Exhibit 10.2


 


FIRST AMENDING AGREEMENT IN


RESPECT OF THE BRIDGE LOAN AGREEMENT


 


THIS FIRST AMENDING AGREEMENT,  made as of the 23rd
day of May, 2008


 


BETWEEN:


 


MAGNA ENTERTAINMENT CORP.,


a corporation incorporated under the laws of
the


State of Delaware


 


(hereinafter called the “Borrower”),


 


OF THE FIRST PART,


 


- and -


 


MID ISLANDI SF.,


a partnership formed under the laws of
Iceland,


acting through its Zug branch


 


(hereinafter called the “Lender”),


 


OF THE SECOND PART,


 


- and -


 


PACIFIC RACING
ASSOCIATION,


a corporation incorporated under the laws of
the


State of California


 


- and -


 


MEC LAND HOLDINGS
(CALIFORNIA) INC.,


a corporation incorporated under the laws of
the


State of California


 


(hereinafter collectively called the “Golden Gate


Fields  Guarantors”),


 


OF THE THIRD PART,


 


- and -


 


THE SANTA ANITA
COMPANIES, INC.,


a corporation incorporated under the laws of
the


State of Delaware


 


- and -


 

















 


LOS ANGELES TURF CLUB,
INCORPORATED,


a corporation incorporated under the laws of
the


State of California


 


(hereinafter collectively called the “Santa Anita


Guarantors”),


 


OF THE FOURTH PART,


 


- and -


 


GULFSTREAM PARK RACING
ASSOCIATION, INC.,


a corporation incorporated under the laws of
the


State of Florida


 


(hereinafter called the “Gulfstream  Guarantor”),


 


OF THE FIFTH PART,


 


- and -


 


GPRA THOROUGHBRED
TRAINING CENTER INC.,


a corporation incorporated under the laws of
the


State of Delaware


 


(hereinafter called the “Palm Meadows Training


Guarantor”),


 


OF THE SIXTH PART,


 


- and -


 


MEC DIXON, INC.,


a corporation incorporated under the laws of
the


State of Delaware


 


(hereinafter called the “Dixon Guarantor”),


 


OF THE SEVENTH PART,


 


- and -


 


MEC HOLDINGS (USA) INC.,


a corporation incorporated under the laws of
the


State of Delaware


 


- and -


 


2

















 


SUNSHINE MEADOWS
RACING, INC.,


a corporation incorporated under the laws of
the


State of Delaware


 


(hereinafter collectively called the “Ocala


Guarantors”),


 


OF THE EIGHTH PART,


 


- and -


 


THISTLEDOWN,
INC.,


a corporation incorporated under the laws of
the


State of Ohio


 


(hereinafter called the “Thistledown  Guarantor”),


 


OF THE NINTH PART,


 


- and -


 


MEC
MARYLAND INVESTMENTS INC.,


a corporation incorporated under the laws of the


State of Delaware


 


- and -


 


30000
MARYLAND INVESTMENTS LLC,


a limited liability company formed under the
laws

of the State of Delaware


 


(hereinafter collectively called the “AmTote

Guarantors”) (the Golden Gate Fields Guarantors,

the Santa Anita Guarantors, the Gulfstream

Guarantor, the Palm Meadows Training Guarantor,

the Dixon Guarantor, the Ocala Guarantors, the
 Thistledown  Guarantor, and the AmTote

Guarantors hereinafter collectively called the

“Guarantors”),


 


OF THE TENTH PART.


 


WHEREAS the
Lender, as lender, the Borrower, as borrower, and the Guarantors, as guarantors, are parties to a bridge
loan agreement made as of September 12, 2007 (the “Bridge Loan
Agreement”);


 


3

















 


AND WHEREAS on September 11, 2007, the
Borrower’s Board of Directors approved and adopted a plan (the “MEC Debt Elimination Plan”) (referenced in the Bridge Loan Agreement as the Borrower Restructuring Plan) to restructure the
Borrower’s balance sheet through the sale of certain assets and entering into
strategic partnerships or joint ventures to allow the Borrower to substantially
eliminate its debt by December 31, 2008, and to pursue a business plan
focused on achieving sustainable profitability;


 


AND WHEREAS
the MEC Debt Elimination Plan contemplated
the sale of assets including, without limiting the generality of the foregoing,
certain of those Properties owned by the Borrower that constitute collateral
for the Loan;


