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Exhibit 10.4

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

BRIDGE LOAN AGREEMENT

Dated as of July 22, 2005

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TABLE OF CONTENTS

ARTICLE 1
INTERPRETATION

1.1   Definitions   4 1.2   Gender and Number   26 1.3   Certificate of the
Lender as to Rates, etc.   26 1.4   Invalidity, etc.   26 1.5   Headings, etc.  
27 1.6   Governing Law   27 1.7   Attornment   27 1.8   Judgment Currency   27
1.9   References   27 1.10   Currency   28 1.11   This Agreement to Govern   28
1.12   Generally Accepted Accounting Principles   28 1.13   Computation of Time
Periods   28 1.14   Actions on Days Other Than Banking Days   28 1.15   Oral
Instructions   28 1.16   Incorporation of Schedules   29

ARTICLE 2
BRIDGE LOAN

2.1   Establishment of Bridge Loan   29 2.2   Non-Revolving Nature of Bridge
Loan   30 2.3   Voluntary Repayments   30 2.4   Mandatory Repayment   30 2.5  
Voluntary Reduction in Aggregate Commitment   31

ARTICLE 3
GENERAL PROVISIONS RELATING TO THE BRIDGE LOAN

3.1   Advances   31 3.2   Payments Generally   32 3.3   Illegality   32 3.4  
Indemnity   32 3.5   Proceedings in Respect of Claims   33 3.6   Evidence of
Indebtedness   35

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ARTICLE 4
ADDITIONAL CONDITIONS PRECEDENT TO ADVANCES
UNDER TRANCHE 2 AND TRANCHE 3

4.1   Tranche 2 Conditions   35 4.2   Tranche 3 Conditions   36

ARTICLE 5
INTEREST AND FEES

5.1   Interest Rate   37 5.2   Calculation and Payment of Interest   39 5.3  
Fees   40 5.4   Payment of Costs and Expenses   40

ARTICLE 6
REPRESENTATIONS AND WARRANTIES

6.1   Representations and Warranties   41 6.2   Survival of Representations and
Warranties   55

ARTICLE 7
COVENANTS

7.1   Affirmative Covenants   55 7.2   Negative Covenants   66 7.3  
Environmental Matters   71 7.4   The Meadows   72

ARTICLE 8
CONDITIONS PRECEDENT

8.1   Conditions Precedent to Closing   73 8.2   Conditions Precedent to
Advances   82

ARTICLE 9
EVENTS OF DEFAULT AND REMEDIES

9.1   Events of Default   83 9.2   Remedies Upon Default   86 9.3  
Distributions   87

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ARTICLE 10
GENERAL

10.1   Reliance and Non-Merger   87 10.2   Confidentiality   87 10.3   No
Set-Off   88 10.4   Employment of Experts   88 10.5   Reliance by Lender   88
10.6   Notices   88 10.7   Further Assurances   92 10.8   Assignment   92 10.9  
Disclosure of Information to Potential Permitted Lender Assignees   93 10.10  
Right to Cure   93 10.11   Forbearance by the Lender Not a Waiver   93 10.12  
Waiver of Statute of Limitations and Other Defenses   93 10.13   Relationship  
93 10.14   Time of Essence   94 10.15   Service of Process/Venue   94 10.16  
Jury Trial Waiver   94 10.17   Final Agreement/Modification   94 10.18  
Continuing Agreement   95 10.19   No Third Party Beneficiaries   95 10.20   No
Brokers   95 10.21   Execution in Counterparts   95 10.22   Contribution by
Guarantors with Respect to Obligations.   95 10.23   Successors and Assigns
Bound; Joint and Several Liability; Agents; and Captions   96 10.24   Loss of
Borrower Note   96 10.25   Acknowledgment   97 10.26   Certain Provisions
relating to The Meadows Guarantors   97

SCHEDULE A — Borrowing Notice

SCHEDULE B — Form of Interest Rate Election

SCHEDULE C — Properties and Prior Mortgages

SCHEDULE D — Environmental Reports

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LOAN AGREEMENT

        THIS AGREEMENT made as of the 22nd day of July, 2005.

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 —

MEC PENNSYLVANIA RACING, INC.,
a corporation incorporated under the laws of the
Commonwealth of Pennsylvania

— and —

WASHINGTON TROTTING ASSOCIATION, INC.,
a corporation incorporated under the laws of the
State of Delaware

— and —

MOUNTAIN LAUREL RACING, INC.,
a corporation incorporated under the laws of the
State of Delaware

(hereinafter collectively called "The Meadows Guarantors"),

OF THE THIRD PART,

— and —

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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 FOURTH PART,

— and —

THE SANTA ANITA COMPANIES, INC.,
a corporation incorporated under the laws of the
State of Delaware

— and —

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 FIFTH 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 SIXTH 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 SEVENTH PART,

— and —

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SLRD THOROUGHBRED TRAINING CENTER, INC.,
a corporation incorporated under the laws of the
State of Delaware

(hereinafter called the "San Luis Rey Downs Guarantor"),

OF THE EIGHTH PART,

— and —

MEC DIXON, INC.,
a corporation incorporated under the laws of the
State of Delaware

(hereinafter called the "Dixon Guarantor"),

OF THE NINTH PART,

— and —

SUNSHINE MEADOWS RACING INC.
a corporation incorporated under the laws of the
State of Delaware

(hereinafter called the "Ocala Guarantor" and together
with The Meadows Guarantors, the Golden Gate Fields Guarantors,
the Santa Anita Guarantors, the Gulfstream Guarantor,
the Palm Meadows Training Guarantor, the San Luis Rey Downs Guarantor and
the Dixon Guarantor, collectively, the "Guarantors"
and each individually a "Guarantor"),

OF THE TENTH PART.

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        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;

"Advance" means any utilization of the Bridge Loan Facility by the Borrower;

"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;

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"Allocable Amount" has the meaning ascribed thereto in Section 10.22;

"Amtote" has the meaning ascribed thereto in Section 7.2(f);

"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);

"Audited and Unaudited Financial Statements" means the audited consolidated
financial statements of the Borrower for the Fiscal Year ended December 31, 2004
and the unaudited consolidated financial statements of the Borrower for the
Fiscal Quarter ended March 31, 2005;

"Banking Day" means a day on which banks are generally open for business in each
of Toronto, Ontario, New York, New York, Miami, Florida, Los Angeles,
California, Philadelphia, Pennsylvania and/or Chicago, Illinois, and with
respect to notices, determinations or payments of Fixed Rate Advances to which
LIBOR applies, London, England;

"Base Rate" means, for any day, the annual rate of interest equal to the greater
of (i) the rate which Bank of Montreal establishes at its principal office in
Chicago, Illinois as the reference rate of interest in order to determine
interest rates it will charge on such day for commercial loans in U.S. dollars
made to its customers in the United States of America and which it refers to as
its "Base Rate", and (ii) the Federal Funds Effective Rate on such day plus 1%
per annum, such rate to be adjusted automatically and without the necessity of
any notice to the Borrower upon each change to such rate;

"Blocked Persons List" has the meaning ascribed thereto in Section 6.1(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 the same may be 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 $50,000,000, and includes any renewal or
refinancing of any such agreement or the indebtedness owing thereunder provided
that the principal amount of such renewed or refinanced indebtedness does not
exceed $50,000,000 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;

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"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 8.1(h)(ii);

"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,
Borrower's and Guarantor's Oklahoma Agent, and the Borrower's and Guarantor's
Pennsylvania 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's and Guarantors' Oklahoma Agent" means the Oklahoma City office of
Crowe & Dunlevy, or such other firm or firms of solicitors or agents in the
State of Oklahoma as are appointed by the Borrower from time to time and notice
of which is provided to the Lender;

"Borrower's and Guarantors' Pennsylvania Agent" means the Pittsburg office of
Eckert Seamans Cherin & Mellott, LLC, or such other firm or firms of solicitors
or agents in the Commonwealth of Pennsylvania 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 6.1(i);

"Borrower Note" has the meaning ascribed thereto in Section 8.1(h)(i);

"Borrower Recapitalization Plan" means the plan approved and adopted by the
Borrower's board of directors to recapitalize the Borrower and its Subsidiaries
and to revise the business plan for the Borrower and its Subsidiaries, and which
shall be in form, scope and terms satisfactory to the Lender in its sole and
absolute discretion;

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"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, maintenance 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;

"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
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 Arrangement Fee" has the meaning ascribed thereto in Section 5.3(b);

"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;

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

"Commitment Fee" has the meaning ascribed thereto in Section 5.3(a);

"Commitment Fee Payment Date" has the meaning ascribed thereto in
Section 5.3(a);

"Compliance Certificate" has the meaning ascribed thereto in Section 7.1(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

(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.

