Document:

QuickLinks
 -- Click here to rapidly navigate through this document

EXHIBIT 10.9  

	 

 
 

SECOND AMENDED AND RESTATED LOAN AGREEMENT
  (Reconstruction of and Addition of Slots Facilities at Gulfstream Park, Florida)    
    

	 

July 26, 2006 

 
 
 

TABLE OF CONTENTS    
    

	 
	 	ARTICLE 1

ARTICLE DEFINITIONS
 
	 	 

	1.1	 	Definitions	 	4
	1.2	 	Time	 	23
	1.3	 	Calculation of Interest and Fees	 	24
	1.4	 	Currency	 	24
	1.5	 	Governing Law	 	24
	1.6	 	Inconsistencies	 	24
	1.7	 	Non-Business Days	 	24
	1.8	 	Late Payments	 	24
	1.9	 	Accounting Terms	 	24
	1.10	 	Interpretation Not Affected by Headings, Etc.	 	25
	1.11	 	Rules of Construction	 	25
	1.12	 	Severability	 	25
	1.13	 	References to Remington Loan Agreement	 	26
	1.14	 	Schedules	 	26
	 
	 	ARTICLE 2

THE LOAN
 
	 	 

	2.1	 	Loan Amount	 	26
	2.2	 	Advances	 	26
	2.3	 	Holdbacks	 	27
	2.4	 	Holdback Advances	 	28
	2.5	 	Advance Payments	 	30
	2.6	 	Evidences of Advances	 	30
	2.7	 	Term	 	30
	2.8	 	Cost Consultant	 	30
	 
	 	ARTICLE 3

PAYMENTS AND INTEREST
 
	 	 

	3.1	 	Repayment	 	31
	3.2	 	Limitation on Prepayment	 	32
	3.3	 	Gulfstream Loan Consent and Waiver Agreement	 	32
	3.4	 	Prepayment	 	32
	3.5	 	Interest	 	33
	3.6	 	Unwinding Costs	 	34
	3.7	 	Application of Expropriation Proceeds	 	34
	3.8	 	Interest on Fees and Other Charges	 	34
	3.9	 	Gulfstream Excess Cash Flow Sweep	 	35
	3.10	 	Costs, Expenses, Etc.	 	35
	3.11	 	Maximum Interest Rate	 	36
	3.12	 	Payments Free of Withholding Taxes	 	37
	3.13	 	Concurrent Exercise of Prepayment Rights	 	37

i

 

	 
	 	ARTICLE 4

ADVANCES UNDER THE LOAN
 
	 	 

	4.1	 	Tranche 1 First Advance	 	38
	4.2	 	Tranche 2 — First Advance	 	43
	4.3	 	Subsequent Advances	 	46
	 
	 	ARTICLE 5

SECURITY FOR LOAN
 
	 	 

	5.1	 	General	 	52
	5.2	 	Right to Substitute Security for the Aventura Property	 	57
	5.3	 	Development of the Mixed-Use Property	 	58
	5.4	 	Additional Slots Financing	 	58
	 
	 	ARTICLE 6

REPRESENTATIONS AND WARRANTIES
 
	 	 

	6.1	 	Borrower's and Guarantors' Representations and Warranties	 	59
	6.2	 	Survival of Borrower's and Guarantors' Representations	 	72
	6.3	 	Lender's Representations and Warranties	 	72
	 
	 	ARTICLE 7

AFFIRMATIVE COVENANTS
 
	 	 

	7.1	 	Covenants	 	72
	 
	 	ARTICLE 8

NEGATIVE COVENANTS
 
	 	 

	8.1	 	Negative Covenants	 	84
	 
	 	ARTICLE 9

EVENTS OF DEFAULT; ACCELERATION OF INDEBTEDNESS
 
	 	 

	9.1	 	Events of Default	 	91
	9.2	 	Acceleration; Remedies	 	95
	9.3	 	Waiver of Certain Rights	 	96
	 
	 	ARTICLE 10

MISCELLANEOUS
 
	 	 

	10.1	 	Reliance and Non-Merger	 	97
	10.2	 	Confidentiality	 	97
	10.3	 	No Set-Off	 	97
	10.4	 	Employment of Experts	 	97
	10.5	 	Reliance by Lender	 	98
	10.6	 	Notices	 	98
	10.7	 	Further Assurances	 	100

ii

 

	10.8	 	Assignment	 	100
	10.9	 	Disclosure of Information to Potential Permitted Lender Assignees	 	101
	10.10	 	Right to Cure	 	101
	10.11	 	Forbearance by the Lender Not a Waiver	 	101
	10.12	 	Waiver of Statute of Limitations and Other Defenses	 	101
	10.13	 	Relationship and Indemnity	 	102
	10.14	 	Time of Essence	 	102
	10.15	 	Service of Process/Venue	 	102
	10.16	 	Jury Trial Waiver	 	103
	10.17	 	Final Agreement/Modification	 	103
	10.18	 	Continuing Agreement	 	103
	10.19	 	No Third Party Beneficiaries	 	103
	10.20	 	Appointment of Administrative Agent	 	104
	10.21	 	No Brokers	 	104
	10.22	 	Execution in Counterparts	 	104
	10.23	 	Contribution by Guarantors with Respect to Indebtedness	 	104
	10.24	 	Successors and Assigns Bound; Joint and Several Liability and Agents	 	105
	10.25	 	Loss of Gulfstream Note	 	105
	10.26	 	Confirmation of Guarantees and Security	 	105
	10.27	 	Acknowledgment	 	106
	10.28	 	Certain Provisions Relating to The Meadows Guarantors	 	107
	10.29	 	Operation of Agreement Relating to the Remington Guarantor	 	107

iii

Exhibit 10.9  

 
 

SECOND AMENDED AND RESTATED LOAN AGREEMENT  
    

        THIS SECOND AMENDED AND RESTATED LOAN AGREEMENT made as of the 26th day of July, 2006. 

	BETWEEN:	 	 
	
 	
 	
GULFSTREAM PARK RACING ASSOCIATION, INC.,
	 	 	a corporation incorporated under the laws of the State of Florida
	
 	
 	

(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
	
 	
 	

(hereinafter called "MEC Pennsylvania" or "The Meadows Owner"),
	
 	
 	

OF THE THIRD PART,
	
 	
 	

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

(hereinafter called "Washington Trotting"),
	
 	
 	

OF THE FOURTH PART,
	
	
 	

 

 

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

(hereinafter called "Mountain Laurel"),
	
 	
 	

OF THE FIFTH PART,
	
 	
 	
REMINGTON PARK, INC.,
	 	 	a corporation incorporated under the laws of the State of Oklahoma
	
 	
 	

(hereinafter called the "Remington 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 Guarantor").
	
 	
 	

OF THE SEVENTH PART
	
 	
 	

 — and —
	
 	
 	
MAGNA ENTERTAINMENT CORP..,
	 	 	a corporation incorporated under the laws of the State of Delaware
	
 	
 	

(hereinafter called "MEC").
	
 	
 	

OF THE EIGHTH PART

        WITNESSES
THAT: 

        WHEREAS
pursuant to a construction loan agreement made as of December 9, 2004 (the "Original Gulfstream Loan Agreement")
between: (i) the Borrower, as borrower; (ii) the Lender, as lender; and (iii) MEC Pennsylvania, Washington Trotting, and Mountain Laurel, each as a guarantor; the Lender agreed to
make the Loan available to the Borrower to finance, inter alia, Construction Costs relating to the Gulfstream Park Race Track
clubhouse/grandstand facility and backstretch and related site works in Broward County and Miami-Dade County, Florida, all as more particularly set forth in the Original Gulfstream
Loan Agreement; 

2

 

        AND
WHEREAS pursuant to an amendment and restatement of the Original Gulfstream Loan Agreement made as of July 22, 2005 (the "Original Amended and
Restated Gulfstream Loan Agreement") between: (i) the parties to the Original Gulfstream Loan Agreement; and (ii) the Remington Guarantor and the Palm Meadows
Guarantor, as additional guarantors (the parties to the Original Amended and Restated Gulfstream Loan Agreement other than the Borrower and the Lender hereinafter collectively referred to as
the "Guarantors"); the terms and conditions of the Original Gulfstream Loan Agreement were amended to include,  inter alia, the Remington Guarantee and
Indemnity, the Palm Meadows Guarantee and Indemnity and the MEC Guarantee and Indemnity, all as more
particularly set forth in the Original Amended and Restated Gulfstream Loan Agreement; 

        AND
WHEREAS pursuant to a consent and waiver agreement made as of October 14, 2005 (the "Gulfstream Loan Consent and Waiver
Agreement"), the parties thereto confirmed the terms and conditions upon which the Lender was prepared to: (i) provide such consents and waivers as were required to
permit the entering into and performance of the Second Amendment Documents (as defined therein) by the Borrower; (ii) provide such consents and waivers as were required to permit the
sale of the Meadows Property by MEC Pennsylvania; and (iii) make a Subsequent Advance under the Original Amended and Restated Gulfstream Loan Agreement (the Original Amended and Restated
Gulfstream Loan Agreement, as amended by the Gulfstream Loan Consent and Waiver Agreement, being referred to herein as the "Amended and Restated Gulfstream Loan
Agreement"); 

        AND
WHEREAS the parties have agreed to enter into this Agreement to confirm the terms and conditions upon which the Lender is prepared to loan to the Borrower an additional $25,750,000
by way of a second tranche of the Loan, for the purposes of funding the Borrower's Slots Facilities Costs; 

        AND
WHEREAS as of the date hereof, Tranche 1 (as defined herein) is fully drawn down and there is $128,318,946.76 outstanding (including Costs and capitalized interest); 

        AND
WHEREAS the parties hereto have agreed to amend and restate the Original Amended and Restated Gulfstream Loan Agreement in order to give effect to the matters referred to in the
preceding recital on the terms and conditions of this Agreement; 

        AND
WHEREAS the parties hereto agree that, notwithstanding such amendment and restatement of the Original Amended and Restated Gulfstream Loan Agreement, the Gulfstream Loan Consent and
Waiver Agreement shall continue to be in full force and effect in accordance with its terms; 

        NOW THEREFOR 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: 

3

 
 
 

ARTICLE 1
  
    ARTICLE DEFINITIONS  
    

         1.1    Definitions    

        As
used herein, unless otherwise herein expressly provided, the following capitalized terms shall have the respective meanings set forth below: 

        "Additional Guarantors" means, collectively, the Remington Guarantor and the Palm Meadows Guarantor; 

        "Additional Security" has the meaning ascribed thereto in Section 5.1; 

        "Additional Slots Facilities Financing" has the meaning ascribed thereto in Section 5.4; 

        "Additional Slots Facilities Financing Terms" has the meaning ascribed thereto in Section 5.4; 

        "Additional Slots Facilities Initiative" has the meaning ascribed thereto in Section 5.4; 

        "Administrative Agent" has the meaning ascribed thereto in Section 10.20; 

        "Advance" means the First Advance and any Subsequent Advances (including a Holdback Advance); 

        "Affiliate" shall mean, with respect to any Person, each Person that controls, is controlled by or is under common control with such
Person or any Affiliate of such Person; provided, however, that in no case shall any Administrative Agent or any Lender be deemed to be an Affiliate of the Borrower or any Guarantor for purposes of
this Agreement. For the purpose of this definition, "control" of a Person shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise; 

        "Agreement" has the meaning ascribed thereto in Section 1.10;. 

        "Allocable Amount" has the meaning ascribed thereto in Section 10.23; 

        "Applicable Legal Requirement" means any Governmental Rule which could be reasonably expected to be generally followed by any Person with
operations comparable to those which are or have been conducted by any of the Borrower and/or any of the Guarantors, as applicable, or to any of the operations now or previously conducted at any of
the Properties and/or The Meadows Property, as applicable; 

        "Approvals and Consents" means, collectively, the Gulfstream Loan OHRC Approval, the Remington Loan OHRC Approval, the Gulfstream Loan Zoo
Consent and the Remington Loan Zoo Consent; 

4

 

        "Architect" means BRPH Company — Engineers, Inc., or such other Person acceptable to the
Lender, acting reasonably, who is engaged in architectural work and who is a member or licensee in good standing of the Florida Association of the American Institute of Architects or any successor
thereto; 

        "Aventura Lands" means the lands of approximately 39.2 acres, in the City of Aventura, Miami-Dade County, Florida,
legally described on Schedule A; 

        "Aventura Property" means the Aventura Lands, and all improvements now or hereafter located on the Aventura Lands, together with all
tangible and intangible property of the Borrower now or hereafter owned or leased by the Borrower in connection with the Aventura Lands or the improvements now or hereafter thereon; 

        "Aventura Property Purchase and Sale Agreement" means the agreement of purchase and sale between the Borrower, as vendor, and the City of
Aventura, as purchaser, in respect of six acres of the Aventura Property; 

        "Bankruptcy Code" has the meaning ascribed thereto in Section 9.1(e); 

        "Base Rate" means, for any day, the annual rate of interest equal to the greater of (i) the rate which the Bank of Montreal
establishes at its principal office in Toronto, Ontario 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 Canada 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; 

        "Borrower" means Gulfstream Park Racing Association, Inc. and its successors and permitted assigns; 

        "Borrower Incorporation Documents" has the meaning ascribed thereto in Section 6.1(f); 

        "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 and the Guarantors 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 and Guarantors from time to time and notice of which is provided to the Lender; 

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

5

 

        "Borrower's and Guarantors' Pennsylvania Agent" means the Pittsburgh 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 and Guarantors from time to time and notice of which is provided to the Lender; 

        "Business Day" means a day other than a Saturday, Sunday or other day on which commercial banks are authorized or obligated to close under
the laws of the United States of America or the State of Florida; 

        "Capital Expenditures" means, for any Person during any period, the aggregate amount of all expenditures of such Person for fixed or
capital assets made during such period which, in accordance with GAAP, are classified as capital expenditures; 

        "Capitalized Interest Tranche" has the meaning ascribed thereto in the Remington Loan Agreement; 

        "Capital Lease Obligations" means the obligations of the Borrower 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; 

        "Closing Date" means July 26, 2006; 

        "Collateral" shall mean, collectively, all of the undertaking, property and assets of the Borrower, the Guarantors and MEC subject to the
Encumbrances, or intended to be subject to the Encumbrances, created by the Security; 

        "Combined" means, in relation to any financial results or financial statements of the Borrower, the Remington Guarantor and the Palm
Meadows Guarantor, the combined financial results or financial statements of the Borrower, the Remington Guarantor and the Palm Meadows Guarantor, calculated and prepared in accordance
with GAAP; 

        "Compliance Certificate" has the meaning attributed thereto in Section 7.1(d)(i)(B); 

        "Construction Contracts" means all contracts entered into by the Borrower or its agents with Persons for the supply by such Persons of
construction services or materials for the Reconstruction or any part thereof or services or materials related thereto, including, without limitation, the Suitt Stipulated Lump Sum Contract and the
Ranger Construction Stipulated Lump Sum Contract; 

6

 

        "Construction Costs" means all costs and expenses properly paid or due for the development, design, and construction of the Gulfstream
Facilities or any part thereof as part of the Reconstruction and the financing of same (but excluding all costs and expenses relating to the development, design and construction of the racing
surfaces and excluding the Gulfstream FF&E), including, without limiting the generality of the foregoing: 

	(i)
	payments
made to general contractors, trade contractors and/or subcontractors and material suppliers pursuant to contracts relating directly to the construction and
lease-up of the Reconstruction;

	(ii)
	on-site
costs incurred by or on behalf of the Borrower, including the cost of full-time on-site employees;

	(iii)
	reasonable
professional and consulting fees and expenses such as architectural, engineering, leasing, surveying, design, legal and accounting fees and expenses;

	(iv)
	costs
of building permits, water and sewer connection or usage fees, municipal levies, hydro fees and other similar expenses, temporary utilities, traffic signalization
and landscaping;

	(v)
	all
expenses relating to construction insurance, necessary surety and other performance bonds;

	(vi)
	underwriting
and financing fees, including letters of credit, standby fees, commitment fees, hedging fees and other finance placement costs; and

	(vii)
	interest
at the rate applicable from time to time on the principal amount outstanding hereunder for the payment of those items listed in clauses (i)
through (vi) of this definition to the end of the previous month; 

        "Cost Consultant" has the meaning ascribed thereto in Section 2.8; 

        "Cost Retainer" has the meaning ascribed thereto in Section 3.10; 

        "Costs" has the meaning ascribed thereto in Section 3.10; 

        "Disclosure Schedule" means the disclosure schedule prepared and executed by the Borrower as of July 26, 2006; 

        "EBITDA" means the earnings of a Person for any period before interest, taxes, depreciation and amortization for such Person, in each
case, determined on a consolidated basis; 

        "Employee Benefit Plan" shall mean any employee benefit plan within the meaning of section 3(3) of ERISA maintained or contributed
to by the Borrower or any Guarantor or any ERISA Affiliate, other than a Multiemployer Plan; 

7

 

        "Encumbrance" means any mortgage, lien (statutory or otherwise), pledge, assignment by way of security, charge, preference, priority,
security interest, lease intended as security, title retention agreement, statutory right reserved in any Governmental Authority, registered lease of real property, hypothecation, deposit arrangement
or other security arrangement of any kind; 

        "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 (i) 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 and/or The Meadows Property or migrating or threatening to migrate to or from any of
the Properties or the Meadows Properties, or (ii) arise from any investigation, Proceeding or remediation of any of the Properties or the Meadows Properties (or any adjacent property to
which any such Hazardous Materials may have migrated) in connection with any allegation that any Person directly or indirectly disposed of Hazardous Materials therein, thereon or thereunder or 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 Legal Requirement that requires or relates to: 

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

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

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

8

 

	(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 chemical substance or product);

	(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 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(w); 

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

        "ERISA Affiliate" means any Person which is treated as a single employer with the Borrower or any Guarantor under Section 414 of
the IRC; 

        "Event of Default" has the meaning ascribed thereto in Section 9.1; 

9

 

        "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 Business 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 Business Day, the average of the quotations for such day on such transactions
received by an agent for the Lender from three United States of America federal funds brokers of recognized standing selected by it; 

        "Future Advance Agreements" means, collectively, the Gulfstream/Aventura Future Advance Agreement, the Palm Meadows Training Centre Future
Advance Agreement and the Remington Future Advance Agreement and, if delivered pursuant to Section 5.1(i), The Meadows Future Advance Agreement; 

        "GAAP" means, at any time, generally accepted accounting principles in effect from time to time in the United States of America as
applied in a consistent manner from period to period; 

        "Governmental Authority" means (a) any nation, state, county, city, town, borough, village, district or other jurisdiction;
(b) any federal, state, local, municipal, foreign or other government; (c) any governmental or quasi-governmental authority of any nature (including any agency, branch, department,
board, commission, court, tribunal or other entity exercising governmental or quasi-governmental power); (d) any body exercising, or entitled or purporting to exercise, any administrative,
executive, judicial, legislative, regulatory or taxing authority or power, including the Federal Deposit Insurance Corporation, the Federal Reserve Board, the Comptroller of the Currency, any central
bank, fiscal, monetary or any comparable authority; or (e) any official of the foregoing; 

        "Governmental Authorizations" means any permit (including a building permit), licence, registration, approval (including a development or
zoning approval or variance or a platting or land subdivision approval), finding of suitability, authorization, plan, directive, order, consent, exemption, waiver, consent order or consent decree of
or from, or notice to, action by or filing with, any Governmental Authority; 

        "Governmental Rule" means any applicable federal, state, provincial, regional, local, municipal, foreign or other law, treaty,
constitution, statute, regulation, by-law, common law, principle of common law, code, ordinance, policy, circular, guideline, rule, Order or any other instrument, declaration or statement
of a Governmental Authority provided that if the same does not have the force of law, it is generally expected to be complied with by those to whom it is addressed by the authority enacting or
responsible for implementing the same; 

        "Guarantees and Indemnities" means, collectively, the Remington Guarantee and Indemnity, the Palm Meadows Guarantee and Indemnity, the
Meadows Guarantee and Indemnity, and the MEC Guarantee and Indemnity; 

        "Guarantor Incorporation Documents" has the meaning ascribed thereto in Section 6.1(g); 

        "Guarantor Payment" has the meaning ascribed thereto in Section 10.23; 

10

 

        "Guarantors" means, collectively, The Meadows Guarantors and the Additional Guarantors; 

        "Gulfstream/Aventura Future Advance Agreement" means the future advance agreement (in form and substance satisfactory to the Lender
and the Borrower) in respect of the Gulfstream/Aventura Mortgage, to be executed and delivered by the Borrower in connection with the creation of Tranche 2 and registered against title
to the Gulfstream/Aventura Lands; 

        "Gulfstream/Aventura Mortgage" has the meaning ascribed thereto in Section 5.1(b); 

        "Gulfstream/Aventura Properties" means, collectively, the Gulfstream Property and the Aventura Property; 

        "Gulfstream/Aventura Title Policy" has the meaning ascribed thereto in Section 4.1(r); 

        "Gulfstream Development Agreement" means the construction agreement, dated March 3, 2002, between the City of Hallandale Beach and
the Borrower, relating to the development of the Gulfstream Property; 

        "Gulfstream Excess Cash Flow" means, for any fiscal year of the Borrower, an amount equal to the EBITDA of the Borrower
(a) increased by, to the extent not added back in the calculation of EBITDA for such fiscal quarter, any non-cash deductions therefrom, including any deductions for deferred or
capitalized interest and for extraordinary or unusual losses, in each case, in respect of such fiscal year and (b) reduced by (i) any Capital Expenditures of the Borrower permitted by
Section 8.1(h), (ii) cash taxes of the Borrower to the extent not included in the calculation of EBITDA for such fiscal year, (iii) extraordinary or unusual gains of the Borrower,
to the extent included in the calculation of EBITDA for such fiscal year, and (iv) all payments for interest (other than deferred or capitalized interest) and principal (other than payments
required for the Gulfstream Excess Cash Flow Sweep) on any debt for borrowed money of the Borrower permitted by Section 8.1(b), in respect of such fiscal year; 

        "Gulfstream Excess Cash Flow Sweep" has the meaning ascribed thereto in Section 3.9; 

        "Gulfstream Excess Cash Flow Sweep Termination Date" means the date upon which the Borrower has repaid in full all of Tranche 2; 

        "Gulfstream Facilities" has the meaning ascribed thereto in the second recital of the Original Gulfstream Loan Agreement; 

        "Gulfstream Facilities Completion Date" means February 1, 2006; 

        "Gulfstream FF&E" means the furniture, fixtures, equipment, machinery and all process related additions to the building relating to the
Gulfstream Facilities; 

11

 

        "Gulfstream Lands" means the lands comprised of approximately 214.8 acres (including the Mixed-Use Lands) and having a
building area of approximately 350,000 square feet for the clubhouse and grandstand plus approximately 240,000 square feet for the backstretch, upon which the Gulfstream
Facilities are to be reconstructed, located in Broward County and Miami-Dade County, Florida, and legally described on Schedule E; 

        "Gulfstream Loan OHRC Approval" means the approval of the OHRC required to permit the Remington Guarantor to enter into the Loan Documents
to be provided by it and to perform its obligations thereunder, in form and on terms satisfactory to the Lender acting reasonably; 

        "Gulfstream Note" has the meaning ascribed thereto in Section 5.1(a); 

        "Gulfstream Property" means the Gulfstream Lands, and all improvements (including without limitation the Gulfstream Facilities) now or
hereafter located on the Gulfstream Lands, together with all tangible and intangible property of the Borrower now or hereafter owned or leased by the Borrower in connection with the Gulfstream Lands
or the improvements now or hereafter thereon; 

        "Gulfstream Repayment Commencement Date" has the meaning ascribed thereto in Section 3.1; 

        "Gulfstream Restricted Payment Release Conditions" has the meaning ascribed thereto in Section 8.1(u); 

        "Gulfstream Tranche 1 Maturity Date" has the meaning ascribed thereto in Section 2.7; 

        "Gulfstream Tranche 2 Maturity Date" has the meaning ascribed thereto in Section 2.7; 

        "Gulfstream Tranche 1 Unamortized Amount" means, at any time and from time to time, the outstanding principal amount of
Tranche 1, including accrued and capitalized interest and Costs in respect thereof of the Lender, at such time; 

        "Gulfstream Tranche 2 Unamortized Amount" means, at any time and from time to time, the outstanding principal amount of
Tranche 2, including accrued and capitalized interest and Costs in respect thereof of the Lender, at such time; 

        "Gulfstream Loan Zoo Trust Consent" means the consent of the Zoo Trust required to permit the Remington Guarantor to enter into Loan
Documents to be provided by it and to perform its obligations thereunder, in form and on terms satisfactory to the Lender, acting reasonably; 

        "H.15 Statistical Release" has the meaning ascribed thereto in Section 3.4; 

        "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 and/or The Meadows Property 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 and/or The
Meadows Property; 

12

 

        "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; 

        "Holdback Advance" means a Reconstruction Holdback Advance or a Slots Facilities Holdback Advance, as the case may be; 

        "Horsemen's Agreement" means an agreement between the Borrower and the Florida Horsemen's Benevolent and Protective
Association, Inc. regarding the application of gross slot machine revenue from the Slots Facilities to thoroughbred horse race purses, in form and substance satisfactory to the Lender; 

        "Indebtedness" has the meaning ascribed thereto in Section 5.1; 

        "Independent Investment Banker" has the meaning ascribed thereto in Section 3.4; 

        "Interest Date" means (i) where the Tranche 1 Interest Rate is being determined with reference to LIBOR, the last day of
each one month LIBOR period used in determining the Tranche 1 Interest Rate, and (ii) in all other cases, the last Business Day of each calendar month; 

        "IRC" means the Internal Revenue Code of 1986, as amended; 

        "JV Ground Lease" has the meaning ascribed thereto in Section 5.3; 

        "JV Inter-Creditor Agreement" has the meaning ascribed thereto in Section 5.3; 

        "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 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; 

13

 

        "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 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; 

        "Lender's Pennsylvania Agent" means the Pittsburgh office of Pepper Hamilton LLP, or such other firm or firms of solicitors or
agents in the Commonwealth of Pennsylvania as are appointed by the Lender from time to time and notice of which is provided to the Borrower and the Guarantors; 

        "Lender's Tranche 1 Pre-Advance Expenses" means all reasonable and documented fees and charges, including legal fees
and disbursements, closing costs, recording and notary fees and any other similar matters pertinent thereto incurred by the Lender and/or its advisors in connection with this Agreement and/or the Loan
Documents on or prior to the date of the Tranche 1 First Advance; 

        "Lender's Tranche 2 Pre-Advance Expenses" means all reasonable and documented fees and charges, including legal fees
and disbursements, closing costs, recording and notary fees and any other similar matters pertinent thereto incurred by the Lender and/or its advisors in connection with this Agreement and/or the Loan
Documents on or prior to the date of the Tranche 2 First Advance; 

        "LIBOR" has the meaning ascribed thereto in the documentation governing MID's principal floating rate credit facility referred to in the
definition of "Tranche 1 Interest Rate"; 

        "Loan" has the meaning ascribed thereto in Section 2.1; 

        "Loan Amount" means the aggregate of the principal amount of the Loan, being comprised of (i) the principal amount of $115,000,000,
together with an amount equal to the Costs that are deemed to be Advances made available pursuant to Tranche 1 (collectively, the "Tranche 1 Loan
Amount"); and (ii) the principal amount of $25,750,000, together with an amount equal to the Costs that are deemed to be Advances made available pursuant to
Tranche 2 and the Tranche 2 Arrangement Fee (collectively, the "Tranche 2 Loan Amount"), as the same may be reduced from
time to time in accordance with the terms hereof; 

        "Loan Documents" means, collectively, this Agreement, the Security and all other documents and agreements delivered pursuant hereto
and thereto; 

        "Loss" means any liability, cost, damage, Environmental Damage, loss, obligation, claim, action, suit, fine, penalty, judgment, award,
legal or administrative proceeding, other Proceeding, demand or response, remedial or inspection cost or expense, amount paid in settlement, interest thereon or expense (including reasonable and
documented legal or consulting fees, court costs and other out-of-pocket expenses incurred by or on behalf of the Lender in investigating, preparing or defending
the foregoing); 

14

 

        "Margin Stock" has the meaning ascribed thereto in Section 6.1(mm); 

        "Material Adverse Change" means any material adverse change in the business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower or of any Guarantor, or of any of the Properties, or The Meadows Property; 

        "Material Adverse Effect" means an event, occurrence or condition which has a material adverse effect on (i) the business, assets,
operations, liabilities, prospects or financial or other condition of the Borrower and/or any of the Guarantors, (ii) the ability of the Borrower to complete the Reconstruction and/or the Slots
Facilities Initiative, (iii) the ability of the Remington Guarantor to complete the Remington Construction, (iv) the ability of the Borrower and/or any of the Guarantors and/or MEC to
pay the Indebtedness or perform any of its obligations in accordance with the terms of this Agreement and the other Loan Documents, (v) the rights and remedies of the Administrative Agent or
any Lender under this Agreement or the other Loan Documents, (vi) the value of the Collateral, or (vii) the Lender's security interests in the Collateral or the perfection or priority of
such security interests; 

        "Material Agreements" means: (i) the Remington Construction Contracts; (ii) the Remington Development Agreement;
(iii) the Aventura Property Purchase and Sale Agreement; (iv) the Construction Contracts; (v) the Slots Facilities Contracts; (vi) the Gulfstream Development Agreement;
(vii) the Remington Lease; (viii) the agreements and other documents disclosed by the Borrower or a Guarantor as Material Agreements in either (A) the Disclosure Schedule or
(B) in writing to the Lender at any time as provided in Section 6.1(o); (ix) other contracts, agreements, commitments or other documents materially affecting the use, development,
leasing, construction and/or operation of any of the Properties and/or The Meadows Property; and (x) any contract, agreement, commitment or other document, the default under or the termination
of which could reasonably be expected to result in a Material Adverse Change; 

        "Meadows Guarantee and Indemnity" has the meaning ascribed thereto in Section 5.1(h); 

        "MEC" means Magna Entertainment Corp., a corporation incorporated and subsisting under the laws of the State of Delaware, and its
successors and permitted assigns; 

        "MEC Bridge Loan Agreement" means the loan agreement made as of July 22, 2005 between,  inter alia, MEC, as borrower, and the Lender, as lender, as supplemented
and amended by a bridge loan consent and waiver agreement made as of
October 14, 2005, as amended by a first amending agreement made as of February 1, 2006 and by a second amending agreement made as of July 26, 2006;as the same may be amended or
restated from time to time; 

        "MEC Guarantee and Indemnity" has the meaning ascribed thereto in Section 5.1(n); 

15

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

        "MID" means MI Developments Inc., a corporation incorporated under the laws of the Province of Ontario; 

        "Mixed-Use Lands" means the lands of approximately 85.7 acres, forming part of the Gulfstream Lands, as more
particularly described on Schedule B-1 of the Mixed-Use Property Pre-Development Agreement, that the Borrower proposes to develop for a mixed-use
development; 

        "Mixed-Use Property" means the Mixed-Use Lands, and all improvements now or hereafter located on the
Mixed-Use Lands, together with all tangible and intangible property of the Borrower now or hereafter owned or leased by the Borrower in connection with the Mixed-Use Lands or
the improvements now or hereafter thereon; 

        "Mixed-Use Property Pre-Development Agreement" means the pre-development management agreement, dated
April 2, 2004, by and between the Borrower, as owner, and Forest City Commercial Group, Inc., as developer; 

        "Mortgages" means, collectively, the Remington Second Mortgage, the Gulfstream/Aventura Mortgage, the Palm Meadows Training Center
Mortgage and The Meadows Second Mortgage; 

        "Multiemployer Plan" means any multiemployer plan within the meaning of section 3(37) of ERISA maintained or contributed to by the
Borrower, any Guarantor or any ERISA Affiliate; 

        "Net Debt" of a Person means, at any time, the debt of such Person and its subsidiaries at such time determined in accordance with GAAP
(including, for greater certainty, indebtedness and liabilities in respect of capital leases and similar obligations) less the aggregate of cash and Cash Equivalents of such Person at such time to
which such Person has the sole and unrestricted right. For greater certainty, cash and Cash Equivalents of a Person shall exclude purse accounts and pooled or co-mingled cash or Cash
Equivalents unless Net Debt is being determined on a Combined basis,
in which case pooled or co-mingled cash or Cash Equivalents which are solely those of Persons included in the calculation of Combined Net Debt shall not be excluded; 

        "Note Agreement" has the meaning ascribed thereto in Section 5.1(i); 

        "Occupancy Agreements" has the meaning ascribed thereto in Section 6.1(q); 

        "OHRC" means the Oklahoma Horse Racing Commission; 

        "Order" means any order, injunction, judgment, decision, decree, ruling, assessment or arbitration award of any Governmental Authority
or arbitrator; 

16

 

        "Organizational Documents" has the meaning ascribed thereto in Section 6.1(g); 

        "Original Gulfstream Loan Agreement" has the meaning ascribed thereto in the first recital hereto; 

        "Original Security" has the meaning ascribed thereto in Section 5.1; 

        "Palm Meadows Guarantee and Indemnity" has the meaning ascribed thereto in Section 5.1(l); 

        "Palm Meadows Guarantor" means GPRA Thoroughbred Training Center, Inc., and its successors and permitted assigns; 

        "Palm Meadows Training Center Lands" means the lands legally described on Schedule D; 

        "Palm Meadows Training Future Advance Agreement" means the future advance agreement (in form and substance satisfactory to the
Lender, acting reasonably) in respect of the Palm Meadows Training Centre Mortgage, to be executed and delivered by the Palm Meadows Guarantor in connection with the creation of Tranche 2
and registered against title to the Palm Meadows Training Centre Property; 

        "Palm Meadows Training Center Mortgage" has the meaning ascribed thereto in Section 5.1(m)(i); 

        "Palm Meadows Training Center Property" means the Palm Meadows Training Center Lands and all improvements now or hereinafter located on
the Palm Meadows Training Center Lands, together with all tangible and intangible property now or hereafter owned or leased by the Palm Meadows Guarantor in connection with the Palm Meadows Training
Center Lands or the improvements now and hereafter thereon; 

        "Permitted Encumbrances" means the encumbrances set out in Schedule C hereto, any Purchase Money Security Interests in respect of:
(a) the Properties up to a maximum aggregate amount (together with any Purchase Money Security Interests in respect of the Properties disclosed on Schedule C) of $12,500,000;
(b) the Slots Facilities up to a maximum aggregate amount of $2,500,000, and any other encumbrances from time to time permitted by the Lender, in its sole and absolute discretion, (including
but not limited to any encumbrances created pursuant to the Additional Slots Facilities Initiative, provided that such encumbrances are approved by the Lender pursuant to Section 5.4) in
respect of any of the Properties and/or The Meadows Property; 

        "Permitted Lender Assignee" has the meaning ascribed hereto in Section 10.6; 

        "Person" means and includes an individual, a partnership, a corporation (including a business trust), a joint stock company, an
unincorporated association, a limited liability company, a limited liability partnership, a joint venture, a trust or other entity or a Governmental Authority; 

17

 

        "Plans", in relation to the Reconstruction or the Slots Facilities Initiative, as the case may be, has the meaning ascribed thereto in
Section 7.1(h) and, in relation to the Remington Construction, has the meaning ascribed thereto in the Remington Loan Agreement; 

        "Pre-Payment Amount" has the meaning ascribed thereto in Section 3.4; 

        "Pre-Payment Date" has the meaning ascribed thereto in Section 3.4; 

        "Pre-Payment Make-Whole Amount" has the meaning ascribed thereto in Section 3.4; 

        "Pre-Payment Notice" has the meaning ascribed thereto in Section 3.4; 

        "Proceeding" means any action, arbitration, audit, claim, hearing, investigation, litigation or suit (whether civil, criminal,
administrative, judicial or investigative, whether formal or informal, whether public or private) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental
Authority or arbitrator; 

        "Properties" means, collectively, the Gulfstream/Aventura Properties, the Remington Property and the Palm Meadows Training Centre Property
and "Property" means any one of the Properties; 

        "Purchase Money Obligation" means any indebtedness, liability or obligation representing any unpaid part of, or incurred or assumed to pay
or refinance the whole or any part of, the cost of acquisition of any property or asset acquired by the Borrower intended to be used in carrying on the business of the Borrower and any expenditures
made for fixed improvements thereto, if such borrowing is incurred or assumed within 24 months after the acquisition of such property or asset or the making of such expenditures, as the case
may be, including Capital Lease Obligations; 

        "Purchase Money Security Interest" means any Encumbrance to secure a Purchase Money Obligation, provided that: (i) the Encumbrance
attaches solely to the property or asset acquired or purchased (excluding any acquired or purchased equity securities) and fixed improvements thereto; (ii) at the time of acquisition of such
property or asset, the aggregate principal amount remaining unpaid on all Purchase Money Obligations secured by such Encumbrance on such property or assets whether or not assumed by the Borrower does
not exceed an amount equal to the total purchase price of such property or assets; and (iii) such Purchase Money Obligations shall have been incurred within the limitations of this Agreement,
together with any renewals or replacements of any such Encumbrances on such property or asset, provided that the amount secured by such renewal or replacement Encumbrance does not increase above the
original amount secured; 

        "Ranger Construction Stipulated Lump Sum Contract" means the stipulated lump sum contract (AIA A101-1997 Edition),
dated April 2004, between the Borrower and Ranger Construction South, a member of Vecellio Group, Inc.; 

        "Reconstruction" has the meaning ascribed thereto in the second recital hereof; 

18

 

        "Reconstruction Holdback" has the meaning ascribed thereto in Section 2.3; 

        "Reconstruction Holdback Advance" has the meaning ascribed thereto in Section 4; 

        "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; 

        "Relevant Entities" shall mean the Borrower and each Guarantor; 

        "Remaining Term" has the meaning ascribed thereto in Section 3.4; 

        "Remington Construction" means the "Construction" as defined in the Remington
Loan Agreement; 

        "Remington Construction Contracts" means "Construction Contracts" as defined in the
Remington Loan Agreement; 

        "Remington Development Agreement" has the meaning ascribed thereto in the Remington Loan Agreement; 

        "Remington Facilities" has the meaning ascribed thereto in the Remington Loan Agreement; 

        "Remington Facilities Completion Date" means November 22, 2005; 

        "Remington Future Advance Agreement" means the future advance agreement (in form and substance satisfactory to the Lender, acting
reasonably) in respect of the Remington Mortgage, to be executed and delivered by the Remington Guarantor in connection with the creation of Tranche 2 and registered against title to the
Remington Property; 

        "Remington Guarantee and Indemnity" has the meaning ascribed thereto in Section 5.1(j); 

        "Remington Guarantor" means Remington Park, Inc., and its successors and permitted assigns; 

        "Remington Lands" means the lands legally described on Schedule B; 

        "Remington Lease" means the lease agreement dated June 12, 1986 between the Trustees of the Zoo Trust, as lessor, and Oklahoma
Racing Associates (a predecessor in interest of the Remington Guarantor), as lessee, as assigned to the Remington Guarantor by agreement dated April 15, 1988, pursuant to which the
Borrower has leased the Remington Lands; 

        "Remington Loan Agreement" means the loan agreement made as of July 22, 2005 among the Remington Guarantor, as borrower, the
Lender, as lender, and the Borrower, the Palm Meadows Guarantor and MEC, as guarantors, as the same may hereafter be further amended or restated from time to time; 

19

 

        "Remington Loan OHRC Approval" means the OHRC Approval as defined in the Remington Loan Agreement; 

        "Remington Loan Zoo Consent" means the Zoo Consent as defined in the Remington Loan Agreement; 

        "Remington Property" means the Remington Guarantor's leasehold interest in the Remington Lands, and all improvements (including without
limitation the Remington Facilities) now or hereafter located on the Remington Lands, together with all tangible and intangible property of the Remington Guarantor now or hereafter owned or leased by
the Remington Guarantor in connection with the Remington Lands or the improvements now or hereafter thereon; 

        "Remington Repayment Commencement Date" shall have the meaning ascribed thereto in the Remington Loan Agreement; 

        "Remington Second Mortgage" shall have the meaning ascribed thereto in Section 5.1(k); 

        "Remington Title Policy" has the meaning ascribed thereto in Section 4.3(n)(ix); 

        "Reportable Event" has the meaning given to that term under ERISA and applicable regulations thereunder; 

        "Request for Advance" means each request for an Advance under the Loan to be submitted by the Borrower in a form acceptable to
the Lender; 

        "ROFO Notice" has the meaning ascribed thereto in Section 5.4; 

        "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 Authority regarding health or safety matters or under any Safety Law; 

        "Safety Law" shall mean any Applicable Legal Requirement 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; 

        "Securities" has the meaning ascribed thereto in Section 8.1(u)(ii); 

        "Security" has the meaning ascribed thereto in Section 5.1; 

        "Slots Facilities" means the slots facilities to be installed and operated in the Gulfstream Facilities; 

20

 

        "Slots Facilities Costs" means the Borrower's costs, not to exceed $25,750,000, in respect of the Slots Facilities Initiative; 

        "Slots Facilities Capital Budget" means the capital budget in respect of the Slots Facilities Initiative, prepared by the Borrower and
approved by the Lender; 

        "Slots Facilities Contracts" means all contracts entered into by the Borrower or its agents with Persons for the supply by such Persons of
construction services or materials for the Slots Facilities or any part thereof or services or materials related thereto; 

        "Slots Facilities FF&E" means up to 500 slot machines, and the furniture, fixtures, and equipment relating thereto; 

        "Slots Facilities Holdback" has the meaning ascribed thereto in Section 2.3; 

        "Slots Facilities Holdback Advance" has the meaning ascribed thereto in Section 4; 

        "Slots Facilities Initiative" means: (i) the acquisition of the Slots Facilities FF&E; (ii) the preparation of the
Gulfstream Facilities to permit the installation of the Slots Facilities FF&E in the Gulfstream Facilities, and the installation of the Slots Facilities FF&E in the Gulfstream Facilities, including
the required capital expenditures related thereto, all as more particularly described in the Slots Facilities Initiative Capital Budget; (iii) the acquisition of all necessary licenses in
respect of the installation and/or operation Slots Facilities including, without limiting the generality of the foregoing: (A) a $3,000,000 licensing fee; and (B) a $250,000 responsible
gaming fee; and (iv) start-up and training costs in respect of the Slots Facilities; 

        "Slots Facilities Opening Date" means the date on which the Slots Facilities shall be opened to the public with substantial completion of
the construction in respect thereof and no fewer than 500 slot machines in operation; 

        "Specified Loan Amount" means any time (i) prior to the Gulfstream Repayment Commencement Date, the principal amount of One Hundred
and Fifteen Million Dollars ($115,000,000) and (ii) on and after the Gulfstream Repayment Commencement Date, the aggregate principal amount of Tranche 1 then outstanding exclusive of the
amount of capitalized interest at such time and any portion of such principal amount representing deemed Advances on account of Costs as reasonably determined by the Lender; 

        "Subsequent Advance Date" means the date as defined in Section 4.3; 

        "Subsequent Advances" has the meaning ascribed thereto in Section 4.3; 

        "Substitute Aventura Security" has the meaning ascribed thereto in Section 5.2; 

        "Suitt Stipulated Lump Sum Construction Contract" means the stipulated lump sum contract (AIA A101 - 1997
Edition), dated August 2004, between Gulfstream Park Racing Association, Inc. and Suitt Construction Company, Inc.; 

21

 

        "Taxes" has the meaning ascribed thereto in Section 3.12(a); 

        "The Meadows FF&E" means the furniture, fixtures, equipment, machinery and all process-related additions to the building to be constructed
in accordance with redevelopment of The Meadows Property referred to in the definition of "Additional Financing"; 

        "The Meadows Future Advance Agreement" means the future advance agreement (in form and substance satisfactory to the Lender, acting
reasonably) in respect of The Meadows Mortgage, to be executed and delivered by The Meadows Owner in
the event that the Second Closing (as defined in the Note Agreement) does not occur by the Deadline Date (as defined in the Note Agreement) in connection with the creation of
Tranche 2 and thereafter registered against title to The Meadows Property; 

        "The Meadows Guarantors" means, collectively, Washington Trotting, MEC Pennsylvania and Mountain Laurel; 

        "The Meadows Lands" means the lands of approximately 154 acres and having a building area of approximately
200,000 square feet, in the Township of North Strabane, County of Washington, Commonwealth of Pennsylvania, legally described on Schedule F; 

        "The Meadows Operating Lease" means the lease, dated April 5, 2001, between The Meadows Owner (then known as Ladbroke Pennsylvania
Racing, Inc.), as lessor, and The Meadows Operators, as lessees, in respect of The Meadows Property; 

        "The Meadows Operators" means, collectively, Washington Trotting and Mountain Laurel; 

        "The Meadows Property" means The Meadows Lands, and all improvements now or hereafter located on The Meadows Lands, together with all
tangible and intangible property of any of the Meadows Guarantors now or hereafter owned or leased by any of The Meadows Guarantors in connection with The Meadows Lands or the improvements now or
hereafter thereon; 

        "The Meadows Second Mortgage" has the meaning ascribed thereto in Section 5.1(i)(i); 

        "The Meadows Security" has the meaning ascribed thereto in Section 5.1; 

        "The Meadows Title Policy" has the meaning ascribed thereto in Section 4.1(s); 

        "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 Release; 

        "Title Company" has the meaning ascribed thereto in Section 4.1(r); 

        "Title Policies" means, collectively, the Gulfstream/Aventura Title Policy, The Meadows Title Policy and the Additional
Title Policy; 

22

 

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

        "Tranche 1 Advances" means the First Advance, and Subsequent Advances under Tranche 1; 

        "Tranche 1 First Advance" has the meaning ascribed thereto in Section 4.1; 

        "Tranche 1 First Advance Date" has the meaning ascribed thereto in Section 4.1(a); 

        "Tranche 1 Interest Rate" means, in respect of Tranche 1: (a) from the date of the First Advance until the Gulfstream
Facilities Completion Date, a floating rate equal to 2.55% above MID's notional per annum cost of one month LIBOR borrowings under its principal floating rate credit facility (as designated by
MID from time to time) to the extent that MID is able to determine such rate under its floating rate credit facility, and otherwise 2.55% above MID's notional per annum cost of Base Rate borrowings
under its floating rate credit facility, in each case, compounded monthly and (b) from and after the Gulfstream Facilities Completion Date until the Gulfstream Tranche 1 Maturity Date, a
fixed rate of 10.5% per annum, compounded semi-annually; 

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

        "Tranche 2 Advances" means Subsequent Advances under Tranche 2; 

        "Tranche 2 Arrangement Fee" has the meaning ascribed thereto in Section 4.2; 

        "Tranche 2 Conditions" has the meaning ascribed thereto in Section 4.2; 

        "Tranche 2 First Advance" has the meaning ascribed thereto under Section 4.2; 

        "Tranche 2 First Advance Date" has the meaning ascribed thereto in Section 4.2; 

        "Tranche 2 Interest Rate" means, in respect of Tranche 2, a fixed rate of 10.5% per annum, compounded
semi-annually; 

        "Unmatured Event of Default" has the meaning ascribed thereto in Section 9.1; 

        "Voluntary Pre-Payment Notice" has the meaning ascribed thereto in Section 3.4; and 

        "Zoo Trust" means the Oklahoma City Zoological Trust. 

         1.2    Time    

        All
references in this Agreement and each of the other Loan Documents to a time of day shall mean Miami time, unless otherwise indicated. 

23

 

         1.3    Calculation of Interest and
Fees    

        All
calculations of interest and fees under this Agreement and the other Loan Documents for any period (a) shall include the first day of such period and, provided that payment is
received by Lender, as the case may be, by 11:00 a.m. on the due date for payment, shall exclude the last day of such period and (b) shall be calculated on the basis of a year of
360 days for actual days elapsed. At the written request of the Borrower, the Lender shall advise the Borrower of the floating rate of the Tranche 1 Interest Rate in effect from time to
time prior to the Gulfstream Facilities Completion Date. 

         1.4    Currency    

        All
dollar amounts expressed herein shall refer to the lawful currency of the United States of America. 

         1.5    Governing Law    

        This
Agreement shall be in accordance with and governed by the laws of the State of Florida and the laws of the United States of America applicable therein, without reference to
conflict of interest rules. 

         1.6    Inconsistencies    

        In
the event of any inconsistency or conflict between the terms of this Agreement and the terms of any of the Security, the terms of this Agreement shall govern. 

         1.7    Non-Business
Days    

        Whenever
any payment to be made hereunder shall be stated to be due or any action is required to be taken hereunder on a day which is not a Business Day, such payments shall be made or
such action shall be taken, as the case may be, on the next succeeding Business Day and in the case of the payment of any monetary amount, such extension of time shall in such case be included for the
purpose of computation of interest payable hereunder. 

         1.8    Late Payments    

        If
any payment on a Business Day required to be made hereunder by the Borrower is made after 11:00 a.m., such payment shall be deemed to have been made on the next
Business Day. 

         1.9    Accounting Terms    

        All
accounting terms not specifically defined herein shall be construed in accordance with GAAP and, except as otherwise provided herein, all financial data and statements submitted
pursuant to this Agreement shall be prepared and all financial calculations shall be made in accordance with such principles. 

24

 

         1.10    Interpretation Not Affected by Headings,
Etc.    

        The
division of this Agreement into Articles, Sections, Subsections, Paragraphs and Subparagraphs and the insertion of headings and an index are for convenience of reference only and
shall not affect the construction or interpretation of this Agreement. The terms "this Loan Agreement", "this Agreement", "hereof", "herein", and "hereunder" and similar expressions refer, in respect
of any period or action prior to July 22, 2005, to the Original Gulfstream Loan Agreement, in respect of any period or action during the period from and after July 22, 2005 and prior to
the Closing Date, to the Original Amended and Restated Gulfstream Loan Agreement and in respect of any period or action on or after the Closing Date, to this Amended and Restated Loan Agreement, and
not to any particular Article, Section, Subsection, Paragraph or Subparagraph or other portion hereof and include any agreement or instrument supplementary or ancillary hereto. 

         1.11    Rules of
Construction    

        Words
importing the singular number only shall include the plural and vice versa. Words importing the use of any gender shall include all
genders. Words importing Persons shall include firms and corporations and vice versa. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation". The word "will" shall be construed to have the same meaning and effect as the word "shall". Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document herein (including this Agreement) shall be construed as referring to such agreement, instrument or other document as from time
to time amended, supplemented, restated or otherwise modified (subject to any restrictions on such amendments, supplements, restatements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and permitted assigns, (c) unless otherwise expressly stated, all references in these Provisions to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, these Provisions, but all such references elsewhere in this Agreement shall be
construed to refer to this Agreement apart from these Provisions, (d) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as
amended, modified or supplemented from time to time and (e) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and contract rights. 

         1.12    Severability    

        In
the event that one or more of the provisions contained in this Agreement shall be invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality or
enforceability of the remaining provisions hereof shall not be affected or impaired thereby; provided, however, that if any provision contained herein which materially affects the ability of the
Borrower to perform its obligations hereunder and under the Security or materially affects the validity, value or enforceability of this Agreement or the Security shall be invalid, illegal or
unenforceable, the Lender may, by written notice to the Borrower, elect to terminate its obligation to make any Advances hereunder. Each of the provisions of this Agreement is hereby declared to be
separate and distinct. 

25

  

         1.13    References to Remington Loan
Agreement    

        All
terms defined in Section 1.1 by reference to the Remington Loan Agreement shall have the respective meanings ascribed thereto in the Remington Loan Agreement. 

         1.14    Schedules    

        The
following schedules are attached hereto and are incorporated in and are deemed to be an integral part of this Agreement: 

        Schedule A:
Legal Description of the Aventura Lands 

        Schedule B:
Legal Description of the Remington Lands 

        Schedule C:
Permitted Encumbrances 

        Schedule D:
Legal Description of the Palm Meadows Training Center Lands 

        Schedule E:
Legal Description of the Gulfstream Lands 

        Schedule F:
Legal Description of The Meadows Lands 

 
 

ARTICLE 2
  
    THE LOAN  
    

         2.1    Loan Amount    

        Subject
to the terms and conditions of this Agreement, the Lender agrees to lend to the Borrower an amount equal to the Loan Amount (the "Loan"). The Loan shall be available in
two tranches on the terms and conditions set out herein. The maximum principal amount of the first tranche ("Tranche 1") of the Loan that shall
be available to the Borrower shall be the Tranche 1 Loan Amount, which tranche shall be used solely for the purpose of financing the Construction Costs and the Lender's Costs in respect thereof
as herein contemplated and for no other purpose. The maximum principal amount of the second tranche ("Tranche 2") of the Loan that shall be
available to the Borrower shall be the Tranche 2 Loan Amount, which tranche shall be used solely for the purpose of financing the Slots Facilities Costs, the Tranche 2 Arrangement Fee
and the Lender's Costs in respect thereof as herein contemplated and for no other purpose. 

        Any
Advances made and subsequently repaid under Tranches 1 and/or 2 may not be reborrowed. 

         2.2    Advances    

        The
Borrower shall be entitled to obtain Advances under the Loan upon the following terms and conditions: 

	(a)
	the
Borrower shall have given to the Lender notice of its intention to obtain an Advance in accordance with the provisions of Sections 4.1, 4.2 or 4.3, as the case
may be; 

26

 

	(b)
	Advances
shall not occur more often than twice per month and shall be in amounts which are not less than Two Hundred and Fifty Thousand Dollars ($250,000) each, other than the last
Advance, which may be for a lesser amount and other than Holdback Advances, each of which shall be in an amount of not less than One Hundred Thousand Dollars ($100,000);

	(c)
	the
total of all Advances made hereunder in respect of Tranche 1 shall not exceed the principal amount of One Hundred and Fifteen Million Dollars ($115,000,000) plus the Costs
relating to Tranche 1 in respect of which deemed Advances may be made pursuant to Section 3.10, exclusive of any deemed Subsequent Advances pursuant to which interest accrued and
remaining unpaid prior to the Gulfstream Facilities Completion Date is capitalized to constitute part of the Tranche 1 Loan Amount in accordance with this Agreement;

	(d)
	the
total of all Advances made hereunder in respect of Tranche 2 shall not exceed the principal amount of Twenty-Five Million Seven Hundred and Fifty Thousand
Dollars ($25,750,000) plus the Tranche 2 Arrangement Fee and the Costs relating to Tranche 2 in respect of which deemed Advances may be made pursuant to Section 3.10, exclusive of
any deemed Subsequent Advances pursuant to which interest accrued and remaining unpaid prior to the Gulfstream Repayment Commencement Date is capitalized to constitute part of the Tranche 2
Loan Amount in accordance with this Agreement;

	(e)
	the
Borrower shall have satisfied, on or before the date of the First Advance, the conditions set out in Section 4.1 and have complied with the requirements of
this Section;

	(f)
	the
Borrower shall have satisfied, on or before the date of any Subsequent Advance, the conditions set out in Section 4.3 and shall have complied with the requirements
of this Section for each Subsequent Advance;

	(g)
	the
Borrower shall have satisfied, on or before the date of the Tranche 2 Advances, the conditions set out in Sections 4.2;

	(h)
	no
Unmatured Event of Default or Event of Default shall have occurred and be continuing; and

	(i)
	no
Advances under Tranche 1 shall be made subsequent to December 31, 2006 and no Advances under Tranche 2 shall be made subsequent to
February 28, 2007. 

         2.3    Holdbacks    

        Each
Advance (other than a Holdback Advance) shall be subject to a holdback by the Lender in an amount determined by the Lender, acting reasonably, and taking into account Applicable
Legal Requirements, and, in respect of Tranche 1 Advances, the Construction Contracts and any other construction contracts relating to the Reconstruction (each such holdback in respect of
Tranche 1 being referred to herein as a "Reconstruction Holdback") and, in respect of Tranche 2 Advances, the Slots Facilities Contracts
and any other construction contracts relating to the Slots Facilities (each such holdback in respect of Tranche 2 being referred to herein as a "Slots Facilities
Holdback"), all of which holdbacks shall be advanced to the Borrower in accordance with the provisions of Sections 2.2 and 2.4. 

27

 

         2.4    Holdback
Advances    

         (a)    Tranche 1    

	(i)
	Upon
notification to the Lender by the Cost Consultant of the expiry of all applicable lien periods that relate to the Reconstruction or any discrete portion of the
Reconstruction or any contract or subcontract relating to the Reconstruction, the Borrower shall be entitled to obtain, as an Advance (herein called a "Reconstruction Holdback
Advance"), the amounts held back pursuant to Section 2.3 in respect of such Reconstruction (or any discrete portion thereof or any contract or subcontract
relating thereto, as applicable) but only upon and in compliance with the following terms and conditions:

	(A)
	the
Borrower shall have delivered a Request for Advance at least five Business Days prior to the date of the Reconstruction Holdback Advance which Request for Advance shall reflect
compliance with this Section 2.4(a) and shall otherwise be complete and acceptable to the Lender;

	(B)
	the
Borrower shall, on or before the date of the Advance in question, have satisfied the conditions set out in Section 4.3 and no Unmatured Event of Default or Event of
Default shall have occurred and be continuing;

	(C)
	there
shall not be any claims for Encumbrances (other than Permitted Encumbrances) registered against title to the applicable Property nor shall the Lender have received notice of any
such claim and the Borrower shall have delivered to the Lender statutory declarations or lien waivers, in form and terms acceptable to the Lender, from all Persons entitled to payment pursuant to the
Construction Contract in question to the effect that, subject to receipt of the holdback amounts in question, they have been fully paid for the work completed to the date thereof and waiving any
rights they may have against the Lender in respect of non-payment for such work to date; and

	(D)
	payment
of a Reconstruction Holdback Advance shall only be made contemporaneously with the payment of another Advance other than another Reconstruction Holdback Advance or a deemed
Advance referred to in Section 3.10; provided that this clause (a)(i)(D) shall not apply to any Reconstruction Holdback Advance to be made after the completion of the Reconstruction. 

28

 

         (b)    Tranche 2    

	(i)
	Upon
notification to the Lender by the Cost Consultant of the expiry of all applicable lien periods that relate to the Slots Facilities or any discrete portion of the
Slots Facilities or any contract or subcontract relating to the Slots Facilities, the Borrower shall be entitled to obtain, as an Advance (herein called a "Slots Facilities
Holdback Advance"), the amounts held back pursuant to Section 2.3 in respect of such Slots Facilities (or any discrete portion thereof or any contract or
subcontract relating thereto, as applicable) but only upon and in compliance with the following terms and conditions:

	(A)
	the
Borrower shall have delivered a Request for Advance at least five Business Days prior to the date of the Slots Facilities Holdback Advance which Request for Advance shall reflect
compliance with this Section 2.4(b) and shall otherwise be complete and acceptable to the Lender;

	(B)
	the
Borrower shall, on or before the date of the Advance in question, have satisfied the conditions set out in Section 4.3 and no Unmatured Event of Default or Event of
Default shall have occurred and be continuing;

	(C)
	there
shall not be any claims for Encumbrances (other than Permitted Encumbrances) registered against title to the applicable Property nor shall the Lender have received notice of any
such claim and the Borrower shall have delivered to the Lender statutory declarations or lien waivers, in form and terms acceptable to the Lender, from all Persons entitled to payment pursuant to the
Slots Facilities Contract in question to the effect that, subject to receipt of the holdback amounts in question, they have been fully paid for the work completed to the date thereof and waiving any
rights they may have against the Lender in respect of non-payment for such work to date; and

	(D)
	payment
of a Slots Facilities Holdback Advance shall only be made contemporaneously with the payment of another Advance other than another Slots Facilities Holdback Advance or a
deemed Advance referred to in Section 3.10; provided that this clause 2.4(b)(i)(D) shall not apply to any Slots Facilities Holdback Advance to be made after the completion of the Slots
Facilities. 

29

 

         2.5    Advance Payments    

        The
proceeds of all Advances shall be paid to the Borrower by way of deposit into the Borrower's current account as specified to the Lender in writing from time to time, provided that
the Lender may, upon the direction of the Borrower, pay all or part of such proceeds directly to a third party to the extent of any Construction Costs or Slots Facilities Costs, as the case may be,
owed to such party which are the subject of such Advance. At its discretion, the Lender may make payment of all or part of such proceeds directly to a third party where necessary in order to preserve
the priority of the Security. The Borrower acknowledges that all proceeds advanced hereunder are subject to the terms hereof, including the restrictions set out in Section 8.1(u). 

         2.6    Evidences of
Advances    

        The
Lender shall maintain a book of account evidencing the indebtedness of the Borrower resulting from each Advance made from time to time and the amounts of principal, interest and
other fees payable and paid, and the amount of interest accrued in accordance with the terms hereof, from time to time hereunder. In any legal action or proceeding in respect of this Agreement, the
entries made in such book shall be in the absence of manifest error conclusive evidence of the amounts of the obligations of the Borrower therein recorded. 

         2.7    Term    

        Unless
otherwise accelerated pursuant to the Loan Documents (as hereinafter defined), Tranche 1 shall mature on the date on the tenth anniversary date of the Gulfstream
Facilities Completion Date (the "Gulfstream Tranche 1 Maturity Date") and Tranche 2 shall mature on December 31, 2011
(the "Gulfstream Tranche 2 Maturity Date"). 

         2.8    Cost Consultant    

        In
connection with the transactions contemplated hereunder and under the other Loan Documents, the Lender shall have the right (but not the duty) to employ such consultants
(hereinafter a "Cost Consultant"), as it may deem appropriate from time to time, to (a) review and make recommendations regarding the work to be
performed pursuant to the Construction Contracts and the Slots Facilities Contracts, (b) inspect the Gulfstream Property from time to time to ensure that the Gulfstream Facilities are being
duly reconstructed in accordance with the Construction Contracts and the Loan Documents and the Slots Facilities are being duly constructed in accordance with the Slots Facilities Contracts and the
Loan Documents, (c) review and make recommendations regarding any elements of a request for disbursement, (d) obtain information and documentation respecting the reconstruction of the
Gulfstream Facilities, the acquisition of the Slots Facilities FF&E, and the construction of the Slots Facilities, and attend meetings respecting the reconstruction of the Gulfstream Facilities, the
acquisition of the Slots Facilities FF&E, and the construction of the Slots Facilities and formulate reports for the Lender pertaining to the reconstruction of the Gulfstream Facilities, the
acquisition of the Slots Facilities FF&E, and the construction of the Slots Facilities and (e) perform such other construction-related services with respect to the Gulfstream Property as the
Lender from time to time may require, all solely on behalf of the Lender. The reasonable costs and disbursements of such consultants shall be paid by the Borrower upon demand from the Lender, which
demand shall be accompanied by an invoice from the Cost Consultant or the Lender. Neither the Lender nor any Cost Consultant shall be deemed to have assumed any responsibility to, or be liable to, the
Borrower or any Guarantor with respect to any actions taken or omitted by the Lender or such consultants pursuant to this Section. The Borrower shall be entitled to receive, at its expense, copies of
all reports of the Cost Consultant, but shall not be entitled to rely on any statements or actions of the Cost Consultant or any of the Lender's other consultants. Neither the Cost Consultant nor any
other consultant retained by the Lender shall have the power or authority to grant any consents or approvals or bind the Lender in any manner, absent written confirmation from the Lender of the
accuracy of the information conveyed by such consultant to the Borrower. Any action or determination referred to hereunder as being taken by the Cost Consultant may, at the Lender's election in its
sole and absolute discretion, instead be taken by the Lender. In the event that at any time there shall be no Cost Consultant in place, then all actions or determinations herein specified to be taken
or made by the Cost Consultant shall be taken or made by the Lender. 

30

 
 
 

ARTICLE 3
  
    PAYMENTS AND INTEREST  
    

         3.1    Repayment    

        Principal
and interest (including capitalized interest) in respect of Tranche 1 shall, subject to the repayment deferral contemplated below, be payable monthly in advance in
12 equal blended monthly instalments per annum of principal and interest (except as otherwise herein provided, based on a 25-year amortization commencing on the Gulfstream
Facilities Completion Date) without demand from and after January 1, 2007 (the "Gulfstream Repayment Commencement Date"). 

        Principal
and interest (including capitalized interest) in respect of Tranche 2 shall, subject to the repayment deferral contemplated below, be payable monthly in advance in
12 equal blended monthly instalments per annum of principal and interest (except as otherwise herein provided, based on a 25-year amortization commencing on the Gulfstream Repayment
Commencement Date) without demand from and after the Gulfstream Repayment Commencement Date. 

        Without
limiting the generality of Sections 3.4 and 9.2, payment of principal and interest payable under this Agreement by the Borrower shall commence without demand on the
Gulfstream Repayment Commencement Date. 

        The
Borrower shall make all payments due hereunder by payments to the Lender at a bank account specified by the Lender from time to time. 

        On
the Gulfstream Tranche 1 Maturity Date, the Borrower shall pay to the Lender the entire amount then owing under Tranche 1 (including without duplication, all accrued and
unpaid interest, fees and other amounts owing), and the Gulfstream Tranche 1 Unamortized Amount (including any interest accrued and added to principal) as of such date. 

        On
the Gulfstream Tranche 2 Maturity Date, the Borrower shall pay to the Lender the entire amount then owing under Tranche 2 (including without duplication, all accrued and
unpaid interest, fees and other amounts owing), and the Gulfstream Tranche 2 Unamortized Amount (including any interest accrued and added to principal) as of such date. 

31

 

         3.2    Limitation on
Prepayment    

        The
Borrower shall have no right to pre-pay or otherwise repay the amounts owing under this Agreement except in accordance with the provisions of Section 3.4. 

