
<PAGE>   1
                                                                    EXHIBIT 10.1

                                                Confidential Treatment Requested
                                                (Information Omitted Pursuant to
                                                Rule 24b-2)



                             JOINT VENTURE AGREEMENT

                                       OF

                                 Stardust A. C.

This Joint Venture Agreement (the "Agreement") is made as of May 29, 1996 by and
between MAC, CORP. ("MR Sub"), a New Jersey corporation which is a wholly owned
subsidiary of Mirage Resorts, Incorporated, a Nevada corporation ("MRI"), and
Grand K, Inc. ("Boyd Sub"), a Nevada corporation which is a wholly owned
subsidiary of Boyd Gaming Corporation, a Nevada corporation ("Boyd") (MR Sub and
Boyd Sub are hereinafter referred to individually as a "Venturer" and
collectively as the "Venturers").

                                    PREAMBLE

WHEREAS, the Venturers desire to form a joint venture for the purpose of
acquiring certain unimproved real property (as more particularly described in
Section 3.2 hereof, the "Property") within the "Huron North Redevelopment Area"
(the "Parcel") located in the Marina area of Atlantic City, New Jersey (the
"City") and designing, developing, constructing, owning and operating a
hotel-casino and related facilities (the "Facility") on the Property.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and in consideration of the mutual promises
set forth, the parties agree as follows:

                                    ARTICLE 1

                                THE JOINT VENTURE

         Section 1.1 Organization. The Venturers hereby form and establish a
joint venture in the form of a general partnership (the "Joint Venture") under
and pursuant to, and which shall continue to constitute a joint venture for

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purposes of, the provisions of this Agreement and the New Jersey Uniform
Partnership Act (the "Act") as of the date first above written, upon the terms
and conditions set forth in this Agreement.

         Section 1.2 Name. The name of the Joint Venture shall be Stardust A. C.
and all business of the Joint Venture shall be conducted solely in such name.

         Section 1.3 Place of Business. The principal office of the Joint
Venture shall be located at such place within Atlantic County, New Jersey as may
be approved by the Venturers.

         Section 1.4 Business of the Joint Venture. The business of the Joint
Venture is to acquire and own the Property and to design, develop, construct,
finance, own and operate the Facility on the Property. In furtherance of its
business, the Joint Venture shall have and may exercise all the powers now or
hereafter conferred by the laws of the State of New Jersey on partnerships
formed under the laws of that State, and may do any and all things related or
incidental to its business as fully as natural persons might or could do under
the laws of that State.

         Section 1.5 Purposes Limited. The Joint Venture shall be a joint
venture only for the purposes specified in Section 1.4. Except as otherwise
provided in this Agreement, the Joint Venture shall not engage in any other
activity or business and neither Venturer shall have any authority to hold
itself out as an agent of the other Venturer in any other business or activity.

         Section 1.6 No Payments of Individual Obligations. The Venturers shall
use the Joint Venture's credit and assets solely for the benefit of the Joint
Venture. No asset of the Joint Venture shall be transferred or encumbered for or
in payment of any individual obligation of a Venturer.

         Section 1.7 Statutory Compliance. The Joint Venture shall exist under
and be governed by, and this Agreement shall be construed and enforced in
accordance with, the laws of the State of New Jersey. The Venturers shall make
all filings and disclosures required by, and shall otherwise comply with, all
such laws. The Venturers shall execute, file and record in the appropriate
records any assumed or fictitious name certificate required by law to be filed
or recorded in connection with the formation of the 

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Joint Venture and shall execute, file and record such other documents and
instruments as may be necessary or appropriate with respect to the formation of,
and conduct of business by, the Joint Venture.

         Section 1.8 Title to Property. All property, whether real or personal,
tangible or intangible, owned by the Joint Venture shall be owned in the name of
the Joint Venture and no Venturer shall have any ownership interest in such
property in its individual name or right and each Venturer's interest in the
Joint Venture shall be personal property for all purposes.

         Section 1.9 Duration. The Joint Venture shall commence on the date
first above written and shall continue until dissolved and liquidated pursuant
to law or any provision of this Agreement.

         Section 1.10 Definitions. As used in this Agreement:

         (a) "Acceptance Notice" has the meaning set forth in Section 11.4
hereof.

         (b) "Accountants" has the meaning set forth in Section 7.3 hereof.

         (c) "Act" has the meaning set forth in Section 1.1 hereof.

         (d) "Affiliate" means a person which directly, or indirectly through
one or more intermediaries, controls, is controlled by or is under common
control with the person specified; provided, however, that a Venturer, as such,
shall not be deemed to be an Affiliate of the other Venturer.

         (e) "Applicable Ratio" has the meaning set forth in Section 3.5 hereof.

         (f) "Appraisal Notice" has the meaning set forth in Section 11.5
hereof.

         (g) "Appraised Value" has the meaning set forth in Section 11.5 hereof.

         (h) "Boyd" has the meaning set forth in the first paragraph of this
Agreement.

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         (i) "Boyd Sub" has the meaning set forth in the Preamble to this
Agreement.

         (j) "Capital Account" has the meaning set forth in Section 3.10 hereof.

         (k) "City" has the meaning set forth in the Preamble to this Agreement.

         (l) "Code" has the meaning set forth in Section 5.1 hereof.

         (m) "Construction Financing" means debt financing, which may be
unsecured or collateralized by a lien on the Property and the Facility or any
portion thereof (including purchase money financing collateralized by furniture,
furnishings, fixtures, machinery or equipment), to be obtained by the Joint
Venture from one or more commercial banks or other lenders (including vendors or
the Venturers) for the purpose of funding Project Costs and which, except as
otherwise provided in Section 4.1 hereof, is non-recourse to the stockholders
and other Affiliates of each Venturer and does not require the stockholders or
other Affiliates of either Venturer to provide a personal guaranty.

         (n) "Construction Period" has the meaning set forth in Section 4.1
hereof.

         (o) "Cumulative Excess Contributions" has the meaning set forth in
Section 3.5 hereof.

         (p) "Defaulting Venturer" has the meaning set forth in Section 12.1
hereof.

         (q) "Development Agreement" means that certain agreement entitled "An
Agreement between the City of Atlantic City and Mirage Resorts, Incorporated for
the Development of the Huron North Redevelopment Area," dated May 3, 1996, which
is attached as Exhibit A to this Agreement, as the same may be amended or
supplemented from time to time.

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         (r) "Disqualification Notice" has the meaning set forth in Section 11.4
hereof.

         (s) "Distributable Cash" has the meaning set forth in Section 6.1
hereof.

         (t) "Event of Bankruptcy" has the meaning set forth in Section 12.1
hereof.

         (u) "Event of Default" has the meaning set forth in Section 12.1
hereof.

         (v) "Facility" means a new hotel-casino and related restaurant,
entertainment, retail and other facilities and amenities, containing not less
than 1,000 guestrooms, to be designed, developed and constructed by the Joint
Venture on the Property, including all furniture, furnishings, machinery,
equipment and other tangible personal property located therein and used in
connection therewith.

         (w) "Government Improvements" has the meaning set forth in Section 4.2
hereof.

         (x) "Initiating Venturer" has the meaning set forth in Section 11.4
hereof.

         (y) "Interest" has the meaning set forth in Section 3.6 hereof.

         (z) "Losses" has the meaning set forth in Section 5.1 hereof.

         (aa) "Managing Venturer" means Boyd Sub until such time, if any, as MR
Sub becomes the Managing Venturer pursuant to Section 9.3 hereof, and thereafter
means MR Sub.

         (bb) "Master Plan" has the meaning set forth in Section 4.2 hereof.

         (cc) "Master Plan Improvements" has the meaning set forth in Section
4.2 hereof.

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         (dd) "MRI" has the meaning set forth in the first paragraph of this
Agreement.

         (ee) "MR Sub" has the meaning set forth in the first paragraph of this
Agreement.

         (ff) "New Jersey Gaming Authorities" means, collectively, the New
Jersey Casino Control Commission and the New Jersey Division of Gaming
Enforcement, or any governmental agency of the State of New Jersey or its
political subdivisions which succeeds to the functions of such agencies.

         (gg) "Non-Managing Venturer" means MR Sub until such time, if any, as
MR Sub becomes the Managing Venturer pursuant to Section 9.3 hereof, and
thereafter means Boyd Sub.

         (hh) "Offering Notice" has the meaning set forth in Section 11.4
hereof.

         (ii) "Parcel" has the meaning set forth in the Preamble to this
Agreement.

         (jj) "Profits" has the meaning set forth in Section 5.1 hereof.

         (kk) "Project Cost" means all costs of designing, developing,
constructing, equipping and opening the Facility paid or accrued prior to the
end of the Construction Period, including all direct costs related thereto such
as labor, materials, supplies, furniture, furnishings, fixtures, machinery,
equipment, construction management, architectural, engineering and design fees,
site work, including all costs and expenses payable by the Joint Venture
pursuant to Section 4.2., utility installation and hook-up fees, construction
permits, certificates and bonds, preopening expenses, gaming tax and other
deposits, license fees, initial gaming and non-gaming bankroll and interest and
fees on the Construction Financing, including the value of the Property but
excluding the cost of acquiring any additional property pursuant to Section 3.4
hereof and excluding all costs associated with evaluation and remediation of
environmental contamination of the Property.

         (ll) "Property" has the meaning set forth in the Preamble to this
Agreement.

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         (mm) "Responding Venturer" has the meaning set forth in Section 11.4
hereof.

         (nn) "Transfer" has the meaning set forth in Section 11.1 hereof.

         (oo) "Venturer" and "Venturers" means, individually or collectively, as
applicable, the parties named as such in the first paragraph of this Agreement
or any successor to either party by Transfer expressly permitted by this
Agreement.

                                    ARTICLE 2

                                  THE VENTURERS

         Section 2.1 Identification. MR Sub and Boyd Sub shall be the Venturers
of the Joint Venture. No other person may become a Venturer except pursuant to a
Transfer specifically permitted under and effected in compliance with this
Agreement.

         Section 2.2 Services of Venturers. During the existence of the Joint
Venture, the Venturers shall be required to devote only such time and effort to
Joint Venture business as may be necessary to promote adequately the interests
of the Joint Venture and the mutual interests of the Venturers, it being
specifically understood and agreed that the Venturers shall not be required to
devote full time to Joint Venture business and, except as provided in Section
3.4 hereof, each Venturer and its Affiliates may at any time and from time to
time engage in and possess interests in other business ventures of every type
and description, independently or with others, whether or not such ventures
relate to or compete with the Facility; and neither the Joint Venture nor the
other Venturer shall by virtue of this Agreement have any right, title or
interest in or to such independent ventures or to the income or profits derived
therefrom. The Venturers contemplate organizing a management company under the
laws of Nevada to manage the affairs of the Joint Venture in a manner consistent
with the provisions of this Agreement.

         Section 2.3 Reimbursement and Fees. Unless expressly provided for in
this Agreement or approved by each of the Venturers, neither of the Venturers
nor any Affiliate thereof shall be paid any compensation for its 

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services to the Joint Venture or be reimbursed for out-of-pocket, overhead or
general administrative expenses.

         Section 2.4 Transactions with Affiliates. Unless expressly provided for
in this Agreement or approved by each of the Venturers, the Joint Venture shall
not employ or retain, or enter into any transaction or contract with, any
Venturer or any officer, employee or Affiliate of any Venturer, except for such
compensation and upon such other terms and conditions as are no less favorable
to the Joint Venture than those that could be obtained at the time from an
unrelated party.