 


AND WHEREAS
the sale of assets under the MEC Debt Elimination Plan has taken longer than originally contemplated;


 


AND WHEREAS on March 31, 2008, the Board of
Directors of MI Developments Inc. (“MID”), an
affiliate of the Lender and the controlling shareholder of the Borrower,
received a reorganization proposal on behalf of various shareholders of MID
that would, among other things, alter the relationship between MID and the
Borrower;


 


AND WHEREAS
the Lender has agreed to amend the Bridge Loan Agreement
to, inter alia: (i) increase the Loan
Amount from $80,000,000 to $110,000,000; (ii) provide that Loan Amounts
borrowed and repaid prior to the date hereof may be reborrowed; (iii) extend
the Maturity Date of the Loan from May 31, 2008 to August 31, 2008;
and (iv) provide for certain additional arrangement and extension fees,
all on the terms and conditions set out herein;


 


NOW THEREFORE, in consideration of the
mutual covenants and agreements set forth in this Agreement and the sum of Ten
Dollars ($10.00) paid by each of the parties hereto to the other and for other
good and valuable consideration (the receipt and sufficiency of which are
hereby acknowledged), the parties hereto covenant and agree as follows:


 


1.             Definitions.  Unless otherwise defined herein, all
capitalized terms used in this agreement (this “Agreement”) shall have the respective meanings ascribed to
them in the Bridge Loan Agreement.


 


2.             Representations
and Warranties.  The Borrower and the
Guarantors jointly and severally represent and warrant to and in favour of the
Lender, with the intent that the Lender shall be entitled to rely upon such
representations and warranties in entering into this Agreement and
notwithstanding the completion of the transactions contemplated herein, that: (i) all
of the recitals to this Agreement are true and complete in all material
respects; (ii) except as specifically qualified in the Disclosure
Schedule, all of the representations and warranties of the Borrower in Article 5
of the Bridge Loan Agreement are true and correct on the date hereof as if made
on and as of the date hereof; and (iii) there are no facts, conditions or
circumstances that are known to the Borrower or any of the Guarantors and that
may reasonably be considered relevant to the Lender’s decision to enter into
this Agreement that have not been disclosed in writing to the Lender.


 


4

















 


3.             Amendments.  The Bridge Loan Agreement  is hereby amended as follows:


 


(a)           by
deleting in its entirety the definition of “Borrower
Restructuring Plan” and replacing each reference thereto with “MEC Debt Elimination Plan”;


 


(b)           by
adding, in proper alphabetical order, the following definition of “Extension Fee” to Section 1.1 of the Bridge Loan
Agreement:


 


““Extension Fee”
has the meaning ascribed thereto in Subsection 4.3(c)”;”


 


(c)           by
adding, in proper alphabetical order, the following definition of “First Bridge Loan Amending Agreement” to Section 1.1 of
the Bridge Loan Agreement:


 


““First Bridge Loan Amending
Agreement” means the First Amending Agreement in respect of the Bridge Loan
Agreement between the Lender, as lender, the Borrower, as borrower, and the
Guarantors, as guarantors, made as of May 23, 2008;”;


 


(d)           by
adding, in proper alphabetical order, the following definition of “First Bridge Loan Amending Agreement Security Amendments” to
Section 1.1 of the Bridge Loan Agreement:


 


““First Bridge Loan Amending
Agreement Security
Amendment” and “First Bridge
Loan Amending Agreement  Security Amendments”
have the meanings ascribed thereto in Subsection 7.2(s);”;


 


(e)           by
deleting the definition of “Maturity Date”
in Section 1.1 of the Bridge Loan Agreement and replacing it with the
following:


 


““Maturity
Date” means, unless otherwise accelerated in accordance with Section 2.6,
August 31, 2008;”;


 


(f)            by
adding, in proper alphabetical order, the following definition of “MEC Debt Elimination Plan” to Section 1.1 of the Bridge
Loan Agreement:


 


