EXHIBIT 10.26

 

January 16, 2002

 

Gary N. Jacobs, Esq.

Executive Vice President and

General Counsel

MGM MIRAGE

3600 Las Vegas Boulevard, South

Las Vegas, NV 80109

 

  Re:   Increase in Scope of Construction of the Borgata

 

Dear Mr. Jacobs:

 

This letter agreement (“Letter Agreement”) represents the agreement to an
increase in the scope of the Facility (as detailed below), to be constructed in
accordance with the terms of that certain Operating Agreement (the “Operating
Agreement”) of Marina District Development Holding Co., LLC, a New Jersey
limited liability company (“Holding Co.”) as adopted and amended by that certain
Contribution and Adoption Agreement, effective December 13, 2000, by and among
Holding Co., MAC, CORP., a New Jersey corporation (“MR Sub”) and Boyd Atlantic
City, Inc., a New Jersey corporation (“Boyd Sub”). MR Sub and Boyd Sub are the
Members of Holding Co. Unless otherwise defined herein, all capitalized terms in
this Letter Agreement shall have the same meaning ascribed to such terms in the
Operating Agreement.

 

The parties hereby agree as follows:

 

A.    MR Sub and Boyd Sub agree and acknowledge that the following shall
represent an increase in the scope of the Facility for purposes of Section
3.3(b)(iii) of the Operating Agreement:

 

1.    Poker Room: A poker room consisting of approximately 35 tables and a race
book having approximately 40 seats, a bar and a snack bar (the “Poker Room”),
increasing the aggregate shared Project Costs by no more than Five Million Two
Hundred Thousand Dollars ($5,200,000), as more particularly described on Exhibit
A attached hereto and incorporated herein by this reference; and

 

2.    Parking Structure: A parking structure to be constructed in material
conformity and compliance with those certain plans and specifications described
on Exhibit B attached hereto and incorporated herein by this reference (the
“Parking Structure”), increasing the aggregate shared Project Costs by no more
than Fourteen Million Nine Hundred Thousand Dollars ($14,900,000) (which
increase in the Project Cost relating to the Parking Structure represents a
budgeted cost of Eighteen Million Nine Hundred Thousand Dollars ($18,900,000),
as generally described on Exhibit C attached hereto and incorporated herein by
this reference, less Four Million Dollars ($4,000,000) representing the budgeted
costs of paving, striping and lighting of the previously contemplated Employee
Parking Lot, which costs are currently included within the overall Project
Costs). The Parking Structure shall be constructed by Marina District
Development Company, LLC, a New Jersey limited liability company (“MDDC”) upon
that certain real property (the “Leased Premises”) that is the subject of a
ground lease to be entered into between MDDC and MR Sub concurrently herewith
(the “Ground Lease”).

 

 

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Gary N. Jacobs, Esq.

MGM MIRAGE

January 16, 2002

 

B.    MR Sub and Boyd Sub shall share equally in the increase, if any, in the
aggregate Project Costs up to but not exceeding the approved increase in scope
as set forth in Sections A(1) and A(2) of this Letter Agreement. As a result of
the approved increase in scope of the Facility, the responsibility of Boyd Sub
to make additional capital contributions due to cost overruns, pursuant to
Section 3.3(b) of the Operating Agreement, shall not be triggered until, and
only to the extent that, the aggregate Project Costs exceed One Billion Fifty
Five Million One Hundred Thousand Dollars ($1,055,100,000), which represents One
Billion Thirty Five Million Dollars ($1,035,000,000) plus the amounts set forth
Sections A(1) and A(2) of this Letter Agreement. Correspondingly, Boyd Sub and
MR Sub shall share equally in all In Balance Contributions, if any, required by
the provider of Construction Financing to the extent such In Balance
Contributions relate to the approved increase in scope as set forth in this
Letter Agreement.

 

C.    The Poker Room and the Parking Structure (including any other use(s) of
the Leased Premises permitted under the Ground Lease) shall be considered a part
of the Program and the Facility for all purposes under the Operating Agreement,
and the Employee Parking Lot shall be removed as a component of the Program and
the Facility for all purposes under the Operating Agreement.

 

D.    MR Sub agrees that the construction of the Parking Structure shall not be
deemed to be a change in the location of the Employee Parking Lot for purposes
of Section 3.2(d)(ii) of the Operating Agreement and shall not result in the
assessment of environmental remediation costs against MDDC as provided therein.

 

E.    The parties agree to prepare and execute any amendments to the Operating
Agreement or such other documents or instruments as may reasonably be necessary
to reflect the terms and provisions of this Letter Agreement, including, but not
limited to (i) amending the Operating Agreement to delete references to the
Employee Parking Lease and the Option Parcel and to include references to the
Ground Lease (including the related purchase option contained therein); and (ii)
amending, to the extent necessary, any existing easement agreements relating to
the construction and operation of the Facility.

 

(signature page follows)

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Gary N. Jacobs, Esq.

MGM MIRAGE

January 16, 2002

 

Please indicate your agreement to the terms of this Letter Agreement by
countersigning below, where indicated.

 

Very truly yours,

BOYD GAMING CORPORATION, a

Nevada corporation

By:

 

  /s/   ELLIS LANDAU

--------------------------------------------------------------------------------

Its:

 

Executive Vice President, Treasurer

and Chief Financial Officer

 

BOYD ATLANTIC CITY, INC., a

New Jersey corporation

By:

 

  /s/    ELLIS LANDAU

--------------------------------------------------------------------------------

Its:

 

Vice President, Treasurer

and Chief Financial Officer

 

ACCEPTED AND AGREED TO this 16 day of January, 2002:

 

MAC, CORP., a New Jersey corporation

By:

 

  /s/    JAMES J. MURREN

--------------------------------------------------------------------------------

Its:

 

Treasurer

MIRAGE RESORTS, INCORPORATED,

a Nevada corporation

By:

 

  /s/    JAMES J. MURREN

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Its:

 

Treasurer