         Section 2.5 Liability of the Venturers; Indemnification. Neither
Venturer shall be liable for damages or otherwise to the Joint Venture or the
other Venturer for any act or omission performed or omitted by it in good faith
on behalf of the Joint Venture and in a manner reasonably believed by it to be
within the scope of the authority granted to it by this Agreement and in the
best interests of the Joint Venture if it shall not have been guilty of gross
negligence, bad faith or willful misconduct with respect to such acts or
omissions. Each Venturer shall be indemnified by the Joint Venture from and
against any and all claims, losses, damages and liabilities, including
reasonable attorneys' fees which shall be reimbursed as incurred, arising out of
or relating to any act or failure to act performed or omitted by it within the
scope of the authority conferred upon it by this Agreement; provided, however,
that such indemnity shall be payable only if such Venturer acted in good faith
and in a manner it reasonably believed to be in, or not opposed to, the best
interests of the Joint Venture. Any indemnity under this Section 2.5 shall be
paid from, and shall be limited to the extent of, Joint Venture assets, and no
Venturer shall have any personal liability on account thereof.

                                    ARTICLE 3

                 CAPITAL CONTRIBUTIONS; LOANS; CAPITAL ACCOUNTS

         Section 3.1 Initial Capital Contributions. On the date of this
Agreement, each Venturer shall contribute or cause to be contributed to the
Joint Venture, as its initial capital contribution, cash in the amount of
$1,000. As of the date of this Agreement, the initial capital contributions
represent the total capital of the Joint Venture.

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         Section 3.2 Contribution of Property. Following the date on which the
City transfers title to the Parcel to an Affiliate of MRI, and on the latest
date practicable prior to the first draw on the Construction Financing, MR Sub
shall, as an additional capital contribution, convey, or cause to be conveyed,
to the Joint Venture by bargain and sale deed fee title to the Property, free
and clear of all monetary liens and encumbrances and all other liens,
encumbrances, rights and restrictions which would materially adversely affect
the Joint Venture's contemplated use of the Property, other than those liens,
encumbrances, rights and restrictions contained or referred to in the deed to
the Parcel from the City to MRI's Affiliate or in the Development Agreement. The
"Property" shall consist of that portion of the Parcel designated by MR Sub
within 30 days following the date Boyd Sub provides MR Sub with a description of
the Facility. The size, shape, frontage and location of the Property shall be
reasonably determined by MR Sub to be adequate for the Joint Venture to
construct the Facility. Boyd Sub shall use its best efforts to provide MR Sub
with a description of the Facility within 180 days of the date of this
Agreement. The Property will be adjacent to the portion of the Parcel on which
MRI intends to develop a hotel-casino. The legal description of the Property
will be inserted as an amendment to this Agreement at the time of designation by
MR Sub. The Venturers agree, solely for purposes of this Agreement, that the
fair market value of the Property is [Information Omitted pursuant to 
Rule 24b-2] as of the date of this Agreement.

         All costs associated with the environmental assessment and remediation
of the Property and all real property transfer taxes and other costs and
expenses of conveying the Property to the Joint Venture, including, if
determined to be necessary by the Managing Venturer, the cost of a CLTA owner's
policy of title insurance, shall be borne by MR Sub.

         Section 3.3 Additional Capital Contributions. Not later than the 
conveyance of the Property to the Joint Venture by MR Sub pursuant to 
Section 3.2, Boyd Sub shall make one or more additional capital contributions 
aggregating [Information omitted pursuant to Rule 24b-2] to the Joint Venture. 
A portion of such additional capital contributions may consist of out-of-pocket 
fees and expenses paid to third parties by Boyd Sub on behalf of the Joint 
Venture in connection with the Joint Venture's pre-construction activities and 
salaries paid to employees of Boyd Sub or its Affiliates who devote 
substantially full time to the Joint Venture. From time 

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to time thereafter, each of the Venturers shall concurrently make additional
capital contributions aggregating [Information omitted pursuant to Rule 24b-2]
to the Joint Venture at such time or times as required by the provider of the
Construction Financing or at the time or times as the Managing Venturer
reasonably determines necessary to coincide with the funding of the Project
Cost; provided, however, that if acceptable to the provider of the Construction
Financing, each of the Venturers may provide all or part of such [Information
omitted pursuant to Rule 24b-2] as subordinated loans, on such terms as the
Venturers may mutually determine, rather than as capital contributions.
Thereafter, Boyd Sub shall make additional capital contributions of cash to the
Joint Venture in an aggregate amount equal to the difference between (i) the
Project Cost, excluding the value of the Property, and (ii) the sum of (A) the
net proceeds from the Construction Financing and (B) the [Information omitted
pursuant to Rule 24b-2] contributed pursuant to the first and third sentences of
this Section 3.3. The additional capital contributions referred to in the
immediately preceding sentence shall be made by Boyd Sub at such time or times
as required by the provider of the Construction Financing or at the time or
times as the Managing Venturer reasonably determines necessary to coincide with
the funding of the Project Cost. If required to fund expenses, each Venturer
shall contribute up to $1,000,000 prior to the conveyance of the Property to the
Joint Venture, which contributions shall be credited against each Venturer's
subsequent capital contributions.

         Section 3.4 Acquisition and Development of Additional Property. MR Sub
or its Affiliates may, alone or as a partner, joint venturer, stockholder or
associate of or with one or more other persons or entities, acquire or develop
property adjacent to the Property or the Parcel on such terms and conditions as
it may determine it its sole discretion, and neither the Joint Venture nor Boyd
Sub shall have any rights with respect thereto except such as may be agreed to
by each of the Venturers. Without the consent of MR Sub, which it may withhold
or condition in its sole discretion, neither Boyd Sub nor its Affiliates, alone
or as a partner, joint venturer, stockholder or associate of or with other
persons or entities, may acquire or possess an interest in any other property or
business located: (i) within the Marina area of Atlantic City, New Jersey at any
time during the term of this Agreement or within five years following the
termination of this Agreement as a result of the occurrence of an Event of
Default by Boyd Sub or (ii) within the entire Atlantic City area during the
five-year period commencing on the date of this Agreement. With the consent of
each Venturer, the Joint Venture may acquire additional property beneficial to
the Joint Venture in the vicinity of the Property. The purchase price and other
terms of any such acquisition shall be subject to the approval of each Venturer.
Unless the Venturers agree otherwise, the acquisition cost of any such
additional property shall be funded 

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by equal additional capital contributions by each of the Venturers on or prior
to the acquisition date, which shall not affect the respective obligations of
the Venturers to make additional capital contributions to the Joint Venture
pursuant to Section 3.3. If any such additional property is acquired by the
Joint Venture and the Joint Venture is thereafter dissolved and liquidated, MR
Sub shall have the option, exercisable for a period of 90 days following
liquidation of the Joint Venture, to purchase any or all of such additional
property for cash at a purchase price equal to the Joint Venture's acquisition
cost of such additional property.

         Section 3.5 Failure to Make Capital Contributions. If a Venturer
defaults in its obligation to make capital contributions required by this
Article 3, the other Venturer shall have and may exercise all remedies available
pursuant to this Agreement, at law or in equity. In addition, if a Venturer
defaults in its obligation to make capital contributions in cash required by
this Article 3, the other Venturer may, but shall not be required to, contribute
to the Joint Venture all or a portion of such amount. If such other Venturer
contributes any amount to the Joint Venture pursuant to this Section 3.5,
immediately following such contribution the Interest of the contributing
Venturer in the Joint Venture shall be increased and the Interest of the
defaulting Venturer in the Joint Venture shall be decreased. The resulting
Interest of the contributing Venturer shall be the number of percentage points
(rounded to the nearest one-hundredth of a percentage point) determined in
accordance with the following formula: (i) determine the percentage equivalent
of a fraction, the numerator of which shall be the aggregate capital
contributions made to the Joint Venture by the contributing Venturer pursuant to
this Agreement, and the denominator of which shall be the aggregate capital
contributions made to the Joint Venture by all Venturers pursuant to this
Agreement, (ii) subtract 50 percentage points, (iii) multiply the result of (i)
and (ii) by the Applicable Ratio (rounded to the nearest one-hundredth of a
percentage point) and (iv) add 50 percentage points to the result of (i), (ii)
and (iii). For purposes of the immediately preceding sentence, the value of the
Property contributed by MR Sub pursuant to Section 3.2 shall at all times be
deemed to be equal to [Information omitted pursuant to Rule 24b-2]. The 
resulting Interest of the defaulting Venturer shall be the number of percentage 
points equal to 100 minus the resulting Interest of the contributing Venturer 
as determined above.

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         As used in this Section 3.5: (i) to the extent that the cash
contributed by the contributing Venturer pursuant to this Section 3.5 in
response to such default, together with all cash previously contributed by the
contributing Venturer pursuant to this Section 3.5 in response to prior defaults
(collectively, the "Cumulative Excess Contributions"), is less than $30,000,000,
the Applicable Ratio shall be 1.20; (ii) with respect to that portion of the
Cumulative Excess Contributions that is between $30,000,000 and $39,999,999, the
Applicable Ratio shall be 1.30; (iii) with respect to that portion of the
Cumulative Excess Contributions that is between $40,000,000 and $49,999,999, the
Applicable Ratio shall be 1.40; and (iv) with respect to that portion of the
Cumulative Excess Contributions that is $50,000,000 or more, the Applicable
Ratio shall be 1.50.

         By way of illustration, assume that (i) MR Sub and Boyd Sub each has a
50% Interest, (ii) MR Sub has previously contributed the Property pursuant to
Section 3.2 and [Information omitted pursuant to Rule 24b-2] pursuant to the
third sentence of Section 3.3, and Boyd Sub has previously contributed a total
of [Information omitted pursuant to Rule 24b-2] pursuant to the first and third
sentences of Section 3.3 and (iii) Boyd Sub is required to contribute an
additional [Information omitted pursuant to Rule 24b-2] pursuant to the fourth
sentence of Section 3.3. If Boyd Sub fails to contribute such amount, and MR Sub
elects to contribute such [Information omitted pursuant to Rule 24b-2] pursuant
to this Section 3.5, the resulting Interest of MR Sub following such
contribution would be [Information omitted pursuant to Rule 24b-2], determined
as follows:

<TABLE>
<S>              <C>                                                  
[Information omitted pursuant to Rule 24b-2] [MR Sub cash and Property contributions]
- --------------------------------------------------------------------------------------
       [Information omitted pursuant to Rule 24b-2] [total cash and Property contributions]
</TABLE>

equals [Information omitted pursuant to Rule 24b-2], minus 50% equals
[Information omitted pursuant to Rule 24b-2], multiplied by [Information 
omitted pursuant to Rule 24b-2] [the blended Applicable Ratio applicable to 
[Information omitted pursuant to Rule 24b-2]] equals [Information omitted 
pursuant to Rule 24b-2], plus 50% equals [Information omitted pursuant to Rule 
24b-2].

Accordingly, the resulting Interest of Boyd Sub would be [Information omitted 
pursuant to Rule 24b-2].

         Section 3.6 Interests. The respective percentage interest (the
"Interest") of the Venturers in the Joint Venture shall initially be as follows:

                  MR Sub - 50%
                  Boyd Sub - 50%

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         Any additional capital contributions made by Boyd Sub pursuant to the
fourth sentence of Section 3.3 shall not increase the Interest of Boyd Sub.

         Section 3.7 Loans by Venturers to the Joint Venture. If the Managing
Venturer reasonably determines that the Joint Venture's existing funds (giving
effect to funds available pursuant to existing third-party financing and amounts
required to be contributed to the Joint Venture by the Venturers pursuant to
Section 3.3) are insufficient to meet the Joint Venture's costs, expenses,
obligations and liabilities, the Managing Venturer may offer to each Venturer
the opportunity to advance funds to the Joint Venture in proportion to its
respective Interest. No Venturer shall be required to advance funds to the Joint
Venture, and neither Venturer shall be permitted to advance funds to the Joint
Venture without the approval of each Venturer. All amounts so advanced shall
take the form of an unsecured loan and shall bear interest at a floating rate
equal to the Joint Venture's weighted average cost of borrowed funds (or, if the
Joint Venture then has no borrowed funds, the published prime rate charged from
time to time by Bank of America NT & SA). Such loans shall be repayable on
demand but solely out of assets of the Joint Venture, in accordance with the
provisions of Section 6.2(a) and Article 13 hereof, and no Venturer shall have
any personal liability on account thereof, nor shall there be any recourse to
such Venturer's assets. To the extent required by the terms of the Construction
Financing or such other third-party financing obtained by the Joint Venture,
repayment of such loans shall be subordinated to the prior repayment of the
Construction Financing or other third-party financing. The provisions of this
Section 3.7 are solely and exclusively for the benefit of the Venturers, may
only be enforced by the Venturers and shall not inure to the benefit of, or be
enforceable by, any third party, including without limitation any creditor of
the Joint Venture.