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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, 2004, and including (i) thoroughbred
and harness horse racing, (ii) dog racing, (iii) off-track betting facilities,
(iv) account wagering and other gaming activities including, without limitation,
slot machine and video lottery terminals, (v) a racetrack and casino complex in
Austria, (vi) any food and beverage operations, sports bar operations,
technology services, entertainment, the ownership and management of real estate
and/or other activities, associated with or ancillary or related to (i), (ii),
(iii), (iv) and/or (v), above, including the ownership or operation of horse or
dog training and boarding centres, arenas and restaurants, and (vii) the
ownership and operation of two golf courses, one of which is located in Aurora,
Ontario and the second of which is located in Oberwaltersdorf, Austria, and all
operations related thereto;

"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 Guarantee and Indemnity" has the meaning ascribed thereto in
Section 8.1(h)(xxxiv);

"Dixon Guarantee Fee" has the meaning ascribed thereto in Section 8.1(h)(xxxiv);

"Dixon Property" means the lands and premises designated as the Dixon Property
in Schedule C hereto;

"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;

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(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

(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;

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(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:

(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 7.1(p);

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

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"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 7.1(p);

"Event of Default" has the meaning attributed to such term in Section 9.1;

"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;

"Federal Funds Effective Rate" means, for any day, the annual rate of interest
equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Banking Day,
for the next preceding Banking Day) by the Federal Reserve Bank of New York, or
if such rate is not so published for any day which is a Banking Day, the average
of the quotations for such day on such transactions received by BMO from three
United States of America federal funds brokers of recognized standing selected
by it;

"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;

"Fixed Rate Advance" has the meaning ascribed thereto in Section 5.1(a)(ii);

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"Flamboro Guarantee and Indemnity" has the meaning ascribed thereto in
Section 7.1(ff);

"Flamboro Guarantors" has the meaning ascribed thereto in Section 7.1(ff);

"Floating Rate Advance" has the meaning ascribed thereto in Section 5.1(a)(i);

"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;

"Golden Gate Fields General Security Agreement" has the meaning ascribed thereto
in Section 8.1(h)(xxv);

"Golden Gate Fields Guarantee and Indemnity" has the meaning ascribed thereto in
Section 8.1(h)(xxv);

"Golden Gate Fields Guarantee Fee" has the meaning ascribed thereto in
Section 8.1(h)(xxv);

"Golden Gate Fields Guarantors' Environmental Indemnity" has the meaning
ascribed thereto in Section 8.1(h)(xxv);

"Golden Gate Fields Property" means the lands and premises designated as the
Golden Gate Fields Property in Schedule C hereto;

"Golden Gate Fields Second Mortgage" has the meaning ascribed thereto in
Section 8.1(h)(xv);

"Golden Gate Fields Security" has the meaning ascribed thereto in
Section 8.1(h)(xviii);

"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 6.1(j);

"Guarantors" means, collectively, The Meadows Guarantors, the Golden Gate Fields
Guarantors, the Santa Anita Guarantors, the Gulfstream Guarantor, the Palm
Meadows Training Guarantor, the San Luis Rey Downs Guarantor, the Dixon
Guarantor, and the Ocala Guarantor, and, in the singular, any one of them;

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"Guarantor Payment" has the meaning ascribed thereto in Section 10.22;

"Gulfstream and Aventura Properties" means the lands and premises designated as
the Gulfstream Property and the Aventura Property in Schedule C hereto;

"Gulfstream Construction Loan Agreement" means the loan agreement made between
Gulfstream Park Racing Association Inc., as borrower, the Lender, as lender, and
others, made as of December 9, 2004 and amended and restated as of July 22,
2005, as the same may be amended or restated from time to time;

"Gulfstream Guarantee and Indemnity" has the meaning ascribed thereto in
Section 8.1(h)(xxxi);

"Gulfstream Guarantee Fee" has the meaning ascribed thereto in
Section 8.1(h)(xxxi);

"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;

"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 8.1(h);

"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, for each Fixed Rate Advance, a period commencing,
(i) in the case of the initial Interest Period for such Advance, on the date of
such Advance; and (ii) in the case of any subsequent Interest Period for such
Advance, on the last day of the immediately preceding Interest Period applicable
thereto and ending, in either case, on the last day of such period as shall be
selected by the Borrower pursuant to the provisions below. If any Advance is a
Floating Rate Advance at any time, and is changed to a Fixed Rate Advance
pursuant to the provisions hereof, the initial Interest Period for such Advance
after such change shall commence on the date of such change. Except as provided
in the next following sentence, the duration of each such Interest Period shall
be, subject to availability for the Lender, one, two or three months, as the
Borrower may select in the applicable Borrowing Notice or Interest Rate
Election. No Interest Period may be selected that conflicts, in the opinion of
the Lender, with the repayment requirements set out in Article 5;

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"Interest Rate Election" means a notice, substantially in the form of
Schedule B, given by the Borrower electing to change from one type of Advance to
another type of Advance or to continue a Fixed Rate Advance for a further
Interest Period;

"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 1.8;

"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 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;

"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;

"Lender's Oklahoma Agent" means the Oklahoma City office of Spradling, Kennedy &
McPhail, L.L.P., or such other firm or firms of solicitors or agents in the
State of Oklahoma 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 Pennsylvania Agent" means the Pittsburgh office of Pepper
Hamilton LLP, or such other firm or firms of solicitors or agents in the State
of Pennsylvania as are appointed by the Lender from time to time and notice of
which is provided to the Borrower and the Guarantors;

"LIBOR" means, for any Fixed Rate Advance for which LIBOR applies, the rate of
interest per annum for deposits in US Dollars in the London interbank market for
the period of any such Fixed Rate Advance and in an amount approximately equal
to the Fixed Rate Advance, calculated on the basis of a year of 360 days, equal
to the arithmetic mean, rounded upwards to the nearest whole multiple of
one-sixteenth of one percent (if already not such a multiple), 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 aggregate of the principal amount of the Bridge Loan,
being comprised of (i) the principal amount of $50,000,000 made available
pursuant to Tranche 1; (ii) the principal amount of $25,000,000 made available
pursuant to Tranche 2; and (iii) the principal amount of $25,000,000 made
available pursuant to Tranche 3, 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;

"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;

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"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;

"Meadows Guarantors" means, collectively, MEC Pennsylvania Racing, Inc.,
Washington Trotting Association, Inc. and Mountain Laurel Racing, Inc.;

"Mortgages" means, collectively, the Golden Gate Fields Second Mortgage, The
Meadows First Mortgage and the Santa Anita Third Mortgage; and, in the singular,
any one of them;

"Mortgaged Properties" means, collectively, the Golden Gate Fields Property, The
Meadows Property and the Santa Anita Property; and, in the singular, any one of
them;

"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;

"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 8.1(h)(xxxv);

"Ocala Guarantee Fee" has the meaning ascribed thereto in Section 8.1(h)(xxv);

"Ocala Property" means the lands and premises designated as the Ocala Property
in Schedule C hereto;

"Occupancy Agreements" has the meaning ascribed thereto in Section 6.1(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
President, the Chief Financial Officer or the Secretary;

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"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 6.1(j);

"Palm Meadows Training Guarantee and Indemnity" has the meaning ascribed thereto
in Section 8.1(h)(xxxii);

"Palm Meadows Training Guarantee Fee" has the meaning ascribed thereto in
Section 8.1(h)(xxxii);

