Exhibit
10.8(d)


 


	
  KERZNERTM

  	
  core value no.1

  blow
  away the customerTM

  



 


19
October, 2005


 


Sultan Ahmed Bin Sulayem


Executive Chairman


Istithmar PJSC


PO Box 17000


Dubai, UAE


 


Dear
Sultan


 


Summary of our discussions relating to the capital structure of
Atlantis The Palm, Dubai


 


As
we discussed last night, the Atlantis, The Palm project has come a long way and
we are now at the point that we can commence construction.  Over the last few years we have been working
on the planning of the project and have gone through various stages of
budgeting.  Today, we have reached a
stage where we are well advanced on the construction documents for the project
and all material respects of the project have been well scoped.  During the course of the last year we have
been through several rounds of value engineering and in an effort to reduce
cost we have taken out various elements of the project.  However, we are now at a stage we feel that
any further scope reductions will begin to hurt the project.  The other issue that we have previously
discussed is that proceeding now with the condos might be a good solution in
the short term but probably not the right way to maximize value.  Rather, we have agreed to postpone the
decision on the condos and to rather develop the first phase of the project and
have it well positioned before we look to future phases.


 


As
you know, we now have prices from contractors for almost 90% of the
construction elements of the project. 
Based on contractor pricing we have had to revise upwards the total cost
of the project such that the total development cost (without land and
capitalized interest) is approximately $1.25 billion and $1.4 billion
with capitalized interest (without land). 
This increase in cost means that our present financing for
$1.2 billion is insufficient.  The
present financing included $700 million of bank debt and $500 million
of equity with Istithmar providing $375mm of equity (Kerzner $125mm).  In order to resolve the shortfall, reduce
Istithmar’s cash contribution and to have Kerzner become a full 50% partner in
the venture, I wish to record the following agreement:


 


•                  The
JV will acquire the land (10 sites) from Nakheel immediately at a cost of
$125 million.  Nakheel will take
back a subordinated PIK Note (Holdco Note) to fund this acquisition and the
terms of the Note shall be: maturity of 12 years; all interest will accrue
and not be cash pay; Year 1 – no interest; Year 2 – 5% interest; Year 3 –
6% interest; Year 4 (from opening) and beyond – interest at 7%;


•                  There
will be cash equity of $400 million with Kerzner increasing its commitment
and will now take up $200 million of such equity (Istithmar $200mm);


•                  Unless
the banking group is prepared to increase the amount under the senior facility
we anticipate issuing $300 million of bonds (second lien) of which we
expect $225mm to be sold to institutions and $75mm taken up by Istithmar (with
the same terms as the institutions except that Istithmar’s would be on a
delayed-draw basis).  We will, however,
endeavour to eliminate the need to issue bonds by having the senior lenders
increase their commitment, although we are not assured that this can be
accomplished;


•                  Kerzner
will undertake to subordinate its base management fees to the banks and/or
bondholders


 


The
various guarantees that currently exist in the senior debt facility, will
remain in place, including :


 





















 


•                  The
cost overrun guarantee of $55 million which is jointly provided by Kerzner
and Istithmar


•                  The
unlimited completion guarantee provided by Istithmar


•                  The
$100 million Istithmar support for interest and capital until such time as
the covenants are met


 


We
also agreed that the project would have the right to reclaim and develop on the
crescent of The Palm (immediately adjacent to our site) a further 125 acres in
the future.


 


I
think this covers all the main financing issues/principles as they relate to
Kerzner International and Istithmar.


 


If
you are in agreement with the above please can you countersign this letter in
the place provided below.


 


Yours
sincerely


 


 


	
  /s/ Butch Kerzner

  	
   

  	
  /s/ Sultan Ahmed Bin Sulayem

  	
   

  
	
  Butch Kerzner

  	
   

  	
  Sultan Ahmed Bin Sulayem