         Section 3.8 No Further Capital Contributions. The Venturers shall not
be required to contribute additional capital or lend any funds to the Joint
Venture, except as expressly provided in this Article 3.


         Section 3.9 Capital Accounts. Each Venturer shall have a single capital
account (the "Capital Account") that shall be (i) increased by (a) the sum of
the cash and the fair market value of any property contributed by such Venturer,
(b) such Venturer's distributive share of Joint Venture Profits and (c) the
amount of any Joint Venture liabilities assumed by such Venturer or secured by
any Joint Venture property distributed to such Venturer and (ii) 

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decreased by (a) the sum of the cash and the fair market value of property
distributed to such Venturer, (b) such Venturer's distributive share of Joint
Venture Losses and (c) the amount of liabilities of such Venturer assumed by the
Joint Venture or that are secured by property contributed by such Venturer to
the Joint Venture. No Venturer shall be entitled to receive or shall be paid
interest on its contributions to the capital of the Joint Venture or on its
Capital Account balance. This Section 3.9 is intended to comply with the
requirements of Treasury Regulation Section 1.704-1(b) regarding the maintenance
of capital accounts and shall be interpreted and applied in a manner consistent
with that provision.

         Section 3.10 Return of Capital. Except as specifically provided herein,
no Venturer may withdraw capital from the Joint Venture. To the extent any cash
which any Venturer is entitled to receive pursuant to any provision of this
Agreement would constitute a return of capital, each of the Venturers consents
to the withdrawal of such capital. If any capital is, or is to be, returned to a
Venturer, the Venturer shall not have the right to receive property other than
cash, except as otherwise expressly provided in this Agreement.

                                    ARTICLE 4

                              PREOPENING ACTIVITIES

         Section 4.1 Construction Financing. The Managing Venturer, in
consultation and cooperation with the Non-Managing Venturer, shall use its best
efforts to obtain as promptly as practicable committed Construction Financing on
the most favorable terms available to the Joint Venture. The Managing Venturer
shall have the responsibility and authority for the negotiation, structuring and
documentation of the Construction Financing. Without the approval of each
Venturer, the outstanding principal amount of the Construction Financing at any
date shall not exceed 60% of the Project Cost incurred through such date;
provided, however, that (i) if the weighted average interest rate accrued on
such indebtedness during the period beginning on the day on which the first draw
on such indebtedness is made and ending on the day before the day on which the
Facility opens to the general public (the "Construction Period") exceeds 8.5%
per annum, the outstanding principal amount of Construction Financing at any
date shall not exceed the sum of 60% of the Project Cost incurred through such
date plus 100% of the difference between (A) the interest accrued on such
indebtedness 

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during the Construction Period and (B) the interest which would have accrued on
such indebtedness during the Construction Period if such weighted average
interest rate had been 8.5% per annum and (ii) provided further, that, without
double counting, the outstanding principal amount of Construction Financing may
be increased by the amount, if any, by which the costs and expenses incurred by
the Joint Venture pursuant to the second and third sentences of Section 4.2
exceed $30,000,000. In any event, without the approval of each Venturer, the
aggregate principal amount of Construction Financing and all other Joint Venture
indebtedness outstanding at any time (other than Venturer subordinated loans
permitted by the third sentence of Section 3.3 hereof) shall not exceed
$300,000,000. The interest rate and other terms of the Construction Financing
and any other Joint Venture indebtedness shall be subject to the approval of
each Venturer, such approval not to be unreasonably withheld or delayed. If
non-recourse debt financing is not available to the Joint Venture on terms
reasonably acceptable to the Venturers, the Venturers will cooperate in good
faith to agree on alternative construction financing and to seek such
alternative construction financing (and in such event such alternative
construction financing shall constitute "Construction Financing" as such term is
used in this Agreement). In no event shall the stockholder or other Affiliates
of MR Sub or Boyd Sub be required to guarantee or otherwise assume liability for
Construction Financing.

         Section 4.2 Design, Development and Construction. MRI or its Affiliates
shall have sole responsibility and authority with respect to the design of the
master plan for the Parcel and the Property, including without limitation all
roads, bridges, tunnels, walkways and other means of transportation within,
adjoining or servicing the Parcel or the Property (the "Master Plan") and all
improvements required by CAFRA and other governmental agencies in order to
construct projects on the Parcel ("Government Improvements"). The Joint Venture
shall pay all costs and expenses of design, development and construction of all
Government Improvements, and all other improvements and development specified in
the Master Plan, including without limitation all such means of transportation
(the "Master Plan Improvements"), which are entirely within the Property. The
Joint Venture shall also pay its equitable share of all such costs and expenses
for Government Improvements and Master Plan Improvements which are not entirely
within the Property or entirely within any other portion of the Parcel on which
a casino-hotel is being developed, based upon the number of 

                                      -15-
<PAGE>   16
developable (i.e. non-wetlands) acres comprising the Property as a percentage of
the total number of developable acres comprising the Parcel. Notwithstanding the
foregoing, the cost of any Government Improvement or Master Plan Improvement
which is located within the Property but is not for the exclusive benefit of the
Facility shall be shared equitably by the parties benefiting from such
Government Improvement or Master Plan Improvement. Except as provided in the
first sentence of this Section 4.2 and in Section 9.2 hereof, the Managing
Venturer shall have the responsibility and authority for supervising the design,
development and construction of the Facility. The Managing Venturer shall
prepare or cause to be prepared as promptly as practicable all necessary
preliminary plans and architectural, engineering, design and construction
drawings and other construction documents for the Facility. The Managing
Venturer shall arrange for the Joint Venture to obtain a construction contract
from a reputable and qualified general contractor and shall engage on behalf of
the Joint Venture other reputable and qualified contractors, architects,
engineers, designers and other professionals for the design, development and
construction of the Facility. The Managing Venturer shall keep the other
Venturer fully advised on a regular basis with respect to all aspects of the
design, development and construction of the Facility. Without the consent of
each Venturer, construction of the Facility shall not commence until the closing
of the Construction Financing, and shall commence as soon as practicable
thereafter. If physical construction of the Facility has not commenced by the
earlier of (i) December 31, 1998 or (ii) the first anniversary of the
commencement of physical construction by an Affiliate of MRI of a hotel-casino
on the Parcel, either Venturer may, by written notice to the other Venturer
delivered within 60 days after such date, elect to dissolve the Joint Venture as
provided in Article 13 hereof. In the event of dissolution, if an Affiliate of
MRI shall have commenced and is continuing physical construction of a
hotel-casino on the Parcel and physical construction of the Facility shall not
have commenced within one year thereafter, prior to any distribution of assets
to the Venturers, Boyd shall pay MR Sub, from Boyd's funds and not from the
assets of the Joint Venture, a termination fee of $2,000,000, unless such delay
in the commencement of construction of the Facility is attributable to factors
beyond Boyd Sub's reasonable control, including without limitation the inability
of the Joint Venture to obtain Construction Financing as provided in Section 4.1
(but which factors shall not include any lack of financial resources that
prevents Boyd Sub from contributing any amount required by Section 3.3 hereof).

                                      -16-
<PAGE>   17
         In the event that construction of the Facility has commenced but is not
completed and the Facility is not open to the public by the date which is three
years following the commencement of construction, unless such delay is
attributable to events of force majeure or other factors beyond Boyd Sub's
reasonable control (but which factors shall not include any lack of financial
resources that prevents Boyd Sub from contributing any amount required by
Section 3.3 hereof), MR Sub may, at its option, by written notice to Boyd Sub
delivered within 10 days after the expiration of such three-year period, (i)
elect to become the Managing Venturer pursuant to Section 9.3 hereof or (ii)
elect to dissolve the Joint Venture as provided in Article 13 hereof, in which
event, prior to any distribution of assets to the Venturers, Boyd shall pay MR
Sub, from Boyd's funds and not from the assets of the Joint Venture, a
termination fee of $2,000,000 or (iii) elect to purchase Boyd Sub's entire
Interest for cash in an amount equal to Boyd Sub's Capital Account balance,
which purchase right may be assigned to any person, including any Affiliate of
MR Sub.

         MRI shall have the responsibility and authority to negotiate a Project
Agreement with the Atlantic City Building Trades Council on behalf of all
developers within the Parcel. Such negotiation shall be conducted by a Committee
chaired by a representative of Atlandia Design and Furnishings, Inc., on which
Boyd Sub shall also be represented by its most senior construction officer.

         Section 4.3 Governmental Approvals. MR Sub shall have the
responsibility and authority for preparing, filing and processing all
applications, documents and instruments necessary to transfer the Property to
the Joint Venture. The Managing Venturer shall have the responsibility and
authority for preparing, filing and processing all applications to obtain all
governmental licenses, approvals, permits and entitlements on behalf of the
Joint Venture necessary or appropriate for the design, development,
construction, ownership and operation of the Facility, including without
limitation building permits and licenses and approvals issued by the New Jersey
Gaming Authorities. The costs of preparing, filing and processing applications
to obtain licenses and approvals from the New Jersey Gaming Authorities,
including investigation costs, shall be borne by the Venturer who (or whose
Affiliates) require such licenses and approvals. The Venturers shall cooperate
with each other and furnish all documents and other 

                                      -17-
<PAGE>   18
information necessary in order to obtain such licenses, approvals, permits and
entitlements.

                                    ARTICLE 5

                        ALLOCATION OF PROFITS AND LOSSES

         Section 5.1 Profits and Losses. The terms "Profits" and "Losses" shall
mean, for each fiscal year, an amount equal to the Joint Venture's federal
taxable income or loss for such period determined in accordance with Section
703(a) of the Internal Revenue Code of 1986, as amended (the "Code"), but
disregarding Section 703(a)(1) of the Code, and with the following adjustments:

               (a) income exempt from federal income tax shall be added to such
taxable income or loss;

               (b) expenditures not deductible in computing the Joint Venture's
taxable income and that are not properly chargeable as capital expenditures
shall be subtracted from such taxable income or loss;

               (c) in the event that the tax book value of any Joint Venture
asset is adjusted pursuant to Section 7.2(a) or (b) hereof, the amount of such
adjustment shall be taken into account as gain or loss from the disposition of
such asset in computing Profits and Losses;

               (d) gain or loss from any disposition of a Joint Venture asset
with respect to which gain or loss is recognized for federal income tax purposes
shall be computed by reference to the tax book value and not the adjusted
federal income tax basis of the asset disposed of; and

               (e) if the tax book value of a Joint Venture asset has been
adjusted pursuant to Section 7.2 hereof, in lieu of federal income tax
depreciation, tax book depreciation (which shall be in the same ratio to tax
book value at the beginning of the taxable period as federal income tax
depreciation is to adjusted federal income tax basis at the beginning of such
period) shall be taken into account in computing Profits and Losses.

         Section 5.2 Allocations. Profits or Losses, including without
limitation all items of income, gain, profit, loss, cost, expense, deduction or
credit earned or incurred by the Joint Venture, shall be allocated and credited
to the Venturers, and reflected in the Capital Accounts of the Venturers, in

                                      -18-
<PAGE>   19
accordance with each Venturer's Interest. Notwithstanding the foregoing, the
following items shall be specially allocated in the following manner:

               (a) Solely for the purpose of federal, state and local income
taxes, and without affecting or in any way being taken into account in computing
a Venturer's Capital Account or share of Profits, Losses or other items or
distributions pursuant to any provision of this Agreement:

                   (i)  items of income, gain, loss and deduction with respect 
to any property contributed to the Joint Venture by any Venturer shall be
allocated among the Venturers in accordance with Section 704(c) of the Code so
as to take account of any variation between the adjusted basis of the property
to the Joint Venture and the fair market value of the property (as determined by
the Venturers) at the time of the contribution; and

                   (ii) in the event that the tax book value of a Joint Venture
asset is adjusted pursuant to Section 7.2(a) hereof, subsequent allocations of
income, gain, loss and deduction with respect to such asset shall take account
of any difference between the adjusted basis of such asset for federal income
tax purposes and its book value in the same manner as under Section 704(c) of
the Code.

