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Sample Business Contracts

Completion Guaranty - MGM Grand Inc., Primadonna Resorts Inc. and Bank of America

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                              COMPLETION GUARANTY
                              -------------------


          This Completion Guaranty ("Guaranty") is made as of September 15,
1995, by MGM Grand, Inc., a Delaware corporation and Primadonna Resorts, Inc., a
Nevada corporation (each a "Guarantor" and collectively, "Guarantors"), jointly
and severally, in favor of Bank of America National Trust and Savings
Association, as Managing Agent, in favor of the Banks under the Loan Agreement
described below and in favor of the Equipment Lessors under the Equipment Lease
defined in the Loan Agreement. Capitalized terms used but not defined herein
shall have the meanings defined for those terms in the Loan Agreement described
below.


                                    RECITALS
                                    --------

          A.   Pursuant to the Construction/Revolving Loan Agreement of even
date herewith by and among New York-New York Hotel, LLC, a Nevada limited
liability company ("Borrower"), the lenders from time to time party thereto
(collectively, the "Banks" and individually, a "Bank"), First Interstate Bank of
Nevada, as Co-Agent, and Bank of America National Trust and Savings Association,
as Managing Agent (as such agreement may from time to time be extended,
modified, renewed, restated, supplemented or amended, the "Loan Agreement"), the
Banks have agreed to extend certain credit facilities to Borrower.

          B.   The Loan Agreement provides, as a condition precedent to the
Banks' obligation to extend credit facilities to Borrower, that Guarantors shall
enter into this Guaranty, and shall guaranty completion of the Project, all
under the terms and conditions set forth in this Guaranty.

          C.   The Loan Agreement contemplates that a portion of the financing
for the construction of the Project will be in the form of the Equipment Lease
covering the Leased Equipment. Guarantors and the Banks agree that the Equipment
Lessors shall also have the benefit of this Guaranty on a proportional basis
with the Banks.

          D.   Guarantors expect to realize direct and indirect benefits as a
result of the availability of the aforementioned credit facilities.

          E.   This Guaranty is one of the Loan Documents described in the Loan
Agreement.

                                      -1-
<PAGE>
 
                                   AGREEMENT
                                   ---------

          NOW, THEREFORE, in order to induce the Banks to extend credit
facilities to Borrower under the Loan Agreement, and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged,
Guarantors hereby agree as follows:


          2.   Completion Guaranty and Agreement.
               --------------------------------- 

          Guarantors, jointly and severally, hereby irrevocably and
unconditionally guarantee that:

(a)       Guarantors shall complete or cause to be completed the construction of
     the Project in conformity in all material respects with the Construction
     Plans, the Construction Budget, the Construction Timetable and the Loan
     Agreement, free and clear of material defects and, except for Permitted
     Encumbrances, Liens or claims for Liens for material supplied or labor or
     services performed in connection therewith.

(b)       If the Construction Budget is insufficient to complete the Project in
     accordance with the Construction Plans, the Guarantors shall promptly make
     or cause to be made Cash Equity Contributions to Borrower sufficient to
     permit such completion .

(c)       If the Completion Date does not occur on or before September 15, 1997,
     the Guarantors shall promptly make or cause to be made Cash Equity
     Contributions to Borrower in an amount equal to $250,000 multiplied by the
     number of days between July 31, 1997 and the Completion Date.

          3.   Payment Provisions in the Event of Bankruptcy.
               --------------------------------------------- 

          In the event, prior to the Completion Date, that the Borrower becomes
insolvent or subject to an Insolvency Proceeding as defined below,
notwithstanding Section 1, but subject to confirmation by the Managing Agent
                ---------                                                   
that any undisbursed Loans will be made pursuant to the Loan Agreement and
confirmation by the Equipment Lessors that any undisbursed equipment purchase
prices will be made pursuant to the Equipment Lease, in each case subject to the
terms and conditions thereof (excluding such Insolvency Proceeding), Guarantors
                              ---------                                        
guarantee and agree that:

(a)       To the extent the Construction Budget is insufficient to complete the
     Project in accordance with the Construction Plans, the Guarantors shall
     make or cause to

                                      -2-
<PAGE>
 
     be made Cash payments into an interest-bearing deposit account designated
     and controlled exclusively by the Managing Agent (the "Deposit Account") in
     which the Managing Agent is hereby granted a security interest for the
     benefit of the Banks as to the Banks' Percentage and for the benefit of the
     Equipment Lessors as to the Equipment Lessors Percentage. The Deposit
     Account is intended to be a "deposit account" for the purposes of Nevada
     Revised Statutes ("NRS") 40.430.4(g). Such funds in the Deposit Account
     shall only be available for and used to complete construction of the
     Project.