"Permitted Debt" means (i) the Bridge Loan; (ii) the Santa Anita Senior
Facility; (iii) the BMO Credit Agreement; (iv) the Remington Construction Loan
Agreement; (v) the Gulfstream Construction Loan Agreement; (vi) 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 (vi) provided the principal amount
of such indebtedness thereunder or security therefor is not thereby increased
beyond the original principal amount of such indebtedness; (vii) unsecured trade
and other accounts payable incurred in the ordinary course of business,
including the Construction (as defined in the Remington Construction Loan
Agreement) and the Reconstruction (as defined in the Gulfstream Construction
Loan Agreement), for the purpose of carrying on the same; (viii) 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; (ix) 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;
(x) indebtedness of up to $6,000,000 in aggregate that may become due to the
Estate of John K. Cooke in connection with the acquisition of The Maryland
Jockey Club; (xi) the obligation to pay $18,312,000 plus accrued interest on the
exercise of either the put or call option for the remaining minority interest in
The Maryland Jockey Club; (xii) the Subordinated Debt; (xiii) 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; (xiv) indebtedness of up to $200,000,000 with
respect to the redevelopment of The Meadows Property, provided that the recourse
of the holder of such indebtedness is limited contractually to the assets being
financed and the Additional Financing Inter-Creditor Agreement (as defined in
the Gulfstream Construction Loan Agreement) is executed and delivered to the
Lender prior to the incurrence of such indebtedness; (xv) other obligations and
indebtedness (including Capital Lease Obligations and Contingent Liabilities)
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
approximately $183,000,000 (which amount includes indebtedness denominated in
foreign currencies and is therefore subject to fluctuation from time to time due
to exchange rate fluctuations); and (xvi) 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;

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"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;

(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;

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(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 Lenders, sufficient in
either case to pay or discharge such Lien or upon other terms satisfactory to
the Lenders;

(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;

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(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 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 June 1, 2005 and 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 $15,000,000; 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 10.8;

"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;

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"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;

"proceeding" has the meaning ascribed thereto in Section 6.1(p);

"Properties" means all lands and premises identified in Schedule C 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 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;

"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.;

"Remington Escrow Agreement" means the escrow agreement dated as of July 26,
2005 among the Lender, the Remington Borrower and the Guarantors (as defined in
the Remington Construction Loan Agreement);

"Remington Property" means the lands and premises designated as the Remington
Property in Schedule C hereto;

"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;

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"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;

"San Luis Rey Downs Guarantee and Indemnity" has the meaning ascribed thereto in
Section 8.1(h)(xxxiii);

"San Luis Rey Downs Guarantee Fee" has the meaning ascribed thereto in
Section 8.1(h)(xxxiii);

"San Luis Rey Downs Property" means the lands and premises designated as the San
Luis Rey Downs Property in Schedule C hereto;

"Santa Anita General Security Agreement" has the meaning ascribed thereto in
Section 8.1(h)(xxviii);

"Santa Anita Guarantee and Indemnity" has the meaning ascribed thereto in
Section 8.1(h)(xxviii);

"Santa Anita Guarantee Fee" has the meaning ascribed thereto in
Section 8.1(h)(xxviii);

"Santa Anita Property" means the lands and premises designated as the Santa
Anita Property in Schedule C hereto;

"Santa Anita Property Environmental Indemnity" has the meaning ascribed thereto
in Section 8.1(h)(xi);

"Santa Anita Security" has the meaning ascribed thereto in Section 8.1(h)(x);

"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;

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"Santa Anita Senior Security" means the security documents and guaranties
securing and supporting the Santa Anita Senior Facility, and includes any
amendment or replacement of any such security or guarantee provided the property
subject thereto or security interest in relation thereto is not increased;

"Santa Anita Third Assignment of Licences and Permits" has the meaning ascribed
thereto in Section 8.1(h)(x);

"Santa Anita Third Assignment of Material Agreements" has the meaning ascribed
thereto in Section 8.1(h)(ix);

"Santa Anita Third Assignment of Rents and Leases" has the meaning ascribed
thereto in Section 8.1(h)(viii);

"Santa Anita Third Mortgage" has the meaning ascribed thereto in
Section 8.1(h)(vii);

"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 8.1(h);

"SHRCP Approval" has the meaning ascribed thereto in Section 7.1(dd);

"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;

"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;

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"Termination Date" means August 31, 2006 or 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;

"The Meadows General Security Agreement" has the meaning ascribed thereto in
Section 8.1(h)(xxiv)(D);

"The Meadows Assignment of Material Agreements" has the meaning ascribed thereto
in Section 8.1(h)(xxiv)(C);

"The Meadows Assignment of Rents and Leases" has the meaning ascribed thereto in
Section 8.1(h)(xxiv)(B);

"The Meadows First Mortgage" has the meaning ascribed thereto in
Section 8.1(h)(xxiv)(A);

"The Meadows Guarantee Fee" has the meaning ascribed thereto in
Section 8.1(h)(xxiii);

"The Meadows Guarantee and Indemnity" has the meaning ascribed thereto in
Section 8.1(h)(xxiii);

"The Meadows Guarantors' Environmental Indemnity" has the meaning ascribed
thereto in Section 8.1(h)(xxiv)(E);

"The Meadows Property" means the lands and premises designated as The Meadows
Property in Schedule C hereto;

"The Meadows Security" has the meaning ascribed thereto in
Section 8.1(h)(xxiv)(D);

"The Meadows Security Conditions" has the meaning ascribed thereto in
Section 5.1(e);

"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;

"Tranche 1" has the meaning ascribed thereto in Section 2.1(e);

"Tranche 2" has the meaning ascribed thereto in Section 2.1(e);

"Tranche 2 Arrangement Fee" has the meaning ascribed thereto in Section 5.3(b);

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"Tranche 2 Conditions" has the meaning ascribed thereto in Section 4.1;

"Tranche 3" has the meaning ascribed thereto in Section 2.1(e);

"Tranche 3 Arrangement Fee" has the meaning ascribed thereto in Section 5.3(b);

"Tranche 3 Conditions" has the meaning ascribed thereto in Section 4.2;

"Unutilized Amount" has the meaning ascribed thereto in Section 5.3(a);

"U.S. 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, as the same may be
amended or restated from time to time.

1.2   Gender and Number

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

1.3   Certificate of the Lender as to Rates, etc.

        A certificate of the Lender certifying the amount of the Base Rate or
the Federal Funds Effective Rate at any particular time in respect of any Loan
made or maintained or to be made or maintained by the Lender hereunder shall be
prima facie evidence thereof. No provision hereof shall be construed so as to
require the Lender to issue a certificate at any particular time.

1.4   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.

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1.5   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.

1.6   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.

1.7   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.

1.8   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.

1.9   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 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.

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1.10 Currency

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

1.11 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.

1.12 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).

1.13 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".

1.14 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.

1.15 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.

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1.16 Incorporation of Schedules

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

Schedule A   Borrowing Notice Schedule B   Form of Interest Rate Election
Schedule C   Properties and Prior Mortgages Schedule D   Environmental Reports

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 of up
to the principal amount of $100,000,000 (the "Bridge Loan"), available in three
tranches on the terms and conditions set out herein:

(b)All Advances shall be made in Dollars.

(c)The Bridge Loan is to be used for general corporate purposes of the Borrower
and its Subsidiaries, provided that such usage shall at all times be consistent
with the Borrower Recapitalization Plan.

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

(e)During the period from the Closing Date to the first Banking Day on or after
October 15, 2005, the maximum principal amount of the Bridge Loan that shall be
available to the Borrower shall be $50,000,000 ("Tranche 1"). On the first
Banking Day on or after October 15, 2005, the maximum principal amount of the
Bridge Loan that shall be available to the Borrower shall be increased by a
further $25,000,000 ("Tranche 2"), subject to the satisfaction of the Tranche 2
Conditions set out in Section 4.1 for a total principal availability as of such
date of $75,000,000. On the first Banking Day on or after January 15, 2006, the
maximum principal amount of the Bridge Loan that shall be available to the
Borrower shall be increased by a further $25,000,000 ("Tranche 3"), subject to
the Tranche 3 Conditions set out in Section 4.2, for a total principal
availability as of such date of $100,000,000. For greater certainty, the
Borrower is not required to draw down a Tranche or any portion thereof upon its
first day of availability nor by the date that the next successive Tranche is
available, availability of all Tranches being, without duplication, cumulative.
The failure of the Borrower to draw down any particular Tranche (or any portion
thereof) before the next Tranche availability (or the next following thereafter
in the case of Tranche 1) shall not terminate the Borrower's right to such
undrawn Tranche or portion thereof provided all conditions precedent to such
Tranche have been satisfied within the time prescribed.

