MGM Resorts International (Form: 8-K, Received: 03/18/2019 17:03:29)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 14, 2019

MGM RESORTS INTERNATIONAL

(Exact name of registrant as specified in its charter)


DELAWARE	001-10362	88-0215232
(State or other jurisdiction of incorporation)	(Commission file number)	(I.R.S. employer identification no.)

3600 Las Vegas Boulevard South, Las Vegas, Nevada		89109
(Address of principal executive offices)		(Zip code)

(702) 693-7120

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01 Entry Into a Material Definitive Agreement.

On March 15, 2019, MGM China Holdings Limited (“MGM China”), an indirect majority-owned subsidiary of MGM Resorts International (the “Company”), announced that on March 14, 2019, MGM Grand Paradise Limited (“MGM Grand Paradise”), a wholly owned subsidiary of MGM China, and Sociedade de Jogos de Macau, S.A. (“SJM”) entered into a Sub-Concession Extension Contract (the “Extension Agreement”) pursuant to which the gaming sub-concession of MGM Grand Paradise, which is due to expire on March 31, 2020, would be extended to June 26, 2022. In connection with the extension, MGM Grand Paradise will pay the government of Macau MOP200 million (equivalent to approximately HK$194.17 million or US$24.73 million) as contract premium for such extension.

Pursuant to the Extension Agreement, MGM Grand Paradise is also required to provide a bank guarantee in an amount of not less than MOP820 million (equivalent to approximately HK$796.12 million or US$101.42 million) to the government of Macau within three months from the date of signing of the Extension Contract to warrant the fulfillment of labor debts upon the expiration of the Extension Contract. The Macau Government may require an increase in the amount of the guarantee, depending on the actual number of employees employed by MGM Grand Paradise.

In addition, MGM Grand Paradise also executed the MGM SJM Agreement with SJM, pursuant to which MGM Grand Paradise will pay SJM an amount of MOP20 million (equivalent to approximately HK$19.42 million or US$2.47 million) in connection of the extension of the sub-concession.

This descriptions of the Extension Agreement and MGM SJM Agreement are qualified in their entirety by reference to the full text of the Extension Agreement and the MGM SJM Agreement attached hereto as Exhibits 10.1 and 10.2, respectively.

Item 9.01 Financial Statements and Exhibits.

(a) Not applicable.

(b) Not applicable.

(d) Exhibits:


Exhibit No.		Description

10.1		Sub-Concession Extension Contract, dated as of March 15, 2019, between MGM Grand Paradise Limited and Sociedade de Jogos de Macau, S.A.

10.2		MGM SJM Agreement, dated as of March 15, 2019, between MGM Grand Paradise Limited and Sociedade de Jogos de Macau, S.A.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: March 18, 2019


MGM Resorts International

By:	/s/ Andrew Hagopian III
	Name:	Andrew Hagopian III
	Title:	Chief Corporate Counsel & Assistant Secretary

Exhibit 10.1

TRANSLATION FOR REFERENCE ONLY

Draft Addendum to the Sub-Concession Contract for the Operation of Games of Luck and Chance or Other Games in Casino in the Special Administrative Region of Macau

Between

Sociedade de Jogos de Macau, S.A., hereinafter the “concessionaire”, with registered office address in Macau, at Avenida de Lisboa, n.ºs 2 a 4, Hotel Lisboa, 9.º andar, registered with the Commercial and Moveable Property Registrar under no. 15056, herein represented by its directors Leong On Kei (holder of Macau Resident ID Card no. 7385888(8)) e So Shu Fai Ambrose (holder of Macau Resident ID Card no. 1263414(3)),

and

MGM Grand Paradise S.A., hereinafter the “sub-concessionaire”, with registered office address in Macau, at Avenida do Dr. Sun Yat Sen, n.º 1101, Edifício MGM Macau, registered with the Commercial and Moveable Property Registrar under no. 18972, herein represented by its director Ho, Pansy Catilina Chiu King (holder of Macau Resident ID Card no. 1263414(3)).