(b)       If the Completion Date does not occur on or before September 15, 1997,
     the Guarantors shall make or cause to be made a Cash payment into the
     Deposit Account in the amount required under Section 1(c). Such funds shall
                                                  ------------
     be held in the Deposit Account as additional collateral for the Obligations
     under the Loan Agreement as to the Banks' Percentage and for the benefit of
     the Equipment Lessors as to the Equipment Lessors Percentage; provided
                                                                   --------
     that, if requested by Borrower, such funds (i) shall applied to payment of
     the Obligations as to the Banks' Percentage and to prepayment of the
     Equipment Lease as to the Equipment Lessors' Percentage and/or (ii) shall
     be applied, with the approval of the Requisite Banks (which shall not be
     unreasonably withheld) to payment of such other obligations of Borrower
     incurred in the ordinary course for the acquisition of goods or services
     which have enhanced or maintained the value of the Collateral covered by
     the Collateral Documents.

(c)       The Cash payments into the Deposit Account and the funds therein shall
     be free and clear of any third party claims thereto, including any claims
     by Borrower as a third party beneficiary under this Guaranty. The
     Guarantors and the Managing Agent on behalf of the Banks specifically agree
     that Borrower is not an intended third party beneficiary to this Guaranty
     and that Borrower has no rights under this Guaranty.

(d)       If, notwithstanding Section 2(a) or 2(b) above, Borrower asserts in an
                              --------------------
     Insolvency Proceeding that it holds the right under this Guaranty to have
     Cash Equity Contributions made to it directly or that funds in the Deposit
     Account deposited pursuant to Section 2(a) shall or may be used for any
                                   ------------
     purposes other than completion of the Project or that funds in the Deposit
     Account deposited pursuant to Section 2(b) are not collateral solely for
                                   ------------
     the Obligations under the Loan Agreement, then this Guaranty shall
     automatically become a continuing unconditional guaranty by the Guarantors
     of the full and timely payment when due of the Obligations under the Loan
     Agreement to

                                      -3-
<PAGE>
 
     the extent and in the amount of the Banks' Percentage of the Cash Equity
     Contributions that have been made and are required to be made pursuant to
     this Guaranty and of the obligations under the Equipment Lease to the
     extent and in the amount of the Equipment Lessors' Percentage of such Cash
     Equity Contributions.

(e)       the term "Insolvency Proceeding" means any case or proceeding,
     voluntary or involuntary, under the Bankruptcy Code, or any similar
     existing or future law of any jurisdiction, state or federal, relating to
     bankruptcy, insolvency reorganization or relief of debtors.

          4.   Performance of Guaranty.  In fulfilling their obligations
               -----------------------                                  
hereunder, Guarantors hereby jointly and severally, irrevocably and
unconditionally guarantee, promise and agree to perform and comply (or cause
Borrower to perform and comply) with all provisions and conditions of the Loan
Agreement relating to (a) the construction of the Project within the time and in
the manner set forth in Construction Plans and the Construction Timetable, (b)
the payment of all costs and expenses thereof, (c) the payment, satisfaction or
discharge of all Liens (other than Permitted Encumbrances) that are or may be
imposed upon or asserted against Borrower, the Project or the Project Property
in connection with the construction of the Project, and (d) the defense and
indemnification of the Managing Agent and the Banks against all such Liens
(other then Permitted Encumbrances), whether arising from the furnishing of
labor, materials, supplies or equipment, from taxes, assessments, fees or other
charges, from injuries or damage to Persons or property, or otherwise in
connection with the construction of the Project. Without limiting the generality
of the foregoing, Guarantors agree (w) to cause any and all costs of
constructing and completing the Project, including, without limitation, the
costs of all labor, materials, supplies and equipment related thereto, to be
paid and satisfied as the same shall become due, subject to Guarantors' right to
remove any Liens arising therefrom by securing bond(s) therefor, (x) to cause
the net amount of cost overruns to be directly or indirectly funded, paid and
satisfied from Guarantors' own resources, (y) directly or indirectly to cause
the completion of the Project in a timely, good, workmanlike and Lien-free
manner (except for Permitted Encumbrances), in accordance in all material
respects with the terms of the Construction Plans, the Construction Budget and
the Construction Timetable and (z) to cause all pre-operating and carrying costs
of the Project, including, without limitation the payment of taxes, assessments,
utilities, insurance and maintenance expenses, to be funded, paid and satisfied
as the same shall become due throughout the term of this Guaranty.