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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   Voluntary Repayments

        Subject to LIBOR contract maturity dates with respect to any Fixed Rate
Advance, the Borrower may from time to time (without premium or penalty) on any
Banking Day repay to the Lender the Loan or any portion thereof, provided that
any such repayment (a) shall be in an amount of at least $1,000,000 and any
greater amount shall be an integral multiple of $100,000 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.

2.4   Mandatory Repayment

(a)The Loans 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

(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 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) but,
in any event, of any sale or other disposition of any of its real property or
other assets specified in the Intercreditor Agreements;

(C)any issue of securities by the Borrower (except those in respect of the
Borrower's long term incentive plan) or any of its Subsidiaries or borrowing of
monies, other than Permitted Debt, by the Borrower of any of its Subsidiaries;
or

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(D)any expropriation or condemnation of the whole or any part of its real
property or other assets specified in the Intercreditor Agreements,

an amount equal to such net proceeds shall be applied in accordance with the
Intercreditor Agreements to repay one or more of (i) the Loan, (ii) the
indebtedness under the BMO Credit Agreement and (iii) the indebtedness under the
Santa Anita Senior Facility; 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. 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(c), 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 (other than
security under the BMO Credit Agreement or the Santa Anita Senior Facility)
attaching to such assets ranking in priority to the Security.

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 10 Banking Days' notice to the Lender, which notice, once given,
shall be irrevocable and binding upon the Borrower, to reduce the then
applicable 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 $1,000,000. The amount of
any such reduction so made by the Borrower shall be permanent and irrevocable
and the Loan Amount shall be reduced accordingly.

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 and any
greater amount shall be an integral multiple of $50,000.

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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:

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(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).

        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.

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(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.

ARTICLE 4
ADDITIONAL CONDITIONS PRECEDENT TO ADVANCES
UNDER TRANCHE 2 AND TRANCHE 3

4.1   Tranche 2 Conditions

        Without derogating from the provisions of Sections 3.1 and 8.2, the
Borrower shall only be entitled to advances under Tranche 2 if the following
conditions (the "Tranche 2 Conditions") shall have been satisfied as of the
first Banking Day on or after October 15, 2005:

(a)Borrower Recapitalization Plan:    The Borrower has established to the
satisfaction of the Lender, in its sole discretion, that the Borrower is in
compliance with, can reasonably be expected to be able to implement, and is
using commercially reasonable efforts to implement, the Borrower
Recapitalization Plan taking into account, among other things, the Tranche 2
Conditions set forth below in subsections (b), (c) and (d);

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(b)Asset Sales:    The Borrower has established to the satisfaction of the
Lender that the Borrower has sold, or is actively pursuing the sale of, a
minimum of four of the assets listed as being intended for disposal in the
Borrower Recapitalization Plan within the time frames included therein, with
aggregate budgeted net proceeds before debt repayment of not less than
$50,000,000;

(c)Gaming Transaction:    The Borrower has established to the satisfaction of
the Lender that the Borrower has implemented a process to actively pursue and
execute a gaming transaction with one or more reputable gaming companies,
including by retaining the advisory services of a gaming consultant acceptable
to the Lender, acting reasonably;

(d)Operations:    The Borrower has established to the satisfaction of the Lender
that the Borrower's EBITDA (excluding asset impairment writedowns and gains and
losses on asset sales and irrespective of any changes in the Borrower's
accounting policies after the Closing Date) for the third quarter of 2005 is no
worse than negative $22,000,000; and

(e)Tranche 2 Arrangement Fee:    The Lender shall have received payment in full
of the Tranche 2 Arrangement Fee.

4.2   Tranche 3 Conditions

        Without derogating from the provisions of Sections 3.1 and 8.2, the
Borrower shall only be entitled to advances under Tranche 3 if the following
conditions (the "Tranche 3 Conditions") shall have been satisfied as of the
first Banking Day on or after January 15, 2006:

(a)Section 4.1 Conditions:    The conditions set out in Section 4.1 shall have
been satisfied or waived by the Lender;

(b)Borrower Recapitalization Plan:    The Borrower has established to the
satisfaction of the Lender, in its sole discretion, that the Borrower is in
compliance with, can reasonably be expected to be able to implement, and is
using commercially reasonable efforts to implement, the Borrower
Recapitalization Plan taking into account, among other things, the associated
milestones set forth below in subsections (c) and (d);

(c)Asset Sales:    The Borrower has (a) sold, or has entered into an agreement
of purchase and sale with respect to, assets that has resulted, or will result,
in a repayment under and permanent reduction of the Bridge Loan of not less than
$25,000,000 and (b) established to the satisfaction of the Lender that the
Borrower has sold, or is actively pursuing the sale of, assets listed as being
intended for disposal in the Borrower Recapitalization Plan within the time
frames included therein, with aggregate budgeted net proceeds before debt
repayment of not less than $100,000,000 (which will include proceeds of sale
achieved as part of the Tranche 2 Conditions and represent a requirement for an
additional $50,000,000 above the amount required pursuant to the Asset Sales
with respect to Tranche 2 Conditions set out in Section 4.1(b));

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(d)Operations:    The Borrower has established to the satisfaction of the Lender
that the Borrower's EBITDA (excluding asset impairment writedowns and gains and
losses on asset sales and irrespective of any changes in the Borrower's
accounting policies after the Closing Date) for the fourth quarter of 2005 is no
worse than negative $11,000,000; and

(e)Tranche 3 Arrangement Fee:    The Lender shall have received payment in full
of the Tranche 3 Arrangement Fee.

ARTICLE 5
INTEREST AND FEES

5.1   Interest Rate

(a)Subject to Sections 5.1(e), (f) and (g), at the option of the Borrower,
Advances under the Loan shall bear interest from time to time at:

(i)a floating rate per annum (each such Advance being referred to as a "Floating
Rate Advance") equal to the greater of: (A) the Base Rate, as announced from
time to time, plus 550 bps per annum and (B) 9% (with interest in each case
payable monthly in arrears); or

(ii)a fixed rate per annum (each such Advance being referred to as a "Fixed Rate
Advance") equal to the greater of: (A) LIBOR plus 650 bps and (B) 9%, subject
to: (I) minimum amounts of US$10,000,000; (II) not more than five separate
Interest Periods outstanding with respect to Fixed Rate Advances at any one
time; and (III) each Interest Period with respect to separate Fixed Rate Advance
is not to exceed the applicable Interest Period or extend beyond the Termination
Date as the case may be (with interest in each case payable at maturity of each
separate Fixed Rate Advance).

(b)Each Advance shall initially be the type of Advance specified in the
applicable Borrowing Notice and shall bear interest at the rate applicable to
such type of Advance (determined as provided in Section 5.1(a) until (i) in the
case of a Fixed Rate Advance, the end of the initial Interest Period applicable
thereto as specified in the applicable Borrowing Notice; or (ii) in the case of
any Floating Rate Advance, the date on which such Advance is repaid in full or
is changed to a Fixed Rate Advance pursuant to and to the extent permitted or
required by Section 5.1(d).

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(c)Each Interest Rate Election shall be made on five (5) Banking Days' prior
notice, in each case, not later than 11:00 a.m. (local time) by the Borrower to
Lender. Each Interest Rate Election shall be given substantially in the form of
Schedule B hereto and shall be irrevocable and binding upon the Borrower.
Subject to Sections 5.1(e) and (f), if the Borrower fails to deliver an Interest
Rate Election to the Lender within five (5) Banking Days prior to the expiration
of any Interest Period for any outstanding Fixed Rate Advance as provided in
this Section 5.1(c), such Fixed Rate Advance shall continue as a Fixed Rate
Advance with an Interest Period of 30 days.