               (b) To the extent the adjusted federal income tax basis of a
Joint Venture asset is adjusted pursuant to Section 734(b) or 743(b) of the
Code, and such adjustment is required by Treasury Regulation Section
1.704-1(b)(2)(iv)(m) to be taken into account in determining Capital Accounts,
the amount of such adjustment to the Capital Accounts shall be treated as an
item of gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases such basis), and such gain or loss shall be allocated
to the Venturers in a manner consistent with the manner in which their Capital
Accounts are required to be adjusted pursuant to such Treasury Regulation.

               (c) Except as provided in Treasury Regulation Section
1.704-2(f)(2), (3) and (4) (pertaining to conversion or repayment of nonrecourse
liabilities), in the event there is a net decrease in partnership minimum gain
(within the meaning of Treasury Regulation Section 1.704-2(d)) for a taxable
year of the Joint Venture, each Venturer must be allocated items of partnership
income and gain for that year equal to that Venturer's share of the net decrease
in partnership minimum gain (within the meaning of Treasury Regulation Section
1.704-2(g)(2)). Allocations made pursuant to this Section 5.2(c) shall consist
of gains recognized from the disposition of Joint Venture 

                                      -19-
<PAGE>   20
property subject to one or more nonrecourse liabilities of the Joint Venture and
then, if necessary, shall consist of a pro rata portion of the Joint Venture's
other items of income and gain for that taxable year.

               (d) Items of loss or deductions attributable to a nonrecourse
liability to a Venturer incurred pursuant to Section 3.7 hereof or to a
nonrecourse liability with respect to which a Venturer bears the economic risk
of loss (within the meaning of Treasury Regulation Section 1.752-2) shall be
allocated to such Venturer.

               (e) If the additional capital contributions of Boyd Sub pursuant
to the first and fourth sentences of Section 3.3 hereof exceed the fair market
value of the Property at the time of the conveyance of the Property to the Joint
Venture as agreed by the Venturers pursuant to Section 3.2 hereof, upon
liquidation of the Joint Venture in accordance with Article 13 hereof MR Sub
shall be allocated items of income and gain, including gross income if
necessary, equal to the excess of such additional capital contributions over
such fair market value.

         Section 5.3 Transfers of Joint Venture Interests. If any Interest in
the Joint Venture is Transferred in accordance with Section 11.2(a) hereof, all
items of Profits or Losses, including without limitation all items of income,
gain, profit, loss, deduction, cost, expense or credit and all other items of
the Joint Venture with respect to the Interest so Transferred, shall be
allocated between the transferor and the transferee in accordance with Section
706 of the Code using such conventions as may be selected by the Venturers.

                                    ARTICLE 6

                          NON-LIQUIDATING DISTRIBUTIONS

         Section 6.1 Distributable Cash. The term "Distributable Cash" with
respect to any period shall mean an amount equal to the total cash revenues and
receipts of the Joint Venture from any source (including capital contributions,
loans and refinancings) for such period, less the sum of (i) all operating
expenses paid or incurred by the Joint Venture, including current principal and
interest payments on the Construction Financing and other Joint Venture
indebtedness, but excluding any distributions pursuant to Section 6.2, (ii) all
capital expenditures made by the Joint Venture and (iii) the amount of 

                                      -20-
<PAGE>   21
any increase during such period in, or amounts established during such period
for, reasonable reserves for anticipated costs, expenses, liabilities and
obligations of the Joint Venture, working capital needs of the Joint Venture or
other appropriate Joint Venture purposes, as reasonably determined by the
Managing Venturer in consultation with the other Venturer.

         Section 6.2 Distribution of Distributable Cash. Subject to any
covenants contained in the documentation governing the Construction Financing or
any other agreements to which the Joint Venture is a party, commencing with the
first full fiscal quarter following the fiscal quarter during which the Facility
opens to the public, Distributable Cash for each fiscal quarter shall be
distributed within 45 days after the end of such quarter in the following order
of priority:

         (a) first, to the Venturers to repay amounts, if any, lent by them to
the Joint Venture pursuant to Section 3.7 hereof, any such payments to be made
on a pro rata basis according to the then outstanding balances of such loans,
with such payments applied first against accrued interest; and

         (b) the balance, if any, to the Venturers, pro rata in accordance with
their respective Interests.

                                    ARTICLE 7

                             ACCOUNTING AND RECORDS

         Section 7.1 Books and Records. The Joint Venture shall keep at its
principal office separate books of account for the Joint Venture which shall
show a true and accurate record of all costs and expenses incurred, all charges
made, all credits made and received and all income derived in connection with
the operation of the Joint Venture business in accordance with generally
accepted accounting principles consistently applied.

         Each Venturer shall, at its sole expense, have the right, at any time
without notice to the other, to examine, copy and audit the Joint Venture's
books and records during normal business hours.

                                      -21-
<PAGE>   22
         Section 7.2 Tax Book Values. The tax book value of any Joint Venture
asset shall be such asset's adjusted basis for federal income tax purposes,
except as follows:

         (a) The tax book value of Joint Venture assets shall be adjusted to
equal their respective gross fair market values, as determined by the Venturers,
as of the following times:

             (i)  upon the acquisition of an additional Interest in the Joint
Venture by any new or existing Venturer in exchange for more than a de minimis
capital contribution; and

             (ii) upon the liquidation of the Joint Venture within the meaning
of Treasury Regulation Section 1.704-1(b)(2)(ii)(g).

         (b) The tax book value of a Joint Venture asset that is distributed to
any Venturer shall be the fair market value of such asset at the time of
distribution, as determined by the Venturers.

         (c) The tax book value of Joint Venture assets shall be increased (or
decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Section 734(b) or 743(b) of the Code, but only to the extent such
adjustments are taken into account in determining Capital Accounts pursuant to
Treasury Regulation Section 1.704-1(b)(2)(iv)(m).

         (d) If the tax book value of a Joint Venture asset has been adjusted
pursuant to this Section 7.2, such tax book value shall thereafter be adjusted
by the amount of tax book depreciation taken into account with respect to such
asset for the purpose of determining Profits and Losses.

         Section 7.3 Reports.

         (a) The Managing Venturer shall cause to be prepared and distributed to
each Venturer the following reports as promptly as practicable, but in any event
within 75 days after the end of each fiscal year of the Joint Venture:

             (i) a balance sheet as of the end of the fiscal year and statements
of income, Venturers' equity and cash flows for the year then ended, each of

                                      -22-
<PAGE>   23
which shall be audited by a firm of independent certified public accountants
(the "Accountants") selected by the Venturers in accordance with Section 9.2(l)
hereof;

             (ii)  a general description of the activities of the Joint Venture
during the period covered by the report; and

             (iii) a report of any material contracts or transactions between
the Joint Venture and the Venturers or any of their Affiliates, including fees
or compensation paid by the Joint Venture and the products supplied and services
performed by the Venturers or any such Affiliate for such fees or compensation.

         (b) As promptly as practicable, but in any event within 30 days after
the end of each of the first three quarters of each fiscal year, the Managing
Venturer shall cause to be prepared and distributed to each Venturer a quarterly
report containing a balance sheet and statement of income for the period covered
by the report, each of which may be unaudited but which shall be certified by
the chief financial officer of the Joint Venture as fairly presenting the
financial position and results of operations of the Joint Venture during the
period covered by the report and as having been prepared in accordance with
generally accepted accounting principles applied on a basis substantially
consistent with that of the Joint Venture's audited financial statements. The
report shall also contain a description of any material event regarding the
business of the Joint Venture during the period covered by the report.

         (c) As promptly as practicable, but in any event within 70 days after
the end of each fiscal year, the Managing Venturer shall cause to be prepared
and distributed to each Venturer all information necessary for the preparation
of such Venturer's federal and state income tax returns, including a statement
showing such Venturer's share of income, gains, losses, deductions and credits
for such year for federal and state income tax purposes and the amount of any
distributions made to or for the account of such Venturer pursuant to this
Agreement.

         Section 7.4 Tax Returns. The Managing Venturer, at the expense of the
Joint Venture, shall prepare or cause the Accountants to prepare all income and
other tax returns, on an accrual basis, of the Joint Venture and 

                                      -23-
<PAGE>   24
cause the same to be filed in a timely manner. The Managing Venturer shall
furnish to each Venturer a copy of each such return as soon as it has been
filed, together with any schedules or other information which each Venturer may
require in connection with such Venturer's own tax affairs. Each of the
Venturers shall, in its respective income tax return and other statements filed
with the Internal Revenue Service or other taxing authority, report taxable
income in accordance with the provisions of this Agreement.

         Section 7.5 Tax Matters Partner. The Managing Venturer is hereby
designated as the "tax matters partner" of the Joint Venture as defined in
Section 6231 of the Code and, to the extent authorized or permitted under
applicable law, the Managing Venturer shall represent the Joint Venture in
connection with all examinations of Joint Venture affairs by taxing authorities,
including, without limitation, resulting administrative and judicial
proceedings.

         Section 7.6 Fiscal Year. The fiscal year of the Joint Venture shall be
the calendar year. As used in this Agreement, a fiscal year shall include any
partial fiscal year at the beginning or end of the term of the Joint Venture.

         Section 7.7 Bank Accounts. The Managing Venturer shall be responsible
for causing one or more accounts to be maintained in one or more banks, which
accounts shall be used for the payment of expenses incurred in connection with
the business of the Joint Venture, and in which shall be deposited any and all
cash receipts. All such amounts shall be and remain the property of the Joint
Venture and shall be received, held and disbursed by the Joint Venture for the
purposes specified in this Agreement. There shall not be deposited in any of
such accounts any funds other than funds belonging to the Joint Venture, and no
other funds shall be commingled with such funds.

         Section 7.8 Tax Elections.

         (a) At the request of any Venturer, the Managing Venturer, on behalf of
the Joint Venture, shall elect to adjust the basis of the assets of the Joint
Venture for federal income tax purposes in accordance with Section 754 of the
Code in the event of a distribution of Joint Venture property as described in
Section 734 of the Code or a transfer by any Venturer of its Interest in the
Joint Venture as described in Section 743 of the Code.

                                      -24-
<PAGE>   25
         (b) The Managing Venturer, on behalf of the Joint Venture, shall from
time to time make such other tax elections as it deems necessary or desirable to
carry out the business of the Joint Venture or the purposes of this Agreement.

         Section 7.9 Tax Withholding. Except as otherwise provided in this
Section 7.9, if the Joint Venture incurs an obligation to withhold taxes with
respect to any Venturer, any amount withheld or paid as withholding taxes by the
Joint Venture with respect to such Venturer shall be treated for all purposes of
this Agreement as if it had been distributed to such Venturer. The Venturers may
make such elections with respect to such withholding obligations, including
without limitation an election pursuant to Section 1446 of the Code, as they
reasonably determine. If the withholding obligation exceeds the amount that
would have been distributed to such Venturer determined without regard to the
provisions of this Section 7.9, such excess amount shall be treated for all
purposes of this Agreement as if it had been transferred to such Venturer by the
Joint Venture as an interest-free loan. If the Joint Venture incurs any
liability as a result of a failure to withhold with respect to any Venturer,
such liability will be borne by such Venturer and charged to such Venturer's
Capital Account. Amounts treated as loaned to any Venturer pursuant to this
Section 7.9 shall be repaid by such Venturer to the Joint Venture as promptly as
practicable. The Joint Venture shall offset such amounts against any amounts
that would otherwise be distributed to such Venturer.