                                      -4-
<PAGE>
 
          5.   Procedures for Completion.
               ------------------------- 

               5.1   In the event that Borrower fails to perform all of its
Obligations under the Loan Agreement relating to construction of the Project,
then in any such event or at any time thereafter, the Managing Agent may give
written notice to Guarantors of the occurrence of such event.

               5.2   Within ten (10) days after the date on which the Managing
Agent gives any such notice to Guarantors, but subject to confirmation by the
Managing Agent that any undisbursed Loans will be made pursuant to the Loan
Agreement subject to the terms and conditions thereof, Guarantors, at their sole
cost (exclusive of undisbursed Loans), shall commence to complete the
construction of the Project and diligently prosecute such construction to
completion within the time and in the manner specified in the Construction
Timetable, free of Liens (other than Permitted Encumbrances) and fully paid for,
                          ----- ----
and shall defend, indemnify and hold the Managing Agent and/or the Banks
harmless from all losses, costs, liabilities and expenses, including attorneys'
fees, incurred in connection with such completion. If at the date of such
notice, there are no undisbursed Loans allocated to construction of the Project,
the Guarantors' obligations under this Section shall be absolute. If on such
date there are any such undisbursed Loans, the obligations of the Guarantors
under this Section shall be that percentage of the remaining costs to complete
the Project equal to 100% minus the percentage thereof represented by the
undisbursed Loans.

               5.3   If Guarantors fail to commence to complete the construction
of the Project or diligently to prosecute such construction to timely completion
as provided in Section 4.2 above, then in addition to all other rights and
               -----------                                                
remedies that may be available to the Managing Agent under the Loan Agreement
and the other Loan Documents, at law or in equity, the Managing Agent may
proceed as follows:

     (a)  Managing Agent may, at the Managing Agent's option, enter the Project
     Property to complete construction of the Project (either itself or through
     any agent, contractor or subcontractor of its selection), which option of
     the Managing Agent shall be exercisable whether or not the Managing Agent
     elects to proceed judicially or non-judicially to foreclose on all or any
     portion of the Collateral.

     (b)  The Managing Agent, at its option and in accordance with the
     Loan Agreement and the other Loan Documents, shall have the right, but
     shall have no obligation, to proceed judicially or non-judicially to
     foreclose on all

                                      -5-
<PAGE>
 
     or any portion of the Collateral, exercisable whether or not the Managing
     Agent elects to undertake to complete the construction of the Project.

     (c)  If the Managing Agent elects to undertake to complete the construction
     of the Project, and whether or not the Managing Agent elects to proceed
     judicially or non-judicially to foreclose on all or any portion of the
     Collateral, the Managing Agent shall have the right to recover damages from
     Guarantors' in an amount equal to the sum of:

                                   (i)   the costs reasonably incurred or
               reasonably estimated to be incurred by the Managing Agent to
               complete the construction of the Project as set forth in
               Paragraph 2 hereof minus any undisbursed Loans allocated to
               construction of the Project (the "Cost to Complete"), provided
                                                                     --------
               that with respect to damages recovered for costs estimated to be
               incurred by the Managing Agent, such funds shall be used for no
               purpose other than the construction of the Project and provided
                                                                      --------
               further that should the total actual costs incurred by the
               -------
               Managing Agent to complete the construction of the Project be
               less than the Cost to Complete, the amount by which the Cost to
               Complete recovered by the Managing Agent exceeds such actual
               construction costs shall be remitted to Guarantors; plus

                                   (ii)  All unreimbursed costs and expenses,
               including attorneys' fees, reasonably incurred by the Managing
               Agent in protecting and preserving the Project and enforcing or
               defending the interests of the Banks under this Guaranty (the
               "Unreimbursed Expenses").

     (d)  In any action or proceeding by the Managing Agent to recover damages
          from Guarantors, the Managing Agent may exercise any and all remedies
          available under applicable Law.

               5.4   The remedy of specific performance, the recovery of damages
and all other rights and remedies under this Guaranty, under the Loan Agreement
and the other Loan Documents, at law or in equity are intended to be non-
exclusive and cumulative. The parties recognize that the choice of remedies by
the Managing Agent will necessarily and properly be a matter of business
judgment, which the passage of time and events may or may not prove to have been
the best choice to

                                      -6-
<PAGE>
 
maximize recovery by the Managing Agent at the lowest cost to either the
Borrower or the Guarantors. Nevertheless, the choice of alternatives by the
Managing Agent shall not be subject to question or challenge by Guarantors or
any other Person, nor shall any such choice be asserted as a defense, set-off or
basis for any claim of failure to mitigate damages in any action or proceeding
arising from this Guaranty.

