Document:

ex10-2_masterfileapa.htm

     

    
Exhibit 10.2

     

     

    ASSET PURCHASE
AGREEMENT

     

    THIS
ASSET PURCHASE AGREEMENT (the “Agreement”) is made
as of the 3rd day of December, 2008, by and between SuperStock, Inc, a Florida
corporation (“Seller”), its parent
company, a21, Inc, (“Parent”) and Masterfile Corporation, a Canadian corporation
(“Purchaser”).
Each of Seller, Parent and Purchaser may hereafter be referred to as a “Party” and
collectively as the “Parties”.

     

    RECITALS

     

    WHEREAS,
Seller is engaged in the business of selling and licensing images and vector
graphics and fonts for graphics design, printing, sign making, advertising and
publishing businesses;

     

    WHEREAS,
Seller’s primary business assets include assets consisting primarily of print
image collections and licensed images, equipment for the digitization and
storage of images, website and technology that permits customers to view, order
and download images from Seller’s website, a subsidiary in the United Kingdom,
SuperStock Ltd., and a leased facility in Jacksonville, Florida;

     

    WHEREAS,  Seller
and Parent have experienced substantial financial difficulties and have
determined that it is in the best interest of Seller and Parent to file for
bankruptcy protection and sell the business of Seller as a going concern free
and clear of all liens and encumbrances.

     

    WHEREAS,
each of Seller and Parent anticipates filing a petition for bankruptcy
protection on or about December 4, 2008 (Seller’s and Parent’s Bankruptcy cases
are collectively referred to as the “Bankruptcy Case”,
under Chapter 11 of Title 11, United States Code (the “Bankruptcy Code”), in
the United States Bankruptcy Court for the Middle District of Florida (the
“Bankruptcy
Court”);

     

    WHEREAS,
Seller and Parent desire to sell to Purchaser, and Purchaser desires to purchase
from Seller and Parent,  certain assets used or held for use in the
Business (as hereafter defined) free and clear of all debts, claims, liens,
taxes, mortgages, and any other liabilities of Seller and Parent pursuant to 11
U.S.C. §363(b) and (f); and

     

    NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and intending to be legally bound hereby, the
Parties agree as follows:

     

    
      
         

      

      
        Page
1

        
          

        

      

      
         

      

    

    

     

    ARTICLE
1                                

     

    

     

    Definitions
and References

     

    “Accepted Originals-Related
Contracts” means contracts or agreements with content providers for whom
Original Materials relating to Images are or are required to be held by the
Business which are identified in a notice in writing delivered by Purchaser to
Seller not less than  five (5) Business Days prior to
Closing.  Such contracts or agreements shall be limited to contracts
or agreements that require the Seller to pay no more than an aggregate of
$500,000 in cure amounts

     

    “Affiliate” has the
meaning ascribed to such term in the Bankruptcy Code.

     

    “Agreement Date” means
the first date upon which this Agreement has been mutually executed and
delivered by Seller, Parent and Purchaser.

     

    “Approval Order” means
the order of the Bankruptcy Court approving this Agreement and the sale by
Seller and Parent to Purchaser of the Purchased Assets, free and clear of all
liens and interests in the property pursuant to Bankruptcy Code Section 363(f)
and (m) containing, among other things, provisions substantially the same as
those set forth on Exhibit A attached
hereto and satisfactory to Purchaser, acting reasonably.

     

    “Assumed Contracts”
means all written contracts, agreements, and binding arrangements which relate
to the Business and to which Seller and/or Parent is bound, including all
confidentiality agreements obtained by Seller or Parent, or for their benefit,
in connection with its sale of the Business and the contracts listed on Schedule 2.4, (such
contracts listed on Schedule 2.4 shall not require the Seller to pay more than
an aggregate of $500,000 in cure amounts and the parties shall agree to such
list by January 6, 2009), but excluding:

     

    (A) the
Excluded Contracts,

     

    
      	
               
      

            	
              (B)
      any contracts under which Seller or Parent is in breach or default (other
      than as a result only of the Bankruptcy Case)
  and

            

    

     

    (C) any
contracts not listed in Schedule 2.4 which:

     

     (i)           involve
a Liability of Seller or Parent in excess of $ 1,000;

     

    iiare
outside the ordinary course of business;

     

    (iii)           involve
operating and capital lease rental agreements

     

    or

     

    
      	
               
      

            	
              (iv)

            	
              do
      not terminate or cannot be terminated on less than three months’ prior
      notice, without penalty or premium.

            

    

     

    
      
         

      

      
        Page
2

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              “Auction” has
      the meaning set forth in Section
6.4.

            

    

     

    “Bankruptcy Case” is
defined in the recitals.

     

    “Bankruptcy Code” is
defined in the recitals.

     

    “Bankruptcy Court” is
defined in the recitals.

     

    “Business” means the
business carried on directly and indirectly by Seller and its Affiliates,
including SuperStock Ltd. of the creation, acquisition, distribution and
licensing of Images.

     

    “Business Day” means
any day that is not a Saturday, Sunday or a day on which the commercial banks in
Jacksonville, Florida or Toronto, Ontario are required or permitted to be
closed.

     

    “Business Records” has
the meaning set forth in Section 2.2(e).

     

    “Claims” has the
meaning set forth in Section 2.1.

     

    “Closing” means the
consummation of the sale of the Purchased Assets to Purchaser pursuant to this
Agreement.

