Exhibit 10.2

 

TWENTIETH AMENDING AGREEMENT

 

 

THIS AGREEMENT is made as of November 26th, 2008,

 

B E T W E E N:

 

MAGNA ENTERTAINMENT CORP.

 

as Borrower (the “Borrower”)

 

- and -

 

THE GUARANTORS SET FORTH

 

ON THE SIGNATURE PAGES HEREOF

 

as Guarantors (collectively, the “Guarantors”)

 

- and -

 

BANK OF MONTREAL, ACTING THROUGH ITS

 

CHICAGO LENDING OFFICE

 

as Lender (the “Lender”)

 

- and -

 

BANK OF MONTREAL, ACTING THROUGH ITS

 

CHICAGO LENDING OFFICE

 

as Agent (the “Agent”)

 

RECITALS:

 

A.                                    The Lender has made a certain credit
facility available to the Borrower in accordance with the terms and conditions
set out in an amended and restated credit agreement (the “Loan Agreement”) dated
as of July 22, 2005, between the Borrower, the Guarantors, the Lender, the Agent
and BMO Nesbitt Burns Inc., a Division of Bank of Montreal, as arranger, and as
amended from time to time.

 

B.                                    The Borrower, the Lender and the Agent
have agreed to further amend the Loan Agreement.

 

C.                                    The Guarantors have agreed to confirm the
guarantees and security granted by them in connection with the Loan Agreement.

 

D.                                    Article 7 of the Loan Agreement sets out
certain affirmative and negative obligations which the Borrower has covenanted
to be bound by and has agreed to follow unless the Agent, on behalf of the
Lender, waives in writing.

 

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NOW THEREFORE in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration (the receipt and sufficiency
of which are hereby acknowledged) the parties agree as follows:

 

1.                                                                                     
Interpretation

 

Capitalized terms not defined in this Twentieth Amending Agreement have the
meaning given to such terms in the Loan Agreement.

 

2.                                                                                     
Loan Agreement Amendments

 

The parties hereto agree to amend the Loan Agreement by:

 

(a)           adding the following new definitions to section 1.1:

 

“MID” means MI Developments Inc.

 

“Reorganization Sale Assets” means those assets of the Borrower sold to MID
pursuant to the Reorganization Plan and which shall include but not be limited
to, MEC’s development lands in Aventura, Florida, Ocala, Florida and Dixon,
California, additional acreage in Palm Beach, Florida, and MEC’s membership
interest in, and land underlying, the joint venture with Forest City Enterprises
at Gulfstream Park.

 

“Reorganization Plan” means the Reorganization Plan of MID  in the same form and
substance delivered to the Lender  on November 25, 2008;

 

(b)         deleting the definition of “Termination Date” in section 1.1.120 and
replacing it with the following new definition of Termination Date:

 

“Termination Date” means the earlier of :

 

(i)            March 16, 2009;

 

(ii)                                  (ii) the date which is 15 days subsequent
to the date that (x) shareholders of MID vote to not approve the Reorganization
Plan; or (y) the Reorganization Plan is abandoned or withdrawn or materially
amended in a manner adverse to the Lender without the consent of the Lender,
acting reasonably (the “BMO Early Termination Date”);

 

(iii)                               the date upon which the Borrower receives
the net proceeds from the sale of the Reorganization Sale Assets, which shall be
as soon as commercially practicable and, in any event,  not later than 14 days
subsequent to the date upon which the Reorganization Plan receives both MID
shareholder approval and court approval, or

 

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(iv) the date the entire balance of the Loans under the Credit Facility may
become due hereunder, whether by acceleration or otherwise.