         3.3    Gulfstream Loan Consent and Waiver
Agreement    

        The
parties hereby agree that, notwithstanding the amendment and restatement of the Original Amended and Restated Gulfstream Loan Agreement contained herein, the Gulfstream Loan Consent
and Waiver Agreement continues to be in full force and effect in accordance with its terms. 

         3.4    Prepayment    

         (a)    Repayment of the Loan    

        The
Borrower shall have the right to pre-pay the Loan in full, provided that: (i) the Borrower pays the principal amount of the Loan then outstanding (together with,
but without limitation, all accrued and unpaid interest, fees and other Indebtedness owing, (including any interest capitalized and added to the principal) as of such date)
(the "Pre-Payment Amount") together with the Pre-Payment Make-Whole Amount; and (ii) the Borrower
cancels any undrawn portion of the Loan. Notice of such voluntary pre-payment (a "Pre-Payment Notice") shall be given by
the Borrower (which notice shall be irrevocable when given) to the Lender not later than 30 Business Days prior to the date of such pre-payment, specifying the date of such
pre-payment (the "Pre-Payment Date"). 

        The
"Pre-Payment Make-Whole Amount" is the amount that, if invested by the Lender on the Pre-Payment
Date for a term equal to the time period from the Pre-Payment Date to the Gulfstream Tranche 1 Maturity Date at a rate equal to the U.S. Government Treasury Yield plus
150 basis points as of the Pre-Payment Date, would yield an amount necessary to provide the Lender with a yield on the Specified Loan Amount such that the aggregate of the
Pre-Payment Make-Whole Amount paid and the earned income would equal the interest that the Lender would have received under the Loan from the Pre-Payment Date to
the Gulfstream Tranche 1 Maturity Date. For the purposes hereof, "U.S. Government Treasury Yield" means a rate of interest per annum equal to the weekly average yield to maturity of
United States Treasury Notes that have a constant maturity that corresponds to the remaining term to maturity of the Loan as of the Pre-Payment Date, calculated to the nearest
1/12th of a year (the "Remaining Term"). The Treasury Yield will be determined as of the third Business Day immediately preceding the
Pre-Payment Date. The weekly average yields of United States Treasury Notes will be determined by reference to the most recent statistical release published by the Federal Reserve
Bank of New York and designated "H.15(519) Selected Interest Rates" or any successor release (the "H.15 Statistical
Release"). If the H.15 Statistical Release sets forth a weekly average yield for United States Treasury Notes having a constant maturity that is the same as the
Remaining Term, then the Treasury Yield will be equal to such weekly average yield. In all other cases, the Treasury Yield will be calculated by interpolation, on a straight-line basis,
between the weekly average yields on the United States Treasury Notes that have a constant maturity closest to and greater than the remaining term and the United States Treasury Notes
that have a constant maturity closest to and less than the Remaining Term (in each case as set forth in the H.15 Statistical Release). Any weekly average yields so calculated by
interpolation will be rounded to the nearest 1/100th of 1%, with any figure of 1/200 of 1% or above being rounded upward. If weekly average yields for United States Treasury Notes are
not available in the H.15 Statistical Release or otherwise, then the Treasury Yield will be calculated by interpolation of comparable rates selected by the Independent Investment Banker. For
purposes of this Section 3.4, "Independent Investment Banker" means a primary United States Government securities dealer appointed by the
Lender after consultation with the Borrower. 

32

 

        On
receipt of full payment of the Pre-Payment Amount plus the Pre-Payment Make-Whole Amount (plus all costs incurred by the Lender in connection with
such pre-payment), which amounts will be paid together by the Borrower on the date set forth in the Pre-Payment Notice (which date will be no less than 15 days and no
more than 30 days after the date on which the Lender receives the Pre-Payment Notice), the Lender will promptly execute and deliver (or cause the Administrative Agent to
execute and deliver) a full release and discharge of the Security held by them with respect to the transactions and obligations contemplated herein and complete or authorize discharges of all security
filings made in respect of same, but in no event shall such release operate as a release of any indemnities which are stated to survive a termination and/or release of any such security
or obligations. 

         (b)    Repayment of Tranche 2    

        In
addition to the Borrower's right to pre-repay the Loan in full, as set out in Section 3.4(a) above, the Borrower shall have the right to pre-pay
Tranche 2, in whole or in part, without payment of any make-whole amount and without exercising its right under Section 3.4(a) above. Notice of such voluntary
pre-payment (a "Tranche 2 Pre-Payment Notice") shall be given by the Borrower (which notice shall be irrevocable
when given) to the Lender not later than 30 Business Days prior to the date of such pre-payment, specifying the date of such pre-payment
(a "Tranche 2 Pre-Payment Date"). 

         3.5    Interest    

        Subject
to Section 3.8, all Tranche 1 Advances, including accrued and unpaid interest, fees, expenses and Tranche 1 Lender's Costs, shall bear interest, before and
after default, at the Tranche 1 Interest Rate, with interest on overdue interest at the rate as was applicable immediately prior to any arrears, and all Tranche 2 Advances, including
accrued and unpaid interest, fees, expenses and Tranche 2 Lender's Costs, shall bear interest, before and after default, at the Tranche 2 Interest Rate, with interest on overdue interest
at the rate as was applicable immediately prior to any arrears. 

        Interest
shall accrue daily, be calculated in accordance with Section 1.3 and be due and payable in accordance with Section 3.1; provided, however, that:
(a) any interest payable in respect of Tranche 1 accruing prior to the Gulfstream Repayment Commencement Date shall be capitalized and added to the then outstanding principal amount of
Tranche 1 on each Interest Date, in which event the interest amount so capitalized shall be treated as principal for all purposes; (b) any interest payable in respect of Tranche 2
accruing prior to the Gulfstream Repayment Commencement Date shall be capitalized and added to the then outstanding principal amount of Tranche 2 on each Interest Date, in which event the
interest amount so capitalized shall be treated as principal for all purposes; (c) any interest accruing in respect of Tranche 1 and/or Tranche 2 from and including the Gulfstream
Repayment Commencement Date shall accrue daily, be calculated in accordance with Section 1.3, be compounded semi-annually and be due and payable commencing on the Gulfstream
Repayment Commencement Date, in accordance with the terms set out in Section 3.1. 

33

 

         3.6    Unwinding Costs    

        The
Borrower shall, from time to time, indemnify the Lender and hold it harmless from and against any and all costs, losses, liabilities or expenses, including losses of profits, whether
on account of interest paid by the Lender to lenders of funds borrowed by it or depositors of funds deposited with it to make or maintain any Advance which it may suffer or incur as a result of any
failure by the Borrower to borrow any funds after requesting an Advance (except where such failure is the result of the refusal of the Lender to make such funds available where the Borrower is
otherwise entitled to borrow such funds hereunder). The obligations of the Borrower under this Section 3.6 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. 

         3.7    Application of Expropriation
Proceeds    

        Upon
the lawful expropriation or condemnation of the whole or any portion of any of the Properties, the proceeds of such expropriation or condemnation, after deducting amounts required
to satisfy the interests of Permitted Encumbrances, up to but not exceeding the amount of the Loan outstanding at the time of the expropriation or condemnation shall be paid immediately over to the
Lender, which shall not be considered a pre-payment. The proceeds of such expropriation or condemnation may be applied by the Lender in repayment of the principal amount of the Loan then
outstanding (without payment of a Pre-Payment Make Whole Amount or otherwise cancelling any undrawn portion of the Loan) in accordance with the provisions hereof. 

         3.8    Interest on Fees and Other
Charges    

        All
fees and other charges or amounts outstanding in respect of the Loan after demand, maturity, default or judgment owing to the Lender shall bear interest at a rate per annum equal to
the Tranche 2 Interest Rate (unless Tranche 2 has been repaid in full prior to such demand, maturity, default or judgment, in which event such fees and other charges or amounts
outstanding in respect of the Loan after demand, maturity, default or judgment owing to the Lender shall bear interest at a rate per annum equal to the Tranche 1 Interest Rate). Such interest
shall be determined daily, payable on demand and compounded monthly in arrears on the last day of each calendar month. 

34

  

         3.9    Gulfstream Excess Cash Flow
Sweep    

        From
and including the date of this Agreement to and including the Gulfstream Excess Cash Flow Sweep Termination Date, the Borrower shall be required to pay
(the "Gulfstream Excess Cash Flow Sweep") to the Lender, on or before the 50th business day following the end of each applicable fiscal
year, an amount equal to 75% of Gulfstream Excess Cash Flow for application against the principal outstanding under Tranche 2. 

         3.10    Costs, Expenses,
Etc.    

        The
Borrower agrees that all Costs (including, without limitation, Tranche 1 Pre-Advance Expenses and Tranche 2 Pre-Advance Expenses) incurred by
the Lender, including in connection with the preparation, execution, delivery and amendment of this Agreement, the Security, any other Loan Documents and/or the Lender's due diligence, including
legal, accounting, environmental and other professional fees and expenses, shall be for the account of the Borrower, and (a) provided that there has not occurred an Event of Default or
Unmatured Event of Default which is continuing, and provided that such amounts are incurred prior to the Gulfstream Repayment Commencement Date, shall be deemed for all purposes to have been paid
through deemed Advances by the Lender to Borrower under this Agreement and (b) provided that such amounts are incurred on and after the Gulfstream Repayment Commencement Date or prior to such
date if an Event of Default has occurred and is continuing, shall (unless the Lender, in its sole discretion, agrees in writing with the Borrower that such amounts shall be deemed for all purposes to
have been paid through deemed Advances by the Lender to Borrower under this Agreement) be paid by the Borrower to the Lender promptly following receipt of an invoice therefor. The Borrower further
agrees to promptly pay following receipt of an invoice therefore all such reasonable Costs incurred by the Lender, and all such Costs incurred by the Lender in connection with the underwriting,
approval, documentation, modification, workout, collection or enforcement of the Loan or any of the Loan Documents (as applicable), including, without limitation, all fees and expenses,
including attorneys' fees and expenses incurred by the Lender in the interpretation and enforcement of its rights hereunder and under the Loan Documents, including the interpretation and enforcement
of any of the Construction Contracts by the Lender, and all such Costs in respect of Tranche 1 shall be included as additional indebtedness bearing interest at the Tranche 1 Interest
Rate set forth hereunder and in the Gulfstream Note until paid, and all such Costs in respect of Tranche 2 shall be included as additional indebtedness bearing interest at the Tranche 2
Interest Rate set forth hereunder and in the Gulfstream Note until paid. For the purposes hereof, "Costs" means all reasonable expenditures and expenses
which may be paid or incurred by or on behalf of the Lender, including repair costs, payments to remove or protect against liens, attorneys' (primary and local) and legal fees and costs (including,
but not limited to, all appellate level and post-judgment proceedings), receivers' fees, appraisers' fees, engineers' fees, accountants' fees, independent consultants' fees (including
environmental and insurance consultants), all reasonable costs and expenses incurred in connection with any of the foregoing, the Lender's out-of-pocket costs and expenses
related to any audit or inspection of the Properties, outlays for documentary and expert evidence, stenographers' charges, documentary transfer and stamp taxes, intangible taxes, escrow fees,
publication costs, and costs (which may be estimates as to items to be expended after entry of an order or judgment) for procuring all such abstracts of title, title searches and examination, title
insurance policies, and similar data and assurances with respect to title as the Lender may deem
reasonably necessary either to prosecute any action or to evidence to bidders at any sale of any collateral the true condition of the title to, or the value of, such collateral. "Costs" shall also
include the reasonable fees and expenses of any of the Lender's consultants retained by the Lender pursuant to the terms of this Agreement. Following the Gulfstream Facilities Completion Date, in the
event that the Borrower shall at any time fail to remit payments of any such Costs to the Lender within 30 days of the Lender's delivery of an invoice therefor, then the Lender reserves the
right, at any time(s) in the future, to require the Borrower to deposit with the Lender an amount of cash equal to the estimated Costs to be incurred by the Lender
(a "Cost Retainer") on account of any pending matter which may result in Costs being incurred by the Lender which the Borrower is responsible to
pay to the Lender hereunder. In such an event, the Lender shall have the right to require a Cost Retainer prior to being obligated to take any action required of the Lender under the Loan Documents.
Upon written request from the Borrower, the Lender shall provide to the Borrower an accounting as to the receipt and expenditure of each Cost Retainer delivered to the Borrower. 

35

 

         3.11    Maximum Interest
Rate    

        Notwithstanding
anything to the contrary contained herein in the event that the Tranche 1 Interest Rate and/or the Tranche 2 Interest Rate exceeds the maximum rate of
interest allowed by applicable law, as amended from time to time, in any interest period during the term of the Loan, only the maximum rate of interest allowed shall then be charged but thereafter in
any interest period or periods during which the rate is less than the maximum rate allowed by applicable law, as amended from time to time, the Tranche 1 Interest Rate and/or the
Tranche 2 Interest Rate, as the case may be, shall be increased so that the Lender may collect interest in such amount as may have been charged pursuant to the terms of the Gulfstream Note, but
which was not charged because of the limitation imposed by law. It is the intent of the parties hereto that in no event shall the amount of interest due or payment in the nature of interest payable
hereunder exceed the maximum rate of interest allowed by applicable law, as amended from time to time, and in the event any such payment is paid by the Borrower or received by the Lender, then such
excess sum shall be credited as a payment of principal, unless the Borrower shall notify the Lender, in writing, that the Borrower elects to have such excess sum returned to it forthwith. The Lender
may, in determining the maximum rate of interest allowed under applicable law, as amended from time to time, take advantage of: (i) the rate of interest permitted by Section 655.56,
Florida Statutes, by reason of both Section 687.12 Florida Statutes ("Interest rates; parity among licensed lenders or creditors") and 12 United States Code, Sections 85
and 86, and (ii) any other law, rule, or regulation in effect from time to time, available to the Lender which exempts the Lender from any limit upon the rate of interest it may charge
or grants to Lender the right to charge a higher rate of interest than that allowed by Florida Statutes, Chapter 687. 

36

 

         3.12    Payments Free of Withholding
Taxes    

	(a)
	All
payments required to be made by the Borrower hereunder shall be made to the Lender free and clear of and without deduction for any and all present and future taxes (other than
income taxes payable by the Lender), withholdings, levies, duties and other governmental charges ("Taxes") with the exception of any Taxes payable by
reason of the Lender or any Permitted Lender Assignee being a non-resident of the United States of America. Upon request by the Lender, the Borrower shall furnish to the Lender a
receipt for any Taxes paid by the Borrower pursuant to this Section 3.12 or, if no Taxes are payable with respect to any payment required to be made by the Borrower hereunder, either a
certificate from each appropriate taxing authority or an opinion of counsel acceptable to the Lender, in either case stating that such payment is exempt from or not subject to Taxes. If any Taxes are
paid or payable by the Lender, other than Taxes which were payable solely by reason of the Lender becoming a non-resident of the United States of America or the assignment by the
Lender, at a time when no demand had been made by the Lender hereunder or, if demand has been made, the time period within which the Borrower must respond to such demand has not expired, of any of its
rights hereunder or under the Security to a Person that was a non-resident of the United States of America, the Borrower will, upon demand by the Lender, and whether or not such
Taxes shall be correctly or legally asserted, indemnify the Lender for such payments, together with any interest, penalties and expenses in connection therewith plus interest thereon at the applicable
rate under the Loan, as the case may be (calculated as if such payments constituted overdue amounts of principal as of the date of making such payments). In the event that any such Taxes paid by the
Lender and reimbursed by the Borrower are incorrectly or illegally asserted, the Lender shall, at the request and expense of the Borrower, cooperate with the Borrower in order to enable the Borrower
to obtain a payment of such Taxes. The obligations of the Borrower under this Section 3.12 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.

	(b)
	The
Lender shall indemnify and save the Borrower harmless from and against any Loss arising by reason of the Lender or any Permitted Lender Assignee being a non-resident
of the United States of America, including, without limitation, the loss of any deductions or credits in respect of Taxes relating to interest paid pursuant to this Agreement. 

         3.13    Concurrent Exercise of Prepayment
Rights    

        Notwithstanding
anything to the contrary in Section 3.4, the parties agree that, in the event the Remington Loan Agreement shall be in effect, it is a condition to the exercise by
the Borrower of its prepayment rights under Section 3.4(a) that the Remington Guarantor exercise its prepayment rights under Section 3.4 of the Remington Loan Agreement concurrently and
that any amounts payable hereunder and thereunder as a result of such concurrent exercise of prepayment rights are due and payable, and are paid, on the same day. 

37

 
 
 

ARTICLE 4
  
    ADVANCES UNDER THE LOAN  
    

         4.1    Tranche 1 First Advance    

        The
Borrower shall be entitled to obtain the first Advance under Tranche 1 (herein called the "Tranche 1 First Advance")
upon, and only in compliance with the following terms and upon satisfaction of the following conditions, all in form and substance satisfactory to the Lender in its sole discretion: 

	(a)
	the
Tranche 1 First Advance shall occur upon a date (herein called the "Tranche 1 First Advance Date") determined by the
Borrower, provided that the Borrower shall have delivered to the Lender a complete and accurate Request for Advance, which Request for Advance shall reflect compliance by the Borrower with the
provisions of this Section 4.1 and, among other things, shall contain the certificate of a senior officer of the Borrower which shall:

	(i)
	certify
as to the aggregate amount of Construction Costs paid or incurred and payable by the Borrower at the date thereof which are the subject of the Request for
Advance in question;

	(ii)
	show
any construction lien holdback;

	(iii)
	certify
that all such Construction Costs are in accordance with the budget and Plans and that the amount remaining to be advanced under the Loan for the Reconstruction
is not less than the remaining Construction Costs that will be required to achieve completion of the Reconstruction; and

	(iv)
	certify
that, to the best of such Person's knowledge, all construction to the date of the certificate is in material compliance with municipal by-laws, all
other governmental requirements, the issued building permits and the Plans, and that there are no material infractions in respect thereof whatsoever. 

Such
certificate, as part of the Request for Advance, shall be supported by evidence satisfactory to the Lender, acting reasonably, and, if requested by the Lender, shall be accompanied by receipts,
invoices, where available and where such costs have not yet been paid, or other satisfactory evidence for the payment of all Construction Costs forming part of the Advance requested, which shall be
verified by and acceptable to the Lender. In addition, the Request for Advance shall be accompanied by: (a) copies of all lien waivers or releases for all lienable work performed on the
Gulfstream Property and paid for with the proceeds of the prior disbursement or otherwise (all such waivers or releases to be in such form as is reasonably required by Lender),
(b) copies of all contractor's affidavits as to payment of work to the date and the Borrower's affidavit as to such work as is not covered by the Construction Contracts, each together with
supporting documentation evidencing to the Lender's satisfaction payment of all Construction Costs to date and funded under the Loan, (c) a report in form and content satisfactory to the Lender
from the Cost Consultant, and (d) such other documents supporting the Request for Advance as the Lender may reasonably request; 

	(b)
	the
Tranche 1 First Advance shall include an amount equal to the Lender's Tranche 1 Pre-Advance Expenses (as determined by the Lender) that have been
invoiced to the Lender prior to the date of the Tranche 1 First Advance, and the cash portion of such Tranche 1 First Advance shall be in an amount which does not exceed the value of the
work in place for the Reconstruction, as determined by the Cost Consultant, provided that the amount remaining to be advanced under the Loan for the Reconstruction shall never be less than the
remaining Construction Costs that will be required to achieve completion of the Reconstruction, as estimated by the Cost Consultant; 

38

 

	(c)
	the
Borrower shall have made available to the Lender true copies, where available, or otherwise photocopies of all Construction Contracts;

	(d)
	the
Borrower shall have delivered to the Lender: (i) an acknowledgement from Suitt Construction Company, Inc. concerning the status of the Suitt Stipulated Lump Sum
Construction Contract; and (ii) an acknowledgement from Vecellio Group, Inc. concerning the status of the Ranger Stipulated Lump Sum Construction Contract, in each case in form and
substance satisfactory to the Lender;

	(e)
	the
Borrower and The Meadows Guarantors shall have made available to the Lender certified copies of their incorporating documents and shall have delivered to the Lender incumbency
certificates with respect to the officers of the Borrower and the Guarantors signing this Agreement and the Security;

	(f)
	the
Borrower and The Meadows Guarantors shall have delivered to the Lender resolutions authorizing the Loan and any documents to be provided pursuant to the provisions hereof, and all
documents evidencing any necessary corporate action of the Borrower and The Meadows Guarantors certified by appropriate officers thereof;

	(g)
	the
representations and warranties set forth in Article 6 shall be true and accurate in all respects as of Tranche 1 First Advance Date, and the Borrower and The Meadows
Guarantors shall have delivered to the Lender a certificate of senior officers of each of the Borrower and The Meadows Guarantors to the foregoing effect;

	(h)
	the
Borrower and The Meadows Guarantors shall have made available to the Lender true copies of all of the Material Agreements then in existence, all of which shall be satisfactory to
the Lender and its counsel, acting reasonably;

	(i)
	the
Lender shall have received the Original Security, all in form and substance satisfactory to the Lender, and all action required by the Borrower and The Meadows Guarantors to fully
perfect and maintain such Original Security of and upon the assets of the Borrower and The Meadows Guarantors to which it applies shall have been successfully completed, including completion of all
security filings under UCC and real property registrations;

	(j)
	the
Borrower shall have delivered to the Lender a certificate of the Borrower in a form satisfactory to the Lender certifying the good standing of the Borrower (and any other
entities controlled by or otherwise affiliated with the Borrower) under, and the validity and currency in force of, all Permitted Encumbrances and Material Agreements; 

39

 

	(k)
	the
Lender shall be satisfied, acting reasonably, with the budget for the Reconstruction;

	(l)
	the
Cost Consultant shall have performed an inspection of the Reconstruction and reported to the Lender that the amount of work in place and the cost to complete in respect of the
Reconstruction do not exceed an aggregate of One Hundred and Fifteen Million Dollars ($115,000,000);

	(m)
	the
Borrower shall have made available to the Lender tax certificates in respect of each of the Gulfstream/Aventura Properties, and The Meadows Guarantors shall have made available to
the Lender tax certificates in respect of The Meadows Property, in each case evidencing that all municipal taxes due in respect thereof up to the Tranche 2 First Advance Date have been paid
in full;

	(n)
	no
litigation, regulatory or other proceeding shall have been commenced seeking to restrict the Borrower and/or the Guarantors from completing the transactions contemplated hereby;

	(o)
	without
derogating from the Borrower's representations, warranties and covenants herein and under the Loan Documents, the Lender shall be satisfied with: (i) its due diligence
review of the Gulfstream/Aventura Properties, including with respect to environmental reports and ability to rely upon such reports, environmental and other approvals, title to properties and assets
and legal matters; and (ii) its assessment of all environmental conditions relating to the Gulfstream/Aventura Properties and actual or potential environmental liabilities of the Borrower and
its subsidiaries, including any appropriate insurance;

	(p)
	in
the opinion of the Lender, no Material Adverse Change shall have occurred;

	(q)
	the
Borrower shall have made available to the Lender copies of paid-up policies evidencing the insurance to be maintained by the Borrower and/or any of The Meadows
Guarantors pursuant to Section 7.1(r);

	(r)
	the
Lender shall have received a title insurance commitment, in from and substance satisfactory to the Lender, committing the title insurer to issue a lender's title insurance policy
(the "Gulfstream/Aventura Title Policy"), in an amount to be determined by the Lender, acting reasonably, from Fidelity National Title Insurance
Company of New York (or any other title company acceptable to the Lender) (the "Title Company"), insuring the Borrower's fee
ownership of the Gulfstream/Aventura Properties, the adequacy of the legal descriptions of the Gulfstream/Aventura Properties, the marketability of title and that the Gulfstream/Aventura Mortgage is a
valid first priority Encumbrances on the Gulfstream/Aventura Properties, free and clear of Encumbrances other than the Permitted Encumbrances and exceptions to title approved in writing by the Lender,
the validity and effectiveness of any such Encumbrances on the exercise by the Lender of its rights and remedies upon the occurrence of an Event of Default under this Agreement, together with an
endorsement to the Lender's title insurance policy to confirm that the title insurance will continue to be effective following the platting of any of the Properties. The Gulfstream/Aventura Title
Policy shall also contain any endorsements required by the Lender; 

40

 

	(s)
	the
Lender shall have received a title insurance commitment, in form and substance satisfactory to the Lender, committing the title insurer to issue a lender's title insurance policy
("The Meadows Title Policy"), in an amount to be determined by the Lender, acting reasonably, from the Title Company, insuring The Meadows Owner's fee
ownership of The Meadows Property, the adequacy of the legal descriptions of The Meadows Property, the marketability of title and that The Meadows Second Mortgage is a valid second priority
Encumbrance on The Meadows Property, free and clear of Encumbrances and encumbrances other than the Permitted Encumbrances and exceptions to title approved in writing by the Lender, the validity and
effectiveness of any such Encumbrance on the exercise by the Lender of its rights and remedies upon the occurrence of an Event of Default under the Meadows Guarantee and Indemnity. The title policy
shall also contain any endorsements required by the Lender;

	(t)
	the
Borrower shall also have made available to the Lender:

	(A)
	surveys
with respect to the Gulfstream/Aventura Properties certified by independent, duly qualified, Florida Land Surveyors, satisfactory in substance and form to the Lender and the
Lender's Florida Agent; and

	(B)
	surveys
with respect to The Meadows Property certified by independent, duly qualified, Pennsylvania Land Surveyors, satisfactory in substance and form to the Lender and the Lender's
Pennsylvania Agent; 

all
of which surveys shall evidence no title defects other than Permitted Encumbrances; 

	(u)
	the
Borrower shall have delivered to the Lender certificates of the Architect or a professional engineer responsible for the design of the Reconstruction in substance and form
satisfactory to the Lender and to the counsel for the Lender (acting reasonably) to the effect that:

	(i)
	such
Architect or professional engineer, as the case may be, is responsible for the preparation of the plans and specifications for the Reconstruction and the
supervision of the Reconstruction in accordance with such plans and specifications;

	(ii)
	the
plans and specifications have been approved by all authorities having jurisdiction and the Reconstruction has been constructed to date substantially in accordance
with such plans and specifications; and

	(iii)
	all
permits, licences or other evidence of authorization required for such Reconstruction to date have been obtained; 

41

 

	(v)
	the
Reconstruction, to the extent constructed to date, complies in all material respects with all applicable zoning and building by-laws and regulations;

	(w)
	the
Lender shall be satisfied with the zoning and other by-law and regulatory requirements for the Reconstruction;

	(x)
	the
Borrower shall have delivered to the Lender an opinion of the Borrower's and Guarantor's Florida Agent addressed to the Lender, the Lender's Counsel and the Lender's Florida
Agent, in form, scope and substance satisfactory to the Lender and its counsel, acting reasonably;

	(y)
	the
Lender shall have received an opinion of the Lender's Florida Agent, addressed to the Lender, in form, scope and substance satisfactory to the Lender;

	(z)
	the
Borrower shall have delivered to the Lender an opinion of the Borrower's and Guarantors' Pennsylvania Agent, addressed to the Lender, the Lender's Counsel and the Lender's
Pennsylvania Agent, in form, scope and substance satisfactory to the Lender and its counsel, acting reasonably;

	(aa)
	the
Lender shall have received an opinion of the Lender's Pennsylvania Agent, addressed to the Lender, in form, scope and substance satisfactory to the Lender;

	(bb)
	all
proceedings to be taken in connection with the transactions contemplated by this Agreement in connection with the Tranche 1 First Advance, and all documents incident
thereto, shall be reasonably satisfactory in form and substance to the Lender, and the Borrower shall have provided to or made available to the Lender copies of all documents which the Lender may
reasonably request in connection with the Tranche 1 First Advance, said transactions and copies of the records of all corporate proceedings in connection therewith in form and substance
reasonably satisfactory to the Lender;

	(cc)
	the
Borrower shall, prior to such Advance and, in accordance with Section 7.1(l), have funded at its own cost and expense, any cost overruns which have been identified by the
Cost Consultant;

	(dd)
	the
Borrower shall have delivered to the Lender a fully executed amendment to the credit facility between Bank of Montreal and MEC that makes all changes necessary to permit the
transactions contemplated by this Agreement, including without limitation, the elimination of the existing negative pledge in favour of the Bank of Montreal over The Meadows Properties; and

	(ee)
	no
Event of Default or Unmatured Event of Default shall have occurred and be continuing or will result from the making of the Tranche 1 First Advance. 

42

 

         4.2    Tranche 2 — First
Advance    

        The
Borrower shall be entitled to obtain the first Advance under Tranche 2 (herein called the "Tranche 2 First Advance")
upon, and only in compliance with the following terms and upon satisfaction of the following conditions, all in form and substance satisfactory to the Lender in its sole discretion: 

	(a)
	the
Tranche 2 First Advance shall occur upon a date (herein called the "Tranche 2 First Advance Date") determined by the
Borrower, provided that the Borrower shall have delivered to the Lender a complete and accurate Request for Advance, which Request for Advance shall reflect compliance by the Borrower with the
provisions of this Section 4.2;

	(b)
	the
Tranche 2 First Advance shall include an amount equal to the Lender's Tranche 2 Pre-Advance Expenses (as determined by the Lender) that have been
invoiced to the Lender prior to the date of the Tranche 2 First Advance, and an arrangement fee (the "Tranche 2 Arrangement Fee")
of $257,500.00;

	(c)
	the
Borrower shall have delivered to the Lender the amended and restated Gulfstream Note referenced in Section 5.1(a);

	(d)
	the
Lender shall have received a fully executed copy of the Horsemen's Agreement;

	(e)
	the
Borrower and the Guarantors shall have made available to the Lender certified copies of their incorporating documents and shall have delivered to the Lender incumbency
certificates with respect to the officers of the Borrower and the Guarantors signing this Agreement and the Security;

	(f)
	the
Borrower and the Guarantors shall have delivered to the Lender resolutions authorizing this Agreement and any documents to be provided pursuant to the provisions hereof, and all
documents evidencing any necessary corporate action of the Borrower and the Guarantors certified by appropriate officers thereof;

	(g)
	the
representations and warranties set forth in Article 6 shall be true and accurate in all respects as of the Tranche 2 First Advance Date, and the Borrower and the
Guarantors shall have delivered to the Lender a certificate of senior officers of each of the Borrower and the Guarantors to the foregoing effect;

	(h)
	the
Borrower and the Guarantors shall have made available to the Lender true copies of all of the Material Agreements then in existence, all of which shall be satisfactory to the
Lender and its counsel, acting reasonably;

	(i)
	the
Lender shall have received the Security, all in form and substance satisfactory to the Lender, and all action required by the Borrower and the Guarantors to fully perfect and
maintain such Security of and upon the assets of the Borrower and the Guarantors to which it applies shall have been successfully completed, including completion of all security filings under UCC and
real property registrations;

	(j)
	the
Borrower shall have delivered to the Lender a certificate of the Borrower in a form satisfactory to the Lender certifying the good standing of the Borrower (and any other
entities controlled by or otherwise affiliated with the Borrower) under, and the validity and currency in force of, all Permitted Encumbrances and Material Agreements; 

43

 

	(k)
	the
Lender shall have received a certificate from the Borrower detailing the Slots Facilities Costs;

	(l)
	the
Lender shall be satisfied, acting reasonably, with the budget for the Slots Facilities Initiative;

	(m)
	the
Cost Consultant shall have performed an inspection of the Slots Facilities Initiative and reported to the Lender that the cost to complete in respect of the Slots Facilities
Initiative does not exceed an aggregate of Twenty Five Million Seven Hundred and Fifty Thousand Dollars ($25,750,000);

	(n)
	the
Borrower shall have made available to the Lender tax certificates in respect of each of the Gulfstream/Aventura Properties, and the Guarantors shall have made available to the
Lender tax certificates in respect of the Properties owned by them, in each case evidencing that all municipal taxes due in respect thereof up to the Tranche 2 First Advance Date have been paid
in full;

	(o)
	no
litigation, regulatory or other proceeding shall have been commenced seeking to restrict the Borrower and/or the Guarantors from completing the transactions contemplated hereby;

	(p)
	in
the opinion of the Lender, no Material Adverse Change shall have occurred;

	(q)
	the
Borrower shall have made available to the Lender copies of paid-up policies evidencing the insurance to be maintained by the Borrower and/or any of the Guarantors
pursuant to Section 7.1(r);

	(r)
	the
Lender shall have received from the Title Company an endorsement in respect of the Gulfstream/Aventura Title Policy, in form and substance satisfactory to the Lender, insuring the
full amount of the Loan (including Lender's Costs and interest);

	(s)
	the
Lender shall have received from the Title Company an endorsement in respect of the Remington Title Policy, in form and substance satisfactory to the Lender, insuring the full
amount of the Loan (including Lender's Costs and interest);

	(t)
	the
Lender shall be satisfied, with the zoning and other by-law and regulatory requirements for the Slots Facilities Initiative;

	(u)
	the
Borrower shall, prior to such Advance and, in accordance with Section 7.1(l), have funded at its own cost and expense, any cost overruns which have been identified by the
Cost Consultant;

	(v)
	no
Event of Default or Unmatured Event of Default shall have occurred and be continuing or will result from the making of the Tranche 2 First Advance. 

44

 

	(w)
	the
Borrower shall have delivered to the Lender an opinion of the Borrower's and Guarantor's Florida Agent addressed to the Lender, the Lender's Counsel and the Lender's Florida
Agent, in form, scope and substance satisfactory to the Lender and its counsel, acting reasonably;

	(x)
	the
Lender shall have received an opinion of the Lender's Florida Agent, addressed to the Lender, in form, scope and substance satisfactory to the Lender;

	(y)
	the
Borrower shall have delivered to the Lender an opinion of the Borrower's and Guarantors' Pennsylvania Agent, addressed to the Lender, the Lender's Counsel and the Lender's
Pennsylvania Agent, in form, scope and substance satisfactory to the Lender and its counsel, acting reasonably;

	(z)
	the
Lender shall have received an opinion of the Lender's Pennsylvania Agent, addressed to the Lender, in form, scope and substance satisfactory to the Lender;

	(aa)
	the
Borrower shall have delivered to the Lender an opinion of the Borrower's and Guarantors' Oklahoma Agent, addressed to the Lender, the Lender's Counsel and the Lender's Oklahoma
Agent, in form, scope and substance satisfactory to the Lender and its counsel, acting reasonably;

	(bb)
	the
Lender shall have received an opinion of the Lender's Oklahoma Agent, addressed to the Lender, in form, scope and substance satisfactory to the Lender;

	(cc)
	the
Borrower shall have delivered to the Lender an opinion of the Borrower's and Guarantor's Counsel addressed to the Lender, and the Lender's Counsel, in form, scope and substance
satisfactory to the Lender and its counsel, acting reasonably;

	(dd)
	the
Gulfstream/Aventura Future Advance Agreement shall have been registered on the Gulfstream/Aventura Properties;

	(ee)
	the
Palm Meadows Training Future Advance Agreement shall have been registered on the Palm Meadows Training Centre Property;

	(ff)
	the
Remington Lands Future Advance Agreement shall have been registered on the Remington Property;

	(gg)
	the
Borrower shall have delivered to the Lender a fully executed amendment to the credit facility between Bank of Montreal and MEC that makes all changes necessary to permit the
transactions contemplated by this Agreement, or a certificate from Bank of Montreal, addressed to MEC and the Lender, certifying that no such changes are required;

	(hh)
	the
Lender shall have received evidence of the Borrower's payment of the additional guarantee fees referenced in Section 10.26; and

	(ii)
	all
proceedings to be taken in connection with the transactions contemplated by this Agreement in connection with the Tranche 2 First Advance, and all documents
incident thereto, shall be reasonably satisfactory in form and substance to the Lender, and the Borrower shall have provided to or made available to the Lender copies of all documents which the Lender
may reasonably request in connection with the Tranche 2 First Advance, said transactions and copies of the records of all corporate proceedings in connection therewith in form and substance
reasonably satisfactory to the Lender. 

45

 

         4.3    Subsequent
Advances    

        The
Borrower shall be entitled to obtain subsequent advances of funds (herein called "Subsequent Advances") under Tranche 1 and
Tranche 2, upon the following terms and conditions: 

	(a)
	except
with respect to Advances deemed to be made hereunder, Subsequent Advances shall occur not more frequently than twice a month, upon a date (herein called a
"Subsequent Advance Date") determined by the Borrower by way of written notice to the Lender in the form of a Request for Advance given at least five
(5) Business Days prior to the Subsequent Advance Date in question, which Request for Advance shall reflect compliance with this Section 4.2 and, in particular, shall contain the same
form of officer's certificate and supporting documentation as is required for a Request for Advance pursuant to Section 4.1(a) or 4.2(a), as the case may be, and shall otherwise be
complete and acceptable to the Lender, acting reasonably;

	(b)
	the
amount of any Subsequent Advance in respect of Tranche 1 shall be in an amount which, together with the aggregate of all previous Advances for the Reconstruction, does not
exceed the value of the work in place for the Reconstruction, as determined by the Cost Consultant, provided that the amount remaining to be advanced under the Loan for the Reconstruction shall never
be less than the remaining Construction Costs that will be required to achieve completion of the Reconstruction, as estimated by the Cost Consultant;

	(c)
	insofar
only as any agreement granting additional security that was not in place at the time of the giving of a previous opinion under Section 4.1 or 4.3(n)(xi) or this
Section is given in favour of the Lender, the Lender shall have. received updated opinions in form, substance and scope satisfactory to the Lender and its counsel to the same effect as the
opinions delivered pursuant to Section 4.1 and, in addition, as to Subsequent Advances made after the Closing Date, 4.3(n)(xi),

	(d)
	if
so requested, the Lender shall have received an opinion from counsel to the Borrower and/or the Guarantors in form, substance and scope satisfactory to the Lender and its counsel
confirming the effectiveness, perfection and priority of the Security;

	(e)
	the
Borrower shall, prior to such Advance and in accordance with Section 7.1(l), have funded at its own cost and expense any cost overruns which have been identified by the
Lender or the Cost Consultant; 

46

  

	(f)
	in
respect of any request for Advance in respect of Tranche 1, the Lender shall have received from the Cost Consultant a report satisfactory to the Lender as to the progress of
the Reconstruction as of the Subsequent Advance Date in question;

	(g)
	in
respect of any Subsequent Advance in respect of Tranche 1, Subsections 4.1(c), (h), (n), (v) and (w) shall have been satisfied and shall continue to be
true and accurate and in full force and effect as of the Subsequent Advance Date in question;

	(h)
	the
representations and warranties set forth in Article 6 shall be true and accurate in all respects as of the date of the Subsequent Advance (except as such representations
and warranties may be updated or otherwise modified to reflect any changes consented to in writing by the Lender), and the Borrower and the Guarantors shall have delivered to the Lender a certificate
of senior officers of each of the Borrower and the Guarantors, without personal liability, to the foregoing effect;

	(i)
	from
and after the earlier of (i) the completion of construction of the Gulfstream Facilities and; (ii) December 31, 2006, the Lender will not be required to make
any Subsequent Advances under Tranche 1, other than Reconstruction Holdback Advances;

	(j)
	the
final Advance for sums due on the Construction Contracts shall be made following completion of the work contemplated thereby to the satisfaction of the Lender and the Cost
Consultant and the furnishing of the following documents to the Lender and the Cost Consultant: (i) all required affidavits from the contractor under the applicable Construction Contracts and
the Borrower, (ii) a certificate from the Borrower certifying that the applicable work was completed in accordance with the Plans, (iii) final releases or lien waivers, which may be
subject to payment of a specific amount as provided in Section 713.20(3), Florida Statutes, from all applicable contractors and other lienors (including, without limitation, the lien rights of
the construction contractor), which releases or waivers must be acceptable to the Lender and the Title Company; provided, however, that the Borrower shall obtain and deliver to the Lender a final
unqualified lien waiver from each such party at the time of payment of such specific amount to such party, (iv) a certificate from the Cost Consultant certifying that the applicable work has
been completed in accordance with the Plans (including completion of the final punch list items, which punch list shall be prepared by or on behalf of the Borrower and approved by the Cost Consultant
in its discretion), that all Governmental Rules in respect of the Reconstruction have been satisfied and that direct connection has been made for all utility services to the Gulfstream Property,
(v) a certificate of occupancy for the Reconstruction, any required approval by the Board of Fire Underwriters or its equivalent having jurisdiction over the Gulfstream Property, and any other
approval required by any Governmental Authority to the extent that any such approval is a condition to the lawful use and occupancy of the Gulfstream Property and the opening of same to the public,
(vi) a final certified "as-built" survey of the Gulfstream Property satisfactory to the Lender and the Cost Consultant, and (vii) the final endorsement to the Title Insurance
Policy, reflecting no exceptions from coverage except the Permitted Encumbrances; 

47

 

	(k)
	an
endorsement to each Title Policy (or if any Title Policy is not then issued, a commitment from the Title Company to issue such endorsement) shall have been delivered to the
Lender, increasing the amount of coverage to include the amount of the Advance then requested, which endorsement shall show no exceptions to title other than the Permitted Encumbrances;

	(l)
	no
Event of Default or Unmatured Event of Default shall have occurred and be continuing or will result from the making of the Subsequent Advance;

	(m)
	in
the opinion of the Lender, no Material Adverse Change shall have occurred since the date of the immediately preceding Advance; and

	(n)
	as
to the first Subsequent Advance made on or after July 22, 2005:

	(i)
	the
Borrower, the Guarantors and MEC shall have made available to the Lender certified copies of their incorporating documents and shall have delivered to the Lender
incumbency certificates with respect to the officers of the Borrower, the Guarantors and MEC signing this Agreement and the Additional Security;

	(ii)
	the
Borrower, the Guarantors and MEC shall have delivered to the Lender resolutions authorizing the execution, delivery and performance of this Agreement and the
Additional Security and any documents to be provided pursuant to the provisions hereof, and all documents evidencing any necessary corporate action of the Borrower, the Guarantors and MEC certified by
appropriate officers thereof;

	(iii)
	the
Borrower and the Guarantors shall have made available to the Lender true copies of all of the Material Agreements (other than those delivered pursuant to
Section 4.1(h)), together with the consents and acknowledgements of all parties thereto required by the terms of such Material Agreements (other than the Borrower or the Guarantors, as
applicable), to the grant of the Security in such Material Agreements all of which shall be in form, scope and terms satisfactory to the Lender and its counsel, acting reasonably;

	(iv)
	the
Lender shall have received the Additional Security to be provided by the Palm Meadows Guarantor and MEC, all in form and substance satisfactory to the Lender, and
all action required by the Palm Meadows Guarantor and MEC to fully perfect and maintain such Additional Security of and upon the assets of the Palm Meadows Guarantor or MEC, as applicable, to which it
applies shall have been successfully completed, including completion of all security filings under UCC and real property registrations; 

48

 

	(v)
	the
Borrower shall have delivered to the Lender a certificate of the Borrower in a form satisfactory to the Lender certifying the good standing of the Borrower and the
Additional Guarantors under, and the validity and currency in force of, all Permitted Encumbrances and Material Agreements applicable to the Additional Guarantors;

	(vi)
	the
Additional Guarantors shall have made available to the Lender tax certificates or other documentation reasonably satisfactory to Lender in respect of each of the
Remington Property and the Palm Meadows Training Center Property, evidencing that all municipal taxes and assessments due and payable in respect thereof up to the date of such Advance have been paid
in full;

	(vii)
	without
derogating from the Borrower's and the Guarantors' representations, warranties and covenants herein and under the Loan Documents, the Lender shall be satisfied
with: (i) its due diligence review of the Remington Property and the Palm Meadows Training Center Property, including with respect to environmental reports and ability to rely upon such
reports, environmental and other approvals, title to properties and assets and legal matters and (ii) its assessment of all environmental conditions relating to such Properties and actual or
potential environmental liabilities of Additional Guarantors and their respective subsidiaries, including any appropriate insurance;

	(viii)
	the
Additional Guarantors and the Borrower shall have made available to the Lender copies of paid-up policies evidencing the insurance to be maintained by
the Additional Guarantors pursuant to Section 7.1(r);

	(ix)
	the
Lender shall have received a title insurance commitment or commitments, in form and substance satisfactory to the Lender, committing the Title Company to issue a
lender's title insurance policy (the "Remington Title Policy") within 90 days thereafter in an amount to be determined by the Lender,
acting reasonably, from the Title Company, insuring the Remington Guarantor's leasehold and fee interests in the Remington Property and the Palm Meadow Guarantor's fee ownership of the Palm Meadow
Property, the marketability of title, that the Remington Mortgage is a valid second priority Encumbrance on the leasehold and fee ownership interest of the Borrower in respect of the Remington
Property and the Palm Meadows Training Center Mortgage is a valid first priority Encumbrance on the Palm Meadows Training Center Property, in each case, free and clear of Encumbrances other than the
Permitted Encumbrances and exceptions to title approved in writing by the Lender, the validity and effectiveness of any such Encumbrances on the exercise by the Lender of its rights and remedies upon
the occurrence of an Event of Default under this Agreement, together with an endorsement to the Lender's title insurance policy to confirm that the title insurance will continue to be effective
following the platting of the Remington Property and the Palm Meadows Training Center Property. The Title Policy shall also contain any endorsements reasonably required by the Lender; 

49

 

	(x)
	the
Borrower and the Additional Guarantors shall also have made available to the Lender surveys with respect to the Remington Property and the Palm Meadows Training
Center Property certified by independent, duly qualified, Oklahoma or Florida Land Surveyors, as applicable, satisfactory in substance and form to the Lender and the Lender's Oklahoma Agent and the
Lender's Florida Agent, respectively, all of which surveys shall evidence no title defects other than Permitted Encumbrances or defects which have been insured over by title insurance;

	(xi)
	the
Borrower and the Additional Guarantors shall have delivered to the Lender opinions of each of the Borrower's and Guarantors' Florida Agent, the Borrower's and
Guarantors' Oklahoma Counsel and the Borrower's and Guarantors' Pennsylvania Agent addressed to the Lender, the Lender's Counsel and, as applicable, the Lender's Florida Agent, the Lender's Oklahoma
Agent or the Lender's Pennsylvania Agent in form, scope and substance satisfactory to the Lender and its counsel, acting reasonably, which shall be similar, mutatis
mutandis, to opinions provided to the Lender in connection with the Tranche 1 First Advance or the Tranche 2 First Advance, whichever is applicable;

	(xii)
	the
Lender shall have received reasonably current environmental reports in respect of the Remington Property and the Palm Meadows Training Center Property prepared by
a duly qualified environmental consultant, together with reliance letters addressed to the Lender, all to be in form, scope and terms satisfactory to the Lender, and the Lender shall be satisfied with
such environmental reports, in its sole and absolute discretion;

	(xiii)
	the
Lender shall have received a reasonably current appraisal of the Palm Meadows Training Center Property prepared by a duly qualified property appraiser, indicating
that the value of such Property is not less than Forty-Five Million Dollars ($45,000,000), in form, scope and terms satisfactory to the Lender, in its sole and absolute discretion;

	(xiv)
	the
Lender's financing commitment for "The Meadows Construction Loan" as referred to in the term sheet dated December 8, 2004 between MEC and the Lender related
to this Agreement shall have been terminated by mutual agreement of all parties thereto; and

	(xv)
	the
Borrower shall have delivered to the Lender a fully executed amendment to the credit facility between Bank of Montreal and MEC that makes all changes to permit the
transactions contemplated by this Agreement, if such is required under the credit facility between Bank of Montreal and MEC. 

50

 

The
provisions of this Section 4.3(n), insofar as they relate to the Remington Guarantor or its property and assets, shall not be operative unless and until it has obtained the Remington Loan
OHRC Approval. 

	(o)
	each
Request for Advance shall specify whether it is in respect of Tranche 1 or Tranche 2;

	(p)
	subject
to Section 3.10, each Subsequent Advance shall include an amount equal to any Lender's Tranche 1 Pre-Advance Expenses, any Lender's Tranche 2
Pre-Advance Expenses, and/or any other Lender's Costs that have been invoiced to the Lender prior to the date of such Subsequent Advance, in each case to the extent that they have not
previously been deemed to have been Advanced under the Loan;

	(q)
	the
amount remaining to be advanced under Tranche 2 shall never be less than the remaining Slots Facilities Costs that will be required to achieve completion of the Slots
Facilities Initiative, as estimated by the Cost Consultant;

	(r)
	in
respect of any request for a Subsequent Advance in respect of Tranche 2, the Lender shall have received from the Cost Consultant a report satisfactory to the Lender as to
the progress of the Slots Facilities Initiative as of the Subsequent Advance Date in question;

	(s)
	from
and after February 28, 2007, the Lender will not be required to make any Subsequent Advances under Tranche 2, other than Slots Facilities Holdback Advances;

	(t)
	the
final Advance in respect of Tranche 2 for sums due on the Slots Facilities Contracts shall be made following completion of the work contemplated thereby to the
satisfaction of the Lender and the Cost Consultant and if so requested by the Lender, the furnishing of the following documents to the Lender and the Cost Consultant: (i) all required
affidavits from the contractor under the applicable Slots Facilities Contracts and the Borrower, (ii) a certificate from the Borrower certifying that the applicable work was completed in
accordance with the Plans, (iii) final releases or lien waivers, which may be subject to payment of a specific amount as provided in Section 713.20(3), Florida Statutes, from all
applicable contractors and other lienors (including, without limitation, the lien rights of the construction contractor), which releases or waivers must be acceptable to the Lender and the Title
Company; provided, however, that the Borrower shall obtain and deliver to the Lender a final unqualified lien waiver from each such party at the time of payment of such specific amount to such party,
(iv) a certificate from the Cost Consultant certifying that the applicable work has been completed in accordance with the Plans (including completion of the final punch list items, which punch
list shall be prepared by or on behalf of the Borrower and approved by the Cost Consultant in its discretion), that all Governmental Rules in respect of the Slots Facilities have been satisfied, and
(v) to the extent required, a certificate of occupancy for the Slots Facilities, any required approval by the Board of Fire Underwriters or its equivalent having jurisdiction over the Slots
Facilities, and any other approval required by any Governmental Authority to the extent that any such approval is a condition to the lawful use and occupancy of the Slots Facilities and the opening of
same to the public, and (vi) a final certified "as-built" survey of the Slots Facilites satisfactory to the Lender and the Cost Consultant, and (vii) the final endorsement to
the Gulfstream/Aventura Title Insurance Policy, reflecting no exceptions from coverage except the Permitted Encumbrances. 

51

 

 
 

ARTICLE 5
  
    SECURITY FOR LOAN  
    

         5.1    General    

        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 deliver to the Lender, in form satisfactory to the Lender and its counsel: 

	(a)
	an
amended and restated promissory note in the amount of One Hundred and Forty Million Seven Hundred and Fifty Thousand Dollars ($140,750,000) from the Borrower in favour of the
Lender (the "Gulfstream Note");

	(b)
	a
perfected first priority Encumbrance on the Gulfstream/Aventura Properties pursuant to a mortgage dated December 9, 2004 from the Borrower in favor of the Lender
(the "Gulfstream/Aventura Mortgage"), together with the Gulfstream/Aventura Future Advance Agreement;

	(c)
	a
first priority assignment of rents and leases generated by the use and occupancy of the Gulfstream/Aventura Properties pursuant to an assignment of rents and lessor's interest in
the Occupancy Agreements relating to the Gulfstream Property and the Aventura Property dated December 9, 2004 from the Borrower to the Lender;

	(d)
	a
general assignment of the Borrower's interest in the Material Agreements relating to any of the Gulfstream/Aventura Properties, where permitted; provided that if the assignment of
any such Material Agreement is not permitted, the Borrower shall use its commercially reasonable efforts to obtain all consents and waivers necessary to assign to the Lender such Material Agreement
and further agrees that if such consents and waivers are not obtained, such Material Agreement shall be held by the Borrower for the benefit of and in trust for the Lender;

	(e)
	a
perfected first priority Encumbrance (subject to any Purchase Money Security Interest granted to lenders or vendors up to a maximum amount of Twelve Million and Five Hundred
Thousand Dollars ($12,500,000) in the aggregate for purposes only of acquiring the Gulfstream FF&E and Purchase Money Security Interest granted to lenders or vendors up to a maximum amount of Two
Million Five Hundred Thousand Dollars ($2,500,000) in the aggregate for purposes only of acquiring the Slots Facilities FF&E) in all personal property of the Borrower now owned and hereafter acquired
(excluding licences and permits), pursuant to a general security agreement of even date herewith from the Borrower to the Lender; 

52

 

	(f)
	the
environmental indemnity agreement in respect of the Gulfstream/Aventura Properties, from the Borrower in favor of the Lender;

	(g)
	a
negative stock pledge agreement from MEC to the Lender regarding 100% of the issued and outstanding capital stock of the Borrower and each of the Guarantors;

	(h)
	in
return for guarantee and indemnity fees paid at the time of the First Advance by the Borrower to The Meadows Guarantors in the amount of $287,500 the joint and several guarantee
and indemnity (the "Meadows Guarantee and Indemnity") of The Meadows Guarantors, under which The Meadows Guarantors jointly and severally
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, the
completion of the Reconstruction in accordance with the Gulfstream Development Agreement, the Construction Contracts, and such plans and specifications as are approved by the Lender and the
performance of all other obligations of the Borrower under the Loan and the Loan Documents, including the payment of cost overruns pursuant to Section 7.1(l);

	(i)
	as
security for the Meadows Guarantee and Indemnity:

	(i)
	a
perfected second priority Encumbrance on The Meadows Property pursuant to a mortgage of dated as of December 9, 2004 from The Meadows Owner in favour of the
Lender ("The Meadows Second Mortgage");

	(ii)
	a
second 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 dated as of December 9, 2004 from The Meadows Owner to the Lender;

	(iii)
	a
second general assignment, dated as of December 9, 2004, of The Meadows Guarantors interest in the Material Agreements relating to The Meadows Property, where
permitted; provided that if the assignment of any such Material Agreements is not permitted, The Meadows Guarantors shall use its commercially reasonable efforts to obtain all consents and waivers
necessary to assign to the Lender such Material Agreement and further agrees that if such consents and waivers are not obtained, such Material Agreement shall be held by The Meadows Guarantors for the
benefit of and in trust for the Lender; 

53

 

	(iv)
	a
perfected second priority Encumbrance in all personal property of The Meadows Guarantors now owned and hereafter acquired (excluding licences and permits), in each
case to the extent permitted by applicable laws and regulations, and a negative pledge respect of all such personal property (excluding licences and permits), pursuant to a general security agreement
dated as of December 9, 2004 from The Meadows Guarantors to the Lender;

	(v)
	the
environmental indemnity agreement in respect of The Meadows Property, dated as of December 9, 2004, from The Meadows Guarantors in favour of the
Lender; and

	(vi)
	in
the event that the Second Closing (as such term is defined in a Post-Closing and Note Issuance Agreement (the "Note
Agreement") dated as of July 26, 2006, between, inter alios, PA Meadows, LLC and MEC) does not occur by the
Deadline Date (as defined in the Note Agreement) The Meadows Owner shall forthwith deliver The Meadows Future Advance Agreement; 

All
of the items of security referred to in this Clause (i) shall be subordinate to the same types of security provided by The Meadows Guarantor to the Lender as security for its liabilities
and obligations under the MEC Bridge Loan Agreement; 

	(j)
	in
return for guarantee and indemnity fees to be paid by the Borrower to the Remington Guarantor upon receipt of the Gulfstream Loan OHRC Approval in the amount of $287,500, the
guarantee and indemnity (the "Remington Guarantee and Indemnity") of the Remington Guarantor, under which the Remington 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, the completion of the
Reconstruction in accordance with the Gulfstream Development Agreement, the Construction Contracts, the Plans and the performance of all other obligations of the Borrower under the Loan and the Loan
Documents, including the payment of cost overruns pursuant to Section 7.1(l);

	(k)
	as
security for the Remington Guarantee and Indemnity:

	(i)
	a
perfected second priority Encumbrance on the Remington Guarantor's leasehold interest in the Remington Lands pursuant to a leasehold mortgage of even date herewith
from the Remington Guarantor in favour of the Lender (the "Remington Second Mortgage"); 

54

 

	(ii)
	a
second priority assignment of rents and leases generated by the use and occupancy of the Remington Property pursuant to an assignment of rents and lessor's interest
in the Occupancy Agreements relating to the Remington Property of even date herewith from the Remington Guarantor to the Lender;

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

	(iv)
	a
perfected second priority Encumbrance (subject to any Permitted Encumbrances) in all personal property of the Remington Guarantor now owned and hereafter acquired
(excluding licences and permits but including the fee interest of Remington in the Remington Park Race Track clubhouse/grandstand forming part of the Remington Property), pursuant to a general
security agreement of even date herewith from the Remington Guarantor to the Lender and which shall also contain a negative pledge on all of the Remington Guarantor's licences and permits; and

	(v)
	the
environmental indemnity agreement in respect of the Remington Property, of even date herewith, from the Remington Guarantor in favour of the Lender. 

All
of the items of security referred to in this Clause (k) shall be subordinate to the same types of security provided by the Remington Guarantor to the Lender as security for its liabilities
and obligations under the Remington Loan Agreement; 

	(l)
	in
return for guarantee and indemnity fees paid by the Borrower to the Palm Meadows Guarantor in the amount of $57,500 the guarantee and indemnity
(the "Palm Meadows Guarantee and Indemnity") of the Palm Meadows Guarantor, under which the Palm Meadows 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, the completion of the Reconstruction
in accordance with the Gulfstream Development Agreement, the Construction Contracts, and the Plans and the performance of all other obligations of the Borrower under the Loan and the Loan Documents,
including the payment of cost overruns pursuant to Section 7.1(l); 

55

 

	(m)
	as
security for the Palm Meadows Guarantee and Indemnity:

	(i)
	a
perfected first priority Encumbrance (subject to any Permitted Encumbrances) on the Palm Meadows Training Center Property pursuant to a mortgage of even date herewith
from the Palm Meadows Guarantor in favour of the Lender (the "Palm Meadows Training Center Mortgage");

	(ii)
	a
first priority assignment of rents and leases generated by the use and occupancy of the Palm Meadows Training Center Property pursuant to an assignment of rents and
lessor's interest in the Occupancy Agreements relating to the Palm Meadows Property of even date herewith from the Palm Meadows Guarantor to the Lender;

	(iii)
	a
first general assignment of the Palm Meadows Guarantor's interest in the Material Agreements relating to the Palm Meadows Training Center Property, where permitted;
provided that if the assignment of any such Material Agreements is not permitted, the Palm Meadows Guarantor shall use commercially reasonable efforts to obtain all consents and waivers necessary to
assign to the Lender such Material Agreement and if such consents and waivers are not obtained, such Material Agreement shall be held by the Palm Meadows Guarantor for the benefit of and in trust for
the Lender;

	(iv)
	a
perfected first priority Encumbrance in all personal property of the Palm Meadows Guarantor now owned and hereafter acquired (excluding licences and permits), in each
case to the extent permitted by applicable laws and regulations pursuant to a general security agreement of even date herewith from the Palm Meadows Guarantor to the Lender and which shall also
contain a negative pledge on all of the licences and permits held by the Palm Meadows Guarantor; and

	(v)
	the
environmental indemnity agreement in respect of the Palm Meadows Training Property, of even date herewith, from the Palm Meadows Guarantor in favour of
the Lender;

	(n)
	the
limited recourse guarantee and indemnity of MEC (the "MEC Guarantee and Indemnity") pursuant to which MEC 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, the completion of the
Reconstruction in accordance with the Gulfstream Development Agreement, the Construction Contracts and the Plans, and the performance of all other obligations of the Borrower under the Loan and the
Loan Documents, including the payment of cost overruns pursuant to Section 7.1(l), together with a stock pledge agreement of even date herewith from MEC to the Lender pursuant to which MEC
pledges 100% of the issued and outstanding capital stock of the Palm Meadows Guarantor; 

56

 

	(o)
	a
specific assignment to the Lender of the policies of insurance referred to in Section 6.1(nn) and the proceeds thereto, together with endorsement thereof reflecting
the Lender as a loss payee or additional insured, as applicable;

	(p)
	related
UCC financing statements;

	(q)
	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/or The Meadows Property and other documentation in support thereof as the Lender and its counsel shall reasonably require; and

	(r)
	such
documents as the Lender, acting reasonably, shall require with respect to the provisions of the Construction Lien Law, Section 713, Florida Statutes and Oklahoma Statutes
§141, et seq for the purpose of preserving the priority of its Security. 

        The
security set out above in this Section 5.1 (except the Gulfstream Note) is herein called the "Security"; all such security set
out above in this Section 5.1 granted by any of the Meadows Guarantors is herein called "The Meadows Security"; the Security provided by the
Borrower and the Meadows Guarantors is herein called the "Original Security" and the Security provided by the Remington Guarantor, the Palm Meadows
Guarantor and MEC is herein called the "Additional Security". The Original Security (save and except for the Future Advance Agreements) was provided on
or before the First Advance Date, the Additional Security from the Palm Meadows Guarantor was provided on July 22, 2005, the Security from the Remington Guarantor was provided upon the receipt
of the Gulfstream Loan OHRC Approval, and the Gulfstream/Aventura Future Advance Agreement, Palm Meadows Training Centre Future Advance Agreement and Remington Future Advance Agreement will each be
provided on the Closing Date. 

         5.2    Right to Substitute Security for the Aventura
Property    

        The
Borrower shall have the right at any time to provide substitute security for the Aventura Property (the "Substitute Aventura
Security"), provided that (a) the Substitute Aventura Security is either (i) cash or one or more letters of credit drawn on a bank or banks acceptable to the
Lender, acting reasonably, or (ii) other property acceptable to the Lender, acting reasonably, (b) the Lender is satisfied, acting reasonably, that the realizable value of the Substitute
Aventura Security is not less than the value of the Aventura Property, and (c) the Borrower pays all costs and expenses (including those of the Lender) in connection with such substitution of
security. The Lender and the Borrower hereby agree that the value of the Aventura Property at any time shall be deemed to be the greater of (a) Fifty-Five Million Dollars
($55,000,000) and (b) the value as determined by the Lender, acting reasonably and based on one or more fair market value appraisals conducted by one or more qualified appraisers determined by
the Lender, acting reasonably, at the time of any request to substitute security. 

        Notwithstanding
the foregoing, the parties agree that it is a condition to the exercise by the Borrower of its rights under this Section 5.2 that the Borrower exercise its
substitution rights under the equivalent section of the Remington Loan Agreement concurrently and that any amounts payable hereunder and under the equivalent provisions of the Remington Loan Agreement
are due and payable, and are paid, on the same day. 

57

 

         5.3    Development of the Mixed-Use Property  

            The Lender acknowledges that the Borrower intends to jointly develop the Mixed-Use
Property with a third party. 

        Promptly
following written request from the Borrower, the parties hereto will use commercially reasonable efforts to negotiate within 90 days an
inter-creditor/non-disturbance agreement (the "JV Inter-Creditor Agreement"), on terms satisfactory to the Lender, acting reasonably,
that provides that, upon the Mixed-Use Property being subdivided from the remainder of the Gulfstream Property, on terms acceptable to the Lender, acting reasonably, the Lender will
subordinate its security interest in such Mixed-Use Property to the joint venture's interest, as tenant, in the 99-year ground lease (the "JV
Ground Lease") that the Borrower will be entering into with the joint venture; provided that: (a) the Lender will be granted a second-ranking security interest over:
(i) the Borrower's (or any Affiliate's) interest in the JV Ground Lease; and (ii) the Borrower's (or any Affiliate's) interest in the joint venture entity, (b) the
Lender shall be satisfied, acting reasonably, that such joint development shall not adversely impact the access to or the structural integrity of the Gulfstream Facilities, (c) the requirement
that the tenant under the JV Ground Lease, the Borrower and the Lender enter into a reciprocal easement agreement, on terms satisfactory to the Lender, acting reasonably, (d) the Lender shall
receive from a reputable title insurance company approved by the Lender, acting reasonably, such title insurance endorsements as are reasonably requested by the Lender to insure the continued priority
and validity of its security interest under the Gulfstream/Aventura Mortgage in respect of the remaining portion of the Gulfstream Property, and (e) any financing related to the joint venture
shall be on terms subject to the approval of the Lender, acting reasonably. 

         5.4    Additional Slots
Financing    

        The
Lender understands that, following the completion of the Slots Facilities Initiative, the Borrower may wish to renovate and/or expand the Gulfstream Facilities and install therein an
additional 1,000 slots (the "Additional Slots Facilities Initiative"), all at the Borrower's sole cost and expense. 

        The
Lender shall have a continuing right of first opportunity, exercisable in its sole and absolute discretion at any time and from time to time, to provide additional financing in
respect of the Additional Slots Facilities Initiative (the "Additional Slots Facilities Financing") required by the Borrower in connection with
the Additional Slots Facilities Initiative. If the Borrower determines that it wishes to pursue the Additional Slots Facilities Initiative, the Borrower shall provide the Lender with a written notice
in accordance with Section 10.6 hereof (the "ROFO Notice") setting out in detail the proposed purpose for the Additional Slots Facilities
Financing, together with the proposed principal amount, term, interest rate, and security in respect of the Additional Slots Facilities Financing (collectively, the "Additional
Slots Facilities Financing Terms"). If the Borrower and Lender are unable to reach agreement on the terms of the Additional Slots Facilities Financing within 50 days of
the delivery of the ROFO Notice, the Lender shall be deemed not to have exercised its right of first opportunity in respect of the Additional Slots Facilities Financing offered on the Additional Slots
Facilities Financing Terms. 