     

    “Closing Date” means
the date upon which a Closing occurs as set forth in Section 4.2 of this
Agreement.

     

    “Competing Offer” has
the meaning set forth in Section 6.4.

     

    “Deposit” has the
meaning set forth in Section 4.3.

     

    “Encumbrances” means
any mortgage, pledge, lien (statutory or otherwise), security interest,
warehouseman’s lien, landlord’s lien, easement, right of way, covenant, claim,
restriction, right, option, conditional sale or other title retention agreement,
charge or encumbrance of any kind or nature.

     

    “Excluded Assets” has
the meaning set forth in Section 2.5.

     

    “Excluded Liabilities”
has the meaning set forth in Section 3.1.

     

    “Excluded Contracts”
means

     

    (i) any
contracts or agreements with content providers for whom Original Materials
relating to Images are or are required to be held by the Business (other than
the Accepted Originals-Related Contracts), unless and until a waiver or release
from any obligations to hold or maintain such Original Materials have been
received from the content provider (and effective upon receipt of such waiver or
release such contract or agreement shall be an Assumed Contract),

     

    
      
         

      

      
        Page
3

        
          

        

      

      
         

      

    

    (ii) all
contracts or agreements with customers for the PurestockX subscription
service,

     

    (iii) any real estate lease or sublease;

     

    (iv) the contracts and agreements listed in
Schedule 2.5  (which the parties shall agree to by January 6,
2009) ;and

     

    
      	
               
      

            	
              (v) any contract or agreement identified in
      the notice delivered by Purchaser pursuant to Section
  2.5.

            

    

     

    “Expense Reimbursement and
Break-Up Fee” has the meaning set forth in Section 6.6.

     

    “Folely Firm” has the
meaning set forth in Section 4.2.

     

    “Image”
means a picture or image created through photography, computer imaging, drawing,
painting or any other form of illustration or depiction regardless of the medium
in which such picture is recorded.

     

    “Intellectual
Property” has the meaning set forth in Section 2.2(c).

     

    “Liabilities” means
all costs, expenses, charges, debts, liabilities, claims, demands and
obligations, assessments or reassessments of any kind or nature, whether primary
or secondary, direct or indirect, fixed, contingent or absolute, voluntarily
incurred or otherwise, whenever asserted.

     

    “Original Materials”
means transparencies, prints, negatives, artwork and other tangible source
materials relating to any Image.

     

    “Person” means any
individual, partnership, joint venture, firm, corporation, limited liability
company, association, trust or other enterprise, or any government or political
subdivision or any agency, department or instrumentality thereof.

     

    “Price Allocation” has
the meaning set forth in Section 4.5.

     

    “Purchased Assets” has
the meaning set forth in Section 2.2.

     

    “Sale Procedure
Motion” means the motion which is substantially in the form attached as
Exhibit B
hereto.

     

    “Sale Procedures
Order” means the order of the Bankruptcy Court with respect to the Sale
Procedure Motion containing, among other things, provisions substantially the
same as those set forth in Exhibit B attached
hereto and satisfactory to Purchaser, acting reasonably.

     

    “Software” means
all

     

    
      	
               
      

            	
              (i)
      computer programs, including any and all software implementations of
      algorithms, models and methodologies, whether in source code or object
      code,

            

    

     

    
      
         

      

      
        Page
4

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (ii)
      databases and compilations, including any and all data and collections of
      data, whether machine readable or
otherwise,

            

    

     

    
      	
               
      

            	
              (iii)
      descriptions, flow-charts and other work product used to design, plan,
      organize and develop any of the foregoing, screens, user interfaces,
      report formats, firmware, development tools, templates, menus, buttons and
      icons, and

            

    

     

    
      	
               
      

            	
              (iv)
      all documentation including user manuals and other training documentation
      related to any of the foregoing.

            

    

     

    “Taxes” includes any
taxes, duties, fees, premiums, assessments, imposts, levies and other charges of
any kind whatsoever imposed by any governmental authority, including all
interest, penalties, fines, additions to tax or other additional amounts imposed
by any governmental authority in respect thereof, and including those levied on,
or measured by, or referred to as, income, gross receipts, profits, capital,
transfer, land transfer, sales, goods and services, harmonized sales, use,
value-added, excise, stamp, withholding, business, franchising, property,
development, occupancy, employer health, payroll, employment, health, social
services, education and social security taxes, all surtaxes, all customs duties
and import and export taxes, countervail and anti-dumping, all license,
franchise and registration fees and all employment insurance, health insurance
and government pension plan premiums or contributions.

     

    “Termination Date” has
the meaning set forth in Section 9.2(d).

     

    ARTICLE
2                                

     

    

     

    Purchase
and Sale of Assets

     

    Section
2.1. Agreement to Purchase and
Sell. On the terms and subject to the conditions contained in this
Agreement, Purchaser agrees to purchase from Seller and Parent, and Seller and
Parent agree to sell to Purchaser, all right, title and interest Seller Parent
and Parent’s Affiliates in and to the Purchased Assets. The Purchased Assets
shall be sold to Purchaser free and clear of any and all debts, liens, Taxes,
claims (as claim is defined in Section 101(5) of the Bankruptcy Code) and other
Encumbrances and Liabilities of Seller and Parent or their bankruptcy estates of
whatever kind or nature, including but not limited to any and all security
interests, landlord’s liens, warehouseman’s liens, mortgages, pledges, charges,
suits, licenses, options, rights of recovery, judgments, rights of first
refusal, orders and decrees of any court or foreign or domestic governmental
entity, interest, covenants, restrictions, indentures, instruments, leases,
options, contracts, agreements, claims for reimbursement, contribution,
indemnity or exoneration, successor, products liability, environmental, tax,
labor, alter ego and other Liabilities (collectively, “Claims”), it being
understood and agreed that Purchaser does not and shall not assume or become
liable for any of the debts, Liabilities or Claims of Seller and Parent in
connection with the prior operation of Seller and Parent’s business, including
any claims for negligence, products liability, breach of contract or labor
related obligations arising out of collective bargaining agreements or
otherwise.