          6.   Commencement of Lawsuit by Managing Agent; Measure of Damages.
               -------------------------------------------------------------  
At any time after the occurrence of an Event of Default under this Guaranty,
Managing Agent, on behalf of the Banks, may commence a lawsuit against
Guarantors to compel Guarantors to perform their obligations under this Guaranty
and/or to recover damages under this Guaranty.  The Banks' damages under this
Guaranty shall include: (a) the costs of completing the Project and/or
correcting any construction defects, minus any undisbursed Loans allocated to
                                     -----                                   
construction of the Project , (b) damages arising from any delay in completing
the Project, including interest, taxes and insurance premiums, and (c) Banks'
attorneys' fees and costs.  Managing Agent need not perform any work on the
Project before commencing such a lawsuit.  GUARANTORS EXPRESSLY ACKNOWLEDGE THAT
THE MEASURE OF THE BANKS' DAMAGES FOR BREACH OF THIS GUARANTY SHALL BE BASED ON
THE COSTS OF COMPLETING THE PROJECT, NOT THE EXTENT TO WHICH COMPLETING THE
PROJECT WOULD INCREASE THE VALUE OF THE PROJECT PROPERTY.

          7.   Rights of the Managing Agent.  Each Guarantor authorizes the
               ----------------------------                                
Managing Agent and the Banks to perform any or all of the following acts at any
time in their sole discretion, all without notice to Guarantors and without
affecting Guarantors' obligations under this Guaranty:

(a)       The Managing Agent and the Banks may alter any terms of the Loan
     Documents to which Guarantors are not a party, including renewing,
     compromising, extending or accelerating, or otherwise changing the time for
     payment of, or increasing or decreasing the rate of interest on, the Loans
     or any part of them.

(b)       The Managing Agent and the Banks may take and hold security for the
     Loans or this Guaranty, accept additional or substituted security for
     either, and subordinate, exchange, enforce, waive, release, compromise,
     fail to perfect and sell or otherwise dispose of any such security.

(c)       The Managing Agent and the Banks may direct the order and manner of
     any sale of all or any part of any security now or later to be held for the
     Loans or this Guaranty, and may also bid at any such sale.

                                      -7-
<PAGE>
 
(d)       The Managing Agent and the Banks may apply any payments or recoveries
     from Borrower, any Guarantor or any other source, and any proceeds of any
     security, to Borrower's obligations under the Loan Documents in such
     manner, order and priority as they may elect, whether or not those
     obligations are guarantied by this Guaranty or secured at the time of the
     application.

(e)       The Managing Agent and the Banks may release Borrower of its liability
     for the Loans or any portion thereof.

(f)       The Managing Agent and the Banks may substitute, add or release any
     one or more guarantors or endorsers.

(g)       In addition to the Loans, the Managing Agent and the Banks may extend
     other credit to Borrower, and may take and hold security for the credit so
     extended, all without affecting Guarantors' liability under this Guaranty.

(h)       The Managing Agent and the Banks may approve modifications to the
     Construction Contracts, Construction Budget and/or the Construction
     Timetable.

(i)       The Managing Agent and the Banks may change the terms or conditions of
     disbursement of the Loans.

(j)       The Managing Agent and the Banks may advance additional funds to
     Borrower for purposes related to those of the Loan Documents.

          8.   Guaranty to be Absolute.  Guarantors expressly agree that until
               -----------------------
the Project is fully completed in all material respects in accordance with the
Construction Plans, the Construction Budget and the Construction Timetable and
each and every term, covenant and condition of this Guaranty is fully performed,
Guarantors shall not be released by or because of:

(a)       Any act or event which might otherwise discharge, reduce, limit or
     modify Guarantors' obligations under this Guaranty;

(b)       Any waiver, extension, modification, forbearance, delay or other act
     or omission of the Managing Agent or the Banks, or any failure to proceed
     promptly or otherwise as against Borrower, any Guarantor or any security;

(c)       Any action, omission or circumstance which might increase the
     likelihood that Guarantors may be called upon to perform under this
     Guaranty or which might affect the rights or remedies of Guarantors as
     against Borrower; or

                                      -8-
<PAGE>
 
(d)       Any dealings occurring at any time between Borrower, the Managing
     Agent or any Bank, whether relating to the Loans or otherwise.

          Guarantors hereby expressly waive and surrender any defense to their
liability under this Guaranty based upon any of the foregoing acts, omissions,
agreements, waivers or matters. It is the purpose and intent of this Guaranty
that the obligations of Guarantors under it shall be absolute and unconditional
under any and all circumstances.

