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Exhibit 10.1  

March 31,
2006 

Mr. W.
Thomas Hodgson

48 Stonecliffe Crescent

Aurora, Ontario

L4G 7Z6 

Dear
Tom: 

        Reference
is made to our recent conversations concerning your departure as President and Chief Executive Officer and as a director of Magna Entertainment Corp. ("MEC") and our
agreements, which are as follows: 

	1.
	Effective
March 31, 2006 (the "Officer Resignation Date"), you will resign as President and Chief Executive Officer and as a director of MEC and as an officer and/or
director of all subsidiaries of MEC or its affiliates for which you serve in such capacities.

	2.
	Following
the Officer Resignation Date, you will remain as an employee of MEC for a two-month transition period. Effective May 31, 2006 (the "Employee
Resignation Date"), you will resign as an employee of MEC. You agree that on the Employee Resignation Date you shall execute and deliver the release in the form of
Schedule A attached hereto.

	3.
	You
shall be entitled to receive your Base Salary of US$300,000 and Guaranteed Bonus of US$200,000 annually up to and including the Employee Resignation Date. You acknowledge that you
have received such Guaranteed Bonus up to and including December 31, 2005 so that you are only entitled to such Guaranteed Bonus for the period from January 1, 2006 to March 31,
2006 (the "2006 First Quarter Bonus") and for the period from April 1, 2006 to May 31, 2006 (the "2006 Second Quarter Partial Bonus"). Notwithstanding the terms of your
employment agreement dated March 22, 2005 (your "Employment Agreement"), you shall receive prompt payment of the full amount of the 2006 First Quarter Bonus and the 2006 Second Quarter Partial
Bonus, respectively, in cash from MEC at the same time that senior executives of MEC are paid their bonuses for the first quarter of 2006 and second quarter of 2006, respectively. 

	4.
	The
amount of 13,086 shares (your "Incentive Stock") of MEC Class A Subordinate Voting Stock ("Class A Stock"), being the amount of your Guaranteed Bonus that is
payable to you in Class A Stock during 2005, shall vest and be released to you on December 1, 2006.

	5.
	Notwithstanding
the terms of your incentive stock option agreements with MEC dated March 7, 2005 and March 21, 2005, your options to purchase 300,000 shares of
Class A Stock (your "Options") shall remain in full force and effect, shall vest on their current schedule, and shall be exercisable at any time up to and including the Expiration Date
(as defined in your stock option agreements) and without application of the terms of sections 2.2(b) through (f) of those agreements. However, in the event that you become
employed by, a director of, or a consultant to, any entity that competes, directly or indirectly, with MEC or any of its subsidiaries prior to the vesting of any Options, such non-vested
Options will be cancelled (all vested Options will be unaffected and remain in-force as set-out above).

	6.
	You
agree that you shall not sell, transfer or otherwise dispose of or trade any securities of MEC (including, without limitation, your Incentive Stock and your Options) before
December 1, 2006. Without limiting the foregoing, you acknowledge that it is your responsibility to be familiar with and comply with your obligations under insider trading laws and similar
securities laws.

	7.
	Upon
you having delivered on the Employee Resignation Date the executed release as provided in paragraph 2 above, MEC shall promptly pay to you a retiring allowance of
US$500,000 as full and final settlement of all amounts owing to you by MEC or its affiliates as a result of your employment with MEC and its subsidiaries, including all amounts owing to you under your
employment agreement with MEC (subject only to paragraph 8 below), which amount shall be paid to you in a lump sum (net of all usual deductions).

	8.
	As
soon as reasonably practicable following the Employee Resignation Date, you shall submit a final expense report or reports for all outstanding expenses which you have incurred on
behalf of MEC or any of its subsidiaries in accordance with typical practice and which have not previously been reimbursed. All such expenses shall be reimbursed to you by MEC promptly following
receipt of such expense report(s). In addition, promptly following execution of this agreement and submission of supporting invoices, MEC shall pay to you the amount of up to CDN$10,000 as partial
reimbursement for your legal expenses in connection with your departure from MEC.

	9.
	MEC
shall continue to maintain on your behalf your current benefits (excluding life and disability coverage) for a period of twelve (12) months commencing on the Employee
Resignation Date. Your current life and disability coverage shall be maintained for a period of not less than the period required by applicable statute. 

	10.
	MEC's
obligations to indemnify you pursuant to its by-laws shall continue in effect in respect of all your activities as a director, officer and employee of MEC and its
subsidiaries, and MEC shall continue to cover you under its directors' and officers' insurance policies in respect of your service as an officer or director of MEC and its subsidiaries (including,
without limitation, with respect to any claims made against you or losses or expenses incurred by you in connection with the litigation brought by Greenlight Capital, Inc. against MI
Developments Inc. ("MID")). For greater certainty, MEC acknowledges that you shall be entitled to reimbursement for all reasonable counsel fees and disbursements in connection with your
representation by counsel of your choice (subject to approval by MEC, acting reasonably) as a witness, party or potential witness or party in any shareholder litigation involving MEC or MID.