58

 

        If
the Lender is deemed not to have exercised its right of first opportunity in respect of a proposed Additional Slots Facilities Financing, the Lender agrees to consider in good faith
and act reasonably in reviewing any request from the Borrower to restructure the Security in respect of the Gulfstream/Aventura Properties held by the Lender in order to accommodate third party
financing of a proposed Additional Slots Facilities Initiative; provided that: (a) the provisos set forth in the immediately preceding paragraph are complied with; (b) the terms of the
third party financing of the proposed Additional Slots Facilities Initiative are no more favourable to the third party lender thereunder than the Additional Slots Facilities Financing Terms that were
contained in the relevant ROFO Notice (c) nothing herein shall require the Lender to subordinate or postpone its Security in respect of the Gulfstream/Aventura Properties or impair its value;
(d) all costs and expenses reasonably incurred by the Lender in reviewing such request and/or restructuring such Security in respect of the Gulfstream/Aventura Properties shall be paid for by
the Borrower; and (e) the Borrower pre-pays Tranche 2, in full, concurrent with the closing of such Additional Slots Facilities Financing. Any encumbrances created pursuant
to the Additional Slots Facilities Initiative that are approved by the Lender shall be deemed to Permitted Encumbrances. In the event that the Borrower does not secure third party financing of the
proposed Additional Slots Facilities Initiative on terms that are no more favourable to the third party lender thereunder than the Additional Slots Facilities Financing Terms that were contained in
the relevant ROFO Notice, the provisions of this Section 5.4 shall continue to apply. 

 
 

ARTICLE 6
  
    REPRESENTATIONS AND WARRANTIES    
    

         6.1    Borrower's and Guarantors' 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, its
subsidiaries and MEC, and the Guarantors hereby make the following representations and warranties with respect to themselves and their subsidiaries as of the date hereof (provided that each of the
representations and warranties is qualified by the disclosure schedule delivered to the Lender concurrently with the execution of the Original Gulfstream Loan Agreement and the Disclosure Schedule
(as specifically set out therein)): 

	(a)
	Binding Obligation:    The Loan Documents have each been duly authorized, executed and delivered by the Borrower, the
Guarantors and MEC and each constitutes the legally binding obligation of the Borrower, the Guarantors and MEC, as the case may be, enforceable (subject to creditors' rights and equitable remedies)
against the Borrower, the Guarantors and MEC, as the case may be, in accordance with each of their respective terms. 

59

 

	(b)
	Borrower's and Guarantors' Existence:    The Borrower is a corporation duly formed, validly existing and in good standing
under the laws of the State of Florida and qualified to own its property and assets and to carry on business in the State of Florida, including the business currently carried on by it. The Meadows
Owner is a corporation duly formed, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania and qualified to own its property and assets and to carry on business in
the Commonwealth of Pennsylvania including the business currently carried on by it. Each of The Meadows Operators and MEC is a corporation duly formed, validly existing and in good standing under the
laws of the State of Delaware and qualified to own its property and assets and to carry on business in the State of Delaware, including the business currently carried on by it. The Remington Guarantor
is a corporation duly formed, validly existing and in good standing under the laws of the State of Oklahoma and qualified to own its property and assets and to carry on business in the State of
Oklahoma, including the business currently carried on by it. The Palm Meadows Guarantor is a corporation duly formed, validly existing and in good standing under the laws of the State of Delaware and
qualified to own its property and assets and to carry on business, including the business currently carried on by it.

	(c)
	Authority:    The Borrower, the Guarantors and MEC have full right, power and authority to execute the Loan Documents on
their own behalf and no consents of any third parties are required that have not been obtained.

	(d)
	Business:    The Borrower does not carry on any business other than the ownership, operation, development, finance and
management of the Gulfstream/Aventura Properties, The Meadows Guarantors do not carry on any business other than the ownership, operation, development, finance and management of The Meadows Property,
the Remington Guarantor does not carry on any business other than the ownership, operation, development, finance and management of the Remington Property and the Palm Meadows Guarantor does not carry
on any business other than the ownership, operation, development, finance and management of the Palm Meadows Training Center Property, including, in each case, horseracing and parimutuel gaming and
activities ancillary thereto. The Borrower and each of the Guarantors conduct their business in a reasonable and prudent manner.

	(e)
	No Violation:    The execution, delivery and compliance with the terms and provisions of this Agreement and the Loan
Documents by the Borrowers, the Guarantors and MEC will not (i) violate in any material respects any provisions of law or any Applicable Legal Requirements, (ii) require any consent of
any third party not previously obtained or as otherwise set out in Section 6.1(m), or (iii) violate in any material respects or cause a default under any agreement to which the Borrower,
the Guarantors and MEC are a party or by which they will be bound.

	(f)
	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 governing 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 were duly executed and delivered, 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. 

60

 

	(g)
	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 governing each of the Guarantors and MEC (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 or MEC relating to the Guarantors or MEC. The Guarantor Incorporation Documents were duly executed and delivered, 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".

	(h)
	Authorized Capital:    The authorized capital of the Borrower 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 holders of such outstanding shares are as follows: 

	 
	 	Beneficial Holder 
	 	Class of Shares
	 	Number of Shares

	 	 	Magna Entertainment Corp.	 	common	 	11,232

The
authorized capital of The Meadows Owner consists of 1,000 Shares of which 100 Shares are duly issued and outstanding as fully paid and non-assessable. The beneficial
holders of such outstanding shares are as follows: 

	 
	 	Beneficial Holder 
	 	Class of Shares
	 	Number of Shares

	 	 	Magna Entertainment Corp.	 	n/a	 	100

61

 

The
authorized capital of Washington Trotting consists of 1,000 common shares of which 100 common shares are duly issued and outstanding as fully paid and non-assessable. The
beneficial holders of such outstanding shares are as follows: 

	 
	 	Beneficial Holder 
	 	Class of Shares
	 	Number of Shares

	 	 	Magna Entertainment Corp.	 	common	 	100

The
authorized capital of Mountain Laurel consists of 1,000 common shares of which 100 common shares are duly issued and outstanding as fully paid and non-assessable. The
beneficial holders of such outstanding shares are as follows: 

	 
	 	Beneficial Holder 
	 	Class of Shares
	 	Number of Shares

	 	 	Magna Entertainment Corp.	 	common	 	100

The
authorized capital of the Remington Guarantor consists of 10,000 common shares of which 500 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	 	500

The
authorized capital of the Palm Meadows 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

	(i)
	Financial Statements:    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 GAAP 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. 

62

 

	(j)
	Combined Financial Statements:    The Lender has been furnished with a copy of the unaudited internally prepared Combined
financial statements dated as of and at the end of the most recently completed fiscal quarter. Such internally prepared Combined financial statements fairly present the Combined financial condition of
the Borrower and the Additional 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 the Additional 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 Combined statements.

	(k)
	Litigation:    There is no litigation, arbitration or other proceeding or governmental investigation pending or, to the best
of the Borrower's and the Guarantors' knowledge, threatened against or relating to the Borrower or any of the Guarantors or any of their property, assets, or business, including any of the Properties
and/or the Meadows Property, which, if decided adversely, could result in a Material Adverse Change or negatively affect the prospects for repayment of the Loan.

	(l)
	Taxes:    Except as could not be reasonably expected to have a Material Adverse Effect, the Borrower and each Guarantor have
filed all tax returns which are required to be filed, paid all Taxes shown as due thereon or as assessed or reassessed, except to the extent that any assessment or reassessment is being contested
diligently and in good faith, including interest and penalties which are due and payable and have provided adequate reserves for payment of any tax the payment of which is being contested.

	(m)
	Governmental Registrations, Approvals, Etc.:    No approval, authorization, consent or other order of, and no designation,
filing, further registration, qualification or recording with, any Governmental Authority, domestic or foreign, is legally required to authorize or is otherwise required in connection with or for the
execution, delivery or performance by the Borrower and/or any of the Guarantors and/or MEC of the Loan Documents, except (i) as have already been obtained, (ii) for the Gulfstream Loan
OHRC Approval (iii) for the Gulfstream Loan Zoo Trust Consent (iv) for the approval referred to in Section 10.28 and (v) except as are otherwise contemplated by the
terms hereof.

	(n)
	Material Assets:    The Borrower and each of the Guarantors owns or has legally enforceable rights to use all material assets
(including real property and licences), contracts, and other documents necessary to conduct its business 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. 

63

  

	(o)
	Material Agreements:    The Material Agreements referred to in items (i) to (vii)(A) inclusive of the
definition of Material Agreements together with any other Material Agreements disclosed in writing to the Lender from time to time constitute all of the Material Agreements in existence. 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 of the 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.

	(p)
	Title:    The Borrower has good and marketable title in fee simple to the Gulfstream/Aventura Properties free and clear of
any Encumbrance of any nature except Permitted Encumbrances, and The Meadows Owner has good and marketable title in fee simple to The Meadows Property free and clear of any Encumbrance of any nature
except Permitted Encumbrances. The Remington Guarantor has a good and valid leasehold interest to the Remington Lands and has a good and valid ownership interest in the other part of the Remington
Property, in each case, free and clear of any Encumbrance of any nature except Permitted Encumbrances, and the Palm Meadows Guarantor has good and marketable title in fee simple to the Palm Meadows
Training Center Property free and clear of any Encumbrance of any nature except Permitted Encumbrances. No Person or entity has any option to acquire ownership of any of the Properties or The Meadows
Property.

	(q)
	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 and/or The Meadows Property (collectively, the "Occupancy Agreements") provided to the Lender in
writing constitutes all of the Occupancy Agreements now in existence. All of the Occupancy Agreements are in good standing and to the best knowledge of the Borrower and/or any of the Guarantors, 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.

	(r)
	By-law Compliance:    All by-laws, zoning, licences, certificates, consents, approvals, rights,
permits and agreements required to enable the Gulfstream Facilities to be reconstructed and to enable the Properties and The Meadows 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 but the same are material, 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. All building services
required for the proper functioning of the Properties and The Meadows Property have been obtained, are functioning properly and are fit and suitable for their intended purpose. 

64

 

	(s)
	Information 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, and all financial projections furnished or made available by the Borrower and/or any of the Guarantors to the Lender have been prepared based on reasonable assumptions 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 writing
to the Lender everything to which it has knowledge regarding the business, operations, property, financial condition, or business prospects of itself, and each of the Properties and/or The Meadows
Property which could result in a Material Adverse Change.

	(t)
	Improvements:    Except as disclosed to the Lender in writing, the present use of each Property and The Meadows Property
complies, and the future use of each Property and The Meadows 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 Authority, including the Gulfstream Development Agreement and the Remington Development Agreement;
(b) building, occupancy and other permits, licences and approvals; and (c) declarations, easements, rights-of-way, covenants, conditions and restrictions
of record.

	(u)
	Properties Access:    The Properties and The Meadows Property are accessible through all current access points, each of which
connects or, upon the completion of the contemplated development of the Properties and The Meadows Property, will connect, directly to a fully improved and dedicated road accepted for maintenance and
public use by the Governmental Authority having jurisdiction.

	(v)
	Utilities:    All utility services necessary and sufficient for the construction, use or operation of the Properties and The
Meadows Property (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 or The Meadows Property, as the case may be, directly to lines owned by the applicable utility and lying in dedicated roads,
including water, storm, sanitary sewer, gas, electric and telephone facilities.

	(w)
	Flood Hazards/Wetlands:    None of the Properties nor The Meadows Property 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 Authority having
jurisdiction over any of the Properties and/or The Meadows Property. 

65

 

	(x)
	Environmental Conditions:    Except as disclosed in the Environmental Disclosure:

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

	(ii)
	neither
the Borrower nor any of the Guarantors has received any, 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 Authority 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 and/or The Meadows Property; 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 in respect of the Properties, The Meadows Property or any adjacent real property;

	(iii)
	the
Borrower and each of the Guarantors have obtained all material Environmental Consents and Safety Consents and have obtained or are 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 Properties and the Meadows Property and all such obtained Environmental
Consents and Safety Consents are in good standing and the Borrower and each of the Guarantors are 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 either of the
Properties, The Meadows Property or offsite location; 

66

 

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

	(vii)
	to
the knowledge of the Borrower and each of the Guarantors, there are no aboveground or underground storage tanks in or associated with either of the Properties
and/or The Meadows Property, that would materially impact any of the Properties and/or The Meadows Property;

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

	(ix)
	to
the knowledge of the Borrower and each of the Guarantors, there are no facts or circumstances at the Properties and/or The Meadows Property 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, neither the Borrower nor any of the Guarantors has assumed the liability of any other Person or entity for,
and has not 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 and/or The
Meadows Property or other claims under Environmental Laws and Safety Laws other than claims with respect to the Properties and/or The Meadows Property; 

67

 

	(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 and/or The Meadows Property, the operations and approval of development of any of the Properties and/or The Meadows Property, compliance by
the Borrower and any of the Guarantors with Environmental Laws and Safety Laws or any actual or potential Environmental or Safety Liability of any of the Relevant Entities with respect to the
Properties or The Meadows Property;

	(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 regarding 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 the Relevant Entities
to address issues under Environmental Laws or Safety Laws.

	(y)
	Taxes/Assessments:    There are no unpaid or outstanding real estate or other taxes or assessments on or against any of the
Properties and/or The Meadows Property or any part thereof which are not overdue. Upon the completion of the Reconstruction, the Tax bills affecting the Gulfstream Property will cover the entire
Gulfstream Property and will not cover or apply to any other property. Neither the Borrower nor any Guarantors have received any written notice of any supplemental Taxes which may be owing or
otherwise assessed which are not overdue.

	(z)
	Eminent Domain:    There is no eminent domain or condemnation proceeding pending or, to the best of the Borrower's knowledge
or any of the Guarantors' knowledge, threatened, relating to any of the Properties, The Meadows Property, or any part thereof.

	(aa)
	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 either of the
Properties and/or The Meadows Property which if enforced would or are likely to result in a Material Adverse Change. 

68

 

	(bb)
	Employee Benefit Plans:    Neither the Borrower nor any of the Guarantors sponsors any pension plan, as defined
in ERISA.

	(cc)
	Labour Controversies:    There are no labour controversies pending or threatened against the Borrower and/or the Guarantors
which, if adversely determined, could result in a Material Adverse Change.

	(dd)
	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.

	(ee)
	Solvency:    The Borrower and each of the Guarantors is solvent, able to pay its debts as such debts become due, has capital
sufficient to carry on its business 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.

	(ff)
	Casualty:    Except for the Reconstruction, and the Remington Construction, there is no damage or destruction to any part of
the Properties and/or The Meadows Property by fire or other casualty that has not been repaired.

	(gg)
	No Agreement to Sell Assets:    Except as specifically set forth in the MEC Recapitalization Plan, the Borrower and each of
the Guarantors do not have any legal obligation, absolute or contingent, to any Person or entity to sell any of their assets, 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 the Guarantors with any other Person or entity or to enter into any agreement with respect thereto.

	(hh)
	Business Purpose:    The proceeds of the Loan to the Borrower pursuant to the Loan Documents will be used by the Borrower
solely and exclusively for the proper business purposes set out in Section 2.1. The Borrower is not in the business of extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System), and no proceeds of any loans and/or advances made by the Lender to or for the benefit of the
Borrower will be used to purchase or carry margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock. 

69

 

	(ii)
	Consideration:    The Loan Documents were executed and delivered by the Borrower 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.

	(jj)
	Unmatured Event of Default or Event of Default:    No Unmatured Event of Default or Event of Default has occurred and
is continuing.

	(kk)
	Other Regulations:    Neither the Borrower nor any Guarantor nor MEC 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 Authority limiting its ability to incur indebtedness.

	(ll)
	Patent and Other Rights:    Each of the Borrower and each of the Guarantors owns, licences or otherwise has the full right
to use, under validly existing agreements, all patents, licences, trademarks, trade names, trade secrets, service marks, copyrights and all rights with respect thereto, which are required to conduct
their businesses as now conducted.

	(mm)
	Margin Stock:    None of the Borrower nor any of the Guarantors nor MEC 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. The term "Margin Stock" shall have the meaning given to such
term in Regulation U issued by the Board of Governors of the Federal Reserve System.

	(nn)
	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. 

70

 

	(oo)
	Legal Name:    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;

	(pp)
	USA Patriot Act:    Neither the Borrower, nor any of the Guarantors nor MEC 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.

	(qq)
	Licences and Permits:    Neither the Borrower nor any Guarantor has pledged any licences or permits, held by it or any of
its subsidiaries, to a third party except that the Borrower has provided a negative pledge of its licences and permits to the Lender pursuant to the Remington Loan Agreement.

	(rr)
	Disclosure.    All information provided to the Lender relating to the financial condition, business, affairs and prospects
of the Borrower and the Guarantors (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 writing to the Lender everything to which it has knowledge
regarding the business, operations, property, financial condition, or business prospects of itself, and each of the Properties and the Meadows Property which could result in a Material
Adverse Change. 

71

 

         6.2    Survival of Borrower's and Guarantors'
Representations    

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

         6.3    Lender's Representations and
Warranties    

        The
Lender hereby represents and warrants that: (a) this Agreement and the other Loan Documents executed by the Lender have each been duly authorized, executed and delivered by
the Lender and each constitutes the legally binding obligation of the Lender, enforceable against the Lender in accordance with its respective terms; (b) the Lender is the Zug Branch of a
partnership duly formed, validly existing and in good standing under the laws of Iceland; and (c) the Lender has full right, power and authority to execute this Agreement and those other Loan
Documents executed by it on its own behalf and no consents of third parties are required which have not been, or will not be, obtained. 

 
 

ARTICLE 7
  
    AFFIRMATIVE COVENANTS  
    

         7.1    Covenants    

        The
Borrower and the Guarantors covenant and agree with the Lender that from the date of this Agreement and thereafter 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)
	Payments:    The Borrower shall duly and punctually pay to the Lender all amounts payable by it hereunder when due.

	(b)
	Corporate Existence:    The Borrower shall maintain in good standing its corporate existence under the laws of the State of
Florida 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, The Meadows Owner
shall maintain in good standing its corporate existence under the laws of the Commonwealth of Pennsylvania 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, each of The Meadows Operators and the Palm Meadows Guarantor 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 its business and
operations and the Remington Guarantor shall maintain in good standing its corporate existence under the laws of the State of Oklahoma 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. 

72

 

	(c)
	Compliance with Laws:    The Borrower and each of the Guarantors shall comply, in all material respects, with all Applicable
Legal Requirements (including environmental laws, rules, regulations and orders and racing and gaming laws, rules, regulations and orders), such compliance to include, without limitation, paying when
due all Taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or any property belonging to it except to the extent contested in good faith and for which
adequate reserves are maintained. 

         (d)    Books and Records; Reporting:    

	(i)
	The
Borrower and each of the Guarantors shall 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 MEC'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 and
The Meadows Property, 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 and/or The Meadows Property. Without limiting the foregoing, the Borrower and each Guarantor agrees to deliver the following to the Lender, in duplicate:

	(A)
	copies
of any notices which any contractor delivers to the Borrower and/or such Guarantor under or pursuant to the Construction Contracts or the Remington Construction Contracts which
relate to (I) the occurrence of any default or event of default or other event that, with the passage of time, giving of notice or both, shall become a default or event of default under any of
the Construction Contracts, the Slots Facilities Contracts or the Remington Construction Contracts, as the case may be, (II) any situation or event which might give rise to the payment by the
Borrower and/or any of the Guarantors of liquidated damages or other monetary amounts, (III) an application for planning or development approval relating to any portion of any of the Properties
and/or The Meadows Property, (IV) any matter relating to the design, layout, alignment or realignment, approval or construction of the Gulfstream Facilities, the Slots Facilities or the
Remington Facilities or (V) any matter relating to the design, layout, approval or construction of utility easements, lines, equipment and infrastructure of any of the Properties and/or The
Meadows Property; 

73

 

	(B)
	upon
the written request of the Lender, and contemporaneously with the quarterly and year-end financial statements required under Section 7.1(d)(ii), 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:

	(I)
	no
Unmatured Event of Default or Event of Default has occurred and is continuing or 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;

	(II)
	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

	(III)
	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 or 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)
	as
soon as available and in any event 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; 

74

 

	(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, (I) a copy of the unaudited financial
statements of the Borrower and each Guarantor for such fiscal quarter and (II) a copy of the unaudited Combined financial statements of the Borrower and the Additional Guarantors 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, (I) a copy of the audited (or, in the case of
the Palm Meadows Guarantor (unaudited)) annual financial statements for the fiscal year just ended of the Borrower and 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 and (II) a copy of the unaudited Combined financial statements of the Borrower and the Additional Guarantors, and including the same type of statements and other
information as are contained in the audited financial statements referred to in (I) above;

	(D)
	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 the Reconstruction and the Slots Facilities Initiative, including an updated budget, if applicable, detailed information regarding infrastructure improvements and development costs, the
status of the Construction Contracts and the Slots Facilities Contracts (and the Borrower's performance thereunder), including detailed information regarding amounts spent or incurred to such
date and required to be spent or incurred to complete the Reconstruction and the Slots Facilities Initiative as of the last day of such fiscal quarter, and any other matters reasonably requested by
the Lender;

	(E)
	as
soon as practicable and in any event not later than 40 days after the commencement of each fiscal year of the Borrower, projected individual and Combined 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 Additional
Guarantors, all in reasonable detail and in any event to include projected operating and capital budgets; 

75

 

	(F)
	within
40 days after the commencement of each fiscal year of the Borrower and the Additional Guarantors, a business plan for the Borrower and each Additional Guarantor for the
two subsequent fiscal years in form, scope and substance acceptable to the Lender and, in the event that any material change is subsequently proposed to any such business plan, within five days
thereafter, written notice to the Lender providing reasonable details of the proposed change, to be followed as soon as practicable thereafter with a modified business plan reflecting such material
change;

	(G)
	until
the Gulfstream Facilities Completion Date, within 20 days after the end of each calendar month the Borrower will make available to the Lender, and, if requested, provide
a report containing, the following information for such calendar month:

	(I)
	a
detailed cost report in respect of the Reconstruction;

	(II)
	a
listing of all accounts payable reflecting the aging thereof and identifying those which are to be paid out of any reasonably contemporaneous
Tranche 1 Advance;

	(III)
	a
listing of all outstanding cheques in respect of the Reconstruction;

	(IV)
	details
of all monies held to satisfy construction liens in respect of the Reconstruction; and

	(V)
	any
material adverse changes to the budget for the Gulfstream Facilities, including any increase or decrease thereto which individually or in the aggregate shall exceed
$100,000;

	(H)
	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

	(I)
	until
the Slots Facilities Opening Date, within 20 days after the end of each calendar month the Borrower will make available to the Lender, and, if requested, provide a report
containing, the following information for such calendar month: 

76

 

	(I)
	a
detailed cost report in respect of the Slots Facilities Initiative;

	(II)
	a
listing of all accounts payable reflecting the aging thereof and identifying those which are to be paid out of any reasonably contemporaneous
Tranche 2 Advance;

	(III)
	a
listing of all outstanding cheques in respect of the Slots Facilities Initiative;

	(IV)
	details
of all monies held to satisfy construction liens in respect of the Slots Facilities Initiative; and

	(V)
	any
material adverse changes to the budget for the Slots Facilities Initiative, including any increase or decrease thereto which individually or in the aggregate shall
exceed $50,000;

	(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 and The Meadows Property (A) required under the Environmental Reports to comply with Environmental Law
or (B) requested by the Lender, 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 August 31, 2005, the Borrower shall submit to the Lender, if
requested, an update prepared by the author of each Environmental Report 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 in respect of remediation during such period.

	(e)
	Additional Information:    Representatives of the Borrower and the Guarantors shall meet regularly with the Lender at the
Lender's request to discuss the status of the Properties and The Meadows Property. In addition, the Borrower and the Guarantors will make financial officers available to discuss with the Lender, upon
reasonable prior notice to the Borrower or the Guarantors, as applicable, the affairs, finances and accounts of the Borrower and the Guarantors and, to the extent the same is relevant to the Loan or
the Security, its Affiliates all at such reasonable times and as often as the Lender may reasonably request. The Borrower and each of the Guarantors shall deliver or make available to the Lender
copies of all business plans, independent authorized gaming analyses, appraisals, and other documentation in the possession or control of the Borrower and/or the Guarantors (and/or any Affiliate of
the Borrower and/or the Guarantors) that relates in any way to the Properties and/or The Meadows Property, or to the businesses to be conducted by the Borrower and/or any of the Guarantors on
Properties and/or The Meadows Property, including any additional information that may be reasonably requested by the Lender (if any) in connection with the foregoing. All costs and expenses
related to such reporting shall be apportioned to, and shall form part of, the Loan Amount and The Meadows Loan Amount (if any) (and shall be deemed to have been advanced by the
respective lender thereunder), such costs and expenses to be apportioned by the Lender acting reasonably. 

77

 

	(f)
	Use of Proceeds:    The Borrower shall use the proceeds of the Loan 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 Loan shall be used by the Borrower to pay any amounts to MEC or 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 and Exchange Act of 1934.

	(g)
	Maintenance of the Properties and The Meadows Property:    Subject to work done in connection with the Reconstruction, the
Slots Facilities Initiative and the Remington Construction, the Borrower and the Guarantors shall keep the Properties, and the Meadows Property including all buildings and improvements now or
hereafter situated thereon, all equipment incidental to any of the Properties or The Meadows Property, 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 complete and restore promptly and in good workmanlike manner any building, improvements or other items of any of the
Properties or The Meadows Property which may be damaged, or destroyed, and pay when due all costs incurred therefor.

	(h)
	Gulfstream Property Operation and Completion:    The Borrower shall at all times remain the operating company for the
Gulfstream Property and will diligently cause to be done all things necessary to carry out to completion the Reconstruction and the Slots Facilities Initiative in accordance with plans and
specifications therefor as are approved by the Lender, subject to such changes thereto as the Borrower may consider necessary and the Lender shall have approved, acting reasonably
(the "Plans"), and in accordance with all development and construction agreements related thereto, subject to such changes thereto as the
Borrower may consider necessary and the Lender shall have approved, acting reasonably, with all convenient speed and to complete such construction and development as promptly as reasonably practicable
and substantially in accordance with the Plans and such agreements in each case to the extent amended as aforesaid. Without derogating from the foregoing, all applications for Governmental
Authorizations in respect of the Plans and/or the Reconstruction and/or the Slots Facilities Initiative shall, to the extent that the scope, form and substance or terms thereof are inconsistent or
otherwise not in accordance with the Plans, be submitted to the Lender for its review and approval. 

78

 

	(i)
	Conduct of Reconstrction and Slots Facilities Initiative:    The Reconstruction and the Slots Facilities will be constructed
in a good and workmanlike manner by the Borrower using quality materials in accordance with the plans and specifications approved by the Lender, acting reasonably.

	(j)
	Compliance with Agreements:    The Borrower and each of the Guarantors shall 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.

	(k)
	Notice of Default:    The Borrower and each of the Guarantors shall provide the Lender with a copy of all written notices,
correspondences and reports received or delivered by the Borrower, any Guarantor or MEC in respect of default under any of the Organizational Documents, Occupancy Agreements, Construction Contracts,
the Slots Facilities Contracts or Material Agreements and notices of violations of any Governmental Rule received by the Borrower or any of the Guarantors relating to any of the Properties and/or The
Meadows Property, including, without limitation, all racing and/or gaming licences, the Gulfstream Development Agreement and/or any of the Construction Contracts and/or the Slots Facilities Contracts.
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.

	(l)
	Construction Cost Overruns:    The Borrower shall promptly fund, at its own cost and expense, all cost overruns for the
Reconstruction and/or the Slots Facilities Initiative, such that the principal amount yet to be advanced hereunder for the Reconstruction and/or the Slots Facilities Initiative, shall not be less than
the remaining cost to complete the Reconstruction and the Slots Facilities Initiative, respectively.

	(m)
	Conduct of Business:    The Borrower and each of the Guarantors shall conduct its business in a reasonable and prudent manner
and, subject to the terms hereof, will take all reasonable steps to maintain and preserve its assets and properties and to maintain full and complete corporate and financial records. Neither the
Borrower nor any of the Guarantors shall engage in any business or activity other than that consistent with past practice or as provided in the MEC Recapitalization Plan and as contemplated hereunder,
which permitted business or activity shall include slots or other forms of alternative gaming permitted in connection with horse racing and parimutuel gaming. 

79

  

	(n)
	Transactions with Affiliates; Separate and Distinct Business:    The Borrower shall conduct its operations as a separate and
distinct business and shall not, save as may be disclosed in the MEC Recapitalization Plan: (i) enter into any contract or agreement with any shareholder, member, partner, principal or
Affiliate, except upon market terms and conditions that are substantially similar to those that would be available to a similarly situated arm's length third party; (ii) commingle its assets or
funds with the assets or funds of any of its shareholders, members, partners, principals, Affiliates or any other entity; (iii) acquire or own any material assets other than the
Gulfstream/Aventura Properties and such incidental personal property as may be necessary for the operation of the Gulfstream/Aventura Properties; (iv) except in respect of the Remington Loan
Agreement and the MEC Bridge Loan Agreement, suggest that it is responsible for the debts of any third party (including any of its shareholders, members, partners, principals, Affiliates or any other
entity); or (v) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations.

	(o)
	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.

	(p)
	Notification of Attachment or Other Action:    The Borrower and 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 and/or The Meadows Property, or the institution of any action, suit or proceeding by or against the
Borrower, any of the Guarantors or any of the Properties and/or The Meadows Property, 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 and/or The Meadows Property, which may adversely affect (i) the Borrower's ability to pay the Indebtedness, (ii) the value of any of the Properties
and/or The Meadows Property or the value, validity or priority of the Lender's security interests granted pursuant to any of the Mortgages and/or any of the other Loan Documents, (iii) any of
the Guarantors' ability to perform under the Guarantees and Indemnities, or (iv) any other rights and remedies of the Lender granted and continued pursuant to the Loan Documents.

	(q)
	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 and The Meadows Property which, if unpaid, might result in, or permit the creation of, any lien or encumbrance on such Property or The Meadows 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 the Property or The Meadows Property, as the case may be, 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. The Borrower and the Guarantors shall at all times defend the Lender's interest in
and to the Properties and The Meadows Property, 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 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. 

80

 

	(r)
	Insurance:    The Borrower and the Guarantors shall maintain or cause to be maintained at all times with respect to the
Properties and The Meadows Property and their business and operations in respect thereof all customary and prudent insurance, including, without limitation, all insurance requested by the Lender,
acting reasonably.

	(s)
	Taxes and Liabilities:    The Borrower and each Guarantor shall promptly pay when due all Taxes, duties, assessments and
other liabilities, except such taxes, duties, assessments and other liabilities as the Borrower is diligently contesting in good faith and by appropriate proceedings; provided that the Borrower or
such Guarantor has provided for and is maintaining adequate reserves with respect thereto.

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

	(u)
	Payment of Obligations:    Subject to the right to contest legitimate disputes and subject, where applicable, to the provisos
in Section 7.1(q), the Borrower and each Guarantor shall 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.

	(v)
	Hold Disbursements in Trust:    Other than the proceeds of the Loan which 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. 

81

 

	(w)
	Required Remediation and Environmental Actions:    Upon request of the Lender acting reasonably, the Borrower or an
Additional Guarantor, as applicable, hereby agrees to complete the requested remediation actions recommended to be taken with respect to the Properties in the Environmental Reports and not heretofore
undertaken as described in the Environmental Reports. The term "Environmental Reports" means collectively (i) the Phase I Environmental
Site Assessment and Environmental Compliance Audit in respect of the Gulfstream/Aventura Properties, prepared by Environmental Resources Management, and dated July 10, 2003, and (ii) the
environmental reports referred to in Section 4.3(n)(xii), 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 shall obtain an update to the applicable Environmental
Report as and when requested by the Lender, acting reasonably, in order to confirm that the Borrower's actions, or Additional Guarantor's in respect of any required remediation aforesaid are in
conformity with Environmental Laws. In connection with each update to an Environmental Report, the Borrower or the Additional Guarantor shall obtain a reliance letter relating thereto addressed to the
Lender in form and substance reasonably satisfactory 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 or The Meadows Property shall be disposed of in conformity with Environmental Laws requirements at a location other than any of the Properties or The Meadows Property.

	(x)
	Surveys:    After the recording of any subdivision, plan of subdivision or small-scale planned development with respect to
any of the Properties or The Meadows Property, 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 or The Meadows Property showing such Property or The Meadows Property as so subdivided; and (ii) an endorsement to the Title
Policies confirming the new legal description created by said subdivision and affirmative insurance that the Mortgage in respect of such Property or The Meadows Property continues to encumber such
Property or The Meadows Property, as subdivided and newly described.

	(y)
	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 the Properties and The Meadows Property 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. 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 the Properties and The Meadows Property are also related to other premises, the amount
of any deposit hereunder shall be based upon the Borrower'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 the Properties and The Meadows Property 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 the Properties and The Meadows Property 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 Business 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 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(y) 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(y), 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. 

82

 

	(z)
	USA Patriot Act:    The Borrower and the Guarantors hereby covenant that until such time as the Indebtedness is paid in full,
they will take no action (nor 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).

	(aa)
	Regulatory Matters:    The Remington Guarantor shall promptly seek and obtain the Approvals and Consents. The Remington
Guarantor shall keep the Lender apprised of the current status of the approval/consent process. In the event that either the Remington Loan OHRC Approval or the Remington Loan Zoo Trust Approval is
not obtained, and the Security to be provided by the Remington Guarantor is not duly registered in all the applicable offices of public record, in each case, on or before October 11, 2005 or
(ii) at any time the OHRC determines that it will not provide the Remington Loan OHRC Approval or, (iii) at any time the Zoo Trust determines that it will not provide the Remington Loan
Zoo Consent, the Lender shall have the right (exercisable in its sole and absolute discretion) to immediately terminate this Agreement. In the event of such termination the Borrower shall immediately
pay to the Lender the Loan Amount (including (and without duplication) all accrued and unpaid interest, fees, expenses and closing costs and other Indebtedness owing as of such date), together
with the Gulfstream Make-Whole Amount. Neither the Borrower nor any Guarantor will take any action which (or fail to take any action the absence of which) would result in the
withdrawal or termination of any Governmental Approval or that would disqualify the Remington Guarantor from applying for, obtaining or receiving all necessary Governmental Authorizations to operate
authorized gaming machines at the Remington Facilities.

	(bb)
	Litigation:    If the Borrower or any of the Guarantors becomes aware of any actual, pending or threatened litigation,
arbitration or other proceeding relating to the Borrower, any of the Guarantors, MEC or any of their property, assets or business, including any of the Properties or The Meadows Property which if
decided adversely could result in a Material Adverse Change, the Borrower or such Guarantor shall promptly give notice thereof to the Lender containing reasonable details thereof and the potential
effect thereof.

	(cc)
	Chief Executive Office:    The Borrower and each Guarantor has advised or will advise the Lender in writing of their or
MEC's respective chief executive offices and places of business and changes thereto.

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

	(i)
	maintain
books and records and 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)
	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)
	use
its own stationary, invoices and cheques; 

83

 

	(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, 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 Remington Loan Agreement and the MEC Bridge 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)
	conduct
business in its own name;

	(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 with minutes thereof delivered to the Lender (or adopt written resolutions in lieu thereof where permitted under
applicable corporate law), with a copy of such minutes and/or resolutions provided 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. 

 
 

ARTICLE 8
  
    NEGATIVE COVENANTS  
    

         8.1    Negative Covenants    

        Except
as expressly permitted under this Agreement and the other Loan Documents, from the date of this Agreement and thereafter until the Loan has been paid in full, the Borrower and the
Guarantors covenant and agree with the Lender as follows: 

	(a)
	Licences and Permits:    Neither the Borrower nor any of the Guarantors shall pledge any of licences or permits, held by it
or any of its subsidiaries, to any third party. 

84

 

	(b)
	Debt:    Neither the Borrower nor any Guarantor shall, directly or indirectly, incur or suffer to exist any debt or enter
into any guarantees, hypothecation, contracts or other agreements which would make the Borrower or such Guarantor liable for any debt or expense other than (i) Permitted Encumbrances,
(ii) customary trade payables and similar types of obligations that are consistent with past practice and in the ordinary course of the Borrower's or such Guarantor's business, (iii) the
Indebtedness, (iv) indebtedness in respect of the Remington Loan Agreement and the MEC Bridge Loan Agreement and guarantees and security in respect thereof, (v) liabilities for
management fees permitted by Section 8.1(r), (vi) intercompany indebtedness of the Remington Guarantor to MEC of approximately $900,000 on account of Construction Costs
(as defined in the Remington Loan Agreement) incurred by MEC prior to the Closing Date; and (vii) indebtedness to BE&K, Inc. in the amount of $16,646,395, pursuant to a loan given
by BE&K, Inc. to the Borrower.

	(c)
	Further Encumbrances:    Neither the Borrower nor any of the Guarantors will create, assume or permit to exist any
Encumbrance or security interest with respect to any of the Properties and/or The Meadows Property, or any portion thereof, whether ranking prior to, pari
passu with or subsequent to the Security, other than Permitted Encumbrances without the prior written consent of the Lender.

	(d)
	Transfers:    Neither the Borrower nor any of the Guarantors shall sell, assign, transfer, convey, lease or otherwise
alienate or dispose of any of the Properties and/or The Meadows Property, or any interest therein (financial or management), whether legal or equitable, without the prior written consent of
the Lender.

	(e)
	Change of Control:    There shall not be, nor shall the Borrower and/or any of the Guarantors permit, any issue,
subscription, allotment, cancellation or redemption initiated by the Borrower or any of the Guarantors or, any transfer by sale, assignment, operation of law or other disposition or any redemption
initiated by a holder of shares of the Borrower and/or any of the Guarantors, of all or any part of the shares of the Borrower and/or any of the Guarantors or of any subsidiary corporation of the
Borrower and/or any of the Guarantors or any corporation which is an Affiliate of the Borrower and/or any of the Guarantors, other than the parent company of the Borrower or any of the Guarantors,
having voting rights, whether contingent or direct, nor permit any re-organization or amalgamation in any such case so as to result in any change in the present effective voting control of
the Borrower and/or any of the Guarantors from the Person or Persons holding such voting control at the date of execution of this Agreement (although the effective voting control may vary among those
Persons holding such voting control at the date of execution of this Agreement) without first obtaining the written consent of the Lender in each instance, which consent may be unreasonably or
arbitrarily withheld, notwithstanding any statutory provision or provisions to the contrary. There shall not be deemed to be a change in the present effective voting control if the shares of the
Borrower and/or any of the Guarantors in question are beneficially owned by (a) a company controlled by the Person who beneficially owns such shares at the date of execution of this Agreement
or (b) an Affiliate. Any subsequent change in control shall similarly be subject to the prior written consent of the Lender. The Borrower and each of the Guarantors shall make available to the
Lender or its lawful representatives all its corporate books and records for inspection at all reasonable times, in order to ascertain whether there has been any change in control. 

85

 

	(f)
	Occupancy Agreements:    Neither the Borrower nor any of the Guarantors shall enter into, nor permit to be entered into any
leases, agreements to lease or any other Occupancy Agreements for any space which constitutes any material part of the Properties, The Meadows Property or any of them without the prior written
approval of the Lender, acting reasonably, other than Permitted Encumbrances and stall agreements and leases for operations such as blacksmiths and veterinarians on market terms and consistent with
past practice.

	(g)
	No Amendments:    Neither the Borrower nor any of the Guarantors shall make, permit or allow any material amendments or other
material changes to or terminate the Material Agreements (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 nor make any material amendments to its constating documents, in each case in a manner which would materially
adversely affect the interest of the Lender hereunder or under the Security, in each case, without the prior written consent of the Lender, which shall not be unreasonably withheld. Neither the
Borrower nor the Remington Guarantor shall materially alter or vary the Plans for the Gulfstream/Aventura Properties or the Remington Property approved by the Lender without the prior written consent
of the Lender, not to be unreasonably withheld.

	(h)
	Capital Expenditures:    Neither the Borrower nor any of the Guarantors shall, without the Lender's prior written approval,
exercisable in the Lender's sole discretion, incur any Capital Expenditures or permit any mechanic's lienable work to be done to or for the benefit of any of the Properties except (a) for the
Reconstruction, (b) the completion of the Slots Facilities Initiative, (c) the Remington Construction, (d) Capital Expenditures in respect of the Gulfstream Facilities, the
Remington Property and the Palm Meadows Training Centre Property not to exceed during any fiscal year Five Million Dollars ($5,000,000) in the aggregate for the Borrower and the Additional Guarantors
(capital expenditures by the Remington Guarantor during any fiscal year in respect of the Remington Facilities not to exceed One Million Two Hundred and Fifty Thousand Dollars ($1,250,000) for
customary refreshing of existing authorized gaming devices), (d) capital expenditures by the Borrower during any fiscal year not to exceed One Million Dollars ($1,000,000) for customary
refreshing of authorized gaming devices in the Slots Facilities, (e) as disclosed in the Occupancy Agreements approved by the Lender, (f) for normal repair and maintenance in the
ordinary course of business or (g) emergency repairs. 

86

 

	(i)
	Use:    None of the Borrower nor either of the Additional Guarantors shall use or develop a Property for any purposes other
than as contemplated under the Gulfstream Development Agreement, the Remington Development Agreement, the Construction Contracts, the Slots Facilities Contracts, the Remington Construction Contracts
and other permitted related purposes. Neither the Borrower nor either of the Additional 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.

	(j)
	Property Manager:    Neither the Borrower nor any of the Guarantors shall enter into any property management agreement in
respect of any of the Properties or the Meadows Property without the Lender's prior written consent.

	(k)
	No Commingling:    Except as specifically contemplated hereby, neither the Borrower nor any Guarantor shall commingle any
assets or funds related to the Properties or The Meadows Property with assets or funds of any of its shareholders, principals, Affiliates or any other entity.

	(l)
	No Change in Nature of Business:    Neither the Borrower nor any Guarantor shall make any material change in the nature of
its business carried on as of the date hereof.

	(m)
	No Mergers, Consolidations, Sales:    Neither the Borrower nor any Guarantor shall be a party to any merger, consolidation or
exchange of ownership interests, or purchase or otherwise acquire all or substantially all of the assets or stock of any class of, or any membership, partnership or joint venture interest in, any
other Person or entity, or sell, transfer, convey or lease all or any substantial part of its assets, or sell or assign, with or without recourse, any receivables.

	(n)
	No Change in Ownership:    Neither the Borrower nor any Guarantor shall permit any Person or entity to become a shareholder
of it or permit any of its shareholders to assign, transfer, pledge, hypothecate or sell any interest in it. If requested by the Lender, the Borrower and each Guarantor shall provide the Lender at
reasonable intervals with a corporate certificate that no such change of ownership has occurred during the preceding period.

	(o)
	ERISA:    Neither the Borrower nor any Guarantor nor any ERISA Affiliate shall (A) adopt or institute any Employee
Benefit Plan that is an employee pension benefit plan within the meaning of section 3(2) of ERISA, (B) 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, (C) 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 the Borrower, any Guarantor or any ERISA Affiliate to any tax, penalty or other liability, including a liability to indemnify, (D) 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), (E) fail to make full payment when due of all amounts due as contributions to any Employee Benefit Plan or Multiemployer Plan, (F) fail to
comply with the requirements of section 4980B of the IRC or Part 6 of Title I(B) of ERISA, or (G) adopt any amendment to any Employee Benefit Plan which would require the posting
of security pursuant to section 401(a)(29) of the IRC, where singly or cumulatively, the above could be reasonably likely to have a Material Adverse Effect. 

87

 

	(p)
	Other Agreements:    Neither the Borrower nor any Guarantor shall enter into any agreement containing any provision which
would be violated or breached by the performance of its obligations hereunder 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 hereof or of any such instrument or document.

	(q)
	Assertion of Certain Claims and Defenses:    To the extent permitted by Applicable Legal Requirements, neither the Borrower
nor any of the Guarantors shall 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.

	(r)
	Compensation and Fees; Disbursements:    Neither the Borrower nor any Guarantor shall pay to any Affiliates or other related
party (other than the Lender) of the Borrower, any of the Guarantors or MEC any compensation or fees for services rendered (including, without limitation any management, consulting or similar fees, or
comparable payment); provided that each of the Borrower and the Additional Guarantors may incur and accrue liabilities for management fees to MEC which, in the aggregate, shall not exceed, in any
fiscal year, 2.5% of the Combined gross revenues of the Borrower and the Additional Guarantors for such fiscal year; provided that no payment may be made in respect of such management fees unless at
the time of the making of such payment, and after giving effect thereto, (i) the ratio of the Combined Net Debt to trailing four quarter Combined EBITDA of the Borrower and the Additional
Guarantors does not exceed, and for prior four consecutive fiscal quarters such ratio has not exceeded, 3:1; and (ii) no Unmatured Event of Default or Event of Default or event of default or
unmatured event of default under the Remington Loan Agreement has occurred and is continuing.

	(s)
	Loans, Advances, Guaranties, Dividends, Distributions:    Except as expressly permitted hereunder, neither the Borrower nor
any of the Guarantors shall lend or advance money or credit to any Person or entity or purchase or repurchase (or agree, contingently or otherwise, to do so) the indebtedness of, or assume,
guarantee (directly or indirectly or by an instrument having the effect of assuming another's payment or performance of any obligation or capability of so doing, or otherwise), or endorse or otherwise
become liable, directly or indirectly, with respect to the obligations, stock or dividends of any Person or entity. 

88

 

	(t)
	Investments; Acquisitions:    Neither the Borrower nor any Guarantor may 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 or any Guarantor may make investments in Cash Equivalents in amounts and pursuant
to terms acceptable to the Lender, acting reasonably.

	(u)
	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, the Remington Guarantee and Indemnity, the Palm Meadows Guarantee and Indemnity and/or the MEC Guarantee and Indemnity remains
outstanding, each of the Borrower and the Additional Guarantors 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, without limitation, 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 Event of Default or an unmatured event of default or event of default under the Remington
Loan Agreement;

	(ii)
	redeeming,
purchasing or otherwise retiring or cancelling any securities (including any warrants, options or rights to acquire securities,
"Securities");

	(iii)
	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;

	(iv)
	issuing
any Securities containing any mandatory or fixed payment obligations of any kind, whether dividend or premium or otherwise;

	(v)
	declaring
or paying any dividends, provided that this provision shall not prohibit and there shall be permitted the declaration and payment of a single annual dividend
to MEC by the Borrower and each of the Additional Guarantors in each year within 60 days after the delivery to the Lender of the audited financial statements referred to in
Section 7.1(d)(ii)(C) for the immediately preceding fiscal year if, at the time of such declaration and payment, and after giving effect thereto, all of the Gulfstream Restricted Payment
Release Conditions have been satisfied; 

89

 

	(vi)
	paying
any management, consulting or similar fee, or comparable payment, (A) to any Affiliate or other related party (other than the Lender) or
(B) outside of the ordinary course of the Borrower's or such Additional Guarantor's business as of the Closing Date and consistent with past practice (it being acknowledged that the
Remington Guarantor has entered into a consulting agreement with Ingenus Management and Consulting with respect to the Remington gaming facility); and

	(vii)
	entering
into any transactions with any Affiliates for the purposes of entering into any transaction or activity that is otherwise prohibited by this
Section 8.1(u). 

For
the purposes hereof, the "Gulfstream Restricted Payment Release Conditions" means: (i) the Capitalized Interest Tranche has been repaid in
full pursuant to the provisions of Section 3.3 of the Remington Loan Agreement, (ii) at the time of the declaring and making of a payment referred to in clause (iv) above
(a "restricted payment"), and after giving effect
thereto, the ratio of outstanding Combined Net Debt of the Borrower and the Additional Guarantors to such entities' trailing four quarter Combined EBITDA does not exceed 4:1, (iii) at the time
of the declaring and making of the restricted payment, and after giving effect thereto, no Event of Default or Unmatured Event of Default or event of default or unmatured event of default under the
Remington Loan Agreement shall have occurred and be continuing, and (iv) the distribution of the restricted payment does not cause the sum of (A) all restricted payments made by the
Borrower and the Additional Guarantors (including the desired payment) and (B) all repayments made on account of the Capitalized Interest Tranche pursuant to Section 3.3 of the Remington
Loan Agreement to exceed an amount equal to (I) 40% of the Combined Excess Cash Flow of the Borrower and the Additional Guarantors since the Remington Facilities Completion Date,
(II) provided that, at the time of the declaring and making of the restricted payment, and after giving effect thereto, the ratio of the Combined Net Debt of the Borrower and the Additional
Guarantors to such entities' trailing four quarter Combined EBITDA does not exceed, and for the prior four consecutive fiscal quarters such ratio has not exceeded, 3:1, 60% of the Combined Excess Cash
Flow of the Borrower and the Additional Guarantors since the Remington Facilities Completion Date or (III) provided that, at the time of the declaring and making of the restricted payment, and
after giving effect thereto, the ratio of the Combined Net Debt of the Borrower and the Additional Guarantors to such entities' trailing four quarter Combined EBITDA does not exceed, and for the prior
four fiscal quarters such ratio has not exceeded, 2:1, 85% of the Combined Excess Cash Flow of the Borrower and the Additional Guarantors since the Remington Facilities Completion Date. 

90

 

Notwithstanding
the foregoing, the Lender agrees that the following types of payments will not be deemed to be restricted payments subject to the above restrictions: (a) payments to MID or the
Lender (including any amounts paid to the Lender in respect of: (i) the Borrower's obligations under the guarantees and indemnities provided by it under the Remington Loan Agreement or the MEC
Bridge Loan Agreement; (ii) the Remington Guarantor's obligations under the guarantees and indemnities provided by it under this Agreement; (iii) the Palm Meadows Guarantor's obligations
under the guarantees and indemnities provided by it under this Agreement, the Remington Loan Agreement or the MEC Bridge Loan Agreement; (iv) The Meadows Guarantors' obligations under this
Agreement or the MEC Bridge Loan Agreement; and/or (v) MEC's obligations under guarantees and indemnities provided by it under this Agreement and the Remington Loan Agreement); (b) the
distribution by the Borrower to MEC of the First Advance, which was an amount equal to the amount paid by MEC with respect to the Reconstruction prior to the closing of the Loan plus
out-of-pocket fees and costs payable by the Borrower or MEC in connection with entering into the Loan; (c) the distribution by the Remington Guarantor to MEC of the
initial advance made to the Remington Guarantor under the Remington Loan Agreement, which initial advance was an amount equal to the amount paid by MEC (either for its account or for the account of
the Remington Guarantor) with respect to the Remington Construction prior to July 22, 2005 plus the out-of-pocket fees and costs payable by the Remington Guarantor or
MEC in connection with entering into the Remington Loan Agreement; (d) guarantee fees paid to the Borrower, the Remington Guarantor, the Palm Meadow Guarantor or The Meadows Guarantors pursuant
to this Agreement, the Remington Loan Agreement or the MEC Bridge Loan Agreement; and (e) provided that at the time of the making of such payment, and after giving effect thereto, no Unmatured
Event of Default or Event of Default or event of default or unmatured event of default under the Remington Loan Agreement, shall have occurred and be continuing, payments to MEC for the reimbursement
of additional amounts paid by MEC from time to time with respect to the Reconstruction, the Slots facilities Initiative, or the Remington Construction, provided that all such amounts were incurred in
accordance with the Plans and with the terms of this Agreement or the Remington Loan Agreement, as applicable. 

 
 

ARTICLE 9
  
    EVENTS OF DEFAULT; ACCELERATION OF INDEBTEDNESS  
    

         9.1    Events of Default    

        The
occurrence or existence of any one or more of the following shall constitute an "Event of Default" hereunder: 

	(a)
	Non-Payment:    Default by the Borrower in payment of (i) any principal when due including, without
limitation, any mandatory repayments pursuant to Section 3.7 and/or 3.9 or (ii) any interest thereon within three Business Days after the same becomes due or (iii) any
other amount hereunder within 10 days after notice of non-payment thereof is received by the Borrower;

	(b)
	Defaults:    Default by the Borrower, any Guarantor or MEC 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, any Guarantor or MEC; or 

91

 

         (c)    Representations and Warranties:    

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 or MEC 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; or 

	(d)
	Cross Default:    (i) The Borrower or a Guarantor fails to make any payment beyond the applicable grace period with respect
thereto, if any (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) in respect of any indebtedness (other than indebtedness to the Lender), having an aggregate
principal amount of not less than Two Million Dollars ($2,000,000); or (ii) the Borrower, any Guarantor or MEC fails to make any payment beyond the applicable grace period with respect thereto,
if any, whether by scheduled maturity, required prepayment, acceleration, demand or otherwise in respect of any indebtedness to the Lender (other than the Indebtedness); or (iii) the applicable
Person in (i) or (ii) fails to observe or perform any other conditions relating to any such indebtedness, or any other event occurs, the effect of which default or other event causes or
permits the holder or holders of such indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, with the giving of notice if required, such indebtedness to become due
or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such indebtedness to be made, prior to its stated
maturity; or

	(e)
	Insolvency, Voluntary Proceedings:    The Borrower, any Guarantor and/or MEC shall (i) apply for or consent to the
appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) or make application for or seek relief or protection of itself or for
the benefit of their creditors under any of the sections, chapters or provisions of Title 11 of the United States Code, 11 U.S.C. §§ 101 et. seq.
(the "Bankruptcy Code"), (iii) be unable, or admit in writing its inability, to pay its debts generally as they mature, (iv) make a
general assignment for the benefit of itself or any of its creditors, (v) be dissolved or liquidated in full or in part, (vi) become insolvent (as such term may be defined or
interpreted under any applicable statute), (vii) commence a voluntary case or other Proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary
case or other Proceeding commenced against it, or (viii) take any action for the purpose of effecting any of the foregoing; or 

92

 

	(f)
	Involuntary Proceedings:    Proceedings for the appointment of a receiver, trustee, conservator, liquidator or custodian of
the Borrower, any Guarantor, and/or MEC or of all or a substantial part of the property thereof, or an involuntary case or other Proceedings seeking liquidation, reorganization, dissolution,
compromise, moratorium, protection, stay of proceedings of creditors or other relief with respect to the Borrower, any Guarantor, and/or MEC or the debts thereof under any bankruptcy, insolvency or
other similar law now or hereafter in effect shall be commenced and such Proceeding is not contested or shall not be dismissed or discharged within 45 days of commencement, provided that if an
order, decree or judgment is granted or entered (whether or not entered or subject to appeal) against any of the Borrower, any Guarantor, and/or MEC in the interim, such 45-day grace
period will cease to apply and provided further that if the Borrower, any Guarantor, and/or MEC files an answer admitting the material allegations of a petition filed against it in any such
Proceeding, such 45-day grace period will cease to apply; or

	(g)
	Judgments:    (i) One or more judgments, Orders, decrees or arbitration awards requiring the Borrower and/or any of the
Guarantors to pay an aggregate amount of One Million Dollars ($1,000,000) or more shall be rendered against the Borrower and/or any of the Guarantors in connection with any single or related series of
transactions, incidents or circumstances and the same shall not be satisfied, vacated or stayed within 15 Business Days from the date of entry thereof and, if stayed, within such period the
same has not been appealed and stayed during such appeal; provided that if enforcement and/or realization Proceedings are commenced in respect thereof, such 15 Business Day grace period shall
cease to apply; (ii) any judgment, writ, assessment, warrant of attachment, tax lien or execution or similar process shall be issued or levied against a substantial part of the Property of any
Loan Party which judgment is not stayed and dismissed or satisfied within 15 Business Days after issue or levy; or (iii) any other judgments, Orders, decrees, arbitration awards, writs,
assessments, warrants of attachment, tax liens or executions or similar processes which, alone or in the aggregate, could be reasonably expected to have a Material Adverse Effect are rendered, issued
or levied; or

	(h)
	Loan Documents:    Any Loan Document or any material term thereof shall cease to be, or be asserted by the Borrower and/or
any Guarantor and/or MEC not to be, a legal, valid and binding obligation of the Borrower and/or any of the Guarantors and/or MEC enforceable in accordance with its terms; or 

93

 

	(i)
	Security:    Any Encumbrance intended to be created by any Security shall at any time be invalidated, subordinated or
otherwise cease to be in full force and effect, for whatever reason, or any Encumbrance purported to be created by any Security shall cease to be, or shall be asserted by the Borrower and/or any of
the Guarantors and/or MEC not to be, a valid (except as expressly otherwise provided in such Security or any other Loan Documents) perfected Encumbrance in the Collateral covered thereby with the
priority contemplated herein; or

	(j)
	Employee Benefit Plans:    Any Reportable Event which constitutes grounds for the termination of any Employee Benefit Plan by
the Borrower or any ERISA Affiliate of the Borrower or for the appointment of a trustee by the Borrower or any ERISA Affiliate of the Borrower to administer any Employee Benefit Plan shall occur, or
any Employee Benefit Plan shall be terminated within the meaning of Title IV of ERISA or a trustee shall be appointed by the Borrower or any ERISA Affiliate of the Borrower to administer any Employee
Benefit Plan; or

	(k)
	Change of Control:    Any change of control shall occur with respect to the Borrower and/or any Guarantor; or

	(l)
	Material Adverse Effect:    Any event, occurrence or condition which, in the opinion of the Lender, has had a Material
Adverse Effect; or

	(m)
	Default under Material Agreement:    A default or event of default, or any event or circumstance not yet constituting an
event of default which, with the giving of any notice or the lapse of any period of time or both, would become an event of default on the part of the Borrower or any Guarantor, shall occur and be
continuing under any Material Agreement; provided that other than in respect of the Material Agreements referred to in items (i) to (vii)(A) of the definition of Material Agreements,
after giving effect to applicable grace periods under such other Material Agreements, the default or event of default under such other Material Agreements could be reasonably expected to have a
Material Adverse Effect, unless within 30 days thereof, such event of default has been cured or such Material Agreement is replaced by an agreement in form and substance, and with a party,
satisfactory to the Lender; or

	(n)
	Termination of Material Contract:    Any Material Agreement or any consent given thereunder shall cease to be in full force
and effect, or any party to a Material Agreement states that such Material Agreement is no longer in full force and effect; provided that other than in respect of the Material Agreement referred to in
items (i) to (vii)(A) of the definition of Material Agreements, the cessation, default or repudiation of such other Material Agreement has had or could be reasonably expected to have a
Material Adverse Effect, unless within 30 days thereof such Material Agreement is replaced by an agreement in form and substance, and with a party, satisfactory to the Lender; or 

94

 

	(o)
	Termination of Racing and/or Gaming Licences:    Any racing and/or gaming licences held by the Borrower or any of the
Guarantors or any consent or approval given thereunder shall cease to be in full force and effect or shall be materially and adversely changed or altered, provided that where such termination, change
or alteration is capable of being cured and the Borrower is using all commercially reasonable efforts to so cure, the Borrower shall have up to 30 days to so cure; or

	(p)
	Delivery of Security:    The Borrower and/or any of the Guarantors and/or MEC shall have failed to deliver to the Lender on
the applicable date the Security required to be delivered pursuant to Section 5.1; or

	(q)
	Defaults of the Guarantors or MEC:    While the Guarantees and Indemnities are in effect, any Guarantor thereunder or MEC
shall fail to observe or perform any covenant, obligation, condition or agreement contained in such Guarantee and Indemnity and such failure shall continue for 30 days; or

	(r)
	Guarantee:    Any of the Guarantees and Indemnities or any material term thereof shall cease to be, or be asserted by the
applicable Guarantors or MEC not to be, a legal, valid and binding obligation of such Guarantors or MEC, enforceable in accordance with its terms, other than in the case of The Meadows Guarantee and
Indemnity terminating in accordance with its terms; or

	(s)
	Termination of Remington Lease:    The Remington Lease shall be terminated as a result of the Zoo Trust exercising its
discretionary termination rights thereunder. 

        As
used herein and in the other Loan Documents, the term "Unmatured Event of Default" means any of the foregoing events described in this
Section 9.1 which, if a notice were given or a cure or grace period expired, would become an Event of Default hereunder. 

         9.2    Acceleration; Remedies    

        Upon
the occurrence of an Event of Default, unless the Lender elects to waive such default in its sole and absolute discretion: (i) the Loan Amount including without duplication,
all accrued and unpaid interest, fees, expenses, closing costs and other Indebtedness owing; and (ii) the Pre-Payment Make-Whole Amount shall become immediately due and
payable without notice to the Borrower and the Lender shall be entitled to all of the rights and remedies provided in the Loan Documents or at law or in equity. Each remedy provided in the Loan
Documents is distinct and cumulative of all other rights or remedies under the Loan Documents or afforded by law or equity, and may be exercised concurrently, independently, or successively, in any
order whatsoever. Upon the occurrence of an Event of Default, the Lender shall be entitled to remain in possession of the Property or any other collateral pledged to secure any obligation of the
Borrower to the Lender, and to collect the rents therefrom and the Borrower shall and hereby consents thereto. 

95

  

         9.3    Waiver of Certain
Rights    

        The
Borrower and each of the Guarantors hereby waives each of the following, to the fullest extent permitted by law: 

	(a)
	any
defence based upon:

	(i)
	the
unenforceability or invalidity of all or any part of the Loan, the Security, any of the Guarantees and Indemnities, or any other Loan Document, or any failure of the
Lender to take proper care or act in a commercially reasonable manner in respect of the Security or any collateral subject to the Security, including in respect of any disposition of the Collateral or
any set-off of the Borrower's or a Guarantor's bank deposits against the Loan;

	(ii)
	any
act or omission of the Borrower or any other Persons, including the Guarantors or MEC, that directly or indirectly results in the discharge or release of the
Borrower or any other Person or any of the Loan or any Security; or

	(iii)
	any
Guarantor's or MEC's present or future method of dealing with the Borrower or any Security (or any Collateral subject to the Security) or any other
guarantee for the Loan;

	(b)
	any
right (whether now or hereafter existing) to require any Guarantor or MEC, as a condition to the enforcement of any of the Guarantees and Indemnity:

	(i)
	to
accelerate the Loan or proceed and exhaust any recourse against the Borrower or any other Person;

	(ii)
	to
realize on any Security that it holds;

	(iii)
	to
marshal the assets of the Borrower or any Guarantees and Indemnity; or

	(iv)
	to
pursue any other remedy that the Borrower or any of the Guarantors or MEC may not be able to pursue itself and that might limit or reduce the Borrower's, a
Guarantor's or MEC's burden;

	(c)
	presentment,
demand, protest and notice of any kind including, without limitation, notices of default and notice of acceptance of any Guarantee and Indemnity;

	(d)
	all
suretyship defences and rights of every nature otherwise available under Florida, Pennsylvania or Oklahoma law or other applicable laws; and

	(e)
	all
other rights and defences (legal or equitable) the assertion or exercise of which would in any way diminish the liability of the Guarantors or MEC under the Guarantees and
Indemnities. 

96

 

 
 

ARTICLE 10
  
    MISCELLANEOUS  
    

         10.1    Reliance and
Non-Merger    

        All
covenants, agreements, representations and warranties of the Borrower or any Guarantor or MEC 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, the Guarantors and
MEC and their respective Subsidiaries provided to it hereunder by and on behalf of the Borrower, any of the Guarantors or MEC 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. 

         10.3    No
Set-Off    

        To
the fullest extent permitted by law, the Borrower and each Guarantor shall make all payments under the Loan Documents 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 Authority which may adversely affect the Borrower's or such Guarantor's obligation to make, or the Lender's right to receive, such payments. The Borrower and each Guarantor grants to the
Lender the right to set off all accounts, credits or balances owed by the Lender to the Borrower or such Guarantor, as applicable, 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 or the other Loan Documents and will advise the Borrower at any time that it elects to do so. 

97

 

         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, any Guarantor or MEC believed by it to be genuine and correct. 

         10.6    Notices    

        Any
notice or other communication which may be or is required to be given or made pursuant to this Agreement shall be deemed to have been sufficiently and effectively given if signed by
or on behalf of the party giving notice and sent by either personal service or paid registered mail to the party for which it is intended at its address as follows: 

	(a)
	if
to the Borrower, at: 

Gulfstream
Park Racing Association, Inc.

901 South Federal Highway

Hallandale Beach, Florida

33009-7199 

Fax:    954-457-6497

Attention:    President 

with
a copy to: 

Magna
Entertainment Corp.

337 Magna Drive

Aurora, Ontario

L4G 7K1 

Fax:    905-726-7448

Attention:    Legal Department 

	(b)
	if
to the Lender, at: 

MID
Islandi sf. Zug Branch

Baarerstrasse 16, CH-6304 Zug Switzerland 

Fax:    +41
41 725 27 25

Attention: Thomas Schultheiss, Branch Manager 

with
a copy to: 

MI
Developments Inc.

455 Magna Drive

Aurora, Ontario,

CANADA L4G 7A9 

Fax:    905-726-2095

Attention:    General Counsel 

98

 

	(c)
	if
to a Meadows Guarantor, at: 

P.O. Box 499

Meadow Lands

Pennsylvania 1543 

Fax:    724-229-7578

Attention:    President 

	(d)
	if
to the Remington Guarantor, at: 

One
Remington Place

Oklahoma City

Oklahoma 73111 

Fax:    405-425-3297

Attention: General Manager 

	(e)
	if
to the Palm Meadows Guarantor, at: 

Palm
Meadows Thoroughbred Training Facility

8898 Lyons Road

Boynton Beach, FL 33437 USA 

Fax:    561.731.3905

Attention:    Chief Financial Officer 

in
each case, with a copy to: 

Magna
Entertainment Corp.

337 Magna Drive

Aurora, Ontario

L4G 7K1 

Attention:    Legal
Department

Fax:    905-726-7448 

        Any
notice or communication which may or is required to be given or made shall be made or given as herein provided or to such other address or in care of such other officer as a party
may from time to time advise to the other parties hereto by notice in writing as aforesaid. The date of receipt of any such notice shall be the date of delivery of such notice if served personally or,
if mailed as aforesaid, shall be deemed to be the fifth (5th) Business Day next following the date of such mailing. If at the date of any such mailing or on or before the third (3rd) Business Day
thereafter there is a general interruption in the operation of the postal service in the United States of America which does or is likely to delay delivery by mail of such notice, to the extent
possible, shall be served personally. 

