act or the respective
applicable rules and regulations of the Commission thereunder.
(e) If any event shall occur as a result of which it is necessary, in
the opinion of counsel for the Underwriters, to amend or supplement the
Prospectus in order to make the Prospectus not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, the
Company will forthwith amend or supplement the Prospectus (in form and
substance satisfactory to counsel for the Underwriters) so that, as so
amended or supplemented, the Prospectus will not include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
existing at the time it is delivered to a purchaser, not misleading, and
the Company will furnish to the Underwriters a reasonable number of copies
of such amendment or supplement.
(f) The Company will endeavor, in cooperation with the Underwriters,
to qualify the Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United States
as the Representative may designate; provided, however, that the Company
shall not be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified. In each jurisdiction in
which the Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such jurisdiction
to continue such qualification
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in effect for a period of not less than one year from the effective date of
the Registration Statement.
(g) The Company will make generally available to its security holders
as soon as practicable, but not later than 50 days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the 1933 Act Regulations) covering a 12-month
period beginning not later than the first day of the Company's fiscal
quarter next following the "effective date" (as defined in said Rule 158)
of the Registration Statement.
(h) The Company will use the net proceeds received by it from the
sale of the Securities in the manner specified in the Prospectus under "Use
of Proceeds".
(i) The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act or the 1934 Act, will file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15
of the 1934 Act within the time periods required by the 1934 Act and the
1934 Act Regulations.
(j) During a period of 90 days from the date of the Pricing
Agreement, the Company will not, without the Representative's prior written
consent, directly or indirectly, sell, offer to sell, grant any option for
the sale of, or otherwise dispose of, any Securities or securities similar
to the Securities, or any securities convertible into or exchangeable or
exercisable for any Securities or any such similar securities, except for
Securities sold to the Underwriters pursuant to this Agreement.
SECTION 4. Payment of Expenses. The Company will pay all expenses
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incident to the performance of its obligations under this Agreement, including
(i) the printing and filing of the Registration Statement as originally filed
and of each amendment thereto, (ii) the printing of this Agreement, the
Indenture and the Pricing Agreement, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, (iv) the
fees and disbursements of the Company's counsel and accountants, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of a Blue Sky Survey and a Legal Investment
Survey, if any, (vi) the printing and delivery to the Underwriters of copies of
the Registration Statement as originally filed and of each
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amendment thereto, of each preliminary prospectus, and of the Prospectus and any
amendments or supplements thereto, (vii) the printing and delivery to the
Underwriters of copies of a Blue Sky Survey and any Legal Investment Survey,
(viii) the fees and expenses of the Trustee, including the fees and
disbursements of counsel for the Trustee in connection with the Indenture and
the Securities; (ix) any fees payable in connection with the rating of the
Securities; and (x) the fee of the National Association of Securities Dealers,
Inc.
If this Agreement is terminated by the Representative in accordance with
the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
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the Underwriters hereunder are subject to the accuracy of the representations
and warranties of the Company and the Subsidiary Guarantors herein contained, to
the performance by the Company of its obligations hereunder, and to the
following further conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission.
(b) At Closing Time the Representative shall have received:
(1) The favorable opinion, dated as of Closing Time, of
Xxxxxxxxxxx, Xxxxxx, Xxxx, Xxxxxx, Xxxxxx, Xxxx & Xxxxxxx, LLP,
counsel for the Company, in form and substance satisfactory to counsel
for the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the State Delaware.
(ii) The Company has all requisite corporate power and
authority to own, lease and operate its properties and to conduct
its business as described in the Registration Statement and
Prospectus, but only to the extent the same are currently
conducted and operated, and to enter into and perform its
obligations under this Agreement, the Pricing Agreement, the
Indenture, the Securities and the Collateral Documents to which
it is a party.
14
(iii) To the best of their knowledge and information, the
Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which
such qualification is required, except where failure to be in
good standing would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its Subsidiaries
considered as one enterprise.
(iv) Each Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the jurisdiction of its incorporation, has all requisite
corporate power and authority to own, lease and operate its
properties, to conduct its business as described in the
Registration Statement and Prospectus but only to the extent the
same are currently conducted and operated and to enter into and
perform its obligations under this Agreement, the Pricing
Agreement, the Indenture, the Subsidiary Guarantees and the
Collateral Documents and, to the best of their knowledge and
information, is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which such qualification is required, except where failure to be
in good standing would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its Subsidiaries
considered as one enterprise, assuming that the Company acquired
such shares in good faith and without knowledge of any adverse
claim, to the best of such counsel's knowledge, all of the issued
and outstanding capital stock of each Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable
and is owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity (except for Liens securing the
Facility, the Securities and the Subsidiary Guarantees and
Permitted Liens under the Indenture).
(v) This Agreement and the Pricing Agreement have each
been duly authorized, executed and delivered by the Company and
the Subsidiary Guarantors.
15
(vi) The Registration Statement is effective under the
1933 Act and, to the best of their knowledge and information, no
stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission.