	11.
	You
acknowledge and agree that you are still subject to, and shall abide by, your obligations as set forth in paragraph 8 of your Employment Agreement.

	12.
	You
agree to promptly execute and provide to MEC all documents reasonably requested by MEC and its affiliates to evidence your resignation as a director and/or officer of MEC and
its affiliates.

	13.
	Except
as already agreed, and except as required by any applicable law, regulation or stock exchange rule, neither you nor MEC shall make any public announcement or issue any press
release with respect to your resignation as a director and officer of, and your departure from, MEC without the prior written consent of the other. Prior to either party making any public announcement
or press release, such party shall provide the other party with a reasonable opportunity to comment on said public announcement or press release.

	14.
	Upon
you having delivered on the Employee Resignation Date the executed release as provided in paragraph 2 above, MEC shall enter into a consulting agreement with you
substantially in the form attached hereto as Schedule B. You shall be entitled to retain the laptop computer and blackberry communications device that you are
presently using for so long as you are acting as a consultant to MEC, although you shall arrange and pay for your own service provider contract for your blackberry communications device.

	15.
	You
hereby acknowledge and agree that this letter agreement, including without limitation Schedule A, supersedes all previous agreements between
you and MEC and its affiliates, whether oral or written, including without limitation your employment agreement. 

        If
you are in agreement with the foregoing, would you kindly execute a duplicate copy of this letter where indicated and return the same to me. 

Yours
truly, 

	 
	 	 

	
 Frank Stronach

Chairman	 	 
	
 Agreed:	
 	

 
	
 Date: March 31, 2006	
 	

 
	 	 	
 W. Thomas Hodgson

 
 

Schedule A
  Release and Resignation  
    

To:    Magna
Entertainment Corp. and its affiliates 

        Having
resigned as an officer and/or director of Magna Entertainment Corp. and its affiliates (collectively, "MEC"), in each case, effective March 31, 2006, I hereby resign as an
employee of Magna Entertainment Corp. effective May 31, 2006. 

I
hereby agree: 

	(i)
	to,
and do hereby, release MEC, its officers, directors and employees, its associates and affiliates (including, without limitation, MI Developments Inc.) and its
shareholders, directors, officers, employees and agents and the respective successors and assigns of all such persons and corporations (collectively described as the "Corporation") of and from all
liabilities, damages, actions, causes of action, claims (including, without limitation, any claim under the Ontario Employment Standards Act) and demands, costs or expenses (including, without
limitation, lawyers' fees), agreements, deferred compensation, provisions and covenants, of any nature or kind now accrued, arising out of any employment relationship with the Corporation and the
cessation thereof;

	(ii)
	that
the release contained herein shall be binding on my heirs, executors, administrators, personal representatives and assigns;

	(iii)
	not
to make any claim or to commence or maintain any action or proceeding against any other person or corporation who might claim contribution, indemnity or relief
over from the Corporation with respect to the subject matter of this release, excepting only any rights enforced in respect of directors' and officers' liability under policies of insurance
for such;

	(iv)
	at
any time hereafter, except with the consent of MEC or as required by law, not to disclose any confidential information concerning the business and affairs of the
Corporation and its customers and suppliers, including its trade secrets and confidential or proprietary information to which I have been exposed during the term of my employment with MEC; and

	(v)
	nothing
in this release affects my rights:

	(a)
	under
my letter agreement with MEC dated March 31, 2006, relating to my departure from MEC;

	(b)
	under
the stock option agreements dated March 7, 2005 and March 21, 2005 and the Performance Share Unit Award Agreement dated as of April 1, 2005;

	(c)
	to
be indemnified and held harmless by MEC and to the benefit of coverage under any directors' and officers' insurance policy in respect of any claim that may be made against me
respecting any act or thing arising from my having served as a director or officer of MEC and its affiliates; and

	(d)
	as
a shareholder of MEC. 

	
  DATED this 31st day of May, 2006.
	
 	

 W. Thomas Hodgson

 
 

Schedule B
  Form of Consulting Agreement  
    

[Letterhead
of Magna Entertainment Corp.] 

May 31,
2006 

W.
Thomas Hodgson

48 Stonecliffe Crescent

Aurora, Ontario

L4G 7Z6 

Dear
Tom: 

 
 

Consulting Agreement with Magna Entertainment Corp. ("MEC")  
    

        Further
to our discussions, MEC wishes to retain you (the "Consultant") to provide consulting services to assist MEC and certain of its affiliates with various projects from time
to time as determined by MEC, including without limitation projects relating to MEC's recapitalization plan (collectively, the "Projects"). The general terms and conditions of the consulting
arrangement would be as follows: 

	1.
	Consultant.    The
Consultant shall make himself reasonably available to MEC to carry out his obligations under this agreement. The Consultant
acknowledges that due to the nature of the Projects, the Consultant may be expected to engage in extensive business travel.