          9.   Guarantors' Waivers.  Guarantors waive:
               -------------------                    

(a)       All statutes of limitations as a defense to any action or proceeding
     brought against Guarantors by the Managing Agent or any Bank, to the
     fullest extent permitted by Law;

(b)       Any right they may have to require the Managing Agent or the Banks to
     proceed against Borrower, proceed against or exhaust any security held from
     Borrower, or pursue any other remedy in their power to pursue;

(c)       Any defense based on any claim that Guarantors' obligations exceed or
     are more burdensome than those of Borrower;

(d)       Any defense based on: (i) any legal disability of Borrower, (ii) any
     release, discharge, modification, impairment or limitation of the liability
     of Borrower under the Loan Documents from any cause, whether consented to
     by the Managing Agent or any Bank or arising by operation of Law or from
     any Insolvency Proceeding, (iii) any rejection or disaffirmance of the
     Loans or any security held for the Loans, in any Insolvency Proceeding and
     (iv) Guarantors' rights under NRS 104.3605, Guarantors specifically
     agreeing that this clause (iv) shall constitute a waiver of discharge under
     NRS 104.3605;

(e)       Any defense based on any action taken or omitted by the Managing Agent
     or any Bank in any Insolvency Proceeding involving Borrower, including any
     election to have a claim allowed as being secured, partially secured or
     unsecured, any extension of credit by the Managing Agent or any Bank to
     Borrower in any Insolvency Proceeding, and the taking and holding by the
     Managing Agent or any Bank of any security for any such extension of
     credit;

(f)       All presentments, demands for performance, notices of nonperformance,
     protests, notices of protest, notices of dishonor, notices of acceptance of
     this Guaranty and of

                                      -9-
<PAGE>
 
     the existence, creation, or incurring of new or additional indebtedness,
     and demands and notices of every kind except for any demand or notice
     expressly provided for in Section 1;
                               ---------

(g)       Any defense based on or arising out of any defense that Borrower may
     have to the payment or performance of the Loans or any portion of the
     Loans; and

(h)       Any defense or benefit based on NRS 40.430 and judicial decisions
     relating thereto and NRS 40.451 et seq. and judicial decisions relating
                                     -- ---
     thereto, Guarantors agreeing that the waiver in this paragraph (h) is
     intended to take advantage of the two (2) waivers permitted by NRS 40.495
     (1) and (2) to the maximum extent permitted.

          10.  Waivers of Subrogation and Other Rights.
               --------------------------------------- 

(a)       Upon the occurrence of any Event of Default, the Managing Agent in its
     sole discretion, without prior notice to or consent of Guarantors, may
     elect to: (i) foreclose either judicially or nonjudicially against any real
     or personal property security for the Loans, (ii) accept a transfer of any
     such security in lieu of foreclosure, (iii) compromise or adjust the Loans
     or any part thereof or make any other accommodation with Borrower or any
     other guarantor, or (iv) exercise any other remedy against Borrower or any
     security. No such action by the Managing Agent or any Bank shall release or
     limit the liability of Guarantors, who shall remain liable under this
     Guaranty after the action, even if the effect of the action is to deprive
     Guarantors of any subrogation rights, rights of indemnity, or other rights
     to collect reimbursement from Borrower for any sums paid to the Managing
     Agent or the Banks, whether contractual or arising by operation of Law or
     otherwise. Guarantors expressly waive any defenses or benefits that may be
     derived from NRS Section 40.430 and judicial decisions relating thereto and
     NRS 40.451, et seq. and judicial decisions relating thereto, or comparable
                 -- ---
     provisions of Nevada Law which are comparable to California Civil Procedure
     (S)(S) 580a, 580b, 580d, or 726 or comparable provisions of the Laws of any
     other jurisdiction, and all other suretyship defenses they otherwise might
     or would have under Nevada Law or other applicable Law. Guarantors
     expressly agree that under no circumstances shall they be deemed to have
     any right, title, interest or claim in or to any real or personal property
     to be held by the Managing Agent or any Bank or any third party after any
     foreclosure or transfer in lieu of foreclosure of any security for the
     Loans.

                                      -10-
<PAGE>
 
(b)       Regardless of whether Guarantors may have made any payments to the
     Managing Agent or any Bank, Guarantors hereby waive: (i) all rights of
     subrogation, all rights of indemnity, and any other rights to collect
     reimbursement from Borrower for any sums paid to the Managing Agent or any
     Bank, whether contractual or arising by operation of Law (including the
     United States Bankruptcy Code or any successor or similar statute) or
     otherwise, (ii) all rights to enforce any remedy that the Managing Agent or
     any Bank may have against Borrower, and (iii) all rights to participate in
     any security now or later to be held by the Managing Agent or any Bank for
     the Loans. The waivers given in this subsection 9(b) shall be effective
                                          ---------------
     until the Loans and all other Obligations have been paid and performed in
     full and all Commitments have been terminated.