                                    ARTICLE 8

                     CONFIDENTIALITY; INTELLECTUAL PROPERTY

         Section 8.1 Confidential Treatment of Information. Each of the
Venturers agrees, and shall cause each of its Affiliates (i) not to disclose any
material information concerning the Joint Venture or its business to the press
or the general public without the approval of the other Venturer, such approval
not to be unreasonably withheld or delayed and (ii) to retain in strict
confidence any proprietary confidential information and trade secrets of the
other Venturer, whether disclosed prior to or after the date hereof, and not to
use or disclose to persons other than the Venturer or its Affiliates ("third
parties"), and to use its best efforts to cause its employees, agents and

                                      -25-
<PAGE>   26
consultants not to use or disclose to third parties, such proprietary
confidential information or trade secrets without the approval of the other
Venturer, unless in either case it can be established by the disclosing party
that such information:

         (a) at the time of disclosure is part of the public domain and readily
accessible to the public or such third party;

         (b) at the time of disclosure is already known by the receiving party
otherwise than pursuant to a breach of an obligation of confidentiality;

         (c) is required by applicable law, regulation or court order to be
disclosed; or

         (d) is required by any vendor, supplier or consultant in order to carry
out the business of the Joint Venture, provided that the disclosing Venturer
shall obtain the written agreement and obligation of such third party, in a form
reasonably satisfactory to the other Venturer, prior to disclosing such
information, that all of the provisions of this Article 8 shall apply with equal
effect to such third party. The Joint Venture shall be a third-party beneficiary
of any such written agreement.

         Section 8.2 Intellectual Property. Neither the Joint Venture, nor Boyd
Sub or its Affiliates, shall have the right to use any trademark, service mark,
trade name, logo, copyright or other intellectual property owned by MRI or any
of its Affiliates in connection with the Facility or the business of the Joint
Venture. The Joint Venture will enter into a license agreement with Boyd
providing for the use of the name "Stardust" (subject to legal availability
thereof) and other intellectual property owned by Boyd, without compensation to
Boyd, as long as Boyd Sub or another Affiliate of Boyd shall be a Venturer. In
the event that Boyd Sub or another Affiliate of Boyd shall cease for any reason
to be a Venturer, the license agreement shall provide for a reasonable
transition period to enable the Joint Venture to replace the intellectual
property, including the Stardust name, without causing any disruption in the
operations of the Facility. Notwithstanding the above, in the event that Boyd
Sub or another Affiliate of Boyd shall become the Non-Managing Venturer, the
license agreement shall provide that the Joint Venture may continue to use the
"Stardust" name and shall provide for a reasonable transition period to enable
the Joint Venture to replace the other 

                                      -26-
<PAGE>   27
intellectual property, without causing any disruption in the operations of the
Facility. The Managing Venturer, on behalf and at the expense of the Joint
Venture, shall prepare, file and prosecute all applications which it reasonably
deems necessary or appropriate to protect and preserve any intellectual property
acquired or developed by the Joint Venture.

                                    ARTICLE 9

                                   MANAGEMENT

         Section 9.1 Management by Managing Venturer. Subject to Section 9.3
hereof, Boyd Sub shall be and hereby is appointed the Managing Venturer of the
Joint Venture and shall serve in such capacity without fee or other
compensation.

         Except as otherwise provided in this Agreement, the Managing Venturer
shall have, and hereby assumes, sole responsibility and authority for the
prudent day-to-day management and operation of the Joint Venture and the
Facility, and in furtherance thereof may exercise the following specific rights
and powers without approval of the other Venturer:

         (a) oversee and manage the day-to-day operations of the Facility, the
Joint Venture business and such other activities as are customary in connection
with such operations;

         (b) except as otherwise provided in Sections 4.2 and 9.2 hereof, direct
and oversee the architectural, engineering, design, construction,
administrative, legal and other work necessary for the design, development,
construction, completion, financing, opening, operation and improvement of the
Facility and other Joint Venture business;

         (c) prepare appropriate budgets and construction schedules for the
development, construction, opening, repair, improvement and operation of the
Facility and other Joint Venture property;

         (d) except as otherwise provided in Section 9.2, negotiate with and
enter into contracts for the design, development, construction, completion,
opening, operation and improvement of the Facility, and supervise all such work;

                                      -27-
<PAGE>   28
         (e) implement decisions made by the Venturers;

         (f) use its best efforts to operate, on behalf of and for the sole
benefit of the Joint Venture, the Facility and such other business and
activities as are customary in connection with such operation;

         (g) preserve, maintain and distribute Joint Venture funds in accordance
with the provisions of this Agreement;

         (h) contract on behalf of the Joint Venture for the services of
independent contractors, including attorneys, accountants and financial
advisers;

         (i) establish, maintain and supervise the deposit of funds and
securities of the Joint Venture with federally insured banking institutions, and
the Managing Venturer is authorized to sign on behalf of the Joint Venture on
all accounts with such banking institutions;

         (j) acquire by purchase, lease or otherwise such personal property as
may be necessary, convenient or incidental to the accomplishment of the purposes
of the Joint Venture;

         (k) procure on behalf of the Joint Venture such general liability,
casualty, comprehensive, workers' compensation, fidelity, errors and omissions,
business interruption and other insurance as is adequate to protect the Joint
Venture; and

         (l) execute on behalf of the Joint Venture any and all agreements,
documents, certificates and instruments necessary or convenient in connection
with the management and operation of the Facility or in connection with managing
the affairs of the Joint Venture.

         Section 9.2 Exclusive Powers of the Venturers. In addition to those
matters which, pursuant to other provisions of this Agreement, require approval
of each Venturer, the following matters shall require the approval of each
Venturer:

                                      -28-
<PAGE>   29
         (a) except as otherwise provided in this Agreement, the admission of an
additional Venturer;

         (b) except as otherwise provided in Section 4.2 hereof, the design of
the exterior of the Facility, including landscaping and signage;

         (c) the acquisition of any real property in addition to the Property;

         (d) any transaction which is unrelated to the purposes of the Joint
Venture or makes it unlawful or impossible to carry out the purposes of the
Joint Venture;

         (e) except with respect to the Construction Financing or as otherwise
provided in this Agreement, the incurrence of any indebtedness;

         (f) the refinancing or early retirement of any Joint Venture
indebtedness;

         (g) except in connection with the Construction Financing, the sale or
hypothecation of all or any significant part of the property or assets of the
Joint Venture, other than in the ordinary course of business;

         (h) capital expenditures which are not included in the original
construction budget or in a budget prepared by the Managing Venturer and
approved by the Non-Managing Venturer on an annual basis;

         (i) except as otherwise provided in Article 11 hereof, the Transfer of
all or any portion of a Venturer's Interest in the Joint Venture;

         (j) the compromise of any claim owned by the Joint Venture in excess of
$500,000 or submission to arbitration of any dispute or controversy involving
the Joint Venture, other than in the ordinary course of business;

         (k) the cancellation or lapse of any material insurance policy, which
approval shall not be unreasonably withheld or delayed;

         (l) the selection and retention of independent certified public
accountants to audit the Joint Venture's financial statements and prepare its
tax returns;

                                      -29-
<PAGE>   30
         (m) the establishment of hotel room rate structures for the Facility;

         (n) any expenditure by the Joint Venture in excess of $50,000 other
than in the ordinary course of business; and

         (o) except as otherwise provided in this Agreement, the dissolution or
liquidation of the Joint Venture, or a merger, consolidation or recapitalization
involving the Joint Venture.

         Any matter which requires the approval of each Venturer may be approved
by an instrument signed by an authorized representative of each Venturer. The
initial authorized representatives of Boyd Sub shall be William S. Boyd, Robert
L. Boughner and Ellis Landau, and the initial authorized representatives of MR
Sub shall be Stephen A. Wynn, Daniel R. Lee and Bruce A. Levin. Either Venturer
may designate different or additional authorized representatives by written
notice to the other.

         Section 9.3 Replacement of Managing Venturer.

         (a) Except as otherwise provided in this Agreement, the Managing
Venturer may only be changed with the approval of each Venturer. In the event
that (i) the Joint Venture is in material default with respect to any of its
debt obligations, whether or not any period to cure such default has expired,
(ii) an Event of Default on the part of Boyd Sub has occurred and is continuing
under this Agreement, (iii) Boyd Sub or another direct or indirect wholly owned
subsidiary of Boyd ceases for any reason (including a Permitted Transfer) to own
at least a 50% Interest in the Joint Venture, (iv) during the five-year period
commencing upon the public opening of the Facility, William S. Boyd ceases to
serve as Chairman of the Board of Boyd other than by reason of his death or
incapacity or, in the event of the death or incapacity of William S. Boyd,
Robert L. Boughner ceases to serve as Chief Operating Officer or a more senior
executive officer of Boyd for any reason, or (v) during the five-year period
commencing upon the public opening of the Facility, William S. Boyd, or his
heirs or legatees collectively, cease to own beneficially at least 15% of the
outstanding common stock or to be the largest beneficial stockholder of Boyd, MR
Sub may, at any time during the continuation of any such event, elect by written
notice delivered to Boyd Sub to become the Managing Venturer, and MR Sub shall
thereupon become the 

                                      -30-
<PAGE>   31
Managing Venturer and Boyd Sub shall become the Non-Managing Venturer. In the
event of such election by MR Sub, the Joint Venture shall pay MR Sub, on a
quarterly basis, a management fee to be negotiated. Upon the occurrence of any
of the events specified in Section 13.1(g) hereof with respect to the Managing
Venturer, if the business of the Joint Venture is continued, the remaining
Venturer shall become the Managing Venturer.

         (b) The Managing Venturer shall not have the right to resign as
Managing Venturer, and any such purported resignation shall constitute an Event
of Default under this Agreement which shall entitle the other Venturer to
exercise all rights and remedies available under this Agreement, at law or in
equity.

         Section 9.4 Meetings of the Venturers; Time and Place. The Venturers
shall meet with each other on a periodic basis, at least quarterly. At such
meetings, the Managing Venturer's representatives shall report on the
performance and condition of the Joint Venture, give progress reports on
negotiation of the Construction Financing, capital projects including
construction of the Facility, material contracts entered into, material
litigation and other matters material to the operation of the Joint Venture.
Meetings shall be held at such time and place within Atlantic County, New Jersey
as the Managing Venturer shall determine or by telephone, provided that each
Venturer's representatives may simultaneously participate and hear each other
Venturer's representatives. The Venturers may take action without a meeting if
the action taken is reduced to writing (either prior to or thereafter) and
signed on behalf of each Venturer. Any Venturer may call for a meeting of the
Venturers at any time by giving at least 48 hours' prior written notice to the
other Venturer.

         Section 9.5 Officers. The Managing Venturer shall appoint the chief
executive officer and other officers of the Joint Venture, who shall serve at
the direction and pleasure of the Managing Venturer. The chief executive officer
and the other officers shall perform those functions of the Managing Venturer
and such other duties and responsibilities as the Managing Venturer may assign
to them. No officer or employee of either Venturer or its Affiliates who does
not devote substantially full time to the Joint Venture shall receive any salary
or other compensation from the Joint Venture. The Managing Venturer may from
time to time appoint certain employees of the Managing Venturer or its
Affiliates to devote substantially full time to the 

                                      -31-
<PAGE>   32
Joint Venture and retain such employees on its payroll. In such event, the Joint
Venture shall reimburse the Managing Venturer or its Affiliate for the
out-of-pocket compensation (including salary, bonus and the direct cost of
health and retirement benefit plans) paid to such employee for performing
services to the Joint Venture on a full-time basis. The terms of any benefits
offered to such an employee shall be within the discretion of the Managing
Venturer or its Affiliate. Each officer of the Joint Venture shall be
indemnified by the Joint Venture from and against any and all claims, losses,
damages and liabilities, including reasonable attorneys' fees which shall be
reimbursed as incurred, arising out of or relating to any act or failure to act
performed or omitted by him; provided, however, that such indemnity shall be
payable only if such officer acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the Joint Venture.
Any indemnity under this Section 9.5 shall be paid from, and shall be limited to
the extent of, Joint Venture assets, and no Venturer shall have any personal
liability on account thereof. Each officer of the Joint Venture shall be fully
protected with respect to any action or omission taken or omitted by him in good
faith if such action or omission is taken or omitted in reliance upon and in
accordance with the opinion or advice of competent legal counsel, accountants,
financial advisers or other professionals as to matters within their
professional competence.