 

(c)          adding a new section 2.3.5 (Repayment under Credit Facility) as
follows:

 

“Notwithstanding the foregoing, section 2.3.2 and 2.3.3 shall not apply to the
Reorganization Sale Assets and all of the net cash proceeds from the direct or
indirect sale of any of the Reorganization Sale Assets including, without
limitation, the shares of the Subsidiaries that own the relevant Reorganization
Sale Asset, and including any cash received in respect of non-cash proceeds
(including any cash payments received by way of deferred payment of principal
pursuant to a note or instalment receivable or purchase price adjustment
receivable or otherwise, but excluding any interest payments) but only as and
when received, in each case after giving effect to agents’ commissions and sale
related expenses (including, without limitation, agents’ fees and expenses) 
shall be paid to the Agent for the account of the Lenders for application
against  the Obligations outstanding under the Credit Facility. Any prepayment
made hereunder shall permanently reduce and cancel the Lender’s Commitment and
the Aggregate Commitment.”

 

3.                                                                                     
Conditions  to Loan Agreement Amendments

 

The obligation of the Lender to agree to the amendment herein, and to make
available any further advances, is subject to fulfillment of the following
conditions on the dates specified below:

 

(A)                                 MID AND THE BORROWER EACH PUBLICLY ANNOUNCE
THE REORGANIZATION PLAN (INCLUDING, WITHOUT LIMITATION, THE PAYMENT TO THE
LENDER OF THE PROCEEDS OF THE REORGANIZATION SALE ASSETS) BY NO LATER THAN
DECEMBER 1ST, 2008;

 

(B)                                 ON OR BEFORE DECEMBER 1, 2008, MID, OR AN
AFFILIATE THEREOF (THE “NEW MID LENDER”)  SHALL PROVIDE THE BORROWER WITH
ADDITIONAL FINANCING OF NOT LESS THAN US$50,000,000 PURSUANT TO A CREDIT
AGREEMENT ON TERMS AND CONDITIONS SATISFACTORY TO THE AGENT AND THE LENDER,
ACTING REASONABLY, AND WHICH HAS A MATURITY DATE OF NOT EARLIER THAN MARCH 31ST,
2009 (THE “NEW MID LOAN”) (SUBJECT TO A RIGHT TO TERMINATE SUCH AGREEMENT ON THE
DATE THAT IS 15 DAYS SUBSEQUENT TO THE BMO EARLY TERMINATION DATE);

 

(C)                                  ON THE DATE HEREOF, WITH RESPECT TO THE
US$125,000,000 CREDIT AGREEMENT DATED AS OF SEPTEMBER 12, 2007 AMONGST THE
BORROWER, AS BORROWER, MID ISLANDI SF, AS LENDER AND CERTAIN OTHER PARTIES
LISTED THEREIN, AS SUCH AGREEMENT HAS BEEN AMENDED ON THE DATE HEREOF AND AS MAY
BE AMENDED FROM TIME TO TIME (THE “BRIDGE LOAN AGREEMENT”), THE MATURITY DATE
SHALL BE EXTENDED SUCH THAT IT OCCURS ON OR LATER THAN MARCH 31ST, 2009 (SUBJECT
TO A RIGHT TO TERMINATE SUCH AGREEMENT ON THE DATE THAT IS 15 DAYS SUBSEQUENT TO
THE BMO EARLY TERMINATION DATE);

 

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(D)                                 ON THE DATE HEREOF, WITH RESPECT TO THE
THIRD AMENDED AND RESTATED GULFSTREAM PARK LOAN AGREEMENT DATED DECEMBER 22,
2006 BETWEEN GULFSTREAM PARK RACING ASSOCIATION, AS BORROWER, AND MID ISLANDI
SF., AS LENDER AND CERTAIN OTHER PARTIES LISTED THEREIN,  AS AMENDED FROM TIME
TO TIME, THE PRE-PAYMENT MAKE-WHOLE AMOUNT FORGIVENESS DATE (AS SUCH TERM IS
DEFINED IN THE GULFSTREAM AGREEMENT) HAS BEEN EXTENDED SUCH THAT IT OCCURS ON OR
LATER THAN MARCH 31ST, 2009 (SUBJECT TO A RIGHT TO TERMINATE SUCH AGREEMENT ON
THE DATE THAT IS 15 DAYS SUBSEQUENT TO THE BMO EARLY TERMINATION DATE);