     

    
      
         

      

      
        Page
5

        
          

        

      

      
         

      

    

    

     

    Section
2.2. Enumeration of Purchased
Assets. All of the properties, assets, interests and rights of Seller,
Parent and their Affiliates used or held for use in connection with the
Business, other than the Excluded Assets shall constitute the “Purchased
Assets”.  For greater certainty, the Purchased Assets shall include
the following properties, assets, interests and rights (except to the extent
that any are Excluded Assets):

     

    (a) Images
and all rights and interests in Images created, acquired or held for licensing
or distribution in the Business;

     

    (b) All
existing operating equipment, manufacturing equipment, office equipment,
furniture, computers, computer files and books, together with related spare
parts and accessories, including the items set forth on Schedule 2.2(b)
attached hereto and made a part hereof.  

     

    (c) All
intellectual property rights used or held for use in connection with the
Business, including trademarks, copyrights, works of authorship, trade names
(including, without limitation, the trade names “SuperStock” and “Purestock”),
service marks, service names,  brand names, logos, corporate names and
internet domain names (including, without limitation, “superstock.com”,
“purestock.com”  and
“superstock.co.uk”, trade secrets (all both registered and common law), patents
and applications therefor (including continuations, divisionals,
continuations-in-part, or reissues of patent applications and patents issuing
thereon), discoveries, concepts, ideas, research and development, know-how,
formulae, inventions, compositions, manufacturing and production processes and
techniques, technical data, procedures, designs, drawings, specifications,
databases and all rights associated therewith and appurtenant thereto, Software
and all assorted goodwill, including the items set forth on Schedule 2.2(c)
attached hereto and made a part hereof (collectively “Intellectual
Property”).

     

    (d) All items
other than Images which are being created, produced or acquired for sale,
license or distribution in the Business, or are to be consumed, directly or
indirectly, in the Business, of every kind and nature and wheresoever situate,
including inventories of raw materials, work-in-progress, finished goods and
by-products, supplies and packaging materials.

     

    (e) All
customer lists, customer relationships, customer files, customer product
specifications, historical sales and price information, vendor and supplier
lists, historical vendor and supplier purchase and price information, marketing
plans, market studies, customer proposals and all other files and records and
business records relating to the production, marketing and sale of products or
services provided by the Business (collectively, “Business
Records”).  Purchaser agrees to retain all such records for
three years and to give Seller and any bankruptcy trustee appointed for Seller
reasonable access to and the right to copy all such records for their business
purposes.

     

    (f)  The exclusive right of
Purchaser to represent itself as carrying on the Business in succession to
Seller and its Affiliates.

     

    
      
         

      

      
        Page
6

        
          

        

      

      
         

      

    

    

     

    (g) All
rights under non-disclosure or confidentiality, non-compete, or non-solicitation
agreements with employees and agents of Seller and Parent or with third parties,
all rights under or pursuant to all warranties, representations and guarantees
made by suppliers, manufacturers and contractors and all goodwill and other
intangible assets associated with the Business and the Purchased
Assets.

     

    (h) All
rights of action against Persons with respect to claims for breach, violation or
infringement of or interference with copyright, model rights, tangible property
rights or other intellectual property rights relating to Images and rights and
interests in Images acquired by Purchaser pursuant to this
Agreement.

     

    Section
2.3. Leased Premises.
Purchaser shall not assume the lease of Seller’s premises in Jacksonville,
Florida or the lease of the premises in the United Kingdom, nor any other lease
of premises held by Seller.  Seller shall use its best efforts to cause its Affiliates to
permit Purchaser to occupy such premises for a period of up to ninety (90) days
from Closing in order to arrange for the orderly removal of the Purchased Assets
therefrom subject to Purchaser paying the rent
associated with the occupied premises.

     

    Section
2.4. Assumed Executory
Contracts.  Purchaser shall assume and agree to perform all the
following, to the extent that it can do so with the Images delivered under the
Assumed Contracts:

     

    (i) all
Seller’s outstanding, unfilled customer orders entered into in the ordinary
course of business consistent with past practice as of the Closing Date,
excluding any unfilled customer orders relating to the PurestockX subscription
service and provided that Seller and Parent shall deliver to Purchaser all
deposits and payments received with respect to the
unperformed  portion of such customer orders;

     

    (ii) all
Liabilities to be incurred or arising on or after Closing under the Assumed
Contracts.

     

    For
greater certainty, Purchaser shall have no Liability for preclosing Liabilities
and obligations under the Assumed Contracts other than customer orders referred
to in (i) above.

