Item 1.01 Entry into a Material Definitive Agreement.
On January 29, 2019, MGM Lessee, LLC (the “Tenant”), a Delaware limited liability company and a subsidiary of MGM Resorts International (the “Company”), entered into a Third Amendment (the “Amendment”) to the Master Lease Agreement, dated as of April 25, 2016 between the Tenant and MGP Lessor, LLC (the “Landlord”), a Delaware limited liability company and a subsidiary of MGM Growth Properties LLC (as amended, the “Master Lease”) with respect to the developed real property associated with the Empire City Casino in Yonkers, New York. The Amendment provides that, among other things, the initial rent under the Master Lease will be increased by $50 million, 90% of which shall be allocated to the Base Rent (as defined in the Master Lease) and 10% of which shall be allocated to the Percentage Rent (as defined in the Master Lease). As a result of the foregoing, following the closing of the acquisition, the rent under the Master Lease will be $820.3 million, with Base Rent of $740.8 million and Percentage Rent of $79.5 million. In addition, the Amendment provides the Landlord with a right of first offer with respect to certain undeveloped land adjacent to the property to the extent the Company or any of its affiliates develops additional gaming facilities and chooses to sell or transfer the property in the future. This description of the Amendment is qualified in its entirety by reference to the full text of the Amendment attached hereto as Exhibit 10.1.
Item 3.02 Unregistered Sale of Equity Securities.
On January 29, 2019, the Company closed the transactions contemplated by the previously disclosed Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Yonkers Racing Corporation, a New York corporation (“YRC”), Brian Boru of Westchester, Inc., a New York corporation (“Boru”), Westchester Mercantile Market, Inc., a New York corporation (“Mercantile”), Boru Merger Sub, LLC, a New York limited liability company and a wholly-owned subsidiary of the Company, Mercantile Merger Sub, LLC, a New York limited liability company and a wholly-owned subsidiary of the Company, MGM Yonkers, Inc., a New York corporation and a wholly-owned subsidiary of the Company (from and after such time as it became party to the Merger Agreement) and Shareholder Representative Services LLC, a Colorado limited liability company. Accordingly, among other things, the Company acquired each of YRC, Boru and Mercantile (which collectively own the real property and operations associated with the Empire City Casino) pursuant to three separate and contemporaneous mergers (collectively, the “Mergers”). In connection with the Mergers, the Company issued 9,372,336 shares of its common stock, par value $0.01 per share (the “Shares”), to certain of the investors in the acquired entities, which amount was determined based on a volume weighted average price of a share of the Company’s common stock for aten-trading-day period prior to thesecond-to-last trading day preceding the closing date. Pursuant to the terms of the Merger Agreement, the Company is required to file with the Securities and Exchange Commission a prospectus supplement providing for the resale of the Shares within five business days of the closing of the transactions contemplated by the Merger Agreement.
The Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities law and may not be offered or sold in the United States or to any U.S. persons absent registration under the Securities Act, or pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Company offered and sold the Shares to the investors in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder, and the offering was undertaken without general solicitation. The Company relied, in part, upon representations from each of the investors that it is an “accredited investor” as such term is defined in Rule 501 of Regulation D.
The Company is filing herewith and incorporating herein by reference the legal opinion and related consent of Milbank, Tweed, Hadley & McCloy LLP regarding the validity of the Company’s common stock, par value $0.01 per share, to be sold from time to time by the selling stockholders identified in the prospectus supplement dated January 29, 2019 to the prospectus dated March 1, 2018 (collectively, the “Prospectus”) forming part of the Company’s Registration Statement onForm S-3 (RegistrationNo. 333-223375) (the “Registration Statement”). Such sales, if any, will be made under the Registration Statement and Prospectus.
Item 9.01 Financial Statements and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) Exhibits:
| | |
Exhibit
No. | | Description |
| |
| 5.1 | | Opinion of Milbank, Tweed, Hadley & McCloy LLP |
| |
| 10.1 | | Third Amendment to Master Lease Agreement, dated as of January 29, 2019, between MGP Lessor, LLC and MGM Lessee, LLC (incorporated by reference to Exhibit 10.1 of the Current Report on Form8-K of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP filed on January 29, 2019). |
| |
| 23.1 | | Consent of Milbank, Tweed, Hadley & McCloy LLP (included in the opinion filed as Exhibit 5.1) |