	2.
	Fees.    MEC
shall pay the Consultant at the rate of US$2,500 per day or part thereof (it being understood that the number of hours per
month and per week may vary from month-to-month and from week-to-week as determined by MEC). Invoices should be rendered on a monthly basis in arrears
and include GST and provincial taxes where applicable.

	3.
	Expenses.    MEC
shall reimburse the Consultant for all reasonable business expenses actually and properly incurred in carrying out the Projects
to the extent specifically required by MEC under this agreement and in accordance with MEC's expense reimbursement guidelines. If the Consultant travels outside of Canada on MEC business, it shall be
the Consultant's responsibility to maintain adequate medical coverage. The Consultant shall supply original vouchers and receipts to support all expenses, shall itemize such expenses on a standard MEC
expense report, and shall obtain advance approval from MEC's Project Coordinator for any individual expense in excess of CDN$5,000. The Consultant shall be based in his own off-site office
and shall be responsible for the expense of all office costs, support services and materials in carrying out his obligations under this agreement.

	4.
	Coordination
of Services.    The Consultant shall carry out those services needed to complete the Project with the assistance and under the
direction of the Project Coordinator or his designees. The Consultant shall provide those written reports required by the Project Coordinator from time to time and shall interact with MEC management
as directed by the Project Coordinator from time to time. The Chairman of MEC, or his designee, shall be the Project Coordinator. 

	5.
	Term.    This
agreement shall commence as of June 1, 2006 and may be terminated (a) by MEC for any reason on thirty
(30) days prior written notice or (b) by the Consultant for any reason on thirty (30) days prior written notice. In addition, this agreement may be immediately terminated by MEC
in the event Consultant is in material breach of the provisions of this agreement.

	6.
	Independent
Contractor.    The Consultant is an independent contractor and in no way shall the Consultant be considered an employee, agent or
joint venturer of MEC. Subject to coordination with the persons designated in paragraph 4, the Consultant shall determine how, where and when he shall carry out his consulting services and
other obligations under this agreement. The Consultant shall have no authority to represent or bind MEC in any way and agrees that he shall not hold himself out as having authority to act for MEC or
its affiliates.

	7.
	Licenses
and Taxes, etc.    As an independent contractor the Consultant shall obtain all necessary licenses for the operation of his consulting
business, including a GST registration number. The Consultant shall also be responsible for all applicable remittances including, but not limited to, federal and provincial taxes on his business
income. MEC shall not be responsible for any of the foregoing.

	8.
	Compliance
with Privacy Laws.    The Consultant agrees to comply with the Canadian Personal Information and Protection of
Electronic Documents Act ("PIPEDA") and such other Legislation and Regulations pertaining to privacy of personal information ("Privacy Laws") with respect to the receipt and
use of personal information relating to MEC's customers and employees. The Consultant further acknowledges that Privacy Law requirements include the need to:

	(a)
	properly
secure such information;

	(b)
	use
such information only for the purpose it was made available;

	(c)
	co-operate
with access requests; and

	(d)
	either
return or destroy such information once it is no longer needed for the Project.

	9.
	Competition.    During
the term of this agreement and for six (6) months following its expiry or termination, you shall not, directly or
indirectly, in any capacity compete with the business of MEC or any of its affiliates in respect of which you have had access to proprietary or confidential information.

	10.
	Confidentiality.    The
Consultant will treat as confidential and will not disclose directly or indirectly at any time during or subsequent to
the conclusion of the Projects any secret or confidential business, financial or other information belonging or relating to MEC or its affiliates or their customers and suppliers. The Consultant will
execute a separate Confidentiality Agreement if requested by MEC.

	11.
	Indemnity.    The
Consultant shall indemnify MEC for any costs, expenses or damages arising from the Consultant's failure to comply in all
material respects with the provisions of paragraphs 6, 7, 8, 9 and 10 of this agreement. 

	12.
	Governing
Law.    This agreement shall be governed by the laws of the Province of Ontario including all federal laws applicable therein. 

If
the terms of the consulting agreement set out in this letter are acceptable to the Consultant, please sign and date three (3) copies of this letter and return two copies to the attention of
MEC's Corporate Secretary. 

Yours
very truly, 

MAGNA ENTERTAINMENT CORP.  

	 

	
	 
	Name:

Title:	 
	 	 
	

	

 
	Name:

Title:	 

The
undersigned agrees to the terms and conditions contained in this letter. 

	 

	
	 	

	Date	 	W. Thomas Hodgson

QuickLinks

Schedule A Release and Resignation

Schedule B Form of Consulting Agreement

Consulting Agreement with Magna Entertainment Corp. ("MEC")QuickLinks
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Exhibit 10.2  

 
 

CONSULTING AGREEMENT    
    

        THIS CONSULTING AGREEMENT (this "Agreement") is made as of April 30, 2006 by
and among MEC Holdings (Canada) Inc., (the "Company"), Magna Entertainment Corp. ("MEC"), McAlpine Capital Advisors Inc.,
(the "Consultant") and Jim McAlpine ("McAlpine"). 