     

    Section
2.5. Excluded Assets. The
Purchased Assets shall not include any of the following assets of Seller or its
bankruptcy estate, or of Parent and its bankruptcy estate, the “Excluded
Assets”:

     

    (a) all cash
and cash equivalents or similar investments, bank accounts, commercial paper,
certificates of deposit, Treasury bills and other marketable
securities;

     

    (b) all
accounts receivable and other receivables which were invoiced by Seller prior to
Closing;

     

    
      
         

      

      
        Page
7

        
          

        

      

      
         

      

    

    

     

    (c) all of
Seller’s credits, prepaid expenses, deferred charges, advance payments, security
deposits, returns to and rebates from vendors, and prepaid items;

     

    (d) the
rights of Seller and Parent under this Agreement and all cash and non-cash
consideration payable or deliverable to Seller under this
Agreement;

     

    (e) all
rights which accrue or will accrue to the benefit of Seller and Parent under
this Agreement or any document executed and delivered in connection
herewith;

     

    (f) all
rights to refunds or recoupment of Taxes of Seller;

     

    (g) all of
Seller’s corporate and tax books and records, including, without limitation, the
corporate charter, seals, minute books, stock transfer books and other documents
relating exclusively to the organization and existence of Seller as a limited
liability company and records relating to accounts receivable and other
receivables which were invoiced by Seller prior to Closing (excluding Business
Records);

     

    (h) Business
Records which are in tangible form to the extent duplicative of Business Records
which are in electronic form;

     

    (i) all
causes of action belonging to Seller or its bankruptcy estate, including, but
not limited to, any causes of action (i) against any Affiliates of Seller,
and/or (ii) arising under Chapter 5 of the Bankruptcy Code;

     

    (j) all
materials subject to any attorney-client or other privilege as well as any
information concerning employees, the disclosure of which would violate an
employee’s reasonable expectation of privacy;

     

    (k) all
insurance policies and all rights thereunder;

     

    (l) the
assets, properties, interests and rights listed in Schedule 2.5;

     

    (m) all
Excluded Contracts;

     

    (n) all
receivables due to Seller from Parent;

     

    (o) shares of
any Affiliate of Seller, including the shares of
Seller’s UK subsidiary, SuperStock, Ltd.; and

     

    (p) all
assets identified as being excluded assets in any notices in writing delivered
by Purchaser to Seller not less than five (5)
Business Days prior to Closing.

     

    
      
         

      

      
        Page
8

        
          

        

      

      
         

      

    

    

     

    ARTICLE
3                                

     

    

     

    Liabilities

     

    Section
3.1. Excluded
Liabilities.  Purchaser shall not assume and shall not be
deemed to have assumed or otherwise be liable for any debts, Claims, obligations
or other Liabilities of Seller, Parent or their respective bankruptcy estates or
in respect of the Purchased Assets whatsoever other than the Liabilities assumed
pursuant to Section 2.4 (the “Excluded
Liabilities”), all of which shall remain the sole responsibility and
obligation of Seller and/or Parent.  Specifically, without limiting
the foregoing, Excluded Liabilities shall include:

     

    (a) income,
capital or capital gains Taxes or Taxes on profits of Seller, Parent and their
Affiliates including accrued income Taxes;

     

    (b) any other
Taxes, paid, payable, collected, collectible or otherwise relating to the
Business or the Purchased Assets for any period prior to Closing;

     

    (c) all
Liabilities relating to the Excluded Assets;

     

    (d) all
payables to Parent or any of its Affiliates;

     

    (e) all
Liabilities associated with Seller’s and Parent’s Bankruptcy Case;

     

    (f) any of
Seller’s or Parent’s Liabilities under this Agreement;

     

    (g) all
Claims and Encumbrances;

     

    (h) all
Liabilities arising out of, relating to or with respect to employees, including
Claims relating to employee severance and termination;

     

    (i) all
Liabilities to customers arising out of, relating to or with respect to the
PurestockX subscription service;

     

    (j) any of
Seller’s or Parent’s Liabilities arising by reason of any violation or alleged
violation of any law or any requirement of any governmental authority or by
reason of any breach or alleged breach of any contract, permit, license
judgment, order or decree, regardless of when any such violation or breach is
asserted;

     

    (k) any of
Seller’s or Parent’s Liabilities relating to claims for loss and/or damage to
original and/or duplicate materials relating to any Image (including, without
limitation, photographic negatives, transparencies, prints, artwork, digital
image files and digital media) by the owners or the agents of such owners of
such materials;

     

    (l) any of
Seller’s or Parent’s Liabilities relating to claims for breach of copyright,
model rights, tangible property rights or intellectual property rights related
to any licensing, distribution or publication of the Images that occurred prior
to Closing;

     

    
      
         

      

      
        Page
9

        
          

        

      

      
         

      

    

    

     

    (m) any of
Seller’s or Parent’s Liabilities relating to claims for breach of any express or
implied warranty, personal injury, damage to property or other loss based upon
or arising out of the sale and distribution of products or the provision of
services by Seller or Parent; and

     

    (n) any other
Liability of Seller or Parent that is not expressly assumed pursuant to Section
2.4 including without limitation any Liabilities or obligations arising out of
transactions entered into at or prior to the Closing, any action or inaction at
or prior to the Closing or any state of fact existing at or prior to the
Closing, regardless of when asserted.

     

    

    ARTICLE
4                                

     

    

     

    Purchase
Price; Manner of Payment and Closing

     

    Section
4.1. Consideration. The
purchase price (the “Purchase Price”) for
the Purchased Assets shall be one million five hundred thousand dollars
($1,500,000.00) plus any adjustment provided pursuant to Section
6.7.  Purchaser agrees to pay the Purchase Price in the manner
described in Section 4.2 below. The Purchase Price shall be allocated among the
Purchased Assets in the manner described in Section 4.5.