(vii) At the time the Registration Statement became
effective and at the Representation Date, the Registration
Statement (other than the financial statements and supporting
schedules and other financial and statistical data included
therein, as to which no opinion need be rendered) complied as to
form in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations.
(viii) To the best of their knowledge and information,
there are no legal or governmental proceedings pending or
threatened which are required to be disclosed in the Registration
Statement, other than those disclosed therein.
(ix) The information in the Prospectus under
"Description of Notes", to the extent that it constitutes matters
of law, summaries of legal matters, documents or proceedings, or
legal conclusions, has been reviewed by them and is correct in
all material respects.
(x) To the best of their knowledge and information,
there are no contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or
referred to in the Registration Statement or to be filed as
exhibits thereto other than those described or referred to
therein or filed or incorporated by reference as exhibits
thereto, the descriptions thereof or references thereto are
correct in all material respects, and no default exists in the
due performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument so described, referred to, filed or incorporated by
reference, where the consequences of such default would have a
material adverse effect on the condition, financial or otherwise,
or the earnings, business affairs or business prospects
16
of the Company and its Subsidiaries considered as one enterprise.
(xi) No authorization, approval, consent or order of any
court or governmental authority or agency is required in
connection with the offering, issuance or sale of the Securities
and the Subsidiary Guarantees contemplated herein and in the
Prospectus, except (a) as disclosed in the Registration
Statement; (b) with respect to the Conditional Collateral or (c)
such as may be required under the Nevada Gaming Laws, as herein
after defined, which have been obtained or the 1933 Act or the
1933 Act Regulations or state securities law or the qualification
of the Indenture under the 1939 Act; and, to the best of their
knowledge and information, the execution, delivery and
performance of this Agreement, the Pricing Agreement, the
Indenture, the Collateral Documents, the Securities and the
Subsidiary Guarantees and the consummation of the transactions
contemplated herein and therein and compliance by the Company and
the Subsidiary Guarantors with its or their obligations hereunder
and thereunder will not conflict with or constitute a breach of,
or default under, or result in the creation or imposition of any
lien, charge or encumbrance (except for Liens securing the
Securities or the Collateral Guarantees or as otherwise
contemplated by the Indenture) upon any property or assets of the
Company or any of its Subsidiaries pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any Subsidiary is a party or
by which it or any of them may be bound, or to which any of the
property or assets of the Company or any of its subsidiaries is
subject which would result in a material adverse effect on the
condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its Subsidiaries
considered as one enterprise, nor will such action result in any
violation of the provisions of any applicable law, administrative
regulation or administrative or court decree which would result
in a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business
prospects of the Company and its Subsidiaries considered as one
enterprise or the charter or by-laws of the Company or any
Subsidiary.
17
(xii) To the best of their knowledge and information,
there are no persons with registration or other similar rights to
have any securities registered pursuant to the Registration
Statement or otherwise registered by the Company under the 1933
Act.
(xiii) The Indenture, the Securities and the Collateral
Documents have been duly authorized, and the Indenture and the
Collateral Documents have been duly executed and delivered by the
Company and (assuming the due authorization, execution and
delivery thereof by the Trustee) the Indenture and the Collateral
Documents constitute and the Securities, when executed by the
Company and authenticated by the Trustee in the manner provided
in the Indenture and delivered against payment therefor specified
in the Pricing Agreement, will constitute the valid and binding
agreements of the Company enforceable against the Company in
accordance with their terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar law relating to or affecting
creditors' rights generally or by general equitable principles,
and except that certain provisions of the above-referenced
documents may not be enforceable in whole or in part under the
laws of the State of Nevada, but the inclusion of such provisions
does not affect the validity of such documents and such documents
contain adequate provisions for enforcing payment of the monetary
obligations of the Company under the Securities and for the
practical realization of the rights and benefits afforded
thereby, provided such enforcement is conducted in accordance
with the procedures established by the laws of the State of
Nevada. We express no opinion with respect to enforceability of
the pledge of the Conditional Collateral.
(xiv) The Indenture, the Subsidiary Guarantees contained
within the Indenture and the Collateral Documents to which they
are a party have been duly authorized, executed and delivered by
the Subsidiary Guarantors and (assuming the due authorization,
execution and delivery thereof by the Trustee) constitute valid
and binding agreements of the Subsidiary Guarantors enforceable
against the Subsidiary Guarantors in accordance with their terms,
18
except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar law
relating to or affecting creditors' rights generally or by
general equitable principles, and except that certain provisions
of the above-referenced documents may not be enforceable in whole
or in part under the laws of the State of Nevada, but the
inclusion of such provisions does not affect the validity of such
documents and such documents contain adequate provisions for
enforcing payment of the monetary obligations of the Company
under the Securities and for the practical realization of the
rights and benefits afforded thereby, provided such enforcement
is conducted in accordance with the procedures established by the
laws of the State of Nevada. Nevada law requires approval under
the Nevada Gaming Laws prior to the sale, disposition or
distribution of slot machines or other gaming devices or in order
to operate or conduct gaming activities at a gaming facility or
to receive the proceeds from either of the foregoing.