(c)       Guarantors understand and acknowledge that if the Managing Agent or
     any Bank forecloses judicially or nonjudicially against any real property
     security for the Loans, that foreclosure could impair or destroy any
     ability that Guarantors may have to seek reimbursement, contribution or
     indemnification from Borrower or others based on any right Guarantors may
     have of subrogation, reimbursement, contribution or indemnification for any
     amounts paid by Guarantors under this Guaranty. Guarantors further
     understand and acknowledge that in the absence of this Section 9, such
                                                            ---------
     potential impairment or destruction of Guarantors' rights, if any, may
     entitle Guarantors to assert a defense to this Guaranty. By executing this
     Guaranty, Guarantors freely, irrevocably and unconditionally: (i) waive and
     relinquish that defense and agree that Guarantors will be fully liable
     under this Guaranty even though the Managing Agent or the Banks may
     foreclose judicially or nonjudicially against any real property security
     for the Loans; (ii) agree that Guarantors will not assert that defense in
     any action or proceeding which the Managing Agent or the Banks may commence
     to enforce this Guaranty; and (iii) acknowledge and agree that the Managing
     Agent and the Banks are relying on this waiver in making the Loans, and
     that this waiver is a material part of the consideration which they are
     receiving for making the Loans.

          11.  Revival and Reinstatement.  If the Banks are required to pay,
               -------------------------                                    
return or restore to Borrower or any other person any amounts previously paid on
the Loans because of any Insolvency Proceeding of Borrower, any stop notice or
any other reason, to the extent that the source of such payment was a Cash
Equity Contribution from Guarantors pursuant to this Guaranty, the obligations
of Guarantors shall be reinstated and revived and the rights of the Managing
Agent and the Banks

                                      -11-
<PAGE>
 
shall continue with regard to such amounts, all as though they had never been
paid.

          12.  Information Regarding Borrower and the Property.  Before signing
               -----------------------------------------------
this Guaranty, Guarantors investigated the financial condition and business
operations of Borrower, the present and former condition, uses and ownership of
the Property, and such other matters as Guarantors deemed appropri ate to assure
themselves of Borrower's ability to discharge its obligations under the Loan
Documents. Guarantors assume full responsibility for that due diligence, as well
as for keeping informed of all matters which may affect Borrower's ability to
pay and perform its obligations to the Managing Agent and the Banks. The
Managing Agent and the Banks have no duty to disclose to Guarantors any
information which they may have or receive about Borrower's financial condition
or business operations, the condition or uses of the Property, or any other
circumstances bearing on Borrower's ability to perform.

          13.  Subordination.  Any rights of Guarantors, whether now existing
               -------------                                                 
or later arising, to receive payment on account of any indebtedness (including
interest) owed to them by Borrower or any subsequent owner of the Property, or
to withdraw capital invested by them in Borrower, or to receive Distributions
from Borrower, shall at all times be subordinate as to lien and time of payment
and in all other respects to the full and prior repayment to the Managing Agent
and the Banks of the Loans and the other Obligations, except to the extent that
                                                      ------                   
such payments or Distributions are expressly contemplated by the Loan Agreement.
Guarantors shall not be entitled to enforce or receive payment of any sums
hereby subordinated until the Loans and all other Obligations have been paid and
performed in full and all Commitments have been terminated and any such sums
received in violation of this Guaranty shall be received by Guarantors in trust
for the Banks.

          14.  Financial Information.  Guarantors shall keep true and correct
               ---------------------                                         
financial books and records, using generally accepted accounting principles
consistently applied.  Guarantors shall provide to the Banks such financial
statements and other information respecting Guarantors as is required under
Section 8.1(g) of the Loan Agreement and such other information concerning their
--------------                                                                  
affairs and properties as the Managing Agent or any Bank may reasonably request.
Any confidential information of Guarantors so furnished shall be subject to the
provisions of Section 12.14 of the Loan Agreement.
              -------------

                                      -12-
<PAGE>
 
          15.  Guarantors' Representations and Warranties.  Each Guarantor
               ------------------------------------------                 
represents and warrants that:

(a)       All financial statements and other financial information furnished or
     to be furnished to the Managing Agent or the Banks by such Guarantor are or
     will be true and correct and do or will fairly represent the financial
     condition of such Guarantor as of the dates and for the periods covered
     thereby;

(b)       All such financial statements were or will be prepared in accordance
     with Generally Accepted Accounting Principles, consistently applied;

(c)       There has been no material adverse change in such Guarantor's
     financial condition since the dates of the statements most recently
     furnished to the Banks; and

(d)       The performance of this Guaranty will not violate any indenture,
     credit agreement or other material agreement to which such Guarantor is a
     party.