 
 

WITNESSES:  
    

        WHEREAS, McAlpine resigned, effective October 18, 2005, from his position as Vice-Chairman,
Corporate Development of MEC; 

        WHEREAS, McAlpine is an employee of the Consultant; 

        WHEREAS, the Company is a wholly owned subsidiary of MEC; and 

        WHEREAS, the Company desires to retain the services of the Consultant and certain of its employees, including McAlpine, and the Consultant
desires to provide such services for the Company. 

        NOW, THEREFORE, in consideration of the premises and the other agreements contained herein, the parties agree as follows: 

1.     ENTIRE AGREEMENT  

This
Agreement is the entire and only agreement between the Company and the Consultant with respect to the employment and consulting services of the Consultant and McAlpine and, except as otherwise
expressly provided herein, it supersedes all prior agreements and arrangements (whether written, oral or implied) between MEC, the Company and the Consultant and between MEC, the Company and McAlpine
with respect to such services. 

2.     COMMENCEMENT; TERMINATION

	2.1
	The
Consultant's services to the Company will be deemed to have commenced on October 19, 2005 and will be terminable by the Company on 90 days prior notice at any time
after May 1, 2006 and before June 30, 2006. At any time after June 30, 2006, the Company may terminate the Consultant's services on 30 days prior notice.

	2.2
	The
Consultant may terminate this Agreement at any time.

	2.3
	The
Company may terminate the Consultant's services immediately by summary notice in writing (notwithstanding that the Company may have allowed any time to elapse or on a former
occasion may have waived its rights under this Section 2) if: 

1

 

	2.3.1
	the
Consultant commits any material or persistent breach of any part of this Agreement or the Consultant's obligations hereunder;

	2.3.2
	the
Consultant, in the performance of its duties under this Agreement or otherwise, commits any act of gross misconduct or serious/gross incompetence or does or omits to do anything
else which is materially prejudicial to the interests of the Company; or

	2.3.3
	after
June 30, 2006, McAlpine is no longer providing services to the Company on behalf of the Consultant. 

3.     DUTIES; STANDARD OF PERFORMANCE

	3.1
	The
Consultant's primary duties will be to provide qualified personnel to give MEC Chairman strategic advice concerning the business development of MEC and the Company.

	3.2
	Any
personnel provided by the Consultant (other than McAlpine) must be approved by the Chief Executive Officer of the Company in his sole and absolute discretion.

	3.3
	The
Consultant shall perform all consulting work on behalf of Company in a timely, competent, diligent and professional manner in accordance with the commercial industry standards
observed by major international consulting firms. 

4.     RELATIONSHIP OF THE PARTIES

	4.1
	The
Consultant's relationship to Company during the time this Agreement is in effect shall be that of an independent consultant and contractor. Nothing herein shall be construed to
create any relationship of employer and employee, agent and principal, partnership or joint venture between the Consultant or any of its employees and the Company. Any individuals assigned to provide
services to the Company by the Consultant, including McAlpine, shall not be deemed to be employees of the Company, and the Consultant shall be responsible for, and shall indemnify and hold harmless
Company against, all taxes, charges, withholding, payments and any other legal requirements with respect to such individuals.

	4.2
	The
Consultant shall not have the authority to bind or obligate MEC or the Company in any way and the Consultant shall not represent that the Consultant has such authority.

	4.3
	Except
as set out in 4.4. below, neither MEC, the Company or the Consultant shall assume, either directly or indirectly, any liability for the actions or inactions of
the other.

	4.4
	MEC's
and the Company's obligations to indemnify McAlpine pursuant to its by-laws shall continue in effect in respect of all his activities as a director, officer and
employee of MEC and its subsidiaries for the period up to and including October 18, 2005, and MEC's directors' and officers' insurance policies shall continue to provide coverage in respect of
his past service as an officer or director of MEC and its subsidiaries. MEC and the Company acknowledge that they are not currently aware of any asserted or unasserted claims or causes of action
arising out of McAlpine's activities as an employee or director of MEC and its subsidiaries. 

2

 

5.     PLACE OF CONSULTING; TRAVEL

	5.1
	The
Consultant shall be responsible for the expense of all its office costs, support services and materials in carrying out its obligations under this Agreement.

	5.2
	The
Consultant will perform its duties from its own offices apart from the Company's premises.

	5.3
	The
Consultant shall undertake such travel (including overseas), but only such travel as may be reasonably required for the proper performance of its duties. 

6.     COMPENSATION; EXPENSES  

	6.1
	Effective
January 1, 2006, the Consultant shall be paid U.S. $500,000 per annum, payable monthly in arrears. There shall be no fee payable under this Agreement with
respect to the period between October 19, 2005 and December 31, 2005. Any amounts owed and unpaid by the Company to the Consultant as of the date of this Agreement shall be paid to the
Consultant in one lump sum with the Consultant's first scheduled monthly payment after the date hereof.

