Exhibit 10.2

MAGNA ENTERTAINMENT CORP.
as Borrower

— and —

THE GUARANTORS SET FORTH
ON THE SIGNATURE PAGES HEREOF
as Guarantors

— and —

MID ISLANDI SF., ACTING
THROUGH ITS ZUG BRANCH
as Lender

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BRIDGE LOAN AGREEMENT

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Dated as of September 12, 2007

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TABLE OF CONTENTS

ARTICLE 1
INTERPRETATION

1.1

Definitions

 

3

1.2

Gender and Number

 

20

1.3

Invalidity, etc.

 

20

1.4

Headings, etc.

 

20

1.5

Governing Law

 

20

1.6

Attornment

 

20

1.7

Judgment Currency

 

20

1.8

References

 

20

1.9

Currency

 

21

1.10

This Agreement to Govern

 

21

1.11

Generally Accepted Accounting Principles

 

21

1.12

Computation of Time Periods

 

21

1.13

Actions on Days Other Than Banking Days

 

21

1.14

Oral Instructions

 

21

1.15

Incorporation of Schedules

 

21

 

ARTICLE 2
BRIDGE LOAN

 

 

2.1

Establishment of Bridge Loan

 

22

2.2

Non-Revolving Nature of Bridge Loan

 

22

2.3

Pre-Payment

 

22

2.4

Mandatory Repayment

 

22

2.5

Voluntary Reduction in Aggregate Commitment

 

23

 

ARTICLE 3
GENERAL PROVISIONS RELATING TO THE BRIDGE LOAN

 

 

3.1

Advances

 

24

3.2

Payments Generally

 

24

3.3

Illegality

 

24

3.4

Indemnity

 

24

3.5

Proceedings in Respect of Claims

 

25

3.6

Evidence of Indebtedness

 

26

 

ARTICLE 4
INTEREST AND FEES

 

 

4.1

Interest Rate

 

27

4.2

Calculation and Payment of Interest

 

28

4.3

Fees

 

28

4.4

Payment of Costs and Expenses

 

28

 

ARTICLE 5
REPRESENTATIONS AND WARRANTIES

 

 

5.1

Representations and Warranties

 

30

5.2

Survival of Representations and Warranties

 

39

 

ARTICLE 6
COVENANTS

 

 

6.1

Affirmative Covenants

 

40

 

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6.2

Negative Covenants

 

47

6.3

Environmental Matters

 

51

 

ARTICLE 7
CONDITIONS PRECEDENT

 

 

7.1

Conditions Precedent to Closing

 

52

7.2

Conditions Precedent to Advances

 

53

 

 

 

 

8.1

Events of Default

 

62

8.2

Remedies Upon Default

 

64

8.3

Distributions

 

64

 

ARTICLE 9
GENERAL

 

 

9.1

Reliance and Non-Merger

 

64

9.2

Confidentiality

 

64

9.3

No Set-Off

 

65

9.4

Employment of Experts

 

65

9.5

Reliance by Lender

 

65

9.6

Notices

 

65

9.7

Further Assurances

 

68

9.8

Assignment

 

68

9.9

Disclosure of Information to Potential Permitted Lender Assignees

 

68

9.10

Right to Cure

 

68

9.11

Forbearance by the Lender Not a Waiver

 

68

9.12

Waiver of Statute of Limitations and Other Defenses

 

69

9.13

Relationship

 

69

9.14

Time of Essence

 

69

9.15

Service of Process/Venue

 

69

9.16

Jury Trial Waiver

 

69

9.17

Final Agreement/Modification

 

70

9.18

Continuing Agreement

 

70

9.19

No Third Party Beneficiaries

 

70

9.20

No Brokers

 

70

9.21

Execution in Counterparts

 

70

9.22

Contribution by Guarantors with Respect to Obligations.

 

70

9.23

Successors and Assigns Bound; Joint and Several Liability; Agents; and Captions

 

71

9.24

Loss of Borrower Note

 

71

9.25

Acknowledgment

 

71

SCHEDULE A — Borrowing Notice

 

 

SCHEDULE B — Properties and Prior Mortgages

 

 

SCHEDULE C — Environmental Reports

 

 

 

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LOAN AGREEMENT

THIS AGREEMENT made as of the 12th day of September, 2007.

BETWEEN:

MAGNA ENTERTAINMENT CORP.,

a corporation incorporated under the laws of the State of Delaware

(hereinafter called the “Borrower”),

OF THE FIRST PART,

- and -

MID ISLANDI SF.,

a partnership formed under the laws of Iceland,

acting through its Zug branch

(hereinafter called the “Lender”),

OF THE SECOND PART,

- and -

PACIFIC RACING ASSOCIATION,

a corporation incorporated under the laws of the State of California

- and -

MEC LAND HOLDINGS (CALIFORNIA) INC.,

a corporation incorporated under the laws of the State of California

(hereinafter collectively called the “Golden Gate

Fields Guarantors”),

OF THE THIRD PART,

- and -

THE SANTA ANITA COMPANIES, INC.,

a corporation incorporated under the laws of the State of Delaware

- and -

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LOS ANGELES TURF CLUB, INCORPORATED,

a corporation incorporated under the laws of the State of California

(hereinafter collectively called the “Santa Anita

Guarantors”),

OF THE FOURTH PART,

- and -

GULFSTREAM PARK RACING ASSOCIATION, INC.

a corporation incorporated under the laws of the State of Florida

(hereinafter called the “Gulfstream Guarantor”),

OF THE FIFTH PART,

- and -

GPRA THOROUGHBRED TRAINING CENTER INC.,

a corporation incorporated under the laws of the State of Delaware

(hereinafter called the “Palm Meadows Training

Guarantor”),

OF THE SIXTH PART,

- and -

MEC DIXON, INC.,

a corporation incorporated under the laws of the State of Delaware

(hereinafter called the “Dixon Guarantor”),

OF THE SEVENTH PART,

- and -

MEC HOLDINGS (USA) INC.

a corporation incorporated under the laws of the State of Delaware

- and —

2

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SUNSHINE MEADOWS RACING, INC.

a corporation incorporated under the laws of the State of Delaware

(hereinafter collectively called the “Ocala Guarantors”),

OF THE EIGHTH PART,

- and -

THISTLEDOWN, INC.

a corporation incorporated under the laws of the State of Ohio

(hereinafter called the “Thistledown Guarantor”),

OF THE NINTH PART,

- and -

MEC MARYLAND INVESTMENTS INC.,

a corporation incorporated under the laws of the State of Delaware

- and -

30000 MARYLAND INVESTMENTS LLC,

a limited liability company formed under the laws of the State of Delaware

(hereinafter collectively called the “AmTote

Guarantors”),

OF THE TENTH PART.

NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the covenants
and agreements herein contained, and in reliance on the individual
creditworthiness of the Borrower and each of the Guarantors based on the
representations, warranties and covenants of the Borrower and each of the
Guarantors contained herein, the parties hereto agree as follows:

ARTICLE 1

INTERPRETATION

1.1          Definitions

For the purposes of this Agreement:

“Acquisition” means any transaction or series of transactions by which the
Borrower or any of its Subsidiaries, directly or indirectly, by means of a
take-over bid, tender offer, amalgamation, merger, purchase of assets, purchase
of shares or otherwise (a) acquires any ongoing business or all or substantially
all of the assets of any Person engaged in any ongoing business, (b) acquires
beneficial ownership (as defined in Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended) of securities of a Person engaged in any
ongoing business representing more than 10% of the ordinary voting power for the
election of directors or other governing position if the business and affairs of
such Person are managed by a board of directors or other governing body, or
(c) acquires beneficial ownership (as defined in Rule 13d-3 promulgated under
the Securities Exchange Act of 1934, as amended) of more than 10% of the
ownership interest in any Person engaged in any ongoing business that is not
managed by a board of directors or other governing body;

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“Advance” has the meaning ascribed thereto in Section 4.1(a);

“Affiliate” means, in respect of any Person, any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such
Person; and for the purpose of this definition, “control” (including, with
correlative meanings, the terms “controlled by” and “under common control with”)
means the power to direct, or cause to be directed, the management and policies
of a Person whether through the ownership of voting shares, by contract or
otherwise, but for greater certainty excluding therefrom the Lender and its
Subsidiaries other than MEC and its Subsidiaries;

“Agreement” means this agreement and the Disclosure Schedule and all schedules
attached to this agreement or to the Disclosure Schedule, in each case as they
may be amended or supplemented from time to time; the expressions “hereof”,
“herein”, “hereto”, “hereunder”, “hereby” and similar expressions refer to this
Agreement as a whole (including the Disclosure Schedule) and not to any
particular article, Section, schedule or other portion hereof, and the
expressions “article” and “Section” followed by a number or by a number and
letter, and “Schedule” followed by a letter, mean and refer to the specified
article or Section of or schedule to this Agreement, as applicable, except as
otherwise specifically provided herein;

“Allocable Amount” has the meaning ascribed thereto in Section 9.22;

“AmTote Guarantee Fee” has the meaning ascribed thereto in Section 7.2(q)(lix);

“AmTote Guarantees and Indemnities” has the meaning ascribed thereto in
Section 7.2(q)(lix);

“AmTote Guarantors” means, collectively, MEC Maryland Investments Inc. and
30000 Maryland Investments LLC, and “AmTote Guarantor” means any one of them;

“Applicable Law” means, in respect of any Person, property, transaction or
event, all applicable laws, statutes, rules, by-laws and regulations, and all
applicable official directives, orders, judgments and decrees of Governmental
Bodies but solely to the extent they have the force of law (and, in the case of
Section 3.3 only, whether or not having the force of law but otherwise binding
on such Person or such Person’s property);

“Approved Sales Contract” means an agreement of purchase and sale between the
Borrower and/or one or more of its Subsidiaries, as vendor, and one or more
other Persons, as purchaser, in respect of the sale of any of the assets and/or
real property of the Borrower and/or its Subsidiaries (as applicable), provided
that such contract shall contemplate an anticipated closing date of no later
than the Maturity Date, and further provided that such contract shall be in form
and substance (including, without limitation, as to all conditions precedent
contained therein) satisfactory to the Lender in its sole and absolute
discretion; for greater certainty, this definition relates soley to
Section 4.1(a) of this Agreement;

“Assignment of Holdback Agreement” has the meaning ascribed thereto in
Section 7.2(q)(iv);

“Audited Financial Statements” means the audited consolidated financial
statements of the Borrower for the Fiscal Year ended December 31, 2006;

“Banking Day” means a day on which banks are generally open for business in each
of Toronto, Ontario, Zug, Switzerland and London, England;

“Blocked Persons List” has the meaning ascribed thereto in Section 5.1(cc);

“BMO” means Bank of Montreal, and its successors and assigns under the BMO
Credit Agreement;

“BMO Credit Agreement” means the amended and restated credit agreement made as
of July 22, 2005 among the Borrower, as borrower, BMO, as agent and lender, and
others, as has been and may be further amended and restated from time to time,
provided that the principal amount outstanding at any time under the BMO Credit
Agreement as so amended or restated shall not exceed $60,000,000, and includes
any renewal or refinancing of any such

4

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agreement or the indebtedness owing thereunder provided that the principal
amount of such renewed or refinanced indebtedness does not exceed $60,000,000
and security therefor is not increased thereby;

“BMO Intercreditor Agreement” means the intercreditor agreement made as of even
date herewith between the Lender, the Borrower and Bank of Montreal, as the same
may be amended or restated from time to time;

“Borrower” means Magna Entertainment Corp., a corporation existing under the
laws of Delaware, and its successors and permitted assigns;

“Borrower General Security Agreement” has the meaning ascribed thereto in
Section 7.2(q)(i);

“Borrower Restructuring Plan” means the plan approved and adopted by the
Borrower’s board of directors as of the Closing Date to restructure the Borrower
and its Subsidiaries and to revise the business plan of the Borrower and its
Subsidiaries, including any amendments, revisions or modifications thereto
(provided that any such amendments, revisions or other modifications shall be in
form, scope and terms satisfactory to the Lender in its sole and absolute
discretion);

“Borrower’s and Guarantors’ California Agent” means the Newport Beach office of
Sherry Meyerhoff Hanson & Crance LLP, or such other firm or firms of solicitors
or agents in the State of California as are appointed by the Borrower from time
to time and notice of which is provided to the Lender;

“Borrower’s and Guarantors’ Counsel” means Osler Hoskin Harcourt LLP, or such
other firm or firms of solicitors or counsel as are appointed by the Borrower
from time to time and notice of which is provided to the Lender;

“Borrower’s and Guarantors’ Florida Agent” means the Miami office of Akerman
Senterfitt, or such other firm or firms of solicitors or agents in the State of
Florida as are appointed by the Borrower from time to time and notice of which
is provided to the Lender;

“Borrower’s and Guarantors’ Local Agents” means, collectively the Borrower’s and
Guarantor’s California Agent, the Borrower’s and Guarantor’s Florida Agent and
the Borrower’s and Guarantor’s New York Agent;

“Borrower’s and Guarantors’ New York and Delaware Agent” means the New York
office of O’Melveny & Myers LLP, or such other firm or firms of solicitors or
agents in the State of New York as are appointed by the Borrower from time to
time and notice of which is provided to the Lender;

“Borrower Incorporation Documents” has the meaning ascribed thereto in
Section 5.1(i);

“Borrowing Date” means any Banking Day on which an Advance is made, or is to be
made, in accordance with a request of the Borrower;

“Borrowing Notice” means a notice substantially in the form of Schedule A;

“Bridge Loan” means the secured non-revolving bridge loan made available to the
Borrower by the Lender pursuant to Section 2.1;

“Capital Expenditures” means, for any period, for any Person those expenditures
made in connection with the purchase, lease, license, acquisition, erection,
development, improvement or construction of property of or by such Person
(including any such property acquired pursuant to a Capital Lease Obligation) or
any other expenditures, in all cases, which in accordance with GAAP are
classified as capital expenditures; provided, however, that such term shall not
include those expenditures (“Maintenance Capital Expenditures”) that are
(a) required to sustain the capacity level or useful life of existing operating
facilities or (b) required or lawfully imposed under any Environmental Law or
Safety Law, or by any Governmental Body;

“Capital Lease Obligations” means the obligations of the Borrower or any
Subsidiary to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real or personal property, which obligations are

5

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required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP and, for purposes of this Agreement, the amount
of such obligations shall in each case be the capitalized amount thereof,
determined in accordance with GAAP;

“Cash Equivalents” means short-term issued guaranteed deposits or certificates
of deposit with recognized financial institutions, bonds or similar obligations
carrying the full faith and credit of the United States of America or any state
thereof or any agency or instrumentality of any of the foregoing unconditionally
backed by such credit and other similar investments acceptable to the Lender in
its sole discretion;

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, including the rules and regulations promulgated
thereunder, as the same may be amended from time to time;

“Claim” has the meaning ascribed thereto in Section 3.4(a);

“Closing Date” means the date on which this Agreement is executed and delivered
by the parties hereto;

“Collateral” means, collectively, all of the undertaking, property and assets of
the Borrower and the Guarantors subject to the Security, or intended to be
subject to the Security;

“Combined” means, in relation to any financial results or financial statements
of a group of entities, the combined financial results or financial statements
of such group of entities (including their respective subsidiaries), calculated
and prepared in accordance with GAAP;

“Company” means, collectively, the Borrower and all of its Subsidiaries;

“Commitment Fee” has the meaning ascribed thereto in Section 4.3(a);

“Commitment Fee Payment Date” has the meaning ascribed thereto in
Section 4.3(a);

“Compliance Certificate” has the meaning ascribed thereto in Section 6.1(l)(i);

“Contingent Liabilities”, at any time, means the amount of all indebtedness and
liabilities, contingent or otherwise, of any other Person at such time,

(i)            guaranteed, directly or indirectly, in any manner by the Borrower
or any Subsidiary including, without limitation, (A) by procuring the issue of
letters of credit or other similar instruments for the benefit of that other
Person, (B) by endorsement of bills of exchange (otherwise than for collection
or deposit in the ordinary course of business), or (C) by the other Person
assigning debts of the Borrower or any Subsidiary (whether or not represented by
an instrument) with recourse to the Borrower or any Subsidiary;

(ii)           in effect guaranteed, directly or indirectly, by the Borrower or
any Subsidiary through an agreement, contingent or otherwise:

(A)          to purchase such indebtedness or liabilities or to advance or
supply funds for the payment or purchase of such indebtedness or liabilities;

(B)           to purchase, sell or lease (as lessee or lessor) property,
products, materials or supplies or to purchase or sell services in circumstances
where the primary purpose of such agreement was to provide funds to the debtor
to enable the debtor to make payment of such indebtedness or liabilities or to
provide goods or services to the debtor to enable it to satisfy other
liabilities, regardless of the delivery or non-delivery of the property,
products, materials or supplies or the provision or non-provision of the
services, including take or pay or throughput agreements; or

(C)           to make any loan, advance, capital contribution to or other
investment in the other Person for the purpose of assuring a minimum equity,
asset base, working capital or other balance sheet condition at any date or to
provide funds for the payment of any liability, dividend or return of
capital; or

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(iii)          secured by any Lien upon property owned by the Borrower or any
Subsidiary, even though neither the Borrower nor any Subsidiary has assumed or
become liable for the payment of such indebtedness or liabilities, provided
that, if neither the Borrower nor any Subsidiary has assumed or become liable
for such assumption, such indebtedness shall be deemed to be an amount equal to
the lesser of (A) the amount of such indebtedness and liabilities and (B) the
book value of such property.

For purposes hereof, a Person shall not be deemed to have a Contingent Liability
if it is the co-maker of the primary obligation and shall have one Contingent
Liability if it has guaranteed the obligations of more than one primary obligor
with respect to the same primary obligation;

“Core Line of Business” means the ownership or operation of racetracks and
pari-mutuel wagering activities, as described in the Form 10-K filed by the
Borrower for the year ended December 31, 2006, and including (i) thoroughbred
and harness horse racing, (ii) off-track betting facilities, (iii) account
wagering and other gaming activities including, without limitation, slot machine
and video lottery terminals, (iv) a racetrack and casino complex in Austria, and
(v) any food and beverage operations, sports bar operations, content
distribution, technology and media services, entertainment, the ownership and
management of real estate and/or other activities, associated with or ancillary
or related to (i), (ii), (iii) and/or (iv), above, including the ownership or
operation of horse training and boarding centres, arenas and restaurants;

“Default” means any event which, but for the lapse of time, giving of notice or
both, would constitute an Event of Default and, for greater certainty, includes
for purposes of this Agreement, any event relating to Subordinated Debt which
would, but for the lapse of time, giving of notice or both, enable the holders
of Subordinated Debt to accelerate the maturity of the Subordinated Debt;

“Disclosure Schedule” means the disclosure schedule as of the Closing Date
prepared and executed by the Borrower;

“Dixon First Assignment of Material Agreements” has the meaning ascribed thereto
in Section 7.2(q)(xxxiv);

“Dixon First Assignment of Rents and Leases” has the meaning ascribed thereto in
Section 7.2(q)(xxxiii);

“Dixon First General Security Agreement” has the meaning ascribed thereto in
Section 7.2(q)(xxxv);

“Dixon First Mortgage” has the meaning ascribed thereto in
Section 7.2(q)(xxxii);

“Dixon Guarantee and Indemnity” has the meaning ascribed thereto in
Section 7.2(q)(lvi);

“Dixon Guarantee Fee” has the meaning ascribed thereto in Section 7.2(q)(lvi);

“Dixon Property” means the lands and premises designated as the Dixon Property
in Schedule B hereto;

“Dixon Property Environmental Indemnity” has the meaning ascribed thereto in
Section 7.2(q)(xxxvi);

“Dixon Security” has the meaning ascribed thereto in Section 7.2(q)(xxxv);

“EBITDA” means, for any Person in any period, Net Income of such Person for
such period:

(a)           increased by the sum of (without duplication) (i) income tax
expense for such period, (ii) interest expense for such period,
(iii) depreciation and amortization expense for such period, (iv) non-cash
losses incurred during such period, in each case to the extent such amounts were
included in the calculation of Net Income of such Person for such period;

(b)           decreased by all cash payments during such period relating to
losses that were added back to Net Income of such Person under clause (a)(iv)
above in determining EBITDA in any prior period; and

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(c)           decreased by such net gains from sales of real estate held for
sale or development and excess racetrack lands which were included in the
calculation of Net Income of such Person for such period;

“Environment” means soil, land, surface and subsurface strata, surface waters,
groundwaters, drinking water supply, stream sediments, ambient air (including
air in buildings, natural or man-made structures), all layers of the atmosphere,
all inorganic and organic matter and living organisms (including humans), all
natural resources and the interacting natural systems that include the foregoing
listed components;

“Environmental Consent” means any consent, approval, permit, licence, order,
filing, authorization, exemption, registration, ratification, permission,
waiver, reporting or notice requirement and any other related agreement or
communications whatsoever issued, granted or given or otherwise made available
by or under the authority of any Governmental Authority regarding environmental
matters or under any Environmental Law;

“Environmental Damages” means all claims, judgments, damages, losses, penalties,
liabilities (including strict liability), fines, charges, costs and expenses,
including costs of investigation, remediation, defense, settlement and
reasonable attorneys’ fees and expenses and reasonable consultants’ fees, that
are incurred at any time as a result of the existence of any Hazardous Materials
at, on, upon, about or beneath any of the Properties or migrating or threatening
to migrate to or from any such real property, or arising from any investigation,
proceeding or remediation of any location at which the Borrower and/or any
Guarantor, any predecessor in title or any employees, agents, contractors or
subcontractors of the Borrower and/or any Guarantor or any predecessor in title,
or any third persons at any time occupying or present on any of the Properties,
are alleged to have directly or indirectly disposed of Hazardous Materials or
arising in any manner whatsoever in violation of Environmental Laws;

“Environmental Disclosure” means the text of the Environmental Reports, in each
case including the attachments thereto but excluding the underlying documents
referred to in the Environmental Reports;

“Environmental Laws” means any Applicable Law that requires or relates to:

(i)            notifying appropriate authorities, employees or the public of the
presence of or intended or actual Releases of Hazardous Materials or violations
of discharge limits or other prohibitions or of the commencement of activities,
such as resource extraction or construction, that could have an impact on the
Environment;

(ii)           preventing or reducing to acceptable levels the presence of or
Release of Hazardous Materials in or into the Environment;

(iii)          reducing the quantities, preventing the Release or minimizing the
hazardous characteristics of wastes that are generated;

(iv)          protecting the Environment, including regulating, limiting or
restricting Releases of Hazardous Materials and protecting resources, species,
or visual or ecological amenities;

(v)           the transportation, use and disposal of Hazardous Materials or
other potentially harmful substances;

(vi)          remediating Hazardous Materials that have been Released or are in
the Environment, preventing the Threat of Release or paying the costs of such
remediation; or

(vii)         making responsible Persons or polluting Persons pay private
parties or third parties, or groups of them, for damages done to their health or
the Environment or permitting representatives of the public to recover for
injuries done to public assets or to obtain any other remedies whatsoever;

and includes all Environmental Consents;

“Environmental or Safety Liability” means any Loss arising from, under, or in
connection with any of the following:

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(i)            any environmental or safety matter or condition (including the
presence, use, generation, manufacture, disposal or transport of Hazardous
Materials, on-site or off-site contamination, safety or health matters, noise,
odour, nuisance or the regulation of any Hazardous Material);

(ii)           responsibility, financial or otherwise, under any Environmental
Law or Safety Law for clean-up costs or corrective action, including any
clean-up, removal, containment, monitoring or other remediation or response
actions required by any Environmental Law or Safety Law (whether or not such
actions have been required or requested by any Governmental Authority or any
other Person) and for any natural resource damages; or

(iii)          any other compliance, corrective, remedial or other measure or
cost required or lawfully imposed under any Environmental Law or Safety Law;

“Environmental Reports” has the meaning ascribed thereto in Section 6.1(p);

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended;

“ERISA Affiliate” means (1) any corporation which is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Internal Revenue Code) as the Borrower; (2) any trade or business (whether or
not incorporated) which is under common control (within the meaning of
Section 414(c) of the Internal Revenue Code) with the Borrower; and (3) a member
of the same affiliated service group (within the meaning of Section 414(m) of
the Internal Revenue Code) as the Borrower, any corporation described in
clause (1) above or any trade or business described in clause (2) above; or
(4) any other Person which is required to be aggregated with the Borrower
pursuant to regulations promulgated under Section 414(o) of the Internal
Revenue Code;

“ESA” has the meaning ascribed thereto in Section 6.1(p);

“Event of Default” has the meaning attributed to such term in Section 8.1;

“Excluded Taxes” means, in relation to the Lender, (a) those Taxes which are
imposed or levied on or measured by or determined by reference to the overall
net income, profits, gross receipts, net worth or capital of the Lender or any
of its branches, and all franchise taxes, taxes on doing business or taxes
measured by capital or net worth imposed on the Lender or any of its applicable
branches pursuant to the laws of the jurisdiction in which the Lender is
organized or resident or in which the Lender’s principal office or applicable
branch is located, and (b) without limiting the generality of the foregoing, all
franchise taxes, taxes on doing business or taxes measured by net income,
capital, profits, gross receipts or net worth imposed on the Lender or any of
its branches, whether collected by withholding or otherwise, as a result of the
Lender (i) carrying on a trade or business in the United States of America or
having a permanent establishment in the United States of America, (ii) being
organized under the laws of the United States of America or any political
subdivision thereof, (iii) being or being deemed to be resident in the
United States of America for income tax purposes, or (iv) not dealing at arm’s
length (as defined for the purposes of the Internal Revenue Code) with the
Borrower, or which would not have been imposed had such Person satisfied a
relevant authority that such Person was not a person mentioned in clause (i),
(ii), (iii) or (iv) above;

“Fair Enterprise Investment” has the meaning ascribed thereto in Section 7.1(f);

“First Arrangement Fee” has the meaning ascribed thereto in Section 4.3(b);

“Fiscal Quarter” means a period of three consecutive months ending on March 31,
June 30, September 30 or December 31, as the case may be, of each Fiscal Year;

“Fiscal Year” means the fiscal year of the Borrower, being January 1 to
December 31;

“GAAP” means, at any time, generally accepted accounting principles in effect
from time to time in the United States of America as recommended by the
Financial Accounting Standards Board, applied on a consistent basis;

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“Golden Gate Fields General Security Agreement” has the meaning ascribed thereto
in Section 7.2(q)(xxiv);

“Golden Gate Fields Guarantee and Indemnity” has the meaning ascribed thereto in
Section 7.2(q)(xxiv);

“Golden Gate Fields Guarantee Fee” has the meaning ascribed thereto in
Section 7.2(q)(lx);

“Golden Gate Fields Guarantors’ Environmental Indemnity” has the meaning
ascribed thereto in Section 7.2(q)(xxiv);

“Golden Gate Fields Property” means the lands and premises designated as the
Golden Gate Fields Property in Schedule B hereto;

“Golden Gate Fields Second Mortgage” has the meaning ascribed thereto in
Section 7.2(q)(xvi);

“Golden Gate Fields Security” has the meaning ascribed thereto in
Section 7.2(q)(xix);

“Governmental Body” means any government, parliament, legislature, or any
regulatory authority, agency, commission or board of any government, parliament
or legislature, or any court or (without limitation to the foregoing) any other
law, regulation or rule-making entity (including, without limitation, any
central bank, fiscal or monetary authority or authority regulating banks),
having jurisdiction in the relevant circumstances over a Person or such Person’s
property, or any Person acting under the authority of any of the foregoing
(including, without limitation, any arbitrator and the Racing and Gambling
Regulatory Authorities);

“Guarantor Incorporation Documents” has the meaning ascribed thereto in
Section 5.1(j);

“Guarantors” means, collectively, (i) the Golden Gate Fields Guarantors,
(ii) the Santa Anita Guarantors, (iii) the Gulfstream Guarantor, (iv) the Palm
Meadows Training Guarantor, (v) the Dixon Guarantor, (vi) the Ocala Guarantors,
(vii) the Thistledown Guarantor and (viii) the AmTote Guarantors, and, in the
singular, any one of them;

“Guarantor Payment” has the meaning ascribed thereto in Section 9.22;

“Gulfstream Construction Loan Agreement” means the Third Amended and Restated
Gulfstream Park Loan Agreement made as of December 22, 2006 between Gulfstream
Park Racing Association Inc., as borrower, the Lender, as lender, and others, as
the same may be amended or restated from time to time;

“Gulfstream Guarantee and Indemnity” has the meaning ascribed thereto in
Section 7.2(q)(liv);

“Gulfstream Guarantee Fee” has the meaning ascribed thereto in
Section 7.2(q)(liv);

“Hazardous Activity” shall include the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
release, storage, transfer, transportation, treatment or use (including any
withdrawal or other use of contaminated groundwater) of Hazardous Materials in,
on, under, about and from any of the Properties or any part thereof and any
other act, business or operation that poses a material risk of harm to Persons
or property on or off the Properties;