99

 

         10.7    Further
Assurances    

        Whether
before or after the happening of an Event of Default, the Borrower and each Guarantor 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 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 any 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 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. 

100

 

         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, a Guarantor or MEC hereunder or required under the Loan Documents or requested by the Lender to preserve, protect, maintain or enforce the Loan, any of
the Properties and/or The Meadows Property or any other Collateral, and which the Borrower, a Guarantor or MEC 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 and/or The Meadows Property 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 Loan, nor shall the Lender's receipt of any awards, proceeds or damages operate to cure or waive the
Borrower's, any of the Guarantors' or MEC's 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. 

101

 

         10.13    Relationship and
Indemnity    

        The
relationship between the Lender and the Borrower, the Guarantors and MEC 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. 

        To
the fullest extent permitted by law, the Borrower and the Guarantors hereby agree to indemnify, protect, hold harmless and defend the Lender, its successors, assigns and members,
shareholders, directors, officers, employees, and agents from and against any and all losses, damages, costs, expenses (including reasonable attorneys' fees (including, but not limited to, all
appellate level and post-judgment proceedings)), claims, proceedings, penalties, fines and other sanctions arising from or relating to the transactions contemplated by this Agreement and
the other Loan Documents, and which arise out of or relate to (a) environmental matters, (b) breach by the Borrower and/or the Guarantors of any of their respective representations,
warranties or covenants set forth in this Agreement and the other Loan Documents, (c) any acts or omissions of the Borrower and/or the Guarantors or any agent or contractor thereof, and
(d) the business of the Borrower and/or the Guarantors. Upon written request by an indemnitee, the Borrower and the Guarantors will undertake, at their own costs and expense, on behalf of such
indemnitee, using counsel satisfactory to the indemnitee in such indemnitee's reasonable discretion, the defense of any legal action or proceeding whether or not such indemnitee shall be a party and
for which such indemnitee is entitled to be indemnified pursuant to this Section. At the Lender's option, the Lender may, at the Borrower's and/or the Guarantors' expense, prosecute or defend any
action involving the priority, validity or enforceability of the Mortgages. The obligations of the Borrower and the Guarantors under this Section 10.13 shall survive the payment and performance
of the Indebtedness, liabilities and obligations of the Borrower and the Guarantors under, and the termination and release by the Lender of, this Agreement and the other Loan Documents. 

         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 Florida and consents to the jurisdiction of the state and federal courts where any
of the Properties is 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 portion of the real property included in any of
the Properties is located or in the United States District Court having jurisdiction over all or any portion of the real property included in any of the Properties. 

102

 

         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 ACKNOWLEDGE 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, MEC 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. 

         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, any of the Guarantors or MEC). 

         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, the Guarantors and MEC 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. 

103

 

         10.20    Appointment of Administrative
Agent    

        The
Lender may, at its discretion, following written notice to the Borrower, appoint and authorize an administrative agent (an "Administrative
Agent") to act as its agent hereunder and under the other Loan Documents with such powers as are expressly delegated to such Administrative Agent by the terms of such
appointment, together with such other powers as are reasonably incidental thereto but subject always to the terms of this Agreement. Any such Administrative Agent may resign at any time by giving
10 days' prior written notice thereof to the Borrower and the Lender, and the Administrative Agent may be removed at any time with or without cause by the Lender. Upon any such resignation or
removal, the Lender shall have the right to appoint a successor Administrative Agent. 

         10.21    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. 

         10.22    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. 

         10.23    Contribution by Guarantors with Respect to
Indebtedness    

        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 Indebtedness 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 Indebtedness, and termination of this
Agreement, such Guarantor shall be entitled to receive contribution and indemnification payments from, and be reimbursed by, each other Guarantor for the amount of such excess,  pro rata based upon
their respective Allocable Amounts in effect immediately prior to such Guarantor Payment. 

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

104

 

        This
Section 10.23 is intended only to define the relative rights of the Guarantors, and nothing set forth in this Section 10.23 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 10.23 shall be exercisable only upon the full and irrevocable payment of the Indebtedness in
cash and the termination of this Agreement, including, without limitation, the termination of the Loan commitment hereunder. 

        All
references in this Section 10.23 to a Guarantor or the Guarantors shall be deemed to include MEC. 

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

            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 10.23, 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. 

         10.25    Loss of Gulfstream
Note    

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

         10.26    Confirmation of Guarantees and
Security    

        The
Borrower hereby confirms and agrees that: (i) the Security to which it is a party shall be deemed for all purposes to secure the payment and performance of the Indebtedness
(including, without limiting the generality of the foregoing, in respect of Tranche 1 and Tranche 2) outstanding from time to time, as well as interest and other amounts owing hereunder
or under the other Loan Documents, the completion of the Reconstruction in accordance with the Gulfstream Development Agreement, the Construction Contracts, and such plans and specifications as are
approved by the Lender and the performance of all other obligations of the Borrower under the Loan and the Loan Documents, including the payment of cost overruns pursuant to Section 7.1(l). 

105

 

        In
return for additional guarantee and indemnity fees paid to each of the Guarantors as of the date of this Agreement (in the amount of $16,666 to each of The Meadows Guarantors,
$10,000 to the Palm Meadows Training Guarantor, and $50,000 to the Remington Guarantor), and in return for, inter alia, agreeing to loan the
Borrower, MEC's wholly owned subsidiary, the Tranche 2 Loan Amount, each Guarantor and MEC hereby confirm and agree that: (i) each of the Guarantees and Indemnities and Security to which
it is a party: (A) remains in full force and effect and has not been terminated, discharged or released; (B) constitutes a legal, valid and binding obligation of it, enforceable against
it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization and other laws of general application limiting the enforceability of creditors' rights; and
(C) guarantees or secures, as the case may be: (I) the payment and performance of the Indebtedness (including, without limiting the generality of the foregoing, in respect of
Tranche 1 and Tranche 2) outstanding from time to time, as well as interest and other amounts owing hereunder or under the other Loan Documents, (II) the completion of the
Reconstruction in accordance with the Gulfstream Development Agreement, the Construction Contracts, and such plans and specifications in respect thereof as are approved by the Lender: (III) the
completion of the Slots Facilities Initiative in accordance with the Slots Facilities Contracts, and such plans and specifications in respect thereof as are approved by the Lender, and (IV) the
performance of all other obligations of the Borrower under the Loan and the Loan Documents, including, in each case, the payment of cost overruns pursuant to Section 7.1(l). 

         10.27    Acknowledgment    

        THE
BORROWER AND EACH GUARANTOR ACKNOWLEDGE THAT THEY HAVE THOROUGHLY READ AND REVIEWED THE TERMS AND PROVISIONS OF THIS AGREEMENT, THE ATTACHED SCHEDULES AND THE LOAN DOCUMENTS AND ARE
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 HAVE HAD FULL BENEFIT AND ADVICE OF COUNSEL OF THEIR SELECTION IN REGARD TO UNDERSTANDING THE TERMS,
MEANING, AND EFFECTS OF THIS AGREEMENT. THE BORROWER AND EACH GUARANTOR FURTHER ACKNOWLEDGE THAT THEIR 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 HAVE RELIED ON NO OTHER REPRESENTATIONS, EITHER WRITTEN OR ORAL, EXPRESS OR
IMPLIED, MADE TO THEM 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 HAS BEEN ACTUAL
AND ADEQUATE. 

106

 

         10.28    Certain Provisions Relating to The Meadows
Guarantors    

        To
the extent that the provisions set forth herein amend the rights and obligations of The Meadows Guarantor from those set forth in the Original Amended and Restated Gulfstream Loan
Agreement, such amendments will not be operative unless approved by The State Harness Racing Commission of Pennsylvania under 58 Pa. Code Section 185.22; provided, however, that the
obligations of The Meadows Guarantors set forth in the Original Gulfstream Loan Agreement shall continue in full force and effect until such approval is obtained. Each of The Meadows Guarantors
covenant that in the event that the Second Closing (as such term is defined in the Note Agreement does not occur by the Deadline Date (as defined in the Note Agreement) 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. 

         10.29    Operation of Agreement Relating to the Remington
Guarantor    

        The
provisions of this Agreement with respect to the Remington Guarantor and its execution of this Agreement, and the Security provided by the Remington Guarantor will not be operative
or effective unless and until it has obtained the Remington Loan OHRC Approval. The Remington Guarantor covenants that it will obtain such approval by September 26, 2006, and further covenants
that it will not take any act (or omit to take any act) that disqualifies it from applying, obtaining, maintaining or receiving a license under the Oklahoma Race Horsing
Act and the terms of the Order granting Conditional Organizational Licenses for 2005 or related regulations as in effect from time to time. 

107

 

        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. 

	 	 	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 PENNSYLVANIA 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.

	 

	 	 	WASHINGTON TROTTING 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.

108

 

	 	 	MOUNTAIN LAUREL RACING, INC.
	
 	
 	

by	

/s/  BLAKE TOHANA      
 Name: Blake Tohana

Title: Executive Vice President and Chief Financial Officer
	
 	
 	

 	

/s/  MARY LYN SEYMOUR      
 Name: Mary Lyn Seymour

Title: Controller
	
 	
 	

We have authority to bind the Corporation.

	 

	 	 	REMINGTON PARK, INC.
	
 	
 	

by	

/s/  BLAKE TOHANA      
 Name: Blake Tohana

Title: Executive Vice President and Chief Financial Officer
	
 	
 	

 	

/s/  WILLIAM FORD      
 Name: William Ford

Title: Secretary
	
 	
 	

We have authority to bind the Corporation.

	 

	 	 	GPRA THOROUGHBRED TRAINING CENTER INC.
	
 	
 	

by	

/s/  BLAKE TOHANA      
 Name: Blake Tohana

Title: Executive Vice President and Chief Financial Officer
	
 	
 	

 	

/s/  WILLIAM FORD      
 Name: William Ford

Title: Secretary
	
 	
 	

We have authority to bind the Corporation.

109

 

	 	 	MAGNA ENTERTAINMENT CORP.
	
 	
 	

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.

110

 

	 	 	MID ISLANDI SF., ACTING THROUGH ITS ZUG BRANCH
	
 	
 	

by	

/s/  THOMAS SCHULTHEISS      
 Name: Thomas Schultheiss

Title: Branch Manager
	
 	
 	

 	

/s/  HERTA KESSLER      
 Name: Herta Kessler

Title: Branch Manager
	
 	
 	

We have authority to bind the Corporation.

111

 
 

SCHEDULE A
  
    Legal Description of the Aventura Lands    
    

PARCEL 2 (FEE SIMPLE ESTATE)  

The
North 659.41 feet of Tracts A and B, DONN ACRES, according to the plat thereof, as recorded in Plat Book 76, Page 30, Public Records of Miami-Dade County, Florida. 

LESS
AND EXCEPT therefrom the land conveyed to the City of Hallandale as set forth in the Right of Way Deed recorded in Official Records Book 22217, Page 230, Public Records of
Miami-Dade County, Florida, described as follows: 

A
portion of Tract B, DONN ACRES, according to the Plat thereof, as recorded in Plat Book 76, at Page 30, of the Public Records of Dade County, Florida, lying in Section 34, Township
51 South, Range 42 East, Dade County, Florida, being more particularly described as follows: Commence at the Northeast corner of said Section 34; thence south 01 degrees
59 minutes 03 seconds East along the East line of said Section 34 for 608.00 feet to the POINT OF BEGINNING; thence continue along the last described course for
51.43 feet; thence South 88 degrees 26 minutes 32 seconds West for 19.33 feet to a point on a curve (said point having a radial bearing of North 74 degrees
44 minutes 38 seconds West from the radius point); thence Northeasterly along a circular curve to the left having a radius of 460.00 feet, a central angle of 06 degrees
49 minutes 49 seconds for an arc distance of 54.84 feet to the POINT OF BEGINNING. 

ALSO
LESS AND EXCEPT THEREFROM the land conveyed to the City of Aventura as set forth in the Right of Way Deed recorded in Official Records Book 17973, Page 3869, Public Records of
Miami-Dade County, Florida, described as follows: 

A
portion of Tracts A, B and C, DONN ACRES, according to the Plat thereof, as recorded in Plat Book 76, at Page 30, Public Records of Dade County, Florida, said portion being more particularly
described as follows: Commencing at the Northeast corner of Section 34, Township 51 South, Range 42 East, in said Dade County; thence South 01 degrees 59 minutes
03 seconds East, on the East line of said Section 34, for 541.55 feet to the POINT OF BEGINNING; thence continue South 01 degrees 59 minutes 03 seconds East,
on said East line, for 117.40 feet to the Northeast corner of Exhibit "B" of that Right of Way Deed to Dade County, as described and shown in Official Records Book 12139, at
Page 3803, of said Public Records; thence South 88 degrees 26 minutes 32 seconds West, on the North line of said Exhibit "B" for 40.00 feet to the Northwest
former of said Exhibit "B"; thence South 01 degrees 59 minutes 03 seconds East, on the West line of said Exhibit "B" for 0.49 feet to a parallel line
659.41 feet South of the North line of said Section 34; thence South 88 degrees 26 minutes 03 seconds West, on said parallel line, for 624.04 feet the East
line of said Tract A; thence continue South 88 degrees 26 minutes 03 seconds West, on said parallel line, for 2209.47 feet to a point on the East right of way line of
Biscayne Boulevard (State Road No. 5), as shown on the amended State Road Department Right of Way Plans, Road No. 4 recorded in Plat Book 34, at Page 54A, of said Public Records,
said point being the beginning of a non-tangent curve concave to the Northwest having a radius of 3909.83 feet and to said point a radial line bears South 69 degrees
16 minutes 28 seconds East; thence Northerly, on said right of way line, along said curve, through a central angle of 02 degrees 21 minutes 50 seconds, for
161.31 feet to the point of cusp with a curve concave to the Northeast having a radius of 25.00 feet, a central angle of 88 degrees 53 minutes 36 seconds and to said
point a radial line bears North 71 degrees 39 minutes 17 seconds West; thence Southerly, Southeasterly and Easterly, along said curve, for 38.79 feet; thence South
70 degrees 31 minutes 53 seconds East, for 132.90 feet to the beginning of a curve concave to the North having a radius of 614.09 feet and a central angle of
21 degrees 02 minutes 04 seconds; thence Easterly, along said curve, for 225.44 feet to a parallel line 629.41 feet South of said North line of Section 34;
thence North 88 degrees 26 minutes 03 seconds East, on said parallel line, for 1792.04 feet to the West line of said Tract B; thence continue North 88 degrees
26 minutes 03 seconds East, on said parallel line for 437.05 feet to the beginning of a curve concave to the North having a radius of 330.00 feet and a central angle of
37 degrees 34 minutes 38 seconds; thence Easterly and Northeasterly, along said curve, for 216.43 feet; thence North 50 degrees 51 minutes 25 seconds
East, for 31.83 feet to the POINT OF BEGINNING. 

 

PARCEL 3 (NON EXCLUSIVE EASEMENT ESTATE)  

Together
with that certain Non Exclusive Drainage Easement as created in Agreement by and between Gulfstream Park Racing Association, Inc., a Florida corporation and City National Bank of Miami
entered into on April 20, 1984, recorded June 1, 1984, in Official Records Book 12165, Page 206, Public Records of Miami-Dade County, Florida, over the following
described land: 

A
portion of Tract D, THE WATER WAYS — SECTION 1, according to the Plat thereof, as recorded in Plat Book 122, at Page 81, Public Records of
Miami-Dade County, Florida being more particularly described as follows: 

The
South 15.00 feet of the North 60.00 feet of the West 305.01 feet of said Tract D. 

2

 
 

SCHEDULE B
  
    Legal Description of the Remington Lands    
    

        Lots One (1), Two (2) and Three (3) in EASTERN INDUSTRIAL ADDITION to Oklahoma City, Oklahoma County, Oklahoma, according to the recorded
plat thereof, 

AND

        Blocks
One (1), Two (2) and Three (3) in CASTLE HILL ADDITION to Oklahoma City, Oklahoma County, Oklahoma, according to the recorded plat thereof, LESS AND EXCEPT the West
26.21 feet of Block 3. 

AND

        A
part of Section Twelve (12), Township Twelve (12) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma being more particularly described
as follows: 

        Commencing
at the Northwest Corner of the Northwest Quarter (NW/4) of said Section 12; 

        Thence
South 00°06'33" East along the West line of said NW/4 a distance of 443.48 feet; 

Thence
North 89°53'27" East a distance of 115.00 feet to the intersection of the East right of way line of Martin Luther King Avenue and the South right of way line of Interstate
Highway No. 440; 

Thence
South 00°06'33" East along said right of way line of Martin Luther King Avenue a distance of 321.86 feet to the centerline of Deep Fork Creek, said point being the point
of beginning; 

Thence
South 74°10'33" East along said centerline a distance of 116:41 feet; 

Thence
South 63°25'33" East along said centerline a distance of 446.00 feet; 

Thence.
South 72°24'03" East along said centerline a distance of 197.55 feet; 

Thence
South 81°22'33" East along said centerline a distance of 225.00 feet; 

Thence
South 86°29'41" East along said centerline a distance of 81.70 feet; 

Thence
North 41°15'40" East along said centerline a distance of 101.96 feet; 

Thence
North 31°00'12" East along said centerline a distance of 240.65 feet; 

Thence
North 51°23'00" East along said centerline a distance of 307.54 feet; 

Thence
North 56°04'05" East along said centerline a distance of 150.70 feet; 

Thence
South 84°56'24" East along said centerline a distance of 107.66 feet; 

 

Thence
South 43°47'02" East along said centerline a distance of 201.38 feet; 

Thence
South 36°27'00" East along said centerline a distance of 124.80 feet; 

Thence
South 29°46'10" East along said centerline a distance of 597.02 feet to a point on the South line of the Northeast Quarter (NE/4) of the said NW/4; 

Thence
North 89°40'05" East along said South line a distance of 326.85 feet; 

Thence
North 89°39'51" East along the South line of the NW/4 of the NE/4 of said Section 12 a distance of 1299.57 feet to a point on the East line of said NW/4 of
the NE/4; 

Thence
North 00°09'28" West along said East line a distance of 478.06 feet; 

Thence
North 89°50'32" East a distance of 575.71 feet; 

Thence
South 00°09'28" East a distance of 52.04 feet; 

Thence
North 89°50'32" East a distance of 211.07 feet to a point on the West right of way line of Interstate Highway No. 35; 

Thence
South 16°02'43" East along said right of way a distance of 258.19 feet 

Thence
South 03°34'32" East a distance of 378.83 feet to a point on said West right of way line of Interstate Highway No. 35; 

Thence
South 68°03'46" East along said highway right of way a distance of 78.40 feet to a point of curvature; 

Thence
Southeasterly on a curve to the right along said highway right of way having a radius of 2709.79 feet (chord bearing South 07°05'22" East; chord distance 652.11 feet)
an arc distance of 653.69 feet; 

Thence
South 01°46'27" West along said highway right of way a distance of 440.14 feet; 

Thence
South 00°10'44" East and parallel with the East line of the Southeast Quarter (SE/4) of said Section 12 and along said Highway right of way line a distance of
919.03 feet; 

Thence
South 04°23'43" West along said highway right of way a distance of 250.80 feet; 

Thence
South 03°26'57" East along said highway right of way a distance of 350.57 feet; 

Thence
South 00°10'44" East and parallel with the East line of the SE/4 of said Section 12 and along said highway light of way a distance of 400.00 feet; 

Thence
South 03°38'07" West along said right of way a distance of 300.67 feet; 

Thence
South 00°10'44" East and parallel with the said East line of the SE/4 of said Section 12 and along said highway right of way a distance of 73.98 feet; 

2

 

Thence
South 89°39'56" West a distance of 668.35 feet to a point on the former East right of way line of the Missouri, Kansas and Texas railroad; 

Thence
South 04°20'04" East along said former railroad right of way a distance of 351.74 feet to a point on the South line of said Section 12; 

Thence
South 89°39'56" West along said South line of said Section a distance of 100.24 feet to a point on the former West right of way line of the Missouri, Kansas and
Texas railroad; 

Thence
North 04°20'04" West along said former railroad right of way a distance of 656.50 feet; 

Thence
South 85°39'56" West along said former railroad right of way a distance of 12.5 feet; 

Thence
North 04°20'04" West along said former railroad right of way a distance of 961.00 feet to a point of curvature; 

Thence
Northeasterly on a curve to the right along said former railroad right of way having a radius of 2938.20 feet (chord bearing North 04°08'10" West; chord distance
20.35 feet) an arc distance of 20.35 feet; 

Thence
South 89°39'56" West and parallel with the South line of the Southwest Quarter (SW/4) of Section 12 a distance of 643.59 feet; 

Thence
South 00°13'34" East a distance of 1633.00 feet to a point on the South line of Said Section 12; 

Thence
South 89°39'56" West along said South line of said Section a distance of 221.22 feet to a point of intersection with the former North right of way line of Grand
Boulevard (now Remington Place); 

Thence
North 42°53'17" West along said former North right of way line of Grand Boulevard a distance of 1066.16 feet to a point of curvature; 

Thence
Northwesterly on a curve to the left along said former Grand Boulevard right of way having a radius of 1194.33 feet (chord bearing North 61°47'63" West; chord distance
774,14 feet) an arc distance of 788.37 feet; 

Thence
North 07°01'01" East a distance of 16.95 feet; 

Thence
South 89°40'01" West along the North right of way line of Grand Boulevard according to the recorded plat of CASTLE HILL ADDITION (now vacated) a distance of
892.20 feet to a point of curvature; 

Thence
Northwesterly on a curve to the right along said North right of way line of Grand Boulevard according to said vacated plat, having a radius of 1810.00 feet (chord bearing North
79°00'49 West; chord distance 710.54 feet) an arc distance of 715.18 feet; 

Thence
North 00°06'22" West a distance of 175.00 feet; 

3

 

Thence
North 65°19'39" West a distance of 150.00 feet to a point on the former East right of way line of Martin Luther King Avenue; 

Thence
North 00°07'18" West along said former right of way a distance of 1094.19 feet to a point on the North line of the Southwest Quarter of said Section 12; 

Thence
North 00°06'33" West along said former right of way a distance of 661.25 feet; 

Thence
North 89°53'27" East along said former right of way a distance of 26.00 feet; 

Thence
North 00°06'33" West along said former right of way a distance of 425.00 feet; 

Thence
North 89°53'27" East along said former right of way a distance of 25.00 feet; 

Thence
North 00°06'33" West along said former right of way a distance of 518.50 feet; 

Thence
North 89°53'27" East along said former right of way a distance of 15.00 feet; 

Thence
North 00°06'33" West along the current right of way a distance of 275.02 feet to the point of beginning. 

        Said
tract being further described as Tracts 2, 16, 17, 19, 20, 21, 22, 24, 27, 28, 30, 31, 32, 34, 41, 42, 43, 44, 46, 48, 47, 48 and 49 as follows: 

Tract 2: 

        The
Southwest Quarter (SW/4) of the Northeast Quarter (NE/4) of Section Twelve (12), Township Twelve (12) North, Range Three (3) West of the Indian Meridian, Oklahoma
County, Oklahoma, as shown by the government survey thereof. 

Tract 16: 

        A
part of the East Half (E/2) of the Northeast Quarter (NE/4) of Section Twelve (12), Township Twelve (12) North, Range Three (3) West of the Indian Meridian, Oklahoma
County, Oklahoma, being more particularly described as follows: 

Commencing
at the Southwest Corner of the Southeast Quarter (SE/4) of the NE/4; 

Thence
North 00°09'28" West along the West line of said SE/4 of the NE/4 a distance of 1010.88 feet to the point of beginning; 

Thence
continuing North 00°09'28" West a distance of 789.98 feet; 

Thence
North 89°50'32" East a distance of 575.71 feet; 

Thence
South 00°09'28" East a distance of 52.04 feet; 

Thence
North 89°50'32" East a distance of 211.07 feet to a point on the West right of way line of Interstate Highway 35; 

4

 

Thence
South 16°02'43" East along said right of way a distance of 258.19 feet to a point on the West right of way line of the Missouri, Kansas and Texas railroad; 

Thence
South 23°56'14" West along said railroad right of way a distance of 488.55 feet; 

Thence
North 60°51'28" West a distance of 225,54 feet; 

Thence
South 71°12'32" West a distance of 487.70 feet to the point of beginning. 

Tract 17: 

        A
part of the Northeast Quarter (NE/4) of Section Twelve (12), Township Twelve (12) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being
more particularly described as follows: 

Commencing
at the Southwest Corner of the Southeast Quarter (SE/4) of the NE/4 

Thence
North 00°09'28" West along the West line of said SE/4 of the NE/4 a distance of 390,00 feet to the point of beginning; 

Thence
continuing North 00°09'28" West along said West line a distance of 620.86 feet; 

Thence
North 71°12'32" East a distance of 487.70 feet; 

Thence
South 60°51'28" East a distance of 225.54 feet to a point on the West right of way line of the Missouri, Kansas and Texas railroad; 

Thence
South 23°56'14" West along said railroad right of way a distance of 722.66 feet; 

Thence
South 88°48'00" West a distance of 383.86 feet to the point of beginning. 

Tract 19: 

        A
part of the Northeast Quarter (NE/4) of Section Twelve (12), Township Twelve (12) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being
more particularly described as follows: 

Beginning
at the Southwest Corner of the Southeast Quarter (SE/4) of the NE/4; 

Thence
North 00°09'28" West along the West line of said SE/4 of the NE/4 a distance of 390.00 feet; 

Thence
North 88°48'00" East a distance of 363.86 feet to a point on the West right of way line of the Missouri, Kansas and Texas railroad; 

Thence
South 23°56'14" West along said railroad right of way a distance of 9.68 feet to a point of curvature; 

5

 

Thence
Southwesterly on a curve to the left along said railroad right of way having a radius of 2950.70 feet an arc distance of 412.55 feet to a point on the South One of
said NE/4; 

Thence
South 89°40'07" West a distance of 218.27 feet to the point of beginning. 898984 

Tract 20: 

        A
part of the Northeast Quarter (NE/4) of Section Twelve (12), Township Twelve (12) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being
more particularly described as follows: 

Commencing
at the Southeast Corner of the NE/4; 

Thence
South 89°40'07" West along the South line of said NE/4 a distance of 287.00 feet to a point on the West right of way of Interstate Highway 35; 

Thence
North 01°46'27" East along said right of way a distance of 96.88 feet to the point of beginning; 

Thence
South 89°40'07" West a distance of 585.85 feet to a point of curvature on the East right of way line of the Missouri, Kansas and Texas railroad; 

Thence
Northeasterly on a curve to the right along said railroad right of way having a radius of 2775.70 feet and an arc distance of 234.89 feet; 

Thence
North 23°56'14" East along said railroad right of way a distance of 882.88 feet to a point on the West right of way line of Interstate Highway 35; 

Thence
South 66°03'46" East along said Highway right of way a distance of 78.40 feet to a point of curvature on the West right of way line of said highway; 

Thence
Southeasterly on a curve to the right along said highway right of way having a radius of 2709.79 feet an arc distance of 653.69 feet; 

Thence
South 01°46'27" West along said highway right of way a distance of 343.26 feet to the point of beginning, 

Tract 21: 

        A
part of the Northeast Quarter (NE/4) of Section Twelve (12), Township Twelve (12) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being
more particularly described as follows: 

Commencing
at the Southeast Corner of said NE/4; 

Thence
South 89°40'07" West along the South line of said NE/4 a distance of 287.00 feet to the point of beginning, said point being on the West right of way line of
Interstate Highway 35; 

6

 

Thence
continuing South 89°40'07" West along the said South line of said NE/4 a distance of 614.43 feet to a point of curvature, said point being on the East right of way
line of the Missouri, Kansas and Texas railroad; 

Thence
Northeasterly on a curve to the right along said railroad right of way having a radius of 2775,70 feet and an arc distance of 102.02 feet; 

Thence
North 89°40'07" East and parallel with the South line of said NE/4 a distance of 585.85 feet to a point on the West right of way line of Interstate Highway 35; 

Thence
South 01°46'27" West along said Highway right of way a distance of 96.88 feet to the point of beginning. 

Tract 22: 

        A
part of the Southeast Quarter (SE/4) of Section Twelve (12), Township Twelve (12) Noah, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being more
particularly described as follows: 

Beginning
at the Northwest Corner of the Southeast Quarter (SE/4); 

Thence
North 89°40'07" East along the North line of said SE/4 a distance of 1546.80 feet to a point of curvature on the West right of way line of, the Missouri, Kansas and
Texas railroad; 

Thence
Southwesterly on a curve to the left along said railroad right of way having a radius of 2925.70 feet an arc distance of 483.33 feet; 

Thence
North 83°23'46" West along said railroad right of way a distance of 12.50 feet to a point of curvature; 

Thence
Southeasterly on a curve to the left along said railroad right of way having a radius of 0938.20 feet an arc distance of 540.58 feet; 

Thence
South 89°39'58" West a distance of 643.69 feet; 

Thence
South 00°13'34" East a distance of 1833.00 feet to a point on the South line of said SE/4; 

Thence
South 89°38'56" West along said South line a distance of 221.22 feet to a point of intersection with the North right of way line of Grand Boulevard; 

Thence
North 42°53'17" West along said right of way a distance of 833.76 feet to a point on the West line of said SE/4; 

Thence
North 00°01'54" West along the West line of said SE/4 a distance of 2029.81 feet to the point of beginning. 

7

 

Tract 24: 

        A
part of the Southeast Quarter (SE/4) of Section Twelve (12), Township Twelve (12) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being
more particularly described as follows: 

Commencing
at the Northeast Corner of the said SE/4; 

Thence
South 89°40'07" West along the North line of said SE/4 a distance of 287.00 feet to the point of beginning, said point being on the West right of way line of
Interstate Highway 35; 

Thence
South 00°10'44" East along said highway right of way a distance of 919.03 feet; 

Thence
South 04°23'43" West along said right of way a distance of 250.80 feet; 

Thence
South 03°26'57" East along said right of way a distance of 350.57 feet; 

Thence
South 00°10'44" East along said right of way a distance of 400.00 feet; 

Thence
South 03°38'07" West along said right of way a distance of 300.67 feet; 

Thence
South 00°10'44" East along said right, of way a distance of. 73,98 feet; 

Thence
South 89°39'56" West a distance of 668.35 feet to a point on the East right of way line of the Missouri, Kansas and Texas railroad; 

Thence
North 04°20'04" West along said railroad right of way a distance of 31.76 feet; 

Thence
North 85°39'56" East along said railroad right of way a distance of 12.5 feet; 

Thence
North 04°20'04" West along said railroad right of way a distance of 961.00 feet to a point of curvature; 

Thence
Northeasterly on a curve to the right along said railroad right of way having a radius of 2813.20 feet and an arc distance of 537.07 feet; 

Thence
North 83°23'46" West along said railroad right of way a distance of 12.5 feet to a point of curvature; 

Thence
Northeasterly on a curve to the right along said railroad right of way having a radius of 2825.70 feet and an arc distance of 498.29 feet to a point on the North line of the
said SE/4; 

Thence
North 89°40'07" East along said North line a distance of 666.78 feet to the point of beginning. 

Tract 27: 

        Lots
One (1), Two (2) and Three (3) In EASTERN INDUSTRIAL ADDITION to Oklahoma City, Oklahoma County, Oklahoma, according to the recorded plat thereof. 

8

 

Tract 28: 

        A
part of the Southwest Quarter (SW/4) of Section Twelve (12), Township Twelve (12) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being
more particularly described as follows: 

Commencing
at the Northwest Corner of the SW/4; 

Thence
South 00°07'18" East along the West line of said Section 12 a distance of 662.73 feet; 

Thence
North 89°37'51" East a distance of 60.00 feet to the point of beginning; 

Thence
continuing North 89°37'51" East a distance of 1259.48 feet; 

Thence
South 00°04'36" East a distance of 660.16 feet to a point on the North Tine of CASTLE HILL ADDITION, according to the recorded plat thereof; 

Thence
South 89°40'01" West along said North line of said addition a distance of 1120.78 feet; 

Thence
North 00°06'22" West a distance of 164.48 feet; 

Thence
North 65°19'39" West a distance of 150.00 feet; 

Thence
North 00°07'18" West and parallel with the West line of said Section a distance of 431.60 feet to the point of beginning. 

Tract 30: 

        The
Northeast Quarter (NE/4) of the Southwest Quarter (SW/4) of Section Twelve (12), Township Twelve (12) North, Range Three (3) West of the Indian Meridian, Oklahoma
County, Oklahoma. 

Tract 31: 

        A
part of the Southwest Quarter (SW/4) of Section Twelve (12), Township Twelve (12) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being
more particularly described as follows: 

Beginning
at the Northeast Corner of CASTLE HILL ADDITION, according to the recopied plat thereof; 

Thence
North 89°40'01" East a distance of 838.83 feet to a point on the East line of said SW/4; 

Thence
South 00°01'54" East along the East line of the said SW/4 a distance of 707.81 feet to a point on the North right of way line of Grand Boulevard;, 

Thence
North 42°53'17" West along said right of way a distance of 232.40 feet to a point of curvature; 

9

 

Thence
Northwesterly on a curve to the left along said right of way having a radius of 1194.33 feet an arc distance of 788.37 feet; 

Thence
North 07°01'01" East a distance of 16.95 feet; 

Thence
North 00°19'59" West a distance of 150.00 feet to the point of beginning. 

Tract 32: 

        All
of Blocks One (1), Two (2) and Three (3), less and except the West 26.21 feet of Block 3, in CASTLE HILL ADDITION, according to the recorded plat thereof. 

Tract 34: 

        A
part of the Northwest Quarter (NW/4) of Section Twelve (12), Township Twelve (12) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being
more particularly described as follows: 

Commencing
at the Northwest Corner of said NW/4 of the NW/4; 

Thence
South 00°06'33" East along the West line of said NW/4 of the NW/4 a distance of 443.48 feet; 

Thence
North 89°53'27" East a distance of 115.00 feet to the intersection of the East right of way line of Martin Luther King Avenue and the South right of way line of Interstate
Highway No. 440; 

Thence
South 00°06'33" East along the East right of way line of Martin Luther King Avenue, 115.00 feet East of and parallel with the West line of said NW/4 of the NW/4 a
distance of 321.86 feet to the centerline of Deep Fork Creek, said point also being the point of beginning; 

Thence
South 74°10'33" East along said centerline a distance of 116.41 feet; 

Thence
South 63°25'33" East along said centerline a distance of 446.00 feet; 

Thence
South 72°24'03" East along said centerline a distance of 197.55 feet; 

Thence
South 81°22'33" East along said centerline a distance of 225.00 feet; 

Thence
South 86°29'41" East along said centerline a distance of 81.70 feet; 

Thence
North 41°15'40" East along said centerline a distance of 101.96 feet; 

Thence
North 31°00'12" East along said centerline a distance of 240:65 feet to. the East line of said NW/4 of the NW/4; 

Thence
South 00°04'09' East along said East line a distance of 603.15 feet to the Southeast Corner of said NW/4 of the NW/4; 

10

 

Thence
South 89°40'30" West along the South line of said NW/4 of the NW/4 a distance of 1208.85 feet to the East right of way line of Martin Luther King Avenue; 

Thence
North 00°06'33" West along said right of way line, 100.00 feet East of and parallel with the West line of said NW/4 of the NW/4, a distance of 281.77 feet; 

Thence
North 89°53'27" East along the East right of way line of Martin Luther King Avenue a distance of 15.00 feet; 

Thence
North 00°08'33" West along the East right of way line of Martin Luther King Avenue, 115.00 feet East of and parallel with the West line of said NW/4 of the NW/4, a distance
of 275.02 feet to the point of beginning. 

Tract 41: 

        A
part of the Northwest Quarter (NW/4) of Section Twelve (12), Township Twelve (12) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being
more particularly described as follows: 

Beginning
at the Southwest Corner of the Northeast Quarter (NE/4) of the NW/4; 

Thence
North 00°04'09" West along the West line of said NE/4 of the NW/4 a distance of 503.15 feet to the centerline of Deep Fork Creek; 

Thence
North 51°23'00" East along said centerline a distance of 307.54 feet; 

Thence
North 56°04'05" East along said centerline a distance of 150.70 feet; 

Thence
South 84°56'24" East along said centerline a distance of 107.66 feet; 

Thence
South 43°47'02" East along said centerline a distance of 201.38 feet; 

Thence
South 36°27'00" East along said centerline a distance of 124.80 feet; 

Thence
South 29°46'10" East along said centerline a distance of 597.02 feet to a point on the South line of the NE/4 of the said NW/4; 

Thence
South 89°40'05" West along the South line of the NE/4 of said NW/4 a distance of 981.89 feet to the point of beginning. 

Tract 42: 

        A
part of the Northwest Quarter (NW/4) of Section Twelve (12), Township Twelve (12) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being
more particularly described as follows: 

Commencing
at the Southwest Corner of said NW/4; 

Thence
North 00°06'33" West a distance of 885.00 feet; 

11

 

Thence
North 89°53'27" East a distance of 75.00 feet to the point of beginning; 

Thence
North 00°06'33" West a distance of 175.00 feet; 

Thence
North 89°53'27" East a distance of 98.00 feet; 

Thence
South 00°06'33" East a distance of 175.00 feet; 

Thence
South 89°53'27" West a distance of 98.00 feet to the point of beginning. 

Tract 43: 

        A
part of the Northwest Quarter (NW/4) of Section Twelve (12), Township Twelve (12) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being
more particularly described as follows: 

Commencing
at the Southwest Corner of said NW/4; 

Thence
North 00°08'33" West along the West Section line a distance of 531.10 feet; 

Thence
North 89°53'27" East a distance of 50,00 feet to the point of beginning; 

Thence
North 00°06'33" West and parallel with the said West Section line a distance of 130.35 feet; 

Thence
North 89°53'27" East a distance of 25.00 feet; 

Thence
North 00°06'33" West and parallel with said West Section line a distance of 223.56 feet; 

Thence
North 89°53'27" East a distance of 98.00 feet; 

Thence
North 00°08'33" West a distance of 175.00 feet; 

Thence
South 89°53'27" West a distance of 98.00 feet; 

Thence
North 00°08'33" West a distance of 26.45 feet; 

Thence
North 89°53'27" East a distance of 25.00 feet; 

Thence
North 00°06'33" West a distance of 236.73 feet to a point on the South line of the NW/4 of the NW/4; 

Thence
North 89°40'30" East along said South line of said NW/4 of the NW/4 a distance of 1208.85 feet to the Southeast Corner of said NW/4 of the NW/4; 

Thence
North 89°40'0S" East a distance of 808.74 feet; 

Thence
South 00°01'54" East a distance of 495,00 feet; 

12

 

Thence
South 89°40'05" West a distance of 808.51 feet to a point on the East line of the SW/4 of said NW/4; 

Thence
South 00°04'13" East along said East line of said SW/4 of said NW/4 a distance of 501.65 feet; 

Thence
South 89°53'27" West a distance of 758.16 feet; 

Thence
North 00°08'33" West a distance of 200.00 feet; 

Thence
South 89°53'27" West a distance of 500.00 feet to the point of beginning. 

Tract 44: 

        A
part of the Northwest Quarter (NW/4) of Section Twelve (12), Township Twelve (12) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being
more particularly described as follows: 

Commencing
at the Southwest Corner of said NW/4; 

Thence
North 00°06'33" West a distance of 331,10 feet; 

Thence
North 89°53'27" East. a distance of 50.00 feet to the point of beginning; 

Thence
North 00°06'33" West a distance of 200.00 feet; 

Thence
North 89°53'27" East a distance of 500.00 feet; 

Thence
South 00°06'33" East a distance of 200.00 feet; 

Thence
South 89°53'27" West a distance of 500.00 feet to the point of beginning. 

Tract 45: 

        The
South Half (S/2) of the South Hail (S/2) of the Southwest Quarter (SW/4) of the Northwest Quarter (NW/4) of Section Twelve (12), Township Twelve (12) North, Range Three
(3) West of the Indian Meridian, Oklahoma County, Oklahoma. 

Tract 46: 

        A
part of the Northwest Quarter (NW/4) of Section Twelve (12), Township Twelve (12) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being
more particularly described as follows; 

Commencing
at the Southeast Corner of the NW/4; 

Thence
North 00°01'54" West along the East line of the said NW/4 a distance of 497,69 feet; 

13

 

Thence
South 89°40'05" West a distance of 500.00 feet to the point of beginning; 

Thence
continuing South 89°40'05" West a distance of 808.28 feet; 

Thence
North 00°04'13" West a distance of 330.00 feet; 

Thence
North 89°40'05" East a distance of 808.51 feet; 

Thence
South 00°01'54" East a distance of 330.00 feet to the point of beginning. 

Tract 47: 

        A
part of the Northwest Quarter (NW/4) of Section Twelve (12), Township Twelve (12) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being
more particularly described as follows: 

Commencing
at the Southeast Corner of said NW/4; 

Thence
North 00°01'54" West along the East line of said NW/4 a distance of 497.89 feet to the point of beginning; 

Thence
South 89°40'05" West a distance of 500.00 feet; 

Thence
North 00°01'54" West a distance of 825.00 feet to a point on the North line of the Southeast Quarter (SE/4) of the said NW/4; 

Thence
North 89°40'05" East along the North line of said SE/4 of the NW/4 a distance of 500.00 feet to a point on the East line of the said NW/4; 

Thence
South 00°01'54" East along the said East line of said NW/4 a distance of 825.00 feet to the point of beginning. 

Tract 48: 

        A
part of the Northwest Quarter (NW/4) of Section Twelve (12), Township Twelve (12) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being
more particularly described as follows: 

Beginning
at the Southeast Corner of the NW/4 of said Section 12; 

Thence
South 89°40'07" West a distance of 1307.95 feet; 

Thence
North 00°04'13" West a distance of 497.68 feet; 

Thence
North 89°40'05" East a distance of 1308.28 feet to a point on the East line of said NW/4; 

Thence
South 00°01'54" East along said East line of said NW/4 a distance of 497,89 feet to the point of beginning. 

14

 

Tract 49: 

        A
part of the East Half (E/2) of Section- Twelve (12), Township Twelve (12) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being more
particularly described as follows: 

Commencing
at the Southeast Corner of the Southeast Quarter (SE/4) of said Section 12; 

Thence
South 89°39'56" West along the South Tine of said SE/4 a distance of 949.88 feet to a point on the East right of way line of the Missouri, Kansas and Texas railroad,
said point being the point of beginning; 

Thence
continuing South 89°39'56" West along said Section line a distance of 100.24 feet to a point on the West right of way line of the Missouri, Kansas and Texas railroad; 

Thence
North 04°20'04" West along said railroad right of way a distance of 656.50 feet; 

Thence
South 85°39'56" West along said right of way a distance of 12.50 feet; 

Thence
North 04°20'04" West along said right of way a distance of 961.00 feet to a point of curvature; 

Thence
Northeasterly along said right of way on a curve to the right having a radius of 2938.20 feet and an arc distance of 560.93 feet; 

Thence
South 83°23'46" East along said right of way a distance of 12.50 feet to a point of curvature; 

Thence
Northeasterly along said right of way on a curve to the right having a radius of 2925.70 feet and an arc distance of 483.33 feet to a point on the North line of said SE/4; 

Thence
South 89°40'07" West along said North line a distance of 26.05 feet to a point of curvature; 

Thence
Northeasterly along said right of way on a curve to the right having a radius of 2950.70 feet and an arc distance of 412.55 feet; 

Thence
North 23°58'14" East along said right of way a distance of 1218.87 feet; 

Thence
South 03°34'32" East a distance of 378.83 feet to a point on the East right of way line of the said railroad; 

Thence
South 23°56'14" West along said right of way a distance of 882.88 feet to a point of curvature; 

Thence
Southwesterly along said right of way on a curve to the left having a radius of 2775.70 feet and an arc distance of 336.91 feet to a point on the North line of said SE/4; 

15

 

Thence
South 89°40'07" West along said North line a distance of 52,33 feet to a point of curvature; 

Thence
Southwesterly along said right of way on a curve to the left having a radius 2825.70 feet and an arc distance of 496.29 feet; 

Thence
South 83°23'46" East along said right of way a distance of 12.50 feet to a point of curvature; 

Thence
Southwesterly along said right of way on a curve to the left having a radius of 2813.20 feet and an arc distance of 537.07 feet; 

Thence
South 04°20'04" East along said right of way a distance of 961.00 feet; 

Thence
South 85°39'56" West along said right of way a distance of 12.50 feet; 

Thence
South 04°20'04" East along said right of way a distance of 663.50 feet to the point of beginning. 

16

 
 

SCHEDULE C
  
    Permitted Encumbrances  
    

I.     General Permitted Encumbrances: 

	1.
	liens
for taxes (which term includes charges, rates and assessments) or utilities (including levies or imposts for sewers and other municipal utility services) not yet due or if due,
the validity of which is being contested in good faith and in respect of which there shall have been deposited with the Lender or a Governmental Authority in an amount sufficient to pay such taxes or
utilities (together with any interest or penalties accrued thereon), and liens or charges for the excess of the amount of any past due taxes or utilities charges for which a final assessment or
account has not been received over the amount of such taxes or utilities charges as estimated and paid by the Borrower;

	2.
	liens
arising out of claims under a judgment rendered or claim filed which are being contested in good faith and in respect of which there shall have been deposited with the Lender or
a Governmental Authority in an amount sufficient to pay such judgment or claim together with any interest accrued thereon and costs claimed in respect thereof;

	3.
	the
rights reserved to or vested in any municipality or governmental or other public authority by any statutory provision;

	4.
	zoning
(including, without limitation, airport zoning regulations), use and building by-laws and ordinances, federal, state or municipal by-laws and regulations
and other restrictions as to the use of any of the Properties or The Meadows Property which in the aggregate do not materially impair the value of any of the Properties or The Meadows Property or
materially restrict the use thereof for the purposes for which any of the Properties or The Meadows Property is held;

	5.
	subdivision,
site plan control, development, reciprocal, servicing, facility cost sharing or similar agreements currently existing or entered into with a governmental authority,
municipality or public utility from time to time in respect of any of the Properties or The Meadows Property which in the aggregate do not materially impair the value of any of the Properties or The
Meadows Property or materially restrict the use thereof for the purposes for which any of the Properties or The Meadows Property is held;

	6.
	minor
title defects or irregularities which, in the aggregate, do not materially impair the value of any of the Properties or The Meadows Property or materially restrict the use
thereof for the purposes for which any of the Properties or The Meadows Property is held;

	7.
	any
subsisting reservations, limitations, provisions and conditions contained in any original grants of any land or interests therein, reservations of undersurface rights to mines and
minerals of any kind including, without limitation, rights to coal, petroleum and minerals of any kind, including rights to enter, prospect and remove the same, and statutory exceptions,
qualifications or limitations to title; 

 
	8.
	minor
encroachments by any of the Properties or The Meadows Property or any facilities of or used in connection with any of the Properties or The Meadows Property over adjacent lands
and permitted under agreements with the owners of such adjacent lands which in the aggregate do not materially impair the value of any of the Properties or The Meadows Property or materially restrict
the use thereof for the purposes for which any of the Properties or The Meadows Property is held;

	9.
	Encumbrances
respecting encroachments by facilities on adjacent lands over any of the Properties or The Meadows Property which in the aggregate do not materially impair the value of
any of the Properties or The Meadows Property or materially restrict the use thereof for the purposes for which any of the Properties or The Meadows Property is held;

	10.
	permits,
licences, agreements, easements, restrictions, restrictive covenants, rights-of-way, public ways, rights in the nature of an easement and other
similar rights in land granted to or reserved by other persons (including, without in any way limiting the generality of the foregoing, permits, licences, agreements, easements,
rights-of-way, sidewalks, public ways, and rights in the nature of easements for sewers, drains, gas and water mains or electric light and power or data, telephone and
telegraph conduits, poles, wires and cables) which in the aggregate do not materially impair the value of any of the Properties or The Meadows Property or materially restrict the use thereof for the
purposes for which any of the Properties or The Meadows Property is held or which are contemplated or provided for or which the Borrower or any Guarantor is bound to enter into pursuant to any
subdivision, development, site plan control or similar agreement in respect of any of the Properties or The Meadows Property, and any encumbrance of any nature whatsoever charging the interest of
persons (other than the Borrower and/or any Guarantor) under any such permit, licence, agreement, easement, restriction, restrictive covenant, right-of-way, public way, right
in the nature of an easement or servitude or other similar rights in land;

	11.
	leases
and any notice in respect thereof and any Encumbrance of any nature whatsoever charging the interest of persons (other than the Borrower and/or any Guarantor) under any such
lease and any non-disturbance or other agreement entered into in respect of such lease;

	12.
	materialmen's,
carriers', repairmen's, warehousemen's or other like liens if collateral in an amount equal to the aggregate of such liens (together with any interest accrued thereon
and costs claimed in respect thereof) is deposited with the Lender or a Governmental Authority;

	13.
	security
given to a public utility or any municipality or other governmental authority or other public authority when required by the operations of either of the Properties or The
Meadows Property in the ordinary course of business, including, without limitation, the right of any such public utility, municipality or other governmental authority or other public authority to
acquire portions of any of the Properties or The Meadows Property for road widening or interchange construction and the right of such public utility, municipality or other governmental authority or
other public authority to complete improvements, landscaping or remedy deficiencies in any pedestrian walkways or traffic control or monitoring to be provided to any of the Properties or The Meadows
Property; 

2

 
	14.
	undetermined
or inchoate liens incidental to construction, maintenance or current operation a claim for which shall not at the time have been filed pursuant to Governmental Rule
registered against any of the Properties or The Meadows Property or of which notice in writing shall not at the time have been given to the Borrower and/or any Guarantor or otherwise or any lien or
charge, a claim for which, although registered, or notice of which, although given, relates to obligations not overdue or delinquent and in respect of any of the foregoing cases, the Borrower and/or
any Guarantor has, where applicable, complied with the holdback or other similar provisions of any Governmental Rule or requirements of the relevant construction contracts so as to protect any of the
Properties or The Meadows Property therefrom and to preserve the priority of the lien of any of the Mortgages or with respect to which the Borrower or a Guarantor, as the case may be, has deposited
collateral with the Lender in an amount equal to the amount of such lien together with the costs claimed in respect thereof;

	15.
	any
Encumbrance payment of which has been provided for by deposit with the Lender or a Governmental Authority of collateral sufficient to pay the same;

	16.
	any
agreement pertaining to the use, operation or maintenance of any of the Properties or The Meadows Property which is necessary or desirable in connection with the efficient and
proper operation of any of the Properties or The Meadows Property and which in the aggregate do not materially impair the value of any of the Properties or The Meadows Property or materially restrict
the use thereof for the purposes for which any of the Properties or The Meadows Property is held;

	17.
	any
and all statutory liens, charges, adverse claims, prior claims, security interests, deemed trusts or other Encumbrances of any nature whatsoever which are not registered on the
title to any of the Properties or The Meadows Property and of which the Borrower and/or any Guarantor does not have notice, claimed or held by any other governmental department, agency or authority
under or pursuant to any applicable legislation, statute or regulation;

	18.
	any
lien (a "tenant lien") a claim for which, although registered or of which notice has been given, relates solely to work done by or on behalf of a tenant under a Lease if
and so long as: 

the
Borrower and/or any Guarantor has not assumed or otherwise become liable for the payment of such work and the claimant is not pursuing such tenant lien against the Borrower; or 

such
tenant lien does not rank and is not capable of ranking prior to or pari passu with the security constituted by the lien of a
Mortgage; or 

there
has been deposited with the Lender or a Governmental Authority collateral in an amount sufficient to pay such tenant lien, including any interest accrued thereon and costs claimed in respect
thereof; and 

3

 
	19.
	any
security provided to the Lender including, without limitation, the Security.

	II
	Specific
Permitted Title Encumbrances for the Gulfstream Lands

	1.
	Easement
as contained in Deed No. 5055 from George W. Hedrick, joined by his wife, Laura E.N. Hedrick, to L.S. Johnson and Sadie R. Johnson, husband and wife, recorded
March 13, 1918, in Deed Book 2, Page 405, Public Records of Broward County, Florida.

	2.
	Right
of Way Agreement in favor of Florida Power & Light Company dated July 1, 1955, in Official Records Book 418, Page 435, Public Records of Broward County,
Florida.

	3.
	Easement
in favor of Florida Power & Light Company, recorded August 9, 1980, in Official Records Book 9047, Page 604, Public Records of Broward County, Florida.

	4.
	Easement
Deed — Water Main in favor of City of Hallandale, a municipal corporation, recorded March 27, 1998, in Official Records Book
27944, Page 354, Public Records of Broward County, Florida.

	5.
	Easement
Deed — 14th Avenue Canal in favor of City of Hallandale, a municipal corporation, recorded March 27, 1998, in
Official Records Book 27944, Page 357, Public Records of Broward County, Florida.

	6.
	Agreement
between Golden Isles Utilities Corporation, a Florida corporation, and Highland Lakes, Inc., a Florida corporation, recorded July 13, 1980, in Official Records
Book 1982, Page 33, Public Records of Broward County, Florida.

	7.
	Drainage
Easement in favor of the City of Hallandale, recorded April 9, 2004, in Official Records Book 37222, Page 80, Public Records of Broward County, Florida.

	8.
	Dedication
of streets, and avenues for the perpetual use of the public as set forth on the plat of Hallandale Park No. 12, Part 2, according to the Plat thereof,
as recorded in Plat Book 10, Page 17, Public Records of Broward County, Florida.

	9.
	Dedication
of avenues, boulevards and drives for the perpetual use of the public as set forth on the Plat of Hallandale Park, No. 12,
Riviera — Section, according to the Plat thereof, as recorded in Plat Boo 10, Page 18, Public Records of Broward County, Florida.

	10.
	Dedication
of streets, avenues and boulevards for the perpetual use of the public as set forth on the Plat of Golden Isles Boulevard Annex, Beach Section, according to the Plat
thereof, as recorded in Plat Book 12, Page 46, Public Records of Broward County, Florida.

	III
	Specified
Permitted Title Encumbrances for the Aventura Lands Parcel 2

	1.
	Right
of Way Agreement in favor of Florida Power & Light Company, a Florida corporation, dated October 18, 1956, recorded in Deed Book 4349, Page 31, Public
Records of Miami-Dade County, Florida. 

4

 
	2.
	Right
of Way Agreement in favor of Florida Power & Light Company, a Florida corporation, recorded June 27, 1957, in Official Records Book 311, Page 306, Public
Records of Miami-Dade County, Florida.

	3.
	Agreement
by and between Gulfstream Realty Corporation, a Florida corporation, The Netherton Corporation, a Florida corporation and Golden Isles Utilities Corporation, a Florida
corporation, recorded May 12, 1960, in Official Records Book 2054, Page 174, Public Records of Miami-Dade County, Florida.

	4.
	Easement
Deed in favor of Golden Isles Utilities Corporation, a Florida corporation, recorded May 12, 1960, in Official Records Book 2054, Page 179, Public Records of
Miami-Dade County, Florida.

	5.
	Easement
Deed in favor of Golden Isles Utilities Corporation, a Florida corporation, recorded May 12, 1960, in Official Records Book 2054, Page 182, Public Records of
Miami-Dade County, Florida.

	6.
	Agreement
between Golden Isles Utilities Corporation, a Florida corporation and Highland Lakes, Inc., a Florida corporation, recorded July 13, 1960, in Official Records
Book 2156, Page 266; as amended by the Agreement recorded August 24, 1961, in Official Records Book 2773, Page 689, Public Records of Miami-Dade County, Florida.

	7.
	Unrecorded
Development Agreement by and between Adventura Commons Associates, Ltd., a Florida limited partnership, Trafalgar Associates of Aventura, Ltd., and Gulfstream
Park Racing Association, Inc., a Florida corporation, as evidenced by the Memorandum of Development Agreement recorded November 12, 1997, in Official Records Book 17863,
Page 2866; Confirmatory Agreement recorded September 6, 2000, in Official Records Book 19271, Page 221, all of the Public Records of Miami-Dade County, Florida.

	8.
	Easement
in favor of Florida Power & Light Company, a Florida corporation, recorded May 2, 2000, in Official Records Book 19092, Page 2020, Public Records of
Miami-Dade County, Florida.

	9.
	Easement
in favor of the City of Aventura recorded May 16, 2002, in Official Records Book 20400, Page 2646, Public Records of Miami-Dade County, Florida.

	10.
	Matters
set forth on the Plat of Donn Acres according to the Plat thereof, as recorded in Plat Book 76, Page 30, Public Records of Miami-Dade County, Florida.

	IV
	Specific
Permitted Title Encumbrances for the Aventura Lands (Parcels 2 and 3)

	1.
	The
obligations set forth in the Agreement (creating a Drainage Easement) by and between Gulfstream Park Racing Association, Inc., a Florida corporation and City National Bank
of Miami, as Trustee Under Land Trust dated March 15, 1968, Trust No. 2-550-6, recorded June 1, 1984, in Official Records Book 12165, Page 206,
Public Records of Miami-Dade County, Florida. 

5

 
	V
	Specified
Permitted Title Encumbrances for the Aventura Lands (Parcel 3)

	1.
	Declaration
of Covenants, Conditions Restrictions, Easements, Charges and Liens, recorded December 1, 1983, in Official Records Book 11984, Page 300; First Amendment and
Supplemental Declaration recorded May 23, 1984, in Official Records Book 12156, Page 957; Second Amendment and Supplemental Declaration recorded November 1, 1984, in Official
Records Book 12314, Page 1118; Assignment of Declarations Rights recorded April 16, 1985, in Official Records Book 12479, Page 1926; Third Amendment and Supplemental Declaration
recorded March 3, 1986, in Official Records Book 12808, Page 1129; Fourth Amendment and Supplemental Declaration recorded February 25, 1988, in Official Records Book 13588,
Page 571; Fifth Amendment and Supplemental Declaration recorded August 16, 1990, in Official Records Book 14665, Page 1726; Sixth Amendment and Supplemental Declaration recorded
September 23, 1993, in Official Records Book 16063, Page 3602, all of the Public Records of Miami-Dade County, Florida.

	2.
	Roadway
Easement, Conditions and Restrictions as set forth on the plat of The Waterways — Section 1, according to the Plat thereof,
as recorded in Plat Book 122, Page 81, Public Records of Miami-Dade County, Florida.

	VI
	Specific
Permitted Title Encumbrances for The Meadows Property 

        The
following rights of way granted to: 

	A)
	South
West Pennsylvania Pipe Line from T. L. McCarrell, et al., dated 11/4/1946 recorded in Deed Book Volume 718, page 336 (for pipelines).

	B)
	The
Manufacturers Light and Heat Company from T. L. McCarrell, et al. dated 11/12/1946 recorded in Deed Book Volume 719, page 272 (for an electrolysis
cable line).

	C)
	The
Manufacturers Light and Heat Company from Washington Trotting Association dated 8/9/1962 recorded in Deed Book Volume 1136, page 543 (for a pipeline). As modified by
Agreement between Columbia Gas Transmission Corp. and Global Development Ind. dated 12/30/1971 recorded in Deed Book Volume 1354, page 468.

	D)
	The
Manufacturers Light and Heat Company from Washington Trotting Association, Inc. dated 4/14/1967 recorded in Deed Book Volume 1267, page 762 (for telephone,
telegraph and electric lines).

	E)
	Washington
Land Company and Global Development, Inc. from Trotting, Inc. dated 2/28/1973 recorded in Deed Book Volume 1433, page 44 (for ingress, egress
and regress).

	F)
	Washington
Land Company from Trotting, Inc., et al. dated 3/1/1973 and recorded in Deed Book Volume 1433, page 52 (for utility lines). 

6

 

	G)
	The
Bell Telephone Company of Pennsylvania from Washington Trotting Association, Inc. dated 6/3/1983 recorded in Deed Book Volume 2122, page 461 (for an
underground vault and lines).

	H)
	Edna
B. McCardle, t/d/b/a Quail Homestead from Meadows Real Estate, Inc. dated 9/8/1987 recorded in Deed Book Volume 2299, page 52 (for a sewer line).

	1.
	Rights
of the public in and to Race Track Road also known as S.R. 1041, formerly known as 62092, Allison Road (also known as Old L.R. 62092) and Johnson Road (also known
as T-665).

	2.
	Oil
and Gas Lease granted to L. C. Thompson and C. C. Nuss from T. L. McCarrell, et al. dated 9/23/1956 and recorded in Deed Book Volume 877, page 394.

	VII
	Specified
Permitted Title Encumbrances for the Palm Meadows Training Center Lands

	1.
	Reservations
in favor of the Board of County Commissioners of Everglades Drainage District now known as the South Florida Water Management District as set forth and contained in that
certain Deed recorded in Deed Book 779, page 551, Public Records Palm Beach County, Florida. (as to Parcel 1)

	2.
	Reservation
of 50% of all oil, gas and other minerals as set forth and contained in that certain Quit Claim Deed recorded in Deed Book 919, page 35; as affected by Release of
Reservations No. 17199 By South Florida Water Management District On Lands Deeded By Board Of County Commissioners Of Everglades Drainage District recorded May 3, 1999 in Official
Records Book 11085, page 761; Non-Use Commitment No. 1361 By South Florida Water Management District On Lands Deeded By Board Of County Commissioners Of Everglades Drainage
District recorded October 2, 2002 in Official Records Book 14219, page 1917, all of the Public Records Palm Beach County, Florida. (as to Parcels 1 & 2)

	3.
	Covenant
set forth and contained in that certain Agreement by and between Boywic Farms Inc. and Florida State Turnpike Authority, a body corporate under the laws of the State of
Florida, recorded October 13, 1955 in Deed Book 1110, page 686, and Warranty Deed recorded November 7, 1955 in Deed Book 1113, page 434, all of the Public Records Palm
Beach County, Florida. (as to Parcels 1 & 2)

	4.
	Easement
in favor of Florida Power & Light Company recorded September 26, 1966 in Official Records Book 1429, page 585, Public Records Palm Beach County, Florida.
(as to Parcel 1)

	5.
	Rights
in Reservation in favor of the Lake Worth Drainage District, for canal and levee purposes, recorded March 28, 1972 in Official Records Book 1994, page 1573, and in
Official Records Book 1994, page 1615, all of the Public Records Palm Beach County, Florida. (as to Parcels 1 & 2) 

7

 
	6.
	Easement
Deed in favor of Lake Worth Drainage District recorded February 4, 1994 in Official Records Book 8109, page 1487; as affected by Quit Claim Deed recorded
July 2, 2004 in Official Records Book 17201, page 554; Special Warranty Deed recorded September 19, 2004 in Official Records Book 17512, page 612, all of the Public Records
Palm Beach County, Florida. (as to Parcels 1 & 2)

	7.
	Standard
Potable Water And Wastewater Development Agreement (SDA) by and between Palm Beach County, a subdivision of the State of Florida, and GPRA Thoroughbred Training
Centre, Inc., a Delaware corporation, recorded July 16, 2001 in Official Records Book 12729, page 1927, Public Records Palm Beach County, Florida. (as to Parcel
1 & 2)

	8.
	Kitchen
Equipment Removal Agreement by and between GPRA Thoroughbred Training Centre, Inc., and Palm Beach County recorded November 21, 2002 in Official Records
Book 14423, page 1762, Public Records Palm Beach County, Florida. (as to Parcel 1)

	9.
	Easement
in favor of Florida Power & Light Company recorded October 9, 2003 in Official Records Book 16002, page 55, Public Records Palm Beach County, Florida.
(as to Parcel 1)

	10.
	Utility
Easement in favor of Florida Power & Light Company recorded November 21, 2003 in Official Records Book 16225, page 849; as corrected by Corrective Utility
Easement in favor of Florida Power & Light Company recorded February 18, 2004 in Official Records Book 16561, page 1171, all of the Public Records Palm Beach County, Florida.
(as to Parcel 1)

	11.
	Utility
Easement in favor of Palm Beach County, c/o Water Utilities Department, recorded February 18, 2004 in Official Records Book 16561, page 1161, Public Records Palm
Beach County, Florida. (as to Parcel 1)

	12.
	Conditions
and Easement as set forth on the plat of PALM BEACH THOROUGHBRED TRAINING FARM, according to the plat thereof, as recorded in Plat Book 96, page 164
through 171, inclusive, Public Records Palm Beach County, Florida. (as to Parcel 1)

	13.
	Restrictive
Covenant recorded October 4, 2001 in Official Records Book 12961, page 1548; Modification to Restrictive Covenant Agreement recorded September 30,
2002 in Official Records Book 14207, page 1232, all of the Public Records Palm Beach County, Florida. (as to Parcel 1)

	14.
	Easement
in favor of Bellsouth Telecommunications, Inc., a Georgia corporation recorded October 25, 2002 in Official Records Book 14316, page 1290, Public Records
Palm Beach County, Florida. (as to Parcel 1)

	VIII
	Specific
Permitted Title Encumbrances for the Remington Lands

	1.
	Final
Order Establishing Prior Ground Water Rights for Oklahoma County, recorded in Book 4840, page 601. 

8

 
	2.
	Rules
and regulations described in Ordinance No. 16376, recorded in Book 4835, page 1021 and amended in Book 4881, page 414, establishing an Urban
Conservation District.

	3.
	Easement
in favor of Oklahoma Gas and Electric Company, recorded in Book 5542, page 1850, as to Tracts 2, 17, 20, 41, 43, 44 and 45.