	6.2
	McAlpine
shall be entitled to receive a lump sum payment of U.S. $809,000 on July 1, 2006; provided, however, that such payment shall be conditioned upon the delivery by
McAlpine to MEC and the Company of an executed release in the form attached hereto as Exhibit A (the "Release").

	6.3
	McAlpine
shall be entitled to receive 31,949 Class A Subordinate Voting Shares of MEC on July 1, 2006 as contemplated by McAlpine's Performance Share Unit Award
Agreement, dated May 1, 2005.

	6.4
	McAlpine's
services to the Company on behalf of the Consultant shall be treated as "employment" for the purposes of the Magna Entertainment Corp. Long-Term Incentive Plan
(the "Plan") and McAlpine's options to purchase 500,000 shares of Class A Subordinate Voting Stock of MEC shall remain in full force and effect and
may be exercised for three years following the date of the termination of the Consultant's services pursuant to this Agreement, in accordance with the terms of the Plan and McAlpine's Incentive Stock
Option Agreement.

	6.5
	The
Consultant will be reimbursed all out of pocket expenses reasonably and properly incurred by it in the performance of its duties under this Agreement and in accordance with the
Company's expense reimbursement guidelines. The Consultant shall supply original vouchers and receipts to support all expenses and shall itemize such expenses on a standard Company expense report, and
shall obtain advance approval from the Chairman of MEC or his designees for any individual expenses in excess of CDN$5,000. 

3

 
	6.6
	The
Company shall continue to maintain for McAlpine his current benefits (excluding life and disability coverage) for a period of twelve (12) months commencing on
October 18, 2005. McAlpine's current life and disability coverage shall be maintained for a period of not less than the period required by applicable statue.

	6.7
	Consultant
shall be entitled to retain the two (2) laptop computers that it is presently using. 

7.     COVENANTS

	7.1
	Licenses
and Taxes. As an independent contractor, the Consultant shall obtain all necessary licenses for the operation of its consulting business,
including a GST registration number and workers' compensation number. The Consultant shall also be responsible for all applicable remittances including, but not limited to, federal and provincial
taxes on its business income, employment insurance, Canada Pension Plan, workers' compensation or income tax source deductions for it and its employees. With respect to any payments or compensation
provided to McAlpine, McAlpine shall be responsible for any and all taxes thereon (whether local, state, provincial, Canadian, United States or other taxes). The Company shall not be
responsible for any of the foregoing and shall not withhold any amounts for taxes under Canadian or United States tax laws.

	7.2
	Compliance
with Privacy Laws. The Consultant, and each of its employees, agrees to comply with the Canadian Personal Information and Protection of
Electronic Documents Act and such other legislation and regulations pertaining to privacy of personal information ("Privacy Laws") with respect to the receipt and use of
personal information relating to the Company's customers and employees. The Consultant further acknowledges that Privacy Law requirements include the need to (i) properly secure such
information; (ii) use such information only for the purpose it was made available; (iii) cooperate with access requests; and (iv) either return or destroy such information once it
is no longer needed for its duties hereunder.

	7.3
	The
Consultant and McAlpine acknowledge and agree that in the performance of their duties hereunder (and in McAlpine's service to the Company prior to the term of this
Agreement), they will be (and have been) brought into frequent contact with existing and potential customers of MEC throughout the world. The Consultant and McAlpine also agree that trade
secrets and confidential information of MEC, more fully described in Section 7.9 of this Agreement, gained by the Consultant and/or McAlpine during the Consultant's and McAlpine's association
with MEC, have been developed by MEC through substantial expenditures of time, effort and money and constitute valuable and unique property of MEC. The Consultant and McAlpine further understand and
agree that the foregoing makes it necessary for the protection of the business of MEC that they not compete with MEC during the term of this Agreement and not compete with MEC for a reasonable period
thereafter, as further provided in the following Sections. 

4

 
	7.4
	During
the term of this agreement, the Consultant and McAlpine will not compete with MEC anywhere in the world. In accordance with this restriction, but without limiting its terms,
during the term of this agreement, the Consultant and McAlpine will not:

	(a)
	enter
into or engage in any business which competes with the Business;

	(b)
	solicit
customers, business, patronage or orders for, or sell, any products or services in competition with, or for any business that competes with, the Business;

	(c)
	divert,
entice, or take away any customers, business, patronage or orders of MEC or attempt to do so; or

	(d)
	promote
or assist, financially or otherwise, any person, firm, association, partnership, corporation or other entity engaged in any business which competes with the Business.