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“Holdback Agreement” means the agreement dated November 14, 2006 between the
Borrower and PA Meadows, LLC in respect of certain holdback amounts arising in
connection with a stock purchase agreement dated November 8, 2005 between the
Borrower, as vendor, and PA Meadows, LLC, as purchaser;

“Hazardous Material” shall mean any solid, liquid, gas, odour, heat, vibration,
radiation or combination of any of them that may have an adverse effect on the
Environment, and includes all wastes, pollutants, contaminants and each
hazardous, toxic, radioactive, noxious, flammable, corrosive or caustic matter
or substance, including any substance, material or waste which is or is expected
to be regulated by any Governmental Authority and including any material,
substance or waste which is defined as a “contaminant” or “pollutant” or as
“hazardous”, “toxic”, “harmful” or “dangerous” under any provision of any
Environmental Law or Safety Law, and including petroleum, petroleum products,
asbestos, asbestos-containing material, urea formaldehyde and polychlorinated
biphenyls;

“Indebtedness” has the meaning ascribed thereto in Section 7.2(q);

“Indemnified Person” has the meaning ascribed thereto in Section 3.4(a);

“Indemnifying Party” has the meaning ascribed thereto in Section 3.4(a);

“Intercreditor Agreements” means, collectively, the BMO Intercreditor Agreement
and the Wells Fargo Subordination Agreement, and, in the singular, any one
of them;

“Interest Period” means a period commencing, (i) in the case of the initial
Interest Period for the first Advance, on the date of such Advance; and (ii) in
the case of any subsequent Interest Period, on the last day of the immediately
preceding Interest Period and ending, in either case, on the 30th day of
such period;

“Interest Rate” has the meaning ascribed thereto in Section 4.1(a)(i);

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations and rulings thereunder;

“Judgment Currency” has the meaning ascribed thereto in Section 1.7;

“Lender” means MID Islandi sf., a partnership formed under the laws of Iceland,
acting through its Zug Branch, and its successors and permitted assigns;

“Lender’s California Agent” means the Los Angeles office of Hogan & Hartson LLP,
or such other firm or firms of solicitors or agents in the State of California
as are appointed by the Lender from time to time and notice of which is provided
to the Borrower and the Guarantors;

“Lender’s Costs” has the meaning ascribed thereto in Section 4.4;

“Lender’s Counsel” means Davies Ward Phillips & Vineberg LLP, or such other firm
or firms of solicitors or counsel as are appointed by the Lender from time to
time and notice of which is provided to the Borrower and the Guarantors;

“Lender’s Delaware Agent” means the Wilmington office of Pepper Hamilton LLP, or
such other firm or firms of solicitors or agents in the State of Delaware as are
appointed by the Lender from time to time and notice of which is provided to the
Borrower and the Guarantors;

“Lender’s Florida Agent” means the Miami office of Stearns Weaver Miller
Weissler Alhadeff & Sitterson, P.A., or such other firm or firms of solicitors
or agents in the State of Florida as are appointed by the Lender from time to
time and notice of which is provided to the Borrower and the Guarantors;

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“Lender’s New York Agent” means the New York office of Davies Ward Phillips &
Vineberg LLP, or such other firm or firms of solicitors or agents in the State
of New York as are appointed by the Lender from time to time and notice of which
is provided to the Borrower and the Guarantors;

“LIBOR” means the one-month rate of interest per annum for deposits in US
Dollars in the London interbank market, calculated on the basis of a year of
360 days, equal to the arithmetic mean of the rates which appear on the Telerate
Page 3750 on the Dow Jones Telerate Service (or any replacement page) as of
11:00 a.m. (London time) on the day which is two Banking Days prior to the first
day of the relevant Interest Period;

“Lien” means any mortgage, lien, pledge, assignment by way of security, charge,
security interest, lease intended as security, title retention agreement,
statutory right reserved in any Governmental Body, registered lease of
properties, hypothec, levy, execution, seizure, attachment, garnishment or other
similar encumbrance;

“Loan” means, at any time, the principal amount of all Obligations then
outstanding under the Bridge Loan;

“Loan Amount” means the maximum principal amount available under the Bridge
Loan, as the same may be reduced from time to time in accordance with the
terms hereof;

“Loan Documents” means, collectively, this Agreement and the Security and “Loan
Document” means any one of them;

“MID” means MI Developments Inc. and its successors and permitted assigns;

“Maintenance Capital Expenditure” has the meaning ascribed thereto in the
definition of Capital Expenditure;

“Material Adverse Change” means a material adverse change in the business,
condition (financial or otherwise), operations, properties, assets, liabilities
or prospects of the Borrower (taken as a whole together with all of its
Subsidiaries on a consolidated basis) or any Guarantor or of any of
the Properties;

“Material Adverse Effect” means material adverse effect on (a) the business,
condition (financial or otherwise), operations, properties, assets, liabilities
or prospects of the Borrower (taken as a whole together with all of its
Subsidiaries on a consolidated basis) or any of the Guarantors or any of the
Properties, or (b) the ability of the Borrower or any of the Guarantors to
perform its Obligations under any Loan Document to which it is or is to be a
party, or (c) the rights and remedies of the Lender under the Agreement or any
of the other Loan Documents or the Intercreditor Agreements, or (d) the Lender’s
security interest in the Collateral or the perfection or priority thereof;

“Material Agreements” means: (i) contracts, agreements, commitments or other
documents materially affecting the use, development, construction and/or
operation of any of the Properties (including without limitation all leases of
the Properties); and (ii) any contract, agreement, commitment or other document
by which the Borrower or any of its Subsidiaries is bound, the default under or
the termination of which could reasonably be expected to result in a Material
Adverse Effect;

“Material Authorization” means any approval, permit, licence, order, consent or
similar authorization from, and any filing, registration, qualification or
recording with, any Governmental Body, domestic or foreign, required by the
Borrower or any of its Subsidiaries, the absence of which could reasonably be
expected to result in a Material Adverse Effect;

“Maturity Date” means May 31, 2008;

“Mortgages” means, collectively, the Golden Gate Fields Second Mortgage, the
Santa Anita Third Mortgage, the Ocala Second Mortgage, the Dixon First Mortgage
and the Thistledown First Mortgage; and, in the singular, any one of them;

“Mortgaged Properties” means, collectively, the Golden Gate Fields Property, the
Santa Anita Property, the Ocala Property, the Dixon Property and the Thistledown
Property, and, in the singular, any one of them;

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“Net Income” of a Person for any period means the consolidated net income of
such Person during such period after taxes, but before extraordinary items and
unusual items, all as otherwise determined in accordance with GAAP. In addition,
there shall be included in Net Income all net income of such Person on a
consolidated basis from investments in accordance with the equity method
of accounting;

“Note Assignment Agreement” means the MEC assignment of Tranche A Junior Notes
and Tranche B Junior Notes made as of July 26, 2006 by the Borrower in favour of
the Lender, as amended to the date hereof;

“Obligations” means all indebtedness, liabilities and other obligations of the
Borrower and Guarantors to the Lender under any other Loan Document (including
any amendments or supplements thereto), whether actual or contingent, direct or
indirect, matured or not, now existing or arising hereafter and includes,
without limitation, all unpaid principal, interest, fees, costs and other
amounts payable by the Borrower and Guarantors to the Lender hereunder or under
any other Loan Document;

“Ocala Guarantee and Indemnity” has the meaning ascribed thereto in
Section 7.2(q)(lvii);

“Ocala Guarantee Fee” has the meaning ascribed thereto in Section 7.2(q)(xxiv);

“Ocala Guarantors” means, collectively, MEC Holdings (USA) Inc., and Sunshine
Meadows Racing Inc., and “Ocala Guarantor” means any one of them;

“Ocala Property” means the lands and premises designated as the Ocala Property
in Schedule B hereto;

“Ocala Property Environmental Indemnity” has the meaning ascribed thereto in
Section 7.2(q)(xxviii);

“Ocala Second Assignment of Material Agreements” has the meaning ascribed
thereto in Section 7.2(q)(xxvi);

“Ocala Second Assignment of Rents and Leases” has the meaning ascribed thereto
in Section 7.2(q)(xxv);

“Ocala Second General Security Agreement” has the meaning ascribed thereto in
Section 7.2(q)(xxvii);

“Ocala Second Mortgage” has the meaning ascribed thereto in
Section 7.2(q)(xxiv);

“Ocala Security” has the meaning ascribed thereto in Section 7.2(q)(xxvii);

“Occupancy Agreements” has the meaning ascribed thereto in Section 5.1(nn);

“Officer’s Certificate” means, unless otherwise provided herein, in respect of
the Borrower, a certificate signed by any one of the Chair of the Board, the
Chief Executive Officer, the Chief Financial Officer or the Secretary;

“Official Body” means any national government or government of any political
subdivision thereof or any parliament, legislature, council, agency, authority,
board, bureau, central bank, commission, department or instrumentality thereof,
or any court, tribunal, grand jury, mediator or arbitrator, whether foreign or
domestic or any non-governmental regulating body, to the extent that the rules,
regulations and orders of such body have the force of law;

“Organizational Documents” has the meaning ascribed thereto in Section 5.1(j);

“Original Bridge Loan Agreement” means the bridge loan agreement made as of
July 22, 2005, among the Borrower, as borrower, the Lender, as lender, and the
guarantors specified therein, as guarantors, as amended, which agreement was
terminated as of December 22, 2006 upon the full repayment of all amounts owing
thereunder;

“Palm Meadows Training Guarantee and Indemnity” has the meaning ascribed thereto
in Section 7.2(q)(lv);

“Palm Meadows Training Guarantee Fee” has the meaning ascribed thereto in
Section 7.2(q)(lv);

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“Permitted Debt” means (i) the Bridge Loan; (ii) the Santa Anita Senior
Facility; (iii) the BMO Credit Agreement; (iv) the SunTrust Credit Agreement;
(v) the Remington Construction Loan Agreement; (vi) the Gulfstream Construction
Loan Agreement; (vii) indebtedness of GPRA Commercial Enterprises Inc. relating
to a loan agreement among, inter alia, Keybank National Association, as
principal lender, and The Village at Gulfstream Park, LCC, as borrower, where
such indebtedness is non-recourse to the Borrower and the Gulfstream Guarantor
and arises under the May 1, 2005 limited liability company agreement, as
amended, by which The Village at Gulfstream Park, LLC, was formed;
(viii) indebtedness of MEC Grundstucksentwicklungs GmbH and Fontana Betelligungs
AG existing on the date hereof; (ix) indebtedness of certain non-guarantor
entities to Mercantile-Safe Deposit and Trust existing on the date hereof;
(x) the lease between a non-guarantor entity and an entity associated with the
City of Grand Prairie, pursuant to which Lone Star Park is operated;
(xi) indebtedness owing under, and not exceeding the amounts permitted to be
outstanding under and secured by, Permitted Encumbrances and extensions,
renewals or replacements of any indebtedness permitted under this clause;
(xii) provided the principal amount of such indebtedness thereunder or security
therefor is not thereby increased beyond the original principal amount of such
indebtedness; (xiii) unsecured trade and other accounts payable incurred in the
ordinary course of business for the purpose of carrying on the same including
the “Construction” (as defined in the Remington Construction Loan Agreement) and
the “Reconstruction” (as defined in the Gulfstream Construction Loan Agreement);
(xiv) indebtedness under interest rate or currency hedging agreements entered
into for the purpose of managing interest rate and currency risks of the
Borrower or any of its Subsidiaries and not for speculative purposes;
(xv) indebtedness under letters of credit, performance bonds, instalment
insurance and insurance premium financing contracts, and similar instruments in
respect of land transfer tax claims, land development charges, gaming permits
and other obligations of the Borrower or its Subsidiaries incurred in the
ordinary course of business; (xvi) the obligation to pay $18,312,650 plus
accrued interest on the exercise of either the put or call option for the
remaining minority interest in The Maryland Jockey Club; (xvii) the Subordinated
Debt; (xviii) unsecured intercompany indebtedness of the Borrower to any of its
Subsidiaries or of any of the Subsidiaries to the Borrower, provided that such
unsecured intercompany indebtedness is existing as of the date hereof or is
entered into on customary terms and in the ordinary course of the Borrower’s
cash management activities consistent with past practice; (xix) other
obligations and indebtedness (including Capital Lease Obligations (other than
that listed in item (iv) of this definition) and Contingent Liabilities, but
excluding item (xiii) listed in this definition) existing on the date hereof and
relating to Subsidiaries which are not Guarantors, and all of which are
disclosed in the Audited and Unaudited Financial Statements including the notes
thereto, in the aggregate amount of not more than $2,000,000 (which amount
includes indebtedness denominated in foreign currencies and is therefore subject
to fluctuation from time to time due to exchange rate fluctuations); and
(xx) other obligations and indebtedness (including Capital Lease Obligations and
Contingent Liabilities) of up to $5,000,000 in the aggregate, provided that none
of such other obligations and indebtedness is secured by any of the Properties;

“Permitted Encumbrances” means any:

(i)            Liens for taxes, assessments or governmental charges or levies
incurred in the ordinary course of business that are not yet due and payable or
the validity of which is being actively and diligently contested in good faith
by the Borrower or a Subsidiary, as the case may be, in respect of which the
Borrower or a Subsidiary has established on its books reserves considered by it
to be adequate therefor, and for which any enforcement proceedings, if
commenced, have been stayed or for which payment has been made in accordance
with (vii) below;

(ii)           rights reserved to or vested in any Governmental Body by the
terms of any lease, licence, franchise, grant or permit, or by any statutory
provision, to terminate the same, to take action which results in an
expropriation, or to require annual or other periodic payments as a condition to
the continuance thereof;

(iii)          construction, mechanics’, workers’, repairers’, carriers’,
warehousemen’s and materialmen’s Liens and Liens in respect of vacation pay,
workers’ compensation, social security, old age pension, employment insurance or
similar statutory obligations, provided the obligations secured by such Liens
are not yet due and payable and, in the case of construction Liens, which have
not yet been filed or for which the Borrower or a Subsidiary has not received
written notice of a Lien or for which a construction lien has been filed and the
Borrower or a Subsidiary is contesting such Lien diligently and in good faith;

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(iv)          Liens arising from court or arbitral proceedings which have been
commenced or are pending, provided that the claims secured thereby are being
contested in good faith by the Borrower or a Subsidiary; any execution thereon
has been stayed and continues to be stayed; and such Liens do not materially
impair the use of the property in the business of the Borrower or the
Subsidiary, as the case may be;

(v)           good faith deposits made in the ordinary course of business to
secure the performance of bids, tenders, contracts (other than for the repayment
of borrowed money), leases, surety, customs, performance bonds and other similar
obligations;

(vi)          deposits to secure public or statutory obligations or in
connection with any matter giving rise to a Lien described in (iii) above;

(vii)         deposits of cash or securities in connection with any appeal,
review or contestation of any Lien or any matter giving rise to a Lien described
in (i) or (iv) above;

(viii)        minor title defects or irregularities, minor encroachments, zoning
laws and ordinances, easements, servitudes, party wall agreements, licences,
rights of way, restrictions that run with the land, leases, municipal by-laws
and regulations or other similar encumbrances or privileges in respect of
Properties (including without limitation, easements, rights of way and
agreements for sewers, trains, gas and water mains or electric conduits, poles,
wires and cable) which in the aggregate do not materially impair the use of such
property by the Borrower or a Subsidiary, as the case may be, in the operation
of its business, and which are not violated in any material respect by existing
or proposed structures or land use;

(ix)          security given by the Borrower or a Subsidiary to a public utility
or any Governmental Body, when required by such utility or Governmental Body in
connection with the operations of the Borrower or a Subsidiary, as the case may
be, in the ordinary course of its business, which singly or in the aggregate do
not materially impair the use of the asset concerned in the operation of the
business of the Borrower or the Subsidiary, as the case may be;

(x)           the reservation in any original grants from the Crown of any land
or interest therein and statutory exceptions to title;

(xi)          Liens granted by the Borrower to any Guarantor or by any Guarantor
to the Borrower or any other Guarantor;

(xii)         any Lien, other than a construction Lien, payment of which has
been provided for by deposit with the Lender of an amount in cash, or the
obtaining of a surety bond or letter of credit satisfactory to the Lender,
sufficient in either case to pay or discharge such Lien or upon other terms
satisfactory to the Lender;

(xiii)        any Lien securing Permitted Debt, unless same is by definition
unsecured;

(xiv)        assignments of insurance provided to landlords (or their
mortgagees) pursuant to the terms of any lease and Liens or rights reserved in
or exercised under any lease and any statutory or common law rights of landlords
for rent or compliance with the terms of such lease;

(xv)         rights and interests created by notice registered by any
transportation authority with respect to proposed roads or highways which do not
materially impair the use of Properties owned or leased by the Borrower or a
Subsidiary in the operation of the business of the Borrower or a Subsidiary;

(xvi)        the granting by the Borrower or any Subsidiary in the ordinary
course of its business consistent with past practice of any lease, sub-lease,
tenancy or right of occupancy to any Person in respect of Properties owned or
leased by the Borrower or a Subsidiary;

(xvii)       applicable municipal by-laws, development agreements, subdivision
agreements, site plan agreements, zoning laws and building restrictions which do
not in the aggregate materially adversely affect the current

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use of the property affected thereby and provided that the same have been
complied with in all material respects;

(xviii)      any attachment or judgment Lien not constituting an Event of
Default;

(xix)         Liens existing on assets of any Person at the time such Person
becomes a Subsidiary, provided that (i) such Lien was not created in
contemplation of such Person becoming a Subsidiary, and (ii) such Lien does not
encumber any assets other than the assets subject to such Lien at the time such
Person becomes a Subsidiary;

(xx)          other Liens incidental to the conduct of the business or the
ownership of the assets of the Borrower or any Subsidiary that (i) were not
incurred in connection with borrowed money, (ii) do not in the aggregate
materially impair the use of the assets subject to the Lien in the operation of
such business, and (iii) do not secure obligations aggregating in excess
of $1,000,000;

(xxi)         the Liens granted pursuant to the Security;

(xxii)        any registered Lien existing as of September 12, 2007 that is
disclosed in the title insurance commitments issued in respect of the Mortgaged
Properties in connection with this Agreement;

(xxiii)       Purchase Money Security Interests existing as of the Closing Date;

(xxiv)      Purchase Money Security Interests incurred after the Closing Date in
connection with the purchase of new assets permitted hereunder up to an
aggregate of $5,000,000; and

(xxv)       any other Lien which the Lender approves in writing as a Permitted
Encumbrance;

“Permitted Lender Assignee” has the meaning ascribed thereto in Section 9.8;

“Person” means any individual, partnership, limited partnership, limited
liability company, joint venture, syndicate, sole proprietorship, company or
corporation with or without share capital, unincorporated association, trust,
trustee, executor, administrator or other legal or personal representative,
Governmental Body or any other legal entity;

“Plan” means an employee benefit plan defined in Section 3(3) of ERISA in
respect of which the Borrower or any ERISA Affiliate is, or within the
immediately preceding six years was, an “employer” as defined in Section 3(5)
of ERISA;

“Pre-Payment Amount” has the meaning ascribed thereto in Section 2.3;

“proceeding” has the meaning ascribed thereto in Section 5.1(p);

“Project Financing Assets” has the meaning ascribed thereto in Section 4.1(a);

“Properties” means all lands and premises identified in Schedule B hereto;

“Purchase Money Security Interest” means any Lien given, assumed or arising by
operation of law to provide or secure, or to provide the obligor with funds to
pay, the whole or any part of the consideration for the acquisition of property
where the principal amount of the obligation secured by such Lien (i) is not in
excess of the cost to the obligor of the property encumbered thereby and (ii) is
secured only by the property being acquired by the obligor, and includes the
renewal or refinancing of any such Lien upon the same property provided that the
indebtedness secured and the security therefor are not increased thereby;

“Racing and Gambling Regulatory Authorities” means the racing and gambling
regulatory authorities in each state where the Borrower or any Guarantor (or any
of their respective Subsidiaries) maintains racetracks and/or carries on
business, including (without limitation) the California Horse Racing Board, the
Division of Pari-Mutuel

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Wagering within the Florida Department of Business and Professional Regulation,
the State Harness Racing Commission of Pennsylvania, the Oklahoma Horse Racing
Commission and the Nevada Gaming Commission;

“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System, in effect from time to time;

“Release” shall mean any release, spill, emission, leaking, pumping, pouring,
dumping, emptying, injection, deposit, disposal, discharge, dispersal, leaching
or migration or other movement on, into or through the Environment or on, into,
through, over or out of any property;

“Release and Termination Agreement” means the release and termination agreement
made as of November 14, 2006 between the Lender, MEC Pennsylvania Racing, Inc.,
Washington Trotting Association, Inc., Mountain Laurel Racing, Inc., the
Borrower and PA Meadows, LLC.

“Remington Construction Loan Agreement” means the loan agreement made as of
July 22, 2005 between Remington Park, Inc., as borrower, the Lender, as lender,
and others, as the same may be amended or restated from time to time;

“Remington Borrower” means Remington Park, Inc.;

“Replacement Cost” means, with respect to any property or asset, the cost of
repairing, replacing or reinstating such property or asset with materials of
like kind and quality and for like occupancy (where applicable) on the same or a
similar site, in accordance with the requirements of any applicable municipal
by-laws and without deduction for depreciation;

“Reportable Event” means any of the events described in Section 4043 of ERISA;

“Safety Consent” shall mean any consent, approval, permit, licence, order,
filing, authorization, exemption, registration, ratification, permission, waived
reporting requirement or waived notice requirement and any related agreement or
communication whatsoever issued, granted, given or otherwise made available by
or under the authority of any Governmental Body regarding health or safety
matters or under any Safety Law;

“Safety Law” shall mean any Applicable Law designed to provide safe or healthy
conditions for the public or workers and to reduce safety or health hazards for
the public or workers and includes all Safety Consents;

“Santa Anita General Security Agreement” has the meaning ascribed thereto in
Section 7.2(q)(xi);

“Santa Anita Guarantee and Indemnity” has the meaning ascribed thereto in
Section 7.2(q)(li);

“Santa Anita Guarantee Fee” has the meaning ascribed thereto in
Section 7.2(q)(li);

“Santa Anita Property” means the lands and premises designated as the Santa
Anita Property in Schedule B hereto;

“Santa Anita Property Environmental Indemnity” has the meaning ascribed thereto
in Section 7.2(q)(xii);

“Santa Anita Security” has the meaning ascribed thereto in Section 7.2(q)(xi);

“Santa Anita Senior Facility” means the term loan credit agreement dated as of
October 8, 2004 between The Santa Anita Companies, Inc. and Wells Fargo Bank,
National Association, together with all guaranties and collateral security
therefor, as amended as of the Closing Date, having a principal amount
outstanding at any time of not greater than $75,000,000, and includes any
renewal or refinancing of any such facility provided the indebtedness thereof or
security therefor is not increased thereby;

“Santa Anita Third Assignment of Material Agreements” has the meaning ascribed
thereto in Section 7.2(q)(x);

“Santa Anita Third Assignment of Rents and Leases” has the meaning ascribed
thereto in Section 7.2(q)(ix);

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“Santa Anita Third Mortgage” has the meaning ascribed thereto in
Section 7.2(q)(viii);

“Second Arrangement Fee” has the meaning ascribed thereto in Section 4.3(b);

“Securities Acts” means both the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended, and the respective rules and
regulations promulgated thereunder;

“Securities Commission” means the Securities and Exchange Commission of the
United States of America, or other Governmental Body in replacement thereof;

“Security” has the meaning ascribed thereto in Section 7.2(q);

“Subordinated Debt” means, collectively, up to $75,000,000 principal amount of
7.25% convertible subordinated notes due December 15, 2009 issued by the
Borrower pursuant to an indenture dated December 2, 2002, and up to $150,000,000
principal amount of 8.55% convertible subordinated notes due June 15, 2010
issued by the Borrower pursuant to an indenture dated June 2, 2003, each with
the Bank of New York, and each as the same may be amended or modified from time
to time on the terms approved by the Lender;

“Subsidiary” means, with respect to any Person at any time, any Person of which
at least a majority of the votes attaching to Voting Interests are at the time,
directly or indirectly, owned by such Person;

“SunTrust” means SunTrust Bank, and its successors and assigns under the
SunTrust Credit Agreement;

“SunTrust Credit Agreement” means the loan and security agreement made as of
May 11, 2007 among AmTote, as borrower, and SunTrust, as lender, as may be
amended from time to time;

“Taxes” means all taxes of any kind or nature whatsoever including, without
limitation, income taxes, sales or value-added taxes, goods and services or use
taxes, levies, imposts, stamp taxes, royalties, duties, and all fees,
deductions, charges and withholdings imposed, levied, collected, withheld or
assessed as of May 1, 2002 or at any time thereafter, by any Governmental Body
of or within the United States of America or any other jurisdiction whatsoever
having power to tax, together with penalties, fines, additions to tax and
interest thereon;

“Termination Date” means: (i) the earlier of the Maturity Date; and (ii) such
earlier date as the entire balance of the Loans under the Bridge Loan may become
due hereunder, whether by acceleration or otherwise;

“The Maryland Jockey Club” means, collectively, Laurel Racing Association
Limited Partnership, Pimlico Racing Association, Inc. and certain of their
Affiliates;

“Thistledown First Assignment of Material Agreements” has the meaning ascribed
thereto in Section 7.2(q)(l);

“Thistledown First Assignment of Rents and Leases” has the meaning ascribed
thereto in Section 7.2(q)(xlix);

“Thistledown First General Security Agreement” has the meaning ascribed thereto
in Section 7.2(q)(li);

“Thistledown First Mortgage” has the meaning ascribed thereto in
Section 7.2(q)(xlviii);

“Thistledown Guarantee Fee” has the meaning ascribed thereto in
Section 7.2(q)(lviii);

“Thistledown Guarantee and Indemnity” has the meaning ascribed thereto in
Section 7.2(q)(lviii);

“Thistledown Guarantor” means Thistledown, Inc.;

“Thistledown Property” means the lands and premises designed as the Thistledown
Property in Schedule B hereto;

“Thistledown Property Environmental Indemnity” has the meaning ascribed thereto
in Section 7.2(q)(xliv);

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“Thistledown Security” has the meaning ascribed thereto in
Section 7.2(q)(xliii);

“Threat of Release” shall mean a reasonable likelihood of a Release that may
require action in order to prevent or mitigate damage to the Environment that
may result from such Release;

“Unmatured Event of Default” means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default;

“Unaudited Financial Statements” means the unaudited consolidated financial
statements of the Borrower for the Fiscal Quarter ended June 30, 2007;

“Unutilized Amount” has the meaning ascribed thereto in Section 4.3(a);

“US Dollars” means lawful money of the United States of America;

“Voting Interests” means shares of capital stock issued by a corporation
(or other equivalent ownership interests in any other Person), the holders of
which are ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or Persons performing similar functions) of such Person,
even if the right so to vote has been suspended by the happening of such a
contingency; and

“Wells Fargo Subordination Agreement” means the subordination agreement made as
of even date herewith between the Lender and Wells Fargo Bank, National
Association, as the same may be amended or restated from time to time.

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1.2                               Gender and Number

Words importing the singular include the plural and vice versa and words
importing gender include all genders.

1.3                               Invalidity, etc.

Each of the provisions contained in any Loan Document is distinct and severable
and a declaration of invalidity, illegality or unenforceability of any such
provision or part thereof by a court of competent jurisdiction shall not affect
the validity or enforceability of any other provision of such Loan Document or
of any other Loan Document. Without limiting the generality of the foregoing, if
any amounts on account of interest or fees or otherwise payable by the Borrower
or the Guarantors to the Lender hereunder exceed the maximum amount recoverable
under Applicable Law, the amounts so payable hereunder shall be reduced to the
maximum amount recoverable under Applicable Law.

1.4                               Headings, etc.

The division of a Loan Document into articles, Sections and clauses, the
inclusion of a table of contents and the insertion of headings are for
convenience of reference only and shall not affect the construction or
interpretation of such Loan Document.

1.5                               Governing Law

This Agreement shall be governed by and construed in accordance with the laws of
the State of New York applicable to contracts wholly to be performed within
such State.

1.6                               Attornment

Each of the parties hereto irrevocably and unconditionally submits and attorns,
for itself and its property, to the non-exclusive jurisdiction of any court of
the State of New York or federal court of the United States of America sitting
in the County and State of New York, and any appellate court therefrom for all
matters arising out of or in connection with this Agreement or any of the other
Loan Documents to which it is a party, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
in any such State of New York court or, to the extent permitted by law, in such
federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Agreement or any of the
other Loan Documents in the courts of any jurisdiction.

1.7                               Judgment Currency

All amounts to be paid pursuant to this Agreement shall be payable when due in
U.S. dollars, in the full amount due, without deduction for any variation in any
rate of exchange (as defined below). Each party hereto hereby agrees to
indemnify the other parties hereto against any loss incurred by any of them as a
result of any judgment or order being given or made for the amount due hereunder
and such judgment or order being expressed and paid in a currency (the “Judgment
Currency”) other than U.S. dollars and as a result of any variation as between
(a) the rate of exchange at which the amount in U.S. dollars is converted into
the Judgment Currency for the purpose of such judgment or order and (b) the rate
of exchange at which such party is then able to purchase U.S. dollars with the
amount of the Judgment Currency actually received by it. The term “rate of
exchange” shall include any premiums and costs of exchange payable in connection
with the purchase of, or conversion into, the relevant currency with or from
U.S. dollars.