	4.
	Easement
in favor of Oklahoma Gas and Electric Company, recorded in Book 5542, page 1852, as to Tracts 34, 43 and 41.

	5.
	Easement
in favor of Oklahoma Gas and Electric Company, recorded in Book 5542, page 1854, as to Tracts 2, 17, 20 and 49.

	6.
	Grant
of Right-of-Way in favor of Champlin Refining Company, recorded in Book 170, page 561, as assigned to Champlin Petroleum Company by Assignment
recorded in Book 3148, page 331; Partial Release recorded in Book 4063, page 822 and in Book 5636, page 1322, as to Tract 2.

	7.
	Right-of-Way
in favor of Cimarron Valley Pipe Line Company, recorded in Book 509, page 49, subsequently assigned to Mid-Continent Pipe Line
Company by Assignment recorded in Book 5275, page 1905; Partial Release recorded in Book 4063, page 822 and in Book 5636, page 1322, as to Tract 2.

	8.
	Right-of-Way
in favor of Standish Pipe Line Company, recorded in Book 520, page 333; Assignment to Mega Natural Gas Company, recorded in Book 5429,
page 9; Partial Release recorded in Book 4063, page 824 and in Book 6370, page 2109, as to Tracts 22 and 24.

	9.
	Right-of-Way
Contract in favor of Standish Pipe Line Company, recorded in Book 520, page 346; Assignment to Mega Natural Gas Company, recorded in Book
5429, page 9; Partial Release recorded in Book 6370, page 2109, as to Tracts 22 and 24.

	10.
	Right-of-Way
Contract in favor of Standish Pipe Line Company, recorded in Book 520, page 347; Assignment to Mega Natural Gas Company, recorded in Book
5429, page 9; Partial Release recorded in Book 6370, page 2109, as to Tracts 22 and 24.

	11.
	Easement
as set forth in Administrator's Deed, recorded in Book 1425, page 657, as to Tracts 17, 19 and 49.

	12.
	Resolution
amending zoning regulations recorded in Book 1785, page 149, as to Tracts 34, 42, 43, 44, 45, 46, 47 and 48.

	13.
	Pipe
Line Right-of-Way in favor of Champlin Refining Company recorded in Book 1866, page 268; Assignment to Williams Pipe Line Company, recorded in Book
5219, page 440; Pipeline Relocation Agreement recorded in Book 5671, page 1104; Corrected partial release recorded in Book 5671, page 1097; Partial Release recorded in Book 5656,
page 252 and in Book 6370, page 2126, as to Tracts 16, 17, 20 and 21. 

9

 
	14.
	Pipe
Line Right-of-Way in favor of Champlin Refining Company recorded in Book 1866, page 269; Assignment to Williams Pipe Line Company, recorded in Book
5219, page 440; Pipeline Relocation Agreement recorded in Book 5671, page 1104; Corrected partial release recorded in Book 5671, page 1097; Partial Release recorded in Book 5656,
page 252 and in Book 6370, page 2126, as to Tract 19.

	15.
	Pipe
Line Right-of-Way in favor of Champlin Refining Company recorded in Book 1866, page 270; Assignment to Williams Pipe Line Company, recorded in Book
5219, page 440; Partial Release recorded in Book 4063, page 822; Pipeline Relocation Agreement recorded in Book 5671, page 1104; Partial Release recorded in Book 5636,
page 1322; Corrected partial release recorded in Book 5671, page 1097; Partial Release recorded in Book 5656, page 252, as to Tract 2.

	16.
	Easement
and Right-of-Way in favor of the Town of Nichols Hills, recorded in Book 2002, page 272, as to Tract 43.

	17.
	Easement
set forth in Report of Commissioners No. 141217, recorded in Book 2164, page 331, as amended by Judgment recorded in Book 2218, page 528, as
to Tract 42.

	18.
	Easement
in favor of the State of Oklahoma, recorded in Book 2344, page 267, as to Tract 34.

	19.
	Easement
in favor of the State of Oklahoma, recorded in Book 2344, page 269, as to Tracts 34, 42 and 43.

	20.
	Easement
in favor of the State of Oklahoma, recorded in Book 2344, page 271, as to Tracts 34, 42 and 43.

	21.
	Pipeline
License in favor of the City of Oklahoma City, recorded in Book 3057, page 446, as to Tract 49.

	22.
	Right-of-Way
Grant in favor of Phillips Petroleum Company, recorded in Book 5200, page 1249, as to Tracts 42 and 43, and Assignment to GPM
Gas Company, L.L.C., recorded in Book 7824, page 1411.

	23.
	Utility
Easements as shown on the recorded plat of Eastern Industrial District, recorded in Book 33 of Plats, page 55, as to Tract 27.

	24.
	Restrictive
covenants recorded in Book 2135, page 161, and in Book 12 of Plats, page 96, as amended by Journal Entry No. 163584, recorded in Book 870,
page 457, which do not provide for a forfeiture or reversion of title upon violation thereof, but deleting any covenant, condition or restriction indicating a preference, limitation or
discrimination based on race, colour, religion, sex, handicap, familial status, or national origin to the extent such covenants, conditions or restrictions violate 42 USC 3604(c), as to Tracts
27 and 32.

	25.
	Building
lines and alley as shown on the recorded plat of Castle Hill Addition, recorded in Book 12 of Plats, page 96, as to Tract 32. 

10

 
	26.
	Easement
in favor of Oklahoma Gas and Electric Company, recorded in Book 5559, page 377, as to Tract 43.

	27.
	Dedication
of Permanent Easement to the Public, recorded in Book 5594, page 1555, as to Tracts 27, 28, 34, 44 and 45.

	28.
	Lease
Agreement dated June 10, 1986 by and between the City of Nichols Hills, Oklahoma, a municipal corporation, Lessor, and Oklahoma City Zoological Trust, a public trust,
Lessee, filed October 6, 1986 and recorded in Book 5533, page 792; Amended and Restated Lease Agreement dated September 9, 1986, filed October 6, 1986 and recorded in Book
5533, page 860, as to Tract 47.

	29.
	Lease
Agreement dated June 12, 1986 by and between the Board of Regents of The University of Oklahoma, a body corporate, Lessor, and The Oklahoma City Zoological
Society, Inc., an Oklahoma charitable corporation, Lessee, filed February 17, 1987 and recorded in Book 5589, page 211; Assignment and Assumption of Lease dated June 13,
1986, filed February 17, 1987 and recorded in Book 5589, page 242, as to Tracts 42 and 43.

	30.
	Amended
and Restated Lease Agreement dated September 30, 1986 by and between the City of Oklahoma City, a municipal corporation and the Oklahoma City Zoological Trust, filed
February 17, 1987 and recorded in Book 5589, page 246, as to Tracts 2, 16, 17, 19-24, 27, 28, 30, 31, 32, 34, 41, 44, 45, 46, 48 and 49; Amended and Restated Lease,
recorded in Book 5606, page 1735; Amended and Restated Lease and Operating Agreement, recorded in Book 6058, page 1170, Second Amended and Restated Lease and Operating Agreement,
recorded in Book 7627, page 565; Ratification and Extension of Lease, recorded in Book 7627, page 627 and Partial Release of Amended and Restated Lease Agreement, Amended and
Restated Lease and Operating Agreement, Second Amended and Restated Lease and Operating Agreement, and Ratification and Extension of Lease, recorded in Book 8458, page 407.

	31.
	Pipeline
Right-of-Way Easement in favor of Mega Natural Gas Company, recorded in Book 5609, page 494; Partial Release recorded in Book 6370,
page 2109.

	32.
	Easement
in favor of the City of Oklahoma City, recorded in Book 5609, page 469, as to Tracts 42 and 43.

	33.
	Easement
in favor of the public as set forth in Dedication filed April 27, 1987 and recorded in Book 5621, page 405; Partial Release recorded in Book 6370,
page 2144 and in Book 6370, page 2145, as to Tracts 22 and 31.

	34.
	Permanent
Easement in favor of the City of Oklahoma City, recorded in Book 6356, page 2363.

	35.
	Permanent
Easement in favor of the City of Oklahoma City, recorded in Book 6356, page 2367. 

11

 
	36.
	Permanent
Easement in favor of the City of Oklahoma City, recorded in Book 6356, page 2371.

	37.
	Permanent
Easement in favor of the City of Oklahoma City, recorded in Book 6356, page 2375.

	38.
	Permanent
Easement in favor of the City of Oklahoma City, recorded in Book 6356, page 2381.

	39.
	Permanent
Easement in favor of the City of Oklahoma City, recorded in Book 6356, page 2385.

	40.
	Permanent
Easement in favor of the City of Oklahoma City, recorded in Book 6356, page 2391.

	41.
	Permanent
Easement in favor of the City of Oklahoma City, recorded in Book 6356, page 2395.

	42.
	Permanent
Easement in favor of the City of Oklahoma City, recorded in Book 6356, page 2399.

	43.
	Permanent
Easement in favor of the City of Oklahoma City, recorded in Book 6370, page 2115.

	44.
	Right-of-Way
agreement in favor of Oklahoma Natural Gas Company, recorded in Book 6370, page 2121.

	45.
	Right-of-Way
Agreement in favor of Oklahoma Natural Gas Company, recorded in Book 6370, page 2133.

	46.
	Easement
in favor of Oklahoma Gas and Electric Company, recorded in Book 6385, page 1762.

	47.
	Agreement
by and between the City of Oklahoma City, a municipal corporation and the Trustees of Oklahoma City Public Property Authority, a public trust and the Oklahoma City
Zoological Trust, a public trust, dated September 1, 1998, filed June 30, 1999 and recorded in Book 7627, page 585.

	48.
	With
respect to Deep Fork Creek:

	•
	change
in its course, or channels thereof, in any manner, affecting title to the Land;

	•
	rights
of others in and to the continued uninterrupted flow of the waters; and

	•
	riparian
rights.

	49.
	Easement
in favor of Oklahoma Gas and Electric Company, recorded in Book 6370, page 2103.

	50.
	Encroachment
of building located in Tract 43 onto Oklahoma Gas and Electric Company easement recorded in Book 6370, page 2103. 

12

 
	51.
	Release
of Amended and Restated Lease Agreement among the City of Oklahoma City, the Trustees of the Oklahoma City Zoological Trust and the Amateur Softball Association of America,
recorded in Book 8458, page 402; Quit Claim Deed from Amateur Softball Association of America in favor of the City of Oklahoma City, recorded in Book 8458, page 413 and Agreement
and Amendment Number Two to Amended and Restated Lease of February 3, 1987, recorded in Book 8458, page 417. 

13

 
 

SCHEDULE D
  
    Legal Description of the Palm Meadows Training Center Lands    
    

PARCEL
1: 

        All
of the Plat of PALM BEACH THOROUGHBRED TRAINING FARM, according to the plat thereof, as recorded in Plat Book 96, page 164 through 171, inclusive, Public Records Palm
Beach County, Florida. 

LESS
AND EXCEPT: 

        All
of Parcel B and the South 80.00 feet of Parcel A, PALM BEACH THOROUGHBRED TRAINING FARM, according to the plat thereof, as recorded in Plat Book 96, page 164
through 171, inclusive, Public Records Palm Beach County, Florida. 

PARCEL
2: 

        That
part of Tracts 55, 86, 87 and 118, Block 46, THE PALM BEACH FARMS CO. PLAT NO. 3, according to the plat thereof, as recorded in Plat Book 2, pages 45
through 54, inclusive, Public Records Palm Beach County, Florida. 

AND

        That
part of Tracts 1 and 32, Block 50, THE PALM BEACH FARMS CO. PLAT NO. 3, according to the plat thereof, as recorded in Plat Book 2, pages 45 through 54,
inclusive, Public Records Palm Beach County, Florida, lying East of the Florida's Turnpike. 

TOGETHER
WITH THE FOLLOWING RIGHTS OF WAY: 

        The
South 1/2 of the 30 foot platted right of way as shown on the said Plat of THE PALM BEACH FARMS COMPANY PLAT NO. 3, lying North of and adjacent to Tract 55,
Block 46, according to the said Plat of THE PALM BEACH FARMS COMPANY PLAT NO. 3 bounded on the East by a line lying 25 feet East of the Northerly extension of the East line of Tract 55
of said Block 46, and bounded on the West by the East right of way line of the Florida State Turnpike as described in Deed Book 1113, pages 434 and 435 of the Public Records Palm Beach
County, Florida. 

AND
ALSO 

        All
of that certain 30 foot right of way lying between Tracts 86 and 87, Block 46, THE PALM BEACH FARMS COMPANY PLAT NO. 3, bounded on the West by the East right of way line of
that certain right of way for the Florida State Turnpike as descried in Deed Book 1113, pages 434 and 435 of the Public Records Palm Beach County, Florida and bounded on the East by a
line lying 25 feet East of the Northerly extension of the East line of said Tract 87. 

AND
ALSO 

 

        The
North 1/2 of the 50 foot right of way lying South of Tract 118, Block 46, according to the said Plat of THE PALM BEACH FARMS COMPANY PLAT NO. 3 bounded
on the West by the East right of way line of the Florida State Turnpike as described in Deed Book 1113, pages 434 and 435 of the Public Records Palm Beach County, Florida, and bounded on
the East by a line lying 25 feet East of the Southerly extension of the East line of said Tract 118. 

AND
ALSO 

        The
South 1/2 of the 50 foot platted right of way as shown on said Plat of THE PALM BEACH FARMS COMPANY PLAT NO. 3, lying North of and adjacent to Tract 1, Block
50, according to the said Plat of THE PALM BEACH FARMS COMPANY PLAT NO. 3 bounded on the East by a line lying 25 feet East of the Northerly extension of East line of Tract 1 of said
Block 50, and bounded on the West by the East right of way line of the Florida State Turnpike as described in Deed Book 1113, pages 434 and 435, of the Public Records Palm Beach County,
Florida. 

AND
ALSO 

        All
that part of the North 1/2 of a 30 foot right of way lying South of Tract 32, Block 50, according to the said Plat of THE PALM BEACH FARMS COMPANY PLAT NO. 3
and its Easterly extension to a line lying 25 foot East of and parallel with the East line of said Tract 32, all lying East of the East right of way line of the Florida's Turnpike as described
in Deed Book 1113, pages 434 and 435 of the Public Records Palm Beach County, Florida. 

AND
ALSO 

        The
West 1/2 of that certain 50 foot road right of way lying adjacent to the East line of Tracts 1 and 32, Block 50, according to the said Plat of PALM BEACH FARMS
COMPANY PLAT NO. 3. 

AND
ALSO 

        All
of that certain 25 foot road right of way lying adjacent to the East line of Tracts 55, 86, 87 and 118, Block 46, according to the said Plat of PALM BEACH FARMS COMPANY PLAT
NO. 3. 

        LESS
AND EXCEPT THE FOLLOWING DESCRIBED PROPERTY: 

        A
portion of the North 1/2 of the 30 foot Platted road right of way lying South of Tracts 17 through 32, Block 50; portions of Tracts 32 and 1, Block 50; a portion
of the 50 foot platted road right of way lying between Blocks 50 and 48; portions of tracts 115 and 87, Block 46; a portion of the 30 foot platted road right of way lying between Tracts
87 and 88 of said Block 46; portions of Tracts 86 and 65; a portion of the South 1/2 of the 30 foot platted road lying North of Tracts 55 through 70, Block 46, all of PALM BEACH
FARMS COMPANY PLAT NO. 3, according to the Plat thereof, as recorded in Plat Book 2, pages 45 through 54, of the Public Records Palm Beach County, Florida, described as follows: 

2

 

        Begin
at the intersection of the West right of way of the Sunshine State Parkway (Miami to Fort Pierce Section) according to the right of way map station 2016+27.78 to
2126+18.91 Palm Beach County (Contract 3.2, sheets 6 and 7 of 13) with the South line of the said North 1/2 of the 30 foot platted road right of way lying South of
Tracts 17 through 32, Block 50 of said PALM BEACH FARMS COMPANY PLAT NO. 3; thence South 89 degrees 59 minutes 00 seconds West, along said South line, a distance of
7.58 feet thence North 00 degrees 06 minutes 36 seconds West, along the West boundaries of said Tracts 32 and 1, Block 50 and the Northerly and Southerly extensions
thereof, also along the West boundaries of said Tracts 118, 87, 86 and 55, Block 46 and the Northerly and Southerly extensions thereof, a distance of 4075.16 feet to the North boundary of the
said South 1/2 of the 30 foot platted road right of way lying North of Tracts 55 through 70, Block 46; thence North 89 degrees 57 minutes 42 seconds East,
along said North boundary a distance of 6.80 feet to the said West right of way of said Sunshine State Parkway; thence South 00 degrees 07 minutes 15 seconds East, along
said West right of way a distance of 4075.17 feet to the POINT OF BEGINNING> 

3

 
 

SCHEDULE E
  
    Legal Description of the Gulfstream Lands    
    

PARCEL 1 (FEE SIMPLE ESTATE)  

        The East 180.6 feet of Lot 1, Block 7; LESS the North 75 feet thereof for State Road Right of way; 

        The
South 300.00 feet of Lot 1, Block 7; LESS the East 180.6 feet thereof; and also less the West 33.23 feet thereof; 

        Lot
4, Block 7, less the North 25.00 feet of the West 33.23 feet thereof; 

        Lots
3 and 4, Block 8; 

        Lots
1, 2, 3 and 4, Block 9; 

        Lots
1, 2, 3 and 4, Block 10; 

        Lots
1, 2, 3 and 4, Block 15; 

        Lots
1, 2, 3 and 4, Block 16; 

        All
of the Subdivision in Section 27, Township 51 South, Range 42 East, according to the Plat of TOWN OF HALLANDALE, according to the Plat thereof, as recorded in
Plat Book B, Page 13, Public Records of Dade County, Florida, now being a part of Broward County, Florida. 

        LESS
AND EXCEPT from all the above those portions lying West of the East right of way of Federal Highway (U.S. No. 1), said East right of way lien being described as
follows: Beginning at the intersection of the North line of said Lot 2, Block 10, with a line that lies 90.00 feet East of and parallel with the West line of the Southeast One Quarter
(SE 1/4) of said Section 27; thence Southerly along said parallel line a distance of 1869.97 feet; to the point of curvature of a curve concave to the West and
having a radius of 3909.83 feet; thence Southerly along said curve through a central angle of 12 degrees 03 minutes 38 seconds for an arc distance of 823.02 feet to
a point of terminus on the South line of the Southeast One Quarter (SE 1/4) of said Section 27, Township 51 South, Range 42 East, Broward County, Florida. 

        Portions
of the Plat of TOWN OF HALLANDALE, according to the Plat thereof, as recorded in Plat Book B, Page 13, Public Records of Miami-Dade County, Florida, now being
a portion of Broward County, Florida, as reflected in the legal description set forth above were replatted by the following plats: 

	(a)
	HALLANDALE
PARK NO. 12 PART 2, recorded in Plat Book 10, Page 17, Public Records of Miami-Dade County, Florida, now being a portion of Broward County,
Florida. 

 

	(b)
	HALLANDALE
PARK NO. 12 REVISED-SECTIONS, recorded in Plat Book 10, Page 18, Public Records of Miami-Dade County, Florida, now being a portion of Broward
County, Florida.

	(c)
	GOLDEN
ISLES BOULEVARD ANNEX BENCH SECTION, recorded in Plat Book 12, Page 46, Public Records of Miami-Dade County, Florida, now being a portion of Broward County,
Florida. 

        AND

        All
of the subdivisions of HOLLYDALE PARK, according to the Plat thereof, as recorded in Plat Book 11, Page 2, Public Records of Broward County, Florida. 

        LESS
AND EXCEPT THEREFROM all of Hibiscus Street as shown on said HOLLYDALE PARK, a/k/a the north 25 feet of the Southwest One Quarter (SW 1/4) of the
Southwest One Quarter (SW 1/4) of the Northeast One Quarter (NE 1/4) of Section 27, Township 51 South, Range 42 East, Broward County,
Florida. 

        ALSO
EXCEPTING THEREFROM all that portion of said Hollydale Park lying West of a line 90.00 feet East of and parallel with the West line of the Southwest One Quarter
(SW 1/4) of the Southwest One Quarter (SW 1/4) of the Northeast One Quarter (NE 1/4) of Section 27, Township 51 South,
Range 42 East, Broward County, Florida. 

AND 

        The
West One Half (W 1/2) of the Southwest One Quarter (SW 1/4) of the Northwest One Quarter (NW 1/4) of the Southwest
One Quarter (SW 1/4) and the West One Half (W 1/2) of the Northwest One Quarter (NW 1/4) of the Southwest One Quarter
(SW 1/4) of the Southwest One Quarter (SW 1/4) of Section 26, Township 51 South, Range 42 East, Broward County, Florida. 

        ALSO
LESS AND EXCEPT THEREFROM all of the above description property conveyed by the Deed to the State of Florida for use and benefit of the State of Florida Department of Transportation
as set forth in the Deed recorded in Official Record Book 13597, Page 886, Public Records of Broward County, Florida, described as follows: That part of Lots 2 and 3, Block 15, TOWN OF
HALLANDALE, according to the Plat thereof, as recorded in Plat Book B, Page 13, Public Records in Broward County, Florida, said part being more particularly described as follows: Commence at
the Northeast corner of the Southeast Quarter of Section 27, Township 51 South, Range 42 East; thence South 87 degrees 07 minutes 18 seconds West along the
North line of said Southeast Quarter of Section 27, a distance of 2665.11 feet to the Northwest corner of said Southeast Quarter of Section 27; thence South 02 degrees
52 minutes 00 seconds East along the West line of the East Half of said Section 27 a distance of 1869.97 feet; thence North 87 degrees 08 minutes
00 seconds East a distance of 94.5 feet; thence South 02 degrees 52 minutes 00 seconds East a distance of 4.32 feet to the POINT OF BEGINNING; thence continue
South 02 degrees 52 minutes 00 seconds East, a distance of 32.91 feet to the beginning of a curve concave Westerly, having a radius of 3743.00 feet and a chord
bearing of South 0 degrees 21 minutes 43 seconds East; thence run Southerly along the arc of said curve through a central angle of 5 degrees 00 minutes
35 seconds a distance of 327.27 feet; thence South 6 degrees 49 minutes 12 seconds West a distance of 99.85 feet to a point on the existing Easterly right of
way line of State Road 5 and the beginning of a curve concave to the West, said curve having a radius of 3819.83 feet and a chord bearing of North 1 degree 32 minutes
43 seconds East; thence Northerly along the arc of said curve a distance of 318.44 feet through a central angle of 4 degrees 46 minutes 35 seconds to the end of said
curve; thence along the South line of said Lot 3, Block 15, North 87 degrees 02 minutes 19 seconds East a distance of 2.11 feet; thence continue along said existing
Easterly right of way line North 2 degrees 52 minutes 00 seconds West a distance of 140.79 feet; thence leaving said existing Easterly right of way line run North
87 degrees 08 minutes 00 seconds East a distance of 4.50 feet to the POINT OF BEGINNING. 

2

 

        ALSO
LESS AND EXCEPT THEREFROM all of the above described property conveyed to the State of Florida for the use and benefit of the State of Florida Department of Transportation as set
forth in the Deed recorded in Official Records Book 15493, Page 113, Public Records of Broward County, Florida, described as follows: That part of Lots 10 and 11, Block 2, of HOLLYDALE PARK,
according to the Plat thereof, as recorded in Plat Book 11, Page 2, Public Records of Broward County, Florida, and that part of a 25 foot abandoned and vacated road as shown on said Plat
of Hollydale Park and that part of Lot 2, Block 10 of the TOWN OF HALLANDALE, according to the Plat thereof, as recorded in Plat Book B, Page 13, Public Records in Dade County, Florida, said
part being more particularly described as follows: Commence at the Southwest corner of the Northwest Quarter in Section 27, Township 51 South, Range 42 East; thence North
87 degrees 07 minutes 28 seconds East, along the Quarter Section lien of said Section 27 a distance of 2655.87 feet to the baseline of survey for State Road 5;
thence North 02 degrees 52 minutes 00 seconds West a distance of 62.77 feet; thence North 87 degrees 08 minutes 00 seconds East a distance of
90.00 feet to the Easterly existing right of way for State Road 5 and the POINT OF BEGINNING; thence South 67 degrees 58 minutes 47 seconds East a distance of
23.16 feet; thence North 87 degrees 07 minutes 18 seconds East a distance of 10.97 feet; thence South 02 degrees 52 minutes 42 seconds East a
distance of 106.00 feet; thence South 42 degrees 07 minutes 39 seconds West a distance of 38.89 feet; thence South 02 degrees 52 minutes
00 seconds East a distance of 200.25 feet; thence South 00 degrees 56 minutes 51 seconds West a distance of 67.65 feet; thence North 02 degrees
52 minutes 00 seconds West a distance of 411.00 feet to the POINT OF BEGINNING; and that part of Lots 1 and 2 in Block 1 of HOLLYDALE PARK, according to the Plat thereof,
as recorded in Plat Book 11, Page 2, of the Public Records in Broward County, Florida, said part being more particularly described as follows: Commence at the Southwest corner of the Northwest
quarter in Section 27, Township 51 South, Range 42 East; thence North 87 degrees 07 minutes 28 seconds East a distance of 2655.87 feet to the baseline
of Survey for State Road 5; thence North 02 degrees 52 minutes 00 seconds West a distance of 618.41 feet; thence South 87 degrees 08 minutes 00 seconds
East a distance of 90.00 feet to the POINT OF BEGINNING; thence North 32 degrees 50 minutes 45 seconds East a distance of 40.03 feet; thence South 87 degrees
12 minutes 47 seconds West a distance of 23.36 feet to the Easterly existing right of way for State Road 5; thence South 02 degrees 52 minutes 00 seconds East
a distance of 32.53 feet to the POINT OF BEGINNING. 

3

 
 

SCHEDULE F
  
    Legal Description of The Meadows Lands    
    

        The parcel of land situated in the Commonwealth of Pennsylvania, County of Washington, described as follows: 

Johnson
Road, North Strabane Township

Washington County, PA

Tax ID No. 520-011-00-00-0016-02 

        ALL
THAT CERTAIN tract of land situate in North Strabane Township, Washington County, Pennsylvania, being more particularly bounded and described as follows, to wit: 

        BEGINNING
at the point of intersection of the centerline of T-663 (Johnson Road) and the line common to lands now or formerly of J. B. McBride and lands of the Grantor;
thence by lands now or formerly of J. B. McBride, South 17 degrees 13' 00" East, a distance of 1,318.21 feet to a point; thence by lands now or formerly of J. B. McBride, North
60 degrees 21' 40" East, a distance of 1,209.05 feet to a point; thence by lands now or formerly of H. P. Rasel, South 14 degrees 30' 00" East, a distance of 1,511.40 feet
to a point; thence by the same lands, South 34 degrees 52' 30" East, a distance of 893.22 feet to a point; thence through lands of the Grantor, South 41 degrees 14' 54" West, a
distance of 295.56 feet to a gas line marker in the centerline of the Manufacturers Light and Heat Company right of way through lands of Grantor; thence by the same centerline, South
40 degrees 43' 04" West, a distance of 322.92 feet to a gas line marker; thence by the same centerline, South 41 degrees 36' 52" West, a distance of 514.16 feet to a point
on the Northerly line of a private access road to L.R. 108 (Route 19), being herein called the Route 19 Access Road; thence by the Northerly line of the said Route 19 Access Road the
following courses and distances: 

        North
63 degrees 18' 44" East, a distance of 223.39 feet; 

        North
61 degrees 39' 39" East, a distance of 101.12 feet; 

        North
58 degrees 32' 35" East, a distance of 99.64 feet; 

        North
57 degrees 45' 27" East, a distance of 845.35 feet; 

        North
60 degrees 29'19" East, a distance of 60.90 feet; 

        North
71 degrees 33' 54" East, a distance of 50.60 feet; 

        South
79 degrees 35' 32" East, a distance of 49.72 feet; 

        South
54 degrees 32' 40" East, a distance of 81.02 feet; 

        South
20 degrees 28' 24" East, a distance of 53.49 feet; 

        South
08 degrees 17' 50" East, a distance of 48.51 feet; 

 

        South
10 degrees 57' 15" East, a distance of 63.15 feet; 

        South
22 degrees 50' 01" West, a distance of 41.23 feet; 

        South
27 degrees 04' 20" West, a distance of 50.54 feet; 

        South
29 degrees 08' 18" West, a distance of 199.21 feet; 

        South
24 degrees 51' 50" West, a distance of 90.38 feet; 

        South
20 degrees 05' 43" East, a distance of 43.66 feet; 

        South
70 degrees 42' 36" East, a distance of 42.38 feet; 

        South
85 degrees 27' 07" East, a distance of 88.224 feet; 

        Thence
by the same Northerly line of said route 19 access Road, South 72 degrees 54' 01" East, a distance of 26.73 feet to a point on the Westerly right of way line
of L.R. 108 (Route 19), said point also being on the original boundary of lands of the Grantor, thence by said Westerly right of way line crossing the Route 19 Access Road to lands of the
Grantor, South 34 degrees 46' 15" West, a distance of 21.81 feet to a point on the Southerly line of said Route 19 Access Road; thence by the Southerly line of said Route
19 Access Road, the following courses and distances: 

        North
72 degrees 28' 47" West, a distance of 15.84 feet; 

        North
85 degrees 27' 07" West, a distance of 88.28 feet; 

        North
78 degrees 41' 24" West, a distance of 40.79 feet; 

        North
45 degrees 00' 00" West, a distance of 42.43 feet; 

        North
14 degrees 49' 35" West, a distance of 35.17 feet; 

        North
24 degrees 21' 11" East, a distance of 104.28 feet; 

        North
29 degrees 38' 18" East, a distance of 200.19 feet; 

        North
28 degrees 04' 21" East, a distance of 51.00 feet; 

        North
22 degrees 50' 01" East, a distance of 41.23 feet; 

        North
10 degrees 37' 11" East, a distance of 48.84 feet; 

        North
08 degrees 07' 48" West, a distance of 49.50 feet; 

        North
21 degrees 02' 15" West, a distance of 41.79 feet; 

        North
52 degrees 02' 45" West, a distance of 63.41 feet; 

2

 

        North
78 degrees 54' 23" West, a distance of 51.97 feet; 

        South
66 degrees 22' 14" West, a distance of 52.39 feet; 

        South
60 degrees 25' 20" West, a distance of 42.54 feet; 

        South
57 degrees 55' 34" West, a distance of 796.59 feet; 

        South
56 degrees 18' 36" West, a distance of 100.96 feet; 

        South
61 degrees 23' 22" West, a distance of 150.36 feet; 

        South
62 degrees 01' 32" West, a distance of 309.12 feet; 

        South
49 degrees 51' 24" West, a distance of 108.58 feet; 

        South
46 degrees 25' 01" West, a distance of 200.17 feet; 

        South
49 degrees 01' 42" West, a distance of 50.33 feet; 

        South
57 degrees 31' 44" West, a distance of 52.15 feet; 

        South
70 degrees 20' 46" West, a distance of 59.46 feet; 

        South
87 degrees 46' 08" West, a distance of 77.06 feet; 

        North
86 degrees 56' 50" West, a distance of 75.11 feet; 

        North
82 degrees 50' 32" West, a distance of 216.69 feet; 

        North
79 degrees 47' 46" West, a distance of 97.87 feet; 

to
a point on the Southerly line of said route 19 Access Road; thence leaving the Southerly line of said Route 19 Access Road, by a line through the lands of the Grantor, South
48 degrees 05' 02" West, a distance of 354.53 feet to a point in the centerline of L.R. 62072 (Race Track Road), said point being station 67-0I-98 on L.R.
62092 (Race Track Road); thence by the centerline of L.R. 62082 (Race Track Road), by an arc having a radius of 11,459.20 feet and a chord of 128.84 feet, North 41 degrees 54' 58"
West, a distance of 128.84 feet to the point of curvature of said arc; thence by the centerline of L.R. 62082 (Race Track Road), North 42 degrees 14' 18" West, a distance of
837.23 feet to a point on the centerline of L.R. 62082 (Race Track Road); thence by a line through the lands of the Grantor, North 51 degrees 28' 35" East, a distance of
330.07 feet to a point in the centerline of Old L.R. 62092 (Allison Road); thence by the centerline of Old L.R. 62092 (Allison Road), North 30 degrees 00' 36" West, a distance of
458.00 feet to a point; thence by the same centerline, North 36 degrees 05' 39" West, a distance of 208.01 feet to a point at the Easterly intersection of T-665
(Johnson Road) and Old L.R. 62092 (Allison Road); thence by the centerline of T-665 (Johnson Road), the following courses and distances: 

        North
18 degrees 29' 07" West, a distance of 165.46 feet; 

3

 

        North
01 degrees 55' 07" East, a distance of 182.79 feet; 

        North
03 degrees 50' 30" East, a distance of 411.34 feet; 

thence
leaving the centerline of T-665 (Johnson Road) by a line through the lands of the Grantor, North 31 degrees 08' 36" West, a distance of 103.87 feet to a point; thence
by the same line, North 13 degrees 32' 10" East, a distance of 141.72 feet to a point; thence by the same line, South 65 degrees 49' 15" West, a distance of 168.12 feet to
an iron pin; thence by the same line, North 27 degrees 10' 45" West, a distance of 247.60 feet to an iron pin; thence by the same line, North 65 degrees 49' 15" East, a distance
of 449.70 feet to a point on the centerline of T-665 (Johnson Road); thence by the centerline of T-665 (Johnson Road), the following courses and distances: 

        North
11 degrees 32' 08" East, a distance of 52.81 feet; 

        North
00 degrees 45' 14" East, a distance of 52.01 feet; 

        North
03 degrees 18' 06" West, a distance of 625.04 feet; 

        North
06 degrees 02' 00" West, a distance of 123.68 feet; 

        North
02 degrees 46' 13" East, a distance of 62.07 feet; 

        North
16 degrees 23' 22" East, a distance of 70.88 feet; 

        North
27 degrees 27' 56" East, a distance of 227.66 feet; 

        Thence
by the same centerline North 33 degrees 13' 54" East, a distance of 196.65 feet to a pint, said point being the intersection of the centerline of T-665
(Johnson Road) and the original boundary line of lands now or formerly of J. B. McBride and the lands of the Grantor, the point of BEGINNING. 

        CONTAINING
154.084 acres, more or less. 

RECITAL  

        BEING the same property that Meadows Real Estate, Inc. conveyed to Ladbroke Racing Pennsylvania, Inc. by Deed dated January 17, 1989 and
recorded January 20, 1989, in Deed Book Volume 2354, page 167. 

4

QuickLinks

SECOND AMENDED AND RESTATED LOAN AGREEMENT (Reconstruction of and Addition of Slots Facilities at Gulfstream Park, Florida)

TABLE OF CONTENTS

SECOND AMENDED AND RESTATED LOAN AGREEMENT

ARTICLE 1 ARTICLE DEFINITIONS

ARTICLE 2 THE LOAN

ARTICLE 3 PAYMENTS AND INTEREST

ARTICLE 4 ADVANCES UNDER THE LOAN

ARTICLE 5 SECURITY FOR LOAN

ARTICLE 6 REPRESENTATIONS AND WARRANTIES

ARTICLE 7 AFFIRMATIVE COVENANTS

ARTICLE 8 NEGATIVE COVENANTS

ARTICLE 9 EVENTS OF DEFAULT; ACCELERATION OF INDEBTEDNESS

ARTICLE 10 MISCELLANEOUS

SCHEDULE A Legal Description of the Aventura Lands

SCHEDULE B Legal Description of the Remington Lands

SCHEDULE C Permitted Encumbrances

SCHEDULE D Legal Description of the Palm Meadows Training Center Lands

SCHEDULE E Legal Description of the Gulfstream Lands

SCHEDULE F Legal Description of The Meadows LandsQuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 10.10

 
 

FIRST AMENDMENT
  TO STOCK PURCHASE AGREEMENT    
    

        This FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT (this "First
Amendment") is dated as of July 26, 2006 and entered into by and between MAGNA ENTERTAINMENT CORP., a Delaware corporation
("Seller"), and PA MEADOWS, LLC, a Delaware limited liability company ("Purchaser"), and is made
with reference to that certain Stock Purchase Agreement, dated as of November 8, 2005 (the "Purchase Agreement"), by and between Seller
and Purchaser. Capitalized terms used herein without definition shall have the same meanings herein as set forth in the Amended Purchase Agreement (as defined below). 

 
 

RECITALS    
    

        WHEREAS, as a result of further negotiations between Seller and Purchaser since the signing of the Purchase
Agreement, Seller and Purchaser have decided to amend the terms of the Purchase Agreement by entering into this First Amendment in order to, (i) reduce the Purchase Price for the Shares from
$225,000,000 to $200,000,000, (ii) reduce the Holdback Amount from $39,000,000 to $25,000,000, (iii) permit the payment of the Purchase Price in the form of two notes, a Tranche A
Note for $175,000,000 and a Tranche B Note for $25,000,000 and (iv) amend other provisions of the Purchase Agreement as set forth in the Amended Purchase Agreement; 

        NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree
as follows: 

 Section 1. AMENDMENT OF PURCHASE AGREEMENT  

        As of the date hereof, the Purchase Agreement and the exhibits thereto shall be and are hereby amended and modified to read in their entirety as set forth in
Annex A hereto (as set forth in such Annex A, the "Amended Purchase Agreement"), and as
so amended are hereby ratified, approved and confirmed in each and every respect. The parties hereto agree and acknowledge that the schedules to the Purchase Agreement delivered on November 8,
2005 shall be the schedules to the
Amended Purchase Agreement, and Seller has delivered a certificate as of the date hereof to Purchaser in accordance with Section 8.03(b) of the Amended Purchase Agreement related to
such schedules. 

 Section 2. MISCELLANEOUS  

         2.1    Fees and
Expenses.    Except as otherwise expressly provided in the Amended Purchase Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred in connection with this First Amendment and the transactions contemplated hereby shall be paid by the party incurring such costs
and expenses. 

 

         2.2    Notices.    All
notices, requests, claims, demands and other communications hereunder shall be made as set forth in Section 11.02 of the Amended Purchase Agreement. 

         2.3    Public
Announcements.    Unless otherwise required by applicable law or stock exchange requirements, no party to this First Amendment shall make any public
announcements in respect of this First Amendment or the transactions contemplated hereby or otherwise communicate with any news media without prior consent of the other party, and the parties will
cooperate as to the timing and contents of any such announcement. Seller and Purchaser acknowledge that OCM HoldCo LLC and Seller will be making filings with the Securities and Exchange
Commission and each of Seller and Purchaser agrees to cooperate in reviewing and providing any comments on such submissions in a timely fashion. 

         2.4    Headings.    The
headings contained in this First Amendment are for reference purposes only and shall not affect in any way the meaning or interpretation of this First Amendment. 

         2.5    Severability.    If
any term or other provision of this First Amendment is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this First Amendment
shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this First Amendment so as to effect the
original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest
extent possible. 

         2.6    Assignment.    This
First Amendment shall not be assigned by operation of law or otherwise, except that prior to the Closing, Purchaser, without the consent of Seller, but with at least 10 Business Days' prior
written notice, may transfer or cause to be transferred all of the equity interests of Purchaser to a wholly owned direct or indirect subsidiary of Cannery Casino Resorts, LLC, a Nevada limited
liability company. 

         2.7    No Third-Party
Beneficiaries.    This First Amendment is for the sole benefit of the parties hereto and their permitted assigns and, except as otherwise expressly
provided in the Amended Purchase Agreement, nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any
nature whatsoever under or by reason of this First Amendment. 

         2.8    Amendment.    This
First Amendment may not be amended or modified except by an instrument in writing signed by Seller and Purchaser. 

         2.9    Governing Law; Jurisdiction; Service of
Process.    This First Amendment shall be governed by, and construed in accordance with, the laws of the State of New York. Seller and Purchaser
hereby agree and consent to the exclusive jurisdiction of, and service of process and venue in, the United States District Court for the Southern District of New York and the courts of
the State of New York located in the County of New York, State of New York and waives any objection with respect thereto, for the purpose of any action, suit or proceeding arising
out of or relating to this First Amendment. 

2

 

         2.10    WAIVER OF JURY
TRIAL.    EACH OF PURCHASER AND SELLER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED
ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS FIRST AMENDMENT OR THE ACTIONS OF PURCHASER OR SELLER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF. 

         2.11    Counterparts.    This
First Amendment may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of
which taken together shall constitute one and the same agreement. 

         2.12    Specific
Performance.    The parties hereto agree that irreparable damage would occur in the event any provision of this First Amendment was not performed in
accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or equity. 

         2.13    Prevailing
Party.    The prevailing party or parties in any arbitration, mediation, court action, or other adjudicative proceeding arising out of or relating to
this First Amendment shall be reimbursed by the party or parties who do not prevail for their reasonable attorneys, accountants and experts fees and for the costs of such proceeding. 

        [The remainder of page intentionally left blank.]

3

        IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above. 

	 	 	PA MEADOWS, LLC
	
 	
 	

By:	

/s/        
 Name:

Title:
	
 	
 	
MAGNA ENTERTAINMENT CORP.
	
 	
 	

By:	

/s/        
 Name:

Title: Authorized Signatory
	
 	
 	

By:	

/s/        
 Name:

Title: Authorized Signatory

 

 
 

STOCK PURCHASE AGREEMENT    
    

dated
November 8, 2005 

between

MAGNA
ENTERTAINMENT CORP. 

and
PA MEADOWS, LLC 

 

 
 
 

TABLE OF CONTENTS    
    

	 
	 	Page
	 	 

	 ARTICLE I — DEFINITIONS	 	1
	 	 SECTION 1.01	 	Certain Defined Terms	 	1
	 ARTICLE II — PURCHASE AND SALE	 	10
	 	 SECTION 2.01	 	Purchase and Sale	 	10
	 	 SECTION 2.02	 	Purchase Price	 	10
	 	 SECTION 2.03	 	Closing	 	10
	 ARTICLE III — REPRESENTATIONS AND WARRANTIES OF SELLER	 	11
	 	 SECTION 3.01	 	Incorporation and Authority of Seller	 	11
	 	 SECTION 3.02	 	Organization, Authority and Qualification of the Companies	 	11
	 	 SECTION 3.03	 	Capital Stock of the Companies; Ownership of the Shares	 	12
	 	 SECTION 3.04	 	Subsidiaries	 	12
	 	 SECTION 3.05	 	No Conflict	 	14
	 	 SECTION 3.06	 	Consents and Approvals	 	15
	 	 SECTION 3.07	 	Financial Information, Books and Records	 	15
	 	 SECTION 3.08	 	No Undisclosed Liabilities	 	16
	 	 SECTION 3.09	 	Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions	 	16
	 	 SECTION 3.10	 	Litigation	 	17
	 	 SECTION 3.11	 	Compliance with Applicable Laws	 	18
	 	 SECTION 3.12	 	Environmental Matters	 	18
	 	 SECTION 3.13	 	Title to Assets; Real Property	 	20
	 	 SECTION 3.14	 	Intellectual Property Rights	 	22
	 	 SECTION 3.15	 	Insurance	 	22
	 	 SECTION 3.16	 	Employee Benefit Matters	 	23
	 	 SECTION 3.17	 	Labor Matters	 	26
	 	 SECTION 3.18	 	Taxes	 	27
	 	 SECTION 3.19	 	Material Contracts	 	29
	 	 SECTION 3.20	 	Racing License	 	31

i

 

	 	 SECTION 3.21	 	Suppliers	 	31
	 	 SECTION 3.22	 	Books and Records	 	31
	 	 SECTION 3.23	 	Brokers	 	31
	 	 SECTION 3.24	 	Racing Days	 	31
	 	 SECTION 3.25	 	Related Parties	 	32
	 ARTICLE IV — REPRESENTATIONS AND WARRANTIES OF PURCHASER	 	32
	 	 SECTION 4.01	 	Incorporation and Authority of Purchaser	 	32
	 	 SECTION 4.02	 	No Conflict	 	33
	 	 SECTION 4.03	 	Consents and Approvals	 	33
	 	 SECTION 4.04	 	Investment Purpose	 	33
	 	 SECTION 4.05	 	Financing	 	34
	 	 SECTION 4.06	 	Brokers	 	34
	 	 SECTION 4.07	 	Specified Investors; Cannery Casino Resorts	 	34
	 ARTICLE V — ADDITIONAL AGREEMENTS	 	34
	 	 SECTION 5.01	 	Conduct of Business Prior to the Closing	 	34
	 	 SECTION 5.02	 	Access to Information	 	35
	 	 SECTION 5.03	 	Books and Records	 	36
	 	 SECTION 5.04	 	Governmental Approvals and Consents; Application Fee; Closing Conditions	 	36
	 	 SECTION 5.05	 	Confidentiality	 	41
	 	 SECTION 5.06	 	Use of Magna Name	 	42
	 	 SECTION 5.07	 	Investigation	 	43
	 	 SECTION 5.08	 	Limited Non-Compete	 	43
	 	 SECTION 5.09	 	Remediation	 	44
	 	 SECTION 5.10	 	No Negotiation	 	45
	 	 SECTION 5.11	 	Title	 	45
	 	 SECTION 5.12	 	Further Action	 	45
	 	 SECTION 5.13	 	Excluded Items	 	46
	 	 SECTION 5.14	 	Estoppels	 	46

ii

 

	 	 SECTION 5.15	 	Cooperation in Preparation of Alternative Application	 	46
	 	 SECTION 5.16	 	Financial Statements	 	46
	 	 SECTION 5.17	 	Separation	 	48
	 	 SECTION 5.18	 	Notification	 	48
	 	 SECTION 5.19	 	Environmental Report	 	48
	 	 SECTION 5.20	 	XpressBet Matters	 	48
	 	 SECTION 5.21	 	[Reserved]	 	48
	 	 SECTION 5.22	 	Phase I	 	48
	 	 SECTION 5.23	 	Slot Machine Taxes	 	49
	 ARTICLE VI — EMPLOYEE MATTERS	 	49
	 	 SECTION 6.01	 	Arrangements; Payroll Obligations	 	49
	 	 SECTION 6.02	 	Benefit Plans and Transferred Employee Related Obligations	 	49
	 	 SECTION 6.03	 	Intentionally Omitted	 	50
	 	 SECTION 6.04	 	Intentionally Omitted	 	50
	 	 SECTION 6.05	 	Employee Benefits Indemnity	 	50
	 	 SECTION 6.06	 	Third-Party Claims	 	51
	 	 SECTION 6.07	 	Survival	 	51
	 ARTICLE VII — TAX MATTERS	 	51
	 	 SECTION 7.01	 	Indemnity	 	51
	 	 SECTION 7.02	 	Returns and Payments	 	52
	 	 SECTION 7.03	 	Refunds	 	53
	 	 SECTION 7.04	 	Contests	 	53
	 	 SECTION 7.05	 	Time of Payment	 	54
	 	 SECTION 7.06	 	Cooperation and Exchange of Information	 	55
	 	 SECTION 7.07	 	Conveyance Taxes	 	55
	 	 SECTION 7.08	 	Miscellaneous	 	55
	 ARTICLE VIII — CONDITIONS TO CLOSING	 	56
	 	 SECTION 8.01	 	Conditions to Obligations of All Parties	 	56

iii

 

	 	 SECTION 8.02	 	Conditions to Obligations of Seller	 	57
	 	 SECTION 8.03	 	Conditions to Obligations of Purchaser	 	58
	 ARTICLE IX — INDEMNIFICATION	 	60
	 	 SECTION 9.01	 	Survival	 	60
	 	 SECTION 9.02	 	Indemnification by Purchaser	 	61
	 	 SECTION 9.03	 	Indemnification by Seller	 	63
	 	 SECTION 9.04	 	Indemnification Procedures, Etc	 	66
	 	 SECTION 9.05	 	Payments	 	69
	 ARTICLE X — TERMINATION, AMENDMENT AND WAIVER	 	69
	 	 SECTION 10.01	 	Termination	 	69
	 	 SECTION 10.02	 	Effect of Termination	 	70
	 	 SECTION 10.03	 	Waiver	 	71
	 ARTICLE XI — GENERAL PROVISIONS	 	71
	 	 SECTION 11.01	 	Expenses; Pro-rations	 	71
	 	 SECTION 11.02	 	Notices	 	72
	 	 SECTION 11.03	 	Public Announcements	 	73
	 	 SECTION 11.04	 	Headings	 	73
	 	 SECTION 11.05	 	Severability	 	73
	 	 SECTION 11.06	 	Entire Agreement	 	73
	 	 SECTION 11.07	 	Assignment	 	73
	 	 SECTION 11.08	 	No Third-Party Beneficiaries	 	74
	 	 SECTION 11.09	 	Amendment	 	74
	 	 SECTION 11.10	 	Governing Law; Jurisdiction; Service of Process	 	74
	 	 SECTION 11.11	 	WAIVER OF JURY TRIAL	 	74
	 	 SECTION 11.12	 	Counterparts	 	74
	 	 SECTION 11.13	 	Specific Performance	 	74
	 	 SECTION 11.14	 	Prevailing Party	 	74

iv

 

EXHIBITS  

	Exhibit 1.01A	 	Form of Note Agreement
	Exhibit 1.01B	 	Meadows Facility
	Exhibit 1.01C	 	MEC Items
	Exhibit 1.01D	 	Off-Track Betting Facilities
	Exhibit 1.01E	 	Racing Services Agreement
	Exhibit 1.01F	 	XpressBet Amendments
	Exhibit 5.11	 	Title Commitment
	Exhibit 5.13	 	Excluded Items
	Exhibit 8.02(g)	 	Form of Opinion of Purchaser Parties' Counsel
	Exhibit 8.03(j)	 	Form of Opinion of Seller Parties' Counsel

v

   
        STOCK PURCHASE AGREEMENT, dated November 8, 2005 (this "Agreement"), between MAGNA ENTERTAINMENT CORP., a Delaware corporation
("Seller"), and PA MEADOWS, LLC, a Delaware limited liability company ("Purchaser"). 

        WHEREAS,
Seller owns (a) all the issued and outstanding shares of common stock of MEC Pennsylvania Racing, Inc., a Pennsylvania corporation
("MECPenn"), (b) all the issued and outstanding shares of common stock of Mountain Laurel Racing, Inc., a Delaware corporation
("MLR"), and (c) all the issued and outstanding shares of common stock of Washington Trotting Association, Inc., a Delaware corporation
("WTA") (MECPenn, MLR and WTA being collectively referred to herein as the "Companies," and each individually as a
"Company," and the issued and outstanding shares of common stock of the Companies being referred to herein collectively as the
"Shares"); and 

        WHEREAS,
Seller wishes to sell to Purchaser, and Purchaser wishes to purchase from Seller, the Shares upon the terms and subject to the conditions set forth herein; 

        NOW,
THEREFORE, in consideration of the premises and of the mutual agreements and covenants hereinafter set forth, Seller and Purchaser hereby agree as follows: 

ARTICLE I

DEFINITIONS  

        SECTION 1.01 Certain Defined Terms. (a) As used in this Agreement, the following terms shall have the
following meanings: 

        "Action"
means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority. 

        "Affiliate"
of a specified Person means a Person that, directly or indirectly, through one or more intermediaries, Controls, is Controlled By or is Under
Common Control With, such specified Person, including such specified Person's Subsidiaries. 

        "Business
Day" means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in the City of
Toronto or the City of Los Angeles. 

        "Code"
or "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended. 

        "Commission"
means the Pennsylvania Harness Racing Commission established by the Pennsylvania Act. 

        "Company
Disclosure Schedule" means the Disclosure Schedule dated as of the date hereof delivered to Purchaser by Seller. 

        "Consummation
Date" shall have the meaning assigned to such term in the Note Agreement. 

1

 

        "Control"
(including the terms "Controlled By" and "Under Common Control With") means the
possession, directly or indirectly or as a trustee or executor (in each case, acting in a fiduciary capacity), of the power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, as trustee or executor (in each case, acting in a fiduciary capacity), by contract or credit arrangement or otherwise. 

        "Employee"
means those Persons employed by the Companies and Subsidiaries immediately prior to the Closing, including those employees on any authorized leave
of absence, including, without limitation, vacation, disability (work-related or otherwise) or sick leave, whether or not such employees return to active employment with any Company
or Subsidiary. 

        "Encumbrance"
means a pledge, lien, security interest, mortgage, charge, adverse claim of ownership or use, option, right of way, right of first refusal or
other encumbrance of any kind. 

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

        "ERISA
Affiliate" shall have the meaning assigned to such term in the Note Agreement. 

        "Escrow
Agreement" shall have the meaning ascribed to such term in the Holdback Agreement. 

        "Exchange
Act" means the Securities Exchange Act of 1934, as amended, and any successor law and regulations issued pursuant thereto. 

        "Excluded
Subsidiaries" means Allegheny Harness Racing Association, Inc., Allegheny Thoroughbred Racing Association, Inc. and
20002 Delaware Inc. 

        "GAAP"
means United States generally accepted accounting principles in effect from time to time applied consistently throughout the
period involved. 

        "Gaming
Act" means the Pennsylvania Race Horse Development and Gaming Act, as amended, and any rules or regulations promulgated thereunder. 

        "Gaming
Board" means the Pennsylvania Gaming Control Board established by the Gaming Act. 

        "Governmental
Authority" means any government, any governmental or government-appointed entity, department, commission, board, agency, regulatory authority
or instrumentality, and any court, tribunal, or judicial body, whether federal, state, local or foreign, or any arbitral body, including, without limitation, the Commission and the
Gaming Board. 

2

 

        "Governmental
Order" means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority. 

        "Gulfstream
Loan Agreement" means the Amended and Restated Loan Agreement dated July 22, 2005 by and among Gulfstream Park Racing
Association, Inc., MID Islandi SF, MECPenn, MLR, WTA, Remington Park, Inc. and GPRA Thoroughbred Training Center, Inc., as amended, restated or modified from time
to time. 

        "Holdback
Agreement" means the Holdback Agreement by and between Seller and Purchaser, substantially in the form attached to the Note Agreement as
Exhibit H, as it may be amended from time to time. 

        "Holdback
Documents" means the Holdback Agreement, the Escrow Agreement, the Escrow Security (as defined in the Holdback Agreement), any other
documents entered into in replacement or substitution thereof and any other documents or instruments executed and delivered in connection therewith. 

        "HSR
Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder. 

        "Intellectual
Property Rights" means all (a) patent and patent applications, (b) trademarks, service marks, logos, trade dress, trade names and
corporate names and registrations and applications for registration thereof, including without limitation, the name "The Meadows", (c) copyrights, whether registered or unregistered, and
registrations and applications for registration thereof and (d) trade secrets, formulas, inventions, invention disclosures, computer software and other proprietary business and intellectual
property rights that have been in the last three years or are employed in the conduct of the business of the Companies and the Subsidiaries as it is now being conducted, but excluding the
Magna Name. 

        "IRS"
means the Internal Revenue Service of the United States. 

        "knowledge
of Seller" or "Seller's knowledge" means the actual knowledge of Drew Shubeck, David Wiegmann, Michael Jeannot, Tom
Hodgson, Brian Budden, Andrew Staniusz and Scott Daruty or such other knowledge that such applicable person should reasonably have acquired through the performance of his job in accordance with
his duties. 

        "Law"
or "Laws" means any statute, law, ordinance, regulation, rule, code, order, other requirement or rule of law of any
country or any state, province, locality, region or area therein, or any other jurisdiction. 

        "Lease"
means the Lease Agreement, dated as of July 22, 2003, as modified by that certain Lease Renewal, dated as of July 30, 2004, as further
modified by that certain Lease Renewal, dated as of March 3, 2005 by and between MEC Penn, as tenant, and D. Fuchs Enterprises, LLC, as landlord. 

3

 

        "Liabilities"
means any and all debts, liabilities and obligations of any kind, character or nature whatsoever, whether accrued or fixed, known or unknown,
asserted or unasserted, absolute or contingent, matured or unmatured, secured or unsecured or determined or determinable, including, without limitation, those arising under any Law (excluding any
Environmental Law), Action or Governmental Order and those arising under any contract, agreement, arrangement, commitment, guarantee or undertaking. 

        "Losses"
of a Person means any and all claims, actions or causes of action, assessments, losses, damages, deficiencies, liabilities, costs, awards, judgments
and expenses (including reasonable legal and expert fees and expenses, interest, penalties, and all reasonable amounts paid in investigation, defense or settlement of any of the foregoing) suffered or
incurred by such Person. 

        "Material
Adverse Effect" means any circumstance, change in, or effect on any Company or Subsidiary that is or would reasonably be expected to be materially
adverse to the business, assets, condition (financial or otherwise), or the results of operations of the Companies and the Subsidiaries, taken as a whole, and taking into account the prospects of
obtaining and maintaining a Conditional Category 1 license and a Category 1 license under the Gaming Act and developing a casino on the Real Property (it being understood that
such taking into account of such prospects shall in no event be interpreted as any Company or any Subsidiary being required to be qualified or licensed to conduct any gaming operations in any
jurisdiction on or prior to the Closing Date); provided, however, that "Material Adverse Effect" shall not include any circumstance, change in
or effect on any Company or any Subsidiary directly or indirectly arising out of or attributable to (a) changes or effects in the financial or securities markets or the regulatory conditions or
the economy in general that generally affect the gaming industry or the industries in which the Companies and their respective Subsidiaries operate, (b) any actions taken or omitted to be taken
by Seller or the Companies or any Subsidiary pursuant to the terms of this Agreement or any actions taken by Purchaser or (c) any effects resulting solely from the announcement of the
transactions contemplated by this Agreement. 

        "Meadows
Facility" means the racetrack facility, buildings, improvements, land and other assets located on the land described on
Exhibit 1.01B hereto. 

        "MEC
Items" means those items as set forth on Exhibit 1.01C. 

        "MID
Bridge Loan Agreement" means the Bridge Loan Agreement dated July 22, 2005 by and among Seller, MECPenn, MLR, WTA and MID Islandi SF, as amended,
restated or modified from time to time. 

        "MID
Loan Documents" means the Magna Loan Documents (as defined in the Note Agreement). 

        "Note
Agreement" means that certain Post-Closing and Note Issuance Agreement dated on or about the Closing Date among Purchaser in its capacity
as purchaser hereunder and borrower thereunder, certain Affiliates of Purchaser, Seller in its capacity as seller hereunder and agent thereunder, and the holders of the Tranche A Note and
Tranche B Note party thereto from time to time, substantially in the form attached hereto as Exhibit 1.01A, as it may be amended from time to time. 

4

 

        "Note
Documents" shall have the meaning assigned to such term in the Note Agreement. 

        "OTB
Facilities" means the off track betting facilities identified on Exhibit 1.01D hereto. 

        "Pennsylvania
Act" means the Pennsylvania Race Horse Industry Reform Act, as amended, and the rules and regulations of the Commission
promulgated thereunder. 

        "Permits"
means all permits, licenses, franchises, approvals, authorizations, registrations, certificates, variances and similar rights obtained, or required
to be obtained, from Governmental Authorities (other than Environmental Permits). 

        "Person"
means an individual, corporation, partnership, joint venture, limited liability company, person (including, without limitation, a "person" as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended), trust, association or another entity. 

        "Post-Closing
Period" means any Tax period beginning after the Closing Date. 

        "Pre-Closing
Period" means any Tax period ending on or before the Closing Date. 

        "Purchaser
Disclosure Schedule" means the Disclosure Schedule dated as of the date hereof delivered to Seller by Purchaser. 

        "Purchaser
Material Adverse Effect" means any circumstance, change in, or effect on Purchaser that is or would reasonably be expected to be materially
adverse to the business, assets, condition (financial or otherwise), or the results of operations of Purchaser, taken as a whole and taking into account the prospects of obtaining and maintaining a
Conditional Category 1 license and a Category 1 license under the Gaming Act and developing a casino on the Real Property (it being understood that such taking into account of
such prospects shall in no event be interpreted as Purchaser being required to be qualified or licensed to conduct any gaming operations in any jurisdictions on or prior to the Closing Date);
provided, however, that "Purchaser Material Adverse Effect" shall not include any circumstance, change in or effect on Purchaser directly or
indirectly arising out of or attributable to (a) changes or effects in the financial or securities markets or the regulatory conditions or the economy in general that generally affect the
gaming industry or the industries in which Purchaser operates, (b) any actions taken or omitted to be taken by Purchaser pursuant to the terms of this Agreement or any actions taken by Seller
or (c) any effects resulting solely from the announcement of the transactions contemplated by this Agreement. 

        "Purchaser
Note Developments" shall have the meaning assigned to such term in the Note Agreement. 

5

 

        "Purchaser's
Accountants" means Piercy Bowler Taylor & Kern. 

        "Racing
Services Agreement" means the Racing Services Agreement by and between Affiliates of Purchaser and Seller in the form attached hereto as
Exhibit 1.01E, as it may be amended from time to time. 

        "Real
Property" means the real property owned, leased or subleased by any Company or any Subsidiary, together with all buildings, structures and facilities
located thereon. 

        "Reference
Balance Sheet Date" means December 31, 2004. 

        "Reference
Balance Sheet" means with respect to the Companies and their Subsidiaries the audited combined balance sheet of the Companies and their
Subsidiaries dated as of December 31, 2004, a copy of which is set forth in Section 3.07 of the Company Disclosure Schedule, including the notes and schedules thereto. 

        "Regulation S-X"
means Regulation S-X promulgated by the Securities and Exchange Commission. 

        "Repayment
Date" means the date on which (i) Purchaser shall have paid the Tranche A Note in cash in full in accordance with its terms and
(ii) the Holdback Documents shall have been executed and delivered in accordance with Section 3.2 of the Note Agreement in replacement of the Tranche B Note. 

        "Seller
Note Certificate Date" shall have the meaning assigned to such term in the Note Agreement. 

        "Seller
Note Developments" shall have the meaning assigned to such term in the Note Agreement. 

        "Seller
Notes" means the Tranche A Note and the Tranche B Note. 

        "Seller's
Accountants" means Ernst & Young, L.L.P. 

        "Specified
Funds" means the two funds that own, as of the date hereof, all of the indirect non-voting interest in Purchaser. 

        "Specified
Investor" means each Person that owns as of the date hereof a 5% or greater partnership interest in the Specified Funds (other than the principals
of Purchaser's equity sponsor and other than any owners of Millennium Gaming, Inc. (including without limitation Mr. William Paulos and Mr. William Wortman)). 

        "Stock
Transfer" shall have the meaning assigned to such term in the Note Agreement. 

        "Stock
Transfer Trigger Date" shall mean the earlier of (i) the date on which any of the events set forth in clauses (i)-(vi) of
Section 3.10(a) of the Note Agreement occurs or (ii) the date any remedies under Section 8.2(c) of the Note Agreement may be exercised by Seller. 

6

 

        "Subsidiary"
or "Subsidiaries" means any and all corporations, partnerships, joint ventures and other entities Controlled By any
Company, directly or indirectly through one or more intermediaries other than the Excluded Subsidiaries. As of the date hereof, Subsidiaries of Companies are set forth on Section 3.04(a) of the
Company Disclosure Schedule and shall, for the sake of clarity, include MECRacing and exclude the Excluded Subsidiaries. All references to "Subsidiary" or "Subsidiaries" herein including any reference
to any Company's Subsidiary or "its Subsidiaries" or "their Subsidiaries" (referring to any Company's Subsidiaries) shall exclude the Excluded Subsidiaries. 

        "Tax"
or "Taxes" means any and all U.S. federal, state, local or foreign taxes, fees, levies, duties, tariffs, imposts,
and other charges of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any government or taxing authority or
amount owing to any party relating to Taxes arising under any Tax law or agreement (including any joint venture or partnership agreement), including, without limitation: taxes or other charges on or
with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, workers' compensation, unemployment
compensation, or net worth; taxes or other charges in the nature of excise, withholding, ad valorem, stamp, transfer, value added, or gains taxes; license, registration and documentation fees; and
customs duties, tariffs and similar charges, whether disputed or not and including any obligations to indemnify or otherwise assume or succeed to the Tax liability of any other Person. 

        "Tax
Return" means any return, declaration, report, claim for refund, form of other information or return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendments thereof. 

        "Tranche A
Note" means the Tranche A Junior Notes issued by Purchaser on the Closing Date pursuant to the Note Agreement in an aggregate
principal amount of $175,000,000, as it may be amended or replaced from time to time in accordance with the Note Agreement. 

        "Tranche B
Note" means the Tranche B Junior Notes issued by Purchaser on the Closing Date pursuant to the Note Agreement in an aggregate
principal amount of $25,000,000, as it may be amended or replaced from time to time in accordance with the Note Agreement. 

        "Transaction
Documents" means this Agreement, the Racing Services Agreement, the XpressBet Amendments and the Holdback Documents. 

        "XpressBet
Amendments" means the XpressBet Lease Amendment, XpressBet Wagering Agreement Amendment and the XpressBet Banking Agreement Amendment. 

7

 

        "XpressBet
Banking Agreement Amendment" means the First Amendment to the letter agreement regarding Pennsylvania account wageror bank accounts, dated as of
October 5, 2005, by and between WTA and MLR, on the one hand, and XpressBet, Inc., on the other hand, substantially in the form attached hereto as Exhibit 1.01F-1. 

        "XpressBet
Lease Amendment" means the First Amendment to the Lease Agreement, dated July 15, 2005, by and between MECPenn and XpressBet, Inc.,
substantially in the form attached hereto as Exhibit 1.01F-2. 

        "XpressBet
Wagering Agreement Amendment" means the First Amendment to the Advanced Account Wagering and Services Agreement, effective as of July 15,
2005 and dated as of August 9, 2005, by and between WTA and MLR, on the one hand, and XpressBet, Inc., on the other hand, substantially in the form attached hereto as
Exhibit 1.01F-3. 