(xv) The Securities are in the form contemplated by the
Indenture.
(xv) The Subsidiary Guarantees have been duly authorized
by the Subsidiary Guarantors and, on the Closing Date will have
been executed by each of the Subsidiary Guarantors. Each of the
Subsidiary Guarantees will constitute valid and binding
obligations of the respective Subsidiary Guarantor, enforceable
against such Subsidiary Guarantor in accordance with their terms,
except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by
general equitable principles.
(xvi) The Indenture has been duly qualified under the
1939 Act.
(xvii) The Securities, the Subsidiary Guarantees and the
Indenture conform in all material respects to the descriptions
thereof contained in the Prospectus.
(xviii) Each document filed pursuant to the 1934 Act (other
than the financial statements and supporting schedules included
19
therein, as to which no opinion need be rendered) and
incorporated or deemed to be incorporated by reference in the
Prospectus complied when so filed as to form in all material
respects with the 1934 Act and the 1934 Act Regulations.
(xix) Subject to the limitations on enforceability
contained in paragraphs (xiii) and (xiv) above, the Company
Pledge Agreement (as confirmed by the Confirmation of Pledge
Agreement) and Subsidiary Pledge Agreements create valid security
interests in favor of the trustee for the benefit of the holders
of the Securities in the pledged collateral described therein
delivered on or before the Closing Time. Such security interests
are perfected so long as the Administrative Agent, as defined in
the Intercreditor Agreement, maintains physical possession of the
pledged collateral pursuant to the terms of the Company Pledge
Agreement, the Subsidiary Pledge Agreements and the Intercreditor
Agreement.
(2) The favorable opinion, dated as of the Closing Time, of
Xxxxxx, Xxxxxx & Xxxxxxx, Nevada counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, to the effect
that:
(i) Each of MGM Hotel, MGM Finance, Destron, Inc., MGM
Movieworld, MGM Laundry, MGM Diamond, MGM Monorail and MGM Grand
Merchandising, Inc. (the "Nevada Subsidiaries") has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Nevada. All of the issued
and outstanding shares of capital stock of each of the Nevada
Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable and are directly owned of record by
the Company. Assuming that the Company acquired such shares in
good faith and without knowledge of any adverse claim, to the
best of such counsel's knowledge, the Company holds such shares
free and clear of any security interest, lien, encumbrance or
other adverse claim (except for Liens securing the Facility,
the Securities and the Subsidiary Guarantees and Permitted Liens
under the Indenture). To such counsel's knowledge, except as
disclosed in the Registration Statement and the Prospectus, there
20
is no outstanding subscription, option, warrant or other right
calling for the issuance of any share of stock of any of the
Nevada Subsidiaries or any security convertible into, exercisable
for, or exchangeable for stock of any Nevada Subsidiary.
(ii) Each of the Nevada Subsidiaries has all requisite
corporate power and authority to own, lease and license their
assets and properties, to conduct their businesses as described
and to the extent described in the Registration Statement and
Prospectus, but only to the extent the same are currently
conducted and operated and to enter into and perform its
obligations under this Agreement, the Pricing Agreement, the
Indenture, the Subsidiary Guarantees contained within the
Indenture and the Collateral Documents to which they are parties.
(iii) To the extent they are parties thereto, the
Indenture, the Subsidiary Guarantees contained within the
Indenture and the Collateral Documents have been duly and validly
authorized, executed and delivered by each Nevada Subsidiary
which is a Subsidiary Guarantor.
(iv) The Construction and Permanent Deed of Trust With
Assignment of Rents and Security Agreement and Fixture Filing
from MGM Hotel as grantor to First American Title Company of
Nevada, as trustee for the benefit of Trustee (the "Nevada
Mortgage") creates a valid deed of trust Lien (as defined in the
Indenture) on MGM Hotel's interest in that portion of the
Property (as defined in the Mortgage) which constitutes real
property and, assuming due recordation of the Mortgage in the
Official Records of the Recorder of Xxxxx County, Nevada, imparts
constructive notice of such Lien to third parties as provided in
NRS 111.320 for the benefit of Trustee as trustee for the holders
of the Securities and which secures the Secured Obligations (as
defined in the Mortgage). Subject to the limitations on
enforceability set forth in opinion ix and (x) below, each of the
Collateral Documents other than the Intercreditor Agreement and
the New Jersey Mortgage as defined below, creates a valid
security interest in the Company's and the
21
Subsidiary Guarantors (as the case may be) interest in that
portion of the collateral (as defined in the appropriate
Collateral Documents) which constitutes personal property and in
which a security interest may be created under Article 9 of the
Nevada Uniform Commercial Code (the "NUCC") (collectively, the
"UCC Collateral"). Upon filing of the {describe Financing
Statements} with the Nevada Secretary of State and recordation of
the Mortgage in the Official Records of the Xxxxx County, Nevada
Recorder, such security interest will be a perfected security
interest in the UCC Collateral to the extent a security interest
can be perfected therein by the filing of a financing statement
under the NUCC. We express no opinion with respect to the
Conditional Collateral (as defined in the Prospectus).