     

    Section
4.2. Time and Place of the
Closing. The closing of the transactions contemplated by this Agreement
shall take place at 10:00 a.m., Eastern Standard Time, at the offices of Foley
& Lardner LLP, Jacksonville Florida (the “Foley
Firm”),

     

    (a)
within three (3) Business Days after all of the conditions set forth in Article
7 have been satisfied or waived (or such longer period after such conditions
have been satisfied as may be required by the Approval Order under the
provisions of the Federal Rules of Bankruptcy Procedure 6004(g) or 6006(d)),
or

     

    (b) on
such other date as the Parties mutually agree upon so long as Purchaser is
deemed a good faith purchaser under 11 U.S.C. § 363(m), but no later than
January 31, 2009, time being of the essence.

     

    Section
4.3. Manner of Payment of the
Consideration. Contemporaneous with the
execution of this Agreement, Purchaser shall deliver to Foley Firm, acting as
escrow agent, a check for  $50,000
(the “Deposit”), to be held by the Foley Firm in escrow in a non-interest
bearing trust account subject to the terms of this Agreement.  At the Closing, Purchaser shall authorize the release of
the Deposit to Seller and pay the balance
of the Purchase Price to the Seller by wire
transfer of immediately available funds to an account designated by Seller,
which Seller shall designate by written notice delivered to Purchaser not later
than two (2) Business Days prior to the Closing Date.  If this Agreement is
terminated by Seller or Parent pursuant to Section 9.2(a) or Section 9.2(b),
Purchaser shall forfeit the Deposit, the Deposit shall be paid to Seller and the
payment of the Deposit to Seller shall be the sole remedy of Seller and Parent
for such breach or failure to comply. If Closing does not occur and the Deposit
has not been

     

    
      
         

      

      
        Page
10

        
          

        

      

      
         

      

    

    forfeited
by Purchaser in accordance with the preceding sentence, then the Deposit shall
be returned to Purchaser on the earlier of the Termination Date and the date of
acceptance of a Competing Offer.

     

    Section
4.4. Closing Deliveries.
At the Closing:

     

    (a) Seller
and Parent shall execute and deliver to Purchaser a Bill of Sale, and an
Assignment of the Intellectual Property, substantially in the forms attached as
Exhibit C and
such other bills of sale, endorsements, assignments and such other instruments
of transfer and conveyance, in form and substance satisfactory to Purchaser,
acting reasonably, as shall be effective, together with the Approval Order, to
vest in Purchaser as of the Closing Date good and marketable title, free and
clear of all Claims and Encumbrances, in and to the Purchased
Assets;

     

    (b) Seller
and Parent shall deliver to Purchaser a copy of the Approval Order and
possession of the Purchased Assets;

     

    (c) Purchaser
shall deliver to Seller a certificate, dated the Closing Date and signed by
Purchaser’s President, Chief Executive Officer or Chief Operating Officer,
certifying that the representations and warranties of Purchaser contained in
Section 5.1 are accurate and complete both when made and at and as of the
Closing Date with the same effect as though made at and as of such time and that
all covenants required by the terms hereof to be performed by Purchaser on or
before the Closing Date, to the extent not waived by Seller in writing, have
been so performed in all material respects (or, if any such covenant has not
been so performed, indicating that such covenant has not been
performed);

     

    (d) Purchaser
shall deliver to Seller a certificate, dated the Closing Date and signed by
Purchaser’s President, Chief Executive Officer or Chief Operating Officer
attaching

     

    (i) a
certified copy of the resolutions of the board of directors of Purchaser,
authorizing the execution, delivery and performance of this Agreement and all
documents associated herewith; and

     

    (ii) a
certified copy of the organizational documents of Purchaser and all amendments
thereto; and

     

    (e) each
Party shall deliver to the other certificates of a senior officer of the Party
confirming the truth and correction of representation and warranties made by the
Party in this Agreement and performance or compliance, as the case may be, with
all obligations and covenants of the Party in this Agreement.

     

    Section
4.5. Allocation of
Consideration. The Purchase Price shall be allocated among the Purchased
Assets as the parties mutually agree immediately prior to Closing. Each Party
agrees to timely file any IRS Form 8594 it may be required by law to file
reflecting the Price Allocation for the taxable year that includes the Closing
Date and to make any timely filing required by applicable state or local laws.
Each Party hereto shall adopt and utilize the Price Allocation for purposes of
all tax returns filed by them and shall not voluntarily take any position
inconsistent with the foregoing in connection with any examination of any tax
return, any refund

     

    
      
         

      

      
        Page
11

        
          

        

      

      
         

      

    

    claim,
any litigation proceeding or otherwise. In the event that the Price Allocation
is disputed by any taxing authority, the Party receiving notice of the dispute
shall promptly notify the other Party of such dispute and the Parties shall
cooperate in good faith in responding to such dispute in order to preserve the
effectiveness of the Price Allocation.

     

    Section
4.6. Prorations. Purchaser
shall be entitled to a credit against the Purchase Price in respect of the
following items relating to the Purchased Assets or the Business, which shall be
adjusted between Seller and Purchaser so as to charge Seller for such items to
the extent they relate to the period ending on or prior to the Closing Date and
so as to charge Purchaser for such items to the extent they relate to periods
after the Closing Date:

     

    (a) periodically
recurring governmental and quasi-governmental fees for transferred licenses and
permits; and

     

    (b) payments
payable under the Assumed Contracts in the ordinary course of business
consistent with past practice.