““MEC Debt Elimination Plan”
means the plan approved and adopted by the Borrower’s Board of Directors as of September 11,
2007 to restructure the
Borrower’s balance sheet through the sale of certain assets and entering into
strategic partnerships or joint ventures to allow the Borrower to substantially
eliminate its debt by December 31, 2008, and to pursue a business plan
focused on achieving sustainable profitability,
including any amendments, revisions or modifications thereto approved by the
Borrower’s Board of Directors in its sole and absolute discretion (and provided
forthwith in writing to the MID Board of Directors), provided that for purposes
of Subsections 5.1(dd), 6.2(b)(i), 6.2(d), 6.2(e) and 6.2(p) of the
Bridge Loan Agreement, the reference to MEC Debt Elimination 


 


5

















 


Plan shall be to the MEC Debt Elimination
Plan existing as of September 11, 2007;”;


 


(g)           by
adding, in proper alphabetical order, the following definition of “MJC Subsidiary” to Section 1.1 of the
Bridge Loan Agreement:


 


““MJC Subsidiary” has the
meaning ascribed thereto in Subsection 6.1(jj);”;


 


(h)           by
deleting the definition of “Permitted Debt”
in Section 1.1 of the Bridge Loan Agreement and replacing it with the
following:


 


““Permitted Debt” means (i) the Bridge
Loan; (ii) the Santa Anita Senior Facility; (iii) the BMO Credit
Agreement; (iv) the SunTrust Credit Agreement; (v) the Remington
Construction Loan Agreement; (vi) the Gulfstream Construction Loan
Agreement; (vii) indebtedness of GPRA Commercial Enterprises Inc. relating
to a loan agreement among, inter alia, Keybank National Association, as
principal lender, and The Village at Gulfstream Park, LCC, as borrower, where
such indebtedness is non-recourse to the Borrower and the Gulfstream Guarantor
and arises under the May 1, 2005 limited liability company agreement, as
amended, by which The Village at Gulfstream Park, LLC, was formed; (viii) indebtedness
of MEC Grundstucksentwicklungs GmbH and Fontana Betelligungs AG existing on the
date hereof; (ix) indebtedness of the MJC Subsidiaries to Mercantile-Safe
Deposit and Trust existing on the date hereof; (x) the lease between a
non-guarantor entity and an entity associated with the City of Grand Prairie,
pursuant to which Lone Star Park is operated; (xi) indebtedness owing under,
and not exceeding the amounts permitted to be outstanding under and secured by,
Permitted Encumbrances and extensions, renewals or replacements of any indebtedness
permitted under this clause; provided the principal amount of such indebtedness
thereunder or security therefor is not thereby increased beyond the original
principal amount of such indebtedness; (xii) unsecured trade and other accounts
payable incurred in the ordinary course of business for the purpose of carrying
on the same including the “Construction”
(as defined in the Remington Construction Loan Agreement) and the “Reconstruction” (as defined in the Gulfstream Construction
Loan Agreement); (xiii) 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; (xiv) 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; (xv) the obligation to pay $18,312,650 plus
accrued interest on the exercise of either the put or call option for the
remaining minority interest in The Maryland Jockey Club; (xvi) the Subordinated
Debt; (xvii) unsecured intercompany indebtedness of the Borrower to any of its 


 


6

















 


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; (xviii) other obligations and
indebtedness (including Capital Lease Obligations (other than that listed in
item (iv) of this definition) and Contingent Liabilities, but excluding
item (xii) listed in this
definition) existing on the date hereof and relating to Subsidiaries which are
not Guarantors, and all of which are disclosed in the Audited and Unaudited
Financial Statements including the notes thereto, in the aggregate amount of
not more than $2,000,000 (which amount includes indebtedness denominated in
foreign currencies and is therefore subject to fluctuation from time to time
due to exchange rate fluctuations); and (xix) 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;”;


 


(i)            by
adding, in proper alphabetical order, the following definition of “Reorganization Proposal” to Section 1.1 of the Bridge
Loan Agreement:


 


““Reorganization Proposal”
means that certain proposal received by MID’s Board of Directors on March 31,
2008 on behalf of various shareholders of MID, as may be amended from time to
time;”;


 


(j)            by
adding, in proper alphabetical order, the following definition of “Reorganization Proposal Approval” to Section 1.1 of the
Bridge Loan Agreement:


 


““Reorganization Proposal
Approval” means: (i) the approval of the Reorganization
Proposal by the shareholders of MID pursuant to applicable statutory and
regulatory requirements governing such approvals at a special meeting of
shareholders called to consider the Reorganization Proposal, together with (ii) the
final, unappealable approval by a court of competent jurisdiction of a plan of
arrangement implementing the Reorganization Proposal;”;