                                   ARTICLE 10

                         REPRESENTATIONS AND WARRANTIES

         Section 10.1 MR Sub. MR Sub hereby represents and warrants, which
representations and warranties shall survive the execution of this Agreement,
that:

         (a) MR Sub is a corporation duly organized, validly existing and in
good standing under the laws of the State of New Jersey and has the requisite
corporate power and authority to enter into and carry out the terms of this
Agreement;

         (b) all of the outstanding capital stock of MR Sub is owned directly or
indirectly by MRI;

                                      -32-
<PAGE>   33
         (c) all corporate action required to be taken by MR Sub to enter into
and carry out the terms of this Agreement has been taken and no further approval
of any governmental agency, court or other body is necessary in order to permit
MR Sub to enter into and carry out the terms of this Agreement;

         (d) this Agreement has been duly executed and delivered by MR Sub and
constitutes the legal, valid and binding obligation of MR Sub, enforceable in
accordance with its terms (subject to applicable bankruptcy, insolvency,
moratorium or similar laws affecting creditors' rights generally, equitable
principles and judicial discretion);

         (e) to the best of its knowledge, neither the execution and delivery of
this Agreement, nor the performance of its obligations hereunder, has resulted
or will result in any violation of, or constitute a default under, the charter
or bylaws of MR Sub or any indenture, trust agreement, mortgage or other
agreement or any permit, judgment, decree or order to which MR Sub is a party or
by which it is bound, and there is no default and no event or omission has
occurred which, with the passage of time or the giving of notice or both, would
constitute a default on the part of MR Sub under this Agreement;

         (f) to the best of its knowledge, there is no action, proceeding or
investigation, pending or threatened, which questions the validity or
enforceability of this Agreement as to MR Sub;

         (g) no representation, warranty or covenant of MR Sub in this
Agreement, or in any document or certificate furnished or to be furnished to
Boyd Sub pursuant hereto, contains or will contain any untrue statement of
material fact or omits or will omit to state a material fact necessary to make
the statements or facts contained therein not misleading; all such
representations, warranties or statements of MR Sub are based, to the best of MR
Sub's knowledge, upon accurate and complete information as of the time of their
making, and there have been, to the best of MR Sub's knowledge, no material
changes in such information subsequent thereto; and

         (h) MR Sub has no reason to believe that it or its Affiliates will not
receive any gaming license, approval or permit necessary for the consummation of
the transactions contemplated by this Agreement.

                                      -33-
<PAGE>   34
         Section 10.2 Boyd Sub. Boyd Sub hereby represents and warrants, which
representations and warranties shall survive the execution of this Agreement,
that:

         (a) Boyd Sub is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada and has the requisite
corporate power and authority to enter into and carry out the terms of this
Agreement;

         (b) all of the outstanding capital stock of Boyd Sub is owned directly
or indirectly by Boyd;

         (c) all corporate action required to be taken by Boyd Sub to enter into
and carry out the terms of this Agreement has been taken and no further approval
of any governmental agency, court or other body is necessary in order to permit
Boyd Sub to enter into and carry out the terms of this Agreement;

         (d) this Agreement has been duly executed and delivered by Boyd Sub and
constitutes the legal, valid and binding obligation of Boyd Sub, enforceable in
accordance with its terms (subject to applicable bankruptcy, insolvency,
moratorium or similar laws affecting creditors' rights generally, equitable
principles and judicial discretion);

         (e) to the best of its knowledge, neither the execution and delivery of
this Agreement, nor the performance of its obligations hereunder, has resulted
or will result in any violation of, or constitute a default under, the charter
or bylaws of Boyd Sub or any indenture, trust agreement, mortgage or other
agreement or any permit, judgment, decree or order to which Boyd Sub is a party
or by which it is bound, and there is no default and no event or omission has
occurred which, with the passage of time or the giving of notice or both, would
constitute a default on the part of Boyd Sub under this Agreement;

         (f) to the best of its knowledge, there is no action, proceeding or
investigation, pending or threatened, which questions the validity or
enforceability of this Agreement as to Boyd Sub;

                                      -34-
<PAGE>   35
         (g) No representation, warranty or covenant of Boyd Sub in this
Agreement, or in any document or certificate furnished or to be furnished to MR
Sub pursuant hereto, contains or will contain any untrue statement of material
fact or omits or will omit to state a material fact necessary to make the
statements or facts contained therein not misleading; all such representations,
warranties or statements of Boyd Sub are based, to the best of Boyd Sub's
knowledge, upon accurate and complete information as of the time of their
making, and there have been, to the best of Boyd Sub's knowledge, no material
changes in such information subsequent thereto; and

         (h) Boyd Sub has no reason to believe that it or its Affiliates will
not receive any gaming license, approval or permit necessary for the
consummation of the transactions contemplated by this Agreement.

         Section 10.3 Brokers. The parties each represent to the other that they
have not retained any broker, finder or agent in connection with the
transactions contemplated hereby or the negotiation thereof. Each party shall
indemnify and hold the other party harmless from and against all losses, claims,
damages and liabilities, including reasonable attorneys' fees, arising out of or
relating to any claim of brokerage or other commissions relative to this
Agreement or the transactions contemplated hereby insofar as any such claim
arises by reason of services alleged to have been rendered to or at the request
of the indemnifying party.

                                   ARTICLE 11

                              TRANSFER OF INTERESTS

         Section 11.1 Restrictions on Transfers. Except as otherwise expressly
provided in this Agreement, no Venturer shall, without the approval of each of
the Venturers, sell, transfer, assign, pledge, encumber or otherwise dispose of
(each a "Transfer") all or any portion of its Interest in the Joint Venture or
any rights therein. Any purported Transfer in violation of the preceding
sentence shall be null and void and of no force or effect. Each Venturer
acknowledges the reasonableness of the restrictions on Transfers imposed by this
Agreement in view of the Joint Venture purposes and the relationship of the
Venturers. The Venturers acknowledge and agree that they are relying on the
experience, reputation and financial condition of each other in entering into
this Agreement, that the nature of the relationship 

                                      -35-
<PAGE>   36
between the Venturers is personal and that the amount of damages that would be
sustained by the Venturers in the event of a breach of the restrictions on
Transfers imposed by this Agreement would not be readily ascertainable.
Accordingly, upon any breach of this Article 11 by any Venturer, the other
Venturer (in addition to all rights and remedies it may have under this
Agreement, at law or in equity) shall be entitled to a decree or order from a
court of competent jurisdiction specifically enforcing the restrictions on
Transfers contained herein. Each Venturer further agrees to hold the Joint
Venture and the other Venturer (and its successors and assigns) harmless from
and against any and all costs, liabilities and damages (including, without
limitation, liabilities for income taxes and costs of enforcing this indemnity)
incurred by any of such indemnified parties as a result of a Transfer or
purported Transfer in violation of this Agreement.

         Section 11.2 Permitted Transfers.

         (a) A Venturer shall be entitled to make the following Transfers (each
a "Permitted Transfer") without the approval of the other Venturer: (i) a pledge
or encumbrance of its Interest in favor of one or more commercial banks or other
institutional lenders to secure a loan provided by such lender(s) to such
Venturer or its Affiliates, provided that a foreclosure upon such pledge or
encumbrance shall not be a Permitted Transfer; (ii) a Transfer to an Affiliate
of such Venturer, subject to the provisions of Section 11.3; (iii) a Transfer to
MR Sub or Boyd Sub; or (iv) a Transfer pursuant to the right of first refusal
provisions of Section 11.4.

         (b) Except with respect to Permitted Transfers described in clause
(ii), (iii) or (iv) of Section 11.2(a), a transferee of an Interest in the Joint
Venture shall be admitted as a Venturer only upon the agreement of each
Venturer. The rights of a transferee who is not admitted as a Venturer shall be
limited to the right to receive allocations and distributions from the Joint
Venture with respect to the Interest transferred, as provided in this Agreement.
A transferee that is not admitted as a Venturer shall not be a Venturer with
respect to such Interest and, without limiting the foregoing, shall not have the
right to inspect the Joint Venture's books or assets, grant or withhold
approvals, act for or bind the Joint Venture or otherwise participate in its
operations.

                                      -36-
<PAGE>   37
         (c) The Venturers intend that a Permitted Transfer shall not cause the
dissolution of the Joint Venture under the Act; however, if a court of competent
jurisdiction determines that a dissolution has occurred, the Venturers shall
continue to hold the Joint Venture's assets and operate its business in joint
venture form pursuant to this Agreement as if no such dissolution had occurred.

         (d) In the event of a Permitted Transfer, the Venturer making the
Transfer shall notify the other Venturer of the Transfer and shall furnish the
Joint Venture with the transferee's taxpayer identification number and
sufficient information to determine the transferee's Interest and tax basis in
the Joint Venture and any other information reasonably necessary to permit the
Joint Venture to file all required tax returns. All Transfers shall be by
instrument in form and substance reasonably satisfactory to counsel for the
Joint Venture and shall contain an agreement of the transferee to accept the
Transfer and to accept and adopt all of the applicable provisions of this
Agreement. The Venturer making a Permitted Transfer shall execute, acknowledge
and deliver all such documents and instruments, in form and substance reasonably
satisfactory to counsel for the Joint Venture, as may be necessary or desirable
to effectuate such Transfer, and shall pay all costs and expenses incurred by
the Joint Venture in connection with such Transfer.

         (e) Notwithstanding anything to the contrary in this Agreement, no
Venturer shall be permitted to Transfer its Interest or any portion thereof to
the extent such Transfer would be in violation of applicable law (including
securities laws) or would cause a default under any agreement to which the Joint
Venture is a party or by which it is bound.

         Section 11.3 Limitation on Ownership of Venturers.

         (a) Unless otherwise agreed by Boyd Sub, all of the outstanding capital
stock of MR Sub shall continue to be owned directly or indirectly by MRI.

         (b) Unless otherwise agreed by MR Sub, all of the outstanding capital
stock of Boyd Sub shall continue to be owned directly or indirectly by Boyd.

                                      -37-
<PAGE>   38
         Section 11.4 Right of First Refusal.

         (a) Commencing on the first anniversary of the opening of the Facility
to the public, either Venturer shall have the right to Transfer all or any part
of its Interest in the Joint Venture to a person who is not an Affiliate of any
Venturer in consideration for cash and/or a promissory note, provided that (i)
the Joint Venture is not in default under the terms of the Construction
Financing, (ii) the Venturer wishing to Transfer its Interest (the "Initiating
Venturer") is not in default under any of the provisions of this Agreement and
(iii) the Initiating Venturer first offers the Interest (or portion thereof) to
the other Venturer as provided in this Section 11.4.

         (b) Prior to becoming legally obligated to Transfer its Interest or any
portion thereof (the "Relevant Interest") to a person who is not an Affiliate of
any Venturer (the "Third Party"), the Initiating Venturer shall deliver written
notice (the "Offering Notice") to the other Venturer (the "Responding Venturer")
offering to Transfer the Relevant Interest to the Responding Venturer on the
same terms and for the same price as the Initiating Venturer proposes to
Transfer to the Third Party. The Offering Notice shall specify the name of the
Third Party, the Relevant Interest proposed to be Transferred and the material
terms on which the Transfer is to be consummated, including without limitation
the Transfer price, terms of payment and the time and place of the closing. The
Responding Venturer shall thereupon have the right and option to purchase from
the Initiating Venturer all ( but not less than all) of the Relevant Interest at
the purchase price set forth in the Offering Notice by delivering written notice
(the "Acceptance Notice") to the Initiating Venturer within 30 days after
delivery of the Offering Notice. If the Responding Venturer delivers the
Acceptance Notice, it shall be legally obligated to purchase the Relevant
Interest on the same terms as specified in the Offering Notice at a closing to
be held as specified in the Offering Notice (but in no event earlier than 60
days after delivery of the Offering Notice) or such other time as may be
directed by the New Jersey Gaming Authorities. At the closing, the Initiating
Venturer shall deliver to the Responding Venturer good title to the Relevant
Interest, free and clear of any liens, claims or other encumbrances.