     

    ARTICLE
5                                

     

    

     

    Representations
and Warranties

     

    Section
5.1. Purchaser’s Representations
and Warranties. Purchaser represents and warrants to Seller and Parent
that:

     

    (a) Purchaser
is a Canadian corporation validly existing and in good standing under the laws
of the jurisdiction of its organization. Purchaser is duly qualified and in good
standing in each jurisdiction in which the nature of its business requires it to
be so qualified.

     

    (b) Purchaser
has full power and authority to enter into and perform this Agreement and all
documents and instruments to be executed by Purchaser pursuant to this
Agreement. The execution and delivery of this Agreement by Purchaser and the
performance by Purchaser of all of its obligations hereunder have been duly
authorized and approved prior to the date hereof by all necessary entity action.
This Agreement has been duly executed and delivered by Purchaser and constitutes
its legal, valid and binding agreement, enforceable against it in accordance
with its terms.

     

    (c) Except
for the Bankruptcy Court’s entry of the Approval Order, no consent,
authorization, order or approval of, or filing or registration with, any
governmental authority or other Person is required for the execution and
delivery by Purchaser of this Agreement and the consummation by Purchaser of the
transactions contemplated by this Agreement.

     

    (d) Neither
the execution and delivery of this Agreement by Purchaser nor the consummation
by Purchaser of the transactions contemplated hereby will conflict with or
result in a breach of any of the terms, conditions or provisions of the
certificate of formation or operating agreement of Purchaser, or of any
agreement or instrument to which Purchaser is a

     

    
      
         

      

      
        Page
12

        
          

        

      

      
         

      

    

    party or
any of its properties is subject or bound or any statute or administrative
regulation, or of any order, writ, injunction, judgment or decree of any court
or governmental authority or of any arbitration award that is binding upon
Purchaser.

     

    (e) Purchaser
has not dealt with any Person or entity in such manner as to give rise to a
valid broker’s commission, finder’s fee, investment banker’s fee or similar
payment from Seller for arranging the transactions contemplated hereby or
introducing the Parties to each other.

     

    (f) As of the
Closing, Purchaser shall have sufficient cash on hand to pay the Purchase Price
and to make all other necessary payments of fees and expenses in connection with
the transactions contemplated by this Agreement, if any.

     

    (g) PURCHASER
HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
SECTION 5.2 BELOW AND OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT, SELLER AND
PARENT MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED,
WITH RESPECT TO ANY MATTER RELATING TO THE PURCHASED ASSETS INCLUDING, WITHOUT
LIMITATION, INCOME TO BE DERIVED OR EXPENSES TO BE INCURRED IN CONNECTION WITH
THE PURCHASED ASSETS, THE VALUE OF THE PURCHASED ASSETS (OR ANY PORTION
THEREOF), THE TRANSFERABILITY OF THE PURCHASED ASSETS, TITLE TO THE PURCHASED
ASSETS (OR ANY PORTION THEREOF), OR ANY OTHER MATTER OR THING RELATING TO THE
PURCHASED ASSETS OR ANY PORTION THEREOF. WITHOUT IN ANY WAY LIMITING THE
FOREGOING, SELLER AND PARENT HEREBY DISCLAIMS ANY WARRANTY, EXPRESS OR IMPLIED,
OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE AS TO ANY PORTION OF
THE PURCHASED ASSETS. PURCHASER FURTHER ACKNOWLEDGES THAT PURCHASER HAS
CONDUCTED AN INDEPENDENT INSPECTION AND INVESTIGATION OF THE PHYSICAL CONDITION
OF THE PURCHASED ASSETS AND ALL SUCH OTHER MATTERS RELATING TO OR AFFECTING THE
PURCHASED ASSETS AS PURCHASER DEEMED NECESSARY OR APPROPRIATE AND THAT IN
PROCEEDING WITH ITS ACQUISITION OF THE PURCHASED ASSETS, EXCEPT FOR ANY
REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS SECTION 5.1,
PURCHASER IS DOING SO BASED SOLELY UPON SUCH INDEPENDENT INSPECTIONS AND
INVESTIGATIONS. ACCORDINGLY, PURCHASER WILL ACCEPT THE PURCHASED ASSETS AT THE
CLOSING “AS IS,” “WHERE IS,” AND “WITH ALL FAULTS”

     

    Section
5.2. Seller and Parent’s
Representations and Warranties. Seller and Parent represents and warrants
to Purchaser that:

     

    (a) Subject
to the Bankruptcy Court’s entry of the Approval Order with respect to the sale
of the Purchased Assets, Seller and Parent has full power and authority to enter
into and perform this Agreement and all documents, agreements and instruments to
be executed by Seller and Parent pursuant to or in connection with this
Agreement.

     

    
      
         

      

      
        Page
13

        
          

        

      

      
         

      

    

    

     

    (b) Upon the
Bankruptcy Court’s entry of the Approval Order, Seller and Parent will have good
title to and the power to sell the Purchased Assets, free and clear of all
Claims or Encumbrances.

     

    (c) Seller
and Parent has not dealt with any Person in such manner as to give rise to a
valid broker’s commission, finder’s fee, investment banker’s fee or similar
payment from Purchaser for arranging the transaction contemplated hereby or
introducing the Parties to each other.