 


(k)           by
adding, in proper alphabetical order, the following definition of “Reorganization Proposal Termination Notice” to Section 1.1
of the Bridge Loan Agreement:


 


““Reorganization Proposal
Termination Notice” has the meaning ascribed thereto in Section 2.6;”;


 


(l)            by
deleting the definition of “Security”
in Section 1.1 of the Bridge Loan Agreement and replacing it with the
following:


 


7

















 


““Security”
has the meaning ascribed thereto in Subsection 7.2(q), provided that from and
after the delivery by the Borrower and the Guarantors of the First Bridge Loan Amending Agreement Security Amendments, “Security” shall
be deemed to mean the Security as amended by the First Bridge Loan Amending Agreement Security
Amendments;”;


 


(m)          by
deleting the definition of “ SunTrust Credit Agreement
“ in Section 1.1 of the Bridge Loan Agreement and replacing it with the
following:


 


““SunTrust Credit Agreement”
means the loan and security agreement made as of May 11,
2007 among AmTote, as borrower, and SunTrust, as lender, as has been and
may be further amended and restated from time to time, provided that the
principal amount outstanding at any time under the SunTrust Credit Agreement as
so amended or restated shall not exceed $16.1 million, 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 $16.1 million and security therefor is not increased thereby;”;


 


(n)           by
adding in proper alphabetical order, the following definition of “Supporting Shareholders” to Section 1.1 of the Bridge
Loan Agreement:


 


““Supporting Shareholders”
means the shareholders on whose behalf the Reorganization Proposal was
submitted to MID’s Board of Directors on March 31, 2008;”;


 


(o)           by
adding, in proper alphabetical order, the following definition of “Third Arrangement Fee” to Section 1.1 of the Bridge
Loan Agreement:


 


““Third Arrangement Fee”
has the meaning ascribed thereto in Subsection 4.3(b);”;


 


(p)           by
deleting the number “$80,000,000” in the third line of Section 2.1 of the
Bridge Loan Agreement, and replacing it with the number “$110,000,000”;


 


(q)           by
deleting Section 2.2 of the Bridge Loan Agreement in its entirety and
replacing it with the following:


 


“2.2         Nature
of Bridge Loan


 


(a) Subject to Subsection 2.2(b), 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.


 


(b) So long as the Borrower is not in
default hereunder, the Borrower shall have the right to re-borrow that portion
of the Loan that the Borrower borrowed and repaid prior to May 23, 2008.”;


 


8

















 


(r)            by
deleting the last sentence of Section 2.3(a) of the Bridge Loan
Agreement, beginning with the words “The Loan Amount” and ending with the words
“such repayment.”, and replacing it with the following:


 


“Subject to Subsection 2.2(b), the Loan
Amount shall be automatically and permanently reduced by the amount of any such
repayment.”;


 


(s)           by
adding the following as Section 2.6 of the Bridge Loan Agreement:


 


“2.6         Acceleration
of Maturity Date


 


In the event that MID gives written notice (a
“Reorganization Proposal Termination Notice”)
to the Lender advising that the Reorganization Proposal will not proceed to a
vote of MID shareholders at a special meeting (as a result of the Supporting
Shareholders abandoning the Reorganization Proposal, the MID Board of Directors
failing to call such a meeting, or for any other reason), that the
Reorganization Proposal has not received the requisite approvals at a special
meeting called to consider the Reorganization Proposal, or that a court of
competent jurisdiction has not approved a plan of arrangement implementing the
Reorganization Proposal, then Lender shall give written notice to the Borrower
that the Lender has received a Reorganization Proposal Termination Notice, and
the Maturity Date shall be the earlier of: (i) August 31, 2008; and (ii) the
date which is one month after the Lender gives the Borrower written notice that
it has received the Reorganization Proposal Termination Notice.”;


 


(t)            by
deleting Subsection 4.3(b) of the Bridge Loan Agreement in its entirety
and replacing it with the following:


 