(v) To such counsel's knowledge, none of the Nevada
Subsidiaries is in violation of any term or provision of its
charter or bylaws. Except as disclosed in the Registration
Statement and the Prospectus, to such counsel's knowledge, no
default exists and no event has occurred which with notice or
lapse of time, or both, would constitute a default in the due
performance and observance of any express term, covenant or
condition by any of the Nevada Subsidiaries of any indenture,
mortgage, deed of trust, note or any other agreement or
instrument to which any of the Nevada Subsidiaries are parties or
by which they or any of their assets or properties or businesses
may be bound or affected, where the consequences of such default
would have a material adverse effect on the assets, properties,
business, results of operations, prospects or financial condition
of the Company and its subsidiaries considered as one enterprise.
(vi) Each of the Company and the Nevada Subsidiaries has
all authorizations, approvals, consents, orders, licenses,
certificates and permits required of or from any governmental or
regulatory body under the Nevada Gaming Control Act and the rules
and regulations promulgated thereunder (the "Nevada Gaming
Laws")(each, a "Nevada Permit") to own, lease and license its
assets and properties and to conduct its business as described in
the Registration Statement and the Prospectus but only to the
22
extent the same are currently conducted and operated. To such
counsel's knowledge, the Company and each of the Nevada
Subsidiaries have fulfilled and performed in all material
respects all of their obligations with respect to Nevada Permits,
and, to the best of such counsel's knowledge, neither the Company
nor any Nevada Subsidiary is in violation of any term or
provision of any such Nevada Permits, nor has any event occurred
which allows, or after notice or lapse of time would allow,
revocation or termination thereof or which could result in any
material impairment of the rights of the holder of any such
Nevada Permits.
(vii) This Agreement and the Pricing Agreement to the
extent the Nevada Subsidiaries are parties thereto have each been
duly authorized, executed and delivered by the Nevada
Subsidiaries. No Nevada Permits are required for the performance
of this Agreement or for the consummation of the transactions
contemplated hereby or any other transaction described in the
Registration Statement to be entered into prior to or
contemporaneously with the sale of the Securities and the
Subsidiary Guarantees, except (i) as disclosed in the
Registration Statement (ii) with respect to the Conditional
Collateral and (iii) except for such Nevada Permits that have
been obtained.
(viii) Assuming that (a) the execution, delivery and
performance of the Intercreditor Agreement are within the power
of the parties thereto, (b) such document has been duly
authorized, executed and delivered and (c) such document will not
violate or result in a breach of any term or provision of any
agreement, judgment, decree or administrative order to which the
parties thereto are subject, the Intercreditor Agreement
constitutes the valid, binding and enforceable obligation of the
parties thereto, enforceable in accordance with its terms
including, without limitation, the provisions thereof which make
the Liens securing the Securities and the Subsidiary Guarantees
and the Liens securing the Facility pari passu except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar law relating to or
affecting creditors' rights generally with respect to the parties
to such agreement or by
23
general equitable principles with respect to the parties to such
agreement.
(ix) Assuming (except as hereinafter provided with respect
to the Securities) the due authorization, execution and delivery
of the Indenture and the Collateral Documents to which it is a
party by the Company, the Indenture and such Collateral Documents
constitute, and the Securities, when executed by the Company and
authenticated by the Trustee in the manner provided in the
Indenture (assuming the due authorization, execution and delivery
of the Indenture by the Trustee) and delivered against payment of
the Purchase Price therefor specified in the Pricing Agreement,
will constitute, the valid and binding agreements of the Company
enforceable against the Company in accordance with their terms
and entitled to the benefits of the Indenture, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar law relating to or
affecting creditors' rights generally or by general equitable
principles and except that certain provisions of the above-
referenced documents may not be enforceable in whole or in part
under the laws of the State of Nevada, but the inclusion of such
provisions does not affect the validity of such documents and
such documents contain adequate provisions for enforcing payment
of the monetary obligations of the Company under the Securities
and for the practical realization of the rights and benefits
afforded thereby, provided such enforcement is conducted in
accordance with the procedures established by the laws of the
State of Nevada.
(x) The Indenture and the Collateral Documents have been
duly authorized, executed and delivered by the Nevada
Subsidiaries to the extent they are parties thereto. Assuming
the due authorization, execution and delivery of the Indenture
and the Collateral Documents to which they are a party by the
Subsidiary Guarantors, other than the Nevada Subsidiaries
(assuming the due authorization, execution and delivery thereof
by the Trustee) the Indenture and the Collateral Documents to
which they are a party constitute valid and binding agreements of
the Subsidiary Guarantors enforceable against the Subsidiary
Guarantors in accordance with their
24
terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar law relating to or affecting creditors' rights generally
or by general equitable principles and except that certain
provisions of the above-referenced documents may not be
enforceable in whole or in part under the laws of the State of
Nevada, but the inclusion of such provisions does not affect the
validity of such documents and such documents contain adequate
provisions for enforcing payment of the monetary obligations of
the Subsidiary Guarantors under the Indenture and the Collateral
Documents and for the practical realization of the rights and
benefits afforded thereby, provided such enforcement is conducted
in accordance with the procedures established by the laws of the
State of Nevada. Nevada law requires approval under the Nevada
Gaming Laws prior to the sale, disposition or distribution of
slot machines or other gaming devices or in order to operate or
conduct gaming activities at a gaming facility or to receive the
proceeds from either of the foregoing.