          16.  Events of Default.  The Managing Agent may declare Guarantors
               -----------------                                            
to be in default under this Guaranty upon the occurrence of any of the following
events ("Events of Default"):

(a)       Either of the Guarantors fail to perform any of their obligations
     under this Guaranty; or

(b)       Either of the Guarantors revoke this Guaranty or dispute the validity
     or coverage thereof or this Guaranty becomes ineffective for any reason; or

(c)       Any representation or warranty made or given by a Guarantor in any
     Loan Document proves to be false or misleading in any material respect; or

(d)       Any Guarantor becomes insolvent or the subject of any case or
     proceeding, voluntary or involuntary, under the Bankruptcy Code, or any
     similar existing or future law of any jurisdiction, state or federal,
     relating to bankruptcy, insolvency, reorganization or relief of debtors
     and, in the case of an involuntary case or proceeding, the same continues
     undismissed or unstayed for ninety (90) calendar days; or

(e)       Any Guarantor dissolves or liquidates.

          17.  Authorization; No Violation.  Guarantors are authorized to
               ---------------------------                               
execute, deliver and perform under this Guaranty, 

                                      -13-
<PAGE>
 
which is a valid and binding obligation of each Guarantor enforceable against
each Guarantor in accordance with its terms, except as enforcement may be
limited by Debtor Relief Laws, Gaming Laws or equitable principles relating to
the granting of specific performance and other equitable remedies as a matter of
judicial discretion. No provision or obligation of Guarantors contained in this
Guaranty violates any Requirement of Law applicable to such Guarantor. No such
provision or obligation conflicts with, or constitutes a breach or default
under, any agreement to which any Guarantor is a party.

          18.  Additional and Independent Obligations.  Guarantors' obligations
               --------------------------------------
under this Guaranty are in addition to their obligations under any other
existing or future guaranties given in connection with the Loan Agreement, and
they shall remain in full force and effect until they are expressly modified or
released in a writing signed by the Managing Agent on behalf the Requisite Banks
(or, if required by the terms of the Loan Agreement, all of the Banks).
Guarantors' obligations under this Guaranty are independent of those of Borrower
under the other Loan Documents. The Managing Agent may bring a separate action,
or commence a separate reference or arbitration proceeding against any Guarantor
without first proceeding against Borrower or any other Guarantor, any other
person or any security that the Managing Agent or the Banks may hold, and
without pursuing any other remedy. The rights under this Guaranty shall not be
exhausted by any action by the Managing Agent or any Bank until the Loans have
been paid and performed in full.

          19.  No Waiver; Consents; Cumulative Remedies.  Each waiver by the
               ----------------------------------------                     
Managing Agent and the Banks must be in writing, and no waiver shall be
construed as a continuing waiver.  No waiver shall be implied from the Managing
Agent's or any Bank's delay in exercising or failure to exercise any right or
remedy against Borrower, Guarantors or any security.  Consent by the Managing
Agent or any Bank to any act or omission by Borrower or Guarantors shall not be
construed as a consent to any other or subsequent act or omission, or as a
waiver of the requirement for their consent to be obtained in any future or
other instance.  All remedies of the Managing Agent and the Banks against
Borrower and Guarantors are cumulative.

          20.  Release.  This Guaranty shall automatically terminate upon
               -------                                                   
satisfaction of the Obligations. Absent such termination, Guarantors shall not
be released from their obligations under this Guaranty except by a writing
signed by the Managing Agent with the consent of all the Banks or upon delivery
and acceptance by the Managing Agent and CSG of the Completion Certificates
specified in Section 7.14 of the Loan Agreement on or before the Completion
             ------------
Date.