	7.5
	For
a period of one (1) year following the termination of this Agreement, neither the Consultant or McAlpine will:

	(a)
	enter
into or engage in any business which competes with the Business within the Restricted Territory;

	(b)
	solicit
customers, business, patronage or orders for, or sell, any products and services in competition with, or for any business, wherever located, that competes with, the Business
within the Restricted Territory;

	(c)
	divert,
entice or otherwise take away any customers, business, patronage or orders of MEC within the Restricted Territory, or attempt to do so; or

	(d)
	promote
or assist, financially or otherwise, any person, firm, association, partnership, corporation or other entity engaged in any business which competes with the Business within
the Restricted Territory.

	7.6
	For
the purposes of sections 7.4 and 7.5, inclusive, but without limitation thereof, the Consultant or McAlpine will be in violation thereof if the Consultant or
McAlpine, as the case may be, engages in any or all of the activities set forth therein directly on its or his own account, or indirectly as a partner, joint venturer, employee, agent, salesperson,
consultant, officer and/or director of any firm, association, partnership, corporation or other entity, or as a stockholder of any corporation in which the Consultant, its affiliates, McAlpine or
McAlpine's spouse, child or parent owns, directly or indirectly, individually or in the aggregate, more than five percent (5%) of the outstanding stock.

	7.7
	If
it shall be judicially determined that the Consultant or McAlpine has violated any of their respective obligations under section 7.5, then the period applicable to each
obligation that the Consultant or McAlpine, as the case may be, shall have been determined to have violated shall automatically be extended by a period of time equal in length to the period during
which such violation(s) occurred. 

5

 
	7.8
	Neither
the Consultant or McAlpine will directly or indirectly at any time during or after the termination of this Agreement attempt to disrupt, damage, impair or interfere with the
business by raiding any of the company's employees or soliciting any of them to resign from their employment by the company, or by disrupting the relationship between the company and any of its
consultants, agents, representatives or vendors. The Consultant and McAlpine acknowledge that this covenant is necessary to enable the company to maintain a stable workforce and remain
in business.

	7.9
	The
Consultant and McAlpine will keep in strict confidence, and will not, directly or indirectly, at any time during or after the termination of this Agreement, disclose, furnish,
disseminate, make available or, except in the course of performing their duties, use any trade secrets or confidential business and technical information of the company or its customers or vendors,
without limitation as to when or how the Consultant or McAlpine may have acquired such information. Such confidential information shall include, without limitation, the company's unique selling
methods and business techniques, training, service and business manuals, promotional materials, training courses and other training and instructional materials, vendor and product information,
customer and prospective customer lists, other customer and prospective customer information and other business information. The Consultant and McAlpine specifically acknowledge that all such
confidential information, whether reduced to writing, maintained on any form of electronic media, or maintained in the mind or memory of the Consultant or McAlpine and whether compiled by the company,
the Consultant and/or McAlpine, derives independent economic value from not being readily known to or ascertainable by proper means by others who can obtain economic value from its disclosure or use,
that reasonable efforts have been made by the company to maintain the secrecy of such information, that such information is the sole property of the company and that any retention and use of such
information by the Consultant or McAlpine during the term of this Agreement (except in the course of performing their respective duties and obligations hereunder) or after the termination of this
Agreement shall constitute a misappropriation of the company's trade secrets.

	7.10
	The
Consultant and McAlpine agree that upon conception and/or development of any idea, discovery, invention, improvement, software, writing or other material or design that:
(i) relates to the business, or (ii) relates to the company's actual or demonstrably anticipated research or development, or (iii) results from any work performed by the
Consultant or McAlpine for the company, the Consultant or McAlpine, as the case may be, will assign to the company the entire right, title and interest in and to any such idea, discovery, invention,
improvement, software, writing or other material or design. 

Neither
the Consultant or McAlpine has an obligation to assign any idea, discovery, invention, improvement, software, writing or other material or design that the Consultant or McAlpine conceives
and/or develops entirely on their own time without using MEC's equipment, supplies, facilities, or trade secret information unless the idea, discovery, invention, improvement, software, writing or
other material or design either: (i) relates to the Business, or (ii) relates to MEC's actual or demonstrably anticipated research or development, or (iii) results from any work
performed by the Consultant or McAlpine for MEC. 

The
Consultant and McAlpine agree that any idea, discovery, invention, improvement, software, writing or other material or design that relates to the Business or relates to MEC's actual or
demonstrably anticipated research or development which is conceived or suggested by the Consultant or McAlpine, either solely or jointly with others, within one (1) year following termination
of this Agreement or any successor agreements shall be presumed to have been so made, conceived or suggested in the course of the term of this Agreement with the use of MEC's equipment, supplies,
facilities, and/or trade secrets. 

6

 

In
order to determine the rights of the Consultant, McAlpine and MEC in any idea, discovery, invention, improvement, software, writing or other material, and to insure the protection of the same, the
Consultant and McAlpine agree that during the term of this Agreement, and for one (1) year after termination of this Agreement or any successor agreements the Consultant and McAlpine will
disclose immediately and fully to MEC any idea, discovery, invention, improvement, software, writing or other material or design conceived, made or developed by the Consultant or McAlpine, as the case
may be, solely or jointly with others. MEC agrees to keep any such disclosures confidential. The Consultant and McAlpine also agree to record descriptions of all work in the manner directed by the
Company and agrees that all such records and copies, samples and experimental materials will be the exclusive property of MEC. 