(xi) Assuming the due authorization, execution and
delivery thereof by the Company and the Subsidiary Guarantors,
other than the Nevada Subsidiaries, and subject to the
limitations on enforceability contained in opinions (ix) and (x)
above, the Company Pledge Agreement, as defined in the Indenture,
and the Subsidiary Pledge Agreements, as defined in the
Indenture, create valid security interests in favor of the
Trustee for the benefit of the holders of the Securities in the
pledged collateral described therein delivered on or before the
Closing Time. Such security interests are perfected so long as
the Administrative Agent, as defined in the Intercreditor
Agreement, maintains physical possession of the pledged
collateral pursuant to the terms of the Company Pledge Agreement,
the Subsidiary Pledge Agreements and the Intercreditor Agreement.
(xii) The statements in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1996 (the "Annual
Report") under the captions "Business - Hotels and Gaming -
Nevada Government Regulation" and -
25
"Regulation and Taxes," incorporated by reference into the
Prospectus, and the Statements under the caption "Regulation and
Licensing -- Nevada" included in the Prospectus insofar as such
statements constitute a summary of matters of Nevada law in
effect at the time such statements were made, are correct in all
material respects.
(3) The favorable opinion, dated as of the Closing Time, of
Xxxxxx & Xxxxxxxx, New Jersey Counsel for the Company in form and
substance satisfactory to counsel for the Underwriters to the effect
that:
(i) MGM Atlantic City has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of New Jersey. All of the issued and outstanding shares of
capital stock of MGM Atlantic City have been duly authorized and
validly issued, are fully paid and nonassessable and are directly
owned of record by the Company. Assuming the Company acquired
such shares in good faith and without knowledge of any adverse
claim, to the best of such counsel's knowledge, the Company holds
such shares free and clear of any security interest, lien,
encumbrance or other adverse claim (except for Liens securing the
Facility, the Securities and the Subsidiary Guarantees to be
executed by MGM Atlantic City). To such counsel's knowledge,
except as disclosed in the Registration Statement and the
Prospectus, there is no outstanding subscription, option, warrant
or other right calling for the issuance of any share of stock of
MGM Atlantic City or any security convertible into, exercisable
for, or exchangeable for stock of such Subsidiary.
(ii) MGM Atlantic City has all requisite corporate power
and authority to own, lease and license its assets and
properties, to conduct its businesses as described in the
Registration Statement and Prospectus, but only to the extent the
same are currently conducted and operated, and to enter into and
perform its obligations under this Agreement, the Indenture, its
Subsidiary Guarantee and the Collateral Documents to which it is
a party.
26
(iii) MGM Atlantic City has taken all necessary corporate
action to authorize the execution and delivery of this Agreement,
the Indenture, its Subsidiary Guarantee and the Collateral
Documents to which it is a party.
(iv) The Mortgage (as defined in the Indenture) to be
executed and delivered by MGM Atlantic City in accordance with
the terms of this Agreement, the Indenture and the Collateral
Documents (the "New Jersey Mortgage") creates a valid Lien (as
defined in the Indenture) upon the real property of MGM Atlantic
City described therein and located in New Jersey, and imparts
constructive notice of such Lien to third parties as provided in
N.J.S.A. (S) 46:21-1, benefiting the Mortgagee described therein,
for the benefit of [the Trustee and the holders of the Subsidiary
Guarantee of MGM Atlantic City], on the "Property" (as such term
is defined in the New Jersey Mortgage), which Lien secures the
performance of the Secured Obligations (as defined in the New
Jersey Mortgage) of MGM Atlantic City, assuming that the New
Jersey Mortgage is executed and delivered by MGM Atlantic City
and is properly recorded in the official records of the Clerk of
Atlantic County, New Jersey.
(v) Assuming that the Company Security Agreement and the
Subsidiary Security Agreement to be executed by MGM Atlantic City
create valid security interests in the personal property of the
Company and MGM Atlantic City described therein and located in
New Jersey, upon proper filing with the governmental offices
described on an Exhibit to such opinion of the financing
statements attached thereto in copy, the Liens in the [Company
Personal Property Collateral] and the [Subsidiary Personal
Property Collateral] will be perfected security interests, to the
extent a security interest can be perfected therein by the filing
of Form UCC-1 financing statements under the Uniform Commercial
Code of the State of New Jersey.