1.8                               References

Except as otherwise specifically provided, reference in any Loan Document to any
contract, agreement or any other instrument (including, without limitation, any
other Loan Document) shall be deemed to include references to the same as
varied, amended, restated, supplemented or replaced from time to time and
reference in any Loan Document to any

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enactment, including without limitation, any statute, law, by-law, regulation,
ordinance or order, shall be deemed to include references to such enactment as
re-enacted, amended or extended from time to time.

1.9                               Currency

Except as otherwise specifically provided herein, all monetary amounts in this
Agreement are stated in U.S. dollars.

1.10                        This Agreement to Govern

If there is any inconsistency between the terms of this Agreement and the terms
of any other Loan Document, the provisions hereof shall prevail.

1.11                        Generally Accepted Accounting Principles

Except as otherwise specifically provided herein, all accounting terms shall be
applied and construed in accordance with GAAP (including, without limitation,
determining the amount of any Contingent Liability).

1.12                        Computation of Time Periods

Except as otherwise specifically provided herein, in the computation of a period
of time from a specified date to a later specified date, the word “from” means
“from and including” and the words “to” and “until” each mean “to but
excluding”.

1.13                        Actions on Days Other Than Banking Days

Except as otherwise specifically provided herein, where any payment is required
to be made or any other action is required to be taken on a particular day and
such day is not a Banking Day and, as a result, such payment cannot be made or
action cannot be taken on such day, then this Agreement shall be deemed to
provide that such payment shall be made or such action shall be taken on the
first Banking Day after such day and interest and fees shall be calculated
accordingly. If the payment of any amount is deferred for any period under this
Section, then such period shall, unless otherwise provided herein, be included
for purposes of the computation of any interest or fees payable hereunder.

1.14                        Oral Instructions

Notwithstanding any other provision herein regarding the delivery of notices,
including Borrowing Notices, by the Borrower, the Lender shall in its sole
discretion be entitled to act upon the oral instructions of the Borrower, or any
Person reasonably believed by the Lender to be a Person authorized by the
Borrower to give instructions, regarding any request for an Advance. All such
oral instructions shall be at the risk of the Borrower and must be confirmed in
writing by the Borrower on the same Banking Day as the verbal instruction is
given. The Lender shall not be responsible for any error or omission in such
instructions or in the performance thereof except in the case of gross
negligence, wilful misconduct, fraud or illegal acts by the Lender or any of its
officers, directors, employees, agents or representatives.

1.15                        Incorporation of Schedules

The following schedules annexed hereto shall, for all purposes hereof, form part
of this Agreement:

 

Schedule A

 

Borrowing Notice

 

Schedule B

 

Properties and Prior Mortgages

 

Schedule C

 

Environmental Reports

 

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ARTICLE 2

BRIDGE LOAN

2.1                               Establishment of Bridge Loan

(a)           Subject to the terms and conditions of this Agreement, the Lender
hereby establishes in favour of the Borrower a secured non-revolving bridge loan
in the principal amount of up to $80,000,000, available on the terms and
conditions set out herein.

(b)           All Advances shall be made in US Dollars.

(c)           At no time shall the amount of the Loan exceed the Loan Amount
available to the Borrower at such time.

(d)           From the Closing Date, the Bridge Loan shall be available to the
Borrower solely for the purposes contemplated in Section 6.1(ee) hereof and for
no other purposes.

2.2                               Non-Revolving Nature of Bridge Loan

The Bridge Loan is a non-revolving facility and any portion of the Loan that is
repaid shall reduce the Loan Amount and may not be re-borrowed.

2.3                               Pre-Payment

(a)           Subject to LIBOR contract maturity dates with respect to any
Advance, the Borrower may from time to time (without premium or penalty) on any
Banking Day repay to the Lender any portion of the Loan, provided that any such
repayment (a) shall be in an amount of at least $500,000 and any greater amount
shall be an integral multiple of $50,000 and (b) shall be effected on at least
ten Banking Days notice in writing to the Lender; provided that such notice,
once given, shall be irrevocable and binding upon the Borrower. The Loan Amount
shall be automatically and permanently reduced by the amount of any
such repayment.

(b)           The Borrower shall also have the right to pre-pay the entire Loan
at any time, provided that the Borrower repays to the Lender the Loan then
outstanding (including, for greater certainty, all accrued and unpaid interest,
fees and other amounts owing as of such date) (the “Pre-Payment Amount”), and
the Borrower cancels any undrawn portion of the Loan. Notice of such voluntary
pre-payment shall be given by the Borrower (which notice shall be irrevocable
when given) to the Lender not later than 10 Banking Days prior to the date of
such pre-payment, specifying the date of such pre-payment. On receipt of full
payment of the Pre-Payment Amount, the Lender shall promptly execute and deliver
a full release of the Security held by it with respect to the transactions and
obligations contemplated herein, but in no event shall such release operate as a
release of any indemnities which are stated to survive a termination and/or
release of any such security or obligation. There shall be no make-whole payment
by the Borrower to the Lender in connection with any pre-payment.

2.4                               Mandatory Repayment

(a)           The Loan shall be repaid in the following amounts and
circumstances:

(i)                                     in the event that the outstanding
principal amount of the Loan at any time shall exceed the Loan Amount at such
time, the Borrower shall forthwith make a repayment on account of the Loan such
that, after giving effect to such repayment, the aggregate principal amount of
the Loan outstanding will be not more than the Loan Amount;

(ii)                                  upon the receipt by the Borrower or any of
its Subsidiaries of the net proceeds of:

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(A)                              insurance claims in excess of $1,000,000 in the
aggregate during the term of this Agreement, other than proceeds of claims under
business interruption insurance, in respect of any of the assets and undertaking
of the Borrower or any of its Subsidiaries, unless such proceeds are used for
repairs or reconstruction of damaged properties (as approved by the Lender,
acting reasonably);

(B)                                asset and/or real property sales by the
Borrower or any of its Subsidiaries out of the ordinary course of business
consistent with past practice (which ordinary course of business includes the
sale of individual residential lots at market prices);

(C)                                any issue of securities (including by way of
incremental debt or equity) by the Borrower (except those in respect of the
Borrower’s long term incentive plan) or any of its Subsidiaries (other than in
connection with the Fair Enterprise Investment), or borrowing of monies, other
than Permitted Debt, by the Borrower of any of its Subsidiaries;

(D)          any expropriation or condemnation of the whole or any part of its
real property or other assets, an amount equal to 100% of such net proceeds
shall be applied to repay the Loan, subject, to the extent applicable, to the
terms of the BMO Intercreditor Agreement; and

(iii)                               in full on the Termination Date.

(b)           The repayments referred to in items (A) to (D) inclusive of
Section 2.4(a)(ii) shall be made as promptly as practicable (and in any event
within three Banking Days) following the receipt by any of the Borrower and/or
its Subsidiaries of the net proceeds referred to therein. Notwithstanding the
foregoing, the Borrower and/or its Subsidiaries shall direct all purchasers of
the assets and/or real property specified in Section 2.4(a)(ii)(B) to pay the
applicable amount of net proceeds arising therefrom and due to the Lender
pursuant to this Agreement directly to the Lender. Upon the repayment of the
principal amount of the Loan or interest pursuant to Section 2.4(a), the Loan
Amount shall be permanently reduced by an amount equal to the principal paid.

(c)           For the purposes of this Section 2.4, net proceeds from any sale
or other transaction referred to herein means the proceeds (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) received by the Borrower
and/or any of its Subsidiaries therefrom net of all reasonable professional
fees, brokers fees paid on an arm’s-length market basis, filing fees,
commissions, sales tax and other direct costs and expenses of such transaction,
together with, where applicable, in respect of any sale or other disposition of
assets, the amounts necessary to repay or otherwise satisfy all Permitted
Encumbrances attaching to such assets ranking in priority to the Security or
arising by virtue of this Agreement.

2.5                               Voluntary Reduction in Aggregate Commitment

The Borrower shall have the right at any time and from time to time, by giving
at least ten Banking Days’ notice to the Lender, which notice, once given, shall
be irrevocable and binding upon the Borrower, to reduce the Loan Amount to a
lower amount that is not less than the principal amount of the Loan then
outstanding. Such notice shall specify the amount of the reduction, which shall
be in an integral multiple of $250,000. The amount of any such reduction so made
by the Borrower shall be permanent and irrevocable and the Loan Amount shall be
reduced accordingly.

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ARTICLE 3

GENERAL PROVISIONS RELATING TO THE BRIDGE LOAN

3.1                               Advances

Each request by the Borrower for an Advance under the Bridge Loan shall be made
by the delivery of a duly completed and executed Borrowing Notice to the Lender
on the fifth Banking Day prior to the proposed Borrowing Date. Any notice in
respect of a proposed Advance shall be irrevocable and binding on the Borrower.
All Advances shall be in an amount of at least $500,000.

3.2                               Payments Generally

All payments in respect of the Bridge Loan (in respect of principal, interest,
fees or otherwise) shall be made by the Borrower to the Lender no later than
2:00 p.m. (Toronto time) on the due date thereof to the account specified
therefor by the Lender from time to time. Any payments received after such time
shall be considered for all purposes as having been made on the next following
Banking Day unless the Lender otherwise agrees in writing. All payments shall be
made by way of immediately available funds.

3.3                               Illegality

If the introduction of or change to any present or future Applicable Law, or any
change in the interpretation or application thereof by any Governmental Body,
shall make it unlawful for the Lender to make or maintain any Loan or any
relevant portion thereof or to give effect to its obligations in respect of such
Loan as contemplated hereby, the Lender may, by notice to the Borrower, declare
that its obligations hereunder in respect of such Loan shall be terminated, and
thereupon, subject as hereinafter provided in this Section 3.3, the Borrower
shall prepay to the Lender forthwith (or at the end of such period to which the
Lender shall in its discretion have agreed) all of the Obligations to the Lender
in respect of such Loan, including all amounts payable in connection with such
prepayment pursuant to Section 3.4. Any repayments made under this Section 3.3
shall permanently reduce the Loan Amount.

3.4                               Indemnity

(a)           The Borrower and each of the Guarantors (each, an “Indemnifying
Party”) shall indemnify the Lender and its officers, directors and employees
(each, an “Indemnified Person”) and shall hold each of them harmless from and
against any and all losses, liabilities, damages, claims and reasonable costs
and out-of-pocket expenses (including reasonable legal fees on a solicitor and
his own client basis) (in each case, a “Claim”) that may be incurred by or
asserted as a result of a claim by any third party or awarded in favour of a
third party against any of them, in each case, arising out of, related to, or in
connection with, or by reason of (i) the transactions contemplated hereby,
(ii) any Acquisition undertaken by the Borrower or any of its Subsidiaries, or
(iii) any Environmental Law, including (A) the claim of any Lien thereunder,
(B) the presence of any Hazardous Substance affecting any Properties or any
adjacent real estate to the Properties, or (C) the Release by the Borrower or a
Subsidiary of any Hazardous Substance into the environment. Notwithstanding the
foregoing provisions of this Section 3.4(a), an Indemnifying Party shall not be
obligated to indemnify an Indemnified Person under this Section 3.4(a) for any
Claim to the extent that such Claim is solely attributable to:

(i)                                     the gross negligence, fraud, wilful
misconduct or wilful illegal acts of any Indemnified Person;

(ii)                                  the failure on the part of any Indemnified
Person to perform any of its material covenants or obligations contained in any
Loan Document to which it is a party, or a representation or warranty made by
any Indemnified Person under the Loan Documents to which it is a party or in any
certificate or other document delivered by any Indemnified Person pursuant
hereto or in connection with any Loan Document being found to be false or
incorrect in any material respect so as to make it materially misleading
when made;

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(iii)                               the Claim of any Indemnified Person for
expenses which such Indemnified Person is obligated to bear hereunder; or

(iv)                              a Claim to the extent arising from the act of
offering, selling, disposing or transferring by any Indemnified Person of all or
part of its interest in the Loan Documents.

(b)           The obligations and indemnification of the Borrower and each of
the Guarantors under this Section 3.4 shall survive the payment and satisfaction
of all Obligations and the termination of this Agreement. The Lender shall hold
the benefit of this indemnity in trust for those Indemnified Persons who are not
parties to this Agreement.

3.5                               Proceedings in Respect of Claims

(a)           If a Claim is made against an Indemnified Person as to which an
Indemnifying Party may have an indemnification obligation under Section 3.4(a),
such Indemnified Person shall notify the Indemnifying Party of the Claim;
provided that the failure to provide such notice promptly shall not release the
Indemnifying Party from any of its obligations to indemnify unless (and only to
the extent) such failure shall prevent the Indemnifying Party from contesting,
or materially and adversely affects the ability of the Borrower to conduct a
contest of, such Claim.

(b)           The Indemnified Person shall be entitled, in its discretion, to
require the Indemnifying Party to prosecute, at the Indemnifying Party’s own
cost and expense, the entire defence of such Indemnified Person against any
Claim by a third party for which such Indemnified Person is indemnified under
Section 3.4(a). In addition, upon delivery by the Indemnifying Party to such
Indemnified Person of a written acknowledgement of the Indemnifying Party’s
obligations to indemnify such Indemnified Person in accordance with the terms of
this Agreement in respect of such Claim, the Indemnifying Party shall be
entitled, at its own expense, to participate in, and, to the extent that the
Indemnifying Party desires, to assume and control the defence thereof through
its own counsel (who shall be subject to the reasonable approval of the
Indemnified Person); provided, however, that if the Indemnifying Party is
controlling any proceedings, the Indemnifying Party shall keep such Indemnified
Person fully apprised of the status of such proceedings and shall provide such
Indemnified Person with all information with respect to such proceedings as such
Indemnified Person shall reasonably request. The Indemnifying Party must
indicate its election to assume such defence by written notice to the
Indemnified Person within 30 days following receipt of the Indemnified Person’s
notice of the Claim, or in the case of a third party Claim which requires a
shorter time for response then within such shorter period as specified in the
Indemnified Person’s notice of Claim, provided that such Indemnified Person has
given the Indemnifying Party notice thereof. The Indemnified Person may
participate at its own expense and with its own counsel (provided that all
Indemnified Persons shall use the same counsel) in any proceeding conducted by
the Indemnifying Party in accordance with the foregoing; provided the
Indemnifying Party shall in any event remain liable hereunder in respect of the
Claim. The Indemnifying Party shall not be entitled to assume and control
(but may, at its own expense, participate in) the defence of any such Claim if
and to the extent that:

(i)                                     in the reasonable opinion of such
Indemnified Person acting in good faith,

(A)                              such proceeding involves any risk of imposition
of criminal liability on such Indemnified Person; or

(B)                                such proceeding involves any risk of
impairment to the reputation of the Indemnified Person in any material
respect; or

(C)                                the control of such action, suit or
proceeding would involve an actual or potential conflict of interest, such that
it is advisable for such Indemnified Person to be represented by separate
counsel; or

(ii)                                  such proceeding involves Claims not fully
indemnified by the Indemnifying Party which the Indemnifying Party and the
Indemnified Person have been unable to sever from the indemnified Claim(s).

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Notwithstanding the first paragraph of this Section 3.5(b), in any of the
circumstances set out in Section 3.5(b)(i) or (ii), the Indemnified Person shall
be entitled to assume the defence of such Claim with counsel selected by it
(provided that all Indemnified Parties shall use the same counsel) and the
reasonable fees and out-of-pocket expenses of such counsel shall be borne by the
Indemnifying Party; provided, that the Indemnifying Party shall in any event
remain liable hereunder in respect of the indemnified Claim.

(c)           Except in the circumstances described in Section 3.5(b)(i)(C), the
Indemnifying Party may enter into any settlement or other compromise with
respect to any Claim in respect of which it has an indemnity payment obligation
under Section 3.5(a) without the prior written consent of the Indemnified
Person, except in the case of a settlement involving an admission of liability
of such Indemnified Person, in which case the prior written consent of the
Indemnified Person shall be obtained, provided that if such Indemnified Person
withholds its consent to such settlement and the required admission of liability
of such Indemnified Person is not in favour of a Governmental Body other than a
court, would not give rise to the imposition of any penalty or sanction against
the Indemnified Person by any Governmental Body, is not in respect of any
criminal liability and would not otherwise impair the reputation of the
Indemnified Person in any material respect, the maximum amount of liability of
the Indemnifying Party to the Indemnified Person with respect to such Claim
shall not exceed the amount of the proposed settlement rejected by such
Indemnified Person. Unless an Event of Default shall have occurred and be
continuing, no Indemnified Person shall enter into any settlement or other
compromise with respect to any Claim for which the Indemnifying Party has in
writing agreed to fully indemnify under Section 3.5(a) without the prior written
consent of the Indemnifying Party, which consent may be withheld in the
Borrower’s sole discretion, unless such Indemnified Person waives its right to
be indemnified under Section 3.5(a), with respect to such Claim.

(d)           Each Indemnified Person shall supply the Indemnifying Party with
such information and documents reasonably requested by the Indemnifying Party as
are necessary or advisable for the Indemnifying Party to participate in any
action, suit or proceeding to the extent permitted above, and the Indemnifying
Party shall reimburse the Indemnified Person for the reasonable costs and
out-of-pocket expenses of supplying such information and documents, all within a
reasonable period of time following the Indemnifying Party’s request therefor.

(e)           Upon payment in full of any Claim pursuant to Section 3.5(a) to or
on behalf of an Indemnified Person, the Indemnifying Party, without any further
action, shall be subrogated to any and all claims that such Indemnified Person
may have relating thereto (other than claims in respect of insurance policies
maintained by such Indemnified Person at its own expense). Each Indemnified
Person agrees, at the Indemnifying Party’s reasonable request and expense, to
give such further assurances or agreements and to otherwise cooperate with the
Indemnifying Party to enable the Indemnifying Party to vigorously pursue
such claims.

(f)            Any amount payable to an Indemnified Person pursuant to
Section 3.5(a) shall be paid to such Indemnified Person within 30 days of the
receipt (or deemed receipt) by the Indemnifying Party of a written request
therefor from such Indemnified Person, accompanied by a written statement
describing in reasonable detail the basis for such indemnity and the computation
of the amount so payable; provided that payment of an indemnity in respect of a
third party Claim need not be made until payment is due, whether by compromise,
settlement, court proceedings, arbitration or otherwise, from the Indemnified
Person in respect of such third party Claim.

3.6                               Evidence of Indebtedness

The Lender shall maintain and keep accounts showing the amount of all Loans
advanced by the Lender, from time to time and the dates thereof and the
interest, fees and other charges accrued thereon or applicable thereto from time
to time, and all payments of principal (including prepayments), interest and
fees and other payments made by the Borrower to the Lender from time to time
under the Bridge Loan. Such accounts maintained by the Lender shall be prima
facie evidence of the matters recorded therein.

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ARTICLE 4

INTEREST AND FEES

4.1                               Interest Rate

(a)                                  Advances under the Loan (each such advance
being referred to as an “Advance”) shall, subject to Applicable Laws, bear
interest from time to time as set forth herein:

(i)                                     subject to Sections 4.1(a)(ii) and (iii)
herein, from and after the Closing Date, all Advances under the Bridge Loan
shall bear interest at a fixed rate per annum equal to LIBOR plus 1,000 basis
points (the “Interest Rate”);

(ii)                                  from and after December 31, 2007, in the
event that the Borrower and/or its Subsidiaries has not (a) completed asset
and/or real property sales, (b) entered into Approved Sales Contracts or
(c) raised equity (other than the Fair Enterprise Investment), with aggregate
net proceeds of not less than $50,000,000, all outstanding and any subsequent
Advances under the Bridge Loan shall bear interest at a fixed rate per annum
equal to the Interest Rate plus 100 basis points; and

(iii)                               from and after February 29, 2008, in the
event that the Borrower and/or its Subsidiaries has not entered into Approved
Sales Contracts in respect of asset sales yielding aggregate net proceeds
sufficient to repay the Loan Amount in full, all outstanding and any subsequent
Advances under the Loan shall bear interest at a fixed rate per annum equal to
the Interest Rate payable pursuant to Sections 4.1(a)(i) or (ii), as applicable,
plus 100 basis points,

with interest in each case payable at maturity of each separate Advance.
Notwithstanding anything herein contained to the contrary, the Borrower
acknowledges and agrees that asset sales or Approved Sales Contracts relating to
(A) purchases by MID or (B) (i) the Aventura Lands (as defined in the Gulfstream
Construction Loan Agreement), (ii) the Hallandale Lands (as defined in the
Gulfstream Construction Loan Agreement), (iii) the membership interest in the
Gulfstream Park joint venture and/or the ground lease underlying the Gulfstream
Park joint venture and (iv) Remington Park (collectively, the “Project Financing
Assets”), shall not be applicable in calculating asset sales as contemplated in
Sections 4.1(a)(ii) and (iii) herein.

(b)                                 If any Obligations are not paid when due or
an Event of Default has occurred and is continuing, all amounts owing or deemed
to be owing hereunder, whether in respect of principal, interest, fees, expenses
or otherwise, both before and after judgment, and in the case of expenses from
the dates such expenses are invoiced to the Borrower, shall bear interest at a
rate per annum determined on a daily basis that is equal to the Interest Rate
payable pursuant to Sections 4.1(a)(i), (ii) or (iii), as applicable, plus
300 basis points per annum, in each case calculated on the basis of the actual
number of days elapsed and on the basis of a year of 365 or 366 days, as the
case may be. Such interest shall accrue from day to day, be payable in arrears
on demand and shall be compounded monthly on the last Banking Day of each
calendar month.

(c)                                  If the Lender determines, in good faith,
which determination shall be final, conclusive and binding upon the Borrower,
and notifies the Borrower that (i) by reason of circumstances affecting
financial markets inside or outside Canada, the United States or Europe, as the
case may be, deposits of U.S. Dollars are unavailable to the Lender in the
London interbank market, (ii) adequate and fair means do not exist for
ascertaining the interest rate for an Advance on the basis provided in the
definition of LIBOR, or (iii) by reason of a change since the date of this
Agreement in any applicable law or governmental regulation, guideline or order
or in the interpretation thereof by any Official Body affecting the Lender, or
any relevant financial market, LIBOR no longer represents the effective cost to
the Lender of making or maintaining an Advance for a relevant interest period or
other relevant period, then:

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(i)                                     the right of the Borrower to request an
Advance shall be suspended until the Lender determines that the circumstances
causing such suspension no longer exist and the Lender so notifies the
Borrower; and

(ii)                                  if any of the circumstances in
Section 4.1(c) shall occur, the Borrower and the Lender shall, following the
giving of notice by the Lender under this Section 4.1(c), endeavour to determine
an alternative basis, which may, if such parties agree, include (without
limitation) alternative rates of interest, alternative Interest Periods,
alternative currencies or any combination thereof, for Advances. If the Borrower
and the Lender are unable to agree on such alternative basis within a period of
30 days from the date of such notice by the Lender (provided that in any event
such period shall not extend beyond the last day specified for giving a
Borrowing Notice in respect of any Advance then outstanding or three Banking
Days before any repayment date required under Applicable Law, as the case may
be), the Lender shall determine an interest rate and specify an Interest Period
(not exceeding one month) in respect of each Advance then outstanding, which
interest rate shall be the cost to the Lender (as certified by the Lender to the
Borrower) of funding any such Advance for the Interest Period so specified from
such sources as it may reasonably select and the amount of any such Advance
shall bear interest at the rate so determined. The provisions of this
Section 4.1(c) shall apply only for so long as the circumstances in
Section 4.1(c) shall exist.

4.2                               Calculation and Payment of Interest

Interest on Advances shall accrue from day to day, both before and after
default, demand, maturity and judgment, shall be calculated on the basis of the
actual number of days elapsed and on the basis of a year of 360 days, and shall
be payable to the Lender in arrears on the last day of the relevant Interest
Period.

4.3                               Fees

(a)           Commitment Fee. The Borrower shall pay to the Lender on the last
Banking Day of each calendar month and on the Termination Date (each a
“Commitment Fee Payment Date”), in arrears, a non-refundable commitment fee
(the “Commitment Fee”) equal to 100 basis points per annum of the amount, if
any, by which the Loan Amount (taking into account any repayments or
cancellations that have been made by the Borrower in accordance with the terms
hereunder) exceeds the amount of the Loan (the “Unutilized Amount”) on each day
in such Fiscal Quarter or the part thereof ending on the Termination Date, as
applicable. The Commitment Fee on any Commitment Fee Payment Date shall be
payable in respect of the period from and including the Closing Date or the
preceding Commitment Fee Payment Date, as the case may be, to but excluding the
next Commitment Fee Payment Date, and shall be calculated on a daily basis on
the Unutilized Amount on each day during such period on the basis of the number
of days elapsed and a year of 365 or 366 days, as the case may be.

(b)           Arrangement Fees. The Borrower shall pay to the Lender, on the
Closing Date, an arrangement fee (the “First Arrangement Fee”) of $2,400,000,
being 3% of the Loan Amount. In addition, the Borrower shall pay to the Lender,
on February 29, 2008, an additional arrangement fee (the “Second Arrangement
Fee”) of 1% of the Loan Amount.

4.4                               Payment of Costs and Expenses

Whether or not the Borrower takes advantage of the Bridge Loan, the Borrower
shall pay to the Lender, on demand, the following costs and expenses
(collectively, the “Lender’s Costs”):

(a)                                  all reasonable costs and out-of-pocket
expenses of the Lender (in the case of solicitors’ costs, on a full indemnity
basis) in connection with the preparation, negotiation and execution of the Loan
Documents, the Intercreditor Agreements, any actual or proposed amendment or
modification hereof or thereof or any waiver hereunder or thereunder and all
instruments supplemental or ancillary thereto and all reasonable documented due
diligence expenses incurred in connection therewith (including any surveys or
appraisals of the Mortgaged Properties reasonably undertaken by the Lender);

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(b)                                 all reasonable costs and out-of-pocket
expenses of the Lender (in the case of solicitors’ costs, on a full indemnity
basis) in connection with obtaining advice as to the rights and responsibilities
of the Lender under the Loan Documents and the Intercreditor Agreements; and

(c)                                  all reasonable costs and out-of-pocket
expenses of the Lender (in the case of solicitors’ costs, on a full indemnity
basis) in connection with the defence, establishment, protection or enforcement
of any of the rights or remedies of the Lender under the Loan Documents or the
Intercreditor Agreements including, without limitation, all costs and expenses
of establishing the validity and enforceability of, or of collection of amounts
owing under, any of the Loan Documents or the Intercreditor Agreements and all
reasonable costs and expenses of any receiver or receiver-manager appointed by
the Lender or any of the Lender or by a court in connection with the enforcement
of the Loan Documents or the Intercreditor Agreements;

including, without limitation, all of the reasonable fees and disbursements of
counsel and other advisors to the Lender, its agents, and any such receiver or
receiver-manager, on a full indemnity basis, incurred in connection therewith,
including all sales, goods and services or value-added taxes payable by any of
them on all such costs, expenses and compensation.