Whereas,

The Parties hereby accept and enter into the present administrative contract of sub-concession for the operation of games of luck and chance or other games in casino, governed by the provisions below.

Clause One :

Clause eight of the Sub-Concession Contract for the Operation of Games of Luck and Chance or Other Games in Casino entered into between Sociedade de Jogos de Macau, S.A., as a concessionaire, and MGM Grand Paradise S.A., as a sub-concessionaire, is hereby amended as follows:

“ Clause eight – Term of the sub-concession

One . The term of the sub-concession is extended up until twenty six June of the year two thousand twenty two.

Two . [unchanged].”

TRANSLATION FOR REFERENCE ONLY

Clause Two :

Clauses sixty three-A and sixty nine-A are added to the contract:

“ Clause sixty three-A—Bank guarantee for security of labor liabilities

One . The sub-concessionaire agrees to provide a bank guarantee on first demand, of an amount no lower than MOP$820,000,000.00 (eight hundred and twenty thousand Patacas), in favor of the Government, to secure the satisfaction of the labor liabilities after the term of the contract.

Two . The Government may demand the increase of the amount of the security mentioned above, in light of the number of employees employed by the sub-concessionaire.

Three . The sub-concessionaire agrees to carry out all diligences for the satisfaction of all obligations arising of the survival of the bank guarantee mentioned in paragraph One .

Four . After the end of this contract, the Government may enforce the bank guarantee mentioned in paragraph One if the sub-concessionaire fails to satisfy its labor liabilities within the deadline set forth by the Government.

Five . The bank guarantee mentioned in paragraph One may only be cancelled upon authorization given by the Government.

Six . The costs arising of the issuance, maintenance and cancellation of the bank guarantee mentioned in paragraph One fall entirely under the sub-concessionaire’s responsibility.

Clause sixty nine-A – Adherence to the Non-Mandatory Central Provident Fund

The sub-concessionaire agrees to adhere to the Non-Mandatory Central Provident Fund, established under Law no. 7/2017.”

TRANSLATION FOR REFERENCE ONLY

Clause Three :

One . In consideration of the extension of the term of the sub-concession for the operation of games of luck and chance or other games in casino up until 26 June 2022, the sub-concessionaire agrees to pay to Macau SAR, upon the execution of this addendum to the contract, MOP$200,000,000.00 (two hundred million Patacas).

Two . The sub-concessionaire agrees to comply with clauses sixty three-A and sixty nine-A added by this addendum to the contract, within three months starting from the date of execution of this addendum to the contract.

Clause Four :

This addendum to the sub-concession contract, executed in both official languages, is entered into in triplicate, with one original belonging to the concessionaire, one other original to the sub-concessionaire and one other original to the Government of Macau SAR.

Macau, 15 March 2019.


On behalf of the concessionaire				On behalf of the sub-concessionaire

/s/ Leong On Kei				/s/ Ho, Pansy Catilina Chiu King
Leong On Kei				Ho, Pansy Catilina Chiu King

On behalf of the concessionaire

/s/ So Shu Fai Ambrose
So Shu Fai Ambrose

Exhibit 10.2

THIS AGREEMENT is dated March 15, 2019 and is made BETWEEN:

(1)

SOCIEDADE DE JOGOS DE MACAU, S.A., a private company incorporated in Macau and having its registered office at 9th Floor Hotel Lisboa, Avenida de Lisboa, no. 2 to 4, Macau SAR. (“SJM”); and

(2)

MGM GRAND PARADISE, S.A., a private company incorporated in Macau and having its registered office at Edifício MGM Macau, Avenida do Dr. Sun Yat Sen, n.º 1101, Macau SAR (“MGM”)

SJM and MGM jointly referred as the “ Parties ”

CONSIDERING THAT:

(A)

Pursuant to the gaming concession contract for the operation of casino games dated 28 March 2002 between the Macau Government and SJM, as amended and supplemented by supplemental agreements between the same parties dated 19 April 2005, 26 September 2013 and 23 January 2017 (the “ SJM Concession Contract ”), SJM holds an 18-year gaming concession beginning on April 1, 2002 and expiring on March 31, 2020 to operate casino games and other gaming areas in Macau S.A.R. as approved and authorised by the Macau Government (the “ SJM Concession ”);