(vi) Assuming that the Intercreditor Agreement is
enforceable against the parties thereto as a matter of Nevada law
and has been duly authorized, executed and delivered by the
parties thereto, to the extent New Jersey law applies,(x) with
respect to Liens created by the
27
New Jersey Mortgage such counsel is not aware of any New Jersey
law that would render ineffective the agreements of such parties
in the Intercreditor Agreement to the effect that, as between
such parties only, the Liens securing the Securities and the
Subsidiary Guarantees and the Liens securing the Facility shall
be pari passu, and (y) with respect to Liens created by the
Security Agreement executed by the Company and MGM Atlantic City,
such counsel is of the opinion that the agreements of such
parties in the Intercreditor Agreement are effective such that,
as between such parties only, the Liens securing the Securities
and the Subsidiary Guarantees and the Liens securing the Facility
shall be pari passu, in each instance as to only those assets of
the Company and the Subsidiary Guarantors in which a valid
security interest has been created under both the Facility and
the Securities and the Subsidiary Guarantees, except as otherwise
set forth in the Intercreditor Agreement or the Prospectus, and
except as the enforcement of the Intercreditor Agreement may be
limited by bankruptcy, fraudulent transfer and conveyance,
insolvency, moratorium and similar laws affecting the rights of
creditors generally as applied to the parties to the
Intercreditor Agreement or by general equitable principles as
applied to the parties to the Intercreditor Agreement.
(vii) To such counsel's knowledge, MGM Atlantic City is not
in violation of any term or provision of its charter or bylaws.
Except as disclosed in the Registration Statement and the
Prospectus, to such counsel's knowledge, no default exists and no
event has occurred which with notice or lapse of time, or both,
would constitute a default in the due performance and observance
of any express term, covenant or condition by such Subsidiary of
any indenture, mortgage, deed of trust, note or any other
agreement or instrument to which such Subsidiary is a party or by
which it or any of its assets or properties or businesses may be
bound or effected, where the consequences of such default would
have a material adverse effect on the assets, properties,
business, results of operations, prospects or financial condition
of the Company.
28
(viii) No authorization, approval, consent, order, license,
certificate or permit required of or from any governmental or
regulatory body under the New Jersey Casino Control Act and the
rules and regulations promulgated thereunder (the "New Jersey
Gaming Laws")(each, "a New Jersey Permit") is required for the
performance of this Agreement or for the consummation of the
transactions contemplated hereby or any other transaction
described in the Registration Statement to be entered into in
connection therewith except as disclosed in the Registration
Statement and except for such New Jersey Permits that have been
obtained. This Agreement, the Registration Statement and the
Prospectus have been presented to any and all governmental
agencies or authorities to the extent required by any New Jersey
Gaming Laws, and such documents and the transactions contemplated
hereby or thereby have been approved by or on behalf of such
governmental agencies or authorities to the extent required by
any New Jersey Gaming Laws, and such approvals have not been
revoked, modified or rescinded.
(ix) The statements in the Prospectus under the caption
"Regulation and Licensing" insofar as such statements constitute
a summary of matters of New Jersey law, are correct in all
material respects.
(4) The favorable opinion of Xxxxxxxxx Xxxxxx PLLC, Michigan
counsel to the Company, in form and substance satisfactory to counsel
for the Underwriters, to the effect that:
(i) The statements in the Prospectus under the caption
"Regulation and Licensing" insofar as such statements constitute
a summary of matters of Michigan law, is correct in all material
respects.
(5) The favorable opinion, dated as of Closing Time, of Xxxxxx,
Xxxx & Xxxxxxxx, counsel for the Underwriters, with respect to the
matters set forth in (i), (v) to (vii), inclusive, and (xiii) to
(xvii), inclusive of subsection (b)(1) of this Section.
(6) In giving their opinions required by subsections (b)(1) and
(b)(5), respectively, of this
29
Section, Xxxxxxxxxxx, Xxxxxx, Xxxx, Xxxxxx, Xxxxxx, Xxxx & Xxxxxxx,
LLP and Xxxxxx, Xxxx & Xxxxxxxx shall each additionally state that
nothing has come to their attention that would lead them to believe
that the Registration Statement (except for financial statements and
schedules and other financial or statistical data included or
incorporated by reference therein and that part of the Registration
Statement which constitutes the Trustee's Statement of Eligibility and
Qualification under the 1939 Act (Form T-1), as to which counsel need
make no statement), at the time it became effective or at the
Representation Date, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus (except for financial statements and schedules and other
financial or statistical data included or incorporated by reference
therein, as to which counsel need make no statement), at the
Representation Date or at Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(c) At Closing Time there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
the Representative shall have received a certificate of the president or a
vice president of the Company and of the secretary of the Company, dated as
of Closing Time, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties in Section 1 hereof
are true and correct with the same force and effect as though expressly
made at and as of Closing Time, (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time, and (iv) no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been initiated or threatened by the
Commission.