(d)Each conversion of an Advance to another type of Advance shall be made on
five (5) Banking Days' prior notice, in each case, not later than 11:00 a.m.
(local time) by the Borrower to Lender, shall be given in the form of an
Interest Rate Election and shall otherwise be made in accordance with and
subject to this Article, provided that any outstanding Fixed Rate Advance may
not be converted to a Floating Rate Advance unless and until the expiration of
the Interest Period applicable to such outstanding Fixed Rate Advance.

(e)Unless SHRCP Approval is obtained and all applicable registrable Security
being provided by The Meadows Guarantors hereunder is registered in the
Commonwealth of Pennsylvania within 75 days of the Closing Date (collectively,
"The Meadows Security Conditions"), the interest rate on the Loan will, on the
75th day following the Closing Date, be increased by 100 basis points per annum
until such time as The Meadows Security Conditions are met.

(f)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 15% 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.

(g)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 a Fixed Rate 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 a Fixed
Rate Advance for a relevant interest period or other relevant period, then:

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

(ii)if no Fixed Rate Advance is outstanding, any applicable Borrowing Notice
requesting a Fixed Rate Advance shall be deemed to be a request for a Floating
Rate Advance;

(iii)if any Fixed Rate Advance is outstanding to the Borrower, it and all other
Fixed Rate Advances shall become Floating Rate Advances on the last day of the
then current Interest Period applicable thereto (or on such earlier date as may
be required to comply with any Applicable Law); and

(iv)if any of the circumstances in Section 5.1(g) shall occur, the Borrower and
the Lender shall, following the giving of notice by the Lender under this
Section 5.1 (g), 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 Fixed Rate 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 Fixed
Rate Advance then outstanding or three Banking Days before any repayment date
required under Applicable Law, as the case may be), and the Borrower has not
elected to convert any outstanding Fixed Rate Advances to Floating Rate
Advances, the Lender shall determine an interest rate and specify an Interest
Period (not exceeding one month) in respect of each Fixed Rate 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 5.1(g) shall apply only for so long as the
circumstances in Section 5.1(g) shall exist.

5.2   Calculation and Payment of Interest

(a)Interest on Floating Rate 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 365 or
366 days, as the case may be, and shall be payable to the Lender in U.S. dollars
in arrears on the first Banking Day of each month. For greater certainty, where
the rate of interest is changed, for a Floating Rate Advance, interest shall be
charged for the day on which such change is effective on the basis of the new
rate.

39

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(b)Interest on Fixed Rate 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.

5.3   Fees

(a)Commitment Fee.    The Borrower shall pay to the Lenders on the third Banking
Day following the end of each Fiscal Quarter and on the Termination Date (each a
"Commitment Fee Payment Date"), in arrears, a non-refundable commitment fee
(the "Commitment Fee") equal to 1% per annum of the amount, if any, by which the
Loan Amount (assuming that all Tranches are available to the Borrower,
irrespective of whether that is actually the case, but 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 Fee.    The Borrower shall pay to the Lender: (i) on the Closing
Date an arrangement fee (the "Closing Arrangement Fee") of $1,000,000, being 2%
of the Tranche 1 Loan Amount; (ii) on the date, if any, on which all or part of
Tranche 2 is made available to the Borrower, an arrangement fee (the "Tranche 2
Arrangement Fee") of $500,000, being 2% of the Tranche 2 Loan Amount; and
(iii) on the date, if any, on which all or part of Tranche 3 is made available
to the Borrower, an arrangement fee (the "Tranche 3 Arrangement Fee") of
$500,000, being 2% of the Tranche 3 Loan Amount.

5.4   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:

(a)all reasonable costs and out-of-pocket expenses of the Lender 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;

(b)all reasonable costs and out-of-pocket expenses of the Lender 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 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;

40

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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.

ARTICLE 6
REPRESENTATIONS AND WARRANTIES

6.1   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;

41

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        (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 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 the SHRCP Approval and filings
with the Securities Commission, no Material Authorization is required in
connection with (i) the execution, delivery or performance of any of 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 8.1(f)(iv);

        (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;

42

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        (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 48,892,971 were issued and outstanding as at June 30, 2005, 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:

43

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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 MEC Pennsylvania Racing, Inc. consists of 1,000 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:

44

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

Beneficial Holder

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

  Class of Shares

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

  Number of Shares

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

Magna Entertainment Corp.   Common   100

The authorized capital of Washington Trotting Association, 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 Mountain Laurel 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 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

45

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

Beneficial Holder

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

  Class of Shares

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

  Number of Shares

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

Magna Entertainment Corp.*   Common   25

The authorized capital of the San Luis Rey Downs 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 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 the Ocala 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

        (l)    Legal Name and Chief Executive Office.    The Borrower and each
Guarantor has advised, or will advise, 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;

46

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        (m)  Solvency.    The Borrower and each of the Guarantors is solvent,
able to pay its debts as such debts become due, taking into account the Borrower
Recapitalization Plan has capital sufficient to carry on its businesses and
transactions and all businesses and transactions in which it is about to engage,
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;

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        (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
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 use 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, within 90 days of the Closing
Date, each of the Palm Meadows Guarantor and the Dixon Guarantor will enter into
a respective perpetual royalty-free exclusive licence agreement with MEC with
respect to the applicable name;

        (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;

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        (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 MI Developments Inc. 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 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;

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        (dd) No Agreement to Sell Assets; Reorganizations.    Except as
specifically set forth in the Borrower Recapitalization 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 C 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, including the Gulfstream
Development Agreement applicable thereto; (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;

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        (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
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;

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(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;

(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;

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(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.

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6.2                   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 6.1(qq). Without derogating from the foregoing, the representations and
warranties of the Borrower and each of the Guarantors set out in
Section 6.1(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.

ARTICLE 7
COVENANTS

7.1   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;

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        (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 Recapitalization Plan.    The Borrower
will use all commercially reasonable efforts to implement the Borrower
Recapitalization Plan;

        (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
Section 7.1(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 (not to be unreasonably withheld) before making,
permitting or allowing any material amendments or other material changes to, or
the termination of, any Material Agreement (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 7.1(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;

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        (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 7.1(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:

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(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;

(B)demonstrating in reasonable detail compliance (or, as the case may be,
non-compliance) at the end of the relevant Fiscal Quarter or Fiscal Year, as
applicable, with the covenants contained in Section 7.1(o);

(C)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

(D)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 40 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 40 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 90 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 and
statements of cash flow of the Borrower and the Guarantors, all in reasonable
detail and in any event to include projected operating and capital budgets; and

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(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)within 40 days after the end of each Fiscal Quarter (or more often if
requested by the Lender), the Borrower shall submit to the Lender 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 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, in
addition, within one month after the end of each third of a calendar year,
commencing with the third of a calendar year ending April 30, 2005, the Borrower
shall submit to the Lender, if requested, an update prepared by a consultant
reasonably satisfactory to the Lender of (x) each of the Environmental Reports
or (y) the most recent update provided to comply herewith, including in such
update the amounts expended during such period;

        (m)  Reporting Requirements re Borrower Recapitalization Plan.    The
Borrower shall deliver to the Lender: (i) a completed consolidated 2006 business
plan of the Borrower, including detail by business unit (and covering not less
than 2 years), by no later than December 15, 2005 and (ii) reasonably detailed
monthly progress reports on the 15th day of each month with respect to the
Borrower Recapitalization Plan and, once prepared, the completed consolidated
2006 business plan of the Borrower. 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, revised or amended
budgets, etc., (ii) an updated marketing plan for the asset sales set out in the
Borrower Recapitalization 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, etc., (iii) an updated status report on the conditions set forth in
Article 4, and (iv) such other information as the Lender requests, acting
reasonably;

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        (n)   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;