(b)           Arrangement Fees.  The Borrower shall pay to
the Lender, on the Closing Date, an arrangement fee (the “First
Arrangement Fee”) of $2,400,000, being
3% of the Loan Amount.  In addition, the
Borrower shall pay to the Lender:  (i) on
February 29, 2008, an additional arrangement fee (the “Second Arrangement Fee”) in the amount equal to 1% of the
then current Loan Amount; and (ii) within 5 Banking Days thereafter, in
the event that the Reorganization Proposal Approval has not been obtained by August 1,
2008, or the Lender receives a Reorganization Proposal Termination Notice, an
additional arrangement fee (the “Third  Arrangement Fee”) in the amount of 1% of the then current
Loan Amount.”;


 


(u)           by
adding the following as Subsection 4.3(c) of the Bridge Loan Agreement:


 


(c)           Extension Fee.  The Borrower shall pay to the Lender an extension
fee (the “Extension Fee”) in the amount of
$1,100,000, being 1% of the Loan Amount.”;


 


9

















 


(v)           by
deleting in its entirety Subsection 6.1(ee) of the Bridge Loan Agreement and
replacing it with the following:


 


“(ee)       Availability.  All requests for Advances
shall be (1) materially consistent (to be determined by the Lender in its
sole and absolute discretion) with the MEC Debt Elimination Plan, the weekly
cash flow forecast reports that the Borrower is required to deliver to the
Lender and MID and the cash flow forecast formally approved by the Borrower’s
Board of Directors on May 22, 2008 and (2) used solely to fund: (i) operations;
(ii) mandatory payments of principal or interest and costs, fees and expenses
due and owing to the Lender under this Agreement and/or any other loans or
credit facilities provided by the Lender to the Borrower and/or its
Subsidiaries, including, without limitation, the Gulfstream Construction Loan
Agreement and the Remington Construction Loan Agreement; (iii) mandatory
payments of interest in connection with Permitted Debt, provided that the
making of any such payment is not prohibited by this Agreement and shall not
result in an Unmatured Event or Default or an Event of Default under this
Agreement; (iv) Maintenance Capital Expenditures; and (v) Capital
Expenditures required pursuant to the terms of the joint venture arrangements
with Forest City Enterprises, Inc. and Caruso Affiliated;”;


 


(w)          by
deleting the word “and” immediately after the “;” at the end of Section 6.1(gg)
of the Bridge Loan Agreement;


 


(x)            by
replacing the “.” with a “;” at the end of Section 6.1(hh) of the Bridge
Loan Agreement;


 


(y)           by
adding, as Sections 6.1(ii) and (jj) of the Bridge Loan Agreement, the following:


 


“(ii)  within 5 Banking Days thereafter,
in the event that the Reorganization Proposal Approval has not been obtained by
August 1, 2008, or in the event that the Lender receives a Reorganization
Proposal Termination Notice, the Borrower shall forthwith pay to the Lender the
Third Arrangement Fee”;
and


 


(jj) 
without derogating from the generality of Section 6.1(hh), if
requested by the Lender in writing, the Borrower agrees: (i) to grant
share pledges, where permitted by Applicable Law, or negative pledges if share
pledges are not permitted by Applicable Law, in respect of each subsidiary of
the Borrower related to or affiliated with the Maryland Jockey Club (each an “MJC Subsidiary”); (ii) to cause each
MJC Subsidiary to provide a guarantee and indemnity pursuant to which each
unconditionally guarantees to and in favour of the Lender 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, as security for such guarantee and indemnity, to cause
each MJC Subsidiary to provide the Lender with such 


 


10

















 


security in respect of its real property
and/or personalty as the Lender, acting in its sole and absolute discretion,
requires, subject to the provisions contained herein.  The Borrower agrees to cause each MJC Subsidiary
to enter into an amending agreement in respect of this Agreement reflecting its
addition as a guarantor under this Agreement, and adding the security granted
by the Borrower and each MJC Subsidiary in connection with this Subsection
6.1(jj) as “Security” for all purposes of this Agreement, it being agreed that
any new security granted by the Borrower and each MJC Subsidiary in connection
with this Subsection 6.1(jj) may need to be subordinate to security existing as
of May 23, 2008 that has been granted by the Borrower and/or by the
applicable MJC Subsidiary in respect of their real property or personalty. In
the event that the Borrower or any MJC Subsidiary requires the consent of an
existing lender to grant such security to the Lender, the Borrower shall use
its reasonable commercial efforts, and shall cause the applicable MJC
Subsidiary to use their reasonable commercial efforts, to obtain such consent.”;