     

    (d) Seller
represents and warrants that:

     

    (1) as of the
Closing Date, it will not have made any sales of furniture, fixtures or
equipment in the prior twelve month period;

     

    (2) it paid
all applicable State of Florida sales and use tax on its initial purchase of the
furniture, fixtures, equipment any any other assets to be conveyed to the
Purchaser hereunder; and

     

    (3) Seller’s
engagement of a broker in this transaction will not result in the inability of
the Purchaser to rely on the Florida sales tax exemption for occasional sales
pursuant to Rule 12A-1.037 Florida Administrative Code.  These
representations and warranties shall survive for three years from the Closing
Date.

     

    ARTICLE
6                                

     

    

     

    Conduct
Prior to the Closing

     

    Section
6.1. Access and
Information. Seller and Parent shall not be required to disclose any
information, records, files or other data to Purchaser where disclosure may be
prohibited by law.  Subject to the foregoing, upon prior written
notice to Seller, Seller and Parent shall afford to Purchaser and to Purchaser’s
financial advisors, legal counsel, accountants, consultants, financing sources,
and other authorized representatives, full access during normal business hours
throughout the period prior to the Closing Date, upon reasonable written notice,
to its books, records, properties, plants and personnel relating to the
Purchased Assets and, during such period, shall furnish as promptly as
practicable to Purchaser, at Purchaser’s expense, copies of such books and
records as Purchaser shall reasonably request.

     

    Section
6.2. Actions Until
Closing. Pending the Closing, except as otherwise authorized by Purchaser
in writing, Seller shall, subject to any restrictions on its ability to do so
arising from the Bankruptcy Case:

     

    (a) use
commercially reasonable best efforts to carry on the Business in the normal
course and preserve its relations with its photographers and other suppliers and
customers;

     

    
      
         

      

      
        Page
14

        
          

        

      

      
         

      

    

    

     

    (b) use
commercially reasonable best efforts to keep the Purchased Assets which
constitute fixed assets in good operating condition and repair (ordinary wear
and tear excepted) having regard for their present use in the
Business;

     

    (c) not
change, amend, terminate or otherwise modify any contract or agreement in any
material respect;

     

    (d) maintain
in full force and effect with respect to the Business, policies of insurance of
the same type, character and coverage as the policies currently
carried;

     

    (e) not waive
any right of substantial value in connection with the conduct of the Business or
any of the Purchased Assets;

     

    (f) not
transfer, assign, sell, distribute to shareholders or otherwise dispose of any
of the assets shown or reflected in its most recent financial statements except
in the ordinary course of business;

     

    (h) not agree
to do any of the items prohibited by this Section 6.2.

     

    Section
6.3. Transition
Arrangements. For ninety (90) days after Closing, except as otherwise
authorized by Purchaser in writing, Seller shall, subject to any restrictions on
its ability to do so arising from the Bankruptcy Case, assist with the
transition of the Business to Purchaser and the transport of the Purchased
Assets to the premises of Purchaser and its Affiliates, including the
following:

     

    (a) maintain
its rights to the leased premises used by the Business in the U.S.A. and the
U.K. subject to Purchaser paying the rent related
to such premises;

     

    (b) maintain
or cause to be maintained in force all insurance regarding the premises of
Seller and its Affiliates and show Purchaser as loss payee under such policies
of insurance;

     

    (c) keep
available the services of those of its present employees necessary or desirable
to facilitate the transition of the Business and the transport of the Purchased
Assets as aforesaid,

     

    (d) . ensure
the continued operations of the custom business operating system of Seller,
known as “SSIDB” through a service contract with the requisite developer(s)
and/or systems administrator(s).

     

    Section
6.4. Bankruptcy
Action.

     

    (a) This
Agreement shall be subject to the consideration of higher or better offers
submitted at an auction (the “Auction”) to be
conducted in the Bankruptcy Case in accordance with sale procedures set forth in
the Sale Procedure Motion attached as Exhibit
B,

     

    
      
         

      

      
        Page
15

        
          

        

      

      
         

      

    

    which
Seller and Parent shall promptly submit to the Bankruptcy Court for approval
upon commencement of the Bankruptcy Case.  Any competing offer (a
“Competing
Offer”) must be submitted to Seller, in writing, in accordance with the
sale procedures set forth in the Sale Procedure Motion.  No Competing
Offer shall qualify as a bid at the Auction unless, among other things, any
requested changes in the terms and conditions from those contained in this
Agreement shall have been approved by Seller in writing prior to the
Auction.

     

    (b) Purchaser
hereby confirms an Approval Order containing the provisions annexed hereto as
Exhibit A is
acceptable to Purchaser. Seller and Parent shall use all reasonable efforts to
obtain entry of the Sale Procedures Order and the Approval Order and approval of
the Expense Reimbursement and Break-Up Fee.

     

    (c) Seller
and Parent shall give appropriate notice, and provide appropriate opportunity
for hearing, to all parties entitled thereto, of all motions, orders, hearings
or other proceedings relating to this Agreement or the transactions contemplated
thereby.