        (o)   Financial Covenants.    The Santa Anita Guarantors, on a Combined
basis, must maintain EBITDA (before inter-company fees), calculated on a rolling
12-month basis at the end of each Fiscal Quarter, of not less than $11 million;
and, commencing with the Fiscal Quarter ending on December 31, 2005, the Golden
Gate Fields Guarantors, on a Combined basis, must maintain EBITDA (before
inter-company fees), calculated on a rolling 12-month basis at the end of each
Fiscal Quarter, of not less than $4 million. Notwithstanding paragraph (c) of
the definition of EBITDA, all net gains from the sale of real estate which were
included in the calculation of Net Income will be deducted from EBTIDA for
purposes of performing any calculations required by this Section 7.1(o);

        (p)   Required Remediation and Environmental Actions.    The Borrower
shall provide the Lender, within 90 days of the Closing Date, with a Phase I
Environmental Site Assessment ("ESA") report or Phase I ESA Update report
prepared by a qualified consultant (with reliance thereon expressly extended to
the Lender) for each of the Golden Gate Property and The Meadows Property. In
the event that any of the Phase I ESA reports or Phase I ESA Update reports
recommend further investigations, all work related to such investigations is to
be undertaken by the Borrower and led by the Guarantors and completed by a
qualified consultant with a report in relation to the investigations at each of
the Golden Gate Property and The Meadows Property to be delivered to the Lender
(with reliance thereon expressly extended to the Lender) within 180 days of the
Closing Date. All Phase I ESA reports, Phase I ESA Update reports and reports
regarding further investigations hereunder shall be defined as the "Initial
ESAs". The Borrower or the Guarantors hereby agree to complete (within a
reasonable period of time following the date of receipt of the Initial ESAs) the
remediation actions recommended to be taken in the Environmental Reports with
respect to the Golden Gate Property and The Meadows Property in the
Environmental Reports 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 D, and any updates or addenda thereto if and to the extent approved
by the Lender in writing 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 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;

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        (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;

(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;

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        (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 7.1(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 7.1(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;

        (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;

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        (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;

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        (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 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 Recapitalization 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);

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        (dd) SHRCP Approval.    Each of The Meadows Guarantors and the Borrower
covenants that it will promptly seek the approval of the State Harness Racing
Commission of Pennsylvania under 58 Pa. Code Section 185.22 in respect of The
Meadows Guarantors' Guarantee and Indemnity and all Security and granted by The
Meadows Guarantors to the Lender hereunder (the "SHRCP Approval"), and further
covenants that it will not take any act (or omit to take any act) that
disqualifies any of The Meadows Guarantors from applying, obtaining, maintaining
or receiving a license under the Pennsylvania Race Horse Development and Gaming
Act, 4 Pa. C.S.A. Sections 1101-1904 (2004) or related regulations as in effect
from time to time;

        (ee) 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 Guarantor, 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 Guarantor, 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;

(vi)except as contemplated by the Loan Documents, and except for the Dixon
Guarantor and the Ocala Guarantor, 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 Guarantor, conduct business in
its own name;

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(x)within 60 days of the Closing Date, have and maintain at least one director
and at least one officer different from the directors and officers of the
Borrower and the other Guarantors;

(xi)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;

(xii)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

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

        (ff)  Sale of Flamboro Downs.    In the event that the closing of the
proposed sale of the Flamboro Downs racetrack to Great Canadian Gaming
Corporation does not take place within 120 days of the Closing Date, or at any
time such transaction is terminated or abandoned by any of the parties thereto,
the Borrower will cause Ontario Racing Inc., Flamboro Downs Holdings Limited and
Flamboro Downs Limited (collectively, the "Flamboro Guarantors"), each a
wholly-owned Subsidiary of the Borrower, to forthwith execute and deliver to the
Lender an unsecured guarantee and indemnity (the "Flamboro Guarantee and
Indemnity") in respect of the Indebtedness, in form and substance satisfactory
to the Lender, acting reasonably, and shall pay to such guarantors a guarantee
fee in an amount satisfactory to the Lender, acting reasonably; and in such
event, the definition of "Security" herein shall thereafter include the Flamboro
Guarantee and the definition of "Guarantors" herein shall thereafter include the
Flamboro Guarantors; and

        (gg) Remington Property.    Until the escrow conditions set out in the
Remington Escrow Agreement have been satisfied, the Borrower shall deliver to
the Lender all reporting, notification and financial information in respect of
the Remington Borrower that the Remington Borrower would have been required to
deliver pursuant to the terms of the Remington Construction Loan Agreement had
the Remington Construction Loan Agreement not been made subject to the Remington
Escrow Agreement.

7.2   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:

        (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 7.2(h);

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        (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 for (i) in accordance with the Borrower
Recapitalization Plan, (ii) the Construction (as defined in and permitted by the
Remington Construction Loan Agreement), (iii) the Reconstruction (as defined in
and permitted by the Gulfstream Construction Loan Agreement) and (iv) 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 Recapitalization 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 Recapitalization 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 (i) make investments in Cash Equivalents in amounts and pursuant to terms
acceptable to the Lender, acting reasonably, and (ii) increase its investment in
Amtote International, Inc. ("Amtote") at a cost not to exceed $7 million on the
condition that the shares of the Borrower's Subsidiary that owns Amtote will be
pledged to the Lender as first ranking security;

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        (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;

(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 (xiii) 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 7.2(g);

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        (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 7.2(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 Recapitalization Plan or that constitutes
real property held for sale or development or constitutes 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 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;

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        (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, other than licences or
permits in respect of The Meadows Property on terms acceptable to the Lender in
accordance with the Additional Financing (as such term is defined in the
Gulfstream Construction Loan Agreement);

        (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)   Use.    Use or develop a 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 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;

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

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

        (s)   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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        (t)    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.

7.3   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 7.3; (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.

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        (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 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 7.3(g).

7.4   The Meadows

        In the event that the Lender, The Meadows Guarantors and the Third Party
Senior Lender (as defined in the Gulfstream Construction Loan Agreement) are
unable to negotiate and enter into the Additional Financing Inter-Creditor
Agreement (as defined in the Gulfstream Construction Loan Agreement) within the
specified time period set out in Section 5.5 of the Gulfstream Construction Loan
Agreement, The Meadows Guarantors may, within the time period prescribed in, and
on the terms and conditions set forth in, the Gulfstream Construction Loan
Agreement, substitute The Meadows Security with Substitute Meadows Security
(as defined in the Gulfstream Construction Loan Agreement). Notwithstanding
anything else herein contained, The Meadows Guarantors' Environmental Indemnity
shall remain in full force and effect following any substitution for The Meadows
Security.

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ARTICLE 8
CONDITIONS PRECEDENT

8.1   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 6.1 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)the Loan Documents, all in form and substance satisfactory to the Lender,
shall have been executed and delivered to the Lender;

(d)the Intercreditor Agreements, in form and substance satisfactory the Lender,
shall have been executed and delivered by all parties thereto;

(e)the BMO Credit Agreement shall have been amended in form and substance
satisfactory to the Lender, in its sole discretion, to provide for this
Agreement and to provide for an extension of the term of the credit facility
therein such that it expires no earlier than July 31, 2006;

(f)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

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(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)an Officer's Certificate dated the Closing Date confirming
Sections 8.1(a), 8.1(b) and 8.1(c);

(iv)opinions of each of the Borrower's and Guarantors' New York and Delaware
Agent, the Borrower's and Guarantors' Florida Agent, the Borrower's and
Guarantors' Pennsylvania 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 Pennsylvania 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 Gulfstream Construction Loan Agreement and
which shall be acceptable, in form and substance, to the Lender, acting
reasonably;

(v)opinions of each of the Lender's Florida Agent, the Lender's Pennsylvania
Agent and the Lender's California Agent, addressed to the Lender, which shall be
similar, mutatis mutandis, to opinions provided to the Lender in connection with
the initial advance under the Gulfstream Construction Loan Agreement and which
shall be acceptable, in form and substance, to the Lender, acting reasonably;

(vi)the Disclosure Schedule;

(vii)the Borrower Recapitalization Plan; and

(viii)such other documentation or information as the Lender shall have
reasonably requested;

(g)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 Closing Date 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 Closing 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;

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(h)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 One Hundred Million Dollars
($100,000,000.00) from the Borrower in favour of the Lender (the "Borrower
Note");