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ARTICLE 5

REPRESENTATIONS AND WARRANTIES

5.1                               Representations and Warranties

To induce the Lender to enter into the Loan Documents and to make the Loan, the
Borrower hereby makes the following representations and warranties with respect
to itself and its Subsidiaries taken as a whole on a consolidated basis, and
each of the Guarantors hereby makes the following representations and warranties
with respect to itself and its Subsidiaries taken as a whole on a consolidated
basis, as of the date hereof (provided that certain of the representations and
warranties are qualified by the Disclosure Schedule (as specifically set out
therein) delivered by the Borrower and the Guarantors to the Lender concurrently
with the execution by them of this Agreement):

(a)           Incorporation and Status. Each of the Borrower and the Guarantors
is duly incorporated, formed or organized, as the case may be, and validly
existing under the laws of its jurisdiction of incorporation, formation or
organization, as the case may be, and has the power and capacity to own its
properties and assets and to carry on its business as presently carried on by it
or as contemplated hereunder to be carried on by it. Each of the Guarantors is
wholly-owned by the Borrower. The Borrower does not carry on any material
business other than the Core Line of Business. None of the Guarantors carries on
any business other than the Core Line of Business and other than the ownership
or operation of casinos, hotels, resorts, card clubs, sports bars, restaurants
and theatres, all of which activities are associated with or ancillary or
related to the Core Line of Business, and the ownership and management of a
portfolio of real estate properties held for development or sale. Except where
the failure to have such Material Authorization could not reasonably be expected
to have a Material Adverse Effect, the Borrower and each Guarantor holds all
Material Authorizations necessary to own or lease, as applicable, each Property
or Properties owned or leased by it or to carry on its Core Line of Business
(including, without limitation, all environmental and other permits, licences
and other authorizations required for the Borrower and each Guarantor to own or
lease such Property or Properties or to carry on its Core Line of Business in
accordance with Applicable Law and further including, without limitation, all
licensing requirements of the Racing and Gambling Regulatory Authorities in
relation to the Borrower or any Guarantor) in each jurisdiction in which it does
so, all of which are in good standing;

(b)           Power and Capacity. Each of the Borrower and the Guarantors has
the power and capacity to enter into each of the Loan Documents to which it is a
party, and to do all acts and things as are required or contemplated hereunder
or thereunder to be done, observed and performed by it;

(c)           Due Authorization. Each of the Borrower and the Guarantors has
taken all necessary action to authorize the execution, delivery and performance
of each of the Loan Documents to which it is a party;

(d)           No Contravention. The execution and delivery of each of the Loan
Documents to which each of the Borrower and the Guarantors is a party, and the
performance by each of the Borrower and the Guarantors of its obligations
thereunder (i) do not and will not contravene, breach or result in any default
under (A) the articles, by-laws, constating documents or other organizational
documents of the Borrower or any Guarantor, (B) any Material Authorization,
(C) any Applicable Law, except where the failure to comply with such Applicable
Law could not reasonably be expected to have a Material Adverse Effect, or
(D) any Material Agreement, (ii) do not and will not oblige the Borrower or any
of its Subsidiaries to grant any Lien to any Person other than the Lender, and
(iii) do not and will not result in or permit the acceleration of the maturity
of any indebtedness, liability or obligation of the Borrower or any Guarantor
under any mortgage, lease, agreement or other legally binding instrument of or
affecting the Borrower or any Guarantor;

(e)           No Consents Required. Other than filings with the Securities
Commission, no Material Authorization is required, and no consents, approvals or
further documentation of any kind whatsoever is required to be obtained from, or
provided by, any Person in connection with (i) the execution, delivery or
performance of any of

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the Loan Documents to which it is a party by the Borrower or any Guarantor,
(ii) the creation of the Security, and (iii) the perfection of such Security;

(f)            Enforceability. Each of the Loan Documents constitutes, or upon
execution and delivery will constitute, a valid and binding obligation of the
Borrower and each Guarantor which is a party to it, enforceable against it in
accordance with its terms, subject only to the qualifications set out in the
opinion of the Borrower’s and Guarantors’ Local Agents delivered pursuant to
Section 7.2(p)(i);

(g)           Financial Statements.

(i)                                     The Audited and Unaudited Financial
Statements have been prepared in accordance with GAAP and present fairly the
financial position and results of operations of the Borrower and its
Subsidiaries on a consolidated basis as of the dates indicated and for the
periods specified; and

(ii)                                  The Lender has been furnished with a copy
of the unaudited internally prepared consolidated financial statements of the
Borrower and each of the Guarantors dated as of and at the end of the most
recently completed fiscal quarter. Such internally prepared consolidated
financial statements of the Borrower and each of the Guarantors fairly present
the financial condition of the Borrower and each of the Guarantors as at such
date in conformity with generally accepted accounting principles applied on a
consistent basis (save and except for the reflection of the value of the assets
of the Borrower and each of the Guarantors at their market value instead of
their cost as reflected in the notes to such financial statements) and there has
been no Material Adverse Change since the date of such statements;

(h)           Books and Records. The Borrower, the Guarantors and each of their
respective Subsidiaries (i) makes and keeps accurate books and records and
(ii) maintains internal accounting controls that provide reasonable assurance
that (A) transactions are executed in accordance with management’s
authorization, and (B) transactions are recorded as necessary to permit
preparation of its financial statements and to maintain accountability for
its assets;

(i)            Borrower Organizational Documents. A true and complete copy of
the certificate of formation, certificate of authority to transact business and
by-laws of the Borrower and all other documents creating and relative to the
organization of the Borrower (collectively, the “Borrower Incorporation
Documents”) have been made available to the Lender. There are no other
agreements, oral or written, among any of the shareholders of the Borrower
relating to the Borrower. The Borrower Incorporation Documents are in full force
and effect, and are binding upon and enforceable in accordance with their terms.
No breach exists under the Borrower Incorporation Documents and no act has
occurred and no condition exists which, with the giving of notice or the passage
of time would constitute a breach under the Borrower Incorporation Documents;

(j)            Guarantors’ Organizational Documents. True and complete copies of
the certificates of formation, certificates of authority to transact business,
certificates of formation, articles of incorporation, by-laws and all other
documents creating and relative to the organization of each of the Guarantors
(collectively, the “Guarantor Incorporation Documents”) have been made available
to the Lender. There are no other agreements, oral or written, among any of the
shareholders of each of the Guarantors relating to the Guarantors. The Guarantor
Incorporation Documents are in full force and effect, and are binding upon and
enforceable in accordance with their terms. No breach exists under the Guarantor
Incorporation Documents and no act has occurred and no condition exists which,
with the giving of notice or the passage of time would constitute a breach under
the Guarantor Incorporation Documents. The Borrower Incorporation Documents and
the Guarantor Incorporation Documents are herein collectively referred to as the
“Organizational Documents”;

(k)           Authorized Capital. The authorized capital of the Borrower
consists of 310,000,000 Class A Subordinate Voting Stock, par value of $0.01 per
share, of which 49,259,999 were issued and outstanding as at

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September 1, 2007, and 90,000,000 shares of Class B stock, par value of $0.01
per share, of which 58,466,056 were issued and outstanding.

The authorized capital of the Gulfstream Guarantor consists of 13,040 common
shares of which 11,232 common shares are duly issued and outstanding as fully
paid and non-assessable. The beneficial holder of such outstanding shares is
as follows:

Beneficial Holder

 

Class of Shares

 

Number of Shares

 

 

 

 

 

 

 

Magna Entertainment Corp.

 

Common

 

11,232

 

 

The authorized capital of the Palm Meadows Training Guarantor consists of
10,000 common shares of which 100 common shares are duly issued and outstanding
as fully paid and non-assessable. The beneficial holder of such outstanding
shares is as follows:

Beneficial Holder

 

Class of Shares

 

Number of Shares

 

 

 

 

 

 

 

Magna Entertainment Corp.

 

Common

 

100

 

 

The authorized capital of Pacific Racing Association consists of 100,000 common
shares of which 69,347 common shares are duly issued and outstanding as fully
paid and non-assessable. The beneficial holder of such outstanding shares is
as follows:

Beneficial Holder

 

Class of Shares

 

Number of Shares

 

 

 

 

 

 

 

Magna Entertainment Corp.

 

Common

 

69,347

 

 

The authorized capital of MEC Land Holdings (California) Inc. consists of
1000 common shares of which 100 common shares are duly issued and outstanding as
fully paid and non-assessable. The beneficial holder of such outstanding shares
is as follows:

Beneficial Holder

 

Class of Shares

 

Number of Shares

 

 

 

 

 

 

 

Magna Entertainment Corp.

 

Common

 

100

 

 

The authorized capital of The Santa Anita Companies, Inc. consists of
10,000 common shares of which 1,100 common shares are duly issued and
outstanding as fully paid and non-assessable. The beneficial holder of such
outstanding shares is as follows:

*  1,100 shares are pledged to Wells Fargo pursuant to the Santa Anita
Senior Facility

Beneficial Holder

 

Class of Shares

 

Number of Shares

 

 

 

 

 

 

 

Magna Entertainment Corp.*

 

Common

 

1,100

 

 

The authorized capital of Los Angeles Turf Club, Incorporated consists of
1,000 common shares of which 25 common shares are duly issued and outstanding as
fully paid and non-assessable. The beneficial holder of such outstanding shares
is as follows:

*  25 Common shares are pledged to Wells Fargo pursuant to the Santa Anita
Senior Facility

Beneficial Holder

 

Class of Shares

 

Number of Shares

 

 

 

 

 

 

 

Magna Entertainment Corp.*

 

Common

 

25

 

 

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The authorized capital of the Dixon Guarantor consists of 10,000 common shares
of which 100 common shares are duly issued and outstanding as fully paid and
non-assessable. The beneficial holder of such outstanding shares is as follows:

Beneficial Holder

 

Class of Shares

 

Number of Shares

 

 

 

 

 

 

 

Magna Entertainment Corp.

 

Common

 

100

 

 

The authorized capital of MEC Holdings (USA) Inc. consists of 10,000 common
shares of which 100 common shares are duly issued and outstanding as fully paid
and non-assessable. The beneficial holder of such outstanding shares is
as follows:

Beneficial Holder

 

Class of Shares

 

Number of Shares

 

 

 

 

 

 

 

Magna Entertainment Corp.

 

Common

 

100

 

 

The authorized capital of Sunshine Meadows Racing, Inc. consists of
10,000 common shares of which 100 common shares are duly issued and outstanding
as fully paid and non-assessable. The beneficial holder of such outstanding
shares is as follows:

Beneficial Holder

 

Class of Shares

 

Number of Shares

 

 

 

 

 

 

 

Magna Entertainment Corp.

 

Common

 

100

 

 

The authorized capital of the Thistledown Guarantor consists of 500 common
shares of which 250 common shares are duly issued and outstanding as fully paid
and non-assessable. The beneficial holder of such outstanding shares is
as follows:

Beneficial Holder

 

Class of Shares

 

Number of Shares

 

 

 

 

 

 

 

Magna Entertainment Corp.

 

Common

 

250

 

 

The authorized capital of MEC Maryland consists of 10,000 common shares of which
100 common shares are duly issued and outstanding as fully paid and
non-assessable. The beneficial holder of such outstanding shares is as follows:

Beneficial Holder

 

Class of Shares

 

Number of Shares

 

 

 

 

 

 

 

Magna Entertainment Corp.

 

Common

 

100

 

 

30000 Maryland is held by:

Member

 

Interest

 

 

 

 

 

Magna Entertainment Corp.

 

1

%

MEC Maryland Investments, Inc.

 

99

%

 

(l)            Legal Name and Chief Executive Office. The Borrower and each
Guarantor has advised, or will advise within five Banking Days of the Closing
Date, the Lender in writing of their respective chief executive offices and
places of business. None of the Borrower nor any of the Guarantors conducts
business under any corporate names other than its legal name, and the Borrower
and each of the Guarantors have, in the past, held themselves out as separate
entities and have conducted operations under their own respective names;

(m)          Solvency. The Borrower has not entered into the transactions
hereunder or any Loan Document with the actual intent to hinder, delay or
defraud any creditor, and the Borrower has received reasonably equivalent value
in exchange for its obligations under the Loan Documents. Taking into account
the Bridge Loan (and

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assuming Advances requested by the Borrower are advanced by the Lender), the
Fair Enterprise Investment and the Borrower Restructuring Plan, the Borrower and
each of the Guarantors is solvent (as such term is used in all applicable laws
relating to bankruptcy, fraudulent transfers and conveyances), able to pay its
debts as such debts become due, has capital sufficient to carry on its
businesses and transactions and all businesses and transactions in which it
anticipates engaging, and the value of its property at a fair valuation is
greater than the sum of its debts. Neither the Borrower nor any of the
Guarantors will be rendered insolvent by the execution and delivery to the
Lender of the Loan Documents or by the transactions contemplated thereunder, and
no: (i) assignment for the benefit of the creditors of any of them;
(ii) appointment of a receiver for any of them or for the property of any of
them; or (iii) bankruptcy, reorganization, or liquidation proceeding, is pending
or threatened (whether voluntary or involuntary) or has been instituted by or
against any of them;

(n)           Consideration. The Loan Documents were executed and delivered by
the Borrower and the Guarantors to the Lender in good faith and in exchange for
a reasonably equivalent value without any intent to hinder, delay or defraud any
creditor of the Borrower or any of the Guarantors;

(o)           Affiliate Transactions. Other than the transactions contemplated
hereby and the transactions contemplated in the Remington Construction Loan
Agreement and the Gulfstream Construction Loan Agreement, since the date of the
Unaudited Financial Statements, neither the Borrower nor any of the Guarantors
has entered into any transaction or agreement with any Affiliate which is not
the Borrower or a Guarantor;

(p)           No Litigation. There is no court, administrative, regulatory or
similar proceeding (whether civil, quasi-criminal, or criminal), arbitration or
other dispute settlement procedure; investigation or enquiry by any Governmental
Body, or any similar matter or proceeding (collectively “proceedings”) against
or involving the Borrower or any Guarantor (whether in progress or threatened),
which, if determined adversely to the Borrower or any Guarantor, could
reasonably be expected to have a Material Adverse Effect or which purports to
affect the legality, validity and enforceability of any Loan Document to which
the Borrower or any of the Guarantors is a party; to the Borrower’s knowledge,
no such proceedings are threatened or contemplated by any Governmental Body or
other Person; to the Borrower’s knowledge, no event has occurred which could
reasonably be expected to give rise to any such proceedings; and there was no
judgment, decree, injunction, rule, award or order of any Governmental Body
outstanding against the Borrower or any of the Guarantors which has had, or
could reasonably be expected to have, a Material Adverse Effect;

(q)           No Default. Neither the Borrower nor any Guarantor is in default
or breach under any Applicable Law or under any Material Agreement, or under the
terms and conditions relating to any Material Authorizations, and there exists
no state of facts which, after notice or the passage of time or both, would
constitute such a default or breach; in all cases where such default or breach
could reasonably be expected to result in a Material Adverse Effect; and there
are no proceedings in progress, pending or threatened which could reasonably be
expected to result in the revocation, cancellation, suspension or any adverse
modification of any Material Authorization;

(r)            Unmatured Event of Default or Event of Default. No Default or
Event of Default has occurred and is continuing;

(s)           No Labour Disturbance. No labour disturbance by the employees of
the Borrower, or any of its Subsidiaries or by any horse owners or trainers
exists or, to the knowledge of the Borrower, is imminent, in each case, that
could reasonably be expected to have a Material Adverse Effect;

(t)            Taxes. Except as could not reasonably be expected to have a
Material Adverse Effect, the Borrower and the Guarantors have accurately
prepared and timely filed all federal, state, provincial and other tax returns
that are required to be filed by them and have paid or made provision for the
payment of all Taxes except those Taxes that are being disputed in good faith by
appropriate proceedings for which the Borrower or any Guarantor has established
on its books reserves considered by it to be adequate therefor, and including,
without limitation, all Taxes that the Borrower or any Guarantor is obligated to
withhold from amounts owing to employees, creditors and third parties, with
respect to the periods covered by such tax returns (whether or not such amounts
are shown as due on any tax return). No deficiency assessment with respect to a
proposed adjustment of the Borrower’s or any Guarantor’s federal, state,
provincial or other Taxes is pending or, to the knowledge of the Borrower or any

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Guarantor, threatened. There was no tax Lien, whether imposed by any federal,
state, provincial or other taxing authority, outstanding against the assets,
properties or business of the Borrower or any Guarantor other than Permitted
Encumbrances;

(u)           Material Assets. The Borrower and each of the Guarantors owns or
licenses or otherwise has legally enforceable rights to use, under validly
existing agreements, all material assets (including all real property, patents,
licences, trademarks, trade names, trade secrets, service marks, copyrights and
all rights with respect thereto), contracts, and other documents necessary to
conduct their businesses as now conducted and that (a) all such assets (other
than permits and licences) have been assigned, pledged, mortgaged or otherwise
encumbered pursuant to the Security and (b) all permits and licences are subject
to a negative pledge; provided that the names “Palm Meadows” and “Dixon Downs”
are owned by MEC and have been licensed to the applicable entity;

(v)           Material Agreements. The list of Material Agreements included on
the Disclosure Schedule (as the same may be supplemented and amended from time
to time) constitutes all of the Material Agreements now in existence for the
Borrower and the Guarantors. Neither the Borrower nor the Guarantors nor, to the
best knowledge of the Borrower and the Guarantors, any other party thereto, is
in breach of or in default of any material obligation thereunder except those in
respect of which the Borrower has advised the Lender in writing from time to
time and of which the Lender has indicated in writing its satisfaction. To the
best knowledge of the Borrower and the Guarantors, the Material Agreements are
in good standing and no event has occurred which, with the passage of time or
the giving of notice or both, would constitute an event of default under any of
the Material Agreements;

(w)          Investments. Except as disclosed in the Audited and Unaudited
Financial Statements, none of the Borrower and its Subsidiaries has loans to or
investments in any Person in excess of $1,000,000, nor have any of them given
any guarantee or incurred any liability in connection with the indebtedness of
any Person in excess of $1,000,000;

(x)            ERISA. (i) the Borrower and its ERISA Affiliates are in
compliance in all material respects with all applicable provisions of ERISA
which would result in any material liability accruing to the Borrower or its
ERISA Affiliates, (ii) neither the Borrower nor any ERISA Affiliate has violated
any provision of any Plan, (iii) no Reportable Event has occurred and is
continuing with respect to any Plan initiated by the Borrower or any ERISA
Affiliate, (iv) the Borrower and all ERISA Affiliates have met their minimum
funding requirements under ERISA with respect to each Plan, and (v) each Plan
was able to fulfill its current benefit obligations as they come due in
accordance with the Plan documents;

(y)           Investment Company. Neither the Borrower nor any Guarantor is an
“investment company”, or an “affiliated person” of, or “promoter” or “principal
underwriter” for, an “investment company”, as such term is defined in the
Investment Company Act of 1940, as amended; provided that with respect to
“affiliated persons” this representation is made solely to the best knowledge of
the Borrower and the best knowledge of each of the Guarantors, without any
investigation, with respect to the holders of publicly traded securities of the
Borrower and provided that no representation is made herein with respect to
Magna International Inc. or MID and the holders of their securities. Neither the
making of any Advances, nor the application of the proceeds or repayment thereof
by the Borrower, nor the consummation of the other transactions contemplated
hereby, will violate any provision of such Act or any rule, regulation or order
of the Securities Commission thereunder;

(z)            Margin Regulations. Neither the Borrower nor any Guarantor is
engaged, nor will any of them engage, principally or as one of its primary
activities, in the business of extending credit for the purpose of “purchasing”
or “carrying” any “margin stock” within the respective meanings of each of the
quoted terms under Regulation U, and neither the Borrower nor any of the
Guarantors owns margin stock which, in each case, in the aggregate, would
constitute over 25% of the assets of such Person and no proceeds of the Loan
will be used to purchase or carry, directly or indirectly, any margin stock or
to extend credit, directly or indirectly, to any Person for the purpose of
purchasing or carrying any margin stock;

(aa)         Foreign Ownership. Neither the Borrower nor any of the Guarantors
is or will be a “foreign corporation”, “foreign partnership”, “foreign trust”,
“foreign estate”, “foreign person”, “affiliate” of a “foreign person” or a
“United States intermediary” of a “foreign person” within the meaning of the
IRC, Sections 897

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and 1445, the Foreign Investments in Real Property Tax Act of 1980, the
International Foreign Investment Survey Act of 1976, the Agricultural Foreign
Investment Disclosure Act of 1978, or the regulations promulgated pursuant to
such Acts or any amendments to such Acts;

(bb)         Other Regulations. Neither the Borrower nor any Guarantor is
subject to regulation under the Investment Company Act of 1940, the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act, any state public utilities code or to any other law, regulation,
rule, limitation or restriction of a Governmental Body limiting its ability to
incur indebtedness;

(cc)         USA Patriot Act. Neither the Borrower nor any of the Guarantors nor
any Affiliate thereof, is identified in any list of known or suspected
terrorists published by any United States government agency (individually, as
each such list may be amended or supplemented from time to time, referred to as
a “Blocked Persons List”) including, without limitation, (i) the annex to
Executive Order 13224 issued on September 23, 2001 by the President of the
United States and (ii) the Specially Designated Nationals List published by the
United States Office of Foreign Assets Control;

(dd)         No Agreement to Sell Assets; Reorganizations. Except as
specifically set forth in the Borrower Restructuring Plan, neither the Borrower
nor any of its Subsidiaries has any legal obligation, absolute or contingent, to
any Person or entity to sell any of its assets (including real and personal
property), except in the ordinary course of business consistent with past
practice; or to effect any merger, consolidation or other reorganization of the
Borrower or any of its Subsidiaries with any other Person or entity or to enter
into any agreement with respect thereto;

(ee)         Adequate Insurance. All of the property of the Borrower and the
Guarantors is insured with good and responsible companies against fire and other
casualties in the same manner and to the same extent as such insurance is
usually carried by Persons carrying on a similar business and owning similar
property located in the same general area as the property owned by the Borrower
or Guarantor, as the case may be, including the Properties, and the Borrower and
each of the Guarantors maintains or causes to be maintained with good and
responsible insurance companies adequate insurance against business interruption
with respect to the operations of all of such property and liability on account
of damage to Persons or property, including damage resulting from product
liability, and under all applicable workers’ compensation laws, in the same
manner and to the same extent as such insurance is usually carried by Persons
carrying on a similar business and owning similar property;

(ff)           Licences and Permits. Except for Permitted Encumbrances, neither
the Borrower nor any of its Subsidiaries has pledged any licences or permits,
held by it or any of its Subsidiaries, to a third party;

(gg)         Title. Subject only to Permitted Encumbrances, the Borrower and
(where applicable) each Guarantor is the absolute beneficial owner of and has
good and marketable title in fee simple to, or has a good and marketable
leasehold interest in, all of the Properties, details of which are set forth in
Schedule B hereto. The Disclosure Schedule contains an accurate and complete
list of the municipal addresses of all Properties. The Borrower and (where
applicable) each Guarantor is the beneficial owner, lessee or licensee, as the
case may be, of all of its other real and personal property and has good title
thereto, or other applicable interest therein, free and clear of any Liens other
than Permitted Encumbrances;

(hh)         Improvements. The present use of each Property complies, and the
future use of each Property will comply, in all material respects, with all:
(a) applicable legal and contractual requirements with regard to the use,
occupancy, construction and operation thereof, including, without limitation,
all zoning, subdivision, environmental, flood hazard, fire safety, health,
handicapped facilities, building and other laws, ordinances, codes, regulations,
orders and requirements of any governmental agency; (b) applicable in respect of
each Property building, occupancy and other permits, licences and approvals; and
(c) declarations, easements, rights-of-way, covenants, conditions and
restrictions of record applicable in respect of each Property;

(ii)           Properties Access. The Properties are accessible through all
current access points, each of which connects or, upon the completion of the
contemplated development of the Properties will connect, directly to a fully

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improved and dedicated road accepted for maintenance and public use by the
Governmental Body having jurisdiction;

(jj)           Utilities. All utility services necessary and sufficient for the
construction, use or operation of each of the Properties (now and as
contemplated by the Borrower and the Guarantors in the future) are currently
connected or, upon the completion of the contemplated development of the
Gulfstream Property, will be connected, at the boundary of the applicable
Property directly to lines owned by the applicable utility and lying in
dedicated roads, including water, storm, sanitary sewer, gas, electric and
telephone facilities;

(kk)         Compliance. There are no alleged or asserted violations of law
(including, without limitation, all racing and gaming laws and regulatory
requirements), municipal ordinances, public or private contracts, declarations,
covenants, conditions, or restrictions of record, or other requirements with
respect to any of the Properties which if enforced could reasonably be expected
to have a Material Adverse Effect. None of the buildings or other structures
located on the Properties encroaches upon any land not leased or owned by the
Borrower or one of the Guarantors, and there are no expropriation or similar
proceedings, actual or threatened, of which the Borrower or any Guarantor has
received notice, against any of the Properties or any part thereof, in all
cases, where the existence and continuance of any encroachment, expropriation or
similar proceedings could reasonably be expected to have a Material Adverse
Effect. All by-laws, zoning, licences, certificates, consents, approvals,
rights, permits and agreements required to enable the Properties to be used,
operated and occupied in their current and intended manner are being complied
with or have been obtained and are in good standing, or, to the extent that any
have not already been obtained, the same are not yet required and, if not yet
required, the Borrower and the Guarantors have no reason to believe that the
same will not be available prior to the time that the same are so required,
except, in all cases, where the breach or non-performance thereof could not
reasonably be expected to have a Material Adverse Effect. All building services
required for the proper functioning of the Properties have been obtained, except
where failure to obtain the same could not reasonably be expected to have a
Material Adverse Effect. All buildings located on the Properties are functioning
properly and are fit and suitable for their intended purpose;

(ll)           Flood Hazards/Wetlands. None of the Properties is situated in an
area designated as having special flood hazards as defined by the Flood Disaster
Protection Act of 1973, as amended, or as wetlands by any Governmental Body
having jurisdiction over any of the Properties;

(mm)       Environmental Conditions. Except as disclosed in the Environmental
Disclosure:

(i)                                     each of the Properties is in material
compliance with all applicable Environmental Laws and all applicable Safety Laws
and all operations and activities on or at each of the Properties are in
material compliance with all applicable Environmental Laws and all applicable
Safety Laws and to the knowledge of the Borrower and each of the Guarantors,
there are no current facts, circumstances or conditions that are reasonably
likely to materially affect such continued compliance;

(ii)                                  neither the Borrower nor any of the
Guarantors has received, or has knowledge of any threatened, Order, notice,
citation, directive, inquiry, summons or warning, verbal, written or otherwise,
or any other written communication from: (A) any Governmental Body or private
citizen, whether acting or purporting to act in the public interest or
otherwise; (B) the current or prior owner, occupant or operator of any of the
Properties; or (C) any other Person to whom any of the Borrower and any of the
Guarantors could be reasonably held liable, of any actual or potential violation
or failure to comply with any Environmental Law or Safety Law or of any actual
or potential obligation to undertake or bear the cost of any Environmental or
Safety Liability, including with respect to any Hazardous Activity;

(iii)                               the Borrower and each of the Guarantors has
obtained all material Environmental Consents and Safety Consents and has
obtained or is in the process of obtaining all non-material Environmental
Consents and Safety Consents, in each case as required for their use and
operation of the Real Property and all such obtained Environmental Consents and
Safety Consents are in good standing and the Borrower and each of the Guarantors
is in compliance with all terms and conditions of such Environmental Consents
and Safety Consents;

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(iv)                              there are no pending or, to the knowledge of
the Borrower or any of the Guarantors, threatened, claims, encumbrances or
restrictions of any nature resulting from or constituting any material
Environmental or Safety Liability or arising under or pursuant to any
Environmental Law or Safety Law affecting the Borrower or any of the Guarantors
or any of the Properties or offsite location;

(v)                                 to the knowledge of the Borrower and each of
the Guarantors, there is no material amount of Hazardous Materials present at,
near or from any of the Properties, including any Hazardous Materials contained
in barrels, aboveground or underground storage tanks, landfills, land deposits,
surface impoundments, dumps, equipment (whether movable or fixed) or other
containers, either temporary or permanent, and deposited or located in land,
water, sumps, containment ponds or any other part of any facility or
incorporated into any structure therein or thereon except in the ordinary course
of business consistent with past practice and for which all necessary
environmental disclosures have been made to Governmental Authorities;

(vi)                              to the knowledge of the Borrower and each of
the Guarantors, there has been no material Release or Threat of Release of any
Hazardous Materials at or from any location where any Hazardous Materials were
generated, manufactured, refined, transferred, produced, imported, used,
processed, transported, stored, handled, treated, disposed, recycled or received
from the Borrower and/or any of the Guarantors;

(vii)                           to the knowledge of the Borrower and each of the
Guarantors, there are no aboveground or underground storage tanks in or
associated with any of the Properties that would have a Material Adverse Affect
on any of the Properties;

(viii)                        to the knowledge of the Borrower and each of the
Guarantors, none of the Properties contains any wetlands or other sensitive,
endangered or protected areas or species or flora or fauna including any that
would materially impede the Construction (as defined in the Remington
Construction Loan Agreement) or the Gulfstream Reconstruction (as defined in the
Gulfstream Construction Loan Agreement) and/or any currently proposed
development of the Palm Meadows Training Center Property;

(ix)                                to the knowledge of the Borrower and each of
the Guarantors, there are no facts or circumstances at the Properties that could
form the basis for the assertion of any material Environmental or Safety
Liability against the Borrower and/or any of the Guarantors, including any
material Environmental or Safety Liability arising from current environmental or
health and safety practices;

(x)                                   to the knowledge of the Borrower and each
of the Guarantors, neither the Borrower nor any of the Guarantors has
compromised or released any insurance policies, or waived any rights under
insurance policies, that may provide coverage for any Environmental or Safety
Liability, where such compromise, release or waiver would have a Material
Adverse Effect;

(xi)                                to the knowledge of the Borrower and each of
the Guarantors, none of the Borrower, and/or any of the Guarantors has assumed
the liability of any other Person or entity for, and none of the foregoing has
agreed to indemnify any other Person or entity against, claims arising out of
the Release of Hazardous Materials into the Environment other than on or from
the Properties or other claims under Environmental Laws and Safety Laws other
than claims with respect to the Properties;

(xii)                             to the knowledge of the Borrower and each of
the Guarantors, the Borrower and the Guarantors have delivered to the Lender
true and complete copies of any and all reports, studies, audits, analyses,
evaluations, assessments or monitoring data which could reasonably be considered
to contain a material fact pertaining to Hazardous Materials or Hazardous
Activities in, on, under or related to any of the Properties, the operations and
approval of development of any of the Properties, compliance by the Borrower and
each of the Guarantors with Environmental Laws and Safety Laws or any actual or
potential Environmental or Safety Liability of any of the Subsidiaries;

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(xiii)                          the Borrower and each of the Guarantors are not
aware of any material conflicts or disagreements between any Governmental
Authorities and the Borrower and each of the Guarantors with respect to
environmental matters; and

(xiv)                         the Borrower and each of the Guarantors do not
intend as at the date of this Agreement to decrease in any material way the
resources available to any Subsidiaries to address issues under Environmental
Laws or Safety Laws;

(nn)         Occupancy Agreements. The list of all of the existing material
leases, agreements to lease, licences and other forms of occupancy agreements
affecting any of the Properties (collectively, the “Occupancy Agreements”)
included on the Disclosure Schedule constitutes all of the Occupancy Agreements
that are material to the Borrower, the Guarantors and the Properties. To the
best knowledge of the Borrower and/or the Guarantors, the Occupancy Agreements
are in good standing and none of the parties thereto is in default of any
material obligation thereunder except those in respect of which the Borrower has
advised the Lender in writing from time to time and of which the Lender has
indicated in writing its satisfaction;

(oo)         Casualty. Except for the Construction (as defined in the Remington
Construction Loan Agreement and the Reconstruction (as defined in the Gulfstream
Construction Loan Agreement), there is no damage or destruction to any part of
the Properties by fire or other casualty that has not been repaired;

(pp)         Liens on Collateral. The Security creates in favour of the Lender
valid and perfected mortgage liens and security interests in or on the
Collateral, subject only to Permitted Encumbrances; and

(qq)         Disclosure. All information provided to the Lender relating to the
financial condition, business, affairs and prospects of the Borrower and the
Subsidiaries (other than financial projections), consisting of those documents
and materials made available for review by the Borrower and referenced in
binders of materials compiled by the Borrower to assist the Lender and the
Lender’s counsel in connection with their due diligence review (but, for greater
certainty, excluding any work product of the Lender or the Lender’s counsel),
together with any information set out in the Disclosure Schedule, was true,
accurate and complete in all material respects and omits no material fact
necessary to make such information not misleading in light of the circumstances
under which such information was provided. All information (other than financial
projections) furnished or made available by the Borrower and/or any of the
Guarantors to the Lender to induce the Lender to enter into or maintain this
Agreement is true, accurate and complete in all material respects and does not
omit to state any material fact. All financial projections furnished or made
available by the Borrower and/or any of the Guarantors to the Lender have been
prepared in good faith, on the basis of all known facts and using reasonable
assumptions and the Borrower and each of the Guarantors believes such
projections to be fair and reasonable and neither the Borrower nor any of the
Guarantors has any knowledge or information which would materially adversely
affect such financial projections. The Borrower and each of the Guarantors has
disclosed in the Disclosure Schedule everything to which it has knowledge
regarding the business, operations, property, financial condition, or business
prospects of itself, and each of the Properties, which could result in a
Material Adverse Change.