 

(E)                                  FOR THE PERIOD FROM THE DATE HEREOF UNTIL
THE TERMINATION DATE, THE REORGANIZATION PLAN SHALL NOT BE AMENDED IN ANY
MATERIAL RESPECTS THAT ARE ADVERSE TO THE LENDER WITHOUT THE CONSENT OF THE
LENDER;

 

(F)                                   ON OR BEFORE DECEMBER 1, 2008, THE AMENDED
AND RESTATED INTERCREDITOR AGREEMENT MADE AS OF THE 23RD DAY OF MAY, 2008 AMONG
THE LENDER, AS SENIOR LENDER, MID ISLANDI SF, AS MID LENDER, MID DEVELOPMENTS
INC., AS PERFORMANCE GUARANTOR AND THE BORROWER, AS BORROWER, SHALL BE AMENDED
ON TERMS AND CONDITIONS SATISFACTORY TO THE LENDER, ACTING REASONABLY, TO:
(A) INCLUDE THE NEW MID LOAN (MAINTAINING BMO’S PRIORITIES AND RIGHTS AS AGAINST
THE LENDER UNDER THE BRIDGE LOAN AGREEMENT AND ESTABLISHING THE SAME  UNDER THE
NEW MID LOAN AGREEMENT), (B) PROVIDE THAT ALL PROCEEDS FROM REORGANIZATION SALE
ASSETS BE USED TO REPAY THE LOAN IN PRIORITY TO ALL OTHER CREDITORS OF THE
BORROWER, AND (C) ALL SUCH OTHER CHANGES AS THE LENDER SHALL REASONABLY REQUIRE,
INCLUDING, WITHOUT LIMITATION AS MAY BE REQUIRED TO DOCUMENT ANY SUBORDINATE
CHARGES THAT THE NEW MID LENDER INTENDS TO TAKE IN RESPECT OF SANTA ANITA
PREMISES AND THE GOLDEN GATE PREMISES UNDER THE NEW MID LOAN;.

 

(G)                                  THE REPRESENTATIONS AND WARRANTIES OF THE
BORROWER SET OUT IN SECTION 6.1 OF THE LOAN AGREEMENT ARE TRUE AND CORRECT ON
THE DATE HEREOF PROVIDED IF ANY SUCH REPRESENTATION AND WARRANTY IS SPECIFICALLY
GIVEN AS OF ANY PARTICULAR DATE OR PARTICULAR PERIOD OF TIME, THEN SUCH
REPRESENTATION AND WARRANTY SHALL CONTINUE TO BE GIVEN AS AT SUCH DATE OR SUCH
PERIOD OF TIME;

 

(H)                                 AS OF THE DATE HEREOF, NO DEFAULT OR EVENT
OF DEFAULT HAS OCCURRED OR IS CONTINUING OR WOULD ARISE IMMEDIATELY AFTER GIVING
EFFECT TO OR AS A RESULT OF THE AMENDMENT HEREIN;

 

(I)                                     AS OF THE DATE HEREOF, NO MATERIAL
ADVERSE CHANGE SINCE MARCH 31ST, 2008 SHALL HAVE OCCURRED;

 

(J)                                    AS OF THE DATE HEREOF, PAYMENT IN FULL OF
ALL REASONABLE INVOICED FEES, INCLUDING FOR GREATER CERTAINTY, AN UPFRONT FEE OF
US$1,750,000 AND ALL REIMBURSABLE OUT-OF-POCKET EXPENSES PAYABLE BY THE BORROWER
ON OR PRIOR TO THE DATE HEREOF INCLUDING PAYMENT OF ALL REASONABLE FEES,
DISBURSEMENTS AND OUT-OF-POCKET EXPENSES OF COUNSEL TO THE AGENT AND THE
LENDERS; AND

 

(K)                                 ON THE DATE HEREOF, SUCH OTHER DOCUMENTATION
OR INFORMATION AS THE LENDER SHALL HAVE REASONABLY REQUESTED.