The
Consultant and McAlpine agree that at the request of and without charge to the Company, but at the Company's expense, the Consultant or McAlpine, as the case may be, will execute a written
assignment of the idea, discovery, invention, improvement, software, writing or other material or design to the Company or MEC and will assign to the Company or MEC any application for letters patent
or for trademark registration made thereon, and to any common-law or statutory copyright therein; and that the Consultant or McAlpine, as the case may be, will do whatever may be necessary
or desirable to enable the Company or MEC to secure any patent, trademark, copyright, or other property right therein in the United States and in any foreign country, and any division, renewal,
continuation, or continuation in part thereof, or for any reissue of any patent issued thereon. 

In
the event the Company is unable, after reasonable effort, and in any event after ten business days, to secure the Consultant's or McAlpine's signature on a written assignment to the Company or MEC
of any application for letters patent or to any common-law or statutory copyright or other property right therein, for any other reason whatsoever, the Consultant and McAlpine irrevocably
designate and appoint the Chairman of MEC as the Consultant's and McAlpine's attorney-in-fact to act on the Consultant's or McAlpine's behalf, as the case may be, to execute
and file any such application and to do all other lawfully permitted acts to further the prosecution and issuance of such letters patent, copyright or trademark. 

The
Consultant and McAlpine acknowledge that to the extent permitted by law, all work papers, reports, documentation, drawings, photographs, negatives, tapes and masters therefor, prototypes and other
materials (hereinafter, "items"), including without limitation, any and all such items generated and maintained on any form of electronic media, generated by the Consultant or McAlpine during the term
of this Agreement shall be considered a "work made for hire" and that ownership of any and all copyrights in any and all such items shall belong to the Company. The item will recognize MEC or the
Company as the copyright owner, will contain all proper copyright notices, e.g., "(creation date) Magna Entertainment Corp., All Rights Reserved," and will be in condition to be registered or
otherwise placed in compliance with registration or other statutory requirements throughout the world. 

7

 
	7.11
	During
the term of this Agreement, neither the Consultant or McAlpine (either through himself or his immediate family members) shall engage in any business activities which may place
the Consultant or McAlpine in an actual or apparent conflict of interest with the Company or MEC.

	7.12
	Other
than Section 7.4, the termination of this Agreement shall not operate to terminate any provision of this Section 7 which shall remain in full force and effect and
binding on the Consultant and McAlpine in accordance with its terms after the termination of this Agreement.

	7.13
	For
the purposes of this section 7 of this Agreement:

	(a)
	"business"
means (a) owning, operating and/or managing horse racetracks, off-track betting facilities, telephonic and internet horse
wagering, a horse racing television network, thoroughbred training centers, and/or production facilities for horse bedding and/or (b) providing totalisator services to the
pari-mutuel industry.

	(b)
	"company"
includes the company's affiliated and associated companies, including their predecessors;

	(c)
	"Consultant"
shall include any affiliate and associated companies of the Consultant, including their predecessors;

	(d)
	"Restricted
Territory" means (and shall be limited to) (a) the geographic area(s) within a fifty (50) mile radius of any and all MEC
location(s) in, to, or for which the Consultant or McAlpine worked, to which the Consultant or McAlpine was assigned or had any responsibility (either direct or supervisory) at the time of termination
of this Agreement and at any time during the two (2) year period prior to such termination; and (b) all of the specific customer accounts, whether within or outside of the geographic
area described in (a), with which the Consultant or McAlpine had any contact or for which the Consultant or McAlpine had any responsibility (either direct or supervisory) at the time of termination of
this Agreement and at any time during the two (2) year period prior to such termination. 

8

 

8.     MISCELLANEOUS

	8.1
	Acknowledgement.    McAlpine
hereby acknowledges and agrees that he has carefully read and fully understands this Agreement and the Release,
that he has been advised in writing (by this Agreement) to consult with an attorney and has been provided a reasonable opportunity to do so prior to signing this Agreement and the Release; and
that he has been given at least twenty-one (21) days after receiving this Agreement and the Release within which to consider them. McAlpine hereby waives any right he might have to
additional time to consider this Agreement and the Release. By signing below, McAlpine acknowledges that he understands that he may revoke this Agreement and the Release within seven (7) days
after signing the Agreement. Any revocation shall be in writing and shall be delivered to the Chairman of the Company at Magna Entertainment Corp., 337 Magna Drive, Aurora, ON, Canada
L4G 7K1 with a copy to the Company's Corporate Secretary. The Agreement shall not become effective, and none of the payments and benefits set forth in this Agreement shall become due or payable
until the Company has received the Agreement and the Release signed by you and your seven-day revocation period has passed without revocation. McAlpine hereby acknowledges and agrees that
the severance payment and other benefits provided to him pursuant to the terms of this Agreement constitute monies and benefits to which he would not otherwise be entitled.