(B)

On April 19, 2005, SJM and MGM entered into a sub-concession contract, approved and authorized by the Macau Government (the “ MGM Sub-concession Contract ”) pursuant to which MGM is entitled to operate games of fortune and chance and other games in casino in Macau S.A.R. as approved and authorised by the Macau Government (the “ MGM Sub-concession ”);

(C)

As confirmed by the Macau Government, the MGM Sub-concession is separate from the SJM Concession under the SJM Concession Contract and MGM does not have any obligations to SJM pursuant to the MGM Sub-concession Contract;

(D)

The expiry date of the SJM Concession and of the MGM Sub-concession is March 31, 2020;

(E)

SJM has engaged in conversations with the Macau Government for the extension of the term of the SJM Concession from March 31, 2020 to June 26, 2022;

(F)

MGM has also engaged in conversations with the Macau Government for the extension of the term of the MGM Sub-concession from March 31, 2020 to June 26, 2022;

(G)

The new expiry date of June 26, 2022 of both the SJM Concession and MGM Sub-concession coincides with the expiry date of other concessions sub-concessions so that all the gaming concessions and sub-concessions will expire at the same time;

(H)

Pursuant to clause 82 paragraph two of the MGM Sub-concession Contract, SJM, as Concessionaire, has given its agreement to any revision to the MGM Sub-concession Contract that may be agreed between the Government and MGM, when the same do not involve any increase of SJM’ responsibility;

(I)

No increase of SJM’ responsibility will arise from the execution of the extension of the MGM Sub-concession through an addendum to the MGM Sub-concession Contract approved and authorized by the Macau Government (the “ MGM Sub-concession Extension Contract ”) and the extension of the term of the MGM Sub-concession from March 31, 2020 to June 26, 2022;

(J)

The Parties now wish to establish the terms and conditions upon which SJM and MGM agree to execute MGM Sub-concession Extension Contract.

NOW IT IS HEREBY AGREED as follows:

The MGM Sub-concession Extension Contract

1.1.

The MGM Sub-concession Extension Contract will be subject to certain conditions (jointly the “ Conditions ”) identified in detail in the draft MGM Sub-concession Extension Contract that was approved and authorized by the Macau Government and is attached hereto as Annex 1.

1.2.

SJM acknowledges the Conditions and agrees to execute the MGM Sub-concession Extension Contract in accordance with the final draft approved and authorized by the Macau Government and MGM agrees to pay SJM the amount in clause 2 below in connection with the extension of the sub-concession.

Consideration

2.1.

MGM agrees to pay SJM the amount of MOP$20,000,000.00 (twenty million Patacas) in connection with the execution of the MGM Sub-concession Extension Contract and the extension of the MGM Sub-concession, which shall be satisfied in accordance with the provisions of clause 4 below and no other payments will be due and payable by any of the Parties in connection with the execution of the MGM Sub-concession Extension Contract and the extension of the MGM Sub-concession.

Completion

3.1.

Completion shall take place upon the execution of MGM Sub-concession Extension Contract by SJM and MGM, in triplicate, on March 15, 2019, on or around 10.30 am.

3.2.

MGM shall pay SJM the amount in clause 2.1. above within 5 (five) business days from Completion, through electronic funds transfer to an account nominated for such purpose by SJM or through bank cheque, and the payment of such amount into SJM’s account or the delivery of the bank cheque to SJM shall be a good discharge to MGM in respect of it.

Representations and warranties and SJM undertaking

4.1.

SJM hereby represents and warrants to MGM that this Agreement constitutes legal, valid and binding obligations of SJM, enforceable in accordance with its terms.

4.2.

MGM hereby represents and warrants to SJM that this Agreement constitutes legal, valid and binding obligations of MGM, enforceable in accordance with its terms.

4.3.

SJM represents and warrants that the MGM Sub-concession will be the only gaming sub-concession entered into by SJM and SJM further undertakes that no additional gaming sub-concessions will be entered into by it with any other party throughout the duration of the MGM Sub-concession as provided in the MGM Sub-Concession Extension Contract.