5.2                               Survival of Representations and Warranties

All representations and warranties of the Borrower and the Guarantors in this
Agreement, the Loan Documents and all representations and warranties in any
certificate delivered by the Borrower pursuant hereto and thereto, shall survive
execution of the Loan Documents and the making of the Loan, and may be relied
upon by the Lender as being true and correct with effect as of the date given
(either initially or as brought down) until the Loan is fully and irrevocably
paid, notwithstanding any investigation made at any time by the Lender or on its
behalf, including, without limitation, the due diligence review referred to in
Section 5.1(qq). Without derogating from the foregoing, the representations and
warranties of the Borrower and each of the Guarantors set out in Section 5.1(mm)
shall survive the payment and performance of the Indebtedness, liabilities and
obligations of the Borrower under, and the termination and release by the Lender
of, this Agreement and the other Loan Documents.

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ARTICLE 6

COVENANTS

6.1          Affirmative Covenants

The Borrower and each of the Guarantors covenants and agrees with the Lender
that it shall, and, except where the failure to cause any Subsidiary could not
reasonably be expected to have a Material Adverse Effect, shall cause its
Subsidiaries to, from and after the Closing Date until the Loan (including
interest thereon) and all fees and expenses to be paid by the Borrower to the
Lender hereunder are paid in full:

(a)           Punctual Payment. The Borrower shall pay or cause to be paid all
Obligations falling due hereunder on the dates and in the manner specified
herein;

(b)           Compliance with Agreements. Carry out all its obligations under
this Agreement, the Security and the Material Agreements and shall use its
reasonable efforts to cause the other parties thereto to do likewise;

(c)           Use of Proceeds. Use the proceeds of the Loans only as authorized
in Section 2.1 hereof and subject to the terms and provisions of the Loan
Documents and for no other purpose, without the Lender’s prior written consent,
in the Lender’s sole discretion. Except as expressly permitted herein, no
portion of the proceeds of the Loans shall be used by the Borrower to pay any
amounts to any Affiliate, and in no event shall any amounts be paid in any
manner that might cause the borrowing or the application of such proceeds to
violate Regulation G, Regulation U, Regulation T or Regulation X or any other
regulation of the Board of Governors of the Federal Reserve System or to violate
the Securities Acts;

(d)           Hold Disbursements in Trust. Other than the proceeds of the Loan
that will be used for the purposes set forth herein, the Borrower will receive
and hold in trust for the Lender all advances made hereunder directly to the
Borrower and the Borrower will not apply the same for any other purposes;

(e)           Implementation of Borrower Restructuring Plan and Use of Specific
Asset Sale Proceeds. The Borrower is using and will continue to use all
commercially reasonable efforts to implement the Borrower Restructuring Plan
(including the sale of specific assets by the time periods listed therein); the
Borrower and its Subsidiaries will use the net proceeds from any asset and/or
real property sales in the manner set forth in Section 2.4 hereof, including,
without limitation, by providing directions to the purchasers thereof to pay the
applicable amount of net proceeds arising therefrom and due to the Lender
pursuant to this Agreement directly to the Lender;

(f)            Corporate Existence. The Borrower shall maintain in good standing
its corporate existence under the laws of the State of Delaware and qualify and
remain duly qualified to do business and own property in each jurisdiction in
which such qualification is necessary in view of, and to carry on, its Core Line
of Business in a commercially reasonable manner in accordance with past
practice, and each Guarantor shall maintain in good standing its corporate
existence under the laws of the jurisdiction of its incorporation and qualify
and remain duly qualified to do business and own property in each jurisdiction
in which such qualification is necessary in view of its business and operations;

(g)           Preservation of Material Authorizations. Preserve, maintain in
effect at all times and at all times comply in all material respects with all
Material Authorizations;

(h)           Compliance with Applicable Law, Material Agreements, etc.
(i) Except where any such failure could not reasonably be expected to have a
Material Adverse Effect, comply with (A) the requirements of all Applicable
Laws, with all obligations, which, if contravened, could give rise to a Lien
(other than a Permitted Encumbrance) over any of the Collateral, and with all
insurance policies required to be maintained under 6.1(q), and (B) all Material
Agreements to which it is a party or by which it or its properties are bound;
(ii) except where any such changes could not reasonably be expected to have a
Material Adverse Effect, obtain the Lender’s prior written consent (which
consent may be withheld in the Lender’s sole and absolute discretion) before
making, permitting or allowing any material amendments or other material changes
to, or the termination of, any Material Agreement

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(excluding leases of space in respect of the Properties of less than two
thousand, five hundred (2,500) square feet) or any other agreement affecting the
Security, except pursuant to an ordinary course renewal thereof consistent with
past practice; (iii) notify the Lender of any default by any party with respect
to such Material Agreements and take all commercially reasonable steps to cure
any such default; (iv) obtain the Lender’s prior written consent before entering
into any agreement containing any provision which would be violated or breached
by the performance of its obligations hereunder or under the Loan Documents or
under any instrument or document delivered or to be delivered by it hereunder or
in connection herewith, or which would violate or breach any provision hereunder
or under the Loan Documents or under any instrument or document delivered or to
be delivered by it hereunder or in connection herewith; and (v) obtain the
Lender’s prior written consent before making any material amendments to its
constating documents;

(i)            Payment of Obligations. Subject to the right to contest
legitimate disputes, and subject, where applicable to the provisos in
Section 6.1(u), pay and discharge, or cause to be paid and discharged, all its
indebtedness and obligations to other Persons promptly in accordance with normal
terms and practices of its businesses, before they shall become in default, as
well as all lawful claims for labour, materials and supplies which otherwise, if
unpaid, might become a lien or charge upon its properties or any part thereof;

(j)            Accounting Methods and Financial Records. Maintain a system of
accounting which is established and administered in accordance with GAAP and
keep adequate records and books of account in which accurate and complete
entries shall be made in accordance with such accounting principles reflecting
all transactions required to be reflected by such accounting principles;

(k)           Public Information. The Borrower shall from time to time deliver
to the Lender copies of all reports, financial statements, information or proxy
circulars and other information sent by the Borrower to its shareholders at the
same time as the Borrower sends such material to its shareholders and the
Borrower shall deliver to the Lender copies of all registration statements,
prospectuses, press releases, material change reports and similar disclosure
documents filed by the Borrower with any securities regulatory authority
(including the Securities Commission) or stock exchange, provided that if any
such reports or disclosures are filed on a confidential basis, then the Borrower
shall not be required to deliver the same to the Lender until such time as they
are no longer filed on a confidential basis;

(l)            Books and Records; Reporting. Keep and maintain (and provide the
Lender and its representatives and agents with reasonable access and copies of
same if so requested by the Lender) at all times at the Borrower’s address
(in the case of the Borrower) or at each Guarantor’s address (in the case of the
Guarantors), or at the Borrower’s address, or at such other place as the Lender
may approve in writing, complete and accurate books of accounts and records
adequate to reflect the results of the operation of each of the Properties, any
financial statements required to be provided to the Lender pursuant to any of
the Mortgages, and copies of all written contracts, correspondence, and other
documents affecting any of the Properties. Without limiting the foregoing, the
Borrower and each Guarantor agrees to deliver the following to the Lender,
in duplicate:

(i)            upon the written request of the Lender, and contemporaneously
with the Fiscal Quarter and Fiscal Year financial statements required under this
Section 6.1(l), a certificate (a “Compliance Certificate”) signed by an officer
of the Borrower and an officer of each Guarantor stating that to the best of his
or her knowledge after having made reasonable inquiry and without personal
liability to such officer:

(A)          (1) no Unmatured Event of Default or Event of Default has occurred
and is continuing or (2) if any such Unmatured Event of Default or Event of
Default has occurred and is continuing, a statement as to the nature and status
thereof, including specifying the relevant particulars and the period of
existence thereof and the action taken, being taken or proposed to be taken by
or on behalf of the Borrower or any Guarantor with respect thereto, and stating
that otherwise no Unmatured Event of Default or Event of Default has occurred
during such Fiscal Quarter or Fiscal Year, as applicable, which is still
continuing;

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(B)           confirming that no distributions, dividends, transfers, loans or
other payments have been made by the Borrower or the Guarantors in contravention
of this Agreement; and

(C)           in each case where a Material Adverse Change has occurred,
specifying the relevant particulars, the period of existence and the action
taken, being taken or proposed to be taken by or on behalf of the Borrower of
any Guarantor with respect thereto,

such certificate to relate to the period from the end of the then last preceding
Fiscal Quarter or Fiscal Year, as applicable, of the Borrower or such Guarantor
in question, to and including the date of such certificate;

(ii)           the Borrower and the Guarantors shall prepare and furnish
(or cause to be so prepared and furnished) to the Lender:

(A)          within 60 days after the end of each month, an unaudited income
statement and a balance sheet for the Borrower and each of the Guarantors for
the preceding month, and such other documentation as the Lender may reasonably
request from time to time certified as true, correct and complete by the
Borrower and each of the Guarantors, as applicable;

(B)           as soon as available and in any event within 60 days after the end
of each Fiscal Quarter of the Borrower and the Guarantors, a copy of the
unaudited financial statements of the Borrower and each Guarantor for such
Fiscal Quarter;

(C)           as soon as available and in any event within 120 days after the
end of the Fiscal Year of the Borrower and the Guarantors, a copy of the audited
annual financial statements for the Fiscal Year just ended of the Borrower and
unaudited for each of the Guarantors fairly presenting the financial condition
and the results of the operations of the Borrower and each Guarantor, including,
without limitation, a balance sheet, an income statement and such additional
reasonable information as the Lender may reasonably request from time to time;

(D)          as soon as practicable and in any event not later than 40 days
after the commencement of each Fiscal Year of the Borrower and the Guarantors,
projected financial statements for the following Fiscal Year, including in each
case, projected balance sheets, statements of income and retained earnings of
the Borrower and the Guarantors, all in reasonable detail and in any event to
include projected operating and capital budgets; and

(E)           if reasonably requested by the Lender, the Borrower will provide
supporting documentation for all receipts and expenditures disclosed on any of
the aforementioned financial statements and reports, including, but not limited
to, bank statements, contracts, invoices, copies of checks and general ledgers.
To the extent the Lender reasonably requires based on adverse or incorrect
matters disclosed in the Borrower’s records or computations, the Lender may
audit the accuracy of the Borrower’s records and computations at any time and
the reasonable costs and expenses of any such audit shall be paid by the
Borrower. If an Event of Default shall be continuing, the Lender shall be free
to conduct such audits as the Lender may deem reasonably necessary and such
shall be paid for by the Borrower; and

(iii)          at any time, if requested by the Lender, the Borrower shall
submit to the Lender (A) a detailed written statement of the status of any
remediation activities in respect of the Properties (I) required under each of
the Environmental Reports, to comply with Environmental Laws and/or
(II) requested by the Lender in respect of the Properties, acting reasonably,
including, without limitation, a statement as to remediation work performed to
date and remediation work remaining to be completed, and (B) an updated report
prepared by a consultant reasonably satisfactory to the Lender of (x) each of
the Environmental Reports which contain recommendations for action by the
Borrower and/or (y) the most recent update provided to comply herewith,
including in such update the amounts expended during such period. In addition,
the Borrower will provide to the Lender

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copies of all notices or warnings of violations, or potential violations, of
Environmental Laws received by the Borrower within five days of receipt of such
notices or warnings;

(m)          Reporting Requirements re Borrower Restructuring Plan. The Borrower
shall deliver to the Lender reasonably detailed monthly progress reports on the
30th day of each month with respect to the Borrower Restructuring Plan, with the
first such report to be delivered on September 30, 2007. The monthly progress
reports shall include (i) monthly financial statements, including up-to-date
cash flow forecasts, summary of capital expenditures incurred in the month and
planned, and revised or amended budgets, (ii) an updated marketing plan for the
asset sales set out in the Borrower Restructuring Plan, including expected dates
for retaining sales agents/brokers, distributing sales materials, receiving
offers, executing documentation and closing and summaries of offers and
expressions of interest received, (iii) a reconciliation of deviations (if any)
from the previously delivered monthly progress report, and (iv) such other
information as the Lender requests, acting reasonably;

(n)           General Reporting Requirements. The Borrower shall deliver to the
Lender and MID weekly cash flow forecast reports with respect to the Borrower
(in form and substance satisfactory to the Lender, acting reasonably), together
with a reconciliation of deviations (if any) from the previously delivered
weekly report;

(o)           Other Financial Information. As soon as practicable following a
request therefor from the Lender, the Borrower shall furnish to the Lender such
other financial information as the Lender may reasonably request from time
to time;

(p)           Required Remediation and Environmental Actions. Upon request of
the Lender, the Borrower or the Guarantors, as applicable, hereby agree to
complete the remediation actions recommended to be taken in the Environmental
Reports with respect to the Mortgaged Properties and not heretofore undertaken
which, if not undertaken, would be reasonably likely to have a Material Adverse
Effect. The term “Environmental Reports” means collectively the environmental
reports referred to in Schedule C, and any updates or addenda thereto if and to
the extent approved by the Lender in writing, and any reports related to the
Environment produced internally by the Borrower or by personnel external to the
Borrower, including environmental operation and/or compliance audits, in each
case along with a reliance letter relating thereto addressed to the Lender in
form and substance satisfactory to the Lender. In connection with such required
remediation actions, the Borrower and/or the Guarantors shall provide the
opportunity to the Lender to independently confirm that the environmental
conditions are in conformity with Environmental Laws, at the cost of the
Borrower, and if the Lender elects not to make such confirmation, then the
Borrower or the Guarantors shall obtain an update to the applicable
Environmental Report as and when requested by the Lender, acting reasonably,
reporting as to the remediation work undertaken and confirming that the
remaining environmental conditions are in conformity with Environmental Laws. In
connection with each update to an Environmental Report, the Borrower or the
Guarantors shall obtain a reliance letter relating thereto addressed to the
Lender in form and substance reasonably satisfactory to the Lender and shall
deliver such updates and reliance letters to the Lender. The Borrower and the
Guarantors covenant that any soils or other materials that are removed in
connection with any remediation of any of the Properties shall be disposed of in
conformity with requirements of law at a location other than any of
the Properties;

(q)           Maintenance of Insurance. The Borrower shall maintain on behalf of
itself and its Subsidiaries or shall cause its Subsidiaries to maintain,
insurance with responsible and reputable insurance companies or associations in
such amounts and covering such risks as is usually carried by companies engaged
in similar businesses and owning similar properties in the same general areas in
which the Borrower or such Subsidiary operates, with the Lender having approved
the present insurers and insurance; provided, however, that the Borrower and its
Subsidiaries may self-insure to the same extent as other companies engaged in
similar businesses and owning similar properties in the same general areas in
which the Borrower or such Subsidiary operates and to the extent consistent with
prudent business practice;

(r)            Payment of Taxes. The Borrower and each of its Subsidiaries
shall:

(i)            pay and discharge all Taxes, duties, assessments and other
liabilities payable by the Borrower or such Subsidiary;

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(ii)           withhold and collect all Taxes required to be withheld and
collected by it and remit such Taxes to the appropriate Governmental Body at the
time and in the manner required; and

(iii)          pay and discharge all obligations incidental to any trust imposed
upon it by statute which, if unpaid, might become a Lien (other than a Permitted
Encumbrance) upon any of its Properties;

except that no such Taxes or obligations need be paid, collected or remitted if
(i) it is being actively and diligently contested in good faith by appropriate
and timely proceedings, (ii) reserves considered adequate by the Borrower or its
Subsidiaries shall have been set aside therefor on its books, and (iii) such
Taxes or obligation shall not have resulted in a Lien other than a Permitted
Encumbrance, for which any enforcement proceedings, if commenced, shall have
been stayed and, in any event, appropriate security shall have been given, if
required, to prevent the commencement or continuation of proceedings;

(s)           Tax Deposits. Upon written direction from the Lender after the
occurrence of an Unmatured Event of Default or an Event of Default which remains
uncured, the Borrower shall immediately commence to deposit with the Lender
commencing with the first interest payment due under the Loan and on the first
day of each month thereafter until the earlier of (i) the date that the
Indebtedness is fully paid and (ii) the Unmatured Event of Default or Event of
Default has been cured, a sum equal to one-twelfth ( 1/12) of the total annual
taxes and assessments (general and special) respecting each of the Properties
and the costs of insurance premiums, based upon the Lender’s reasonable estimate
as to the amount of the taxes, assessments and premiums to be levied, assessed
and incurred (except to the extent, and only to the extent, that, in respect of
the Golden Gate Property and/or the Santa Anita Property, the Borrower or any
Guarantor is making such payments to BMO and/or Wells Fargo, as the case may be,
pursuant to the BMO Credit Agreement and/or the Santa Anita Senior Credit
Facility). The Borrower’s initial deposit shall be increased by an amount equal
to the Lender’s reasonable estimate of the amount of such taxes and insurance
premiums to become owing on the due dates for the payment of such taxes and
insurance premiums less the monthly payments to be deposited hereunder prior to
such due dates. If any such taxes or insurance premiums relating to each of the
Properties are also related to other premises, the amount of any deposit
hereunder shall be based upon the Borrower’s and/or any Guarantor’s share of the
taxes, assessments or insurance premiums, the Borrower shall apportion the total
amount of the taxes, assessments or premiums levied or assessed as between such
other premises and each of the Properties for the purposes of computing the
amount of any deposit hereunder. Such deposits shall be held without any
allowance of interest. Such deposits shall be used for the payment of such
taxes, assessments and insurance premiums on each of the Properties on the
earliest possible date when such payments become due. If the funds so deposited
are insufficient to pay any such taxes, assessments and insurance premiums for
any year when the same shall become due and payable, the Borrower shall, within
10 Banking Days after receipt of demand therefor from the Lender, deposit such
additional funds as may be necessary to pay such taxes, assessments and
insurance premiums in full. If the funds so deposited exceed the amount required
to pay such taxes, assessments and insurance premiums for the year, the excess
shall be applied on a subsequent deposit or deposits. Said deposits shall be
kept in a separate, non-interest bearing account created by and in the name of
the Lender. Upon the occurrence of an Unmatured Event of Default or an Event of
Default, the Lender may, at its option, without being required to do so, apply
any monies at the time on deposit pursuant to this Section 6.1(s) on any of the
Indebtedness, in such order and manner as the Lender may elect. When the
Indebtedness has been fully paid, any remaining deposits shall be paid to the
Borrower. A security interest within the meaning of the Uniform Commercial Code
of the state in which the Borrower is organized as a legal entity is hereby
granted to the Lender in and to any monies at any time on deposit pursuant to
this Section 6.1(s), as additional security for the Indebtedness. Such funds
shall be applied by the Lender for the purposes made hereunder and shall not be
subject to the direction or control of the Borrower. The Lender shall not be
liable for any failure to apply the funds so deposited hereunder to the payment
of any particular taxes, assessments and insurance premiums unless the Borrower,
while not in default hereunder, shall have requested the Lender in writing to
make application of such funds to the payment of the particular taxes,
assessments or premiums for payment of which they were deposited, accompanied by
the bills for such taxes, assessments or premiums. The Lender shall not be
liable for any act or omission taken in good faith or pursuant to the
instruction of any party, but shall be liable only for gross negligence or
wilful misconduct;

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(t)            Preserve Security. The Borrower and each of the Guarantors shall
upon reasonable request in writing by the Lender do, observe and perform all
matters and things reasonably within its powers necessary or expedient to be
done, observed or performed for the purpose of maintaining and preserving the
security interest of the Lender as provided for herein and in the Security as
valid security, perfected in the manner contemplated hereby and in the Security;

(u)           Defense of Collateral. The Borrower and the Guarantors shall pay
when due all obligations, lawful claims or demands with respect to each of the
Properties which, if unpaid, might result in, or permit the creation of, any
Lien on such Property, including but not limited to all lawful claims for
labour, materials and supplies; provided that the Borrower or the applicable
Guarantor shall have the right to contest any such claim so long as the Borrower
or such Guarantor posts a bond acceptable to the Lender to protect the Lender’s
interest in such Property, and, in general, do or cause to be done everything
necessary to fully preserve the rights and interests of the Lender under this
Agreement and the other Loan Documents in respect of such Property. The Borrower
and the Guarantors shall at all times defend the Lender’s interest in and to the
Properties, and the priority position of said interest subject to the Permitted
Encumbrances, against any and all claims of any Person adverse to the Lender.
The Borrower and the Guarantors shall take all actions reasonably deemed
necessary or appropriate by the Lender to give effect to the Lender’s priority
of interests contemplated by this Agreement and the other Loan Documents;

(v)           Maintenance of the Properties. Subject to work done in connection
with the Construction (as defined in and permitted by the Remington Construction
Loan Agreement) and the Reconstruction (as defined in and permitted by the
Gulfstream Construction Loan Agreement), the Borrower and the Guarantors shall
keep the Properties, including all buildings and improvements now or hereafter
situated thereon, and all equipment owned by them and material to the operation
of any of the Properties, in good condition subject to reasonable wear and tear,
not commit or permit any waste thereof, make all necessary or advisable repairs,
replacements and improvements and subject to force majeure, and complete and
restore promptly and in good workmanlike manner any building, improvements or
other items of any of the real property that may be damaged, or destroyed, and
subject to the right to contest legitimate disputes, pay when due all costs
incurred therefor;

(w)          Material Adverse Change. Upon the happening of any Material Adverse
Change, the Borrower and/or the Guarantors shall promptly advise the Lender of
such change or event;

(x)            Notice of Default. The Borrower and each of the Guarantors shall
promptly provide the Lender with a copy of all written notices and reports
received or delivered by the Borrower or such Guarantor (including notices of
default) under any of the Organizational Documents, Occupancy Agreements,
Construction Contracts or Material Agreements or any other agreement providing
for the borrowing of money or other extension of credit, and notices of
violations of Applicable Law received by the Borrower or any of the Guarantors
relating to any of the Properties that might have a Material Adverse Effect,
including, without limitation, all racing and/or gaming licenses. The Borrower
shall furnish, or cause to be furnished, to the Lender, immediately upon
becoming aware of the existence of an Event of Default or any Unmatured Event of
Default, written notice of the existence of any such event or the existence of
any such condition;

(y)           Notification of Attachment or Other Action. As soon as it becomes
aware of same, the Borrower and/or each of the Guarantors shall immediately
notify the Lender in writing of any attachment or other legal process levied or
threatened against any of the Properties, or the institution of any action, suit
or proceeding by or against the Borrower, any of the Guarantors or any of the
Properties, or any information received by the Borrower and/or any of the
Guarantors relative to any of the Guarantors and/or the Borrower or any of the
Properties which might have a Material Adverse Effect or constitute a Material
Adverse Change;

(z)            Notice of Litigation and Other Matters. The Borrower and the
Guarantors shall, as soon as practicable after any of them shall become aware of
the same, give notice to the Lender of the following events:

(i)            the commencement of any action, proceeding, arbitration or
investigation against or in any other way relating adversely to the Borrower or
any of the Guarantors or any of their respective properties, assets or
businesses by any Person (including any Governmental Body) which, if

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adversely determined, could singly or when aggregated with all other such
actions, proceedings, arbitrations and investigations reasonably be expected to
have a Material Adverse Effect;

(ii)           any actual, pending or threatened litigation, arbitration or
other proceeding relating to the Borrower or any of the Guarantors or any of
their property, assets or business, including any of the Properties, which if
decided adversely could result in a Material Adverse Change;

(iii)          any insurance claim made by the Borrower or any of the Guarantors
in excess of $1,000,000;

(iv)          any development which has had or could reasonably be expected to
have a Material Adverse Effect; and

(v)           any Default or Event of Default;

specifying, in each case, the relevant particulars thereof and the period of
existence thereof and the action taken, being taken or proposed to be taken by
or on behalf of the Borrower or any Guarantor with respect thereto;

(aa)         Surveys. After the recording of any subdivision, plan of
subdivision or small-scale planned development with respect to any of the
Properties, the Borrower and the Guarantors shall obtain and deliver to the
Lender, at the Borrower’s and Guarantors’ expense, in a form reasonably
acceptable to the Lender: (i) an updated plan of survey for such Property
showing such Property as so subdivided; and (ii) an endorsement to the Lender’s
title insurance policy confirming the new legal description created by said
subdivision and affirmative insurance that the Mortgage in respect of such
Property continues to encumber such Property, as subdivided and newly described;

(bb)         Inspections and Meetings. The Borrower and each of the Guarantors
shall permit each of the Lender and its authorized employees, representatives
and agents at reasonable times and during normal business hours, upon giving
reasonable notice, to discuss, or meet at the head office of the Borrower to
discuss, with senior management of the Borrower, the business, property,
financial condition and prospects of the Borrower and/or any of the Guarantors
(including the Borrower Restructuring Plan) and to inspect any of
the Properties;

(cc)         USA Patriot Act. The Borrower hereby covenants that until such time
as the Obligations are paid in full, neither it nor any of its Subsidiaries will
take action (or fail to take any action) that would violate the PATRIOT Act,
IEEPA or OFAC and will take all customary and reasonable steps to ensure that
they are in compliance with any orders issued thereunder. For purposes hereof,
“IEEPA” means the International Emergency Economic Power Act, 50 U.S.C.
§1701 et. seq., “OFAC” means the U.S. Department of Treasury’s Office of Foreign
Asset Control and “Patriot Act” means the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 (Public Law 107-56) (The USA PATRIOT Act);

(dd)         Separateness of Guarantors. Each of the Guarantors shall:

(i)            maintain books and records and, if a Guarantor providing a
secured guarantee hereunder, bank accounts, separate from those of any other
Person and maintain separate financial statements, except that it may also be
included in consolidated financial statements of its Affiliate;

(ii)           except for the Dixon Guarantor and the Ocala Guarantors, be, and
at all times hold itself out to the public and all other Persons as, a separate
legal entity and correct any known misunderstandings regarding its existence as
a separate legal entity;

(iii)          pay the salaries of its own employees, if any, and maintain a
sufficient number of employees in light of its contemplated business operations;

(iv)          except for the Dixon Guarantor and the Ocala Guarantors, use its
own stationary, invoices and cheques;

(v)           file its own tax returns with respect to itself (or consolidated
tax returns, if applicable) as may be required under applicable law;

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(vi)          except as contemplated by the Loan Documents, and except for the
Dixon Guarantor and the Ocala Guarantors, not commingle or permit to be
commingled its funds or other assets with those of any other Person;

(vii)         maintain its assets in such a manner that it is not costly or
difficult to segregate, ascertain or identify its individual assets from those
of any other Person;

(viii)        except as contemplated by the Loan Documents, the Gulfstream
Construction Loan Agreement and the Remington Construction Loan Agreement, not
guarantee or otherwise hold itself or its assets out to be responsible or
available for the debts or obligations of any Person, including any Affiliate;

(ix)           except for the Dixon Guarantor and the Ocala Guarantors, conduct
business in its own name;

(x)            hold separate annual shareholder meetings (or adopt written
resolutions in lieu thereof where permitted under applicable corporate law),
with a copy of such minutes and/or resolutions delivered to the Lender;

(xi)           hold separate quarterly and annual Board of Directors meetings
(or adopt written resolutions in lieu thereof where permitted under applicable
corporate law), with a copy of such minutes and/or resolutions delivered to the
Lender; and

(xii)          maintain adequate capital in light of its contemplated business
operations;

(ee)         Availability. All requests for Advances shall be consistent (to be
determined by the Lender in its sole and absolute discretion) with the Borrower
Restructuring Plan and the weekly cash flow forecast reports that the Borrower
is required to deliver to the Lender and MID and used solely to fund:
(i) operations; (ii) mandatory payments of principal or interest and costs, fees
and expenses due and owing to the Lender under this Agreement and/or any other
loans or credit facilities provided by the Lender to the Borrower and/or its
Subsidiaries, including, without limitation, the Gulfstream Construction Loan
Agreement and the Remington Construction Loan Agreement; (iii) mandatory
payments of interest in connection with Permitted Debt, provided that the making
of any such payment is not prohibited by this Agreement and shall not result in
an Unmatured Event or Default or an Event of Default under this Agreement;
(iv) Maintenance Capital Expenditures; and (v) Capital Expenditures required
pursuant to the terms of the joint venture arrangements with Forest City
Enterprises, Inc. and Caruso Affiliated;

(ff)           Fair Enterprise Investment. The Borrower shall close the Fair
Enterprise Investment as soon as possible after the date hereof and, in any
event, on or prior to October 31, 2007. The Borrower hereby covenants that net
proceeds raised from the Fair Enterprise Investment shall be applied in a manner
consistent (to be determined by the Lender in its sole and absolute discretion)
with the Borrower Restructuring Plan and the weekly cash flow forecast reports
that the Borrower is required to deliver to the Lender and MID, and that no
further Advances shall be requested or made hereunder until all such proceeds
have been exhausted;

(gg)         Appraisals. The Borrower shall deliver to the Lender, as soon as
reasonably practicable following the date hereof, updated appraisals, in form
and substance reasonably satisfactory to the Lender, for the Santa Anita
Property, the Golden Gate Fields Property and Gulfstream Park; and

(hh)         Interest Rate Increases. To the extent that either of the Interst
rate increases contemplated in Sections 4.1(a)(ii) or (iii) has occurred, the
Borrower shall use, and shall cause its Subsidiaries to use, commercially
reasonable efforts to provide such additional security as the Lender, in its
sole and absolute discretion, requests.