	8.2
	Notice.    Notice
under this Agreement by the Consultant to the Company or MEC should be addressed to the Company and left at its office at
337 Magna Drive, Aurora, ON, Canada L4G 7K1, sent by first class mail to such office. Notices given by the Company to the Consultant should be served personally or sent by first class
post or sent by facsimile transmission to 4 Jarvis Ave., Aurora, ON L4G 6W8, Facsimile: 905-727-2503. In case of service by mail the
day of service will (unless sooner receipt is established) be 48 hours after posting.

	8.3
	Governing
Law.    The validity, construction, and effect of this Agreement shall be determined in accordance with the laws of the Province of
Ontario without regard to conflicts-of-laws principles that would require the application of any other law.

	8.4
	Severability.    If
any provision of the Agreement is or becomes or is deemed to be invalid, illegal, or unenforceable, such provision shall be
construed or deemed amended to conform the applicable law, or if it cannot be construed or deemed amended without materially altering the intent of the Agreement, such provision shall be stricken and
the remainder of the Agreement shall remain in full force and effect.

	8.5
	Counterparts.    This
Agreement may be executed in one or more counterparts. 

9

 

        IN WITNESS WHEREOF, THIS AGREEMENT has been executed and delivered by the parties hereto on the date stated at the beginning of
this Agreement. 

	 	 	MAGNA ENTERTAINMENT CORP.
	
 	
 	

	 	 	By:

Its:	Frank Stronach

Interim Chief Executive Officer
	
 	
 	

	 	 	By:

Its:	Blake Tohana

Executive Vice-President and

Chief Financial Officer
	
 	
 	
MEC HOLDINGS (CANADA) INC.
	
 	
 	

	 	 	By:

Its:	Blake Tohana

Executive Vice-President and

Chief Financial Officer
	
 	
 	

	 	 	By:

Its:	William Ford

Secretary
	
 	
 	
McALPINE CAPITAL ADVISORS INC.
	
 	
 	

	 	 	By:

Its:	 
	
 	
 	

 Jim McAlpine

10

 
EXHIBIT A  

 
 

FORM OF RELEASE  
    

        FOR AND IN CONSIDERATION OF the compensation, payments and other benefits to be provided in accordance with the consulting agreement by and among MEC Holdings
(Canada) Inc. (the "Company"), Magna Entertainment Corp. ("MEC"), McAlpine Capital Advisors Inc. and me on April 30, 2006
(the "Agreement"), subject to my signing this Release, I, on my own behalf and on behalf of my heirs, executives, administrators, beneficiaries, personal
representatives and assigns, hereby release and forever discharge MEC, its subsidiaries and affiliates (including without limitation MI Developments Inc. and Magna International Inc.),
and all of its past, present and future officers, directors, shareholders, employees, agents, general and limited partners, joint venturers, representatives, successors and assigns, both individually
and in their official capacities, from any and all causes of action, rights and claims of any type or description (including any claim under the Ontario Employment Standards Act), whether known or
unknown, which I have had in the past, now have, or might now have, through the date of my signing of this Release, in any way resulting from, arising out of or connected with my employment by MEC
and/or the Company, the consulting services provided by McAlpine Capital Advisors and me pursuant to the Agreement, the termination of my employment, the termination of the consulting services
contemplated by the Agreement, or pursuant to any federal, state, provincial or local law, regulation or other requirement. Excluded from the scope of this Release, however, are (i) any rights
I have under the Agreement and (ii) any rights I have now or hereafter acquire to indemnification or contribution under the articles of incorporation or by-laws of MEC or under
applicable law. 

        In
signing this Release, I acknowledge that I received this Release in connection with the negotiation of the Agreement, and that I have been advised in writing by receipt of the
Agreement to consult with an attorney before signing the Agreement and the Release. I further acknowledge that I have been given at least twenty-one (21) days to decide whether to
sign the Agreement and this Release, unless I voluntarily choose to sign the Agreement and this Release before the end of the twenty-one (21) day period. I understand that I may
revoke the Agreement and this Release at any time within seven (7) days of the date of my signing the Agreement, and that the Agreement and this Release will not become effective or enforceable
until after this revocation period has expired. I understand that in order to revoke the Agreement and this Release, I must give written notice to the Chairman of the Company at Magna Entertainment
Corp., 337 Magna Drive, Aurora, ON, Canada L4G 7K1, in writing, delivered by close of business on the seventh day after my signing the Agreement with a copy to the Company's Corporate
Secretary. I understand that I will not be entitled to any benefits under the Agreement until the end of the seven (7) day revocation period. 

        DATED:
This                          day of
                                    ,
200            .
 

	
 	

 Jim McAlpine

11

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