                                      -14-
<PAGE>
 
          21.  Successors and Assigns; Participations.  The terms of this
               --------------------------------------                    
Guaranty shall bind and benefit the legal representatives, successors and
assigns of the Managing Agent, the Banks and the Guarantors; provided, however,
that Guarantors may not assign this Guaranty, or assign or delegate any of their
rights or obligations under this Guaranty, without the prior written consent of
the Managing Agent in each instance. The Banks may sell or assign participations
or other interests in the Loans and this Guaranty, in accordance with Section
                                                                      -------
12.8 of the Loan Agreement. Also without notice to or the consent of Guarantors,
the Managing Agent and the Banks may disclose any and all information in their
possession concerning Guarantors, this Guaranty and any security for this
Guaranty to any actual or prospective purchaser of any securities issued or to
be issued by Banks, and to any actual or prospective purchaser or assignee of
any participation or other interest in the Loan Documents, all in accordance
 with Section 12.14 of the Loan Agreement.
      -------------                       

          22.  Governing Law.  This Guaranty shall be governed by, and
               -------------                                          
construed in accordance with, the local Laws of the State of Nevada.

          23.  Costs and Expenses.  If any lawsuit, reference or arbitration
               ------------------                                           
is commenced which arises out of, or which relates to this Guaranty, the
prevailing party shall be entitled to recover from each other party such sums as
the court, referee or arbitrator may adjudge to be reasonable attorneys' fees
(including reasonably allocated costs for services of in-house counsel) in the
action or proceeding, in addition to costs and expenses otherwise allowed by
Law.  In all other situations, including any Insolvency Proceeding, Guarantors
agree to pay all of the Managing Agent's and the Banks' reasonable costs and
expenses, including attorneys' fees (including reasonably allocated costs for
services of their respective in-house counsel) which may be incurred in any
effort to collect or enforce this Guaranty.  From the time(s) incurred until
paid in full, all sums shall bear interest at the Default Rate.

          24.  Integration; Modifications.  This Guaranty (a) integrates all
               --------------------------                                   
the terms and conditions mentioned in or incidental to this Guaranty, (b)
supersedes all oral negotiations and prior writings with respect to its subject
matter, and (c) is intended by Guarantors, the Managing Agent and the Banks as
the final expression of the agreement with respect to the terms and conditions
set forth in this Guaranty and as the complete and exclusive statement of the
terms agreed to by Guarantors, the Managing Agent and the Banks. No
representation, understanding, promise or condition shall be

                                      -15-
<PAGE>
 
enforceable against any party unless it is contained in this Guaranty.

          25.  Waiver of Right to Trial by Jury.  EACH PARTY TO THIS GUARANTY
               --------------------------------                              
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTY HERETO OR ANY OF THEM WITH
RESPECT TO THIS GUARANTY, THE LOAN AGREEMENT AND ANY OTHER LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS GUARANTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

          26.  Notices.  Notices hereunder shall be in writing and shall be
               -------                                                     
delivered in the manner prescribed for notices in the Loan Agreement.

          27.  Miscellaneous.  The illegality or unenforceability of one or
               -------------                                               
more provisions of this Guaranty shall not affect any other provision.

          28.  Equipment Lessors' Rights.  Any reference in Paragraph 3 and
               -------------------------                                   
following of this Guaranty to the Obligations, the Loans, the Loan Agreement and
analogous terms shall be deemed to be qualified, where the context requires, by
limiting the same to the Banks' Percentage thereof and shall be deemed to be
amended, where the context requires, by adding a reference to the Equipment
Lessors' Percentage of the obligations under the Equipment Lease.  The Managing
Agent shall be entitled, as respects the Equipment Lessors, to all of the rights
and protections set forth in Article 11 of the Loan Agreement; provided that the
                                                               --------         
Equipment Lessors shall not be entitled to any rights under this Guaranty if
they do not confirm in writing promptly following request by the Managing Agent
therefor their acceptance of the indemnification provisions contained in Section
11.7 of the Loan Agreement as to the Equipment Lessors' Percentage of any
occurrence covered thereby.

                                      -16-
<PAGE>
 
          IN WITNESS WHEREOF, Guarantors have executed this Guaranty as of the
date first written above by their respective duly authorized officers.

                                  MGM GRAND, INC.,                   
                                  a Delaware corporation             
                                                                     
                                                                     
                                                                     
                                  By: /s/ K. Eugene Shutler
                                     ------------------------------------
                                  Title: Executive Vice President
                                        ---------------------------------
                                                                     
                                  PRIMADONNA RESORTS, INC.,          
                                  a Nevada corporation               
                                                                     
                                                                     
                                                                     
                                  By: /s/ Craig F. Sullivan
                                     -----------------------------------
                                  Title: Chief Financial Officer
                                        --------------------------------

Accepted:

BANK OF AMERICA NATIONAL TRUST
  AND SAVINGS ASSOCIATION, as
  Managing Agent


By: /s/ L. Chenevert, Jr.
   --------------------------
Title: Vice President
      -----------------------

                                      -17-