6.2          Negative Covenants

The Borrower and each of the Guarantors covenants and agrees with the Lender
that, except as expressly permitted under this Agreement and the other Loan
Documents, it shall not, nor shall it permit any of its respective Subsidiaries
to, from and after the Closing Date until the Loan (including interest thereon)
and all fees and expenses to be paid by the Borrower to the Lender hereunder are
paid in full:

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(a)           Encumber Property. Create, grant, assume or suffer to exist any
Lien upon any of its or their properties or assets, other than Permitted
Encumbrances and Liens arising in connection with financial assistance permitted
by Section 6.2(h);

(b)           Capital Expenditures. Without the Lender’s prior written approval,
exercisable in the Lender’s sole discretion, incur or commit or agree to incur
any Capital Expenditures, or any lienable work to be done to or for the benefit
of any of the Properties, except (i) in accordance with the Borrower
Restructuring Plan, (ii) as required pursuant to the terms of the joint venture
arrangements with Forest City Enterprises, Inc. and Caruso Affiliated, and
(iii) emergency repairs;

(c)           Transactions with Affiliates. Repay any existing indebtedness or
liabilities owed to, or otherwise enter into any transaction or agreement with,
any Affiliate (or any corporation which, after the transaction in question
becomes effective, would become an Affiliate), other than the Lender and its
Affiliates (other than the Borrower and its Subsidiaries), or permit any of its
Subsidiaries to enter into any such transaction, other than (i) with an
Affiliate which is the Borrower or a Guarantor, (ii) where such transaction
constitutes the purchase, sale or lease of assets or the purchase or provision
of services, in each case in the ordinary course of business consistent with
past practice and either (A) such transaction is conducted on commercially
reasonable terms and conditions, or (B) if such transaction relates to sharing
facilities or personnel among the Borrower and one or more of its Affiliates,
the related costs are allocated on a reasonable basis or (iii) where the
repayment is of unsecured intercompany indebtedness that is Permitted Debt and
has been established in the ordinary course of the Borrower’s cash management
process consistent with past practice;

(d)           Amalgamations, etc. Except as specifically set forth in the
Borrower Restructuring Plan, enter into any transaction (including by way of
reorganization, consolidation, amalgamation, liquidation, transfer, sale or
otherwise) whereby the Borrower or any of its Subsidiaries, all or any other
material portion of the undertaking, property and assets of the Borrower or any
of its Subsidiaries, would become the property of any other Person;

(e)           Change in Ownership of Subsidiaries. Except as specifically set
forth in the Borrower Restructuring Plan, sell or otherwise transfer or dispose
of any shares in the capital stock of any Subsidiary, or any warrants, rights or
options to acquire such stock, or permit any Subsidiary to issue, sell or
otherwise transfer or dispose of any shares in its capital stock or the capital
stock of any Subsidiary or any warrants, rights or options to acquire such stock
except to the Borrower or any Subsidiary;

(f)            Investments; Acquisitions. Engage directly or indirectly in any
business activity unrelated to its Core Line of Business, or purchase or
otherwise acquire or make any investment in any properties or assets, or permit
or otherwise undertake any Acquisitions; provided, however, that the Borrower
may make investments in Cash Equivalents in amounts and pursuant to terms
acceptable to the Lender, acting reasonably;

(g)           Restricted Payments: Without in any way limiting the generality of
the restrictions and limitations contained within the covenants referenced in
this Agreement, for so long as the Loan and/or any Guarantees and Indemnities
delivered in connection therewith remains outstanding, the Borrower and each of
its Subsidiaries (except for the Gulfstream Guarantor, the Palm Meadows Training
Guarantor and the Remington Borrower, which entities shall be permitted to make
restricted payments in accordance with and subject to the provisions set forth
in the Gulfstream Construction Loan Agreement and the Remington Construction
Loan Agreement) is prohibited from undertaking the following without the express
prior written consent of the Lender in its sole and absolute discretion:

(i)            making any payments on, in respect of or arising under or in
connection with any indebtedness pari passu with or subordinated to the Loan or
indebtedness owed to any Affiliate, including any indebtedness owing to a
shareholder or a Subsidiary (other than the Lender), other than payments of
interest due and owing where the making of such payments will not result in an
Unmatured Event of Default or an Event of Default under this Agreement;
provided, however, that the Borrower may make payments of principal on its
existing unsecured indebtedness in favour of MEC Grundstucksentwicklungs GmbH
and Fontana Betelligungs AG;

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(ii)           making any loans to third parties or Affiliates; provided,
however, that the Borrower and its Subsidiaries may enter into unsecured
intercompany indebtedness that is Permitted Debt pursuant to clause (xviii) of
the definition thereof;

(iii)          redeeming, purchasing or otherwise retiring or cancelling for
consideration any securities (including any warrants, options or rights to
acquire securities, “Securities”), excluding conversion of the Subordinated Debt
into equity of the Borrower in accordance with its terms;

(iv)          creating any sinking fund or entering into any analogous
arrangement whereby cash is set aside or segregated for the payment of any
indebtedness, other than the Loan, or for the acquisition of any equity
securities of the Borrower;

(v)           except for issuances of the Borrower’s Class A Subordinate Voting
Stock, issuing any Securities containing any mandatory or fixed payment
obligations of any kind, whether dividend or premium or otherwise;

(vi)          declaring or paying any dividends, other than in the case of the
Borrower as required by the Borrower’s certificate of incorporation;

(vii)         paying any management, consulting or similar fee, or comparable
payment outside of the ordinary course of business consistent with past practice
(which past practice the Lender acknowledges includes the payment of management
fees to the Borrower by its Subsidiaries of up to 2.5% of the gross revenues of
such Subsidiary); and

(viii)        entering into any transactions with any Affiliate for the purposes
of undertaking indirectly any transaction or activity that is otherwise
prohibited by this Section 6.2(g);

(h)           Debt. Directly or indirectly, incur, assume or suffer to exist any
indebtedness (including Capital Lease Obligations and Contingent Liabilities) or
enter into any guarantees, hypothecation, contracts or other agreements which
would make the Borrower or such Subsidiary liable for any indebtedness
(including Capital Lease Obligations and Contingent Liabilities) or expense
other than (i) Permitted Debt or (ii) indebtedness arising in connection with
financial assistance permitted by Section 6.2(i);

(i)            Financial Assistance. Provide financial assistance, either
directly or indirectly, by means of a guarantee, provision of security or
otherwise to any Person, except for (i) Permitted Debt or Permitted Encumbrances
and any other obligations which the Borrower may enter into in favour of the
Lender, (ii) financial assistance given by the Borrower to any Guarantor, or by
any Guarantor to the Borrower or any other Guarantor and (iii) financial
assistance given to a Subsidiary in connection with an acquisition or investment
expressly permitted by this Agreement;

(j)            Disposition of Assets. Sell, assign, transfer, convey, lease or
otherwise alienate or dispose of any assets or properties, or any interest
therein (financial or management) whether legal or equitable (or agree to do any
of the foregoing), outside of the ordinary course of business consistent with
past practice, without the prior written consent of the Lender; except that the
Borrower or any Guarantor may (i) sell, lease or consign assets or properties
contemplated for sale in the Borrower Restructuring Plan or that constitute real
property held for sale or development or excess racetrack lands, provided that,
in all cases, the proceeds therefrom are used to pay off debt in accordance with
Section 2.4, and (ii) transfer, abandon, surrender or otherwise dispose of any
non-material fixtures, equipment, machinery, tools, implements, facilities and
appliances which may have become worn out, unserviceable, obsolete, unsuitable
or unnecessary in the conduct of their businesses;

(k)           ERISA. Following the Closing Date, (i) adopt or institute any
Employee Benefit Plan that is an employee pension benefit plan within the
meaning of Section 3(2) of ERISA, (ii) take any action which will result in the
partial or complete withdrawal, within the meanings of Sections 4203 and 4205 of
ERISA, from a Multiemployer Plan except in the case of a closure of the
businesses or facilities of an ERISA Affiliate, (iii) engage or permit any
Person to engage in any non-exempt transaction prohibited by Section 406 of
ERISA or Section 4975 of the IRC involving any Employee Benefit Plan or
Multiemployer Plan which would subject Borrower, any of the

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Guarantors or any ERISA Affiliate to any tax, penalty or other liability
including a liability to indemnify, (iv) incur or allow to exist any accumulated
funding deficiency (within the meaning of Section 412 of the IRC or Section 302
of ERISA), except for any funding deficiencies that relate to a Multiemployer
Plan caused by a third party (other than an Affiliate of the Borrower), (v) fail
to make full payment when due of all amounts due as contributions to any
Employee Benefit Plan or Multiemployer Plan, (vi) fail to comply with the
requirements of Section 4980B of the IRC or Part 6 of Title I(B) of ERISA,
(vii) adopt any amendment to any Employee Benefit Plan which would require the
posting of security pursuant to Section 401(a)(29) of the IRC or (viii) permit
any ERISA Affiliate to do any of the things referred to in items (i) to (vii)
above, where singly or cumulatively, the above could be reasonably likely to
have a Material Adverse Effect;

(l)            Assertion of Certain Claims and Defenses. To the extent permitted
by Applicable Law, assert in any judicial proceeding any lender liability claim
or counterclaim, the defense of lack of consideration or violation of any
applicable usury laws or any similar legal or equitable defense to the validity
or enforceability of this Agreement or any other Loan Document;

(m)          Sale Leasebacks. Directly or indirectly, become or remain liable as
lessee or as guarantor or other surety with respect to any lease of any property
(whether real or personal or mixed), whether now owned or hereafter acquired,
(i) which the Borrower or any Guarantor has sold or transferred or is to sell or
transfer to any other Person other than the Borrower or a Guarantor or (ii) the
Borrower or any Guarantor intends to use for substantially the same purpose as
any other property which has been sold or is to be sold or transferred by the
Borrower or any Guarantor to any Person other than the Borrower or a Guarantor
in connection with such lease; and

(n)           Licences and Permits. Pledge any licences or permits, held by it
or any of its Subsidiaries, to any third party;

(o)           Occupancy Agreements. Enter into, nor permit to be entered into
Occupancy Agreements for any space which constitutes any material part of the
Properties or any of them without the prior written approval of the Lender,
acting reasonably, other than stall agreements, horsemen’s quarters and leases
for operations such as blacksmiths and veterinarians on market terms and
consistent with past practice;

(p)           Material Agreements. Enter into, nor permit to be entered into,
any new Material Agreements without the prior written consent of the Lender,
which consent may be withheld by the Lender in its sole and absolute discretion,
except for any Material Agreement directly related to a gaming transaction or
other strategic initiative contemplated by the Borrower Restructuring Plan;

(q)           Use. Use or develop a Mortgaged Property for any purposes other
than as contemplated under the Gulfstream Development Agreement, the Gulfstream
Construction Contracts (as defined in the Gulfstream Construction Loan
Agreement), the Remington Construction Contracts (as defined in the Remington
Construction Loan Agreement) and other permitted related purposes. Neither the
Borrower nor any of the Guarantors shall permit a Mortgaged Property or any
portion thereof to be converted or take any preliminary actions which could lead
to a conversion to condominium or cooperative form of ownership until such time
as the Loan is paid in full, together with all interest thereon;

(r)            Property Manager. Enter into any property management agreement in
respect of any of the Properties without the Lender’s prior written consent;

(s)           No Commingling Funds. Commingle any assets or funds of the
Guarantors (other than the Dixon Guarantor and the Ocala Guarantors) with assets
or funds of any of its shareholders, members, partners, principals, Affiliates
or any other Person;

(t)            Subordinated Debt. The Borrower shall not redeem any Subordinated
Debt (other than by conversion into equity of the Borrower, in accordance with
its terms) or otherwise create or become subject to any obligation to make any
unscheduled repayment of principal on, or repurchase of, the Subordinated
Debt; and

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(u)           No Change in Accounting Policies. Except as required by Applicable
Law, there shall be no changes to accounting policies, practices and calculation
methods from the accounting policies, practices and calculation methods used by
the Borrower and the Guarantors, respectively, as at the date of this Agreement.

6.3          Environmental Matters

(a)           The Borrower and each of the Guarantors shall maintain, for itself
and its Subsidiaries, a system to ensure and monitor continued compliance with
Environmental Laws, which shall include reviews of such compliance, and the
maintenance, in all material respects, of environmental documents and records
relating to their respective businesses as required by Environmental Law.

(b)           The Borrower and each of the Guarantors shall comply, and shall
take all necessary corporate or other action to cause any of its Subsidiaries to
comply with all Environmental Laws except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

(c)           The Borrower and each of the Guarantors covenants and agrees that
it and each Subsidiary shall not cause or permit a Release of any Hazardous
Substance except in compliance, in all material respects, with Environmental
Laws or that would not reasonably be expected to lead to material liability
under Environmental Laws against the Borrower or a Subsidiary.

(d)           The Borrower and each of the Guarantors covenants and agrees that
it and each Subsidiary shall not knowingly permit, and shall use reasonable
commercial efforts to prevent any person, including but not limited to any
invitee, occupant or tenant of or on real property or any part thereof, to
engage in any activity (or fail to take action), which is likely to lead to the
imposition of any Environmental or Safety Liability against the Borrower or a
Subsidiary which would have a Material Adverse Effect.

(e)           The Borrower and each of the Guarantors shall, and shall take all
necessary corporate action to cause each Subsidiary to, promptly remove any
Hazardous Substance (or if removal is prohibited by any Environmental Law, the
Borrower or applicable Subsidiary shall take whatever action is required to
ensure compliance with such Environmental Law) from any real properties
(or neighbouring lands where the Hazardous Substance has come from the
Properties) to the extent required by Environmental Law where the failure to do
so could reasonably be expected to have a Material Adverse Effect.

(f)            The Borrower and each of the Guarantors shall provide the Lender
with an environmental audit report (which shall include a report arising from an
environmental site assessment, investigation, compliance audit or environmental
review) with respect to any real property or an update of such audit (i) upon
the written request of the Lender documenting its reasonable opinion that the
Borrower or any Guarantor may not be in material compliance with this
Section 6.3; (ii) if such audit is required by any Governmental Body or (iii) if
an Event of Default relating to an environmental matter has occurred, and the
Lender has made a reasonable written request to the Borrower for such audit or
update to address the Event of Default within 60 days after such request, and
all such audits or updates thereof shall be at the Borrower’s expense.

(g)           If the Borrower, any Guarantor or any Subsidiary (i) receives
notice that any violation of any Environmental Law may have been committed or is
about to be committed by it, (ii) receives notice that any administrative or
judicial complaint or order has been filed or is about to be filed against it
alleging violations of any Environmental Law or requiring it to take any action
in connection with the release of Hazardous Substances into the environment, or
(iii) receives any notice from a Governmental Body or other Person alleging that
the Borrower or any Guarantor may be liable or responsible for any Environmental
or Safety Liability, in each case where the ultimate liability of the Borrower
and/or any of the Guarantors or any Subsidiary which may arise from such notice
could reasonably be expected to have a Material Adverse Effect, the Borrower
shall, and shall cause each Subsidiary to, provide the Lender with a copy of
such notice within five days of receipt thereof. The Borrower and each of the
Guarantors shall, and shall cause each Subsidiary to, also provide to the
Lender, as soon as practicable after it becomes available, a copy of any
environmental audit report (including any report arising from an environmental
site assessment, investigation, compliance audit or environmental review),
including any report required to be submitted to any Governmental Body. If any
such report estimates the cost of any clean-up or remedial action, including any
approved by a Governmental Body, to be in excess of $500,000, the Borrower and
each of the

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Guarantors shall, and shall cause each Subsidiary to, provide evidence
satisfactory to the Lender, acting reasonably, of disbursements made from time
to time to effect and complete such clean-up or remedial action, including
within such time as may be prescribed by a Governmental Body. The Borrower and
each of the Guarantors shall, and shall cause each Subsidiary to, provide
written evidence to the Lender, including a report which the Lender shall
expressly be entitled to rely on, confirming the completion of the clean-up or
remediation of a site with a cost in excess of $500,000, including any
investigations and monitoring.

(h)           The Borrower shall, and shall cause each Subsidiary to, permit the
Lender and its authorized employees, representatives and agents, at reasonable
times and during normal business hours and at the Borrower’s own cost, upon
giving reasonable notice, to visit, inspect and investigate (including intrusive
investigations)any real property where the Lender, in its reasonable opinion,
believes that the Borrower or any Subsidiary may not be in compliance with
Section 6.3(g).

ARTICLE 7

CONDITIONS PRECEDENT

7.1          Conditions Precedent to Closing

The obligations of the Lender to make available the Bridge Loan or any part
thereof to the Borrower are subject to compliance, on or before the Closing
Date, with each of the following conditions precedent, which conditions
precedent are for the sole and exclusive benefit of the Lender and may be waived
in writing by the Lender:

(a)           the representations and warranties set out in Section 5.1 shall be
true and correct in all material respects on the Closing Date as if made on and
as of such date;

(b)           no Default or Event of Default shall have occurred and be
continuing nor shall it be reasonably anticipated that there be any Default or
Event of Default immediately after giving effect to the execution of the
Loan Documents;

(c)           this Agreement, in form and substance satisfactory to the Lender,
shall have been executed and delivered to the Lender;

(d)           an amendment to the Gulfstream Construction Loan Agreement, in
form and substance satisfactory to the Lender, in its sole and absolute
discretion, shall have been executed and delivered by the parties thereto, which
amendment shall provide as follows:

(i)            the Borrower shall be added as a guarantor thereunder;

(ii)           the borrower and all the guarantors thereunder (which shall
include, without limitation, the Borrower) shall covenant to (A) use all
commercially reasonable efforts to implement the Borrower Restructuring Plan
(including the sale of specific assets by the time periods listed therein), and
direct any applicable asset sales proceeds as required under the Gulfstream
Construction Loan Agreement, and (B) reduce the indebtedness owing under the
Gulfstream Construction Loan Agreement by an amount of not less than
$100,000,000 by the Maturity Date; and

(iii)          as consideration for the foregoing, the Lender (as lender under
the Gulfstream Construction Loan Agreement), shall (A) waive payment of any
make-whole amount owing in respect of repayments made under the Gulfstream
Construction Loan Agreement by the Maturity Date and (B) agree to adjust the
amortization schedule for the Gulfstream Construction Loan Agreement at such
time as, prior to the Maturity Date, $100,000,000 of the loan thereunder has
been repaid, provided that (i) repayments by or on behalf of the borrower
thereunder shall first be applied to Tranche 2 (as such term is defined in the
Gulfstream Construction Loan Agreement), then to repayment of Tranche 3 (as such
term is defined in the Gulfstream Construction Loan Agreement, and then to
repayment of Tranche 1 (as such term is defined in the Gulfstream Construction
Loan Agreement) and (ii) at the time such repayments are received by the Lender,
no event of default, nor any event

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or circumstance, which, with the giving of notice, the lapse of time, or both,
would (if not cured or otherwise remedied during such time) constitute an event
of default, shall exist under the Gulfstream Construction Loan Agreement or the
Remington Construction Loan Agreement;

(e)           each of the Borrower, the Lender and MID shall have received the
approval of their respective board of directors;

(f)            the Lender shall have received an executed commitment letter or
subscription agreement, in form and substance satisfactory to the Lender, in its
sole and absolute discretion, pursuant to which Fair Enterprise Limited (or an
affiliate thereof) commits to providing an equity investment (the “Fair
Enterprise Investment”) in the Borrower of $20,000,000, which investment has
been agreed to by the Borrower’s board of directors; and

(g)           the Lender shall have received the following in form, scope and
substance satisfactory to the Lender, acting reasonably:

(i)            an Officer’s Certificate dated the Closing Date certifying that
attached thereto are true and correct copies of the following documents, and
that such documents are in full force and effect, unamended:

(A)          the articles or constating documents of the Borrower and each
Guarantor;

(B)           the by-laws or other organizational documents of the Borrower and
each Guarantor;

(C)           a certificate of incumbency including sample signatures of
officers and directors of the Borrower and each Guarantor who have executed any
of the Loan Documents, or any other document delivered to the Lender under this
Article; and

(D)          the resolutions or other documentation evidencing that all
necessary action, corporate or otherwise, has been taken by the Borrower and
each Guarantor to authorize the execution, delivery and performance of the Loan
Documents to which it is a party;

(ii)           a certificate of status, certificate of good standing or similar
certificate with respect to the jurisdiction of incorporation of the Borrower
and each Guarantor;

(iii)          the Disclosure Schedule;

(iv)          the Borrower Restructuring Plan; and

(v)           such other documentation or information as the Lender shall have
reasonably requested.

7.2          Conditions Precedent to Advances

The obligation of the Lender to make any Advances is subject to compliance, on
or before the relevant Borrowing Date, with each of the following conditions
precedent, which conditions precedent are for the sole and exclusive benefit of
the Lender and may be waived in writing by the Lender in its sole discretion:

(a)           the representations and warranties set out in Section 5.1 hereof
shall be true and correct on the relevant Borrowing Date as if made on and as of
such date and the Borrower and the Guarantors shall have delivered a certificate
to that effect;

(b)           no Default or Event of Default shall have occurred and be
continuing nor shall it be reasonably anticipated that there will be any Default
or Event of Default immediately after giving effect to the proposed Advance and
the Borrower and the Guarantors shall have delivered a certificate to
that effect;

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(c)           no Material Adverse Change shall have occurred since the Closing
Date in the case of the initial Advance and in the case of each subsequent
Advance, since the date of the last Advance and the Borrower and the Guarantors
shall have delivered a certificate to that effect;

(d)           the Lender shall have received a Borrowing Notice dated at least
five Banking Days prior to the relevant Borrowing Date (other than with respect
to the First Advance, which Borrowing Notice shall be dated contemporaneously
therewith);

(e)           the Intercreditor Agreements, in form and substance satisfactory
to the Lender, in its sole and absolute discretion, shall have been executed and
delivered by all parties thereto;

(f)            the BMO Credit Agreement shall have ben amended in form and
substance satisfactory to the Lender, in its sole and absolute discretion, to
provide for (i) this Agreement (unless a consent from BMO, in form and substance
satisfactory to the Lender, shall have been received to provide for this
Agreement), and (ii) an extension of the term of the credit facility therein
such that it expires no earlier than January 31, 2008;

(g)           the Lender shall have received the most recent monthly progress
report relating to the Borrower Restructuring Plan, in form and substance
satisfactory to the Lender, acting reasonably;

(h)           the Lender shall be satisfied, in its sole and absolute
discretion, that substantial progress has been made, and continues to be made,
toward closing of the Fair Enterprise Investment;

(i)            the Lender shall have received and be satisfied, in its sole and
absolute discretion, with updated environmental reports for each of the
Properties owned or leased by the Guarantors to be delivered pursuant to
Section 6.1(p).