 

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4.                                                                                     
Loan Agreement

 

Save as expressly amended by this Twentieth Amending Agreement, all other terms
and conditions of the Loan Agreement and each of the Loan Documents remain in
full force and effect, unamended, and this Twentieth Amending Agreement
constitutes a Loan Document for the purposes of the Loan Agreement and, for
greater certainty, the Borrower acknowledges and agrees that any failure to
satisfy the conditions precedent to the Loan Agreement shall be an Event of
Default under the Loan Agreement.

 

5.                                                                                     
Confirmation of Guarantee and Security

 

Each of the Guarantors acknowledges and confirms that (i) the guarantee granted
by it pursuant to Article 10 of the Loan Agreement constitutes a continuing
guarantee of, among other things, all present and future obligations of the
Borrower to the Lender under the Loan Agreement and shall remain in full force
and effect; and  (ii) each of the other Loan Documents executed by it shall
remain in full force and effect.  In addition, (i) MEC Land Holdings
(California) Inc. acknowledges and confirms that the Golden Gate Mortgage
constitutes continuing security for the obligations secured thereby and shall
remain in full force and effect, and (ii) The Santa Anita Companies, Inc.
acknowledges and confirms that the Santa Anita Mortgage constitutes continuing
security for the obligations secured thereby and shall remain in full force and
effect.

 

6.                                                                                     
Counterparts

 

This Twentieth Amending Agreement may be signed in any number of counterparts,
each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.

 

IN WITNESS WHEREOF this Twentieth Amending Agreement has been executed by the
parties hereto as of the date first written above.

 

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MAGNA ENTERTAINMENT CORP., as Borrower

 

 

 

 

 

 

 

By:

 

 

 

Name: Blake S. Tohana

 

 

Title: Executive Vice-President and Chief Financial Officer

 

 

 

 

 

 

 

By:

 

 

 

Name: William G. Ford

 

 

Title: Secretary

 

 

 

 

 

 

 

 

 

 

PACIFIC RACING ASSOCIATION, as Guarantor, but only with respect to Article 10 of
the Loan Agreement and all other provisions related thereto

 

 

 

 

 

 

 

By:

 

 

 

Name: Blake S. Tohana

 

 

Title: Executive Vice-President and Chief Financial Officer

 

 

 

 

 

 

 

By:

 

 

 

Name: William G. Ford

 

 

Title: Secretary

 

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MEC LAND HOLDINGS (CALIFORNIA) INC., as Guarantor, but only with respect to
Article 10 of the Loan Agreement and all other provisions related thereto

 

 

 

 

 

 

 

By:

 

 

 

Name: Blake S. Tohana

 

 

Title: Executive Vice-President and Chief Financial Officer

 

 

 

 

 

 

 

By:

 

 

 

Name: William G. Ford

 

 

Title: Secretary

 

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THE SANTA ANITA COMPANIES, INC., as Guarantor, but only with respect to
Article 10 of the Loan Agreement and all other provisions related thereto

 

 

 

 

 

 

 

By:

 

 

 

Name: Blake S. Tohana

 

 

Title: Executive Vice-President and Chief Financial Officer

 

 

 

 

 

 

 

By:

 

 

 

Name: William G. Ford

 

 

Title: Secretary

 

 

 

 

 

 

 

 

 

 

LOS ANGELES TURF CLUB, INCORPORATED, as Guarantor, but only with respect to
Article 10 of the Loan Agreement and all other provisions related thereto

 

 

 

 

 

 

 

By:

 

 

 

Name: Blake S. Tohana

 

 

Title: Executive Vice-President and Chief Financial Officer

 

 

 

 

 

 

 

By:

 

 

 

Name: William G. Ford

 

 

Title: Secretary

 

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BANK OF MONTREAL, acting through its Chicago lending office, as Lender

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

 

 

BANK OF MONTREAL, acting through its Chicago lending office, as Agent

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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