 


(z)            by
deleting in its entirety Subsection 7.2(q)(i)) of the Bridge Loan Agreement and
replacing it with the following:


 


“(i)          a grid
promissory note in the amount of One Hundred and Ten Million Dollars ($110,000,000) from the Borrower in favour of the Lender (the “Borrower Note”);”;


 


(aa)         by
replacing the “.” with a “; and” at the end of Section 7.2(q) of the
Bridge Loan Agreement;


 


(bb)         by
adding the following as Section 7.2(r) of the Bridge Loan Agreement:


 


“(r) prior to the first Advance after May 23,
2008, the Board of Directors of the Borrower shall have formally approved (with
evidence thereof in the form of a certified resolution provided to the Lender)
a cash flow forecast through August 31, 2008 and, in the event that any
material variances to such forecast occur, the Board of Directors of the
Borrower shall formally approve a revised forecast (with evidence thereof in the
form of a certified resolution provided to the Lender) prior to any requests
for Advances being made subsequent to the date of any such variance;”; and


 


(cc)         by
adding the following as Section 7.2(s) of the Bridge Loan Agreement:


 


“(s) as condition precedent to any
Advances after June 15, 2008: (i) the Borrower shall have delivered
to the Lender, in form and substance satisfactory to the Lender, acting in its sole and
absolute discretion, such
amendments (collectively, the “First Bridge Loan Amending Agreement
Security Amendments” and individually a “First Bridge
Loan Amending Agreement Security Amendment”) to the Security referenced in Subsection 7.2(q) of
this Agreement, as are required (as determined by the Lender acting in its sole and absolute discretion) to reflect the amendments contemplated in the First Bridge Loan
Amending 


 


11

















 


Agreement (including, without limiting the
generality of the foregoing, the increase in the Loan Amount from $80,000,000
to $110,000,000) and to ensure the enforceability of the Security; and (ii) the Lender shall have received  opinions from counsel to the Borrower and to
the Guarantors, in form and substance satisfactory to the Lender, confirming, inter alia, the due authorization, execution and delivery of
the First Bridge Loan
Amending Agreement by the Borrower and each of the
Guarantors, the due authorization, execution and delivery of each First Bridge
Loan Amending Agreement Security Amendment by the Borrower and/or the relevant
Guarantor or Guarantors, as the case may be, that is a party thereto, the
enforceability of the First Bridge Loan Amending Agreement and each Bridge Loan
Amending Agreement Security Amendment in accordance with its terms, and the
continued enforceability, after giving effect to the First Bridge Loan Amending
Agreement and the Bridge Loan Amending Agreement Security Amendments, of the
Bridge Loan Agreement and each of the guarantees and indemnities given by the
Guarantors in respect of the Indebtedness.”.


 


4.             Conditions
Precedent  The amendments contained in this Agreement shall be conditional upon
the satisfaction (or waiver by the Lender) of all of the following conditions
(collectively, the “Conditions  Precedent”): (i) the Borrower extending the maturity of the BMO Credit Agreement from May 23,
2008 to no earlier than July 30, 2008 (subject to acceleration terms
substantially similar to those applicable to the Bridge Loan) on terms
satisfactory to the Lender in its sole and absolute discretion; (ii) the
Lender receiving the Extension Fee of $1,100,000; (iii) the Borrower delivering to the Lender, on or
before May 23, 2008, the Borrower Note in the
amount of One Hundred and Ten Million Dollars ($110,000,000)
(which Borrower Note shall supersede the existing Borrower Note in the amount
of Eighty Million Dollars ($80,000,000));  (iv) the delivery by the Borrower to the Lender of a certified copy
of the resolution passed by the Borrower’s Board of Directors approving the
entering into of this Agreement; and (v) the
complete truth and accuracy of the representations and warranties set forth in Section 2
of this Agreement. The Conditions Precedent are strictly inserted for the
benefit of the Lender and may be waived, in whole or in part, at any time and
from time to time, by the Lender at the Lender’s sole and absolute discretion.