(j)            as a condition precedent to the initial Advance only, the Lender
shall have received payment in full of (i) all reasonable invoiced fees and
reimbursable out-of-pocket expenses payable by the Borrower on or prior to the
date of such initial Advance in respect of this Agreement or under any other
Loan Document, including payment of all reasonable fees, disbursements and
out-of-pocket expenses of counsel to the Lender and (ii) the First Arrangement
Fee. For greater certainty, the Lender acknowledges that such amounts may be
paid to the Lender by the Borrower using proceeds from the initial Advance;

(k)           as a condition precedent to the first Advance on or following
January 15, 2008, the Lender shall be satisfied, in its sole and absolute
discretion, that that term of the BMO Credit Agreement will be extended such
that the facility thereunder expires no earlier than April 30, 2008 (or that a
refinancing of the BMO Credit Agreement has been arranged by the Borrower on
terms satisfactory to the Lender, acting reasonably);

(l)            as a condition precedent to the first Advance on or following
February 29, 2008, the Lender shall have received payment in full of the Second
Arrangement Fee;

(m)          as a condition precedent to the first Advance on or following
October 31, 2007, the Fair Enterprise Investment shall have closed;

(n)           to the extent that the Fair Enterprise Investment has closed,
proceeds therefrom shall have been (i) applied in a manner consistent (to be
determined by the Lender in its sole and absolute discretion) with the Borrower
Restructuring Plan and the weekly cash flow forecast reports that the Borrower
is required to deliver to the Lender and MID and (ii) fully exhausted;

(o)           as a condition precedent to the first Advance that would result in
the Loan exceeding $40,000,000, the Borrower shall have established to the
satisfaction of the Lender, in its sole and absolute discretion, that the
Borrower is in compliance with, can reasonably be expected to be able to
implement, and is using all commercially reasonable efforts to implement, the
Borrower Restructuring Plan;

(p)           as a condition precedent to the initial Advance only, the Lender
shall have received the following in form, scope and substance satisfactory to
the Lender, acting reasonably:

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(i)            opinions of each of the Borrower’s and Guarantors’ New York and
Delaware Agent, the Borrower’s and Guarantors’ Florida Agent, and the Borrower’s
and Guarantors’ California Agent addressed to the Lender, the Lender’s Agent
and, as applicable, the Lender’s Florida Agent, the Lender’s California Agent,
the Lender’s Delaware Agent, or the Lender’s New York Agent, which shall be
similar, mutatis mutandis, to opinions provided to the Lender in connection with
the initial advance under the Original Bridge Loan Agreement and which shall be
acceptable, in form and substance, to the Lender, acting reasonably; and

(ii)           the Lender shall have received, at the expense of the Borrower, a
loan title insurance policy and evidence of zoning compliance (in the form of a
zoning endorsement to the title insurance policy) in respect of each of the
Mortgaged Properties, all in form, scope and substance satisfactory the Lender;

(q)           as a condition precedent to the initial Advance only, as evidence
of, and security for, the Loan and all other obligations, liability and
indebtedness of the Borrower hereunder and under the other Loan Documents, both
present and future (the “Indebtedness”), the Borrower shall have delivered to
the Lender, in form satisfactory to the Lender and its counsel:

(i)            a grid promissory note in the amount of Eighty Million Dollars
($80,000,000) from the Borrower in favour of the Lender (the “Borrower Note”);

(ii)           a perfected Encumbrance (subject only to Permitted Encumbrances)
in all personal property of the Borrower now owned and hereafter acquired
(including, licences and permits), in each case to the extent permitted by
Applicable Law (with a negative pledge provided where a pledge is not permitted
by Applicable Law) pursuant to a general security agreement from the Borrower to
the Lender (the “Borrower General Security Agreement”);

(iii)          a second assignment of the right, title and interest of the
Borrower in, to and under the Holdback Agreement of even date with this
Agreement from the Borrower to the Lender, the Borrower and the Lender
acknowledging and agreeing that such Holdback Agreement was assigned by the
Borrower in favour of the Lender pursuant to the Note Assignment Agreement
whereby the Ancillary Rights (as such term is defined in the Note Assignment
Agreement) were assigned by the Borrower in favour of the Lender, it having been
acknowledged by PA Meadows, LLC under the Release and Termination Agreement that
Ancillary Rights under the Note Assignment Agreement included the right, title
and interest of the Borrower in, to and under the Holdback Agreement; provided
that in connection with such assignment, the Borrower shall have complied with
all notice requirements under the Holdback Agreement and shall have obtained all
consents and waivers necessary to assign to the Lender such Holdback Agreement
(the “Assignment of Holdback Agreement”);

(iv)          a specific assignment of all inter-company loans between the
Borrower and its Subsidiaries;

(v)           a specific assignment to the Lender of the policies of insurance
referred to in Section 5.1(ee) and the proceeds thereof, together with
endorsements thereof in form and terms satisfactory to the Lender reflecting the
Lender as a loss payee or additional insured, as applicable;

(vi)          share pledges, where permitted by Applicable Law, or negative
pledges if share pledges are not permitted by Applicable Law or have previously
been pledged pursuant to Permitted Debt, in respect of the shares of each of the
Guarantors;

(vii)         negative pledges in respect of the shares of each of the
Subsidiaries of the Borrower other than the Guarantors (subject to any existing
pledges pursuant to Permitted Debt);

(viii)        a perfected third priority Encumbrance on the Santa Anita Property
pursuant to a mortgage of even date with this Agreement from the Santa Anita
Guarantors in favour of the Lender (the “Santa Anita Third Mortgage”);

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(ix)          a third priority assignment of rents and leases generated by the
use and occupancy of the Santa Anita Property pursuant to an assignment of rents
and lessor’s interest in the Occupancy Agreements relating to the Santa Anita
Property of even date with this Agreement from the Santa Anita Guarantors in
favour of the Lender (the “Santa Anita Third Assignment of Rents and Leases”);

(x)           a third general assignment of the Santa Anita Guarantors’ interest
in the Material Agreements relating to the Santa Anita Property, where
permitted; provided that if the assignment of any such Material Agreements is
not permitted, the Santa Anita Guarantors shall use is commercially reasonable
efforts to obtain all consents and waivers necessary to assign to the Lender
such Material Agreement and further agrees that if such consents and waivers are
not obtained, such Material Agreement shall be held by the Santa Anita
Guarantors for the benefit of and in trust for the Lender (the “Santa Anita
Third Assignment of Material Agreements”);

(xi)          a perfected third priority Encumbrance in all personal property of
the Santa Anita Guarantors now owned and hereafter acquired (excluding licenses
and permits), in each case to the extent permitted by Applicable Law, and a
negative pledge in respect of all such personal property (excluding licenses and
permits), pursuant to a general security agreement from the Santa Anita
Guarantors to the Lender (the “Santa Anita General Security Agreement”), it
being acknowledged and agreed that the Santa Anita Third Mortgage, the Santa
Anita Third Assignment of Rents and Leases, the Santa Anita Third Assignment of
Material Agreements and the Santa Anita Third General Security Agreement
(collectively, the “Santa Anita Security”) is security for the Indebtedness, and
not as security for the Santa Anita Guarantee and Indemnity;

(xii)         the environmental indemnity agreement in respect of the Santa
Anita Property, from the Santa Anita Guarantors in favour of the Lender
(the “Santa Anita Property Environmental Indemnity”);

(xiii)        related UCC financing statements;

(xiv)        a specific assignment by the Santa Anita Guarantors of the policies
of insurance in respect of the Santa Anita Property and the proceeds thereof,
together with endorsements thereof in form and terms satisfactory to the Lender
reflecting the Lender as a loss payee or additional insured, as applicable;

(xv)         any other collateral or security described in this Agreement or in
any of the other Loan Documents, and such other assignments, mortgages, security
agreements and undertakings relating to the Santa Anita Property and other
documentation in support thereof as the Lender and its counsel shall reasonably
require;

(xvi)        a perfected second priority Encumbrance on the Golden Gate Fields
Property pursuant to a mortgage of even date with this Agreement from the Golden
Gate Fields Guarantors in favour of the Lender (the “Golden Gate Fields Second
Mortgage”);

(xvii)      a second priority assignment of rents and leases generated by the
use and occupancy of the Golden Gate Fields Property pursuant to an assignment
of rents and lessor’s interest in the Occupancy Agreements relating to the
Golden Gate Fields Property of even date with this Agreement from the Golden
Gate Fields Guarantors in favour of the Lender (the “Golden Gate Fields Second
Assignment of Rents and Leases”);

(xviii)     a second general assignment of the Golden Gate Fields Guarantors’
interest in the Material Agreements relating to the Golden Gate Fields Property,
where permitted; provided that if the assignment of any such Material Agreements
is not permitted, the Golden Gate Fields Guarantors shall use commercially
reasonable efforts to obtain all consents and waivers necessary to assign to the
Lender such Material Agreement and further agrees that if such consents and
waivers are not obtained, such Material Agreement shall be held by the Golden
Gate Fields Guarantors for the

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benefit of and in trust for the Lender (the “Golden Gate Fields Second
Assignment of Material Agreements”);

(xix)        a perfected second priority Encumbrance in all personal property of
the Golden Gate Fields Guarantors now owned and hereafter acquired (excluding
licences and permits), in each case to the extent permitted by Applicable Law,
and a negative pledge in respect of all such personal property (excluding
licences and permits), pursuant to a general security agreement from the Golden
Gate Fields Guarantors to the Lender (the “Golden Gate Fields Second General
Security Agreement”), it being acknowledged and agreed that the Golden Gate
Fields Second Mortgage, the Golden Gate Fields Second Assignment of Rents and
Leases, the Golden Gate Fields Second Assignment of Material Agreements and the
Golden Gate Fields Second General Security Agreement (collectively, the “Golden
Gate Fields Security”) is security for the Indebtedness, and not as security for
the Golden Gate Fields Guarantee and Indemnity;

(xx)         the environmental indemnity agreement in respect of the Golden Gate
Fields Property, from the Golden Gate Fields Guarantors in favour of the Lender
(the “Golden Gate Fields Property Environmental Indemnity”);

(xxi)        related UCC financing statements;

(xxii)       a specific assignment by the Golden Gate Fields Guarantors of the
policies of insurance relating to the Golden Gate Fields Property and the
proceeds thereof, together with endorsements thereof in form and terms
satisfactory to the Lender reflecting the Lender as a loss payee or additional
insured, as applicable;

(xxiii)      any other collateral or security described in this Agreement or in
any of the other Loan Documents, and such other assignments, mortgages, security
agreements and undertakings relating to the Golden Gate Fields Property and
other documentation in support thereof as the Lender and its counsel shall
reasonably require;

(xxiv)      a perfected second priority Encumbrance on the Ocala Property
pursuant to a mortgage of even date with this Agreement from the Ocala
Guarantors in favour of the Lender (the “Ocala Second Mortgage”);

(xxv)       a second priority assignment of rents and leases generated by the
use and occupancy of the Ocala Property pursuant to an assignment of rents and
lessor’s interest in the Occupancy Agreements relating to the Ocala Property of
even date with this Agreement from the Ocala Guarantors in favour of the Lender
(the “Ocala Second Assignment of Rents and Leases”);

(xxvi)      a second general assignment of the Ocala Guarantors’ interest in the
Material Agreements relating to the Ocala Property, where permitted; provided
that if the assignment of any such Material Agreements is not permitted, the
Ocala Guarantors shall use commercially reasonable efforts to obtain all
consents and waivers necessary to assign to the Lender such Material Agreement
and further agrees that if such consents and waivers are not obtained, such
Material Agreement shall be held by the Ocala Guarantors for the benefit of and
in trust for the Lender (the “Ocala Second Assignment of Material Agreements”);

(xxvii)    a perfected second priority Encumbrance in all personal property of
the Ocala Guarantors now owned and hereafter acquired (excluding licenses and
permits), in each case to the extent permitted by Applicable Law, and a negative
pledge in respect of all such personal property (excluding licenses and
permits), pursuant to a general security agreement from the Ocala Guarantors to
the Lender (the “Ocala Second General Security Agreement”), it being
acknowledged and agreed that the Ocala Second Mortgage, the Ocala Second
Assignment of Rents and Leases, the Ocala Second Assignment of Material
Agreements and the Ocala Second General Security Agreement

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(collectively, the “Ocala Security”) is security for the Indebtedness, and not
as security for the Ocala Guarantee and Indemnity;

(xxviii)   the environmental indemnity agreement in respect of the Ocala
Property, from the Ocala Guarantors in favour of the Lender (the “Ocala Property
Environmental Indemnity”);

(xxix)      related UCC financing statements;

(xxx)       a specific assignment by the Ocala Guarantors of the policies of
insurance in respect of the Ocala Property and the proceeds thereof, together
with endorsements thereof in form and terms satisfactory to the Lender
reflecting the Lender as a loss payee or additional insured, as applicable;

(xxxi)      any other collateral or security described in this Agreement or in
any of the other Loan Documents, and such other assignments, mortgages, security
agreements and undertakings relating to the Ocala Property and other
documentation in support thereof as the Lender and its counsel shall reasonably
require;

(xxxii)     a perfected first priority Encumbrance on the Dixon Property
pursuant to a mortgage of even date with this Agreement from the Dixon Guarantor
in favour of the Lender (the “Dixon First Mortgage”);

(xxxiii)   a first priority assignment of rents and leases generated by the use
and occupancy of the Dixon Property pursuant to an assignment of rents and
lessor’s interest in the Occupancy Agreements relating to the Dixon Property of
even date with this Agreement from the Dixon Guarantor in favour of the Lender
(the “Dixon First Assignment of Rents and Leases”);

(xxxiv)   a first general assignment of the Dixon Guarantor’s interest in the
Material Agreements relating to the Dixon Property, where permitted; provided
that if the assignment of any such Material Agreements is not permitted, the
Dixon Guarantor shall use its commercially reasonable efforts to obtain all
consents and waivers necessary to assign to the Lender such Material Agreement
and further agrees that if such consents and waivers are not obtained, such
Material Agreement shall be held by the Dixon Guarantor for the benefit of and
in trust for the Lender (the “Dixon First Assignment of Material Agreements”);

(xxxv)    a perfected first priority Encumbrance in all personal property of the
Dixon Guarantor now owned and hereafter acquired (excluding licenses and
permits), in each case to the extent permitted by Applicable Law, and a negative
pledge in respect of all such personal property (excluding licenses and
permits), pursuant to a general security agreement from the Dixon Guarantor to
the Lender (the “Dixon First General Security Agreement”), it being acknowledged
and agreed that the Dixon First Mortgage, the Dixon First Assignment of Rents
and Leases, the Dixon First Assignment of Material Agreements and the Dixon
First General Security Agreement (collectively, the “Dixon Security”) is
security for the Indebtedness, and not as security for the Dixon Guarantee
and Indemnity;

(xxxvi)   the environmental indemnity agreement in respect of the Dixon
Property, from the Dixon Guarantor in favour of the Lender (the “Dixon Property
Environmental Indemnity”);

(xxxvii)   related UCC financing statements;

(xxxviii)  a specific assignment by the Dixon Guarantor of the policies of
insurance in respect of the Dixon Property and the proceeds thereof, together
with endorsements thereof in form and terms satisfactory to the Lender
reflecting the Lender as a loss payee or additional insured, as applicable;

(xxxix)    any other collateral or security described in this Agreement or in
any of the other Loan Documents, and such other assignments, mortgages, security
agreements and undertakings relating to the Dixon

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Property and other documentation in support thereof as the Lender and its
counsel shall reasonably require;

(xl)          a perfected first priority Encumbrance on the Thistledown Property
pursuant to a mortgage of even date with this Agreement from the Thistledown
Guarantor in favour of the Lender (the “Thistledown First Mortgage”);

(xli)         a first priority assignment of rents and leases generated by the
use and occupancy of the Thistledown Property pursuant to an assignment of rents
and lessor’s interest in the Occupancy Agreements relating to the Thistledown
Property of even date with this Agreement from the Thistledown Guarantor in
favour of the Lender (the “Thistledown First Assignment of Rents and Leases”);

(xlii)        a first general assignment of the Thistledown Guarantor’s interest
in the Material Agreement relating to the Thistledown Property, where permitted;
provided that if the assignment of any such Material Agreements is not
permitted, the Thistledown Guarantor shall use its commercially reasonable
efforts to obtain all consents and waivers necessary to assign to the Lender
such Material Agreement and further agrees that if such consents and waivers are
not obtained, such Material Agreement shall be held by the Thistledown Guarantor
for the benefit of and in trust for the Lender (the “Thistledown First
Assignment of Material Agreements”);

(xliii)       a perfected first priority Encumbrance in all personal property of
the Thistledown Guarantor now owned and hereafter acquired (excluding licenses
and permits), in each case to the extent permitted by Applicable Law, and a
negative pledge in respect of all such personal property (excluding licenses and
permits), pursuant to a general security agreement from the Thistledown
Guarantor to the Lender (the “Thistledown First General Security Agreement”), it
being acknowledged and agreed that the Thistledown First Mortgage, the
Thistledown First Assignment of Rents and Leases, the Thistledown First
Assignment of Material Agreements and the Thistledown First General Security
Agreement (collectively, the “Thistledown Security”) is security for the
Indebtedness, and not as security for the Thistledown Guarantee and Indemnity;

(xliv)      the environmental indemnity agreement in respect of the Thistledown
Property, from the Thistledown Guarantor in favour of the Lender
(the “Thistledown Property Environmental Indemnity”);

(xlv)        related UCC financing statements;

(xlvi)      a specific assignment by the Thistledown Guarantor of the policies
of insurance in respect of the Thistledown Property and the proceeds thereof,
together with endorsements thereof in form and terms satisfactory to the Lender
reflecting the Lender as a loss payee or additional insured, as applicable;

(xlvii)     any other collateral or security described in this Agreement or in
any of the other Loan Documents, and such other assignments, mortgages, security
agreements and undertakings relating to the Thistledown Property and other
documentation in support thereof as the Lender and its counsel shall reasonably
require;

(xlviii)    in consideration of the guarantee and indemnity fees paid by the
Borrower to the Golden Gate Fields Guarantors in the amount of $25,000
(the “Golden Gate Fields Guarantee Fee”), the direct and indirect financial and
other support that the Borrower has provided, and such direct and indirect
financial and other support as the Borrower intends in the future to provide, to
the Golden Gate Fields Guarantors, and in order to induce the Lender to enter
into the Agreement, the guarantee and indemnity (the “Golden Gate Fields
Guarantee and Indemnity”) of the Golden Gate Fields Guarantors, under which the
Golden Gate Fields Guarantors unconditionally guarantee the payment and
performance of the Indebtedness outstanding from time to time, as well as
interest and other

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amounts owing hereunder or under the other Loan Documents and the performance of
all other obligations of the Borrower under the Loan and the Loan Documents;

(xlix)       related UCC financing statements;

(l)            any other collateral or security described in this Agreement or
in any of the other Loan Documents, and such other assignments, mortgages,
security agreements and undertakings relating to the Golden Gate Fields Property
and other documentation in support thereof as the Lender and its counsel shall
reasonably require;”

(li)           in consideration of the guarantee and indemnity fees paid by the
Borrower to the Santa Anita Guarantors in the amount of $25,000 (the “Santa
Anita Guarantee Fee”), the direct and indirect financial and other support that
the Borrower has provided, and such direct and indirect financial and other
support as the Borrower intends in the future to provide, to the Santa Anita
Guarantors, and in order to induce the Lender to enter into the Agreement, the
guarantee and indemnity (the “Santa Anita Guarantee and Indemnity”) of the Santa
Anita Guarantors, under which the Santa Anita Guarantors unconditionally
guarantee the payment and performance of the Indebtedness outstanding from time
to time, as well as interest and other amounts owing hereunder or under the
other Loan Documents and the performance of all other obligations of the
Borrower under the Loan and the Loan Documents;

(lii)          related UCC financing statements;

(liii)         any other collateral or security described in this Agreement or
in any of the other Loan Documents, and such other assignments, mortgages,
security agreements and undertakings relating to the Santa Anita Property and
other documentation in support thereof as the Lender and its counsel shall
reasonably require;”

(liv)         in consideration of the guarantee and indemnity fees paid by the
Borrower to the Gulfstream Guarantor in the amount of $25,000 (the “Gulfstream
Guarantee Fee”), the direct and indirect financial and other support that the
Borrower has provided, and such direct and indirect financial and other support
as the Borrower intends in the future to provide, to the Gulfstream Guarantor,
and in order to induce the Lender to enter into the Agreement, the guarantee and
indemnity (the “Gulfstream Guarantee and Indemnity”) of the Gulfstream
Guarantor, under which the Gulfstream Guarantor unconditionally guarantees the
payment and performance of the Indebtedness outstanding from time to time, as
well as interest and other amounts owing hereunder or under the other Loan
Documents, and the performance of all other obligations of the Borrower under
the Loan and the Loan Documents;

(lv)          in consideration of the guarantee and indemnity fees paid by the
Borrower to the Palm Meadows Training Guarantor in the amount of $3,500
(the “Palm Meadows Training Guarantee Fee”), the direct and indirect financial
and other support that the Borrower has provided, and such direct and indirect
financial and other support as the Borrower intends in the future to provide, to
the Palm Meadows Training Guarantor, and in order to induce the Lender to enter
into the Agreement, the guarantee and indemnity (the “Palm Meadows Training
Guarantee and Indemnity”) of the Palm Meadows Training Guarantor under which the
Palm Meadows Training Guarantor unconditionally guarantees the payment and
performance of the Indebtedness outstanding from time to time, as well as
interest and other amounts owing hereunder or under the other Loan Documents,
and the performance of all other obligations of the Borrower under the Loan and
the Loan Documents, such guarantee and indemnity to be limited to the value of
the Palm Meadows Training Guarantor’s membership interest in Palm Meadows
Estates, LLC;

(lvi)         in consideration of the guarantee and indemnity fees paid by the
Borrower to the Dixon Guarantor in the amount of $15,000 (the “Dixon Guarantee
Fee”), the direct and indirect financial and other support that the Borrower has
provided, and such direct and indirect financial and other support as the
Borrower intends in the future to provide, to the Dixon Guarantor, and in order
to induce the

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Lender to enter into the Agreement, the guarantee and indemnity (the “Dixon
Guarantee and Indemnity”) of the Dixon Guarantor, under which the Dixon
Guarantor unconditionally guarantees the payment and performance of the
Indebtedness outstanding from time to time, as well as interest and other
amounts owing hereunder or under the other Loan Documents, and the performance
of all other obligations of the Borrower under the Loan and the Loan Documents;

(lvii)        in consideration of the guarantee and indemnity fees paid by the
Borrower to the Ocala Guarantors in the amount of $15,000 (the “Ocala Guarantee
Fee”), the guarantee and indemnity (the “Ocala Guarantee and Indemnity”) of
Ocala Guarantors, under which Ocala Guarantors unconditionally guarantees the
payment and performance of the Indebtedness outstanding from time to time, as
well as interest and other amounts owing hereunder or under the other Loan
Documents, and the performance of all other obligations of the Borrower under
the Loan and the Loan Documents;

(lviii)       in consideration of the guarantee and indemnity fees paid by the
Borrower to the Thistledown Guarantor in the amount of $10,000 (the “Thistledown
Guarantee Fee”), the direct and indirect financial and other support that the
Borrower has provided, and such direct and indirect financial and other support
as the Borrower intends in the future to provide, to the Thistledown Guarantor,
and in order to induce the Lender to enter into the Agreement, the guarantee and
indemnity (the “Thistledown Guarantee and Indemnity”) of the Thistledown
Guarantor, under which the Thistledown Guarantor unconditionally guarantee the
payment and performance of the Indebtedness outstanding from time to time, as
well as interest and other amounts owing hereunder or under the other Loan
Documents and the performance of all other obligations of the Borrower under the
Loan and the Loan Documents;

(lix)         in consideration of the guarantee and indemnity fees paid by the
Borrower to each of the AmTote Guarantors in the amount of $2,500 (the “AmTote
Guarantee Fee”), the direct and indirect financial and other support that the
Borrower has provided, and such direct and indirect financial and other support
as the Borrower intends in the future to provide, to the AmTote Guarantors, and
in order to induce the Lender to enter into the Agreement, a guarantee and
indemnity (the “AmTote Guarantees and Indemnities”) of each of the AmTote
Guarantors, under which the AmTote Guarantors unconditionally guarantee the
payment and performance of the Indebtedness outstanding from time to time, as
well as interest and other amounts owing hereunder or under the other Loan
Documents and the performance of all other obligations of the Borrower under the
Loan and the Loan Documents;

(lx)          any other collateral or security described in this Agreement or in
any of the other Loan Documents, and such other assignments, mortgages, security
agreements and undertakings relating to any of the Properties and other
documentation in support thereof as the Lender and its counsel shall reasonably
require;

The security set out above in this Section 7.2(q) is herein called the
“Security”. All of the foregoing documents and instruments shall have been
properly registered, recorded and filed in all places which, searches shall have
been conducted in all jurisdictions which, and deliveries of all consents,
approvals, acknowledgements, undertakings, non-disturbance agreements,
directions, negotiable documents of title and other documents and instruments to
the Lender shall have been made which, in the opinion of the Lender’s counsel,
are desirable or required to make effective the Security created or intended to
be created in favour of the Lender to ensure the perfection and the intended
priority of the Security.

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ARTICLE 8

EVENTS OF DEFAULT AND REMEDIES

8.1                               Events of Default

The occurrence of any of the following events shall constitute an Event
of Default:

(a)                                  default by the Borrower in payment of
(i) any principal when due (including, without limitation, any mandatory
prepayments pursuant to Section 2.4 or (ii) any interest thereon within three
Banking Days after the same becomes due or (iii) any other amount hereunder
within 10 days after notice of non-payment thereof is received by the Borrower;

(b)                                 default by the Borrower or any Guarantor in
the performance or observance of any covenant, condition or obligation contained
in any Loan Document to which it is a party that does not require the payment of
money to the Lender, including, without limitation, failure by the Borrower to
use, or cause its Subsidiaries to use, all commercially reasonable efforts to
implement the Borrower Restructuring Plan, and such default continues for a
period of 20 days (or such longer period as the Lender may in its sole
discretion determine) after the earliest of (x) receipt of notice from the
Lender of such default, and (y) knowledge of the existence of such default by
any officer of the Borrower;

(c)                                  any representation, warranty, certificate,
information or other statement (financial or otherwise) made, deemed to be made,
or furnished by or on behalf of the Borrower or any Guarantor in, or in
connection with, this Agreement or any of the other Loan Documents (i) that is
not or has not been qualified by reference to “material”, “in all material
respects” or “Material Adverse Effect”, or any other materiality standard, shall
be found to be false, incorrect, incomplete or misleading in any material
respect when made, deemed to be made, or furnished or (ii) that is or has been
qualified by reference to “material”, “in all material respects” or “Material
Adverse Effect”, or any other materiality standard, shall be found to be false,
incorrect, incomplete or misleading when made, deemed to be made, or furnished,
where, in all such cases, the consequences of such misrepresentation or breach
of warranty could reasonably be expected to have a Material Adverse Effect;

(d)                                 any event shall occur or condition shall
exist, and shall continue after the applicable grace period, if any, specified
in any agreement or instrument relating to any indebtedness or liability
(including Capital Lease Obligations and Contingent Liabilities) of the
Borrower, any Guarantor, and or any Subsidiary of the Borrower or any Guarantor
(other than Obligations) and the effect of such event or condition is to
accelerate the maturity of such indebtedness or liability (including Capital
Lease Obligations and Contingent Liabilities) of the Borrower, any Guarantor,
and or any Subsidiary of the Borrower or any Guarantor which (except in respect
of any such indebtedness or liability to the Lender) is outstanding in an
aggregate principal amount exceeding $2,000,000, or any such indebtedness or
liability (including Capital Lease Obligations and Contingent Liabilities) of
the Borrower, any Guarantor, and or any Subsidiary of the Borrower or any
Guarantor which (except in respect of any such indebtedness or liability to the
Lender) is outstanding in an aggregate principal amount exceeding $2,000,000
shall be declared to be due and payable prior to the stated maturity thereof;
provided, in each case, that it shall not be an Event of Default if the Borrower
or applicable Guarantor or applicable Subsidiary is diligently contesting such
acceleration or declaration in good faith by appropriate proceedings or has
fully repaid the indebtedness accelerated or declared due;

(e)                                  the Borrower or any Guarantor admits in
writing or by way of a public or press announcement its inability to pay its
debts generally as they become due or otherwise acknowledges in writing or by
way of a public or press announcement its insolvency;

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(f)                                    the Borrower or any Guarantor institutes
any proceeding, or takes any corporate action or executes any agreement, to
authorize its participation in or commencement of, or consents to, acquiesces
in, any proceeding:

(i)            seeking to adjudicate it a bankrupt or insolvent, or

(ii)           seeking liquidation, dissolution, winding up, reorganization,
arrangement, protection, relief or composition of it or any of its property or
debt or making a proposal or application with respect to it under any law
relating to bankruptcy, insolvency, reorganization or compromise of debts or
other similar laws (including, without limitation, any reorganization,
arrangement or compromise of debt under the laws of its jurisdiction of
incorporation);

(g)                                 any proceeding is commenced against or
affecting the Borrower or any Guarantor:

(i)            seeking to adjudicate it a bankrupt or insolvent;

(ii)           seeking liquidation, dissolution, winding up, reorganization,
arrangement, protection, relief or composition of it or any of its property or
debt or making a proposal with respect to it under any law relating to
bankruptcy, insolvency, reorganization or compromise of debts or other similar
laws (including, without limitation, any reorganization, arrangement or
compromise of debt under the laws of its jurisdiction of incorporation); or

(iii)          seeking appointment of a receiver, trustee, agent, custodian or
other similar official for it or for any Property or any substantial part of its
properties and assets; and

in each case, such proceeding is not being contested in good faith by
appropriate proceedings or, if so contested, remains outstanding, undismissed
and unstayed more than 45 days from the institution of such first mentioned
proceeding; provided, in each case, the Borrower and any of the Guarantors
remain current on their respective payroll obligations during such contest;

(h)                                 any creditor of the Borrower or any other
Person shall privately appoint a receiver, trustee or similar official for any
Property or any substantial part of the Borrower’s properties and assets having
a Replacement Cost greater than $10,000,000 and such appointment is not stayed
and is not being contested in good faith by appropriate proceedings or, if so
contested, such appointment is not terminated within 45 days from the original
date of such appointment; provided, in each case, the Borrower and any of the
Guarantors remain current on their respective payroll obligations during
such contest;

(i)                                     any judgment or order for the payment of
money in excess of $10,000,000 shall be rendered against the Borrower or any
Guarantor which remains unsatisfied and (i) executions shall have been levied on
any property of the Borrower or any Guarantor by or on behalf of any creditor in
reliance on such judgment or order and (ii) there shall be any period during
which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or

(j)                                     if, at any time after execution and
delivery thereof, other than by reason of a wilful act or omission of the
Lender, (i) any Loan Document ceases to be in full force and effect (ii) any
Loan Document is declared by a court or tribunal of competent jurisdiction to be
null and void; or (iii) the validity or enforceability of any Loan Document is
contested by the Borrower or any Guarantor; or (iv) the Borrower or any
Guarantor denies in writing that it has any or further liability or obligations
under any Loan Document; or

(k)                                  except in connection with a transaction
permitted under Section 6.2(d), the Borrower or any Guarantor ceases or
threatens in writing or by way of public or press announcement to cease to carry
on business in the ordinary course; or

(l)                                     any event shall occur or condition shall
exist, and shall continue after the applicable grace period, if any, specified
in any note or indenture relating to the Subordinated Debt, and the effect of
such event or condition is to enable the holders of Subordinated Debt to
accelerate the maturity of the Subordinated Debt

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(whether or not the Subordinated Debt is accelerated), or any Subordinated Debt
shall be declared to be due and payable or the Borrower shall be required to
repurchase any Subordinated Debt prior to the stated maturity thereof; or

(m)                               a Material Adverse Change occurs; or

(n)                                 any event of default shall occur under any
other obligation of the Borrower or any of its Subsidiaries to the Lender,
including, without limitation, any Event of Default (as defined in the
Gulfstream Construction Loan Agreement and/or the Remington Construction Loan
Agreement).