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

(iv)a specific assignment to the Lender of the policies of insurance referred to
in Section 6.1(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;

(v)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;

(vi)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);

(vii)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");

(viii)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 to the
Lender (the "Santa Anita Third Assignment of Rents and Leases");

(ix)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");

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(x)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;

(xi)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");

(xii)related UCC financing statements;

(xiii)a specific assignment to 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;

(xiv)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;

(xv)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");

(xvi)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 to the Lender (the "Golden Gate Fields Second Assignment of Rents and
Leases");

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(xvii)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 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 Golden
Gate Fields Guarantors for the benefit of and in trust for the Lender
(the "Golden Gate Fields Second Assignment of Material Agreements");

(xviii)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;

(xix)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");

(xx)related UCC financing statements;

(xxi)a specific assignment to 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;

(xxii)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;"

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(xxiii)in consideration of the guarantee and indemnity fees paid by the Borrower
to The Meadows Guarantor in the amount of $19,800 (the "The Meadows 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 Meadows Guarantors, and in
order to induce the Lender to enter into this Agreement, the guarantee and
indemnity ("The Meadows Guarantee and Indemnity") of The Meadows Guarantors,
under which The Meadows 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;

(xxiv)as security for The Meadows Guarantee and Indemnity:

(A)a perfected first priority Encumbrance on The Meadows Property pursuant to a
mortgage of even date with this Agreement from The Meadows Guarantors in favour
of the Lender ("The Meadows First Mortgage");

(B)a first priority assignment of rents and leases generated by the use and
occupancy of The Meadows Property pursuant to an assignment of rents and
lessor's interest in the Occupancy Agreements relating to The Meadows Property
of even date with this Agreement from The Meadows Guarantors to the Lender
(the "The Meadows Assignment of Rents and Leases");

(C)a first general assignment of The Meadows Guarantors' interest in the
Material Agreements relating to The Meadows Guarantors Property, where
permitted; provided that if the assignment of any such Material Agreements is
not permitted, The Meadows Guarantors shall use their 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 Meadows Guarantors
for the benefit of and in trust for the Lender (the "The Meadows Assignment of
Material Agreements");

(D)a perfected first priority Encumbrance in all personal property of The
Meadows Guarantors now owned and hereafter acquired (excluding licenses and
permits), in each case to the extent permitted by Applicable Law, and a negative
pledge respect of all such personal property (excluding licenses and permits),
pursuant to a general security agreement of even date with this Agreement from
The Meadows Guarantors to the Lender (the "The Meadows General Security
Agreement") (The Meadows Mortgage, The Meadows Assignment of Rents and Leases,
The Meadows Assignment of Material Agreements and The Meadows Assignment General
Security Agreement being referred to herein, collectively, as the "The Meadows
Security");

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(E)the environmental indemnity agreement in respect of The Meadows Guarantors
Property, of even date with this Agreement, from The Meadows Guarantors in
favour of the Lender ("The Meadows Guarantors' Environmental Indemnity");

(F)related UCC financing statements;

(G)a specific assignment to The Meadows Guarantors of the policies of insurance
relating to The Meadows 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;

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

All of the items of security referred to in this Section 8.1(h)(xxiv) shall be
in priority to the same types of security provided by The Meadows Guarantors to
the Lender as security for their liabilities and obligations under their
guarantee and indemnity in respect of the Gulfstream Loan Construction
Agreement. The obligations of The Meadows Guarantors under The Meadows
Guarantors' Guarantee and Indemnity will not be operative unless the SHRCP
Approval has been obtained;

(xxv)in consideration of the guarantee and indemnity fees paid by the Borrower
to the Golden Gate Fields Guarantors in the amount of $32,500 (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
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;

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(xxvi)related UCC financing statements;

(xxvii)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;"

(xxviii)in consideration of the guarantee and indemnity fees paid by the
Borrower to the Santa Anita Guarantors in the amount of $13,200 (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;

(xxix)related UCC financing statements;

(xxx)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;"

(xxxi)in consideration of the guarantee and indemnity fees paid by the Borrower
to the Gulfstream Guarantor in the amount of $20,500 (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;

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(xxxii)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;

(xxxiii)in consideration of the guarantee and indemnity fees paid by the
Borrower to the San Luis Rey Downs Guarantor in the amount of $2,300 (the "San
Luis Rey Downs 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 San
Luis Rey Downs Guarantor, and in order to induce the Lender to enter into the
Agreement, the guarantee and indemnity (the "San Luis Rey Downs Guarantee and
Indemnity") of the San Luis Rey Downs Guarantor, under which the San Luis Rey
Downs 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;

(xxxiv)in consideration of the guarantee and indemnity fees paid by the Borrower
to the Dixon Guarantor in the amount of $5,200 (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
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;

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(xxxv)in consideration of the guarantee and indemnity fees paid by the Borrower
to the Ocala Guarantor in the amount of $3,000 (the "Ocala Guarantee Fee"), the
guarantee and indemnity (the "Ocala Guarantee and Indemnity") of Ocala
Guarantor, under which Ocala 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; and

(xxxvi)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 8.1(h) (except the Borrower Note) is
herein called the "Security";

(i)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; and

(j)all 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.

8.2   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)as a condition precedent to the Initial Advance only:

(i)the Lender shall be satisfied, in its sole and absolute discretion, with the
CB Richard Ellis appraisal for the Santa Anita Property prepared for Wells Fargo
dated September 10, 2004 in connection with the extension of the Santa Anita
Senior Facility;

(ii)the Lender shall have received and be satisfied, in its sole and absolute
discretion, with an appraisal for the Golden Gate Fields Property;

(iii)the Lender shall have received and be satisfied, in its sole and absolute
discretion, with an appraisal for the Gulfstream and Aventura Properties;

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(iv)the Lender shall have received and be satisfied, in its sole and absolute
discretion, with an appraisal for the Palm Meadows Residential Lands;

(v)the Lender shall have received and be satisfied, in its sole and absolute
discretion, with an appraisal for the San Luis Rey Downs Property;

(vi)the Lender shall have received and be satisfied, in its sole and absolute
discretion, with an appraisal for the Dixon Property; and

(vii)the Lender shall have received and be satisfied, in its sole and absolute
discretion, with an appraisal for the Ocala Property;

(b)the representations and warranties set out in Section 6.1 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;

(c)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;

(d)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;

(e)the Lender shall have received a Borrowing Notice dated at least 5 Banking
Days prior to the relevant Borrowing Date (other than with respect to the First
Advance, which Borrowing Notice shall be dated contemporaneously therewith);

(f)the Lender shall have received monthly progress reports relating to the
Borrower Recapitalization Plan, in form and substance satisfactory to the
Lender, acting reasonably; and

(g)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 7.1(p).

ARTICLE 9
EVENTS OF DEFAULT AND REMEDIES

9.1   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;

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(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 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;

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(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;

(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;

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(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 7.2(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 (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).

9.2   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,

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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.

9.3   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 Lenders may
from time to time in its sole discretion see fit, notwithstanding any previous
application.

ARTICLE 10
GENERAL

10.1 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 Lenders shall have no further obligation to make Advances
hereunder. For clarity, this Section 10.1 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.

10.2 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 the Borrower or any of its Subsidiaries or obtained in respect of any
diligence conducted in respect hereof; provided, however, that this Section 10.2
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.

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10.3 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.

10.4 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.

10.5 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.