 


5.             Confirmation of Amended Bridge Loan Agreement   The Bridge Loan Agreement, as
amended by this Agreement, is hereby ratified and confirmed in all respects and
time shall remain of the essence. After
the date hereof (subject to the satisfaction or waiver of all Conditions
Precedent), all references in each Loan Document to the Loan Agreement shall be
deemed to be a reference to the Bridge Loan Agreement as amended by this
Agreement.


 


6.             Successors and Assigns.  This Agreement shall enure
to the benefit of and shall be binding on and enforceable by the parties hereto
and their respective successors and permitted assigns.


 


7.             Governing Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
and the federal laws of the United States of America applicable herein.


 


12
















 


8.             Time of the Essence.  Time shall be of the essence of this
Agreement.  If anything herein is to be
done on a day which is not a Business Day, the same shall be done on the next
succeeding Business Day.  Where in this
Agreement a number of days is prescribed, the number shall be computed by
excluding the first day and including the last day.


 


9.             Headings, Extended Meanings.  The headings in this Agreement are inserted
for convenience of reference only and shall not constitute a part hereof and
are not to be considered in the interpretation hereof.  In this Agreement, words importing the
singular include the plural and vice versa;
words importing the masculine gender include the feminine and vice versa; and words importing persons
include firms or corporations and vice versa.


 


10.           Counterparts.  This Agreement may be executed in
counterparts and may be delivered by e-mail and/or facsimile transmission.


 


IN WITNESS
WHEREOF, the parties hereto have executed this Agreement or have caused the
same to be executed by their duly authorized representatives as of the date
first above written.


 


 


	
   

  	
  MAGNA ENTERTAINMENT CORP.,

  as Borrower

  
	
   

  	
   

  
	
   

  	
  by

  	
   /s/Blake
  Tohana

  
	
   

  	
   

  	
   Name:

  	
  Blake Tohana

  
	
   

  	
   

  	
   Title: 

  	
  Executive Vice President

  and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   /s/William
  Ford

  
	
   

  	
   

  	
   Name:

  	
  William Ford

  
	
   

  	
   

  	
   Title: 

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   We
  have authority to bind the Corporation.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PACIFIC
  RACING ASSOCIATION

  
	
   

  	
   

  
	
   

  	
  by

  	
   /s/Blake
  Tohana

  
	
   

  	
   

  	
   Name:

  	
  Blake
  Tohana

  
	
   

  	
   

  	
   Title: 

  	
  Executive
  Vice President

  and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   /s/William
  Ford

  
	
   

  	
   

  	
   Name:

  	
  William
  Ford

  
	
   

  	
   

  	
   Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   We
  have authority to bind the Corporation.

  



 


13

















 


	
   

  	
  MEC LAND HOLDINGS

  (CALIFORNIA) INC.

  
	
   

  	
   

  
	
   

  	
  by

  	
   /s/Blake
  Tohana

  
	
   

  	
   

  	
   Name:

  	
  Blake Tohana

  
	
   

  	
   

  	
   Title:

  	
  Executive
  Vice President

  and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   /s/William
  Ford

  
	
   

  	
   

  	
   Name:

  	
  William Ford

  
	
   

  	
   

  	
   Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   We
  have authority to bind the Corporation.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  SANTA ANITA COMPANIES,

  INC.

  
	
   

  	
   

  
	
   

  	
  by

  	
   /s/Blake
  Tohana

  
	
   

  	
   

  	
   Name:

  	
  Blake
  Tohana

  
	
   

  	
   

  	
   Title:

  	
  Executive
  Vice President

  and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   /s/William
  Ford

  
	
   

  	
   

  	
   Name:

  	
  William
  Ford

  
	
   

  	
   

  	
   Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   We
  have authority to bind the Corporation.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LOS ANGELES TURF CLUB,

  INCORPORATED

  
	
   

  	
   

  
	
   

  	
  by

  	
   /s/Blake
  Tohana

  
	
   

  	
   

  	
   Name:

  	
  Blake Tohana

  
	
   

  	
   

  	
   Title:

  	
  Executive
  Vice President

  and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  	
   /s/William
  Ford

  
	
   

  	
   

  	
   Name:

  	
  William Ford

  
	
   

  	
   

  	
   Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   We
  have authority to bind the Corporation.

  



 


14

















 


	
   

  	
  GULFSTREAM PARK RACING

  ASSOCIATION, INC.