8.2                               Remedies Upon Default

Upon the occurrence of any Event of Default, subject to any applicable cure
period, the Lender may by notice given to the Borrower:

(a)                                  declare the unutilized portion of the
Bridge Loan to be terminated (whereupon the Lender shall not be required to make
any further Advances);

(b)                                 declare all Obligations to be immediately
due and payable; and

(c)                                  take such actions and commence such
proceedings as may be permitted at law or in equity at such times and in such
manner as the Lender in its sole discretion may consider expedient,

all without, except as may be required by Applicable Law, any additional notice,
presentment, demand, protest, notice of protest, dishonour or any other action.
The rights and remedies of the Lender hereunder are cumulative and are in
addition to and not in substitution for any other rights or remedies provided by
Applicable Law.

8.3                               Distributions

During the occurrence and continuance of an Event of Default, all distributions
under or in respect of any of the Loan Documents shall be held by the Lender on
account of the Obligations without prejudice to any claim by the Lender for any
deficiency after such distributions are received by the Lender, and the Borrower
shall remain liable for any such deficiency. All such distributions may be
applied to such part of the Obligations as the Lender may see fit in its sole
discretion. The Lender may at any time change any such appropriation of any such
distributions or other moneys received by the Lender and may reapply the same to
any other part of the Obligations as the Lender may from time to time in its
sole discretion see fit, notwithstanding any previous application.

ARTICLE 9

GENERAL

9.1                               Reliance and Non-Merger

All covenants, agreements, representations and warranties of the Borrower made
herein or in any other Loan Document or in any certificate or other document
signed by any of its directors or officers and delivered by or on behalf of any
of them pursuant hereto or thereto are material, shall be deemed to have been
relied upon by the Lender notwithstanding any investigation heretofore or
hereafter made by the Lender or Lender’s Counsel or any employee or other
representative of any of them and shall survive the execution and delivery of
this Agreement and the other Loan Documents until there are no Loans outstanding
and the Lender shall have no further obligation to make Advances hereunder. For
clarity, this Section 9.1 shall in no way affect the survival of those
provisions of this Agreement or any Loan Document which by their terms are
stated to survive termination of this Agreement.

9.2                               Confidentiality

The Lender will maintain on a confidential basis (except as otherwise permitted
hereunder or as required by Applicable Law) all information relating to the
Borrower and its Subsidiaries provided to it hereunder by and on behalf of

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the Borrower or any of its Subsidiaries or obtained in respect of any diligence
conducted in respect hereof; provided, however, that this Section 9.2 shall not
apply to any information which (i) was lawfully in the public domain at the time
of communication to the Lender, (ii) lawfully enters the public domain through
no fault of the Lender subsequent to the time of communication to the Lender,
(iii) was lawfully in the possession of the Lender free of any obligation of
confidence at the time of communication to the Lender, or (iv) was lawfully
communicated to the Lender free of any obligation of confidence subsequent to
the time of initial communication to the Lender.

9.3                               No Set-Off

To the fullest extent permitted by law, the Borrower and each of the Guarantors
shall make all payments hereunder regardless of, but without prejudice to or
otherwise releasing the Lender of or from, any liability, defense or
counterclaim, including, without limitation, any defense or counterclaim based
on any law, rule or policy which is now or hereafter promulgated by any
Governmental Body which may adversely affect the Borrower’s and each of the
Guarantor’s obligation to make, or the Lender’s right to receive, such payments.
The Borrower and each of the Guarantors grants to the Lender the right to set
off all accounts, credits or balances owed by the Lender to the Borrower and/or
any of the Guarantors against the aggregate amount of principal, interest, fees
and other amounts due hereunder or under any other Loan Document when any such
amount shall become due and payable, whether at maturity, upon acceleration of
maturity thereof or otherwise.

9.4                               Employment of Experts

The Lender may, at any time and from time to time, at the Borrower’s cost,
retain and employ legal counsel, independent accountants and other experts in
order to perform or assist it in the performance of its rights and powers under
this Agreement, the other Loan Documents or the Intercreditor Agreements and
will advise the Borrower at any time that it elects to do so.

9.5                               Reliance by Lender

The Lender shall be entitled to rely upon any schedule, certificate, statement,
report, notice or other document or written communication (including any
facsimile, telex or other means of electronic communication) of the Borrower
believed by it to be genuine and correct.

9.6                               Notices

Any notice or other communication required or permitted to be given hereunder
shall be in writing and shall be given by facsimile or other means of electronic
communication or by hand-delivery or courier as hereinafter provided. Any such
notice, if delivered by courier, shall be deemed to be received on the next
Banking Day after the date of delivery thereof, or if sent by facsimile or other
means of electronic communication, shall be deemed to have been received on the
day sent if sent prior to 2:00 p.m. (Toronto time) on any Banking Day or
otherwise on the next succeeding Banking Day. Notice of change of address shall
also be governed by this Section 9.6. Notices and other communications shall be
addressed as follows:

(a)

 

if to the Borrower:

 

 

 

 

 

 

 

 

 

Magna Entertainment Corp.
337 Magna Drive
Aurora, Ontario
L4G 7K1

 

 

 

 

 

 

 

Attention:

 

Chief Financial Officer, Finance

 

 

Facsimile number:

 

(905) 726-7448

(b)

 

if to the Guarantors:

 

 

 

 

 

 

 

 

 

Pacific Racing Association
c/o Magna Entertainment Corp.
337 Magna Drive
Aurora, Ontario
L4G 7K1

 

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Attention:

 

Chief Financial Officer, Finance

 

 

Facsimile number:

 

(905) 726-7448

 

 

MEC Land Holdings (California) Inc.

 

 

c/o Magna Entertainment Corp.
337 Magna Drive
Aurora, Ontario
L4G 7K1

 

 

 

 

 

 

 

Attention:

 

Chief Financial Officer, Finance

 

 

Facsimile number:

 

(905) 726-7448

 

 

The Santa Anita Companies, Inc.

 

 

c/o Magna Entertainment Corp.
337 Magna Drive
Aurora, Ontario
L4G 7K1

 

 

 

 

 

Attention:

 

Chief Financial Officer, Finance

 

 

Facsimile number:

 

(905) 726-7448

 

 

Los Angeles Turf Club, Incorporated

 

 

c/o Magna Entertainment Corp.
337 Magna Drive
Aurora, Ontario
L4G 7K1

 

 

 

 

 

Attention:

 

Chief Financial Officer, Finance

 

 

Facsimile number:

 

(905) 726-7448

 

 

Gulfstream Park Racing Association, Inc.

 

 

c/o Magna Entertainment Corp.
337 Magna Drive
Aurora, Ontario
L4G 7K1

 

 

 

 

 

Attention:

 

Chief Financial Officer, Finance

 

 

Facsimile number:

 

(905) 726-7448

 

 

GPRA Thoroughbred Training Center Inc.

 

 

c/o Magna Entertainment Corp.
337 Magna Drive
Aurora, Ontario
L4G 7K1

 

 

 

 

 

Attention:

 

Chief Financial Officer, Finance

 

 

Facsimile number:

 

(905) 726-7448

 

 

MEC Dixon, Inc.

 

 

 

 

c/o Magna Entertainment Corp.
337 Magna Drive
Aurora, Ontario
L4G 7K1

 

 

 

 

 

Attention:

 

Chief Financial Officer, Finance

 

 

Facsimile number:

 

(905) 726-7448

 

 

MEC Holdings (USA) Inc.

 

 

c/o Magna Entertainment Corp.
337 Magna Drive
Aurora, Ontario
L4G 7K1

 

 

 

 

 

Attention:

 

Chief Financial Officer, Finance

 

 

Facsimile number:

 

(905) 726-7448

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Sunshine Meadows Racing Inc.

 

 

c/o Magna Entertainment Corp.
337 Magna Drive
Aurora, Ontario
L4G 7K1

 

 

 

 

 

Attention:

 

Chief Financial Officer, Finance

 

 

Facsimile number:

 

(905) 726-7448

 

 

Thistledown, Inc.,

 

 

 

 

c/o Magna Entertainment Corp.
337 Magna Drive
Aurora, Ontario
L4G 7K1

 

 

 

 

 

Attention:

 

Chief Financial Officer, Finance

 

 

Facsimile number:

 

(905) 726-7448

 

 

MEC Maryland Investments Inc.

 

 

c/o Magna Entertainment Corp.
337 Magna Drive
Aurora, Ontario
L4G 7K1

 

 

 

 

 

Attention:

 

Chief Financial Officer, Finance

 

 

Facsimile number:

 

(905) 726-7448

 

 

30000 Maryland Investments LLC

 

 

c/o Magna Entertainment Corp.
337 Magna Drive
Aurora, Ontario
L4G 7K1

 

 

 

 

 

Attention:

 

Chief Financial Officer, Finance

 

 

Facsimile number:

 

(905) 726-7448

 

 

in each case with a copy to:

 

 

Magna Entertainment Corp.

 

 

337 Magna Drive
Aurora, Ontario
L4G 7K1

 

 

 

 

 

Attention:

 

Chief Financial Officer, Finance

 

 

Facsimile number:

 

(905) 726-4448

(c)

 

if to the Lender:

 

 

 

 

 

 

 

 

 

MID Islandi sf. Zug Branch
Baererstrasse 16, CH-6304
Zug Switzerland

 

 

 

 

 

 

 

Attention:

 

Thomas Schultheiss

 

 

 

 

Branch Manager

 

 

Facsimile number:

 

+41 41725 2725

 

 

with a copy to:

 

 

 

 

MI Developments Inc.
455 Magna Drive
Aurora, Ontario
L4G 7A9

 

 

 

 

 

Attention:

 

General Counsel

 

 

Facsimile number:

 

(905) 726-2095

 

67

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9.7                               Further Assurances

Whether before or after the happening of an Event of Default, the Borrower shall
at its own expense do, make, execute or deliver, or cause to be done, made,
executed or delivered by its Subsidiaries or other Persons, all such further
acts, documents and things in connection with the Bridge Loan and the Loan
Documents as the Lender may reasonably require from time to time for the purpose
of giving effect to the Loan Documents all within a reasonable period of time
following the request of the Lender.

9.8                               Assignment

The Loan Documents shall enure to the benefit of the Lender, its successors and
assigns, and shall be binding upon the Borrower and the Guarantors, and their
respective successors and assigns. Neither the Borrower nor either of the
Guarantors shall assign, sell, convey or otherwise transfer any of its rights or
obligations under the Loan or the Loan Documents. The Lender, may assign, sell,
convey, grant participations in, pledge, or otherwise transfer all or any part
of its rights or obligations under the Loan and the Loan Documents as follows
(each a “Permitted Lender Assignee”): (a) at any time, to any Affiliate of the
Lender, without the Borrower’s or the Guarantors’ consent; (b) at any time
during which an Event of Default has occurred and is continuing, to any third
party, without the Borrower’s or any Guarantor’s consent; and (c) at any time,
with the Borrower’s consent, not to be unreasonably withheld. Any Permitted
Lender Assignee shall provide written notice to the Borrower and the Guarantors
of such assignment and its assumption of the obligations of the Lender hereunder
and thereafter shall be entitled to the performance of all of the Borrower’s and
the Guarantors’ agreements and obligations under the Loan and the Loan Documents
and shall be entitled to enforce all the rights and remedies of the Lender under
the Loan Documents, for the benefit of such Permitted Lender Assignee, as fully
as if such Permitted Lender Assignee was herein by name specifically given such
rights and remedies. Each of the Borrower and the Guarantors expressly agrees
that it will assert no claims or defenses that it may have against the Lender
against any Permitted Lender Assignee, except those specifically available under
this Agreement. In the event that the Borrower or any Guarantor shall become
directly liable for any additional charges or levies by any governmental or
regulatory authority in consequence of the operation of this Section 9.8, the
Borrower shall give the Lender notice thereof and thereafter the Lender shall
indemnify the Borrower or the Guarantor, as applicable, in full for any such
charges or levies. The Borrower and the Guarantors shall be given written notice
of any such assignment. The Borrower and the Guarantors shall cooperate with and
perform the reasonable requirements of the Permitted Lender Assignee, but the
costs and expenses, including reasonable legal fees and disbursements relating
directly to or arising directly out of any such assignment shall not be the
expense of the Borrower or the Guarantors.

9.9                               Disclosure of Information to Potential
Permitted Lender Assignees

The Borrower and the Guarantors agree that the Lender shall have the right
(but shall be under no obligation) to make available to any potential Permitted
Lender Assignee any and all information which the Lender may have pursuant to
the Loan Documents, provided such disclosure is not in violation of any
applicable securities laws, rules or regulations and such potential Permitted
Lender Assignee enters into a typical and customary confidentiality agreement in
favour of the Borrower and the Guarantors.

9.10                        Right to Cure

The Lender may from time to time, in its sole and absolute discretion (but shall
have no obligation to do so), for the Borrower’s account and at the Borrower’s
expense, pay any amount or do any act required of the Borrower or a Guarantor
hereunder or required under the Loan Documents or requested by the Lender to
preserve, protect, maintain or enforce any Loan, any of the Properties or any
other Collateral, and which the Borrower or a Guarantor fails to pay or do or
cause to be paid or done, including, without limitation, payment of insurance
premiums, taxes or assessments, warehouse charge, finishing or processing
charge, landlord’s claim, and any other lien upon or with respect to the
Properties or any other Collateral. Any payment made or other action taken by
the Lender pursuant to this Section shall be without prejudice to any right to
assert an Event of Default hereunder and to pursue the Lender’s other rights and
remedies with respect thereto.

9.11                        Forbearance by the Lender Not a Waiver

Any forbearance by the Lender in exercising any right or remedy under any of the
Loan Documents, or otherwise afforded by Applicable Law, shall not be a waiver
of or preclude the exercise of any right or remedy. The Lender’s

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acceptance of payment of any sum secured by any of the Loan Documents after the
due date of such payment shall not be a waiver of the Lender’s right to either
require prompt payment when due of all other sums so secured or to declare a
default for failure to make prompt payment. The procurement of insurance or the
payment of taxes or other liens or charges by the Lender shall not be a waiver
of the Lender’s right to accelerate the maturity of the Bridge Loan, nor shall
the Lender’s receipt of any awards, proceeds or damages operate to cure or waive
the Borrower’s or any of the Guarantors’ default in payment or sums secured by
any of the Loan Documents. With respect to all Loan Documents, only waivers made
in writing by the Lender shall be effective against the Lender.

9.12                        Waiver of Statute of Limitations and Other Defenses

The Borrower and Guarantors hereby waive the right to assert any statute of
limitations or any other defense as a bar to the enforcement of the lien created
by any of the Loan Documents or to any action brought to enforce any obligation
secured by any of the Loan Documents.

9.13                        Relationship

The relationship between the Lender and the Borrower and the Guarantors shall be
that of creditor-debtor only. No term in this Agreement or in the other Loan
Documents, nor any shareholder or other Affiliate relationship between the
parties, and no course of dealing between the parties shall be deemed to create
any relationship of agency, partnership or joint venture or any fiduciary duty
by the Lender to any other party.

9.14                        Time of Essence

Time is of the essence of this Agreement and each of the other Loan Documents
and the performance of each of the covenants and agreement contained herein
and therein.

9.15                        Service of Process/Venue

The Borrower and each Guarantor hereby consents to service of process, and to be
sued, in the State of New York and consents to the jurisdiction of the state and
federal courts where the Properties are located as well as the jurisdiction of
all courts from which an appeal may be taken from such courts, for the purpose
of any suit, or other proceeding arising out of any of their obligations
hereunder, and expressly waive any and all objections they may have as to venue
in any such courts. Further, in the Lender’s sole and absolute discretion, suits
to enforce this Agreement or in any way relating to the subject matter of this
Agreement may be brought by the Lender in any court located within the State or
County where any of the Properties is located or in the United States District
Court having jurisdiction over all or any portion of the Properties.

9.16                        Jury Trial Waiver

THE BORROWER, THE GUARANTORS AND THE LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THE
SUBJECT MATTER OF THIS AGREEMENT AND THE BUSINESS RELATIONSHIP THAT IS BEING
ESTABLISHED. THIS WAIVER IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY THE
BORROWER, THE GUARANTORS AND THE LENDER, THE BORROWER AND EACH GUARANTOR
ACKNOWLEDGES THAT NEITHER THE LENDER NOR ANY PERSON ACTING ON BEHALF OF THE
LENDER HAS MADE ANY REPRESENTATIONS OF FACT TO INCLUDE THIS WAIVER OF TRIAL BY
JURY OR HAS TAKEN ANY ACTIONS WHICH IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THE
BORROWER, EACH GUARANTOR AND THE LENDER ACKNOWLEDGE THAT THIS WAIVER IS A
MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH OF THEM HAS
ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH OF
THEM WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. THE
BORROWER, EACH GUARANTOR AND LENDER FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN
REPRESENTED (OR HAVE HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF
THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL.

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9.17                        Final Agreement/Modification

This Agreement, together with the other Loan Documents is intended as the final
expression of the agreement between the Borrower, the Guarantors and the Lender.
All prior discussions, negotiations and agreements are of no further force and
effect. This Agreement can be modified only in writing executed by all parties
and the written agreement may not be contradicted by any evidence of any alleged
oral agreement.

9.18                        Continuing Agreement

This Agreement shall in all respects be a continuing agreement and shall remain
in full force and effect (notwithstanding, without limitation, the death,
incompetence or dissolution of any of the Borrower or any of the Guarantors).

9.19                        No Third Party Beneficiaries

This Agreement, the Security and the other Loan Documents are made for the sole
benefit of the Lender, the Borrower and the Guarantors, and no other party shall
have any legal interest of any kind under or by reason of any of the foregoing.
Whether or not the Lender elects to employ any or all the rights, powers or
remedies available to it under any of the foregoing, the Lender shall have no
obligation or liability of any kind to any third party by reason of any of the
foregoing or any of the Lender’s actions or omissions pursuant thereto or
otherwise in connection with this transaction.

9.20                        No Brokers

Each of the Borrower and the Guarantors, on the one hand, and the Lender on the
other hand, warrants and represents to the other that it has not employed any
broker or agent in connection with the transaction contemplated hereby. Each of
the Borrower and the Guarantors, on the one hand, and the Lender on the other
hand, shall indemnify and hold the other harmless from any loss or cost suffered
or incurred by it as a result of any commission owed to any broker or agent
claiming a commission due as a result of representing such party (or any of its
Affiliates) with respect hereto.

9.21                        Execution in Counterparts

This Agreement may be executed in any number of counterparts, each of which when
so executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.

9.22                        Contribution by Guarantors with Respect to
Obligations.

To the extent that any Guarantor shall make a payment (a “Guarantor Payment”)
under its Guarantee and Indemnity given in connection with this Agreement,
which, taking into account all other Guarantor Payments then previously or
concurrently made by any other Guarantor, exceeds the amount which otherwise
would have been paid by or attributable to such Guarantor if each Guarantor had
paid the aggregate Obligations satisfied by such Guarantor Payment in the same
proportion as such Guarantor’s “Allocable Amount” (as defined below)
(as determined immediately prior to such Guarantor Payment) bore to the
aggregate Allocable Amounts of each of the Guarantors as determined immediately
prior to the making of such Guarantor Payment, then, following irrevocable
payment in full in cash of the Guarantor Payment and the Obligations, and
termination of this Agreement, such Guarantor shall be entitled to receive
contribution and indemnification payments from, and be reimbursed by, each other
Guarantor for the amount of such excess, pro rata based upon their respective
Allocable Amounts in effect immediately prior to such Guarantor Payment.

As of any date of determination, the “Allocable Amount” of any Guarantor shall
be equal to the maximum amount of the claim which could then be recovered from
such Guarantor under its Guarantee and Indemnity given in connection with this
Agreement without rendering such claim voidable or avoidable under Section 548
of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform
Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or
common law.

This 9.22 is intended only to define the relative rights of the Guarantors, and
nothing set forth in this Section 9.22 is intended to or shall impair the
obligations of the Guarantors, jointly and severally, to pay any amounts as and
when the same

70

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shall become due and payable in accordance with the terms of the respective
Guarantees and Indemnity given by each of them in connection with
this Agreement.

The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of the Guarantor or Guarantors
to which such contribution and indemnification is owing.

The rights of the indemnifying Guarantors against other Guarantors under this
Section 9.22 shall be exercisable only upon the full and irrevocable payment of
the Obligations in cash and the termination of this Agreement, including,
without limitation, the termination of the Loan commitment hereunder.

9.23                        Successors and Assigns Bound; Joint and Several
Liability; Agents; and Captions

The covenants and agreements contained in the Loan Documents shall bind, and the
rights thereunder shall inure to, the respective permitted successors and
assigns of the Lender, the Borrower and the Guarantors, subject to the
provisions of this Agreement. Subject to Section 9.22, all covenants and
agreements of the Borrower and the Guarantors shall be joint and several. In
exercising any rights under the Loan Documents or taking any actions provided
for therein, the Lender may act through its employees, agents or independent
contractors as authorized by the Lender.

9.24                        Loss of Borrower Note

Upon notice from the Lender of the loss, theft, or destruction of the Borrower
Note and upon receipt of an indemnity reasonably satisfactory to the Borrower
from the Lender, or in the case of mutilation of the Borrower Note, upon
surrender of the mutilated Borrower Note, the Borrower shall make and deliver a
new note of like tenor in lieu of the then to be superseded Borrower Note.

9.25                        Acknowledgment

THE BORROWER AND EACH GUARANTOR ACKNOWLEDGES THAT IT HAS THOROUGHLY READ AND
REVIEWED THE TERMS AND PROVISIONS OF THIS AGREEMENT, THE ATTACHED SCHEDULES AND
THE LOAN DOCUMENTS AND IS FAMILIAR WITH THE TERMS OF SAME; THAT THE TERMS AND
PROVISIONS CONTAINED IN THIS AGREEMENT HAVE BEEN THOROUGHLY READ BY THE BORROWER
AND EACH GUARANTOR AND ARE CLEARLY UNDERSTOOD AND FULLY AND UNCONDITIONALLY
CONSENTED TO BY THE BORROWER AND EACH GUARANTOR. THE BORROWER AND EACH GUARANTOR
HAS HAD FULL BENEFIT AND ADVICE OF COUNSEL OF ITS SELECTION, IN REGARD TO
UNDERSTANDING THE TERMS, MEANING, AND EFFECTS OF THIS AGREEMENT. THE BORROWER
AND EACH GUARANTOR FURTHER ACKNOWLEDGES THAT ITS EXECUTION OF THIS AGREEMENT AND
THE LOAN DOCUMENTS IS DONE FREELY, VOLUNTARILY AND WITH FULL KNOWLEDGE, AND
WITHOUT DURESS, AND THAT IN EXECUTING THIS AGREEMENT AND THE LOAN DOCUMENTS, THE
BORROWER AND EACH GUARANTOR HAS RELIED ON NO OTHER REPRESENTATIONS, EITHER
WRITTEN OR ORAL, EXPRESS OR IMPLIED, MADE TO IT BY ANY OTHER PARTY TO THE
AGREEMENT; AND THAT THE CONSIDERATION RECEIVED BY THE BORROWER AND EACH
GUARANTOR UNDER THIS AGREEMENT AND THE LOAN DOCUMENTS AND HAS BEEN ACTUAL
AND ADEQUATE.

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[Intentionally Left Blank]

72

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

 

MAGNA ENTERTAINMENT CORP., as Borrower

 

 

by

 

/s/ BLAKE TOHANA

 

 

 

 

 

 

 

 

 

 

Name: Blake Tohana
Title: Executive Vice President and Chief Financial Officer

 

 

 

 

/s/ WILLIAM FORD

 

 

 

 

 

 

 

 

 

 

Name: William Ford
Title: Secretary

 

 

 

 

We have authority to bind the Corporation.

 

 

PACIFIC RACING ASSOCIATION

 

 

by

 

/s/ BLAKE TOHANA

 

 

 

 

 

 

 

 

 

 

Name: Blake Tohana
Title: Executive Vice President and Chief Financial Officer

 

 

 

 

/s/ WILLIAM FORD

 

 

 

 

 

 

 

 

 

 

Name: William Ford
Title: Secretary

 

 

 

 

We have authority to bind the Corporation.

 

 

MEC LAND HOLDINGS (CALIFORNIA) INC.

 

 

by

 

/s/ BLAKE TOHANA

 

 

 

 

 

 

 

 

 

 

 

Name: Blake Tohana
Title: Executive Vice President and Chief Financial Officer

 

 

 

 

/s/ WILLIAM FORD

 

 

 

 

 

 

 

 

 

 

Name: William Ford
Title: Secretary

 

 

 

 

We have authority to bind the Corporation.

 

 

THE SANTA ANITA COMPANIES, INC.

 

 

by

 

/s/ BLAKE TOHANA

 

 

 

 

 

 

 

 

 

 

 

Name: Blake Tohana
Title: Executive Vice President and Chief Financial Officer

 

 

 

 

/s/ WILLIAM FORD

 

 

 

 

 

 

 

 

 

 

Name: William Ford
Title: Secretary

 

 

 

 

We have authority to bind the Corporation.

 

 

LOS ANGELES TURF CLUB, INCORPORATED

 

 

by

 

/s/ BLAKE TOHANA

 

 

 

 

 

 

 

 

 

 

 

Name: Blake Tohana
Title: Executive Vice President and Chief Financial Officer

 

 

 

 

/s/ WILLIAM FORD

 

 

 

 

 

 

 

 

 

 

Name: William Ford
Title: Secretary

 

 

 

 

We have authority to bind the Corporation.

 

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GULFSTREAM PARK RACING ASSOCIATION, INC.

 

 

by

 

/s/ BLAKE TOHANA

 

 

 

 

 

Name: Blake Tohana
Title: Executive Vice President and Chief Financial Officer

 

 

 

 

/s/ WILLIAM FORD

 

 

 

 

 

 

 

 

 

 

Name: William Ford
Title: Secretary

 

 

 

 

We have authority to bind the Corporation.

 

 

MEC HOLDINGS (USA) INC.

 

 

by

 

/s/ BLAKE TOHANA

 

 

 

 

 

Name: Blake Tohana
Title: Executive Vice President and Chief Financial Officer

 

 

 

 

/s/ WILLIAM FORD

 

 

 

 

 

 

 

 

 

 

Name: William Ford
Title: Secretary

 

 

 

 

We have authority to bind the Corporation.

 

 

MEC DIXON, INC.

 

 

by

 

/s/ BLAKE TOHANA

 

 

 

 

 

Name: Blake Tohana
Title: Executive Vice President and Chief Financial Officer

 

 

 

 

/s/ WILLIAM FORD

 

 

 

 

 

 

 

 

 

 

Name: William Ford
Title: Secretary

 

 

 

 

We have authority to bind the Corporation.

 

 

GPRA THOROUGHBRED TRAINING CENTER, INC.

 

 

by

 

/s/ BLAKE TOHANA

 

 

 

 

 

Name: Blake Tohana
Title: Executive Vice President and Chief Financial Officer

 

 

 

 

/s/ WILLIAM FORD

 

 

 

 

 

 

 

 

 

 

Name: William Ford
Title: Secretary

 

 

 

 

We have authority to bind the Corporation.

 

 

SUNSHINE MEADOWS RACING, INC.

 

 

by

 

/s/ BLAKE TOHANA

 

 

 

 

 

Name: Blake Tohana
Title: Executive Vice President and Chief Financial Officer

 

 

 

 

/s/ WILLIAM FORD

 

 

 

 

 

 

 

 

 

 

Name: William Ford
Title: Secretary

 

 

 

 

We have authority to bind the Corporation.

 

 

THISTLEDOWN, INC.

 

 

by

 

/s/ BLAKE TOHANA

 

 

 

 

 

Name: Blake Tohana
Title: Executive Vice President and Chief Financial Officer

 

 

 

 

/s/ WILLIAM FORD

 

 

 

 

Name: William Ford
Title: Secretary

 

 

 

 

We have authority to bind the Corporation.

 

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MEC MARYLAND INVESTMENTS INC.

 

 

by

 

/s/ BLAKE TOHANA

 

 

 

 

 

Name: Blake Tohana
Title: Executive Vice President and Chief Financial Officer

 

 

 

 

/s/ WILLIAM FORD

 

 

 

 

 

 

 

 

 

 

Name: William Ford
Title: Secretary

 

 

 

 

We have authority to bind the Corporation.

 

 

30000 MARYLAND INVESTMENTS LLC

 

 

by

 

/s/ BLAKE TOHANA

 

 

 

 

 

Name: Blake Tohana
Title: Executive Vice President and Chief Financial Officer

 

 

 

 

/s/ WILLIAM FORD

 

 

 

 

 

 

 

 

 

 

Name: William Ford
Title: Secretary

 

 

 

 

We have authority to bind the Corporation.

 

 

MID ISLANDI SF., acting through its Zug Branch

 

 

by

 

/s/ THOMAS SCHULTHEISS

 

 

 

 

 

Name: Thomas Schultheiss
Title: Branch Manager

 

 

 

 

/s/ PETER NIDEROEST

 

 

 

 

 

 

 

 

 

 

Name: Peter Nideroest
Title: Branch Manager

 

 

 

 

We have authority to bind the Partnership.

 

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