	(b)
	Each
of the following terms is defined in the section set forth opposite such terms below: 

	Term 
	 	Section

	2004 Audited Balance Sheet	 	5.16(b)
	2005 Audited Financial Statements	 	5.16(a)
	2006 Interim Financial Statements	 	5.16(a)
	2005 Quarterly Financial Statements	 	5.16(a)
	Action Notice	 	8.03(m)
	Agreement	 	Preamble
	Applicable Date	 	9.02(a)
	Applicable Local Authorities	 	9.03(a)
	Alternative Scenario	 	5.04(c)(i)
	Annual Applicable Amount	 	9.03
	Assets	 	3.13(a)
	Benefit Plans	 	3.16(a)
	CERCLA	 	3.12(c)
	Claim Notice	 	9.04(a)
	Closing	 	2.03(a)
	Closing Date	 	2.03(a)
	COBRA	 	6.02(c)
	Commission Approval	 	8.01(c)
	Company; Companies	 	Recitals
	Company Employees	 	6.01
	Company Financial Statements	 	3.07(a)
	Company Interim Financial Statements	 	3.07(a)
	Company Plans	 	3.16(a)
	Confidentiality Agreement	 	5.05(a)
	Contest	 	7.04(b)
	Election	 	7.08(a)
	Employee Agreements	 	3.16(a)
	Environmental Actions	 	3.12(c)
	Environmental Laws	 	3.12(c)
	Environmental Permits	 	3.12(c)

8

 

	Term 
	 	Section

	Excluded Items	 	5.13
	Existing Stock	 	5.06(b)
	Former Subsidiaries	 	3.04(d)
	Fundamental Representations	 	9.01
	Gaming Application	 	5.04(c)(i)
	Gaming Application Fee	 	5.04(d)
	Hazardous Materials	 	3.12(c)
	Indemnified Party	 	9.04(a)
	Indemnifying Party	 	9.04(a)
	Insured Exception	 	5.11(c)
	lease	 	3.19(a)
	Local Applicable Date	 	9.03(a)
	Local Share Assessment Losses	 	9.03(a)
	Local Tax Assessment Date	 	9.03(a)
	Magna Name	 	5.06(a)
	Material Contracts	 	3.19(a)
	MEC Health Plan	 	6.02(a)
	MECPenn	 	Recitals
	MECPenn Common Stock	 	3.03(a)
	MECRacing	 	3.20
	MLR	 	Recitals
	MLR Common Stock	 	3.03
	Multiemployer Plans	 	3.16(a)
	Non-Competition Covenant	 	5.08(a)
	Non-Competition Period	 	5.08(a)
	Other Purchaser Materials	 	5.04(e)
	Paddock Refurbishment	 	3.13(e)
	Pension Survival Period	 	9.03(a)(viii)
	Permitted Exceptions	 	3.13(a)
	Phase I	 	5.22
	Proposed Development	 	3.13(e)
	Purchaser's Notice	 	5.11(c)
	Purchase Price	 	2.02
	Purchaser	 	Preamble
	Purchaser Application Materials	 	5.04(e)
	Purchaser Developments	 	8.02(b)
	Qualified Plans	 	3.16(h)
	Releases	 	3.12(c)
	Replacement Trigger	 	5.04(d)
	RCRA	 	3.12(c)
	Seller	 	Preamble
	Seller Developments	 	8.03(b)
	Shares	 	Recitals
	Specified Notes	 	5.01(c)
	Survey	 	5.11(a)

9

 

	Term 
	 	Section

	Tax Adjusted Local Share Assessment Losses	 	9.03(a)
	Tax Benefit	 	9.03(a)
	Terminating Purchaser's Breach	 	10.01(d)
	Terminating Seller's Breach	 	10.01(c)
	Title Commitment	 	5.11(a)
	Title Company	 	5.11(a)
	Title Objection	 	5.11(b)
	Title Policy	 	8.03(k)
	Transaction Scenario	 	5.04(c)(i)
	Transferred Employees	 	6.01
	True-Up	 	9.03(a)
	WTA	 	Recitals
	WTA Common Stock	 	3.03

ARTICLE II

PURCHASE AND SALE  

        SECTION 2.01 Purchase and Sale. Upon the terms and subject to the conditions set forth in this Agreement, Seller agrees to
sell to Purchaser, and Purchaser agrees to purchase from Seller, on the Closing Date, the Shares. 

        SECTION 2.02
Purchase Price. The aggregate purchase price for the Shares (and the limited non-compete set forth in
Section 5.08) shall be $200,000,000 (the "Purchase Price"), of which (i) $175,000,000 shall be paid with the issuance of the Tranche A Note to
Seller or its permitted designee in accordance with the Note Agreement on the Closing Date as provided in Section 2.03(c) and (ii) $25,000,000 shall be paid with the issuance of the
Tranche B Note to Seller or its permitted designee in accordance with the Note Agreement on the Closing Date as provided in Section 2.03(c) (in each case together with the
execution and delivery of each of the other Note Documents). Within 30 days after Closing, Seller will provide Purchaser with an allocation of the Purchase Price (less the $2,000,000 allocated
pursuant to Section 5.08 hereof) among MECPenn, MLR, WTA and the Subsidiaries for approval, such approval not to be unreasonably withheld. The allocation shall be adjusted by the parties to
reflect any payments made under the Seller Notes in a manner consistent with the initial allocation. The parties agree that the allocation determined under this Section 2.02 shall be binding
and the parties shall not take a position that is inconsistent with such allocation in any matter. 

        SECTION 2.03
Closing. (a) Subject to the terms and conditions of this Agreement, the sale and purchase of the Shares contemplated hereby shall
take place at a closing (the "Closing") to be held at 10:00 a.m., New York time, no later than two Business Days after the last of the conditions to
Closing set forth in Sections 8.01, 8.02 and 8.03 has been satisfied or waived (other than conditions which, by their nature, are to be satisfied on the Closing Date). The Closing will
occur at the offices of O'Melveny & Myers LLP, 7 Times Square, New York, New York, or at such other time or on such other date or at such other place as Seller and
Purchaser may mutually agree upon in writing (the day on which the Closing takes place being the "Closing Date"). 

10

 

        (b)   At
the Closing, Seller shall deliver or cause to be delivered to Purchaser stock certificates evidencing the Shares duly endorsed in blank or accompanied by stock powers
duly executed in blank, in proper form for transfer and with all required stock transfer tax stamps affixed. 

        (c)   At
the Closing, against delivery of the stock certificates evidencing the Shares, Purchaser shall deliver to Seller or its permitted designee in accordance with the Note
Agreement (i) the executed Tranche A Note in an aggregate principal amount equal to $175,000,000 and (ii) the executed Tranche B Note in an aggregate principal amount equal
to $25,000,000, in each case together with the other Note Documents executed by each party thereto (other than Seller). 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER  

        Seller represents and warrants to Purchaser as of the date hereof (other than such representations and warranties as are made as of another date)
as follows: 

        SECTION 3.01
Incorporation and Authority of Seller. Seller is a corporation duly incorporated, validly existing and in good standing under the laws of
Delaware. Seller is duly qualified as a foreign corporation to do business in each jurisdiction where the character of its properties owned, operated or leased or the nature of its activities as
currently conducted makes such qualification necessary, except for such failures to be so qualified that would not have a Material Adverse Effect. Seller has all necessary corporate power and
authority to enter into this Agreement and the other Transaction Documents to which Seller is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby or thereby. The execution and delivery by Seller of this Agreement and any other Transaction Document to which Seller is a party, the performance by Seller of its obligations
hereunder and thereunder and the consummation by Seller of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of Seller. This
Agreement has been duly executed and delivered by Seller, and (assuming due authorization, execution and delivery by Purchaser) this Agreement constitutes a legal, valid and binding obligation of
Seller enforceable against it in accordance with its terms, subject to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to the effect of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). When each
Transaction Document to which Seller is or will be a party has been duly executed and delivered by Seller (assuming due authorization, execution and delivery by each other party thereto), such
Transaction Document will constitute a legal and binding obligation of Seller enforceable against it in accordance with its terms, subject to the effect of any applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors' rights generally and subject, as to enforceability, to the effect of general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law). 

11

   
        SECTION 3.02    Organization, Authority and Qualification of the Companies.    Each Company is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of incorporation and has all necessary corporate power and authority to own, operate or lease the properties and assets now
owned, operated or leased by it and to carry on its business as it has been and is currently conducted. Section 3.02 of the Company Disclosure Schedule sets forth each jurisdiction in which
each Company is licensed or qualified to do business, and each Company is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased
by it or the operation of its business as currently conducted makes such licensing or qualification necessary, except as set forth on Section 3.02 of the Company Disclosure Schedule and except
for such failures which would not have a Material Adverse Effect. All corporate actions taken by each Company in connection with this Agreement and the other Transaction Documents will be duly
authorized on or prior to the Closing, and none of the Companies has taken any such action that conflicts with, constitutes a default under or results in a violation of any provision of its
Certificate of Incorporation (or Articles of Incorporation) or By-laws. True, complete and correct copies of the Certificate of Incorporation and By-laws
(or similar organizational documents) of each Company, each as in effect on the date hereof, have been delivered by Seller to Purchaser. 

        SECTION 3.03    Capital
Stock of the Companies; Ownership of the Shares.    (a) The authorized capital stock of MECPenn
consists of 1,000 shares of common stock, par value $1.00 per share ("MECPenn Common Stock"), the authorized capital stock of MLR consists of 10,000 shares
of common stock, no par value ("MLR Common Stock"), and the authorized capital stock of WTA consists of 10,000 shares of common stock, no par value
("WTA Common Stock"). As of the date hereof, 100 shares of MECPenn Common Stock, 100 shares of MLR Common Stock and 100 shares of WTA Common Stock are
issued and outstanding, all of which have been validly authorized and are validly issued, fully paid and nonassessable. None of the Shares was issued in violation of any preemptive rights. There are
no options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to the capital stock of any Company or obligating Seller or any Company
to issue or sell any shares of capital stock of, or any other interest in, any Company. Except as set forth in Section 3.03 of the Company Disclosure Schedule or except as may arise from the
MID Loan Documents or the Note Documents, there are no outstanding contractual obligations of any Company to repurchase, redeem or otherwise acquire any shares of its common stock or to provide funds
to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any other Person. Except as disclosed in Section 3.03 of the Company Disclosure Schedule, the
Shares constitute all the issued and outstanding capital stock of the Companies and are owned of record and beneficially solely by Seller free and clear of all Encumbrances (other than the
Encumbrances contemplated by the MID Loan Documents or the Note Documents). 

        (b)   Upon
consummation of the transactions contemplated by this Agreement and registration of the Shares in the name of Purchaser in the respective stock records of the
Companies, Purchaser, assuming it shall have purchased the Shares for value in good faith and without notice of any adverse claim, will own all the issued and outstanding capital stock of each Company
free and clear of all Encumbrances (other than the Encumbrances contemplated by the MID Loan Documents or the Note Documents), assuming the release of the Encumbrances disclosed in Section 3.03
of the Company Disclosure Schedule, and the Shares will be fully paid and nonassessable. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect
with respect to the voting or transfer of any of the Shares. 

12

 

        SECTION 3.04    Subsidiaries.    (a) Section 3.04(a)
of the Company Disclosure Schedule sets forth a true and
complete list of all Subsidiaries, listing for each Subsidiary its name, type of entity, the jurisdiction and date of its incorporation or organization, its authorized capital stock, partnership
capital or equivalent, the number and type of its issued and outstanding shares of capital stock, partnership interests or similar ownership interests and the current ownership of such shares,
partnership interests or similar ownership interests. All such shares, partnership interests or similar ownership interests have been validly authorized and are validly issued, fully paid and
nonassessable. None of such shares, partnership interests or similar ownership interests was issued in violation of any preemptive rights. There are no options, warrants, convertible securities or
other rights, agreements, arrangements or commitments of any character relating to the shares, partnership interests or similar ownership interests of any Subsidiary or obligating any Company or
Subsidiary to issue or sell any shares, partnership interests or similar ownership interests of, or any other interest in, any Subsidiary. Except as set forth in Section 3.04 of the Company
Disclosure Schedule or except as may arise from the MID Loan Documents or the Note Documents, there are no outstanding contractual obligations of any Subsidiary to repurchase, redeem or otherwise
acquire any of its shares, partnership interests or similar ownership interests or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any
other Person. Except as disclosed in Section 3.04(a) of the Company Disclosure Schedule, the shares, partnership interests or similar ownership interests set forth in Section 3.04(a) of
the Company Disclosure Schedule constitute all the issued and outstanding shares, partnership interests or similar ownership interests of the Subsidiaries and are owned of record and beneficially
solely by the Company or Companies indicated on Section 3.04(a) of the Company Disclosure Schedule, free and clear of all Encumbrances (other than the Encumbrances contemplated by the MID Loan
Documents or the Note Documents). 

        (b)   Except
as set forth on Section 3.04(b) of the Company Disclosure Schedule, other than the Subsidiaries, there are no other corporations, partnerships, joint
ventures, associations or other entities in which any Company owns, of record or beneficially, any direct or indirect equity or other interest or any right (contingent or otherwise) to acquire the
same. Except as set forth on Section 3.04(b) of the Company Disclosure Schedule, other than the Subsidiaries, none of the Companies is a member of (nor is any part of the business of
Company and its Subsidiaries as currently conducted on the date of this Agreement conducted through) any partnership. Except as set forth in Section 3.04(b) of the Company Disclosure Schedule,
none of the Companies is a participant in any joint venture or similar arrangement. 

        (c)   Each
Subsidiary that is a corporation: (i) is a corporation duly organized and validly existing under the laws of its jurisdiction of incorporation,
(ii) has all necessary power and authority to own, operate or lease the properties and assets owned, operated or leased by such Subsidiary and to carry on its business as it has been and is
currently conducted by such Subsidiary, and (iii) is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the
operation of its business makes such licensing or qualification necessary or desirable, except as set forth in Section 3.04(c) of the Company Disclosure Schedule and except for such failures
which would not have a Material Adverse Effect. Each Subsidiary that is not a corporation: (i) is duly organized and validly existing under the laws of its jurisdiction of organization,
(ii) has all necessary power and authority to own, operate or lease the properties and assets owned, operated or leased by such Subsidiary and to carry on its business as it has been and is
currently conducted by such Subsidiary and (iii) is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the
operation of its business makes such licensing or qualification necessary or desirable, except as set forth in Section 3.04(c) of the Company Disclosure Schedule and except for such failures
which would not have a Material Adverse Effect. Section 3.04(c) of the Company Disclosure Schedule sets forth each jurisdiction in which each Subsidiary is licensed or qualified to do business.
All corporate or entity actions taken by each Subsidiary in connection with this Agreement and the other Transaction Documents will be duly authorized on or prior to the Closing, and none of the
Subsidiaries has taken any such action that conflicts with, constitutes a default under or results in a violation of any provision of its Certificate of Incorporation (or Articles of
Incorporation) or By-laws (or similar organizational documents). True, complete and correct copies of the Certificate of Incorporation and By-laws (or similar
organizational documents) of each Subsidiary, each as in effect on the date hereof, have been delivered by Seller to Purchaser. 

13

 

        (d)   Section 3.04(d)
of the Company Disclosure Schedule sets forth a true and complete list of any and all former Subsidiaries of the Companies or the Subsidiaries
(the "Former Subsidiaries"). Neither of the Former Subsidiaries has engaged in or conducted any business or transactions or entered into any material contracts or
agreements. Each of the Former Subsidiaries was dissolved in accordance with the laws of the State of Delaware, and at the time of dissolution, all Liabilities of the Former Subsidiaries were
satisfied by Seller, and Seller has received confirmation from the applicable Governmental Authorities that the entities have been dissolved in accordance with applicable Law and that all Tax
Liabilities have been satisfied. 

        SECTION 3.05    No
Conflict.    The execution, delivery and performance by Seller of this Agreement and the other Transaction
Documents to which Seller is or will be a party do not and will not (a) violate, conflict with or result in the breach of any provision of the Certificate of Incorporation or
By-laws (or similar organizational documents) of Seller, the Companies or any Subsidiary, (b) assuming that all consents, approvals, authorizations and other actions
described in Section 3.06 have been obtained and all filings and notifications listed in Section 3.06 of the Company Disclosure Schedule have been made, conflict with or violate, or give
any Governmental Authority the right to challenge the transactions contemplated by this Agreement or any other Transaction Document to which Seller is a party, or to exercise any remedy or obtain any
relief under, any Law or Governmental Order, including without limitation any state takeover or similar statute or regulation, applicable to Seller, the Companies or any Subsidiary or
(c) assuming that all consents, approvals, authorizations and other actions described in Section 3.06 have been obtained and all filings and notifications listed in Section 3.06
of the Company Disclosure Schedule have been made, except as set forth in Section 3.05(c) of the Company Disclosure Schedule, conflict with, result in any breach of, constitute a default
(or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent or provision of notice under, or give to others any rights of
termination, amendment, acceleration, suspension, revocation or cancellation of, or result in the creation of any Encumbrance on any of the Shares or on any of the assets or properties of Seller, the
Companies or any Subsidiary (other than the Encumbrances contemplated by the MID Loan Documents or the Note Documents) pursuant to, any (i) Material Contract, (ii) any Permit under which
the consequences of a default or termination would have a Material Adverse Effect or (iii) any Environmental Permit. 

14

 

        SECTION 3.06    Consents
and Approvals.    The execution and delivery by Seller of this Agreement and any other Transaction
Document to which Seller is a party do not or will not, and the performance by Seller of this Agreement and any other Transaction Document to which Seller is a party will not, require any consent,
approval, authorization or other action by, or filing with or notification to, any Governmental Authority, except (a) the notification requirements of the HSR Act, (b) as described in
Section 3.06 of the Company Disclosure Schedule, and (c) as may be necessary as a result of any facts or circumstances relating solely to Purchaser. Except for the consent of MID Islandi
SF in connection with the MID Bridge Loan Agreement, the Gulfstream Loan Agreement and the documents related thereto, the execution and delivery by Seller of this Agreement and any other Transaction
Document contemplated hereby to which Seller is a party do not or will not, and the performance by Seller of this Agreement and any Transaction Document to which Seller is a party will not, require
the consent, approval or authorization of the shareholders of Seller. 

        SECTION 3.07    Financial
Information, Books and Records.    (a) True, complete and correct copies of the audited combined
balance sheet of the Companies and their Subsidiaries as of December 31, 2004 and the audited combined financial statements for each of the two fiscal years ended as of December 31, 2003
and 2002 and the related audited combined statements of income and cash flows of the Companies and their Subsidiaries, together with all related notes and schedules thereto
(the "Company Financial Statements") and (B) the combined statement of income of the Companies and their Subsidiaries for the 9 month period ending
September 30, 2005 (the "Company Interim Financial Statements") have been delivered by Seller to Purchaser. The Company Financial Statements and the Company
Interim Financial Statements (i) were prepared in accordance with the books of account and other financial records of the Companies and the Subsidiaries, (ii) present fairly the
financial condition and results of operations of the Companies and the Subsidiaries as of the dates thereof or for the periods covered thereby, (iii) have been prepared in accordance with GAAP,
applied on a basis consistent with the past practices of Seller and the Companies and (iv) include all adjustments (consisting only of normal recurring accruals) that are necessary for a fair
presentation of the financial condition of the Companies and the Subsidiaries and the results of the operations of the Companies and the Subsidiaries as of the dates thereof or for the periods covered
thereby. To the extent delivered prior to the Closing Date, the financial statements delivered pursuant to Section 5.16, when delivered (i) will be prepared in accordance with the books
of account and other financial records of the Companies and the Subsidiaries, (ii) will present fairly the financial condition and results of operations of the Companies and the Subsidiaries as
of the dates thereof or for the periods covered thereby, (iii) will have been prepared in accordance with GAAP, applied on a basis consistent with the past practices of Seller and the Companies
and (iv) will include all adjustments (consisting only of normal recurring accruals) that are necessary for a fair presentation of the financial condition of the Companies and the Subsidiaries
and the results of the operations of the Companies and the Subsidiaries as of the dates thereof or for the periods covered thereby. 

15

 

        (b)   The
books of account and other financial records of the Companies and the Subsidiaries: (i) reflect all items of income and expense and all assets and Liabilities
required to be reflected therein in accordance with GAAP applied on a basis consistent with the past practices of the Companies and the Subsidiaries, respectively and (ii) are in all material
respects complete and correct, and do not contain or reflect any material inaccuracies or discrepancies. The Companies and the Subsidiaries maintain a system of internal accounting controls sufficient
to provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP. 

        (c)   All
accounts receivable of the Companies and the Subsidiaries, whether reflected on the Company Financial Statements or otherwise, represent sales actually made in the
ordinary course of business or finance charges imposed in the ordinary course of business related to such sales. The allowance for possible losses as reflected on the Company Financial Statements as
of and for the period ended on the Reference Balance Sheet Date was adequate as of such date and was calculated consistent with past practice. 

        SECTION 3.08    No
Undisclosed Liabilities.    To the knowledge of Seller, except as set forth in Section 3.08 of the
Company Disclosure Schedule and except under the Note Documents, there are no Liabilities of any Company or any Subsidiary, other than Liabilities (a) reflected or reserved against on the
Reference Balance Sheet and (b) incurred since the date of the Reference Balance Sheet in the ordinary course of the business, consistent with the past practice, of the Companies and
the Subsidiaries. 

        SECTION 3.09    Conduct
in the Ordinary Course; Absence of Certain Changes, Events and Conditions.    Since the Reference Balance
Sheet Date, except as disclosed in Section 3.09 of the Company Disclosure Schedule and except for entry into the Note Documents, and the MID Forbearance Agreement, the business of the Companies
and the Subsidiaries has been conducted in the ordinary course and consistent with past practice. As amplification and not limitation of the foregoing, except as disclosed in Section 3.09 of
the Company Disclosure Schedule and except for entry into the Note Documents and the MID Forbearance Agreement, since the Reference Balance Sheet Date until the date hereof, neither the Companies nor
any Subsidiary has: 

	(a)
	changed
any Company's or Subsidiary's authorized or issued shares of capital stock, partnership interests or similar ownership interests; granted any option or right to purchase any
such shares, partnership interests or similar ownership interests; issued any security convertible into such shares, partnership interests or similar ownership interests; granted any registration
rights; or purchased, redeemed, retired, or otherwise acquired any such shares, partnership interests or similar ownership interests;

	(b)
	other
than as described in Section 5.01(c) or Section 8.03(p), declared, set aside or paid any dividend or made any distribution with respect to any Company's or
Subsidiary's shares of capital stock, partnership interests or similar ownership interests (whether in cash or in kind); 

16

 

	(c)
	amended
the organizational documents of any Company or Subsidiary;

	(d)
	paid
or increased any material bonuses, salaries, or other compensation to any stockholder, director, officer, or (except in the ordinary course of business) employee or entered into
any material employment, severance, or similar Material Contract with any director, officer, or employee;

	(e)
	adopted,
or materially increased the payments to or benefits under, any profit sharing, deferred compensation, savings, insurance, pension, retirement, or other employee benefit plan
for or with any employees of any Company or Subsidiary;

	(f)
	suffered
any damage to or destruction or loss of any asset or property of any Company or Subsidiary not covered by insurance and in excess of $100,000;

	(g)
	entered
into, amended, extended, terminated, or received notice of termination of, or acceleration of obligations under, (i) any license, lease, distributorship, dealer, sales
representative, joint venture, partnership, credit, collective bargaining, indemnification or similar agreement, or (ii) any contract, agreement or transaction involving a total remaining
commitment by or to any Company or Subsidiary of at least $100,000;

	(h)
	sold,
leased, or otherwise disposed of any material asset or property of any Company or Subsidiary or mortgaged, pledged, or suffered the imposition of any Encumbrance on any material
asset or property of any Company or Subsidiary, including the sale, lease, or other disposition of any material Intellectual Property Rights;

	(i)
	committed
to make any capital expenditures, in excess of $1,000,000 in the aggregate for the period from the Reference Balance Sheet Date until September 30, 2005, or in excess
of $500,000 in the aggregate for the period from October 1, 2005 until the Closing Date, in each case except as set forth on the Reference Balance Sheet;

	(j)
	compromised,
canceled, waived or released any claims or rights with a value to any Company or Subsidiary in excess of $100,000;

	(k)
	made
any material change in the accounting methods used by the Companies or the Subsidiaries at the time of preparation of the Reference Balance Sheet;

	(l)
	made
any material election with respect to Taxes affecting any Company or Subsidiary or settlement or compromise affecting any Company or Subsidiary of any material Tax liability
or refund;

	(m)
	suffered
any Material Adverse Effect; or

	(n)
	entered
into any agreement to do any of the foregoing. 

        SECTION 3.10    Litigation.    Except
as set forth in Section 3.10 of the Company Disclosure Schedule, there are no Actions
pending or, to the knowledge of Seller, threatened against or by either any Company or Subsidiary or affecting any of their respective assets or properties (or by or against Seller or any
Affiliate thereof and relating to the Companies and the Subsidiaries), which involve a claim or potential claim or group of related claims of liability in excess of $25,000 or which seek or would seek
to restrain or enjoin any activities of any Company or Subsidiary or to impose any criminal or civil penalties or sanctions on any Company or any Subsidiary. Except as set forth in Section 3.10
of the Company Disclosure Schedule, none of the Companies or Subsidiaries nor any of their assets or properties is subject to any Governmental Order, nor, to the knowledge of Seller, are there any
such Governmental Orders threatened to be imposed by any Governmental Authority. 

17

 

        SECTION 3.11    Compliance
with Applicable Laws.    (a) Except as set forth in Section 3.11(a) of the Company
Disclosure Schedule, since April 5, 2001, no Company or Subsidiary has violated or failed to comply with any statute, law, regulation, rule, or Governmental Order of any Governmental Authority
applicable to its business or operations as currently being conducted in any respect that would have a material effect to the detriment of the business or operations of the Companies and Subsidiaries.
The conduct of the business of each Company and Subsidiary as currently being conducted is in conformity with all federal, state and local governmental and regulatory requirements applicable to its
business and operations, except where such nonconformities would not have a material effect to the detriment of the business or operations of the Companies and Subsidiaries. No Company or Subsidiary,
or any officer or agent thereof, has made any illegal or improper payment to, or provided any illegal or improper benefit or inducement for, any government official, supplier, customer or other person
in an attempt to influence any person to take or refrain from taking any action relating to any Company or Subsidiary, except where such illegal or improper payment, benefit or inducement would not
have a material effect to the detriment of the business or operations of the Companies and the Subsidiaries. 

        (b)   Each
Company and Subsidiary has all material Permits required to own and use its assets and to conduct its business as now being conducted. Each such Permit is set forth
on Section 3.11(b) of the Company Disclosure Schedule and is valid and in full force and effect. Each Company and Subsidiary is in compliance with all such Permits and no Company or Subsidiary
is in default under any such Permit or has received any notice of violation or noncompliance or claim of default with respect thereto, except where such noncompliance, default or the effect of receipt
of such notice would not, individually or in the aggregate, have a Material Adverse Effect. 

        SECTION 3.12    Environmental
Matters.    (a) Except as disclosed in Section 3.12 of the Company Disclosure
Schedule: (i) to Seller's knowledge, the Companies and the Subsidiaries are, and have been since April 5, 2001, in material compliance with all applicable Environmental Laws and have
obtained and are, and have been since April 5, 2001, in compliance with all required Environmental Permits, which are set forth on Section 3.12 of the Company Disclosure Schedule, and
are valid and in full force and effect; (ii) there are no Environmental Actions pending or threatened in writing against any of Seller, the Companies or Subsidiaries with respect to the
business or operations of the Companies or Subsidiaries or the Real Property; (iii) to Seller's knowledge, no Hazardous Materials have been released into the environment by any of the Companies
or Subsidiaries on any of the Real Property except as authorized under Environmental Law and no condition exists that would require investigation or remediation under any Environmental Law;
(iv) to Seller's knowledge, there are no underground storage tanks at any facilities owned or operated by any Company or Subsidiary; (v) to Seller's knowledge, all underground storage
tanks maintained at such facilities are in good working order, do not leak into soil or groundwater, and are in compliance with Environmental Laws or for which there is any pending or threatened
action seeking to require remediation or clean up; (vi) to Seller's knowledge, none of such facilities contains any asbestos or polychlorinated biphenyls; (vii) to Seller's knowledge,
none of the Companies nor any Subsidiary has sent Hazardous Materials to a disposal location owned or operated by a third party that requires remediation or clean up or for which there is any pending
or threatened Action seeking to require remediation or clean up; and (viii) Seller has provided Purchaser with copies of any and all written environmental assessment or audit reports generated
within the last three years and in the possession of Seller or their respective attorneys, agents or consultants, that relate to the business of the Companies and the Subsidiaries or the Real
Property. Except as disclosed in Section 3.12 of the Company Disclosure Schedule, Seller, the Companies and the Subsidiaries have not received since April 5, 2001 any written notice of
any actual, alleged or potential noncompliance with, liability under, or claimed violation of, any Environmental Laws, including without limitation, from any government agency or prosecutor, from any
private citizen acting in the public interest or from any prior owner or operator of the Real Property, and, to the knowledge of Seller, there has not occurred and there does not exist any event or
condition which would cause noncompliance with, liability under, or violation of, any Environmental Laws. Except as disclosed in Section 3.12 of the Company Disclosure Schedule, Seller, the
Companies and the Subsidiaries have not received any notice of violation or noncompliance or claim of default with respect to any Environmental Permit. 

18

 

        (b)   Purchaser
acknowledges that (i) the representations and warranties contained in Section 3.05 (as it relates to Environmental Permits) and this
Section 3.12 are the only representations and warranties being made with respect to compliance with or liability under Environmental Laws or with respect to any environmental matter, including
natural resources, related in any way to the Companies, the Subsidiaries or the Real Property or to this Agreement or its subject matter, and (ii) no other representation contained in this
Agreement shall apply to any such matters and no other representation or warranty, express or implied, is being made with respect thereto. 

	(c)
	For
purposes of this Agreement: 

"CERCLA"
means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended. 

"Environmental
Actions" means any and all Actions arising out of, or related to the presence, Release or threatened Release of any Hazardous Materials, including Actions
alleging common law liability arising out of, or related to the presence, Release or threatened Release of any Hazardous Materials. 

"Environmental
Laws" means any civil and criminal Laws, rules, Permits or Governmental Orders relating to or addressing pollution or protection of the environment, public
health or safety, including, without limitation, those relating to the presence, use, production, processing, generation, handling, labeling transportation, treatment, storage, disposal, distribution,
testing, processing, Release, threatened Release or discharge, investigation, control, exposure or cleanup of Hazardous Materials, wastes, substances, storm water or waste water. 

19

 

"Environmental
Permits" means any permit, approval, identification number, license or other authorization obtained, or required of any Company or Subsidiary to be
obtained, under any Environmental Law. 

"Hazardous
Materials" means (a) any petroleum, petroleum products, by-products or breakdown products, radioactive materials, asbestos-containing
materials, urea formaldehyde foam, heavy metals or polychlorinated biphenyls, (b) any waste, chemical, material or substance defined or regulated as toxic or hazardous under any applicable
Environmental Law or (c) anything that is a "hazardous substance" pursuant to CERCLA or any similar applicable state law, anything that is a "solid waste" or "hazardous waste" pursuant to RCRA
or any similar applicable state law or any "pesticide," "pollutant," "contaminant," "toxic chemical" or "noise." 

"RCRA"
means the Resource Conservation and Recovery Act, as amended. 

"Release"
means any release, spill, emission, leaking, dumping, injection, pouring, deposit, discharge, dispersal, leaching or migration of a Hazardous Material into the
environment (including ambient air, surface water, ground water, land surface or subsurface strata) or within any building, structure or facility. 

        SECTION 3.13    Title
to Assets; Real Property.    (a) Except as set forth in Section 3.13(a) of the Company
Disclosure Schedule, and excluding the Real Property, each Company and Subsidiary has good and marketable title to, or valid leasehold interests in, all the tangible personal properties and personal
assets used by it or located on its premises that are material to the conduct of its business or which are shown on the Company Financial Statements (collectively, the
"Assets"), except for such as are no longer useful in the conduct of its business or as have been disposed of in the ordinary course of business. All such assets and
properties (including leasehold interests) are free and clear of Encumbrances except for (i) Encumbrances that would not unreasonably interfere with the use or operation of the Assets;
(ii) liens for taxes not yet due or being contested in good faith by appropriate procedures and for which there are adequate reserves on the books; (iii) mechanics, carriers, workmen's,
repairmen's or other like liens arising or incurred in the ordinary course of business for amounts that are not delinquent and which are not, individually or in the aggregate, material to the business
of the Companies and the Subsidiaries, (iv) in the case of Assets other than Real Property, liens arising under original purchase price conditional sales contracts and equipment leases with
third parties entered into in the ordinary course of business, (v) any Encumbrances for the obligations of third party lessors, (vi) those items set forth in Section 3.13(a) of
the Company Disclosure Schedule, or (vii) Encumbrances contemplated by the MID Loan Documents or the Note Documents (the "Permitted Exceptions"). The Real
Property will be free and clear of all monetary Encumbrances as of the Closing, other than Encumbrances contemplated by the MID Loan Documents or the Note Documents. Seller has no knowledge of any
matters that would affect the marketability of title of the Real Property other than as set forth on the applicable Title Policy. 

20

 

        (b)   Section 3.13(b)
of the Company Disclosure Schedule lists: (i) the street address of each parcel of Real Property; (ii) if such property is owned by
any Company or Subsidiary, the owner of such property; (iii) if such property is leased or subleased by any Company or Subsidiary as lessee, the landlord under the lease, the rental amount
currently being paid, and the expiration of the term of such lease or sublease; and (iv) the current use of such property. Seller has delivered or made available to Purchaser true, complete and
correct copies of any leases affecting the Real Property. 

        (c)   As
is the case with most harness racing facilities of the age of the Meadows Facility, most of the Assets are old and need periodic repair and replacement. Nevertheless,
to Seller's knowledge, as of the date hereof and as of the Closing (subject to Seller Developments in the latter case) (i) all of the material equipment, inventory and other items of tangible
property and assets included in the Assets are at such times in a condition sufficient for the operation of the business currently being conducted at the Real Property and (ii) each material
building or material improvement on any of the Real Property is at such times in a condition sufficient for the operation of the business currently being conducted at the Real Property. 

        (d)   To
the knowledge of Seller, the real property improvements at the Real Property, and the current use and operation thereof, are in compliance with and authorized by
applicable zoning and other land use regulations and none of Seller, the Companies or the Subsidiaries has received any written notice that any Governmental Authority or other Person considers any of
the Real Property, or the improvements thereat, to violate any such regulations. There is no Action pending or, to the knowledge of Seller, threatened: (i) to take all or any portion of the
Real Property or the improvements through eminent domain, (ii) to modify the zoning or other governmental rules or restrictions applicable to the use or development of the Real Property or
improvements, or (iii) that would reasonably be expected to have a material adverse effect on the ownership or leasehold interest in the Real Property. There is no Action brought with respect
to the Real Property, pending against Seller, the Companies or the Subsidiaries, or as to which Seller has knowledge, or, to the knowledge of Seller, threatened, that would have a Material Adverse
Effect on the value, use, development or occupancy of the Real Property, other than Actions that are general in nature concerning the Gaming Act or not based upon land, zoning, use or Laws related to
the ownership and development of real property interests. The Companies and the Subsidiaries are permitted by the appropriate Governmental Authorities to occupy the Meadows Facility. 

        (e)   Immediately
following the consummation of the transactions contemplated by this Agreement, either a Company or a Subsidiary, as the case may be, will continue to own, or
lease, under valid and subsisting leases, or otherwise retain its respective interest in the Assets without incurring any material penalty or other adverse consequence, including, without limitation,
any material increase in rentals, royalties, or licenses or other fees imposed as a result of, or arising from the consummation of the transactions contemplated by this Agreement, and, except as
otherwise contemplated in the Racing Services Agreement, collectively, the Companies and the Subsidiaries will have all of the assets and rights that are necessary and sufficient for the conduct of
the business of the Companies and the Subsidiaries in substantially the same manner as currently conducted. Except as otherwise contemplated in the Racing Services Agreement, immediately following the
Closing, either a Company or a Subsidiary, as the case may be, shall own and possess all documents, books, records, agreements, contracts, Permits, warranties, plans, specifications, drawings,
customer lists, supplier lists and financial data of any sort used in the conduct of the business of the Companies and the Subsidiaries as currently conducted. 

21

 

        (f)    Seller
acknowledges that it intended, and that Purchaser intends, to (i) develop a portion of the owned Real Property located in North Strabane Township in the
Commonwealth of Pennsylvania with a casino and certain uses ancillary thereto (the "Proposed Development") and (ii) refurbish the paddock area currently
located on such property (the "Paddock Refurbishment"). None of Seller, the Companies or any Subsidiary has received any written notice from a Governmental
Authority indicating that either the Proposed Development or the Paddock Refurbishment will be prohibited by any Governmental Authority, Law or Environmental Law or challenged by any
Governmental Authority. 

        (g)   The
Real Property is connected to adequate sanitary sewer, storm sewer, water, electricity, gas, telephone and all other utilities and services necessary for the current
use of the Real Property in accordance with all applicable Laws of any Governmental Authority having or claiming jurisdiction thereover and to the knowledge of Seller, there has not occurred any event
or condition which would result in termination of such connections. There is to the knowledge of Seller, no present or threatened ban or moratorium on new connections or additional flows to the sewage
treatment plant serving the Real Property. 

        SECTION 3.14    Intellectual
Property Rights.    The Companies and the Subsidiaries each have good, valid and marketable title to,
or the right to use, all Intellectual Property Rights. To the knowledge of Seller, all current and former employees of the Companies and the Subsidiaries have assigned to each, respectively, all
Intellectual Property Rights that such employees have created while in the scope of their employment with each, respectively, including, without limitation, copyrights in works made for hire and
patents, except where failure to assign such Intellectual Property Rights could not reasonably be expected to materially impair the ability of the Companies or the Subsidiaries to continue to obtain
free of charge the benefits of such Intellectual Property Rights. Section 3.14 of the Company Disclosure Schedule lists each registered Intellectual Property Right owned by the Companies and
the Subsidiaries. The Company Disclosure Schedule lists each material contract, license and agreement with respect to Intellectual Property Rights pursuant to which any of the Companies or the
Subsidiaries has granted any Person the right to reproduce, distribute, market or exploit Intellectual Property Rights. There is no Action, pending, or to Seller's knowledge, threatened that
challenges the validity of ownership or use of any Intellectual Property Rights of the Companies and the Subsidiaries. To Seller's knowledge, no third party's operations or products infringe on the
Intellectual Property Rights in any material respect. To Seller's knowledge, neither the Companies' nor any Subsidiary's operations and products infringe in any material respect on the intellectual
property rights of any other Person. Seller, the Companies and the Subsidiaries have not received since April 5, 2001 any written claim of infringement with respect to any Intellectual Property
Rights used by the Companies or the Subsidiaries. 

        SECTION 3.15    Insurance.    Section 3.15
of the Company Disclosure Schedule sets forth a complete list of all material
insurance policies (including policies providing property, casualty, liability and workers' compensation coverage and bond and surety arrangements) with respect to which any Company or Subsidiary is a
party, a named insured or otherwise the beneficiary of coverage (together with the policy owner, limit and premium for each such policy). Such coverage or similar insurance coverage has been
maintained with respect to the Companies and the Subsidiaries at all times in the past three years. With respect to each such insurance policy: (a) such policy is in full force and effect;
(b) no Company or Subsidiary, nor Seller, nor, to the knowledge of Seller, any other party to such policy is in material breach or default thereunder and all premiums due are currently paid,
and no event has occurred which, with or without notice or the lapse of time, would constitute such a material breach or default, or permit termination, modification or acceleration under such policy;
(c) no party to such policy has repudiated any material provision thereof; and (d) none of Seller, any Company or any Subsidiary has received any written notice that such policy has been
or will be cancelled or terminated or will not be renewed on substantially the same terms. 

22

 

        SECTION 3.16    Employee
Benefit Matters.    (a) Section 3.16(a) of the Company Disclosure Schedule lists
(i) each employee benefit plan, program, arrangement and contract (including, without limitation, any "employee benefit plan" as defined in Section 3(3) of ERISA) maintained, contributed
to or sponsored by any Company or any Subsidiary excluding Multiemployer Plans (the "Benefit Plans"), (ii) all Benefit Plans as to which any Company or
Subsidiary is or was the "administrator" or "plan sponsor," as those terms are defined in Section 3 of ERISA, without regard to whether or not such Plan is an ERISA plan, at any time within the
past three years (the "Company Plans"), (iii) all material employment, termination, severance or other contracts or agreements (including, without
limitation, collective bargaining agreements and other labor union agreements), in respect of any Employee, to which a Company or a Subsidiary is a party or, with respect to which, a Company or a
Subsidiary has any obligation (collectively, the "Employee Agreements") and (iv) any multiemployer plans (as defined in Section 3 (37) of
ERISA), pursuant to which Seller, a Company or a Subsidiary contributes, or has an obligation to contribute, in respect of any Employee, former employee, officer or director of the Companies or
Subsidiaries (together with any multiemployer plans to which Seller, a Company or a Subsidiary has contributed, or had an obligation to contribute, since April 5, 2001, the
"Multiemployer Plans"). Section 3.16(a) of the Disclosure Schedule identifies which Benefit Plans are Company Plans and Multiemployer Plans and, for each
Multiemployer Plan, sets forth, to the extent such information is in the possession of Seller, a Company or a Subsidiary, the amount of potential withdrawal liability of the Companies as of its last
valuation date. 

        (b)   Seller
has made available to Purchaser a copy of (i) the most recent three annual reports (Form 5500) filed with the IRS, including all schedules and
attachments thereto for each Benefit Plan, (ii) a copy of each Benefit Plan, (iii) if applicable, each trust agreement relating to such Benefit Plan, (iv) the most recent summary
plan description for each Benefit Plan for which a summary plan description is required and the most recent summaries and descriptions furnished to participants regarding Company Plans for which a
summary plan description is not required, (v) the most recent determination letter, if any, issued by the IRS with respect to any Benefit Plan qualified under Section 401(a) of the
Internal Revenue Code, (vi) all Company personnel and employment manuals and policies, (vii) all collective bargaining agreements pursuant to which contributions are being made or
obligations are owed by a Company or Subsidiary, (viii) all registration statements filed with respect to any Company Plan, (ix) all insurance policies purchased by or to provide
benefits under any Company Plan, (x) all contracts with third party administrators, actuaries, investment managers, consultants, and other independent contractors that relate to any Company
Plan, (xi) all reports submitted within the three years preceding the date of this Agreement by third party administrators, actuaries, investment managers, consultants, or other independent
contractors with respect to any Company Plan, and all such reports in the possession of Seller, a Company or a Subsidiary relating to a Multiemployer Plan, (xii) all notices that were given by
any Company or any Subsidiary with respect to any Company Plan, or by any Company Plan, to the IRS or the PBGC pursuant to statute, within the three years preceding the date of this Agreement,
including notices that are expressly mentioned elsewhere in this Section 3.16, (xiii) all notices that were given by the IRS, the PBGC, or the Department of Labor to a Company or a
Subsidiary with respect to any Company Plan if such notice could result in material liability to a Company, a Subsidiary or to any Company Plan, within the three years preceding the date of this
Agreement, and (xiv) all other material correspondence with any Governmental Authority relating to any Benefit Plan. 

23

 

	(c)
	No
Benefit Plan is subject to Title IV of ERISA. 

        (d)   Seller
has made available to Purchaser (i) copies of all material employment agreements with officers of the Companies and the Subsidiaries; (ii) copies of
all material severance agreements, programs and policies of the Companies and the Subsidiaries with or relating to the Employees; and (iii) copies of all material plans, programs, agreements
and other arrangements of the Companies and the Subsidiaries with or relating to the Employees which contain change in control provisions. 

        (e)   Except
as provided in Section 3.16(e) of the Company Disclosure Schedule or as otherwise required by Law, no Company Plan provides retiree medical or retiree life
insurance benefits to any person. 

        (f)    Set
forth in Section 3.16(f) of the Company Disclosure Schedule is a true and complete list of all individuals employed by the Companies or any Subsidiary as of
the date hereof that receive annual salary and wages in excess of $100,000 annually, the position of and base compensation payable to each such individual and bonus, deferred or contingent
compensation and other like benefits paid or payable in 2004 to each such individual. 

        (g)   Seller,
each Company and each Subsidiary has complied in all material respects with the provisions of each Benefit Plan, with ERISA, the Code and other applicable Laws,
and has timely made all contributions and other payments required by and due under the terms of each Benefit Plan and each Multiemployer Plan. To the knowledge of Seller, all Companies and
Subsidiaries have made appropriate entries in their financial records and financial statements for all obligations and liabilities of such Companies and Subsidiaries under such Benefit Plans that have
accrued but are not yet due. To the knowledge of Seller, no Action is pending or threatened with respect to any Multiemployer Plan or the assets of any Multiemployer Plan (other than claims for
benefits in the ordinary course). No Action is pending or, to the knowledge of Seller, threatened with respect to any Benefit Plan or the assets of any Benefit Plan (other than claims for benefits in
the ordinary course) and, to the knowledge of Seller, no fact or event exists that could give rise to any such Action. There are no audits, inquiries or proceedings pending or, to the knowledge of
Seller, threatened by any Governmental Authority against any Benefit Plan. 

24

  

        (h)   Each Benefit Plan that is intended to be qualified under Section 401(a) of the Code (collectively, the "Qualified Plans") has timely
received a favorable determination letter from the IRS stating that the Qualified Plan is so qualified and each trust established in connection with any Qualified Plan which is intended to be exempt
from federal income taxation under Section 501(a) of the Code has received a determination letter from the IRS that it is exempt, and, to the knowledge of Seller, no fact or event has occurred
since the date of such determination letter or letters from the IRS to adversely affect the qualified status of any such Qualified Plan or the exempt status of any such trust. 

	(i)
	Except
as set forth in Section 3.16(i) of the Disclosure Schedule:

	(i)
	To
Seller's knowledge, no transaction prohibited by ERISA § 406 and no "prohibited transaction" under Code Section 4975 has occurred with respect to any
Benefit Plan that would be expected to have a Material Adverse Effect.

	(ii)
	To
Seller's Knowledge, all filings required by ERISA and the Code as to each Company Plan have been timely filed and all notices and disclosures to participants required by ERISA or
the Code have been timely provided.

	(iii)
	All
contributions and payments made or accrued with respect to all Benefit Plans are deductible under Code Section 162 or Section 404. No amount or any asset of any
Benefit Plan is subject to tax as unrelated business taxable income.

	(iv)
	Each
Company Plan that is not a Qualified Plan can be terminated within thirty days, without payment of any additional contribution or amount and without the vesting or acceleration
of any benefits promised by such Company Plan.

	(v)
	To
the knowledge of Seller, no event has occurred or circumstance exists that could result in a material increase in premium costs of the Company Plans that are insured, or a material
increase in benefit costs of such Company Plans that are self-insured.

	(vi)
	No
accumulated funding deficiency, whether or not waived, exists with respect to any Benefit Plan, and no event has occurred or circumstance exists that may result in an accumulated
funding deficiency as of the last day of the current plan year of any such Benefit Plan.

	(vii)
	No
Company or Subsidiary has withdrawn or partially withdrawn from any Multiemployer Plan with respect to which there is any outstanding liability as of the date of the Agreement.
To the knowledge of Seller, no event has occurred or circumstance exists, including but not limited to the transactions contemplated by this Agreement, that presents a risk of the occurrence of any
withdrawal from, or the termination, reorganization, or insolvency of, any Multiemployer Plan that could result in any liability of either Company, any Subsidiary or Purchaser to a
Multiemployer Plan.

	(viii)
	No
Company or Subsidiary has received notice from any Multiemployer Plan that it is in reorganization or is insolvent, that increased contributions may be required to avoid a
reduction in plan benefits or the imposition of any excise Tax, or that such plan intends to terminate or has terminated. 

25

 

	(ix)
	To
the knowledge of Seller, no Multiemployer Plan to which either Company or any Subsidiary contributes, or has contributed since April 5, 2001, immediately preceding the date
hereof is a party to any pending merger or asset or liability transfer or is subject to any proceeding brought by the PBGC.

	(x)
	No
payment that is owed or may become due to any director, officer, Employee, or agent of either Company or Subsidiary will be non-deductible to such Company or Subsidiary
or subject to tax under Code Section 280G or Section 4999; nor will either Company or Subsidiary be required to "gross up" or otherwise compensate any such Person because of the
imposition of any excise tax on a payment to such person.

	(xi)
	The
consummation of the transactions contemplated by this Agreement will not result in the payment, vesting, or acceleration of any benefit, except as may be required by a Qualified
Plan pursuant to Section 411(d)(3) of the Code.

	(xii)
	No
event has occurred that could result in any material liability of either any Company or any Subsidiary as the result of it being treated, together with one or more other Persons,
as a single employer under Code Section 414 or similar provisions of ERISA. 

        SECTION 3.17    Labor Matters.    Except
as set forth on Section 3.17 of the Company Disclosure Schedule:
(a) there are no material Actions or controversies pending or, to the knowledge of Seller, threatened, between any Company or Subsidiary and any of the Employees or former employees of the
Companies or the Subsidiaries, and, to the knowledge of Seller, there is no event or condition which would reasonably be expected to give rise to any such Action or controversy; (b) no Company
or Subsidiary is a party to any collective bargaining agreement or other labor union contract applicable to Persons employed thereby, and to Seller's knowledge, currently there are no organization
campaigns, petitions or other unionization activities seeking recognition of a collective bargaining unit which could affect any Company or Subsidiary; (c) during the past five years, there
have been no unfair labor practice complaints pending against any Company or Subsidiary before the National Labor Relations Board; (d) during the past five years, there have been no strikes,
slowdowns, work stoppages, lockouts, or, to Seller's knowledge, threats thereof, by or with respect to any employees of any Company or Subsidiary; (e) neither the Companies nor any Subsidiaries
have breached, in any material respect, or otherwise failed to comply, in any material respect, with the provisions of any collective bargaining or union contract and there are no grievances
outstanding against the Companies or Subsidiaries under any such agreement or contract; (f) neither the Companies nor any Subsidiaries are parties to, or otherwise bound by, any Governmental
Order, consent decree with, or citation by, any Governmental Authority relating to employees or employment practices; (g) there is no charge or proceeding with respect to a violation of any
occupational safety or health standards that has been asserted or is now pending or, to Seller's knowledge, threatened with respect to the Companies or Subsidiaries; and (h) there is no charge
of discrimination in employment or employment practices, for any reason, including, without limitation, age, gender, race, religion or other legally protected category, which has been asserted or is
now pending or, to Seller's knowledge, threatened before the United States Equal Employment Opportunity Commission or any other Governmental Authority. The relations of WTA and MLR with owners
and trainers who have participated in racing at the Meadows Facility within the past year are satisfactory, and, to the knowledge of Seller, there is no event or condition that would reasonably be
expected to materially affect adversely such relations as a whole. Except as set forth in Section 3.17 of the Company Disclosure Schedule, the persons employed in the XpressBet, Inc.
business are employees of XpressBet, Inc. and have no employment relationship with any of the Companies or Subsidiaries nor are any such persons entitled to payment from any Company or any
Subsidiary for services performed. 

26

 

        SECTION 3.18    Taxes.    (a) Except
as set forth in Section 3.18 of the Company Disclosure Schedule: (i) all
Tax Returns in respect of Taxes required to be filed with respect to the Companies and each Subsidiary (including the consolidated federal income tax return of Seller and any state Tax Return that
includes the Companies or any Subsidiary on a consolidated or combined basis) have been timely filed; (ii) all Taxes owing with respect to the assets, operations, and activities of the
Companies and each Subsidiary have been timely paid; (iii) all such Tax Returns are true, complete and correct in all material respects; (iv) no adjustment relating to such Tax Returns
has been proposed by any Tax authority (insofar as either relates to the activities or income of the Companies or any Subsidiary or could result in Liability of the Companies or any Subsidiary on the
basis of joint and/or several liability) and, to the knowledge of Seller, no basis exists for any such adjustment; (v) there are no pending or, to the knowledge of Seller, threatened Actions or
proceedings for the assessment or collection of Taxes against the Companies or any Subsidiary or (insofar as either relates to the activities or income of the Companies or any Subsidiary or could
result in Liabilities of the Companies or any Subsidiary on the basis of joint and/or several liability) any corporation that was included in the filing of a Tax Return with Seller on a consolidated
or combined basis; (vi) no claim has been made by a Tax authority in a jurisdiction where Tax Returns are not filed by or on behalf of the Companies or any Subsidiary that a Company or a
Subsidiary is or may be subject to taxation by that jurisdiction; (vii) from and after January 1, 2001, the Companies and each Subsidiary (other than any such Subsidiary which is not a
partnership) have been and continue to be a member of the affiliated group (within the meaning of Section 1504(a)(1) of the Code) with which Seller files a consolidated Tax Return, and
has not been includible in any other consolidated Tax Return for any taxable period for which the statute of limitations has not expired; (viii) all Tax Returns filed with respect to Tax years
of the Companies and each Subsidiary through the Tax year ended 2001 have been examined and closed or are Tax Returns with respect to which the applicable period for assessment under applicable law,
after giving effect to extensions or waivers, has expired; and (ix) there are no Encumbrances for Taxes (other than Taxes not yet due and payable) upon any of the assets of the Companies or
any Subsidiary. 

        (b)   Except
as disclosed with reasonable specificity in Section 3.18 of the Company Disclosure Schedule, there are no outstanding waivers or agreements extending the
statute of limitations for any period with respect to any Tax to which the Companies or any Subsidiary may be subject. 

        (c)   (i)
Section 3.18 of the Company Disclosure Schedule lists all income, franchise and similar Tax Returns (federal, state, local and foreign) filed with respect to
each of the Companies and the Subsidiaries for taxable periods ended on or after January 1, 2001, indicates for which jurisdictions Tax Returns have been filed on the basis of a unitary group,
indicates the most recent income, franchise or similar Tax Return for each relevant jurisdiction for which an audit has been completed or the statute of limitations has lapsed and indicates all Tax
Returns that currently are the subject of audit; (ii) Seller has delivered to Purchaser copies of all federal, state and foreign income, franchise and similar Tax Returns, examination reports,
and statements of deficiencies assessed against or agreed to by the Companies or any Subsidiary since January 1, 2001; (iii) Section 3.18 of the Company Disclosure Schedule lists
all closing agreements and Tax rulings received (and all such agreements and rulings that, since January 1, 2001, have been requested) from any Tax authority with respect to the
Companies or any Subsidiary. None of the Companies or Subsidiaries or their respective Affiliates, has received a Tax opinion with respect to any transaction relating to a Company or a Subsidiary
other than a transaction in the ordinary course of business. Seller has delivered to Purchaser copies of all pro forma federal income Tax Returns of the Subsidiaries, prepared in connection
with Seller's or any other consolidated federal income Tax Return, accompanied by a schedule reconciling the items in the pro forma Tax Return to the items as included in the consolidated Tax
Return for all taxable years ending on or after January 1, 2001. 

27

 

        (d)   Except
as disclosed with reasonable specificity in Section 3.18 of the Company Disclosure Schedule, each of the Companies and Subsidiaries have withheld and paid
each Tax required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, shareholder or other party, and complied with all
information reporting and backup withholding requirements, including maintenance of required records with respect thereto. 

        (e)   Except
as disclosed with reasonable specificity in Section 3.18 of the Company Disclosure Schedule, none of the Companies or Subsidiaries is a party to any Tax
allocation, Tax sharing or Tax reimbursement agreement or arrangement with any Person. 

        (f)    Except
as disclosed with reasonable specificity in Section 3.18 of the Company Disclosure Schedule, no Company or Subsidiary will have any taxable income or gain
as a result of prior intercompany transactions that have been deferred and that will be taxed as a result of the changes in ownership contemplated by this Agreement. 

        (g)   Except
as disclosed with reasonable specificity in Section 3.18 of the Company Disclosure Schedule, Purchaser is not required to withhold Tax on the purchase of
the Shares by reason of Section 1445 of the Code. Seller is not a "foreign person" (as that term is defined in Section 1445 of the Code). Except as disclosed with reasonable
specificity in Section 3.18 of the Company Disclosure Schedule, none of the Companies or Subsidiaries has entered into any compensatory agreements with respect to the performance of services
payment under which would result in a nondeductible expense pursuant to Sections 162(m) or 280G of the Code or an excise tax to the recipient of such payment pursuant to
Sections 409A or 4999 of the Code; none of the Companies or Subsidiaries has agreed to make, and none is required to make, any adjustment under Section 481(a) of the Code by
reason of a change in accounting method or otherwise; no Tax asset of a Company or Subsidiary is currently subject to a limitation under Sections 382 or 383 of the Code or similar
provisions of state, local or foreign law; none of the Companies or Subsidiaries has been the "distributing corporation" (within the meaning of Section 355(c)(2) of the Code) with respect to a
transaction described in Section 355 of the Code within the 3-year period ending as of the date of this Agreement; none of the Companies or Subsidiaries has made or is bound by any
election under Section 197 of the Code; none of the Companies or Subsidiaries is a party to any understanding or arrangement described in Section 6662(d)(2)(C)(ii) of the Code, a
"reportable transaction" within the meaning of Treasury Regulations Section 1.6011-4(b) or a "listed transaction" within the meaning of Treasury Regulation
Section 1.6011-4(b)(2). 

28

 

        (h)   Except
as disclosed with reasonable specificity in Section 3.18 of the Company Disclosure Schedule, the amount of the liability for the Companies and Subsidiaries
for unpaid Taxes for all periods ending on or before the date of the most recent Company Financial Statements does not, in the aggregate, exceed the amount of the current liability accruals for Taxes
(excluding reserves for deferred Taxes) solely with respect to the Companies and Subsidiaries as of such date, and the amount of their liability for unpaid Taxes for all periods ending on or before
the Closing Date shall not, in the aggregate, exceed the amount of the current liability accruals for Taxes (excluding reserves for deferred Taxes) as such accruals are reflected on the Company
Financial Statements, as adjusted for transactions through the Closing Date that either (i) occur in the ordinary course of business or (ii) are contemplated by this Agreement. Except as
disclosed with reasonable specificity in Section 3.18 of the Company Disclosure Schedule, no item of income or gain reported for financial purposes in any Pre-Closing Period is
required to be included in taxable income for a Post-Closing Period. 

        SECTION 3.19    Material
Contracts.    (a) Section 3.19(a) of the Company Disclosure Schedule lists each of the
following contracts and agreements of the Companies and the Subsidiaries other than the Note Documents and the MID Forbearance Agreement, (such contracts and agreements, together with all contracts,
agreements, leases and subleases concerning the occupancy, management or operation of any Real Property (including without limitation, brokerage contracts) listed or otherwise disclosed in
Section 3.13(a) or 3.13(b) of the Company Disclosure Schedule to which the Companies or any Subsidiary is a party and all agreements relating to Intellectual Property Rights set forth in
Section 3.14 of the Company Disclosure Schedule, being "Material Contracts"): 

	(i)
	each
contract and agreement for the furnishing of services to or by the Companies, any Subsidiary or otherwise related to the business of the Companies and the Subsidiaries as
currently conducted under the terms of which the Companies or any Subsidiary: (A) is likely to receive, pay or otherwise give consideration of more than $50,000 in the aggregate during the
calendar year ended December 31, 2005, (B) is likely to receive, pay or otherwise give consideration of more than $100,000 in the aggregate over the remaining term of such contract or
(C) cannot be cancelled by the Companies or such Subsidiary without penalty or further payment and without more than 30 days' notice;

	(ii)
	all
broker, distributor, dealer, manufacturer's representative, franchise, agency, sales promotion, market research, marketing consulting and advertising contracts and agreements to
which the Companies or any Subsidiary is a party;

	(iii)
	all
management contracts and contracts with independent contractors or consultants (or similar arrangements) to which the Companies or any Subsidiary is a party and which are
not cancelable without penalty or further payment and without more than 30 days' notice; 

29

 

	(iv)
	all
contracts and agreements relating to indebtedness (including, without limitation, guarantees) of the Companies or any Subsidiary;

	(v)
	all
contracts and agreements with any Government Authority to which any Company or Subsidiary is a party;

	(vi)
	all
contracts or agreements to which any Company or any Subsidiary is a party that provide for, or restrict, (A) the future acquisition or disposition of Assets (other than in
the ordinary course of business and other than anti-assignment provisions) or (B) any merger or business combination;

	(vii)
	all
contracts and agreements that limit or purport to limit the ability of the Companies or any Subsidiary to compete in any line of business or with any Person or in any geographic
area or during any period of time;

	(viii)
	any
contracts or agreements to which any Company or any Subsidiary is a party that provide for any joint venture, partnership or similar arrangement by any Company or
any Subsidiary;

	(ix)
	all
contracts and agreements between or among the Companies or any Subsidiary on the one hand and Seller or any Affiliate of Seller (other than the Companies or any Subsidiary) on
the other hand;

	(x)
	any
collective bargaining contracts or agreement or contracts or agreements with any labor organization, union or association to which any Company or any Subsidiary is a party;

	(xi)
	any
employment agreement involving payments of base cash compensation annually by any Company or Subsidiary in excess of $100,000;

	(xii)
	all
contracts and agreements entered into by any Company or any Subsidiary on or after April 5, 2001 that provide for indemnification by any Company or any Subsidiary with
respect to Liabilities relating to the Real Property or current or former business or operations of the Companies and the Subsidiaries or any of their predecessors or with respect to Liabilities under
any Environmental Laws or for the investigation, remediation or clean-up of any Hazardous Materials; and

	(xiii)
	any
other contract or agreement to which any Company or any Subsidiary is a party under which the consequences of a default or termination would have a Material
Adverse Effect. 

        For
purposes of this Section 3.19 and Sections 3.09, 3.13 and 3.14, the term "lease" shall include any and all leases, subleases,
occupancy agreements, sale/leaseback agreements or similar arrangements. 

30

 

        (b)   Except
as disclosed in Section 3.19(b) of the Company Disclosure Schedule, each Material Contract: (i) is valid and binding on the Companies or a
Subsidiary and is in full force and effect and (ii) upon consummation of the transactions contemplated by this Agreement, except to the extent that any consents set forth in
Section 3.05(c) of the Company Disclosure Schedule are not obtained, shall continue in full force and effect without penalty or other adverse consequence. Neither the Companies nor any
Subsidiary is in breach of, or default under, any Material Contract, and, to the knowledge of Seller, no event or condition has occurred that, with or without notice or lapse of time or both, would
constitute a breach of or default under any Material Contract. 

        (c)   Except
as disclosed in Section 3.19(c) of the Company Disclosure Schedule, to the knowledge of Seller, no other party to any Material Contract is in breach
thereof or breach thereunder. 

        SECTION 3.20    Racing
License.    Each of WTA and MLR has been granted permission to conduct harness racing with
pari-mutuel wagering pursuant to the Pennsylvania Act. MEC Racing Management ("MECRacing") has received permission from the Commission to own and operate the
OTB Facilities pursuant to the Pennsylvania Act, to conduct interstate simulcasting pursuant to the Pennsylvania Act and to conduct intrastate simulcasting pursuant to the Pennsylvania Act, all for
and on behalf of WTA and MLR and pursuant to the licenses held by WTA and MLR. The location and description of each OTB Facility is set forth on Section 3.20 of the Company Disclosure Schedule.
In 2003 and 2004, WTA and MLR have operated race meetings at the Meadows Facility in fulfillment of their respective allocations of racing days by the Commission and their obligations under their
agreement with the Meadows Standardbred Owners' Association. To Seller's knowledge, since April 5, 2001, except as disclosed on Section 3.20 of the Company Disclosure Schedule, no
Company or Subsidiary has: 

	(a)
	falsified
answers or made misrepresentations to the Commission in any document required to be filed under the Pennsylvania Act;

	(b)
	issued
or caused to be issued false or misleading advertisements which would have a Material Adverse Effect;

	(c)
	knowingly
permitted on the grounds or within the enclosure of the Meadows Facility or the OTB Facilities, illegal lotteries, pool selling, touting or bookmaking or any other kind of
illegal gambling which would have a Material Adverse Effect. 

        SECTION 3.21    Suppliers.    To
the knowledge of Seller, no supplier of any Company or Subsidiary intends to cease doing business
with such Company or Subsidiary or materially alter the amount of business it is presently doing with such Company or Subsidiary. 

        SECTION 3.22    Books
and Records.    The minute books and corporate records of each Company and Subsidiary contain, in all
material respects, accurate copies of the minutes of all formal board of directors or shareholder or similar meetings held since April 5, 2001 and of all written consents executed after
April 5, 2001 in lieu of the holding of any such meeting to the extent that such meetings or written consents involve material actions. 

31

 

        SECTION 3.23    Brokers.    No
broker, finder or investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of Seller. 

        SECTION 3.24    Racing
Days.    Each of WTA and MLR meets the eligibility requirements of Sections 1302 and 1303 of
the Gaming Act. In each of 2003 and 2004, WTA and MLR conducted live racing at The Meadows for at least 100 days for each license held. In 2005, WTA and MLR are scheduled to conduct at least
100 days of live racing at The Meadows for each license held. To Seller's knowledge, there are no events or circumstances that have occurred or that are planned by Seller or any Company or any
Subsidiary that would, prior to Closing, cause WTA or MLR to cease meeting the eligibility requirements of Sections 1302 and 1303 of the Gaming Act. 

        SECTION 3.25    Related
Parties. 