If the Responding Venturer does not elect to purchase the Relevant Interest, it
may, within the 30-day period referred to above, deliver to the Initiating
Venturer written notice (the "Disapproval Notice") stating that it does not

                                      -38-
<PAGE>   39
elect to purchase the Relevant Interest and that it disapproves of the proposed
Transfer to the Third Party. In the event that the Responding Venturer delivers
the Disapproval Notice within such 30-day period, and the Disapproval Notice
sets forth the existence of specific facts which reasonably demonstrate that the
Third Party would not be suitable as a Venturer due to its background,
reputation or lack of financial capability, the Initiating Venturer may not
consummate the proposed Transfer. The Responding Venturer may deny such approval
if the proposed Transferee or its Affiliates operates another casino in the
greater Atlantic City, New Jersey area. If the Responding Venturer does not
deliver the Acceptance Notice or the Disapproval Notice within the 30-day period
referred to above, or if the Disapproval Notice does not satisfy the
requirements of the immediately preceding sentence, the Initiating Venturer may,
within 90 days after the expiration of such 30-day period, consummate the
proposed Transfer to the Third Party on the terms set forth in the Offering
Notice or on substantially similar terms. If the Initiating Venturer does not
consummate the proposed Transfer within such 90-day period, the proposed
Transfer may not be effected unless the Initiating Venturer again complies with
the provisions of this Section 11.4.

         Section 11.5 Buy-Out on Default. At any time during the continuance of
an Event of Default under this Agreement, the non-defaulting Venturer, without
limiting any other rights or remedies it may have under this Agreement, at law
or in equity, may, upon written notice (the "Appraisal Notice") delivered to the
Defaulting Venturer, elect to purchase all (but not less than all) of the
Interest of the Defaulting Venturer for cash in an amount equal to 80% of the
Appraised Value of the Defaulting Venturer's Interest. The "Appraised Value"
shall be an amount equal to the Defaulting Venturer's Interest multiplied by the
fair market value of the Joint Venture, which shall represent the amount that a
single purchaser unrelated to any Venturer would reasonably be expected to pay
for the Joint Venture business and assets as a going concern, subject to all
existing indebtedness, liens and encumbrances, in a single cash purchase, taking
into account the current condition, use and net income of the Facility. If the
Venturers are unable to mutually agree upon the Appraised Value within 30 days
after delivery of the Appraisal Notice, each Venturer shall select a reputable
MAI appraiser to determine the Appraised Value. The two appraisers shall furnish
the Venturers with their written appraisals within 45 days of their selection,
setting forth their determinations of the Appraised Value as of the date of the
Appraisal Notice. 

                                      -39-
<PAGE>   40
If the higher of such appraisals does not exceed the lower of such appraisals by
more than 10%, the Appraised Value shall be the average of the two appraisals.
If the higher of such appraisals exceeds the lower of such appraisals by more
than 10%, the two appraisers shall, within 20 days, mutually select a third
reputable MAI appraiser. The third appraiser shall furnish the Venturers with
its written appraisal within 45 days of its selection, and the Appraised Value
shall be the average of the three appraisals. The cost of the appraisals shall
be borne equally by the Defaulting Venturer and the non-defaulting Venturer. The
determination of the Appraised Value in accordance with this Section 11.5 shall
constitute a final and non-appealable arbitration. The closing of the purchase
and sale of the Interest of the Defaulting Venturer pursuant to this Section
11.5 shall occur not later than 90 days after determination of the Appraised
Value, or such other time as may be directed by the New Jersey Gaming
Authorities. At the closing, the Defaulting Venturer shall deliver to the
non-defaulting Venturer good title to its Interest, free and clear of any liens,
claims or other encumbrances.

                                   ARTICLE 12

                                EVENTS OF DEFAULT

         Section 12.1 Events of Default. The occurrence of any of the following
events shall constitute an "Event of Default" hereunder on the part of the
Venturer to which such event relates (the "Defaulting Venturer") if within 30
days following delivery to the Defaulting Venturer of written notice of such
default by the other Venturer, or within 10 days if the default is due solely to
the non-payment of monies, whichever is applicable, the Defaulting Venturer
fails to pay such monies or, in the case of non-monetary defaults, fails to
commence substantial efforts to cure such default or thereafter fails within a
reasonable time to prosecute to completion with diligence the curing of such
default; provided, however, that the occurrence of any of the events described
in Section 12.1(a) or (b) shall constitute an Event of Default immediately upon
such occurrence without any requirement of notice or the passage of time except
as specifically set forth therein:

         (a) the violation by a Venturer of any of the restrictions set forth in
Article 11 of this Agreement upon the right of such Venturer to Transfer its
Interest;

                                      -40-
<PAGE>   41
         (b) (i) the institution by a Venturer of proceedings under any federal
or state law for the relief of debtors wherein such Venturer is seeking relief
as debtor, (ii) a general assignment by a Venturer for the benefit of creditors,
(iii) the institution by a Venturer of a proceeding for relief under the Federal
Bankruptcy Code, (iv) the institution against a Venturer of a proceeding under
the Federal Bankruptcy Code, which proceeding is not dismissed, stayed or
discharged within 60 days after the filing thereof or, if stayed, which stay is
thereafter lifted without a contemporaneous discharge or dismissal of such
proceeding, (v) the admission by a Venturer in writing of its inability to pay
its debts as they mature or (vi) the attachment, execution or other judicial
seizure of all or any substantial part of a Venturer's Interest which remains
undismissed or undischarged for a period of 15 days after the levy thereof, if
such attachment, execution or other judicial seizure would reasonably be
expected to have a material adverse effect upon the performance by such Venturer
of its obligations under this Agreement; provided, however, that any such
attachment, execution or seizure shall not constitute an Event of Default if
such Venturer posts a bond sufficient to fully satisfy the amount of such claim
or judgment within 15 days after the levy thereof and the Venturer's Interest is
thereby released from the lien of such attachment (each an "Event of
Bankruptcy");

         (c) any material breach by a Venturer of its representations and
warranties pursuant to Article 10 hereof or any material default in performance
of, or failure to comply with, any other agreement, obligation or undertaking of
a Venturer contained in this Agreement;

         (d) the Managing Venturer causing or permitting a material event of
default under the Construction Financing or any other third-party indebtedness
incurred by the Joint Venture, irrespective of any cure period;

         (e) the issuance of a final and non-appealable order or directive of a
governmental agency of any jurisdiction, including the New Jersey Gaming
Authorities, disqualifying a Venturer from holding any license, approval or
permit required for the business of the Joint Venture, or directing that the
other Venturer or any of its Affiliates terminate its relationship with such
Venturer; and

                                      -41-
<PAGE>   42
         (f) the failure or inability of a Venturer, its officers, directors,
key employees or direct or indirect owners or the officers, directors or key
employees of its direct or indirect owners to obtain any license, approval or
permit required for the business of the Joint Venture or any other event
involving a Venturer which results in the Joint Venture or such Venturer
becoming unable to conduct a gaming business.

         Section 12.2 Remedies upon Default. Upon the occurrence of any Event of
Default, the non-defaulting Venturer shall have the right, without limitation,
to exercise any and all rights and remedies set forth in this Agreement or as
may be available at law or in equity against the Defaulting Venturer.

                                   ARTICLE 13

                           DISSOLUTION AND LIQUIDATION

         Section 13.1 Events of Dissolution. The Joint Venture shall dissolve
upon the occurrence of any of the following events:

         (a) the sale or other disposition (including, without limitation,
taking by eminent domain) of all or substantially all of the assets of the Joint
Venture and the collection of the proceeds thereof;

         (b) upon the approval of each of the Venturers;

         (c) at the election of the non-defaulting Venturer, the occurrence of
an Event of Default by a Defaulting Venturer;

         (d) December 31, 2066;

         (e) at the election of Boyd Sub or MR Sub, as the case may be, pursuant
to Section 4.2 hereof;

         (f) the final and non-appealable rejection of the Joint Venture's
application for a casino license for the Facility or, after issuance, the final
and non-appealable revocation of such license;

                                      -42-
<PAGE>   43
         (g) the death, withdrawal, bankruptcy or dissolution of a Venturer, or
the occurrence of any event that terminates a Venturer's continued interest in
the Joint Venture or causes a Transfer of such interest by operation of law,
unless within 90 days after such event one or more new Venturers is admitted
pursuant to Section 11.2 or 13.2 hereof;

         (h) at the election of and without liability to either Venturer, if
title to the Parcel shall for any reason not have been transferred by the City
to an Affiliate of MRI pursuant to the Development Agreement by December 31,
1997;

         (i) at the election of MR Sub and without liability to either Venturer,
if at any time MR Sub determines in its sole discretion that the costs
associated with the environmental assessment and remediation of the Property are
unreasonable; or

         (j) the occurrence or failure to occur of any other event, as a result
of which it is or becomes unlawful or impossible to carry on the business of the
Joint Venture.

         Section 13.2 Venturers' Consent to Continue Business. Upon the
occurrence of an event described in Section 13.1 which may cause the dissolution
of the Joint Venture, or subsequent discovery of the occurrence of such an
event, the Managing Venturer shall immediately notify each of the remaining
Venturers of the occurrence of the event, and each of the remaining Venturers
shall notify the Managing Venturer whether or not it consents to continue the
business of the Joint Venture. If all of the remaining Venturers consent to
continue the Joint Venture's business, and there are at least two remaining
Venturers, the Joint Venture shall not be dissolved and the remaining Venturers
shall continue the Joint Venture's business. If there is only one remaining
Venturer and it consents to continue the Joint Venture's business, such Venturer
shall have the absolute right, notwithstanding any contrary provision of this
Agreement, to Transfer a portion of its Interest to a transferee (who may be an
Affiliate of such Venturer) and to unilaterally admit such transferee as a new
Venturer in the Joint Venture, so that such two Venturers may continue the Joint
Venture's business.

         Section 13.3 Dissolution and Liquidation. Upon the occurrence of an
event of dissolution described in Section 13.1, if the business of the Joint

                                      -43-
<PAGE>   44
Venture is not continued by the remaining Venturers pursuant to Section 13.2, 
the Joint Venture shall continue solely for the purpose of winding up its
affairs in an orderly manner, liquidating its assets and satisfying the claims
of its creditors and Venturers and no Venturer shall take any action that is
inconsistent with, or not necessary to or appropriate for, winding up the Joint
Venture's business and affairs. To the extent not inconsistent with the
foregoing, all covenants and obligations set forth in this Agreement shall
continue in effect until such time as the Joint Venture's assets have been
distributed pursuant to this Section 13.3 and the Joint Venture has been
liquidated. The Managing Venturer shall be responsible for overseeing the
winding up and liquidation of the Joint Venture, shall take full account of the
Joint Venture's liabilities and assets, shall cause the assets to be liquidated
as promptly as is consistent with obtaining the fair market value thereof and
shall cause the proceeds therefrom, to the extent sufficient therefor, to be
applied and distributed in the following order:

         (a) first, to the payment and discharge of all of the Joint Venture's
debts and liabilities to creditors other than Venturers, in the order of
priority provided by law;

         (b) second, to the payment and discharge of all of the Joint Venture's
debts and liabilities to Venturers, other than liabilities for distributions to
which Venturers are entitled in their capacities as Venturers pursuant to
Article 6 hereof;

         (c) third, to the establishment of any reserves that may reasonably be
deemed necessary by the Managing Venturer to meet any contingent or unforeseen
liabilities or obligations of the Joint Venture not covered by insurance. Any
such reserve shall be deposited in a bank or other financial institution. All or
any portion of such reserve no longer needed for the purpose for which it was
established shall be distributed as promptly as practicable in accordance with
Section 13.3(d) or 13.3(e), as appropriate;

         (d) fourth, to the Venturers in accordance with the positive balances
in their respective Capital Accounts; and

         (e) fifth, to the Venturers in accordance with their respective
Interests.