30
(d) At the time of the execution of this Agreement, the
Representative shall have received from Xxxxxx Xxxxxxxx LLP, independent
public accountants a letter dated such date, in form and substance
satisfactory to the Representative, to the effect that (i) they are
independent public accountants with respect to the Company and its
subsidiaries within the meaning of the 1933 Act and the 1933 Act
Regulations; (ii) it is their opinion that the financial statements and
supporting schedules included in the Registration Statement and the
Prospectus and covered by their opinions therein comply as to form in all
material respects with the applicable accounting requirements of the 1933
Act and the 1933 Act Regulations; (iii) based upon limited procedures set
forth in detail in such letter, nothing has come to their attention which
causes them to believe that (A) the unaudited financial statements and
supporting schedules of the Company and its subsidiaries included in the
Registration Statement and the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the 1933
Act and the 1933 Act Regulations or are not presented in conformity with
generally accepted accounting principles applied on a basis consistent with
that of the audited financial statements included in the Registration
Statement, or (B) the unaudited amounts of revenues, net income and net
income per share set forth under "Selected Consolidated Financial
Information" in the Prospectus were not determined on a basis consistent
with that used in determining the corresponding amounts in the audited
financial statements included in the Registration Statement and the
Prospectus; and (iv) in addition to the examination referred to in their
opinions and the limited procedures referred to in clause (iii) above, they
have carried out certain specified procedures, not constituting an audit,
with respect to certain amounts, percentages and financial information
which are included in the Registration Statement and Prospectus and which
are specified by the Representative, and have found such amounts,
percentages and financial information to be in agreement with the relevant
accounting, financial and other records of the Company and its subsidiaries
identified in such letter.
(e) At Closing Time the Representative shall have received from
Xxxxxx Xxxxxxxx LLP, independent public accountants a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (d) of this Section, except that
the specified date referred to shall be a date not more than five days
prior to Closing Time.
31
(f) At Closing Time, the Securities shall be rated at least Baa3 by
Xxxxx'x Investors Service Inc. and BBB- by Standard & Poor's Corporation,
and the Company shall have delivered to the Representative a letter, dated
the Closing Time, from each such rating agency, or other evidence
satisfactory to the Representative, confirming that the Securities have
such ratings; and, since the date of this Agreement, there shall not have
occurred a downgrading in the rating assigned to the Securities or any of
the Company's other debt securities by any nationally recognized securities
rating agency, and no such securities rating agency shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of the Securities or any of the Company's other
debt securities.
(g) At Closing Time counsel for the Underwriters shall have been
furnished with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated and related proceedings, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the
Securities as herein contemplated shall be satisfactory in form and
substance to the Representative and counsel for the Underwriters.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Representative by notice to the Company at any time at or prior to Closing Time,
and such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof.
SECTION 6. Indemnification.
---------------
(a) The Company and the Subsidiary Guarantors, jointly and severally agree
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act as
follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), or the Prospectus or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements
32
therein not misleading or arising out of any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto) or the omission
or alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 6(c) hereof, the fees and disbursements of counsel
chosen by BancAmerica Xxxxxxxxx Xxxxxxxx), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
-------- -------
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representative expressly for use in the Registration
Statement (or any amendment thereto) or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto) or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in
33
conformity with written information furnished to the Company by such Underwriter
through the Representative expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No indemnifying
party shall, without the prior consent of the indemnified parties (which consent
shall not be unreasonably withheld), settle or compromise or consent to the
entry of any judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnification or contribution could be
sought under this Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for the reasonable fees
and expenses of counsel, such indemnifying party agrees that it shall be liable
for any settlement of the nature contemplated by Section 6(a)(ii) effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the
date of such settlement.
34
SECTION 7. Contribution. In order to provide for just and equitable
------------
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company and the
Underwriters shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and one or more of the Underwriters, as incurred, in
such proportions that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount appearing on the
cover page of the Prospectus bears to the initial public offering price
appearing thereon and the Company is responsible for the balance; provided,
however, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as the Company.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement and
the Pricing Agreement, or contained in certificates of officers of the Company
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
------------------------
(a) The Representative may terminate this Agreement, by notice to the
Company, at any time at or prior to Closing Time (i) if there has been, since
the date of this Agreement or since the respective dates as of which information
is given in the Registration Statement, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or elsewhere or any outbreak of hostilities or escalation
thereof or other calamity or crisis
35
the effect of which is such as to make it, in the judgment of the
Representative, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in the Common Stock of the
Company has been suspended by the Commission, or if trading generally on either
the American Stock Exchange or the New York Stock Exchange has been suspended,
or minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by either of said Exchanges or by
order of the Commission or any other governmental authority, or if a banking
moratorium has been declared by either Federal, New York or Nevada authorities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof. Notwithstanding any such termination, the
provisions of Sections 6 and 7 shall remain in effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
------------------------------------------
the Underwriters shall fail at Closing Time to purchase the Securities which it
or they are obligated to purchase under this Agreement and the Pricing Agreement
(the "Defaulted Securities"), the Representative shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representative shall not have completed
such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
Securities, each of the non-defaulting Underwriters shall be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear
to the underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
Securities, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Representative or
36
the Company shall have the right to postpone Closing Time for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements.