        (a)   Except
as set forth on Section 3.25 of the Company Disclosure Schedule, and except as may arise from this Agreement or any other Transaction Document or any Note
Documents entered into in connection with the transactions contemplated hereby and except under the MID Loan Documents, since April 5, 2001, neither Seller nor any Affiliate of Seller (other
than the Companies and the Subsidiaries) (a) has or has had any interest in any property (whether real, personal or mixed and whether tangible or intangible) used in or pertaining to the
business or operations of the Companies and the Subsidiaries; (b) is, or has owned (of record or as a beneficial owner), an equity interest or any financial or profit interest or a
Person that has had a material business dealing or a material financial interest in any transaction with the Companies or Subsidiaries; or (c) is a party to any contract with, or has any claim
or right against, the Companies or Subsidiaries that would survive after the Closing Date. 

        (b)   As
of the date hereof, the relationship between WTA and MLR, on the one hand, and XpressBet, Inc., on the other hand, has been formalized to provide for
(i) an agreement for the provision of account wagering services by XpressBet, Inc. to WTA and MLR with respect to WTA's and MLR's Pennsylvania account wagering customers and
(ii) a lease for the premises occupied by XpressBet, Inc. at the Meadows Facility. Such agreement and lease have been approved by the Commission. 

 
 

ARTICLE IV    
    

 
 

REPRESENTATIONS AND WARRANTIES OF PURCHASER    
    

        Purchaser represents and warrants to Seller as of the date hereof (other than such representations and warranties as are made as of another date)
as follows: 

        SECTION 4.01    Incorporation
and Authority of Purchaser.    Purchaser is a limited liability company duly formed, validly
existing and in good standing under the laws of the state of Delaware and has all necessary limited liability company power and authority to enter into this Agreement and the other Transaction
Documents to which Purchaser is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery by
Purchaser of this Agreement and any other Transaction Document to which Purchaser is a party, the performance by Purchaser of its obligations hereunder and thereunder and the consummation by Purchaser
of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser, and
(assuming due authorization, execution and delivery by Seller) constitutes a legal, valid and binding obligation of Purchaser enforceable against Purchaser in accordance with its terms, subject to the
effect of any applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors' rights generally and subject, as to enforceability, to the effect of general principles
of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). When each Transaction Document to which Purchaser is a party has been duly executed and
delivered by Purchaser (assuming due authorization, execution and delivery by each other party thereto), such Transaction Document will constitute a legal and binding obligation of Purchaser
enforceable against it in accordance with its terms, subject to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors' rights generally
and subject, as to enforceability, to the effect of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 

32

 

        SECTION 4.02    No
Conflict.    The execution, delivery and performance by Purchaser of this Agreement and any other Transaction
Document to which Purchaser is or will be a party do not and will not (a) violate or conflict with the certificate of formation or limited liability company agreement (or other similar
applicable documents) of Purchaser, (b) assuming that all consents, approvals, authorizations and other actions described in Section 4.03 have been obtained and all filings and
notifications listed in Section 4.03 of Purchaser Disclosure Schedule have been made, and except as may result from any facts or circumstances relating solely to Seller, conflict with or
violate, or give any Governmental Authority the right to challenge the transactions contemplated by this Agreement or any other Transaction Document to which Seller is a party, or to exercise any
remedy or obtain any relief under, any Law or Governmental Order, including without limitation any state takeover or similar statute or regulation, applicable to Purchaser or (c) assuming that
all consents, approvals, authorizations and other actions described in Section 4.03 have been obtained and all filings and notifications listed in Section 4.03 of Purchaser Disclosure
Schedule have been made, and except as may result from any facts or circumstances relating solely to Seller, result in any breach of, conflict with, or constitute a default (or event which with
the giving of notice or lapse of time, or both, would become a default) under, require any consent or provision of notice under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of any Encumbrance on any of the assets or properties of Purchaser pursuant to any material note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument relating to such assets or properties to which Purchaser or any of its subsidiaries is a party or by which any of such assets or properties is bound or
affected, other than Encumbrances contemplated by the MID Loan Documents or the Note Documents. 

        SECTION 4.03    Consents
and Approvals.    The execution and delivery by Purchaser of this Agreement and any other Transaction
Document to which Purchaser is a party do not, and the performance by Purchaser of this Agreement and any other Transaction Document to which Purchaser is a party will not, require any material
consent, approval, authorization or other action by, or filing with or notification to, any Governmental Authority, except (a) as set forth on Section 4.03 of Purchaser Disclosure
Schedule, (b) the notification requirements of the HSR Act, and (c) as may be necessary as a result of any facts or circumstances relating solely to Seller. 

33

 

        SECTION 4.04    Investment
Purpose.    Purchaser is acquiring the Shares solely for the purpose of investment and not with a view
to, or for offer or sale in connection with, any distribution thereof. Purchaser acknowledges that the Shares are not registered under the Securities Act, and that the Shares may not be transferred or
sold except pursuant to the registration provisions of the Securities Act or pursuant to an applicable exemption therefrom and subject to state securities laws and regulations, as applicable. 

        SECTION 4.05    Financing.    Purchaser
has received and has provided to Seller a commitment letter relating to the financing of
the Purchase Price. Purchaser has committed sources that would provide it with sufficient funds to pay the Tranche A Notes on the Consummation Date subject to the conditions contained in such
commitment letter. 

        SECTION 4.06    Brokers.    No
broker, finder or investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of Purchaser. 

        SECTION 4.07    Specified
Investors; Cannery Casino Resorts.    There are no more than five Specified Investors. Each Specified
Investor is a qualified purchaser as defined under the Investment Company Act of 1940, as amended. Cannery Casino Resorts, LLC, a Nevada limited liability company, directly or indirectly owns
all of the assets related to the Cannery Casino and Hotel and holds the management rights to the Rampart Casino. 

 
 

ARTICLE V    
    

 
 

ADDITIONAL AGREEMENTS    
    

        SECTION 5.01    Conduct of Business Prior to the Closing.    (a) Unless Purchaser otherwise agrees
in writing and except as otherwise set forth in Section 5.01 of the Company Disclosure Schedule, between the date of this Agreement and the Closing Date, Seller shall cause each Company and
Subsidiary to (i) conduct its business only in the ordinary course and consistent with past practice, (ii) use commercially reasonable efforts to preserve intact the business
organization, assets and prospects of each Company and Subsidiary, subject to the conduct of its business in the ordinary course of business and consistent with past practice, (iii) use
commercially reasonable efforts to keep available to Purchaser the services of the present officers and key employees of each Company and Subsidiary and (iv) use commercially reasonable efforts
to preserve the current relationships of each Company and Subsidiary with its respective customers, suppliers, distributors and other Persons with which each Company and Subsidiary has significant
business relationships. Seller shall cause WTA and MLR to continue to operate race meetings at the Meadows Facility in fulfillment of their respective allocations of racing days by the Commission and
their obligations under their agreement with the Meadows Standardbred Owners' Association. Between the date hereof and the Closing Date, Seller will cause the Companies and the Subsidiaries not to
enter into any contract, agreement or arrangement that would impose any restrictions or requirements on the operation of a gaming operation on the Real Property. 

34

 

        (b)   Between
the date hereof and the Closing Date, Seller shall cause WTA and MLR to apply for allocations of racing days pursuant to Section 207 of the Pennsylvania
Act to conduct race meetings with pari-mutuel wagering in 2006. The number of racing days sought shall be approximately 200 to 215 or such other number of races as WTA, MLR and the Meadows
Standardbred Owners' Association shall agree, provided, that in no event shall the number of racing days be less than the number set forth in Section 1303 of the Gaming Act. Between the date
hereof and the Closing Date, neither the Companies nor any Subsidiary will do any of the things enumerated in the second sentence of Section 3.09 (including, without limitation,
clauses (a) through (n) thereof) to the extent any such thing is within the control of Company and the Subsidiaries, without the prior written consent of Purchaser; provided that the
Companies and the Subsidiaries shall have the right, without the consent of Purchaser, to engage in the activities set forth in Section 5.01 of the Company Disclosure Schedule. 

        (c)   Purchaser
acknowledges that Seller intends to distribute as a dividend or contribute as a capital contribution, or cause the distribution or contribution of, prior to or
at the Closing, (i) amounts owing pursuant to the intercompany accounts between the Companies and the Subsidiaries, on the one hand, and their respective Affiliates (including Seller and its
Affiliates but not including any Company or any Subsidiary), on the other hand, (ii) the Excluded Subsidiaries, and (iii) one or more notes in an aggregate amount no greater than
$25,000,000 (the "Specified Notes"), and that such distribution or contribution will not result in a breach of this Agreement. Purchaser acknowledges that Seller intends to convert
20002 Delaware Inc. into a single member limited liability company and subsequently cause MECPenn to distribute all interest in such limited liability company to Seller as a dividend
prior to Closing. In the event that Magna pays or declares a dividend of the Specified Notes, Magna agrees that it shall, the next Business Day and no later than one Business Day before Closing,
contribute the Specified Notes back to each of the Companies making the respective distribution and causing each of the Companies' net worth to be unaffected by the distribution of the Specified Notes
and the recontribution to the Companies. 

        (d)   Seller
agrees to cause intercompany accounts between Seller or its Affiliates (other than the Companies and Subsidiaries), on the one hand, and the Companies and
Subsidiaries, on the other hand, to be settled prior to Closing. 

        SECTION 5.02    Access
to Information.    From the date hereof until the Closing, Seller shall cause the officers, directors,
employees, agents, representatives, accountants and counsel of each Company and Subsidiary to: (i) afford the officers, employees and authorized agents, accountants, counsel, and
representatives of Purchaser reasonable access, upon reasonable notice and during normal business hours, to (A) the assets (including the Real Property) for inspection and testing
(it being understood that the cost of such inspection and testing shall be borne by Purchaser and any testing that is other than a Phase I testing shall be conducted only after obtaining
the approval of Seller, and Purchaser shall promptly indemnify Seller Indemnified Parties for any Losses in accordance with Article IX hereof arising from injury to person or physical damage to
property incurred by any Company or any Subsidiary as a result of the testing conducted pursuant to this Section 5.02, other than as a result of the gross negligence or willful misconduct of
Company or any Subsidiary and in no event as a result of the discovery of an environmental matter as a result of such testing) and (B) the officers, directors, employees, accountants and other
representatives of Seller and each Company and Subsidiary who have relevant knowledge relating to any Company or Subsidiary; provided,
however, that such access shall not unreasonably interfere with any of the business or operations of any Company or Subsidiary or the duties of any such officer, director,
employee, accountant or other representative, and (ii) promptly furnish to the officers, employees, and authorized agents, accountants, counsel and representatives of Purchaser such financial
and operating data and other information regarding employees, assets, properties, goodwill and business of each Company and Subsidiary as Purchaser may reasonably request. 

35

 

        SECTION 5.03    Books
and Records.    (a) In order to facilitate the resolution of any claims made against or incurred by
Seller prior to the Closing, or for any other reasonable purpose, for a period of five years after the Closing, Purchaser shall (i) retain the books and records (including personnel files) of
the Companies and Subsidiaries relating to periods prior to the Closing in a manner reasonably consistent with the prior practices of the respective Companies and Subsidiaries and (ii) upon
reasonable notice, afford the officers, employees and authorized agents and representatives of Seller reasonable access (including the right to make, at Seller's expense, photocopies), during normal
business hours, to such books and records. 

        (b)   In
order to facilitate the resolution of any claims made by or against or incurred by Purchaser, the Companies or any Subsidiary after the Closing, or for any other
reasonable purpose, for a period of five years following the Closing, Seller shall (i) retain the books and records (including personnel files) of Seller which relate to the Companies and the
Subsidiaries and their operations for periods prior to the Closing and (ii) upon reasonable notice, afford the officers, employees and authorized agents and representatives of Purchaser, the
Companies or any Subsidiary reasonable access (including the right to make, at Purchaser's expense, photocopies), during normal business hours, to such books and records. 

        (c)   Neither
Purchaser nor Seller shall be obligated to provide the other party with access to any books or records (including personnel files) pursuant to this
Section 5.03 where such access would violate any Law or Environmental Law. 

        SECTION 5.04    Governmental
Approvals and Consents; Application Fee; Closing Conditions.    (a) Each party hereto will use
its commercially reasonable efforts to obtain all authorizations, consents, orders and approvals of all Governmental Authorities that may be or become necessary for its execution and delivery of this
Agreement and the performance of its obligations pursuant to this Agreement and any agreement or document contemplated hereby and will cooperate fully with the other party in promptly seeking to
obtain all such authorizations, consents, orders and approvals. Each party hereto agrees to make an appropriate filing of a Notification and Report Form pursuant to the HSR Act with respect to the
transactions contemplated hereby no later than January 15, 2006 and to supply promptly any additional information and documentary material that may be requested pursuant to the HSR Act. The
parties hereto will not willfully and unreasonably take any action that will have the effect of delaying, impairing or impeding the receipt of any required approvals. 

36

 

        (b)   Purchaser
and Seller shall as soon as practicable, but in no event later than 30 days after the date hereof, unless sooner required by the Pennsylvania Act, the
regulations of the Commission or the Commission, together file with the Commission the applications, affidavits (including without limitation the affidavits specified pursuant to Section 204 of
the Pennsylvania Act) and other information required pursuant to the Pennsylvania Act and regulations of the Commission necessary to obtain approval from the Commission for the purchase of the
Companies by Purchaser and for Seller's management of the racing operations of the Meadows Facility under the Racing Services Agreement. In addition, both Purchaser and Seller shall furnish to the
Commission such other information, financial statements and other documentation as the Commission requires concerning Purchaser or Seller or any of their respective Affiliates and will make available
representatives of Purchaser or Seller to meet with the Commission, or its staff, to expedite the ability of the Commission to complete its work and make the determinations required by
Article VIII of this Agreement as expeditiously as practicable. Purchaser and Seller agree to provide formal notice to the Commission of the change of ownership of the Companies within
10 days after the Closing Date. 

	(c)
	Gaming
Application.

	(i)
	Until
the earlier of (A) the Repayment Date and (B) the date of the Stock Transfer, Purchaser and Seller each will use commercially reasonable efforts to promptly make
available or file with the Gaming Board such information as it or its staff may request under the Gaming Act. Purchaser and Seller will, not later than December 20, 2005 (or two weeks
before such other date as the Gaming Board may select for submission of applications so long as filing on such later date does not provide an advantage to other applicants or is otherwise detrimental
to the Companies' application or to their right to timely obtain a Conditional Category 1 license or Category 1 license for gaming from the Gaming Board), file with the Gaming Board the
application for Conditional Category 1 license as required by the Gaming Act (the "Gaming Application"). The Gaming Application will be drafted to reflect
two different scenarios — one in which Purchaser is the operator and owner of the Meadows Facility and the operator of the gaming operations with an Affiliate of
Seller serving as a manager of the racing operations of the Meadows Facility (such scenario, the "Transaction Scenario") and one in which Seller or one or more of its
Affiliates is the operator and owner of the Meadows Facility (the "Alternative Scenario"). In addition, until the earlier of (A) the Repayment Date and
(B) the date of the Stock Transfer, both Purchaser and Seller shall furnish to the Gaming Board such other information, financial statements and other documentation as the Gaming Board requires
concerning Purchaser or Seller and will make available representatives of Purchaser or Seller to meet with the Gaming Board, or its staff, to expedite the ability of the Gaming Board to complete its
work. For the avoidance of doubt, while Purchaser and Seller will both use reasonable efforts to accomplish the matters set forth in this Section and to assemble such application, Purchaser shall be
responsible for all items with respect to the Gaming Application other than the MEC Items. Prior to the Closing Date, Purchaser and Seller agree to discuss with the Gaming Board whether there are any
deficiencies in the MEC Items that have been provided to the Gaming Board in respect of the Gaming Application filed by Purchaser and Seller agrees to use its commercially reasonable efforts to remedy
such deficiencies. Seller agrees that, after the Closing Date and until the earlier of (i) the Repayment Date, and (ii) a Stock Transfer Trigger Date, it shall use its commercially
reasonable efforts to fulfill any requirements related to the MEC Items and any other items requested from Seller by the Gaming Board with respect to the Gaming Application filed by Purchaser. 

37

 

	(ii)
	Each
of Purchaser and Seller agrees to use its best efforts to complete the Gaming Application for submission to the Gaming Board on or before December 20, 2005, and agrees to
have a weekly scheduled telephone call or meeting at which the individuals with responsibility for organizing each of the Purchaser's and Seller's efforts in connection with the filing of the Gaming
Application review and discuss the progress being made to complete the Gaming Application.

	(iii)
	Either
party shall notify the other upon becoming aware that the Gaming Board may consider, identify or support an Action that could jeopardize Seller's ability to obtain a
Conditional Category 1 license or Category 1 license in its own name if Seller continues to pursue a Conditional Category 1 license or a Category 1 license with Purchaser
prior to the Closing Date. Prior to termination of this Agreement, Seller and Purchaser agree not to take any action that could reasonably be expected to impede the consideration of the Gaming
Application for the Transaction Scenario (it being acknowledged that Seller's exercise of its rights under Section 5.15 or under the Note Documents or Seller's or Purchaser's
exercise of rights under Section 10.01 shall not be considered an action that constitutes a breach of the obligations set forth in this sentence). Prior to the earlier of Closing or termination
of this Agreement, Seller and Purchaser agree to use their best efforts, to permit Seller and Purchaser to jointly pursue the Gaming Application for the Transaction Scenario (it being
acknowledged that Seller's exercise of its rights under Section 5.15 or Seller's or Purchaser's exercise of rights under Section 10.01 shall not be considered an action that
constitutes a breach of the obligations set forth in this sentence). Seller agrees to make itself available to participate in meetings, appearances and hearings to assist in the joint efforts of
Seller and Purchaser to pursue the Gaming Application for the Transaction Scenario. 

        (d)   Simultaneously
with the submission of the Gaming Application, Purchaser shall at its cost take such steps as are necessary, including but not limited to the posting of a
letter of credit, the posting of a bond or the payment of a fee, to satisfy any monetary or financial requirements that the Gaming Board may require in conjunction with submission and maintenance of
the Gaming Application (the "Gaming Application Fee"). Until thirty days after the earlier of (i) the date on which this Agreement is terminated prior to
Closing and (ii) the date of the Stock Transfer (the earlier of clause (i) and (ii) being the "Replacement Trigger"), Purchaser shall maintain the Gaming Application Fee.
If (i) the fee is paid by Purchaser in cash to the Gaming Board to satisfy the requirements of the Gaming Board, (ii) a Replacement Trigger occurs, (iii) Seller uses such fee in
furtherance of its application with the Gaming Board after such Replacement Trigger (or to the extent Seller actually receives the benefit of such fee), and (iv) Purchaser executes
documentation in form and substance satisfactory to Seller confirming that Seller is entitled to, and has full rights with respect to, the fee that Purchaser has paid to the Gaming Board and that
Purchaser releases all rights with respect thereto, then Seller shall, to the extent Purchaser does not receive a refund of such fee from the Gaming Board and to the extent Seller receives the benefit
of such fee, reimburse Purchaser for the Gaming Application Fee (but only to the extent Seller receives the benefit of such fee) promptly, and in any event within 30 days of the
occurrence of the circumstances set forth in clauses (i) through (iv) above (or if Seller does not use such fee in furtherance of its application with the Gaming Board but instead
actually receives the benefit of such fee, then within thirty days after receipt by Seller of such benefit). To the extent that Purchaser has not received a refund of its Gaming Application Fee,
Seller agrees to use its commercially reasonable efforts to receive the benefit from the fee should Seller or any Affiliate pursue a gaming license and to reimburse Purchaser in accordance with the
preceding sentence to the extent of the benefit received. To the extent that Seller intends to continue with its application with the Gaming Board after the Replacement Trigger, Seller agrees to use
commercially reasonable efforts to replace within thirty days the Gaming Application Fee theretofore maintained by Purchaser as expeditiously as possible after the Replacement Trigger, and to use its
commercially reasonable efforts in cooperating with Purchaser to cause the withdrawal of such Gaming Application Fee. For the period of up to thirty days after the Replacement Trigger during which
Purchaser maintains a letter of credit to maintain the Gaming Application Fee, Seller agrees to reimburse Purchaser for the letter of credit fee incurred by Purchaser in maintaining such letter of
credit for such 30 day period after the Replacement Trigger (it being understood that such reimbursement obligation shall only apply to the extent the incurrence of such costs resulted
in out of pocket expenditures by Purchaser and equity holders of Purchaser (rather than out of pocket expenditures by any of the Companies or any of their respective Subsidiaries)). 

38

 

        (e)   Upon
the termination of this Agreement for any reason other than consummation of the transactions contemplated by this Agreement, Purchaser and Seller agree to take such
actions as are necessary as soon as possible to amend the Gaming Application to remove the Transaction Scenario. In addition, upon the termination of this Agreement for any reason other than
consummation of the transactions contemplated by this Agreement or, after the Closing, upon the consummation of the Stock Transfer, Purchaser shall permit Seller to use and continue to have submitted
with the Gaming Application all architectural, design and construction plans and any other materials prepared by Purchaser or its agents or consultants (the "Purchaser Application
Materials"); provided, however that Seller agrees to reimburse Purchaser for the reasonable and direct costs incurred by Purchaser with respect to the
Purchaser Application Materials used by Seller (it being understood that such reimbursement obligation shall only apply to the extent the incurrence of such costs resulted in out of pocket
expenditures by Purchaser and equity holders of Purchaser (rather than out of pocket expenditures by any of the Companies or any of their respective Subsidiaries)). Purchaser shall also permit Seller
to use any other plans and materials developed or obtained by Purchaser in connection with the development and construction of the casino or other gaming activities at the Meadows (the "Other
Purchaser Materials"); provided, however, that Seller agrees to reimburse Purchaser for the reasonable and direct costs incurred by Purchaser with respect to the Other Purchaser Materials used by
Seller (it being understood that such reimbursement obligation shall only apply to the extent the incurrence of such costs resulted in out of pocket expenditures by Purchaser and equity holders
of Purchaser (rather than out of pocket expenditures by any of the Companies or any of their respective Subsidiaries)). In addition, Seller acknowledges that it has separate reimbursement obligations
to Purchaser pursuant to a letter dated May 24, 2006 for expenses for other professional services. 

39

  

	(f)
	Upon
the Closing, Purchaser and Seller agree to take such actions as are necessary as soon as possible to amend the Gaming Application to remove the Alternative Scenario. On and after
the Closing Date and until the earlier of (i) the Repayment Date and (ii) a Stock Transfer Trigger Date, Seller agrees to use commercially reasonable efforts to support the application
of Purchaser under the Transaction Scenario and Seller and Purchaser agree to use commercially reasonable efforts to obtain all necessary approvals from Governmental Authorities for MEC Pennsylvania
Racing Services, Inc. to undertake its responsibilities under the Racing Services Agreement. After the Closing Date, Seller agrees to provide Purchaser for filing with the Gaming Board the
information (if any) that Purchaser reasonably considers necessary, or that the Gaming Board requests, in order to qualify Seller as a lender in connection with the Tranche A and
Tranche B Notes, and thereafter, to use its commercially reasonable efforts to obtain the necessary approvals, if any, from the Gaming Board to permit the Tranche A and
Tranche B Notes to remain outstanding in accordance with the terms of the Note Documents.

	(g)
	Seller
and Purchaser shall use commercially reasonable efforts to give all notices to and obtain all consents from all third parties and Governmental Authorities that are described in
Section 3.05(c) or Section 3.06 of the Company Disclosure Schedule and Section 4.03 of Purchaser Disclosure Schedule, including but not limited to the Commission Approval. Seller
and Purchaser agree to consider comments and input from Governmental Authorities and to use commercially reasonable efforts to consider means in which to address such comments and input without
resulting in changing or adversely affecting the economics of the transactions contemplated hereby or the ability of either party to close such transactions.

	(h)
	Without
limiting the generality of the parties' undertakings pursuant to Section 5.04(a) though (g), each of the parties hereto shall use all reasonable efforts to
(i) respond to any inquiries by any Governmental Authority regarding antitrust or other matters with respect to the transactions contemplated by this Agreement or any agreement or document
contemplated hereby, (ii) avoid the imposition of any order or the taking of any action that would restrain, alter or enjoin the transactions contemplated by this Agreement and (iii) in
the event any Governmental Order adversely affecting the ability of the parties to consummate the transactions contemplated by this Agreement or any agreement or document contemplated hereby has been
issued, to have such Governmental Order vacated or lifted.

	(i)
	If
any consent, approval or authorization necessary to preserve any right or benefit under any lease, license, contract, commitment or other agreement or arrangement to which the
Company or any Subsidiary is a party is not obtained prior to the Closing, Seller shall, subsequent to the Closing, cooperate with Purchaser and the Companies in attempting to obtain such consent,
approval or authorization as promptly thereafter as practicable. If such consent, approval or authorization cannot be obtained, Seller shall use its commercially reasonable efforts to provide such
Company or such Subsidiary, as the case may be, with the rights and benefits of the affected lease, license, contract, commitment or other agreement or arrangement for the term thereof, and, if Seller
provides such rights and benefits, such Company or such Subsidiary, as the case may be, shall assume all obligations and burdens thereunder. Seller shall have no obligation under this
Section 5.04(i) after a Stock Transfer Trigger Date. 

40

 

	(j)
	From
the date hereof until the Closing, each party hereto shall, and Seller shall cause each Company and Subsidiary to, use all commercially reasonable efforts to take such actions as
are necessary to expeditiously satisfy the closing conditions set forth in Article VIII hereof. From the Closing Date until the earlier of (i) the Consummation Date and (ii) a
Stock Transfer Trigger Date, (a) Purchaser shall, and Purchaser shall cause each Company and Subsidiary to, use its respective commercially reasonable efforts to take such actions as are
necessary to cause the Consummation Date to occur, including, without limitation, satisfying its lenders with respect to any condition imposed by the Gaming Board in its approval for issuance of the
Conditional Category 1 or Category 1 License to WTA, and (b) Seller shall use its commercially reasonable efforts to cooperate with Purchaser with respect thereto.

	(k)
	[Reserved]

	(l)
	Until
the earlier of (i) the Repayment Date and (ii) the date of the Stock Transfer, all analyses, appearances, meetings, discussions, presentations, memoranda, briefs,
filings, arguments, and proposals made by or on behalf of either party before any Governmental Authority, including the Gaming Board and the Commission, or the staff or regulators of any Governmental
Authority, in connection with the transactions contemplated hereunder (but, for the avoidance of doubt, not including any interactions between Seller, the Companies or the Subsidiaries with
Governmental Authorities in the ordinary course of the conduct of its business operations, any disclosure which is not permitted by law or any disclosure containing confidential information) shall be
disclosed to the other party hereunder in advance of any filing, submission or attendance, it being the intent that the parties will consult and cooperate with one another, and consider in good faith
the views of one another, in connection with any such analyses, appearances, meetings, discussions, presentations, memoranda, briefs, filings, arguments, and proposals. Until the earlier of
(i) the Repayment Date and (ii) the date of the Stock Transfer, each party shall give notice to the other party with respect to any meeting, discussion, appearance or contact with any
Governmental Authority or the staff or regulators of any Governmental Authority, with such notice being sufficient to provide the other party with the opportunity to attend and participate in such
meeting, discussion, appearance or contact.

	(m)
	Notwithstanding
anything in this Agreement to the contrary, the parties agree that at any time after the date which is 14 days prior to the date, if any, identified by the
Gaming Board after which continued pursuit by Seller of a Conditional Category 1 license with Purchaser pursuant to the Gaming Application would jeopardize Seller's ability to obtain a
Conditional Category 1 license or a Category 1 license in its own name, Seller shall not have any obligation during the period of such jeopardy to comply with any of its obligations
under Section 5.04, Section 5.12 and any other provision of this Agreement that would require Seller to directly or indirectly comply with any of its obligations under
Section 5.04 or 5.12; provided, however, if the Closing hereunder is reasonably capable of occurring prior to the date identified by the Gaming Board, then Seller shall continue to
comply with its obligations under Section 5.04 and 5.12 and any other provision of this Agreement that would require Seller to directly or indirectly comply with any of its obligations
under Section 5.04 or 5.12 until such time as Seller terminates the Agreement in accordance with the provisions of Section 10.01(k) hereof. 

41

 

        SECTION 5.05
Confidentiality. (a) The terms of the letter agreement dated September 9, 2005 (the "Confidentiality
Agreement") between Seller and Millennium Management Group, LLC are hereby incorporated herein by reference as if Purchaser were a party thereto and shall continue in full force
and effect until the Repayment Date, at which time such Confidentiality Agreement and the obligations of Purchaser under this Section 5.05 shall terminate;
provided, however, that the Confidentiality Agreement shall terminate only in respect of that portion of the Information (as defined in
the Confidentiality Agreement) exclusively relating to the transactions contemplated by this Agreement. If this Agreement is, for any reason, terminated prior to the Closing or if the Closing occurs
but the Repayment Date does not occur, the Confidentiality Agreement shall continue in full force and effect. 

	(b)
	Prior
to a Stock Transfer Trigger Date, Seller agrees to, and shall cause its agents, representatives, Affiliates, employees, officers and directors to, protect (and not
disclose or provide access to any Person) all confidential information relating to trade secrets, price, customer and supplier lists and pricing and marketing plans with respect to the business of the
Companies and the Subsidiaries and all other information that Seller regards as confidential information as of the date hereof with respect to the business of the Companies and the Subsidiaries as
currently conducted, by using the same degree of care, but no less than a reasonable degree of care, to prevent the unauthorized disclosure or use of such confidential information, as Seller uses to
protect its own confidential information of a like nature; provided, however, that this sentence shall not apply to any information that, at
the time of disclosure, (i) is disclosed by and between Seller and its agents, representatives, Affiliates, employees, officers or directors on a need-to-know basis
(provided that such Persons are bound by a duty of confidentiality), (ii) is available publicly and was not disclosed in breach of this Agreement by Seller or its respective agents,
representatives, Affiliates, employees, officers or directors (provided that information provided to or filed with the Commission or any other Governmental Authority shall not be deemed to be publicly
available by virtue of such filing), or (iii) is required to be disclosed in compliance with Section 5.04 of this Agreement, federal and state laws or regulations or the regulations
governing any national securities exchange or quotation system or is requested by a regulatory body that has authority over Seller or Purchaser (provided that Seller provides prompt notice to
Purchaser of the disclosure requirement and uses its reasonable efforts to disclose only such confidential information as is legally required to be disclosed and exercises reasonable efforts to obtain
assurance that such confidential information will be accorded confidential treatment); provided, further that, so long as the Tranche A Note or Tranche B Note is outstanding, this
Section 5.05(b) shall not apply to the exceptions to confidentiality set forth in Section 10.14 of the Note Agreement. 

        SECTION 5.06
Use of Magna Name. (a) Purchaser hereby acknowledges that all right, title and interest in and to the trade names of Seller, the
names "Magna," "MEC," "XpressBet," and "Call-A-Bet" and all similar or related names and all derivations or acronyms thereof and all trademarks, service marks, trade names,
collective marks, certification marks, trade dress, designs or logos containing or incorporating the foregoing, including registrations and applications for registration thereof (collectively, the
"Magna Name"), are owned exclusively by Seller and its Affiliates (other than the Companies and their Subsidiaries), and that, except as provided in
Section 5.06(b), any and all right of the Companies and the Subsidiaries in the Magna Name shall terminate as of the Closing Date and shall immediately revert back to Seller and its
Affiliates (other than the Companies and their Subsidiaries). On or before the Closing Date, Seller shall take any and all actions necessary to transfer the domain name of "meadowsracing.com" and any
rights associated therewith to an entity designated by Purchaser. To the extent that the transfer is not made prior to the Closing Date, Seller and such entity designated by Purchaser shall enter into
such arrangements as may be reasonably acceptable to each to provide such designee with the right to use the domain name. 

42

 

	(b)
	Purchaser
shall, promptly following the Closing Date, cause each Company and Subsidiary to remove or obliterate the Magna Name from all of its existing stocks of signs, letterheads,
advertisements and promotional materials and other documents and materials ("Existing Stock") or to cease using such Existing Stock. Notwithstanding the foregoing, in the
event that removal or obliteration of the Magna Name from certain items of Existing Stock or the cessation of the use thereof is impracticable, each Company and Subsidiary may use such items of
Existing Stock, so long as a mark or some other designation identifying that each Company or Subsidiary is an Affiliate of Purchaser (and not of Seller) is clearly indicated on such items of
Existing Stock, until such items of Existing Stock is depleted, or a period of three (3) months from the Closing Date, whichever occurs first. Except as expressly provided in this Agreement, no
other right to use the Magna Name is granted by Seller to Purchaser, Companies and Subsidiaries, whether by implication or otherwise.

	(c)
	Purchaser
shall, as soon as practicable after the Repayment Date, but in no event later than 10 Business Days after such date, cause MECPenn, MEC Pennsylvania Food
Service, Inc. and MECRacing to file amended articles of incorporation with the appropriate authorities changing their corporate names to a corporate name that does not contain the word "Magna"
or any Magna Name. 

        SECTION 5.07
Investigation. (a) Purchaser acknowledges and agrees that (i) has made its own inquiry and investigation into, and, based
thereon, has formed an independent judgment concerning, the Companies and Subsidiaries and (ii) it has not, for purposes of entering into this Agreement, relied on any representation or
warranty or other statement or omission of Seller or any of its directors, officers, employees, agents, stockholders, Affiliates, consultants, counsel, accountants, investment bankers or
representatives, other than the representations and warranties contained in this Agreement (including the Exhibits and the Company Disclosure Schedule). 

	(b)
	In
connection with Purchaser's investigation of the Companies and Subsidiaries, Purchaser has received from Seller certain estimates, projections, forecasts, plans and budgets for the
Companies and Subsidiaries, including, without limitation, projected income statement and balance sheet information. Purchaser acknowledges that there are uncertainties inherent in attempting to make
such estimates, projections, forecasts, plans and budgets, that Purchaser is familiar with such uncertainties and that Purchaser is taking full responsibility for making its own evaluation of the
adequacy and accuracy of all estimates, projections, forecasts, plans and budgets so furnished to it. Accordingly, Seller makes no representation or warranty with respect to any estimates,
projections, forecasts, plans or budgets referred to in this Section 5.07, except that they have been prepared in the ordinary course of business consistent with past practice. 

43

 

        SECTION 5.08
Limited Non-Compete. (a) As an inducement for Purchaser to enter into this Agreement and in consideration of the
receipt of $2,000,000 (which amount is included in the Purchase Price), Seller agrees that for a period commencing on the Closing Date and ending on the later of (i) five years from the Closing
Date and (ii) twelve months after the termination of the Racing Services Agreement for any reason (the "Non-Competition Period"), except with
Purchaser's prior written consent, Seller shall not directly or indirectly (including through MEC Pennsylvania Racing Services, Inc.) own or operate a pari-mutuel wagering facility
with expanded gaming within 100 miles of the Meadows Facility (the "Non-Competition Covenant"). Notwithstanding the foregoing, the
Non-Competition Covenant shall not apply (i) to Thistledown (located in North Randall, Ohio) or operation of the Meadows Facility pursuant to the Racing Services Agreement or
(ii) after a Stock Transfer Trigger Date. 

	(b)
	Seller,
for itself and its Affiliates, agrees that a breach or violation of the Non-Competition Covenant shall entitle Purchaser, as a matter of right, to an injunction
issued by any court of competent jurisdiction restraining any further or continued breach of violation of such covenant. Such right to an injunction shall be cumulative, and in addition to, and not in
lieu of, any other remedies to which Purchaser may show itself justly entitled. Further, during any period in which Seller or any of its Affiliates are in breach of the Non-Competition
Covenant, the time period of such covenant shall be extended for an amount of time that Seller or any of its Affiliates are in breach hereof, with the effect that the total duration of the
Non-Competition Covenant shall be the original period plus the actual amount of time that Seller or any of its Affiliates are in breach.

	(c)
	Further,
Seller, for itself and its Affiliates, agrees that the Non-Competition Covenant is appropriate and reasonable when considered in light of the nature and extent of
the business conducted by Purchaser. Seller, for itself and its Affiliates, acknowledges and agrees that: (i) Purchaser would not enter into this Agreement unless Seller, for itself and its
Affiliates, agreed to the Non-Competition Covenant; and (ii) it has read and understands the terms of this Agreement, including, without limitation, the Non-Competition
Covenant, and has been provided the opportunity to discuss this Agreement and such covenant with Purchaser and counsel of its choice and has carefully considered the nature and extent of the
restrictions upon it and the rights and remedies conferred upon Purchaser hereunder. Seller, for itself and its Affiliates, hereby acknowledges and agrees that Purchaser has a legitimate interest in
protecting its business and that the Non-Competition Covenant is reasonable in limitations as to time, scope, geographical area and activity, and is fully required and is no greater than
necessary to protect the legitimate business interests of Purchaser. Seller, for itself and its Affiliates, further agrees that the Non-Competition Covenant is not unduly harsh or
oppressive to Seller, or any of its Affiliates, in curtailing their legitimate efforts to earn a livelihood and does not stifle the inherent skill and experience of Seller, or any of its Affiliates,
or confer a benefit upon Purchaser disproportionate to the detriment to Seller, or any of its Affiliates, or harm in any manner whatsoever the public interest or operate as a bar to the sole means of
support of Seller, or any of its Affiliates.

	(d)
	Seller,
for itself and its Affiliates, agrees that if the Non-Competition Covenant should be held by any Governmental Authority to be void or unenforceable in any
particular area or jurisdiction, then Purchaser and Seller shall consider this Agreement to be modified so as to eliminate that particular area or jurisdiction as to which the
Non-Competition Covenant is held to be void or otherwise enforceable, and as to all other areas and jurisdictions and scope covered by this Agreement, the terms hereof shall remain in full
force and effect as originally written. Further, if the Non-Competition Covenant should be held by any Governmental Authority to be effective in any particular area or jurisdiction or
scope only if said covenant is modified to limit its duration or scope, then Seller and Purchaser shall consider the Non-Competition Covenant to be amended and modified with respect to
that particular area or jurisdiction so as to comply with the order of any Governmental Authority, and as to all other political subdivisions of the United States, the
Non-Competition Covenant shall remain in full force and effect as originally written. 

44

 

        SECTION 5.09
Remediation. Seller hereby agrees that after the Repayment Date it will complete items (1) and (2) on Part D of
NPDES Permit #PA0252905 issued on August 11, 2005 by the Department of Environmental Protection of the Commonwealth of Pennsylvania on or before the deadline for completion specified in
such items, but only to the extent such items are not completed in connection with the backside improvements required by Section 1404 of the Gaming Act. Seller further agrees it will complete
any other matters arising under the NPDES Permit # PA0252905 during the two years on and after the Repayment Date. 

        SECTION 5.10
No Negotiation. Until the earlier of (a) the Closing Date and (b) such time, if any, as this Agreement is terminated
pursuant to this Agreement, Seller will not, and will cause the Companies and the Subsidiaries, and each of their employees, financial advisors, attorneys, accountants and other representatives, not
to directly or indirectly solicit, initiate, or encourage any inquiries or proposals from, discuss or negotiate with, or provide any non-public information to, any Person (other than
Purchaser) relating to any transaction involving the sale of any of the Companies or the Subsidiaries or the Assets (other than sales of Assets in the ordinary course of business) of the Companies or
the Subsidiaries or any of the capital stock of the Company or the Subsidiaries, or any merger, consolidation, business combination, or similar transaction involving the Companies or
the Subsidiaries. 

        SECTION 5.11
Title. 

	(a)
	Seller
has provided Purchaser, for each parcel of owned Real Property, with a title commitment issued by First American Title Insurance Company (the "Title
Company"), in the form attached as Exhibit 5.11 hereto (the "Title Commitment"), together with complete and legible copies of all
recorded documents listed as exceptions. Purchaser shall cause an ALTA survey of the owned Real Property certified in favor of Purchaser, Seller and Title Company
(the "Survey") to be prepared at Purchaser's expense, and Seller shall cooperate with Purchaser in the preparation of the Survey.

	(b)
	At
the Closing, the Title Company shall irrevocably commit to issue (i) an ALTA extended coverage owner's title insurance policy in the form of the Title Commitment for each of
Seller's interests in the owned Real Property containing the endorsements set forth on Exhibit 5.11 hereto and (ii) such other title insurance policy or policies as are required
by the Note Documents. Seller covenants and agrees that it will provide such information and execute such documents as are reasonable and customary as required by the Title Company to issue the
applicable Title Policy in conformity with the Title Commitment. 

45

 

	(c)
	If,
after the date hereof and prior to the Closing, the Title Company revises the Title Commitment to disclose any title exception or the Survey depicts any matter (each, a
"Title Objection"), in each case, that is not a Permitted Exception, then Purchaser may provide written notice of objection to Seller ("Purchaser's
Notice") of such matters within 10 days after receiving written notice of such Title Objection and complete and legible copies of any recorded documents relating thereto. Seller
shall make reasonable efforts to cure each Title Objection included in Purchaser's Notice or to cause the Title Company to eliminate each Title Objection as an exception to the Title Commitment or to
remove it from the Survey. Any Title Objection that is cured or that the Title Company is willing to insure over on terms acceptable to Seller and Purchaser is herein referred to as an
"Insured Exception." The Insured Exceptions shall be deemed to be acceptable to Purchaser. If any Title Objection cannot be cured and the Title Company will not insure
over it on terms acceptable to Seller and Purchaser, then Purchaser shall have a right to terminate this Agreement if such Title Objection would have a Material Adverse Effect. 

        SECTION 5.12
Further Action. Each of the parties hereto shall execute and deliver such documents and other papers and take such further actions as may
be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement. 

        SECTION 5.13
Excluded Items. The parties agree that all assets exclusively related to Seller's account wagering operations
(i.e., XpressBet, Inc. (formerly known as Call-A-Bet)) and all Liabilities associated therewith (the "Excluded Items") have
been or will be transferred to XpressBet, Inc. prior to Closing. Seller will transfer, sell or otherwise dispose of the Excluded Items identified on Exhibit 5.13 prior to the
Closing Date so that none of the Companies or Subsidiaries shall have any direct or indirect ownership in, or any Liability (other than Liability under any agreement by and between any Company or
Subsidiary and XpressBet, Inc.) for, the Excluded Items as of the Closing Date. 

        SECTION 5.14
Estoppels. Prior to the Closing, Seller shall use commercially reasonable efforts to obtain estoppel certificates from third parties
under the leases of Real Property, in a form consistent with the form of any estoppel certificates incorporated into such leases, or has been delivered in the past under such leases. 

        SECTION 5.15
Cooperation in Preparation of Alternative Application. Any time on or after December 1, 2005, upon the request of Seller,
Purchaser shall assist Seller in compiling an application for a Conditional Category 1 license and Category 1 license to conduct slot machine gaming pursuant to the Gaming Act on the
basis that Seller will be submitting such application as the operator and owner of the Meadows Facility, which efforts shall include, without limitation, allowing Seller to use and submit with its
application all Purchaser Application Materials; provided, however that Seller agrees to reimburse Purchaser for the reasonable and direct costs incurred by Purchaser with
respect to the Purchaser Application Materials used by Seller in the event that this Agreement is terminated. 

46

 

        SECTION 5.16
Financial Statements. (a) Seller agrees to prepare, and use its commercially reasonable efforts, including expending additional
funds for expediting fees or similar fees to Seller's Accountants, to cause Seller's Accountants to assist Seller in preparing the following materials in a timely fashion after execution of this
Agreement or, in the case of periods ending on and after the date of this Agreement, in a timely fashion after passage of the ending date for such period: (i) an audited combined balance sheet
of the Companies and their Subsidiaries (excluding the Excluded Subsidiaries) as of December 31, 2005 and the related audited statements of income, equity and cash flows for the year then ended
in compliance with GAAP and meeting all requirements of Regulation S-X (the "2005 Audited Financial Statements"); (ii) unaudited combined
balance sheets of the Companies and their Subsidiaries (excluding the Excluded Subsidiaries) as of March 31, 2005, June 30, 2005 and September 30, 2005 and the related statements
of income, equity and cash flows for the three months, six months and nine months, respectively, then ended in compliance with GAAP and meeting all requirements of Regulation S-X
(taking into account Rule 10-01 thereunder) (the "2005 Quarterly Financial Statements"), together with a SAS 100 review thereof by
Seller's Accountants in a form reasonably satisfactory to Purchaser and Purchaser's Accountants; and (iii) with respect to each fiscal quarter in 2006 ending prior to the Repayment Date and any
shorter period from the prior quarter end to the Repayment Date, an unaudited combined balance sheet of the Companies and their Subsidiaries (excluding, the Excluded Subsidiaries) as of the last day
of each such fiscal quarter or such shorter period and the related statements of income, equity and cash flows for the latest year-to-date period ended as of such day in
compliance with GAAP and meeting all requirements of Regulation S-X (taking into account Rule 10-01 thereunder) (the "2006 Interim
Financial Statements"), together with a SAS 100 review thereon by Seller's Accountants in a form reasonably satisfactory to Purchaser and Purchaser's Accountants. On and after
the Closing and through the Repayment Date, Purchaser agrees to cooperate with Seller and Seller's Accountants in connection with the preparation of any unaudited financial statements for any period
ending on the Repayment Date, or any fiscal quarter ending prior to the Repayment Date. To the extent that Purchaser requires any audited financial statement for any period beginning and ending within
2006 for which an audit has not already been prepared by Seller's Accountant on or prior to the Closing Date, then Seller and Purchaser shall cooperate with Seller's Accountants or such other
accountants as are required, if Seller's Accountants are not able to prepare such financial statements, to prepare audited financial statements for the requested period. 

	(b)
	Seller
shall, and shall cause the officers, directors, employees, agents, representatives, accountants and counsel of Seller and each Company and Subsidiary to, cooperate with
Purchaser and its financing sources and their respective officers, employees and authorized agents, accountants, counsel and representatives in connection with the obtaining of financing of the
Purchase Price (and any refinancings thereof) (each, a "Financing") and any Securities and Exchange Commission registration process contemplated by a Financing or
any filings otherwise required to be made with the Securities and Exchange Commission by Purchaser, its Affiliates or OCM HoldCo, LLC. Such cooperation shall include, without limitation:
(i) the provision of auditor's consents with respect to the inclusion of the audited combined balance sheet of the Companies and their Subsidiaries (excluding the Excluded Subsidiaries) as of
December 31, 2004 (the "2004 Audited Balance Sheet") and the 2005 Audited Financial Statements in filings and marketing materials; (ii) the provision
of accountant's comfort letters with respect to the 2004 Audited Balance Sheet, 2005 Audited Financial Statements, 2005 Quarterly Financial Statements, the 2006 Interim Financial Statements, financial
data derived from books and records prior to Closing and customary negative assurances with respect to matters relating to the foregoing; (iii) the provision of customary representations to
accountants in connection with audits, reviews and comfort letters; (iv) provision of the unaudited combined balance sheets of the Companies and their Subsidiaries (excluding the Excluded
Subsidiaries) as of March 31, 2004, June 30, 2004 and September 30, 2004 and the related statements of income, equity and cash flows for the three, six and nine months,
respectively, then ended; (v) responding to due diligence requests from financing sources; and (vi) providing customary legal opinions to financing sources. Notwithstanding the
foregoing, Seller shall not be required to provide or prepare audited financial statements for any period prior to January 1, 2006, other than the 2004 Audited Balance Sheet and the 2005
Audited Financial Statements. 

47

 

	(c)
	Purchaser
shall pay for all costs and expenses reasonably incurred by Seller after the Closing as a result of Seller's efforts under the last sentence of Section 5.16(a);
provided that, in the event that the Repayment Date occurs, Seller shall reimburse Purchaser for the first audit requested pursuant to the last sentence of Section 5.16(a) for any period
on or prior to the Repayment Date. Seller shall reimburse Purchaser on the Repayment Date, and if such payment is not made in cash, then Seller or Agent under the Note Agreement shall provide a
direction letter that permits Purchaser to retain a portion of the amount to be paid on the Tranche A Note equal to the reimbursement owed by Seller. To the extent that the reimbursement
obligation is not known until after the Repayment Date, Seller shall pay any reimbursable amount in cash or Purchaser may offset the amount against any amount owed to Seller or its Affiliates under
any Transaction Document. 

        SECTION 5.17
Separation. Seller shall use commercially reasonable efforts to separate the agreement listed on Section 5.17 of the Company
Disclosure Schedule, such that WTA and MLR are licensees of, and responsible for, only those seat licenses allocated as of the date hereof to the Meadows Facility and the OTB Facilities. If such
separation has not occurred prior to the Closing Date, Seller shall indemnify WTA and MLR for any Losses related to sites authorized to use software under the agreement listed on Section 5.17
of the Company Disclosure Schedule other than the Meadows Facility and the OTB Facilities. 

        SECTION 5.18
Notification. Seller and Purchaser shall promptly, and in any event prior to the Closing, notify the other party in writing of all
events, circumstances, facts and occurrences which such party becomes aware of if such events, circumstances, facts and occurrences would reasonably be expected to result in a Purchaser Material
Adverse Effect or a Material Adverse Effect. 

        SECTION 5.19
Environmental Report. Seller shall exercise its best efforts (at no material cost to Seller) to cause the consultant(s) which
issued the Phase I Environmental Site Assessment dated October 28, 2005 prepared by AMEC Earth & Environmental and the Phase I obtained by Seller pursuant to
Section 5.22 to permit Purchaser and any lender providing financing to Purchaser with respect to or secured by any of the Real Property, to rely on such reports to the full extent that
Seller may rely on such reports. 

        SECTION 5.20
XpressBet Matters. Seller shall use commercially reasonable efforts to complete on or before the Closing Date the formalization of the
relationship between WTA and MLR, on the one hand, XpressBet, Inc., on the other hand, to enter into (i) a formal agreement for the provision of banking services by
XpressBet, Inc. to WTA and MLR with respect to the accounts of WTA's and MLR's Pennsylvania account wagering customers and (ii) separate tote structures and service agreements for WTA
and MLR, on the one hand, and XpressBet, Inc., on the other hand. Seller shall seek Commission approval for each of such agreements. 

48

 

        SECTION 5.21  [Reserved]

        SECTION 5.22
Phase I. Seller agrees to cause, at its expense, a Phase I environmental assessment to be conducted by AMEC Earth and
Environmental, Inc. (or other reputable consultant agreed to by Purchaser) on the real property located on Section 5.22 of the Company Disclosure Schedule
(the "Phase I"). Seller shall deliver the Phase I to Purchaser within sixty days after the date hereof. Seller and Purchaser acknowledge that
to the extent a circumstance, event or occurrence is disclosed in the Phase I that, if known by Seller as of the date hereof, would have resulted in Seller's representations in
Section 3.12 being untrue, that such a circumstance, event or occurrence constitutes a Seller Development as defined in Section 8.03(b). 

        SECTION 5.23
Slot Machine Taxes. Seller and Purchaser shall use commercially reasonable efforts to support the interpretation by all relevant
Governmental Authorities that the local share assessment payable by each slot machine licensee under Section 1403(b) of the Gaming Act shall not in any circumstance exceed four percent (4%) of
the gross terminal revenue from slot machines in operation at such licensee's facility, including amounts payable by such licensee in respect of such local share assessment to the State Gaming Fund
established by Section 1403(a) of the Gaming Act and amounts to be paid to any other Governmental Authorities under Section 1403(c). 

ARTICLE VI

EMPLOYEE MATTERS  

        SECTION 6.01 Arrangements; Payroll Obligations. (a) Immediately prior to Closing, all employees of the Company and its
Subsidiaries (other than those listed on Schedule 6.01(a) of the Company Disclosure Schedules, which listed employees are hereinafter referred to as the "Company
Employees") shall be transferred to MEC Pennsylvania Racing Services, Inc. and shall be employees of MEC Pennsylvania Racing Services, Inc. rather than any Company or any
of its Subsidiaries. Such employees who are so transferred shall be referred to as the "Transferred Employees". Seller agrees that Purchaser shall not assume or be
responsible for, and shall be indemnified against, any and all Liabilities related to the Transferred Employees and the transfer of the Transferred Employees to MEC Pennsylvania Racing
Services, Inc., including without limitation, any payroll, vacation, sick leave, severance, WARN Act, COBRA costs or similar amounts. 

	(b)
	Seller
will be responsible under the Racing Services Agreement for the payroll obligations with respect to the Company Employees who are the responsibility of MEC Pennsylvania Racing
Services, Inc. under the Racing Services Agreement (including, without limitation, the satisfaction of all payroll withholding tax obligations) for the Companies and Subsidiaries payable after
the Closing Date. Subject to Section 6.03 and anything to the contrary in the Racing Services Agreement, Seller agrees that Purchaser shall not assume or be responsible for, and shall be
indemnified against, any and all Liabilities related to the Company Employees who are the responsibility of MEC Pennsylvania Racing Services, Inc. under the Racing Services Agreement, including
without limitation, any payroll, vacation, sick leave, severance, WARN Act, COBRA costs, workers compensation or similar amounts. Except with respect to any vacation benefits, Multiemployer Plans and
the MEC Health Plan, the Company Employees do not participate in any Benefit Plans. 

49

 

        SECTION 6.02
Benefit Plans and Transferred Employee Related Obligations. (a) Seller agrees to continue coverage of the Transferred Employees
under its or its Affiliates' employee benefit plans in accordance with their terms and its or its Affiliates' personnel policies on and after the Closing Date. As of the Closing Date, each Company
Employee who was covered by the health plan listed on Section 6.02 of the Company Disclosure Schedule (the "MEC Health Plan") shall cease to be covered by
such health plan. Seller agrees, at its sole cost and expense, to create a separate employee plan in the name of Purchaser to provide to such Company Employees substantially similar benefits to those
provided for under the MEC Health Plan, except in instances where the benefit cannot be replicated because of the different provider. Seller shall remain obligated for any and all benefits and benefit
entitlements under the Benefit Plans that were earned or accrued by any Company Employee or any Transferred Employee or former employees of any Company or Subsidiary on and prior to the Closing Date.
With respect to the Benefit Plans that provide welfare benefits, Seller represents, warrants and agrees that there will be no disruption in the coverage for the Transferred Employees under such
welfare plans as a result of their transfer to MEC Pennsylvania Racing Services, Inc. To the extent that there is a termination in coverage under the MEC Health Plan for the Company Employees
covered thereby as of the Closing Date, Seller represents, warrants and agrees that either it or the applicable insurance carrier, as set forth in the MEC Health Plan, shall remain obligated to
reimburse such Company Employees for eligible health care benefit expenses and services incurred prior to the Closing; provided that such Company Employees' claims for
reimbursement for such expenses and services are delivered to the appropriate party within applicable time limits, as set forth in the MEC Health Plan. An expense or service is deemed to be incurred,
with respect to the MEC Health Plan, when the medical services are performed, and, with respect to plans that provide welfare benefits other than medical or dental benefits, when the event giving rise
to such expense or service occurs. 

	(b)
	Seller
agrees that it shall remain obligated for any expenses or Losses incurred in connection with any claim of an Employee or a former employee of any Company or Subsidiary arising
on or prior to the Closing Date under the workers' compensation laws of any state (a "Workers' Compensation Claim").

	(c)
	Seller
agrees to remain obligated to provide continuation health care coverage, in accordance with Section 4980B of the Code and Sections 601 to 608 of ERISA
("COBRA"), to all Employees or former employees of any Company or Subsidiary and their qualified beneficiaries (i) who incur a qualifying event on or prior to the
Closing Date and (ii) to whom Seller, any Company, or any Subsidiary are, on the Closing Date, (A) providing such continuation coverage or (B) under an obligation to provide such
continuation coverage at the election of the Employee or former employee or his or her qualified beneficiary. 

50

  

        (d)   Seller agrees that it shall be obligated to make contributions on behalf of Companies and Subsidiaries to any Multiemployer Plan in respect of the Company Employees to
the extent set forth in the Racing Services Agreement. 

SECTION 6.03        Intentionally
Omitted. 

SECTION 6.04        Intentionally
Omitted. 

SECTION 6.05        Employee
Benefits Indemnity. 

        (a)   Seller
agrees to indemnify Purchaser against and hold Purchaser harmless from all Losses arising out of: 

        (i)    the
breach of any representation, warranty, covenant or agreement of Seller made in Section 3.16 or Section 3.17 hereof or this Article VI; 

        (ii)   any
and all Liabilities related to, arising out of or associated with the Transferred Employees (including their transfer to MEC Pennsylvania Racing
Services, Inc.); 

        (iii)  any
and all Liabilities arising prior to the Closing under or with respect to employment, working conditions, wages and/or compensation, benefits, claims and all other
matters related to employees, agents and other personnel of the Companies and the Subsidiaries and of Seller and its subsidiaries; and 

        (iv)  any
and all Actions by, and all Liabilities related to, employees or independent contractors of Companies and the Subsidiaries and of Seller and its subsidiaries
arising prior to the Closing, including without limitation, any Actions or Liabilities arising out of any employee benefit plan or arrangement, any Actions or Liabilities for accrued vacation and sick
time of the employees, Seller's, the Companies' or any of their Affiliates' failure to deposit or fund any amounts withheld from employees pursuant to any retirement plan or arrangement or retiree
medical plan or arrangement, or any unfunded retirement plan or arrangement (whether or not payment is currently due under Law) or any obligations to current or former plan participants or
beneficiaries under any plan or arrangement intended to provide benefits to current or former employees of Seller, the Companies or any of their Affiliates. 

        (b)   Purchaser
agrees to indemnify Seller against and hold Seller harmless from all Losses arising out of the breach of any representation, warranty, covenant or agreement of
Purchaser made in this Article VI. 

                SECTION 6.06        Third-Party
Claims. Nothing in this Agreement is intended, or shall be construed, to confer upon any person,
other than the parties hereto and their successors and permitted assigns, any rights or remedies by reason of this Article VI. 

                SECTION 6.07        Survival.
The covenants and agreements of the parties hereto contained in this Article VI shall survive
the Closing and shall remain in full force and effect indefinitely. 

51

 
 
 

ARTICLE VII
  
    TAX MATTERS    
    

                SECTION 7.01        Indemnity. (a) Seller agrees to indemnify and hold harmless
Purchaser, the
Companies and each Subsidiary against the following Taxes in excess of the amount, if any, paid on account of Taxes pursuant to Section 15.6.5 of the Racing Services Agreement to the extent
taken into account in determining the payment pursuant to such section, and, except as otherwise provided in Section 7.04, against any loss, damage, liability or expense, including reasonable
fees for attorneys and other outside consultants, incurred in contesting or otherwise in connection with any such Taxes: (i) Taxes imposed on the Companies or any Subsidiary with respect to
taxable periods of such Person ending on or before the Closing Date; (ii) with respect to taxable periods beginning before the Closing Date and ending after the Closing Date, Taxes imposed on
the Companies or any Subsidiary which are allocable, pursuant to Section 7.01(b), to the portion of such period ending on the Closing Date; (iii) Taxes imposed on any member of any
affiliated group with which any of the Companies and the Subsidiaries file or have filed a Tax Return on a consolidated or combined basis that includes the Companies' and the Subsidiaries' taxable
periods ending on or before the Closing Date; and (iv) any and all Taxes of any Person (other than the Companies and the Subsidiaries) imposed on any of the Companies or the Subsidiaries as a
transferee or successor, by contract or pursuant to any Law. Purchaser shall be responsible for and agrees to pay all Taxes and associated expenses not allocated to Seller pursuant to the first
sentence hereof; and Purchaser agrees to indemnify and hold harmless Seller against all such Taxes and expenses. 

        (b)   In
the case of Taxes that are payable with respect to a taxable period that begins before the Closing Date and ends after the Closing Date, the portion of any such Tax
that is allocable to the portion of the period ending on the Closing Date shall be: 

        (i)    in
the case of Taxes that are either (x) based upon or related to income or receipts, or (y) imposed in connection with any sale or other transfer or
assignment of property (real or personal, tangible or intangible) (other than conveyances pursuant to this Agreement, as provided under Section 7.07), deemed equal to the amount which would be
payable if the taxable year ended with the Closing Date; and 

        (ii)   in
the case of Taxes imposed on a periodic basis with respect to the assets of the Companies or any Subsidiary, or otherwise measured by the level of any item, deemed
to be the amount of such Taxes for the entire period (or, in the case of such Taxes determined on an arrears basis, the amount of such Taxes for the immediately preceding period), multiplied by a
fraction the numerator of which is the number of days in the period ending on the Closing Date and the denominator of which is the number of days in the entire period. 

        Purchaser
shall provide Seller for its review and comment any Tax Returns filed by or with respect to any of the Companies or any of the Subsidiaries during the period beginning on the
day after the Closing Date and ending on the earlier of the Repayment Date and the date of the Stock Transfer. 

52

 

        (c)   Any
indemnity payable under this Section 7.01 shall be net of any Tax benefit enjoyed by the applicable indemnified party, determined in a manner consistent with
the last two sentences in Section 9.02(b) or Section 9.03(c) hereof. 

            SECTION 7.02    Returns
and Payments. (a) From the date of this Agreement through and after the Closing Date, Seller
shall prepare and file or otherwise furnish in proper form to the appropriate Governmental Authority (or cause to be prepared and filed or so furnished) in a timely manner all Tax Returns
relating to the Companies and the Subsidiaries that are due on or before or relate to any taxable period ending on or before the Closing Date (and Purchaser shall do the same with respect to
any taxable period ending after the Closing Date). Tax Returns of the Companies and the Subsidiaries not yet filed for any taxable period that begins before the Closing Date shall be prepared in a
manner consistent with past practices employed with respect to the Companies and the Subsidiaries (except to the extent counsel for Seller or the Companies renders a legal opinion that there is no
reasonable basis in law therefor or determines that a Tax Return cannot be so prepared and filed without being subject to penalties). With respect to any Tax Return required to be filed by Purchaser
or Seller with respect to the Companies and the Subsidiaries and as to which an amount of Tax is allocable to the other party under Section 7.01(b), the filing party shall provide the other
party and its authorized representatives with a copy of such completed Tax Return and a statement certifying the amount of Tax shown on such Tax Return that is allocable to such other party pursuant
to Section 7.01(b), together with appropriate supporting information and schedules at least 20 Business Days prior to the due date (including any extension thereof) for the filing of
such Tax Return, and such other party and its authorized representatives shall have the right to review and comment on such Tax Return and statement prior the filing of such Tax Return. 

        (b)   Seller
shall pay or cause to be paid when due and payable all Taxes described in Sections 7.01(a)(i) and 7.01(a)(ii), and Purchaser shall so pay or cause
to be paid Taxes for any taxable period ending after the Closing Date (subject to its right of indemnification from Seller by the date set forth in Section 7.05 for Taxes attributable to
the portion of any Tax period that includes the Closing Date pursuant to Sections 7.01(a) and 7.01(b)). 

            SECTION 7.03    Refunds.
Any Tax refund (including any interest with respect thereto), and any equivalent benefit through a
reduction in tax liability for a post-Closing Date period, relating to the Companies or any Subsidiary for any taxable period prior to the Closing Date shall be the property of Seller, and
if received by Purchaser or the Companies or any Subsidiary shall be paid over to Seller within five Business Days of the earlier of receipt or entitlement thereto;
provided, however, that any Tax benefit obtained by Purchaser, the Companies or any Subsidiary as a result of utilizing any net operating loss
carryforward or other carryforward (which may be subject to adjustments) which is allocable to the Companies or any Subsidiary shall be retained by Purchaser, the Companies or such Subsidiary.
Purchaser shall cause the Companies and the Subsidiaries to elect, where permitted by law, to carry forward any net operating loss, charitable contribution or other item arising after the Closing Date
that could, in the absence of such election, be carried back to a taxable period of the Companies ending on or before the Closing Date in which the Companies are included in a consolidated, combined
or unitary Tax return; provided that, if such election to carry forward an item is not available, any cash refund received by Seller with respect to such carryback shall be paid over to Purchaser
within five Business Days of actual receipt. Purchaser shall, if Seller so requests and at Seller's expense, cause the relevant entity to file for and obtain any refunds or equivalent amounts to which
Seller is entitled under this Section 7.03. Purchaser shall permit Seller to control (at Seller's expense) the prosecution of any such refund claim, and shall cause the relevant entity
to authorize by appropriate power of attorney such persons as Seller shall designate to represent such entity with respect to such refund claim; provided,
however, that Seller shall not take any action in the prosecution of such refund claims that would be materially detrimental to Purchaser, the Companies or the
Subsidiaries (including for this purpose the tax positions of such entities). In the event that any refund or credit of Taxes for which a payment has been made to Seller pursuant to this
Section 7.03 is subsequently reduced or disallowed, Seller shall indemnify and hold harmless the payor for any Tax Liability, including interest and penalties assessed against such payor by
reason of the reduction or disallowance. 

53

 

            SECTION 7.04    Contests.
(a) After the Closing, Purchaser shall promptly notify Seller in writing upon the
commencement of any Tax audit or administrative or judicial proceeding that could affect Seller, and shall also separately notify Seller, in writing, of a proposed assessment or claim in an audit or
administrative or judicial proceeding of Purchaser or of any of the Companies and the Subsidiaries which, if determined adversely to the taxpayer, would be grounds for indemnification under this
Article VII. If Purchaser fails to give Seller prompt notice of an asserted Tax liability as required by this Section 7.04, then (a) if Seller is precluded by the failure to give
notice within 30 days of the commencement of such proceeding from contesting the asserted Tax liability in both the administrative and judicial forums, then Purchaser shall have sole
responsibility for such Tax liability or (b) if Seller is not precluded from contesting but such failure to give notice within 30 days of the commencement of such proceeding results in
detriment to Seller, then any amount that Seller is otherwise required to pay to Purchaser pursuant to Section 7.01 with respect to such liability shall be reduced by the amount of
such detriment. 