                                      -44-
<PAGE>   45
         The Managing Venturer shall not receive any compensation for any
services performed pursuant to this Section 13.3 but shall be entitled to
reimbursement for all out-of-pocket costs and expenses reasonably incurred in
connection therewith.

         Any gains or losses on the disposition of assets of the Joint Venture
in the process of liquidation shall be credited or charged to the Venturers in
accordance with Article 5 hereof. Any property distributed in kind in the
liquidation shall be valued by agreement of the Venturers and the Capital
Accounts of the Venturers shall be adjusted to reflect the amount of Profits or
Losses that would have been recognized by the Joint Venture had such property
been sold for such value immediately before such distribution.

         In the event that any Venturer has a negative balance in its Capital
Account after the liquidation of all of the Joint Venture's assets, such
Venturer shall contribute to the Joint Venture cash in an amount sufficient to
eliminate such negative balance.

         Section 13.4 Notice of Dissolution. Upon the occurrence of an event of
dissolution described in Section 13.1, if the business of the Joint Venture is
not continued by the remaining Venturers pursuant to Section 13.2, the Managing
Venturer shall, within 30 days thereafter (i) provide written notice thereof to
each of the Venturers and to all other persons with whom the Joint Venture
regularly conducts business (as determined in the discretion of the Managing
Venturer) and (ii) publish notice of such dissolution in a newspaper of general
circulation in each place in which the Joint Venture conducts business.

                                   ARTICLE 14

                            MISCELLANEOUS PROVISIONS

         Section 14.1 Waiver of Partition and Covenant not to Withdraw. Each
Venturer covenants and agrees that the Venturers have entered into this
Agreement based on the mutual expectation that both Venturers will continue as
Venturers and carry out the duties and obligations undertaken by them hereunder
and, except as otherwise expressly required or permitted by this Agreement or
approved by each of the Venturers, each Venturer covenants and agrees not to (i)
take any action to require partition or to compel any sale 

                                      -45-
<PAGE>   46
with respect to its Interest, (ii) take any action to file a certificate of
dissolution or its equivalent with respect to itself, (iii) take any action that
would cause an Event of Bankruptcy of such Venturer, (iv) withdraw or resign, or
attempt to do so, from the Joint Venture, (v) exercise any power under the Act
to dissolve the Joint Venture, (vi) except as permitted herein, transfer all or
any portion of its Interest, (vii) petition for judicial dissolution of the
Joint Venture or (viii) demand a return of its capital contributions. Upon any
breach of this Section 14.1 by any Venturer, the other Venturer (in addition to
all rights and remedies it may have under this Agreement, at law or in equity)
shall be entitled to a decree or order from a court of competent jurisdiction
restraining and enjoining such application, action or proceeding.

         Section 14.2 Notices. Unless otherwise provided herein, all notices or
other communications required or permitted by this Agreement shall be in writing
and shall be deemed to have been duly given on the date of delivery if delivered
personally to the party to whom notice is given, on the next business day if
sent by confirmed facsimile transmission or on the date of actual delivery if
sent by overnight commercial courier or by first-class mail, registered or
certified, with postage prepaid and properly addressed to the party at its
address set forth below, or at any other address that any party may from time to
time designate by written notice to the others:

         If to MR Sub:

                       MAC, CORP.
                       c/o Mirage Resorts, Incorporated
                       3400 Las Vegas Boulevard South
                       Las Vegas, Nevada  89109
                       Attention:  General Counsel
                       Facsimile:  (702) 791-5787

         If to Boyd Sub:

                       Grand K, Inc.
                       2950 South Industrial Road
                       Las Vegas, NV  89109-1100
                       Attention:  General Counsel
                       Facsimile:  (702) 696-1114

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<PAGE>   47
         Section 14.3 Amendments. The provisions of this Agreement may not be
waived, amended or repealed, in whole or in part, except with the written
consent of each of the Venturers.

         Section 14.4 Successors and Assigns. This Agreement shall be binding
on, and inure to the benefit of, the parties hereto and their respective heirs,
legal representatives, successors, transferees and assigns.

         Section 14.5 Time. Time is of the essence with respect to this
Agreement.

         Section 14.6 Severability. Each provision of this Agreement is intended
to be severable. If any term or provision hereof is held to be illegal or
invalid for any reason, such illegality or invalidity shall not affect the
legality or validity of the remainder of this Agreement.

         Section 14.7 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         Section 14.8 Attorneys' Fees. Should any action or proceeding be
commenced (including without limitation any proceeding in bankruptcy) by either
Venturer to enforce any of the terms of this Agreement or that in any other way
pertains to Joint Venture affairs or this Agreement, the prevailing party in
such action or proceeding (as determined by the presiding official(s)) shall be
entitled to receive from the opposing party or parties the prevailing party's
reasonable costs and attorneys' fees incurred in investigating, prosecuting,
defending or appearing in any such action or proceeding.

         Section 14.9 Entire Agreement. This Agreement constitutes the complete
and exclusive statement of the agreement between the Venturers. This Agreement
supersedes all prior negotiations, understandings and agreements of the parties,
written or oral, with respect to the subject matter hereof.

         Section 14.10 Further Assurances. Each Venturer agrees to perform any
further acts and execute, acknowledge and deliver any documents or instruments
which may be reasonably necessary or appropriate to carry out the provisions of
this Agreement.

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<PAGE>   48
         Section 14.11 Headings. Article and section headings contained in this
Agreement are for convenience of reference only and shall not be deemed a part
of this Agreement or have any legal effect.

         Section 14.12 Exhibits. Each of the Exhibits referred to herein and
attached hereto is hereby incorporated by reference and made a part hereof for
all purposes. Unless the context otherwise expressly requires, any reference to
"this Agreement" shall mean and include all such Exhibits.

         Section 14.13 Approvals and Consents. Whenever the approval or consent
of a Venturer is required by this Agreement, such Venturer shall have the right
to give or withhold such approval or consent in its sole discretion, unless
otherwise expressly provided herein.

         Section 14.14 Estoppels. Each Venturer shall, upon the written request
of the other Venturer, promptly execute and deliver to the other Venturer a
statement certifying that this Agreement is unmodified and in full force and
effect (or, if modified, the nature of the modification) and whether or not
there are, to such Venturer's knowledge, any uncured defaults on the part of the
other Venturer, specifying such defaults if any exist. Any such statement may be
relied upon by third parties.

         Section 14.15 Compliance with Laws and Contractual Obligations. Each
Venturer shall at all times act in accordance with all applicable laws and
regulations and shall indemnify and hold harmless the other Venturer from and
against any and all claims, losses, damages and liabilities, including
reasonable attorneys' fees which shall be reimbursed as incurred, arising out of
or relating to any breach of such laws or regulations. The Joint Venture will at
all times comply with all legal and contractual obligations and requirements
applicable to the acquisition or development of the Property and the operation
of the Facility, including without limitation those relating to the employment
of economically disadvantaged persons and City residents, contained in the
Development Agreement, and with all applicable federal, state and local
statutes, ordinances and regulations.

         Section 14.16 Remedies Cumulative. Each right, power and remedy
provided for in this Agreement or now or hereafter existing at law, in equity,
by statute or otherwise shall be cumulative and concurrent and shall be in

                                      -48-
<PAGE>   49
addition to every other right, power or remedy provided for in this Agreement or
now or hereafter existing at law, in equity, by statute or otherwise, and the
exercise by any party of any one or more of such rights, powers or remedies
shall not preclude the simultaneous or later exercise by such party of any or
all of such other rights, powers or remedies.

         Section 14.17 Waiver. No consent or waiver, express or implied, by any
party to or of any breach or default by any other party in the performance of
obligations under this Agreement shall be deemed or construed to be a consent or
waiver to or of any other breach or default in the performance by such party.
Failure on the part of any party to complain of any act or failure to act by any
other party or to declare any other party in default, irrespective of how long
such failure continues, shall not constitute a waiver by any party of its rights
under this Agreement.

         Section 14.18 Gaming Licensing Matters. The Venturers shall provide all
reasonable cooperation with any investigation by any gaming authority having
jurisdiction over any Venturer or any Affiliate of any Venturer. Each Venturer
shall cause any transferee of any portion of its Interest likewise to so
cooperate. Each Venturer agrees that it shall not take any action or omit to
take any action that would have the effect of adversely affecting any gaming
license, approval or permit held by any Venturer. Without limiting the
generality of the foregoing, Boyd and its Affiliates shall, within 60 days from
the date of this Agreement, apply for, and thereafter diligently pursue, a
statement of compliance from the New Jersey Casino Control Commission. MR Sub
and its Affiliates shall cooperate with Boyd and its Affiliates, to the extent
reasonably necessary, in connection with any review of this Agreement by the New
Jersey Gaming Authorities, and the Venturers shall execute and deliver any
further documents or instruments, including amendments to this Agreement, as the
New Jersey Gaming Authorities may reasonably require and which do not alter the
terms of this Agreement in a manner unfavorable to either of the Venturers in
its sole discretion. Each Venturer acknowledges that monetary damages alone
would not be adequate compensation for a breach of this Section 14.18 and the
Venturers agree that a non-breaching Venturer shall be entitled to seek a decree
or order from a court of competent jurisdiction for specific performance to
restrain a breach or threatened breach of this Section 14.18 or to require
compliance by a Venturer with this Section 14.18.

                                      -49-
<PAGE>   50
         Section 14.19 Liquidated Damages. The provisions of Section 3.5 hereof,
which in certain circumstances could result in the reduction of a Venturer's
Interest, constitute an agreement by the Venturers upon a liquidated amount as
to the damages sustained by the other Venturer upon the failure of a Venturer to
contribute to the capital of the Joint Venture. Each Venturer acknowledges that
the amount of damages sustained by the Venturers in the event of such a failure
is not readily ascertainable and that the provisions of Section 3.5 hereof
establishing such liquidated amount are reasonable under the circumstances
existing at the time of the execution of this Agreement and, to the extent
permitted by law, each Venturer waives any and all rights of any nature
whatsoever to challenge the reasonableness of such provisions as of the date of
this Agreement. In the event that the non-defaulting Venturer contributes the
full amount of capital that the defaulting Venturer shall have failed to
contribute, the reduction in the defaulting Venturer's Interest shall be the
sole measure of damages resulting from the occurrence of such a failure. If the
non-defaulting Venturer does not contribute the full amount of the deficit, the
Joint Venture and the non-defaulting Venturer shall have all other rights and
remedies that may be available under this Agreement, at law or in equity against
the defaulting Venturer with respect to the portion of the deficit not
contributed by the non-defaulting Venturer.

         Section 14.20 Joint Access. The Master Plan shall include a public
connection or transportation link between the Facility and MRI's adjacent
facility.

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<PAGE>   51
         IN WITNESS WHEREOF, the parties have executed this Joint Venture
Agreement as of the date first above written.

                                MAC, CORP., a New Jersey corporation

                                By:  /s/ BRUCE A. LEVIN
                                     ------------------------------------------
                                     Bruce A. Levin
                                     Vice President and Assistant Secretary

                                Grand K, Inc., a Nevada corporation

                                By:  /s/ ELLIS LANDAU
                                     ------------------------------------------
                                     Ellis Landau
                                     Vice President and Treasurer

                                Boyd Gaming Corporation hereby agrees to all of
                                its obligations specified in the foregoing 
                                Agreement.

                                Boyd Gaming Corporation, a Nevada corporation

                                By:  /s/ ELLIS LANDAU
                                     -----------------------------------------
                                     Ellis Landau
                                     Senior Vice President and Treasurer

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