  
	
   

  	
   

  
	
   

  	
  by

  	
   /s/Blake
  Tohana

  
	
   

  	
   

  	
   Name:

  	
  Blake
  Tohana

  
	
   

  	
   

  	
   Title:

  	
  Executive
  Vice President

  and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   /s/William
  Ford

  
	
   

  	
   

  	
   Name:

  	
  William
  Ford

  
	
   

  	
   

  	
   Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   We
  have authority to bind the Corporation.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MEC HOLDINGS (USA) INC.

  
	
   

  	
   

  
	
   

  	
  by

  	
  /s/Blake
  Tohana

  
	
   

  	
   

  	
   Name:

  	
  Blake Tohana

  
	
   

  	
   

  	
   Title:

  	
  Executive
  Vice President

  and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   /s/William
  Ford

  
	
   

  	
   

  	
   Name:

  	
  William Ford

  
	
   

  	
   

  	
   Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   We have authority to
  bind the Corporation.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MEC DIXON, INC.

  
	
   

  	
   

  
	
   

  	
  by

  	
   /s/Blake
  Tohana

  
	
   

  	
   

  	
   Name:

  	
  Blake
  Tohana

  
	
   

  	
   

  	
   Title:

  	
  Executive
  Vice President

  and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   /s/William
  Ford

  
	
   

  	
   

  	
   Name:

  	
  William
  Ford

  
	
   

  	
   

  	
   Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   We
  have authority to bind the Corporation.

  



 


15

















 


	
   

  	
  GPRA THOROUGHBRED

  TRAINING CENTER, INC.

  
	
   

  	
   

  
	
   

  	
  by

  	
   /s/Blake
  Tohana

  
	
   

  	
   

  	
   Name:

  	
  Blake Tohana

  
	
   

  	
   

  	
   Title:

  	
  Executive
  Vice President

  and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   /s/William
  Ford

  
	
   

  	
   

  	
   Name:

  	
  William Ford

  
	
   

  	
   

  	
   Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   We
  have authority to bind the Corporation.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SUNSHINE MEADOWS RACING,

  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   /s/Blake
  Tohana

  
	
   

  	
   

  	
   Name:

  	
  Blake
  Tohana

  
	
   

  	
   

  	
   Title:

  	
  Executive
  Vice President

  and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   /s/William
  Ford

  
	
   

  	
   

  	
   Name:

  	
  William
  Ford

  
	
   

  	
   

  	
   Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   We
  have authority to bind the Corporation.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THISTLEDOWN, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   /s/Blake
  Tohana

  
	
   

  	
   

  	
   Name:

  	
  Blake
  Tohana

  
	
   

  	
   

  	
   Title:

  	
  Executive
  Vice President

  and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   /s/William
  Ford

  
	
   

  	
   

  	
   Name:

  	
  William Ford

  
	
   

  	
   

  	
   Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   We have authority to
  bind the Corporation.

  



 


16

















 


	
   

  	
  MEC MARYLAND INVESTMENTS

  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   /s/Blake
  Tohana

  
	
   

  	
   

  	
   Name:

  	
  Blake Tohana

  
	
   

  	
   

  	
   Title:

  	
  Executive
  Vice President

  and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   /s/William
  Ford

  
	
   

  	
   

  	
   Name:

  	
  William Ford

  
	
   

  	
   

  	
   Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  We have authority to bind the
  Corporation.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  30000 MARYLAND INVESTMENTS

  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   /s/Blake
  Tohana

  
	
   

  	
   

  	
   Name:

  	
  Blake Tohana

  
	
   

  	
   

  	
   Title:

  	
  Executive
  Vice President

  and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   /s/William
  Ford

  
	
   

  	
   

  	
   Name:

  	
  William Ford

  
	
   

  	
   

  	
   Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  We have authority to bind the
  Corporation.

  



 


17

















 


	
   

  	
  MID ISLANDI SF., Acting  Through Its

  Zug Branch

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   /s/Thomas
  Schultheiss

  
	
   

  	
   

  	
   Name:

  	
  Thomas Schultheiss

  
	
   

  	
   

  	
   Title:

  	
  Branch
  Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   /s/Peter
  Nideroest

  
	
   

  	
   

  	
   Name:

  	
  Peter Nideroest

  
	
   

  	
   

  	
   Title:

  	
  Branch Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  We have authority to bind the
  Partnership.