10.6 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 10.6. 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
And Attention: Legal Department
Facsimile number: (905) 726-7172

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(b)if to the Guarantors:

MEC Pennsylvania Racing, Inc.
Foster Plaza 9
750 Holiday Drive
Pittsburgh, PA
15220

Attention: Chief Financial Officer
Facsimile number: (724) 229-7518

Washington Trotting Association Inc.
1209 Orange Street
Wilmington, DE
19801
USA

Attention: Chief Financial Officer
Facsimile number: (724) 229-7518

Mountain Laurel Racing, Inc.
1209 Orange Street Wilmington, DE
19801
USA

Attention: Chief Financial Officer
Facsimile number: (724) 229-7518

Pacific Racing Association
1100 Eastshore Highway
Albany, CA
94710

Attention: Chief Financial Officer
Facsimile number: (510) 559-7465

MEC Land Holdings (California) Inc.
818 West Seventh Street
Los Angeles, CA
90017

Attention: Chief Financial Officer
Facsimile number: (510) 559-7465

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The Santa Anita Companies, Inc.
1209 Orange Street
Wilmington, DE
19801
USA

Attention: Chief Financial Officer
Facsimile number: (626) 821-1514

Los Angeles Turf Club, Incorporated
1209 Orange Street
Wilmington, DE
19801
USA

Attention: Chief Financial Officer
Facsimile number: (626) 821-1514

Gulfstream Park Racing Association, Inc.
501 South Federal Hwy
Hallandale, FL
33009
USA

Attention: Chief Financial Officer
Facsimile number: (954) 457-6497

GPRA Thoroughbred Training Center Inc.
1209 Orange Street
Wilmington, DE
19801
USA

Attention: Chief Financial Officer
Facsimile number: (954) 457-6497

SLRD Thoroughbred Training Center, Inc.
1209 Orange Street
Wilmington, DE
19801
USA

Attention: Chief Financial Officer
Facsimile number: (954) 457-6497

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MEC Dixon, Inc.
1209 Orange Street
Wilmington, DE
19801
USA

Attention: Chief Financial Officer
Facsimile number: (302) 655-5049

Sunshine Meadows Racing Inc.
1209 Orange Street
Wilmington, DE
19801
USA

Attention: Chief Financial Officer
Facsimile number: (302) 655-5049

in each case with a copy to:

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

Attention: Chief Financial Officer
And Attention: Legal Department
Facsimile number: (905) 726-7172

(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
455 Magna Drive
Aurora, Ontario
L4G 7A9

Attention: General Counsel
Facsimile number: (905) 726-2095

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10.7 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.

10.8 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 10.8, 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.

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10.9 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.

10.10 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.

10.11 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
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.

10.12 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.

10.13 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.

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10.14 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.

10.15 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.

10.16 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.

10.17 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.

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10.18 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,
incompetency or dissolution of any of the Borrower or any of the Guarantors).

10.19 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.

10.20 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.

10.21 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.

10.22 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.

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        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 Section 10.22 is intended only to define the relative rights of the
Guarantors, and nothing set forth in this Section 10.22 is intended to or shall
impair the obligations of the Guarantors, jointly and severally, to pay any
amounts as and when the same 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 10.22 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.

10.23 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 10.22, 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.

10.24 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.

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10.25 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.

10.26 Certain Provisions relating to The Meadows Guarantors

        The provisions of this Agreement with respect to each of The Meadows
Guarantors, as Guarantors, will not be operative unless approved by The State
Harness Racing Commission of Pennsylvania under 58 Pa. Code Section 185.22. Each
of The Meadows Guarantors covenants that they will promptly seek such approval,
and further covenants that they will not take any act (or omit to take any act)
that disqualifies them from applying, obtaining, maintaining or receiving a
license under the Pennsylvania Race Horse Development and Gaming Act, 4 Pa.
C.S.A. Sections 1101-1904 (2004) or related regulations as in effect from time
to time.

        [Intentionally Left Blank]

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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
 
 
by:
/s/ Mary Lyn Seymour      

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

Name: Mary Lyn Seymour
Title: Controller
 
 
 
We have authority to bind the Corporation.
 
 
 
      MEC PENNSYLVANIA RACING, INC.
 
 
by:
/s/ Blake Tohana      

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

Name: Blake Tohana
Title: Executive Vice President and Chief Financial Officer
 
 
by:
/s/ Mary Lyn Seymour      

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

Name: Mary Lyn Seymour
Title: Controller
 
 
 
We have authority to bind the Corporation.

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    WASHINGTON TROTTING ASSOCIATION, INC.
 
 
by:
/s/ Blake Tohana      

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

Name: Blake Tohana
Title: Executive Vice President and Chief Financial Officer
 
 
by:
/s/ Mary Lyn Seymour      

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

Name: Mary Lyn Seymour
Title: Controller
 
 
 
We have authority to bind the Corporation.
 
 
 
      MOUNTAIN LAUREL RACING, INC.
 
 
by:
/s/ Blake Tohana      

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

Name: Blake Tohana
Title: Executive Vice President and Chief Financial Officer
 
 
by:
/s/ Mary Lyn Seymour      

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

Name: Mary Lyn Seymour
Title: Controller
 
 
 
We have authority to bind the Corporation.

99

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    PACIFIC RACING ASSOCIATION
 
 
by:
/s/ Blake Tohana      

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

Name: Blake Tohana
Title: Executive Vice President and Chief Financial Officer
 
 
by:
/s/ Mary Lyn Seymour      

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

Name: Mary Lyn Seymour
Title: Controller
 
 
 
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
 
 
by:
/s/ Mary Lyn Seymour      

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

Name: Mary Lyn Seymour
Title: Controller
 
 
 
We have authority to bind the Corporation.

100

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    THE SANTA ANITA COMPANIES, INC.
 
 
by:
/s/ Blake Tohana      

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

Name: Blake Tohana
Title: Executive Vice President and Chief Financial Officer
 
 
by:
/s/ Mary Lyn Seymour      

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

Name: Mary Lyn Seymour
Title: Controller
 
 
 
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
 
 
by:
/s/ Mary Lyn Seymour      

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

Name: Mary Lyn Seymour
Title: Controller
 
 
 
We have authority to bind the Corporation.

101

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    GULFSTREAM PARK RACING ASSOCIATION, INC.
 
 
by:
/s/ Blake Tohana      

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

Name: Blake Tohana
Title: Executive Vice President and Chief Financial Officer
 
 
by:
/s/ Mary Lyn Seymour      

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

Name: Mary Lyn Seymour
Title: Controller
 
 
 
We have authority to bind the Corporation.
 
 
 
      SLRD THOROUGHBRED TRAINING CENTER, INC.
 
 
by:
/s/ Blake Tohana      

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

Name: Blake Tohana
Title: Executive Vice President and Chief Financial Officer
 
 
by:
/s/ Mary Lyn Seymour      

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

Name: Mary Lyn Seymour
Title: Controller
 
 
 
We have authority to bind the Corporation.

102

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    MEC DIXON, INC.
 
 
by:
/s/ Blake Tohana      

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

Name: Blake Tohana
Title: Executive Vice President and Chief Financial Officer
 
 
by:
/s/ Mary Lyn Seymour      

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

Name: Mary Lyn Seymour
Title: Controller
 
 
 
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
 
 
by:
/s/ Mary Lyn Seymour      

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

Name: Mary Lyn Seymour
Title: Controller
 
 
 
We have authority to bind the Corporation.

103

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    SUNSHINE MEADOWS RACING INC.
 
 
by:
/s/ Blake Tohana      

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

Name: Blake Tohana
Title: Executive Vice President and Chief Financial Officer
 
 
by:
/s/ Mary Lyn Seymour      

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

Name: Mary Lyn Seymour
Title: Controller
 
 
 
We have authority to bind the Corporation.

104

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    MID ISLANDI SF., acting through its Zug Branch
 
 
by:
/s/ Thomas Schultheiss      

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

Name: Thomas Schultheiss
Title: Branch Manager
 
 
by:
/s/ Herta Kessler      

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

Name: Herta Kessler
Title: Branch Manager
 
 
 
We have authority to bind the Corporation.

105

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QuickLinks

BRIDGE LOAN AGREEMENT
TABLE OF CONTENTS
LOAN AGREEMENT
ARTICLE 1 INTERPRETATION
ARTICLE 2 BRIDGE LOAN
ARTICLE 3 GENERAL PROVISIONS RELATING TO THE BRIDGE LOAN
ARTICLE 4 ADDITIONAL CONDITIONS PRECEDENT TO ADVANCES UNDER TRANCHE 2 AND
TRANCHE 3
ARTICLE 5 INTEREST AND FEES
ARTICLE 6 REPRESENTATIONS AND WARRANTIES
ARTICLE 7 COVENANTS
ARTICLE 9 EVENTS OF DEFAULT AND REMEDIES
ARTICLE 10 GENERAL