SECTION 11. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representative at BancAmerica Xxxxxxxxx
Xxxxxxxx, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, attention of
Syndicate Manager, notices to the Company shall be directed to it at 0000 Xxx
Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxx 00000, attention of Xxxxx Xxxxxxxx,
Secretary, Treasurer.
SECTION 12. Parties. This Agreement and the Pricing Agreement shall each
-------
inure to the benefit of and be binding upon the Underwriters and the Company and
their respective successors. Nothing expressed or mentioned in this Agreement or
the Pricing Agreement is intended or shall be construed to give any person, firm
or corporation, other than the Underwriters and the Company and their respective
successors and the controlling persons, officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or the
Pricing Agreement or any provision herein or therein contained. This Agreement
and the Pricing Agreement and all conditions and provisions hereof and thereof
are intended to be for the sole and exclusive benefit of the Underwriters and
the Company and their respective successors, and said controlling persons,
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. Governing Law and Time. This Agreement and the Pricing
----------------------
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in said
State. Specified times of day refer to New York City time.
37
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
MGM Grand, Inc.
By /s/ Xxxxx Xxxxxxxx
---------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Secretary/Treasurer
Joined in and agreed to and accepted by the
following Subsidiary Guarantors as of the date
first above written:
MGM Grand Hotel Inc.
By /s/ Xxxxx Xxxxxxxx
---------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Assistant Secretary
MGM Grand Movieworld, Inc.
By /s/ Xxxxx Xxxxxxxx
---------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Secretary
38
Grand Laundry, Inc.
By /s/ Xxxxx Xxxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Secretary
MGM Grand Monorail, Inc.
By /s/ Xxxxx Xxxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Secretary/Treasurer
MGM Dist., Inc.
By /s/ Xxxxx Xxxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Secretary/Treasurer
Destron, Inc.
By /s/ Xxxxx Xxxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Secretary/Treasurer
Destron Marketing, Inc.
By /s/ Xxxxx Xxxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Secretary
39
MGM Grand Merchandising, Inc.
By /s/ Xxxxx Xxxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Secretary/Treasurer
MGMG Trading Co.
By /s/ Xxxxx Xxxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Secretary/Treasurer
MGM Grand Atlantic City, Inc.
By /s/ Xxxxx Xxxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Secretary/Treasurer
MGM Grand Development, Inc.
By /s/ Xxxxx Xxxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Secretary/Treasurer
MGM Grand Detroit, Inc.
By /s/ Xxxxx Xxxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Secretary/Chief Financial Officer
40
CONFIRMED AND ACCEPTED,
as of the date first above written:
BancAmerica Xxxxxxxxx Xxxxxxxx
By /s/ X. X. Xxxxxxxx
---------------------------
Name: X. X. Xxxxxxxx
Title: Managing Director
For itself and as Representative of the other Underwriters named in Schedule A
hereto.
41
SCHEDULE A
Aggregate
Principal Amount
Name of Underwriter of Securities
------------------- -------------
BancAmerica Xxxxxxxxx Xxxxxxxx......... $100,000,000
Deutsche Xxxxxx Xxxxxxxx, Inc.......... $100,000,000
CIBC Xxxxxxxxxxx Corp.................. $100,000,000
------------
Total.................................. $300,000,000
============
$300,000,000
MGM Grand, Inc.
(a Delaware corporation)
6.95% Senior Collateralized Notes Due 2005
PRICING AGREEMENT
-----------------
January 26, 1998
BancAmerica Xxxxxxxxx Xxxxxxxx
as Representative of the several Underwriters
named in the within-mentioned Purchase Agreement
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Dear Sirs:
Reference is made to the Purchase Agreement dated January 26, 1998 (the
"Purchase Agreement") relating to the purchase by the several Underwriters named
in Schedule A thereto, for whom BancAmerica Xxxxxxxxx Xxxxxxxx is acting as
representative (the "Representative"), of the above 6.95% Senior Collateralized
Notes due 2005 (the "Securities") of MGM Grand, Inc., a Delaware corporation
(the "Company").
Pursuant to Section 2 of the Purchase Agreement, the Company agrees with
each Underwriter as follows:
1. The initial public offering price of the Securities shall be
98.639% of the principal amount thereof, plus accrued interest, if any,
from the date of settlement.
2. The purchase price to be paid by the Underwriters for the
Securities shall be 98.039% of the principal amount thereof.
3. The interest rate on the Securities shall be 6.95% per annum.
4. The semi annual interest payment dates shall be August 1 and
February 1, beginning on August 1, 1998.
5. The maturity date shall be February 1, 2005.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
MGM Grand, Inc.
By /s/ Xxxxx Xxxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Secretary/Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written:
BancAmerica Xxxxxxxxx Xxxxxxxx
By /s/ X. X. Xxxxxxxx
---------------------------
Name: X. X. Xxxxxxxx
Title: Managing Director
For itself and as Representative of the other Underwriters named in Schedule A
hereto.
2