No Partnership

5.1.

None of the provisions of this Agreement shall be deemed to constitute a partnership among the Parties nor constitute any Party the agent of any other Party for any purpose.

Costs

6.1.

SJM shall be responsible for its own costs, legal fees and other expenses incurred by it in reviewing, negotiating and executing this Agreement.

6.2.

MGM shall be responsible for its own costs, legal fees and other expenses incurred by it in the preparation, negotiation and execution of this Agreement.

Assignment

7.1.

Save as expressly permitted by this Agreement, neither Party may assign, transfer, charge or dispose of, or purport to do any of the same, any of its rights, beneficial interests or obligations hereunder to any person without the prior written consent of the other Party.

Successors and assigns

8.1.

This Agreement shall endure for the benefit of and be binding on the respective successors in title and permitted assigns of each party.

Waiver, forbearance and variation

9.1.

The rights of each Party shall not be prejudiced or restricted by any indulgence or forbearance extended to the other Party and no waiver by either Party in respect of any breach shall operate as a waiver in respect of any subsequent breach.

9.2.

This Agreement shall not be varied or cancelled, unless such variation or cancellation shall be expressly agreed in writing by each Party.

10.

Severability

10.1.

If any of the provisions of this Agreement is found by a court or other competent authority to be void or unenforceable, such provision shall be deemed to be deleted from this Agreement and the remaining provisions of this Agreement shall continue in full force and effect. Notwithstanding the foregoing the Parties shall thereupon negotiate in good faith in order to agree the terms of a mutually satisfactory provision to be substituted for the provision so found to be void or unenforceable.

10.2.

All rights and remedies conferred on any Party under this Agreement are cumulative and are additional to, and not exclusive of, any rights or remedies provided by law or otherwise available at any time to any Party.

11.

Entire Agreement

11.1.

This Agreement supersedes any previous agreement between the Parties and represents the entire understanding between the parties in relation to the subject matter of this Agreement.

12.

Notices

12.1.

Any notice to be given under this Agreement shall be in writing in the English language and shall either be delivered personally or sent by first class post pre-paid (or airmail if overseas), by facsimile transmission or electronic mail, to each of the Parties due to receive the notice, at the address, fax number or electronic mail address set out below:

To SJM:

Hotel Lisboa, 9th Floor

Avenida de Lisboa

no. 2 to 4

Macau SAR.

For the attention of: Dr Rui José da Cunha

Email: ruicunha@macausjm.com

Fax number +853 28715072

To MGM:

Edifício MGM Macau

Avenida do Dr. Sun Yat Sen, n.º 1101,

Macau SAR.

For the attention of: Dr. António Menano

Email: antoniomenano@mgm.mo

Fax number +853 88025905

or to such other address, number or address as one party may by notice advise from time to time to the other, but without prejudice to the effectiveness of any notice already given in accordance with this clause.

13.

Governing law

13.1.

This Agreement shall be governed in all respects by, and construed in accordance with the Macau S.A.R. law.

13.2.

If any Party has a claim against another Party arising out of or in connection with this Agreement such claim shall be referred to the courts of Macau S.A.R, to the jurisdiction of which each of the Parties to this Agreement irrevocably submits. The jurisdiction of the Macau S.A.R. courts over such claim shall be an exclusive jurisdiction and no courts outside Macau S.A.R. shall have any jurisdiction to hear and determine such claim.

14.

Counterparts

14.1.

This Agreement may be executed in any number of counterparts all of which taken together shall constitute one and the same document, and any Party may execute this Agreement by signing any one or more of such counterparts.

IN WITNESS whereof this Agreement has been entered into the day and year first above written.


For and on behalf of SJM SIGNED by				For and on behalf of MGM SIGNED by

/s/ So Shu Fai Ambrose				/s/ Ho, Pansy Catilina Chiu King
So Shu Fai Ambrose				Ho, Pansy Catilina Chiu King
Chairman of the Board of Directors				Managing Director

/s/ Leong On Kei
Leong On Kei
Managing Director