        (b)   Seller
may elect to direct, through counsel of its own choosing and at its own expense, any audit, claim for refund and administrative or judicial proceeding involving
any asserted liability with respect to which indemnity may be sought under this Article VII (any such audit, claim for refund or proceeding relating to an asserted tax liability are
referred to herein collectively as a "Contest"). If Seller elects to direct the Contest of an asserted Tax liability, it shall within 30 days of receipt of the
notice of asserted tax liability notify Purchaser of its intent to do so, and Purchaser shall cooperate and shall cause each Subsidiary and any successor to a Subsidiary or its successor to cooperate,
at Seller's expense, in each phase of such Contest. Purchaser also may participate in any such audit or proceeding and, if Seller does not assume the defense of any such audit or proceeding, Purchaser
may defend the same in such manner as it may deem appropriate, including, but not limited to, settling such audit or proceeding after giving five Business Days' prior written notice to Seller setting
forth the terms and conditions of settlement. In the event that issues relating to a potential adjustment for which Seller would be liable are required to be dealt with in the same proceeding as
separate issues relating to a potential adjustment for which Purchaser would be liable, Purchaser shall have the right, at its expense, to control the audit or proceeding with respect to the latter
issues. If Seller chooses to direct the Contest, Purchaser shall promptly empower and shall cause the appropriate Subsidiary or its successor promptly to empower (by power of attorney and such
other documentation as may be appropriate) such representatives of Seller as it may designate to represent Purchaser or the Subsidiary or its successor in the Contest insofar as the Contest involves
an asserted tax liability for which Seller would be liable under this Article VII. If Seller assumes the defense of a Contest, Seller shall not enter into any compromise or agree to settle any
claim pursuant to any Tax audit or proceeding which would adversely affect Purchaser for any taxable year without the written consent of Purchaser, which consent shall not be
unreasonably withheld. 

54

 

            SECTION 7.05    Time
of Payment. Payment by Seller of any amounts due under this Article VII shall be made
(i) at least three Business Days before the due date of the applicable estimated or final Tax Return required to be filed by Purchaser on which is required to be reported income for a period
ending after the Closing Date for which Seller is responsible under Sections 7.01(a) and 7.01(b) and with respect to which Tax must be paid, and (ii) within five Business Days
following an agreement between Seller and Purchaser that an indemnity amount is payable or a "determination" as defined in Section 1313(a) of the Code. If liability under this
Article VII is in respect of costs or expenses other than Taxes, payment by Seller of any amounts due under this Article VII shall be made within five Business Days after the date when
Seller has been notified by Purchaser that Seller has a liability for a determinable amount under this Article VII and is provided with calculations or other materials supporting
such liability. 

            SECTION 7.06    Cooperation
and Exchange of Information. Upon the terms set forth in Section 5.02 of this Agreement,
Seller and Purchaser will provide each other with such cooperation and information as either of them reasonably may request of the other in filing any Tax Return, amended Tax Return or claim for
refund, determining a liability for Taxes or
a right to a refund of Taxes, participating in or conducting any audit or other proceeding in respect of Taxes or making representations to or furnishing information to parties subsequently desiring
to purchase any of the Companies or the Subsidiaries or any part of the business of the Companies and the Subsidiaries from Purchaser. Such cooperation and information shall include providing copies
of relevant Tax Returns or portions thereof, together with accompanying schedules, related work papers and documents relating to rulings or other determinations by Tax authorities. Each of Seller and
Purchaser shall retain all Tax Returns, schedules and work papers, records and other documents in its possession relating to Tax matters of the Companies and the Subsidiaries for each taxable period
first ending after the Closing Date and for all prior taxable periods until the later of (i) the expiration of the statute of limitations of the taxable periods to which such Tax Returns and
other documents relate, without regard to extensions except to the extent notified by the other party in writing of such extensions for the respective Tax periods, or (ii) six years following
the due date (without extension) for such Tax Returns. Any information obtained under this Section 7.6 shall be kept confidential except as may be otherwise necessary in connection with the
filing of Tax Returns or claims for refund or in conducting an audit or other proceeding. 

            SECTION 7.07    Conveyance
Taxes. Seller and Purchaser shall each pay 50% of any real property transfer or gains, sales, use,
transfer, value added, stock transfer, and stamp taxes, any transfer, recording, registration, and other fees, and any similar Taxes which become payable in connection with the transactions
contemplated by this Agreement, and shall file such applications and documents as shall permit any such Tax to be assessed and paid on or prior to the Closing Date in accordance with any available
pre-sale filing procedure. Each party hereto shall execute and deliver all instruments and certificates necessary to enable the other party or parties to comply with the foregoing. 

55

 

            SECTION 7.08    Miscellaneous.
(a) Seller and Purchaser agree to treat all payments made by either of them to or for
the benefit of the other (including any payments to the Companies or any Subsidiary) under this Article VII, under other indemnity provisions of this Agreement and for any misrepresentations or
breaches of warranties or covenants as adjustments to the Purchase Price or as capital contributions for Tax purposes and that such treatment shall govern for purposes hereof. 

        (b)   All
amounts payable under any tax sharing agreement or arrangement between Seller and the Companies or any Subsidiary for any taxable period ending on or prior to the
Closing Date shall be calculated on a basis consistent with that used to date and shall be considered as an intercompany account owing to or from an Affiliate as of the Closing Date for purposes of
Section 5.01(c). Any tax sharing agreement or arrangement between Seller and/or its Affiliates, on the one hand, and the Companies or any Subsidiary, on the other hand, shall be terminated
immediately prior to the Closing and shall have no further effect for any taxable year or period (whether past, present or future) and no additional payments shall be made thereunder in respect of a
redetermination of tax liabilities or otherwise. 

        (c)   Notwithstanding
any provision in this Agreement to the contrary, the obligations of Seller to indemnify and hold harmless Purchaser, the Companies and the Subsidiaries
pursuant to this Article VII, and the representations and warranties contained in Section 3.18, shall terminate at the close of business on the 60th day following the expiration
of the applicable statute of limitations with respect to the Tax liabilities in question (giving effect to any waiver, mitigation or extension thereof). 

        (d)   For
purposes of this Article VII, "Purchaser" and "Seller," respectively, shall include each member of the affiliated group of corporations of which it is
or becomes a member (other than the Companies and the Subsidiaries, except to the extent expressly referenced). 

        (e)   In
the event that Purchaser transfers the Shares back to Seller in satisfaction of the Notes pursuant to Section 3.10 of the Note Agreement, then Seller and
Purchaser shall treat the acquisition of the Shares by Purchaser from Seller as being rescinded for all tax purposes and neither Seller nor Purchaser nor any other Person shall take any position
inconsistent therewith unless otherwise required by a "determination" (as defined in Section 1313(a)(1) of the Code) or by applicable state or local income or franchise tax law. 

 
 

ARTICLE VIII
  
    CONDITIONS TO CLOSING    
    

            SECTION 8.01    Conditions to Obligations of All Parties. The obligations of each party hereto to
consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions: 

        (a)   HSR
Act.    Any waiting period (and any extension thereof) under the HSR Act applicable to the purchase of the Shares
contemplated hereby shall have expired or shall have been terminated; 

56

 

        (b)   No
Order.    No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Governmental Order which
is in effect and has the effect of making the transactions contemplated by this Agreement illegal, otherwise restraining or prohibiting consummation of such transactions or causing any of the
transactions contemplated hereunder to be rescinded following completion thereof; 

        (c)   Commission
Approvals.    Purchaser and Seller shall have received preliminary approval from the Commission of (i) the
purchase of the Companies by Purchaser and (ii) Seller's management of the racing operations of the Meadows Facility under the Racing Services Agreement (collectively, the
"Commission Approval"), each in form and substance satisfactory to Seller and Purchaser in their reasonable discretion; and 

        (d)   No
Proceeding or Litigation.    No Action shall have been commenced or threatened by or before any Governmental Authority against
either Seller or Purchaser, seeking to restrain or materially and adversely alter the transactions contemplated hereby which is reasonably likely to render it impossible or unlawful to consummate
such transactions. 

            SECTION 8.02    Conditions
to Obligations of Seller. The obligations of Seller to consummate the transactions contemplated by
this Agreement shall be subject to the fulfillment or waiver, at or prior to the Closing, of each of the following conditions: 

        (a)   Representations
and Warranties; Covenants.    (i) The representations and warranties of Purchaser contained in this Agreement
shall be true and correct as of the date hereof, except as would not have a Purchaser Material Adverse Effect, other than such representations and warranties as are made as of another date, which
shall be true and correct on and as of such date, except as would not have a Purchaser Material Adverse Effect, (ii) the covenants and agreements contained in this Agreement to be complied with
by Purchaser on or before the Closing shall have been complied with in all material respects, and (iii) Seller shall have received a certificate of Purchaser to such effect signed by a duly
authorized officer thereof; 

        (b)   Changes
Since the Date of Signing.    (i) Seller shall have received a certificate of Purchaser (1) indicating which, if
any, representations and warranties of Purchaser contained in this Agreement would not be true and correct if made on the Closing Date, other than such representations and warranties as are made as of
another date, which would not be true and correct on and as of such date and (2) describing the circumstances, if any, which would cause such representations and warranties to not be so true
and correct if made on the Closing Date (or on such other date if made on another date) as a result of events, occurrences or change of circumstances that has occurred since the date of this
Agreement (such circumstances, "Purchaser Developments"), and (ii) if there are such Purchaser Developments that would result in a Purchaser Material Adverse
Effect, Seller shall have the right to not proceed with the Closing; provided, that Purchaser Developments will not constitute a breach of representation or warranty by
Purchaser hereunder whether or not Seller proceeds with the Closing and whether or not the Repayment Date occurs; 

        (c)   Resolutions.    Seller
shall have received a true and complete copy, certified by the Secretary or an Assistant Secretary of
Purchaser (or equivalent officer), of the resolutions, if any, duly and validly adopted by the Board of Directors of Purchaser evidencing its authorization of the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby; 

57

 

        (d)   Incumbency
Certificate.    Seller shall have received a certificate of the Secretary or an Assistant Secretary
(or equivalent officer) of Purchaser certifying the names and signatures of the officers of Purchaser authorized to sign this Agreement and the other documents to be delivered hereunder; 

        (e)   XpressBet
Amendments.    Each party to the XpressBet Amendments (other than XpressBet, Inc.) shall have delivered to Seller
an executed counterpart of each of the XpressBet Amendments; 

        (f)    Racing
Services Agreement.    MECRacing, MECPenn, WTA and MLR shall have delivered to Seller an executed counterpart of the Racing
Services Agreement; 

        (g)   Legal
Opinion.    Seller shall have received from Purchaser's counsel a legal opinion, addressed to Seller and dated the Closing
Date, substantially in the form of Exhibit 8.02(g); and 

        (h)   Note
Documents.    Each party to the Note Documents (other than Seller) shall have executed and delivered each of the Note
Documents and each of the conditions in Sections 4.1 and 4.2 of the Note Agreement shall have been satisfied (or waived in writing by Seller). 

            SECTION 8.03    Conditions
to Obligations of Purchaser. The obligations of Purchaser to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment or waiver, at or prior to the Closing, of each of the following conditions: 

        (a)   Representations
and Warranties; Covenants.    (i) The representations and warranties of Seller contained in this Agreement shall
be true and correct as of the date hereof, except as would not have a Material Adverse Effect, other than such representations and warranties as are made as of another date, which shall be true and
correct on and as of such date, except as would not have a Material Adverse Effect, (ii) the covenants and agreements contained in this Agreement to be complied with by Seller on or before the
Closing shall have been complied with in all material respects, and (iii) Purchaser shall have received a certificate of Seller to such effect signed by a duly authorized
officer thereof; 

        (b)   Changes
Since the Date of Signing.    (i) Purchaser shall have received a certificate of Seller (1) indicating which, if
any, representations and warranties of Seller contained in this Agreement would not be true and correct if made on the Closing Date other than such representations and warranties as are made as of
another date, which would not be true and correct on and as of such date and (2) describing the circumstances, if any, which would cause such representations and warranties to not be so true
and correct if made on the Closing Date (or on such other date if made on another date) as a result of events, occurrences or change of circumstances that has occurred since the date of this
Agreement (such circumstances, the "Seller Developments"), and (ii) if there are Seller Developments which would result in a Material Adverse Effect, Purchaser
shall have the right to not proceed with the Closing; provided, that Seller Developments will not constitute a breach of representation or warranty by Seller hereunder
whether or not Purchaser proceeds with the Closing and whether or not the Repayment Date occurs; 

58

 

        (c)   Resolutions.    Purchaser
shall have received a true and complete copy, certified by the Secretary or an Assistant Secretary
(or equivalent officer) of Seller, of the resolutions duly and validly adopted by the Board of Directors of Seller evidencing its authorization of the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby; 

        (d)   Incumbency
Certificate.    Purchaser shall have received a certificate of the Secretary or an Assistant Secretary
(or equivalent officer) of Seller certifying the names and signatures of the officers of Seller authorized to sign this Agreement and the other documents to be delivered hereunder; 

        (e)   Resignations
of Directors.    The members of the Board of Directors of each Company and Subsidiary shall have resigned; 

        (f)    [Reserved]

        (g)   XpressBet
Amendments.    XpressBet, Inc. shall have delivered to Purchaser an executed counterpart of each of the
XpressBet Amendments; 

        (h)   Racing
Services Agreement.    MEC Pennsylvania Racing Services, Inc. shall have delivered to Purchaser an executed
counterpart of the Racing Services Agreement; 

        (i)    FIRPTA.    Seller
shall have provided Purchaser with a certificate pursuant to Treasury Regulations
Sections 1.1445-2(b) that the Seller is not a foreign person under the provisions of the Internal Revenue Code; 

        (j)    Legal
Opinion.    Purchaser shall have received from one or more of Seller's counsel (including internal counsel) one or more
legal opinions, each addressed to Purchaser and dated the Closing Date, substantially in the forms attached hereto as Exhibit 8.03(j); 

        (k)   Title
Insurance.    For each parcel of owned Real Property, the Title Company shall be irrevocably committed to issue an ALTA
extended owner's coverage title insurance policy (each, a "Title Policy") in the form of the relevant Title Commitment insuring fee title in such Real Property, vested in
the applicable Company or Subsidiary, in such amount as shall be reasonably requested by Purchaser, but not in excess of $53,000,000 for the Meadows Facility Real Property, subject only to Permitted
Exceptions and Insured Exceptions and containing such affirmative coverages and endorsements described in Section 5.11; 

        (l)    Employees.    The
Transferred Employees shall no longer be employees of the Companies or the Subsidiaries; 

59

 

        (m)  Gaming
License.    No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Governmental Order
which is in effect, no Action shall have been commenced by or before any Governmental Authority (provided that if any such Action has been commenced by or before any
Governmental Authority, Purchaser shall have 10 days from receipt of written notice from Seller of such Action to provide a written notice to Seller ("Action
Notice") that it considers such Action to be non-frivolous and that based on such Action it will not close the transaction contemplated hereunder, and if Purchaser does not
provide an Action Notice with respect to such Action within such 10 day period, the commencement or existence of such Action shall not be the basis of a claim for a failure of a condition to
the Purchaser's obligations to consummate the transactions contemplated hereunder) and no Law shall have been enacted or adopted and remain in effect which would have or has had, as applicable, the
effect of (i) having a material and adverse effect on the right of Purchaser to own and control the Companies and the Subsidiaries following completion of the transactions contemplated
hereunder or (ii) having a material adverse effect on the ability of WTA or MLR to obtain a Conditional Category 1 license or Category 1 license under the Gaming Act, or to own or
operate a temporary or permanent facility at the Meadows Facility containing at least 3,000 slot machines no later than March 31, 2007, in each case of clause (i) or (ii)
other than such Laws that would have such material and adverse effect solely due to the bad acts or bad character issues of Purchaser or any of its Affiliates; 

        (n)   MEC
Items.    Seller and Purchaser shall not have received notification from the Gaming Board or its staff that the Gaming
Application filed with the Gaming Board by Purchaser for a Conditional Category 1 license will be subject to being declared or deemed incomplete with respect to the MEC Items and such matters
have not been rectified to the satisfaction of the Gaming Board. 

        (o)   [Reserved]

        (p)   Excluded
Subsidiaries.    Each of the Excluded Subsidiaries shall have been sold or transferred to Seller or any Affiliate of
Seller (other than any Company or any Subsidiary). Seller agrees that neither the Companies nor the Subsidiaries shall retain any Liabilities related to the Excluded Subsidiaries; 

        (q)   Financial
Statements.    Purchaser shall have received the 2005 Audited Financial Statements, the 2005 Quarterly Financial
Statements (accompanied by the SAS 100 review thereon by Seller's Accountants as required by Section 5.16 hereof), and the 2006 Interim Financial Statements (accompanied by the
SAS 100 review thereon by Seller's Accountants as required by Section 5.16 hereof); provided, that with respect to any period from the end of the previous
fiscal quarter to the Closing Date (it being understood that any determination of Closing or Closing Date in this Agreement shall be determined without giving effect to the closing condition
relating to the foregoing deliverables with respect to such interim periods and/or fiscal quarters set forth in this Section 8.03(q)), and if any 2006 fiscal quarter has ended after
45 days prior to the Closing Date, the foregoing deliverables with respect to such interim periods and/or fiscal quarters need not be provided on or prior to the Closing Date, but shall be
provided not later than 45 days after the end of such period; and 

        (r)   Note
Document Conditions.    Each party to the Note Documents (other than the Loan Parties, Parent Entites and OCM AcquisitionCo
(each as defined in the Note Agreement)) shall have executed and delivered each of the Note Documents and each of the conditions in Sections 4.1 and 4.3 of the Note Agreement shall have
been satisfied (or waived in writing by Purchaser). 

60

 
 
 

ARTICLE IX
  
    INDEMNIFICATION    
    

            SECTION 9.01    Survival. Subject to the limitations and other provisions of this Agreement, the
representations, warranties, covenants and agreements of the parties contained herein shall survive the Closing and shall remain in full force and effect until the date that is 15 months from
the earlier of the Stock Transfer Trigger Date and the Seller Note Certificate Date; provided, however, (w) that the covenants and
agreements set forth in Sections 5.03, 5.04, 5.05, 5.06, 5.08, 5.09, 5.12, 5.15, 5.16, 5.17 and 5.23 and in Article VI, Article XI and this Article IX shall
remain in full force and effect for the applicable periods specified in the respective Sections or Articles or, if no such period is specified, indefinitely; (x) that the representations and
warranties set forth in Section 3.18 (relating to Taxes) and the agreements in Article VII shall remain in full force and effect as provided in Section 7.08(c); (y) the
representations and warranties set forth in Section 3.12 (relating to environmental matters) shall survive for a period of seven years from the Closing Date; and (z) the representations
and warranties set forth in the 1st, 3rd, and 4th sentences of Section 3.01, Section 3.02, Section 3.03, all of
Section 3.04(a) excluding the 1st sentence and the 1st and 2nd sentences of Section 4.01 (collectively, the
"Fundamental Representations") shall survive indefinitely. Whether or not Purchaser or Seller proceeds to the Repayment Date after the delivery of the Seller Note
Certificate (as defined in the Note Agreement), (i) the Seller Note Developments and the Purchaser Note Developments, as applicable, will not constitute a breach of representation or
warranty by Seller or Purchaser, respectively, hereunder and (ii) any breach of any representation or warranty by Seller made under the Seller Note Certificate will not constitute a breach of
representation or warranty of Seller to the extent (a) not within the knowledge of Seller (or not within what reasonably should have been within the knowledge of Seller) with respect to
facts and circumstances relating to any period after the Closing Date; or (b) resulting from (1) any actions taken or omitted to be taken by Seller, Purchaser or any of their respective
Affiliates in compliance with the terms of the Note Documents or the Transaction Documents or (2) any actions taken or omitted to be taken by or on behalf of any of the Companies
(not within the sole or shared control of the Operator under the Racing Services Agreement) after the Closing Date (other than activities taken or omitted to be taken by Operator under the
Racing Services Agreement) or by or on behalf of Purchaser or any of its Affiliates (other than the Companies). 

            SECTION 9.02    Indemnification
by Purchaser. (a) Purchaser agrees, subject to the other terms and conditions of this
Agreement, to indemnify Seller and its Affiliates and the officers, directors, employees and agents of each of the foregoing (all such Persons being included within the definition of "Seller"
only for purposes of this Section 9.02, Article VI and Article VII) against and hold them harmless from all Losses arising out of (i) the breach of any representation,
warranty, covenant or agreement of Purchaser herein (other than Article VI and Article VII, it being understood that the sole remedy for any such breach thereof shall be pursuant to
Article VI or Article VII respectively, as applicable), (ii) subject to the terms of the Racing Services Agreement, the conduct of the business of each Company and Subsidiary by
Purchaser following the Closing Date and (iii) any employee benefit plan (as defined in Section 3(3) of ERISA) maintained, sponsored or contributed to by Purchaser or any current
or former ERISA Affiliate of Purchaser (other than the Companies and their Subsidiaries), including without limitation any multiemployer plan (as defined in Section 3(37) of ERISA).
Anything in Section 9.01 to the contrary notwithstanding, no claim may be asserted, nor, subject to the last sentence of this Section 9.02(a), may any action be commenced, against
Purchaser for breach of any representation, warranty, covenant or agreement contained herein, unless written notice of such claim or action is received by Purchaser describing in reasonable detail the
facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation, warranty, covenant or agreement on which such claim or action is
based ceases to survive as set forth in Section 9.01 (the "Applicable Date"), irrespective of whether the subject matter of such claim or action shall have
occurred before or after such date. If a claim or a potential claim arises, Purchaser and Seller shall promptly work in good faith to determine the validity of such claim or potential claim within a
reasonable period of time and if such claim or potential claim is not resolved to both parties' satisfaction within such reasonable period of time, either party may commence legal proceedings to
resolve such claim or potential claim (but in no event (other than as described in the next sentence) after the Applicable Date). If Seller becomes aware of any such claim or potential claim
within ninety days prior to the Applicable Date and promptly gives such written notice thereof as aforesaid on or prior to the Applicable Date, then upon the giving of such notice, Seller and its
Affiliates, or any of them, shall have the right to commence legal proceedings for a period of up to ninety days subsequent to the date of such written notice for the enforcement of their rights under
Section 9.02 with respect to the matters indicated in such notice. 

61

 

        (b)   Payments
by Purchaser pursuant to Section 9.02(a) shall be limited to the amount of any liability or damage that remains after deducting therefrom any Tax benefit
to Seller and any insurance proceeds and any indemnity, contribution or other similar payment recovered by Seller from any third party with respect thereto (it being agreed that Seller will use
its commercially reasonable efforts to recover such proceeds and payments and that, promptly after the realization of any insurance proceeds, indemnity, contribution or other similar payment, Seller
shall reimburse Purchaser for such reduction in Losses for which Seller was indemnified prior to the realization of such reduction of Losses). A Tax benefit to Seller for purposes of this
Section 9.02 shall be reasonably determined by Seller's Accountants as the difference between (i) the amount of federal, state and local Tax Liabilities of Seller and its Affiliates for
the year with respect to which the indemnity payment is made, and (ii) the amount of federal, state and local Tax Liabilities of Seller and its Affiliates for the year with respect to which the
indemnity payment is made but without the effect of event that gave rise to the indemnity payment. Seller shall provide Purchaser with calculations and/or other information reasonably supporting the
determination of the amount of the Tax benefit. 

        (c)   No
claim may be made against Purchaser for indemnification pursuant to Section 9.02(a)(i) (other than breaches and claims under Section 2.03(c)
and the Fundamental Representations) with respect to any individual item of liability or damage arising out of a breach of a representation or warranty of Purchaser or of a covenant or
agreement to be performed by Purchaser prior to the Closing Date, unless the aggregate of all such Losses of Seller with respect to Sections 9.02(a)(i) (other than breaches and claims under
Section 2.03(c) and the Fundamental Representations) shall exceed $1,000,000, and Purchaser shall be required to pay or be liable only for amounts in excess of such aggregate amount.
Seller shall not be indemnified pursuant to Section 9.02(a)(i) with respect to any individual item of liability or damage (other than breaches and claims under Section 2.03(c)
and the Fundamental Representations) if the aggregate of all liabilities and damages of Seller for which Seller has received indemnification pursuant to Sections 9.02(a)(i) shall have
exceeded $20,000,000 (including any amounts paid or payable by Purchaser or any of its Affiliates under the Note Documents to the extent such amounts are liabilities and damages that would have been
payable under Section 9.02(a)(i) (other than breaches and claims under Section 2.03(c) and the Fundamental Representations) but excluding any principal or interest payment under
the Seller Notes and any other amounts paid or payable by Purchaser or any of its Affiliates under the Note Documents with respect to any other liabilities and damages). 

62

 

        (d)   Except
as set forth in this Agreement (including the Exhibits and the Purchaser Disclosure Schedule), the other Transaction Documents and the Note Documents, Purchaser
is not making any representation, warranty, covenant or agreement with respect to the matters contained herein. Anything herein to the contrary notwithstanding and except as set forth in this
Agreement and the Note Documents, no breach of any representation, warranty, covenant or agreement contained herein shall give rise to any right on the part of Seller, after the consummation of the
purchase and sale of the Shares contemplated by this Agreement, to rescind this Agreement or any of the transactions contemplated hereby. 

            SECTION 9.03    Indemnification
by Seller. (a) Seller agrees, subject to the other terms and conditions of this
Agreement, to indemnify Purchaser and its Affiliates and the officers, directors, employees and agents of each of the foregoing (all such Persons being included in the definition of "Purchaser"
only for purposes of this Section 9.03, Article VI and Article VII) against and hold it harmless from all Losses arising out of the following: 

        (i)    the
breach of any representation, warranty, covenant or agreement of Seller herein (other than Article VI and Article VII and Sections 3.16, 3.17
and 3.18, it being understood that the sole remedy for any such breach thereof shall be pursuant to Article VI or Article VII respectively, as applicable); 

        (ii)   any
and all Liabilities related to, arising out of or associated with the Excluded Items or the business or operations of XpressBet, Inc., or any predecessor or
successor (including the Companies and the Subsidiaries but only to the extent that the business or operations of the Companies and the Subsidiaries related to the account wagering business now
conducted by XpressBet, Inc.), prior to, on and after the Closing Date, including, without limitation, any Liabilities related to, arising out of or associated with the formalizing of the
relationship between XpressBet, Inc., Seller, any Company and its Subsidiaries; 

        (iii)  any
and all Liabilities related to, arising out of or associated with the Excluded Subsidiaries or the Former Subsidiaries; 

        (iv)  any
Liability, obligation or responsibility under or related to Environmental Laws, whether such Liability or obligation or responsibility is known or unknown,
contingent or accrued, arising from acts, omissions, conduct or circumstances occurring between April 5, 2001 and the Closing Date; 

63

  

	(v)
	any
Liability, obligation or responsibility under or required by Environmental Law, whether such Liability, obligation or responsibility is known or unknown, contingent
or accrued, arising from acts, omissions, conduct or circumstances occurring prior to April 5, 2001 and the occurrence or existence of which is a violation of Environmental Law existing as of
the Closing Date;

	(vi)
	those
matters set forth in the following Sections of the Company Disclosure Schedules: Schedule 3.05(c) (item (b) only), Schedule 3.10(a) (except
for items (g) and (h) under the headings "Litigation Not Covered by Insurance") and Schedule 3.11(a) (under the heading "OSHA Citation");

	(vii)
	any
liability, obligation or responsibility under the Lease Agreement, including without limitation, (A) base rent payable under the Lease or otherwise to the
landlord thereunder for any period on or prior to the Closing Date; and (B) any penalties, damages or claims assessed by the landlord under the Lease in connection with any default under the
Lease or damage to the premises leased under the Lease; and

	(viii)
	any
withdrawal liability that becomes due and payable to any Multiemployer Plans listed in Schedule 3.16(a) during the period commencing on the Closing Date
and ending on the fifth anniversary of the Closing (the "Pension Survival Period") by the Companies or any of their Subsidiaries; provided, however, that if Operator (as defined in the
Racing Services Agreement) terminates the Racing Services Agreement pursuant to Sections 15.4.3, 15.4.6, 15.4.7 (to the extent that the revocation, suspension, withdrawal or failure of
renewal of any license referenced in Section 15.4.7 is caused by act or omisssion of any Owner (as defined in the Racing Services Agreement) or any of its Affiliates), 15.4.10, or
15.4.12 of the Racing Services Agreement, then the Pension Survival Period shall terminate on the date of termination of Operator's services under the Racing Services Agreement and this indemnity
shall not apply to any withdrawal liability that becomes due and payable to any Multiemployer Plans on and after the date of such termination or as a result of the termination of, or as a result of
any actions or omissions of Owners (as defined in the Racing Services Agreement) or any of their Affiliates that gave rise to the termination of, the Operator's services under the Racing
Services Agreement pursuant to the aforementioned sections of the Racing Services Agreement. 

        Seller
and Purchaser agree that the following amounts will annually be determined and, to the extent claimed by Purchaser and acknowledged by Seller, shall be Agreed Upon Losses
(as defined in the Holdback Agreement), and, to the extent claimed by Purchaser (and to the extent such claim has not become an Agreed Upon Loss or a Non-Loss
(as defined in the Holdback Agreement)), shall be Disputed Losses (as defined in the Holdback Agreement) on each January 31 occurring within five years of the Repayment Date and
on the fifth anniversary of the
Repayment Date (each a "Local Tax Assessment Date") in an amount equal to the lesser of (i) the Maximum Amount then in effect, and (ii) the Annual Applicable Amount. The "Annual
Applicable Amount" for any such date means 50% of the Tax Adjusted ocal Share Assessment Losses (i) with respect to the first January 31 occurring after the Repayment Date, for the
period (if any) from the Repayment Date to the December 31 immediately preceding such January 31, (ii) with respect to any subsequent January 31 occurring prior to
the fifth anniversary of the Repayment Date, for the twelve-month period ending on the immediately preceding December 31 (or, if shorter, for the period commencing on the Repayment Date and
ending on the immediately preceding December 31), and (iii) with respect to the fifth anniversary of the Repayment Date, for the period from the January 1 occurring the day after
the most recent December 31 described in clause (ii) above to such fifth anniversary, as applicable. If North Strabane Township were to change its fiscal year, then the references to
December 31 in the preceding sentence would be to the end of the new fiscal year, and the references to January 31 would be to the month end next succeeding the new fiscal
year end. 

64

 

        The
"Local Share Assessment Losses" for any period means the positive amount, if any, calculated as follows: (i) the local share assessment for such period paid by Purchaser or
WTA to the Applicable Local Authorities pursuant to Section 1403(C)(3) of the Gaming Act, minus (ii) two percent (2%) of the aggregated daily gross terminal revenue from slot
machines in operation at WTA's gaming facility for such period as calculated by the Department of Revenue of the Commonwealth of Pennsylvania minus (iii) the incremental portion, if any, of
such local share assessment for such period paid by Purchaser or WTA to the Applicable Local Authorities pursuant to Section 1403(C)(3) of the Gaming Act which results from a change in law or
regulation, or interpretation thereof or from any other change thereto, in each case that occurs after the end of the first legislative session of the Pennsylvania state legislature following the
Closing Date (the "Local Applicable Date") minus (iv) any Refund received in such period from any Applicable Local Authority; provided, however, that if there is any change to
Section 1403(C)(3) of the Gaming Act or interpretation thereof prior to the Local Applicable Date, then for purposes of calculating the Local Share Assessment Losses, the amount in
clause (i) above shall be the lesser of (a) the amount described in clause (i) above and (b) the minimum annual dollar amount (which amount is currently $10,000,000)
required under such Section 1403(C)(3) after giving effect to any such change (prorated if such period is less than a year), or, if there is no minimum annual amount after giving effect to such
change, then $10,000,000 (prorated if such period is less than a year). 

        The
"Tax Adjusted Local Share Assessment Losses" for any period means the Local Share Assessment Losses for such period net of any Tax Benefits the Companies actually recognize in the
taxable year in which or with which such period ends ("Current Tax Year") that are directly attributable to any Local Share Assessment Losses. For this purpose, the Companies shall be deemed to
recognize a Tax benefit ("Tax Benefit") with respect to a taxable year if, and to the extent that, the Companies' cumulative liability for Taxes through the end of such taxable year, calculated
by excluding any Tax items attributable to the Local Share Assessment Losses from all taxable years, exceeds the Companies' cumulative liability for Taxes through the end of such taxable year,
calculated by taking into account any Tax items attributable to the Local Share Assessment Losses for all taxable years (to the extent permitted by relevant Tax law and treating such Tax items
as the last items claimed for any taxable year). If the relevant income Tax return for the Current Tax Year has not yet been filed when making the cumulative liability for Taxes calculations described
above, Taxes for the Current Tax Year shall be reasonably estimated in those calculations. If an estimate is made pursuant to the previous sentence, once the relevant income Tax return is filed, the
previously estimated calculation shall be finalized, and an appropriate upward or downward adjustment to the Agreed Upon Losses shall be made at the next Local Tax Assessment Date
(the "True-Up") (or if the income Tax return is filed after the final Local Tax Assessment Date and the estimate is finalized after such date, Purchaser will pay to Seller or
Seller will pay to Purchaser, as appropriate, in cash an amount equal to the True Up; provided that in the event Seller owes any True Up amount in cash pursuant to the foregoing provision, Seller
shall be required to pay Purchaser such amount in cash only to the extent that it has previously received cash from Releases (as defined in the Holdback Agreement) that it would not have
received but for the under estimation of taxes that resulted in such True Up amount). The last determination of Tax Benefits shall be for the taxable year following the last taxable year in which
local share assessments attributable to the five year period following the Repayment Date are deducted, and no further adjustments for Tax Benefits shall be made in subsequent taxable years. In no
event shall the cumulative Tax Benefit adjustments exceed the cumulative Local Share Assessment Losses for the five years following the Repayment Date to which the Tax Benefits are attributable. The
parties agree to act in good faith when making the Tax Benefit calculations, to make such calculations treating the Companies as a single taxpayer, and to not take into account any payments made by
the Companies to, or received by the Companies from, any Affiliate of Purchaser (other than the Companies) unless such payments are de minimis. For purposes of this paragraph, the term "Companies"
shall also include MEC Pennsylvania Food Services, Inc., MEC Racing Management, and any other subsidiaries of any of the Companies. 

65

 

        In
the event that Purchaser or any of its Affiliates receives a Refund during or after the sixth year following the Repayment Date, and Seller has borne a portion of the cost of the
local share assessment for the year to which the Refund is attributable because there were Local Share Assessment Losses for such year (other than any such Refund that was deducted pursuant to
clause (iv) of the Local Share Assessment Losses calculation for any period within such five years), Purchaser agrees to give written notice thereof to Seller within five (5) Business
Days of receipt of each Refund and an amount equal to the following will be due from Purchaser to Seller: (a) 50% of the lesser of (i) such Refund amount and (ii) the Local Share
Assessment Losses for the year to which the Refund is attributable, minus (b) any Tax liability to Purchaser related to the portion of the Refund creditable or payable to Seller pursuant to
clause (a) (the "Seller Credit"). If receipt of such Refund occurs following the fifth anniversary of the Repayment Date, Purchaser agrees to pay the Seller Credit to Seller in cash
within fifteen days of receipt of the Refund. 

        Notwithstanding
anything to the contrary contained in this Agreement or any of the other Transaction Documents or any of the Note Documents, Seller's indemnification obligations under
this paragraph with respect to the Annual Applicable Amount shall only reduce the Holdback Amount and under no circumstances is Seller or any of its Affiliates required to pay Purchaser or any of its
Affiliates any cash or any other consideration (other than a reduction in the Maximum Amount to the extent described above). 

        "Applicable
Local Authorities" means North Strabane Township and other local authorities in Pennsylvania that are entitled to the local share assessment paid by Purchaser or WTA pursuant
to Section 1403(C)(3) of the Gaming Act. The term shall also include the Department of Revenue and the Treasury Department of the Commonwealth of Pennsylvania and the Pennsylvania Department of
Economic and Community Development in their capacities or on behalf of the local authorities described in the preceding sentence. 

66

 

        "Refund"
means any rebates, reimbursements, credits, refunds or other relief from any Applicable Local Authority credited to or paid to Purchaser or any of its Affiliates or any grant or
funding paid to Purchaser or any of its Affiliates from any Applicable Local Authority, in each instance, directly related to a local share assessment previously paid by Purchaser or WTA with respect
to the five years following the Repayment Date pursuant to Section 1403(C)(3) of the Gaming Act. To the extent the "Refund" for any period exceeds the excess, if any, of clause (i) of
the definition of Local Share Assessment Losses for such period over the sum of clauses (ii) and (iii) of the definition of Local Share Assessment Losses for such period, then such
excess shall be deemed to be a Refund received in the next period. 

        Anything
in Section 9.01 to the contrary notwithstanding, no claim may be asserted nor, subject to the second to the last sentence of this Section 9.03(a), may any
action be commenced against Seller for breach of any representation, warranty, covenant or agreement contained herein, unless written notice of such claim or action is received by Seller describing in
reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the Applicable Date, irrespective of whether the subject matter of such claim or
action shall have occurred before or after such date. If a claim or a potential claim arises, Purchaser and Seller shall promptly work in good faith to determine the validity of such claim or
potential claim within a reasonable period of time and if such claim or potential claim is not resolved to both parties' satisfaction within such reasonable period of time, either party may commence
legal proceedings to resolve such claim or potential claim (but in no event (other than as described in the next sentence) after the Applicable Date). If Purchaser becomes aware of any such
claim or potential claim within ninety days prior to the Applicable Date and promptly gives such written notice thereof as aforesaid on or prior to the Applicable Date, then upon the giving of such
notice, Purchaser and its Affiliates, or any of them, shall have the right to commence legal proceedings for a period of up to ninety days subsequent to the date of such written notice for the
enforcement of their rights under Section 9.03 with respect to the matters indicated in such notice. To the extent that Seller's undertakings set forth in this Section 9.03 may be
unenforceable, Seller shall contribute the maximum amount that it is permitted to contribute under applicable law to the payment and satisfaction of all Losses incurred by Purchaser, the Companies and
the Subsidiaries. 

        (b)   No
claim may be made against Seller for indemnification pursuant to Section 9.03(a)(i) (other than breaches and claims under the Fundamental Representations and
Section 3.12 (as to environmental matters)) with respect to any individual item of liability or damage arising out of a breach of a representation or warranty of Seller or of a covenant
or agreement to be performed by Seller prior to the Closing Date, unless the aggregate of all such Losses of Purchaser with respect to Section 9.03(a)(i) (other than breaches and claims under
the Fundamental Representations and Section 3.12 (as to environmental matters)) shall exceed $1,000,000, and Seller shall be required to pay or be liable only for amounts in excess of
such aggregate amount. Purchaser shall not be indemnified pursuant to Section 9.03(a)(i) with respect to any individual item of liability or damage (other than breaches and claims under the
Fundamental Representations and Section 3.12 (as to environmental matters)) if the aggregate of all liabilities and damages of Purchaser for which Purchaser has received indemnification
pursuant to Section 9.03(a)(i) shall have exceeded $20,000,000 (including any amounts paid or payable by Seller or any of its Affiliates under the Note Documents and the Holdback Documents to
the extent such amounts are liabilities and damages that would have been payable under Section 9.03(a)(i) (other than breaches and claims under Section 3.12 (as to environmental
matters) and the Fundamental Representations) but excluding any amounts paid or payable by Seller or any of its Affiliates under the Note Documents and the Holdback Documents with respect to any other
liabilities and damages). 

67

 

        (c)   Payments
by Seller pursuant to this Section 9.03 and Sections 6.05 and 7.01 shall be limited to the amount of any liability or damage that remains
after deducting therefrom (i) any Tax benefit to Purchaser, (ii) any insurance proceeds and any indemnity, contribution or other similar payment recovered by Purchaser from any third
party with respect thereto (it being agreed that Purchaser will use its commercially reasonable efforts and will cause Companies and Subsidiaries to use their respective commercially reasonable
efforts, to recover such proceeds and payments and that, promptly after the realization of any insurance proceeds, indemnity, contribution or other similar payment, Purchaser shall reimburse Seller
for such reduction in Losses for which Purchaser was indemnified prior to the realization of reduction of such Losses), and (iii) any amount paid pursuant to Section 15.6.5 of the Racing
Services Agreement with respect to the subject matter in dispute to the extent taken into account in determining the payment pursuant to such section. A Tax benefit to Purchaser for purposes of this
Section 9.03 will be reasonably determined by Purchaser's Accountants as the difference between (i) the amount of federal, state and local Tax Liabilities of Purchaser and its Affiliates
(including the Companies and the Subsidiaries) for the year with respect to which the indemnity payment is made, and (ii) the amount of federal, state and local Tax Liabilities of Purchaser and
its Affiliates (including the Companies and the Subsidiaries) for the year with respect to which the indemnity payment is made but without the effect of event that gave rise to the indemnity payment.
Purchaser shall provide Seller with calculations and/or other information reasonably supporting the determination of the Tax benefit. 

        (d)   Except
as set forth in this Agreement (including the Exhibits and the Company Disclosure Schedule), the other Transaction Documents and the Note Documents, Seller is not
making any representation, warranty, covenant or agreement with respect to the matters contained herein. Anything herein to the contrary notwithstanding and except as set forth in this Agreement and
the Note Documents, no breach of any representation, warranty, covenant or agreement contained herein shall give rise to any right on the part of Purchaser, after the consummation of the purchase and
sale of the Shares contemplated hereby, to rescind this Agreement or any of the transactions contemplated hereby. 

        (e)   Seller
and its Affiliates shall have no liability under any provision of this Agreement for any liabilities and damages to the extent that such liabilities and damages
relate to actions taken by Purchaser or its Affiliates, including, without limitation, each Company and Subsidiary, after the Closing Date. 

        (f)    Seller
and its Affiliates shall have no liability under any provision of this Agreement for any liabilities and damages to the extent that such liabilities and damages
are obligations of MEC Pennsylvania Racing Services, Inc. under the Racing Services Agreement to the extent satisfied thereunder. 

68

 

        (g)   Notwithstanding
anything herein or in the Racing Services Agreement to the contrary, (i) prior to the Repayment Date, subject to the next sentence, all of the
indemnification obligations of Seller and its Affiliates under this Agreement (including without limitation under Articles VI, VII and IX hereof) and the Racing Services Agreement
(including without limitation any guaranty obligations of Seller thereunder) shall be deferred, and Purchaser and its Affiliates shall not be able to set off their obligations to Seller and its
Affiliates against such indemnification obligations, until the Repayment Date (and, subject to the next sentence, no such obligations of Seller or any of its Affiliates shall be payable prior to the
Repayment Date) and (ii) on the Repayment Date, to the extent there are Losses agreed to or proven to be payable on or prior to the Repayment Date (pursuant to a final, nonappealable
adjudication) under this Agreement or the Racing Services Agreement, as the case may be, the obligations with respect to any such agreed to or proven Losses shall be satisfied by a reduction of the
Tranche B Note (and thereafter, the Tranche A Note) on the Repayment Date in an amount equal to the aggregate amount of such agreed to or proven Losses. Notwithstanding anything
herein or in the Racing Services Agreement to the contrary, upon the earlier of the date of the Stock Transfer and the completion of all of Seller's rights and remedies under the Note Agreement,
neither Seller nor any of its Affiliates shall have any indemnification obligations under this Agreement (including without limitation under Articles VI, VII and IX hereof) or the Racing
Services Agreement (including without limitation any guaranty obligations of Seller thereunder) other than for Losses, in each case, which have resulted in out-of-pocket
expenditures by Purchaser's equity holders as a result of Seller's breach of representation, warranty or covenant under this Agreement or under the Racing Services Agreement. Nothing in this Agreement
or in any of the Transaction Documents shall limit any rights or claims Seller or any of its Affiliates may have under the Note Documents. Notwithstanding this Section 9.03(g), the procedures
set forth in Section 9.04 shall continue to apply to any claims that arise prior to the Repayment Date. 

        (h)   Notwithstanding
anything herein or in the Racing Services Agreement to the contrary, (i) prior to the earlier of the Repayment Date and the Stock Transfer Trigger
Date, all of the indemnification obligations of Purchaser and its Affiliates under this Agreement (including without limitation under Articles VI, VII and IX hereof) and the Racing
Services Agreement shall be deferred, and Seller and its Affiliates shall not be able to set off their obligations to Purchaser and its Affiliates against such indemnification obligations, until the
earlier of the Repayment Date and the Stock Transfer Trigger Date (and no such obligation of Purchaser or any of its Affiliates shall be payable prior to the earlier of the Repayment Date and
the Stock Transfer Trigger Date) and (ii) on the earlier of the Repayment Date or the Stock Transfer Trigger Date, to the extent that there are Losses agreed to or proven to be payable on or
prior to the Repayment Date or Stock Transfer Trigger Date, as applicable, under this Agreement or the Racing Services Agreement, as the case may be, the obligations shall be paid in cash. Nothing in
this Agreement or in any of the Transaction Documents shall limit any rights or claims Purchaser or any of its Affiliates may have under the Note Documents. 

69

 

SECTION 9.04
Indemnification Procedures, Etc. (a) Each of Purchaser and Seller (for purposes of this Section 9.04(a), an
"Indemnified Party") agrees to give the indemnifying party under Section 6.05, 7.01, 9.02 or 9.03, as applicable (for purposes of this
Section 9.04(a), an "Indemnifying Party") prompt written notice (a "Claim Notice") of any claim, assertion, event or proceeding
by or in respect of a third party of which it has knowledge concerning any liability or damage as to which it may request indemnification under Section 6.05, 7.01, 9.02 or 9.03, as
applicable, provided, however, that no delay on the part of the Indemnified Party in notifying any Indemnifying Party shall relieve the Indemnifying Party from any liability hereunder unless
(and then solely to the extent) the Indemnifying Party thereby is materially prejudiced by the delay. The Indemnifying Party shall have the right to assume, through counsel of its own choosing,
the defense or settlement of any such claim or proceeding at its own expense. If the Indemnifying Party elects to assume the defense of any such claim or proceeding, the Indemnified Party may
participate in such defense, but in such case the expenses of the Indemnified Party shall be paid by it; provided, however, that if there
exists or is reasonably likely to exist a conflict of interest (including, without limitation, if there may be one or more legal or equitable defenses available to the Indemnified Party which are
different from or in addition to those of the Indemnifying Party and representation by the same counsel would be inappropriate due to the actual or potential differences between the parties) that
would make it inappropriate in the reasonable judgment of the Indemnified Party for the same counsel to represent both the Indemnified Party and the Indemnifying Party, then the Indemnified Party
shall be entitled to retain its own counsel, in each jurisdiction for which the Indemnified Party determines counsel is required, at the expense of the Indemnifying Party. With reasonable notice, the
Indemnified Party shall provide the Indemnifying Party with reasonable access to its records and personnel relating to any such claim, assertion, event or proceeding during normal business hours and
shall otherwise cooperate with the Indemnifying Party in the defense or settlement thereof, and the Indemnifying Party shall reimburse the Indemnified Party for all its reasonable
out-of-pocket expenses in connection therewith. If the Indemnifying Party elects to assume the defense of any such claim or proceeding, the Indemnified Party shall not pay, or
permit to be paid, any part of any claim or demand arising from such asserted liability unless the Indemnifying Party consents in writing to such payment or unless the Indemnifying Party, subject to
the penultimate sentence of this Section 9.04(a), withdraws from the defense of such asserted liability or unless a final judgment from which no appeal may be taken by or on behalf of the
Indemnifying Party is entered against the Indemnified Party for such liability. If the Indemnifying Party shall fail to defend, or if after commencing or undertaking any such defense, fails to
prosecute or withdraws from such defense, the Indemnified Party shall have the right to undertake the defense or settlement thereof, at the expense of the Indemnifying Party. If the Indemnified Party
assumes the defense of any such claim or proceeding pursuant to this Section 9.04(a) and proposes to settle such claim or proceeding prior to a final judgment thereon or to forego any
appeal with respect thereto, then the Indemnified Party shall give the Indemnifying Party prompt written notice thereof and the Indemnifying Party shall have the right to participate in the settlement
or assume or reassume the defense of such claim or proceeding. Neither the Indemnified Party nor the Indemnifying Party shall settle any claim or proceeding without the written approval of the
Indemnifying Party (in the case of a settlement by the Indemnified Party) or of the Indemnified Party (in the case of a settlement by the Indemnifying Party), which approval shall not be
unreasonably withheld. 

        (b)   Neither
Seller nor Purchaser shall have any liability to Purchaser or Seller (as defined in Section 9.03(a) and Section 9.02(a), respectively), as
the case may be, under Article VI, Article VII or this Article IX for consequential or punitive damages, except that this Section 9.04(b) shall not limit an
Indemnified Party's right to recover fees or expenses of counsel or reimbursement or indemnity for claims by third parties to the extent otherwise provided for in Article VI, Article VII
or this Article IX and paid or payable by an Indemnified Party. 

70

 

        (c)   Each
of Seller and Purchaser hereby acknowledges and agrees that, from and after the Closing, other than the claims, remedies and other rights of Seller, Purchaser and
their respective Affiliates under the Note Documents, the sole and exclusive remedy of Seller or Purchaser (as defined in Section 9.02(a) and Section 9.03(a), respectively), as
the case may be, against Purchaser or Seller, as the case may be, with respect to any and all claims relating to the subject matter of this Agreement shall be pursuant to the indemnification
provisions set forth in this Article IX and in Article VI and Article VII, except for any claims arising out of fraud and where a party is entitled to seek
injunctive relief because there is no adequate remedy at law. In furtherance of the foregoing, each of Purchaser and Seller hereby waives, on behalf of itself and any other Purchaser or Seller
(as defined in Section 9.02(a) and 9.03(a), respectively), as the case may be, to the fullest extent permitted under applicable law, any and all rights, claims and causes of
action such Purchaser and Seller (or, after the Closing, any Company or Subsidiary), as the case may be, may have against Seller or Purchaser, as the case may be, (other than pursuant to this
Article IX, Article VI, or Article VII, as applicable) relating to the subject matter of this Agreement arising under or based upon any law, rule, regulation, order, judgment or
decree applicable to it or by which any of the properties of it or any of its subsidiaries is bound or affected, subject to the exception set forth in the immediately preceding sentence and subject to
the claims, remedies and other rights of Seller, Purchaser and their respective Affiliates under the Note Documents. Nothing in the forgoing provisions of this Section 9.04(c) shall limit any
rights or claims any party hereto, any Company, any Subsidiary or MEC Pennsylvania Racing Services, Inc. or any of their respective Affiliates may have under the Racing Services Agreement, the
Note Documents, the Holdback Documents, the Equity Commitment Agreement or any agreements related thereto (including any agreements guarantying the obligations under or otherwise lending credit
support to the Holdback Documents or Equity Commitment Agreement). 

        (d)   Each
of Purchaser and Seller agrees that, in the event an Indemnifying Party elects to assume the defense of any claim or proceeding, it will refrain from making any
public announcements in respect of such claim or otherwise communicating with the news media. 

        (e)   Purchaser
and Seller hereby consent to the non-exclusive jurisdiction of any court in which an Action by a third party is brought against any Indemnified
Party for purposes of any claim that an Indemnified Party may have under this Agreement with respect to such Action or the matters alleged therein and agree that process may be served on Purchaser and
Seller with respect to such a claim at the address specified in this Agreement. From and after the Closing, neither the Companies nor the Subsidiaries shall have any Liability to Seller or its
Affiliates for any breaches of the representations, warranties, agreements or covenants of Seller, the Companies or the Subsidiaries set forth herein (other than such agreements and covenants of the
Companies or the Subsidiaries set forth herein to the extent such agreements and covenants are to be performed after the Closing). From and after the Closing, neither Seller nor its Affiliates shall
seek indemnification or contribution from any Company or Subsidiary (including any of its employees or agents) for any such breaches (other than breaches of such agreements and covenants to be
performed after the Closing Date) or in respect of any other payments required to be made by Seller or its Affiliates (other than the Companies or the Subsidiaries) pursuant to this Agreement. Nothing
in the foregoing provisions of this Section 9.04(e) shall limit any rights or claims any party hereto, any Company, any Subsidiary, MEC Pennsylvania Racing Services, Inc. or any of their
respective Affiliates may have under the Racing Services Agreement, the Note Documents, the Holdback Documents, the Equity Commitment Agreement or any agreements related thereto (including any
agreements guarantying the obligations under or otherwise lending credit support to the Holdback Documents or Equity Commitment Agreement). 

71

 

        SECTION 9.05
Payments. Subject to Section 9.03(g), once a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable
pursuant to Section 6.05, Section 7.01 or this Article IX, the Indemnifying Party shall satisfy its obligations within fifteen (15) Business Days of such final,
nonappealable adjudication by wire transfer of immediately available funds; provided, that during the term of any of the Holdback Documents, if the Indemnifying Party is
Seller and the Losses are covered under the Holdback Documents, then such obligations shall be satisfied in accordance with the provisions of the Holdback Documents. The parties hereto agree that
should an Indemnifying Party not make full payment of any such obligations (other than such obligations described in the proviso set forth in the immediately preceding sentence or in
Section 9.03(g)) within such fifteen (15) Business Day period, any amount payable shall accrue interest, compounded annually, calculated from the date of agreement of the Indemnifying
Party or final, nonappealable adjudication through the date such payment has been made, on the basis of the average of the daily rate of interest publicly announced by Citibank N.A. in
New York, New York from time to time as its base rate from the date of such agreement or such adjudication to the date of such payment. The parties hereto agree that any indemnification
made pursuant to this Agreement (including without limitation any indemnification covered by the Holdback Documents or any indemnification resulting in the reduction of amounts owing under the Seller
Notes) shall be treated as an adjustment to the Purchase Price. 

 
 

ARTICLE X
  
    TERMINATION, AMENDMENT AND WAIVER    
    

        SECTION 10.01 Termination. This Agreement may be terminated at any time prior to the Closing: 

	(a)
	by
the mutual written consent of Seller and Purchaser;

	(b)
	by
Seller if the condition set forth in Section 8.03(n) of this Agreement has not been satisfied or waived by Purchaser by July 31, 2006;

	(c)
	by
Purchaser, upon a material breach of any representation, warranty, covenant or agreement of Seller set forth in this Agreement such that the conditions set forth in
Section 8.03 would not be satisfied or if any representation or warranty of Seller shall have become untrue such that Purchaser would have the right not to proceed with the Closing pursuant to
Section 8.03(b) (a "Terminating Seller's Breach"); provided, however, that if such Terminating
Seller's Breach is curable by Seller through the exercise of its reasonable efforts within 30 days from the date Seller becomes aware thereof and is cured, Purchaser may not terminate this
Agreement pursuant to this Section 10.01(c) solely by reason of such Terminating Seller's Breach; 

72

  

        (d)   by Seller, upon a material breach of any representation, warranty, covenant or agreement of Purchaser set forth in this Agreement such that the conditions set forth in
Section 8.02 would not be satisfied or if any representation or warranty of Purchaser shall have become untrue such that Seller would have the right not to proceed with the Closing pursuant to
Section 8.02(b) (a "Terminating Purchaser's Breach"); provided, however, that if such Terminating
Purchaser Breach is curable by Purchaser through the exercise of its reasonable efforts within 30 days from the date Purchaser becomes aware thereof and is cured, Seller may not terminate this
Agreement pursuant to this Section 10.01(d) solely by reason of such Terminating Purchaser's Breach; 

        (e)   by
Purchaser or Seller in the event that any Governmental Authority shall have issued an order, decree or ruling or taken any other action restraining or enjoining the
transactions contemplated by this Agreement, and such order, decree, ruling or other action shall have become final and nonappealable; 

        (f)    by
Seller, upon receiving an Action Notice from the Purchaser; 

        (g)   [reserved];

        (h)   by
Seller upon failure to submit the Gaming Application to the Gaming Board by December 20, 2005 in accordance with Section 5.04(c) or the failure
by Purchaser to satisfy and continue to satisfy the Gaming Application Fee requirement in accordance with Section 5.04(d); provided, however that if the failure to
submit such Gaming Application is the result of the failure of Seller to make reasonable efforts in accordance with Section 5.04(c), Seller may not terminate pursuant to this
Section 10.01(h); 

        (i)    by
Seller or Purchaser if the condition set forth in Section 8.01(c) of this Agreement has not been satisfied or waived by both Purchaser and Seller by
July 31, 2006; 

        (j)    [reserved];

        (k)   by
Seller, at any time after the date which is 5 Business Days prior to the date, if any, identified by the Gaming Board after which continued pursuit by Seller
of a Conditional Category 1 license with Purchaser pursuant to the Gaming Application would jeopardize Seller's ability to obtain a Conditional Category 1 license or a Category 1
license in its own name; 

        (l)    by
Seller or Purchaser if it reasonably determines that Closing has become impossible due to events or circumstances that have occurred since the date of this Agreement;
provided however that the right to terminate this Agreement under this Section 10.01(l) shall not be available to a party whose failure to fulfill any obligation under this Agreement shall have
been the cause of, or shall have resulted in, the Closing becoming impossible; or 

        (m)  by
Seller or Purchaser if the Closing shall not have occurred prior to July 31, 2006. 

        Time
shall be of the essence in this Agreement. 

73

 

        SECTION 10.02    Effect
of Termination.    In the event of termination of this Agreement in accordance with this Agreement, this
Agreement shall forthwith become void and there shall be no liability on the part of any party hereto (a) except as set forth in Sections 5.04(e), 5.05 and 5.15 and the second,
third and fourth sentences of Section 5.04(d) and Article XI hereof and (b) nothing herein shall relieve any party hereto from liability for any willful breach of any provision
hereof (including, without limitation, Section 5.10). 

        SECTION 10.03    Waiver.    At
any time prior to the Closing, each of the parties hereto may (a) extend the time for the
performance of any of the obligations or other acts of the other party hereto, (b) waive any inaccuracies in the representations and warranties contained herein or in any document delivered
pursuant hereto or (c) waive compliance with any of the agreements or conditions contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing
signed by the party to be bound by such extension or waiver, as applicable. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of
the same term or condition, or a waiver of any other term or condition, of this Agreement. The failure of any party to assert any of its rights hereunder shall not constitute a waiver of any of
such rights. 

 
 

ARTICLE XI    
    

 
  GENERAL PROVISIONS    
    

        SECTION 11.01    Expenses; Pro-rations. 

        (a)   Except
as otherwise expressly provided herein, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and
accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, whether or not the Closing shall have
occurred. Seller shall pay (i) the cost of the Title Commitments; (ii) the portion of the premium attributable to the standard coverage portion of the Title Policies (excluding the costs
of any endorsements requested by Purchaser, except as are necessary to cure any Title Objection or obtained in connection with an Insured Exception); (iii) Seller's share of the
pro-rations described in this Section 11.01; and (iv) one-half of the HSR filing fee. Purchaser shall pay (i) the portion of the premium attributable to
any endorsements to the Title Policies (except as set forth in the preceding sentence) and the portion of the premium attributable to the "extended coverage" portion of the Title Policies;
(ii) Purchaser's share of the pro-rations described in this Section 11.01; and (iii) one-half of the HSR filing fee. 

        (b)   All
non-delinquent real estate Taxes and assessments on the Real Property will be prorated as of the Closing based on the actual current Tax bill. If the
Closing takes place before the real estate Taxes are fixed for the Tax year in which the Closing occurs, the apportionment of real estate Taxes will be made on the basis of the real estate Taxes for
the immediately preceding Tax year applied to the latest assessed valuation. All delinquent Taxes and all delinquent assessments, if any, on the Real Property will be satisfied at the Closing by
Seller. All supplemental Taxes billed after the Closing for periods prior to the Closing will be paid promptly by Seller. Any Tax refunds received by Purchaser which are allocable to the period prior
to the Closing (less Purchaser's reasonable out-of-pocket costs in connection with any such refund proceedings) will be paid by Purchaser to Seller. 

74

 

        (c)   With
respect to rent and other amounts payable by Seller in connection with any leases, all such rent and other amounts will be prorated as of the Closing. Any
delinquent rent or other payments payable by Seller in connection with the leases will be satisfied at the Closing by Seller. 

        (d)   With
respect to rent and other amounts payable to Seller in connection with any leases, all rents which are actually received by Seller as of the Closing will be
prorated. Delinquent rents and rents not paid by Closing will not be prorated and Seller can continue to collect such rents, provided that Purchaser shall not have the obligation to pursue any Action
or other proceedings in connection therewith. Rents allocable to the period prior to the Closing will be the property of Seller and rents allocable to the period after the Closing will be the property
of Purchaser. 

        (e)   All
pro-rations will be made as of the date of the Closing based on a 365-day year or the number of days in the month during which the Closing
occurs, as applicable. 

        SECTION 11.02    Notices.    All
notices, requests, claims, demands and other communications hereunder shall be in writing and
shall be given or made on the date delivered by hand or by internationally recognized courier service such as Federal Express or by other messenger (or if delivery is refused, upon
presentment), or upon receipt by facsimile transmission (without confirmation), or upon delivery by registered or certified mail (postage prepaid, return receipt requested) to the parties hereto at
the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 11.02): 

	(a)
	if
to Seller: 

Magna
Entertainment Corp.

337 Magna Drive

Aurora, Ontario

L4G 7K1, Canada

Facsimile: 905-726-7177

Attn: CEO/General Counsel 

with
a copy to: 

O'Melveny &
Myers LLP

400 South Hope Street

15th Floor

Los Angeles, CA 90071

Facsimile: 213-430-6407

Attn: Joseph K. Kim, Esq. 

75

 

	(b)
	if
to Purchaser: 

PA
Meadows, LLC

211 North Rampart Blvd.

Las Vegas, Nevada 89115

Facsimile: 702-507-5992

Attn: William Paulos

William Wortman 

with
a copy to: 

Munger,
Tolles & Olson, LLP

355 S. Grand Avenue, 35th Floor

Los Angeles, CA 90071-1560

Facsimile: 213-687-3702

Attn: Sandra Seville-Jones, Esq. 

and
a copy to: 

Santoro,
Driggs, Walch, Kearney, Johnson & Thompson

400 South Fourth Street

Suite 300

Las Vegas, NV 89101

Facsimile: 702-791-1912

Attn: Michael Kearney 

        SECTION 11.03    Public
Announcements.    Unless otherwise required by applicable law or stock exchange requirements, no party to
this Agreement shall make any public announcements in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media without prior consent of the other
party, and the parties will cooperate as to the timing and contents of any such announcement. 

        SECTION 11.04    Headings.    The
headings contained in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. 

        SECTION 11.05    Severability.    If
any term or other provision of this Agreement is invalid, illegal or incapable of being
enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the
transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible. 

        SECTION 11.06    Entire
Agreement.    This Agreement, the Note Documents and the Transaction Documents constitute the entire
agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, other than the Confidentiality Agreement, between
Seller and Purchaser (or Millennium Management Group, LLC) with respect to the subject matter hereof and except as otherwise expressly provided herein. 

76

 

        SECTION 11.07    Assignment.    This
Agreement shall not be assigned by operation of law or otherwise, except that prior to the
Closing, Purchaser, without the consent of Seller, but with at least 10 Business Days' prior written notice to Seller, may transfer or cause to be transferred all of the equity interests of
Purchaser to a wholly owned direct or indirect subsidiary of Cannery Casino Resorts, LLC, a Nevada limited liability company. 

        SECTION 11.08    No
Third-Party Beneficiaries.    Except as provided in Article IX, this Agreement is for the sole benefit
of the parties hereto and their permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement. 

        SECTION 11.09    Amendment.    This
Agreement may not be amended or modified except by an instrument in writing signed by Seller
and Purchaser. 

        SECTION 11.10    Governing
Law; Jurisdiction; Service of Process.    (a) This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York. Seller and Purchaser hereby agree and consent to the exclusive jurisdiction of, and service of process and venue in, the
United States District Court for the Southern District of New York and the courts of the State of New York located in the County of New York, State of New York and
waives any objection with respect thereto, for the purpose of any action, suit or proceeding arising out of or relating to this Agreement. 

        SECTION 11.11    WAIVER
OF JURY TRIAL.    EACH OF PURCHASER AND SELLER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF PURCHASER OR SELLER IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF. 

        SECTION 11.12    Counterparts.    This
Agreement may be executed in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. 

        SECTION 11.13    Specific
Performance.    The parties hereto agree that irreparable damage would occur in the event any provision
of this Agreement was not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law
or equity. 

        SECTION 11.14    Prevailing
Party.    The prevailing party or parties in any arbitration, mediation, court action, or other
adjudicative proceeding arising out of or relating to this Agreement shall be reimbursed by the party or parties who do not prevail for their reasonable attorneys, accountants and experts fees and for
the costs of such proceeding. 

77

 

        IN
WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized. 

	 	 	PA MEADOWS, LLC
	 	 	 	 
	 	 	By:	 
 Name:

Title:
	 	 	 	 
	 	 	 	 
	 	 	MAGNA ENTERTAINMENT CORP.
	 	 	 	 
	 	 	By:	 
 Name:

Title:
	 	 	 	 
	 	 	 	 
	 	 	By:	 
 Name:

Title:

S-1

QuickLinks

FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT

RECITALS

STOCK PURCHASE AGREEMENT

TABLE OF CONTENTS

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PURCHASER

ARTICLE V

ADDITIONAL AGREEMENTS

ARTICLE VII TAX MATTERS

ARTICLE VIII CONDITIONS TO CLOSING

ARTICLE IX INDEMNIFICATION

ARTICLE X TERMINATION, AMENDMENT AND WAIVER

ARTICLE XI

GENERAL PROVISIONS

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}]]