     

    Section
6.5. Expense Reimbursement and
Break-Up Fee.  In the event that, at the Auction, a Person
presents a Competing Offer which constitutes a higher or better offer in
accordance with the Sale Procedure Order and Seller subsequently consummates a
sale of some or all of the Purchased Assets pursuant to a Competing Offer,
Purchaser shall be entitled to payment of a fee in the amount of $250,000 (the
“Expense Reimbursement
and Break-Up Fee”) in respect of

     

    (a) its
costs and expenses associated with the conduct of due diligence and the
negotiation and execution of this Agreement and the documents and agreements
prepare in connection with this Agreement, including legal fees and the costs
and expenses of other professional advisors; and

     

    (b) its
work

     

    (i) in
establishing a bid standard or minimum for other bidders in the
Auction,

     

    (ii) in
placing estate property in a sales configuration mode attracting other bidders
to the Auction and

     

    (iii) for
serving, by its name and its expressed interest, as a catalyst for other bidders
in the Auction.

     

    The
Expense Reimbursement and Break-Up Fee shall be paid in cash from the proceeds
of and concurrent with the closing of any Competing Offer or as otherwise
ordered by the Bankruptcy Court.  The Expense Reimbursement and
Break-Up Fee shall be paid as, and constitute, an administrative expense, of
Seller under Sections 503(b)(1) and 507(a)(1) of the Bankruptcy
Code.  The Expense Reimbursement and Break-Up Fee will be Purchaser’s
sole remedy if the Bankruptcy Court approves an offer other than Purchaser’s
offer described in this Agreement.  Seller also shall pay the Expense
Reimbursement and Break-Up Fee if this Agreement is  terminated by
Seller pursuant to Section 9.2(c) on the grounds that there has been an overbid
by a third party that results in an Approval Order for the transactions
contemplated hereby not being entered by the Bankruptcy Court.

     

    
      
         

      

      
        Page
16

        
          

        

      

      
         

      

    

    

     

    Section
6.6. Destruction or Expropriation
of Assets.  From the date hereof up to the Closing, the
Purchased Assets shall be and remain at the risk of Seller and Parent. If, prior
to the Closing, any Purchased Assets are destroyed or damaged by fire or any
other casualty, Purchaser shall have the option, exercisable by notice given
within ten (10) days of Purchaser receiving a notice from either of Seller or
Parent of such destruction, damage, which notice Seller or Parent are obliged to
promptly give to Purchaser, to:

     

    (a) complete
the purchase and sale contemplated herein without reduction of the Purchase
Price, in which event all proceeds of any casualty insurance for damage or
destruction or compensation for expropriation occurring after the Closing Date
shall be payable to Purchaser, all right and claim of Seller or Parent to any
such amounts shall be assigned to Purchaser, and Seller or Parent, at the
Closing, shall pay to Purchaser an amount equal to the amount of the
deductible(s) under the insurance policy or policies which cover any damage or
destruction occurring on or prior to the Closing Date; or

     

    (b) terminate
this Agreement and not complete the purchase and sale contemplated
herein.

     

    Section
6.7. Cure
Amounts.  The cure amounts, as determined by the Bankruptcy
Court, if any, necessary to cure all defaults, if any, and to pay all actual or
pecuniary losses that have resulted from such defaults under the Assumed
Contracts, shall be paid by Seller, on or before Closing, and not by
Purchaser.  Purchaser shall have no Liability for any cure amounts
unless the aggregate cure amount exceeds $500,000.  The Purchase Price
shall be increased by the aggregate cure amount that exceeds
$500,000..

     

    ARTICLE
7                                

     

    

     

    Conditions
to Closing

     

    Section
7.1. Conditions to Seller’s
Obligations. The obligation of Seller and Parent to consummate the
transactions contemplated hereby is subject to the satisfaction at or prior to
the Closing Date of the following conditions:

     

    (a) The
representations and warranties made by Purchaser in Section 5.1 shall have been
true and correct in all material respects when made and shall be true and
correct in all material respects as if originally made on and as of the Closing
Date, except as such representation and warranties may be affected by
transactions or events expressly contemplated or permitted by this
agreement.

     

    (b) All
obligations of Purchaser to be performed hereunder on or prior to the Closing
Date shall have been duly performed in all material respects.

     

    (c) No action
or proceeding before any court, government body or other tribunal shall have
been commenced or threatened (by a party other than Seller and Parent) wherein
an unfavorable judgment, decree or order would

     

    
      
         

      

      
        Page
17

        
          

        

      

      
         

      

    

    (i)
prevent the carrying out of this Agreement or any of the transactions
contemplated hereby,

     

    (ii)
declare unlawful any of the transactions contemplated by this Agreement
or

     

    (iii)
cause any of such transactions to be rescinded as reasonably determined by
Purchaser and Purchaser’s counsel.

     

    (d) The
Approval Order shall have been entered by the Bankruptcy Court and the
effectiveness of the Approval Order shall not have been modified, reversed,
vacated, stayed, restrained or enjoined on the Closing Date.

     

    (e) To the
extent not addressed or covered by the Approval Order, Seller and Parent shall
have received the consent of all third parties holding Encumbrances, Claims or
interests against the Purchased Assets to the release of all such Encumbrances,
Claims and interests in the Purchased Assets as required under 11 U.S.C. §
363(b) and (f).

     

    (f) Seller’s
receipt of Purchaser’s closing deliveries pursuant to Section 4.4.

     

    (g) Seller’s
receipt of the Deposit and the balance of the Purchase Price pursuant to Section
4.2.  Each of the foregoing conditions is for the benefit of Seller
and Parent, which may waive any of such conditions at, or prior to, the
Closing.

     

    Section
7.2. Conditions to Purchaser’s
Obligations. The obligation of Purchaser to consummate the transaction
contemplated hereby is subject to the satisfaction at or prior to the Closing
Date of the following conditions:

     

    (a) The
representations and warranties made by Seller and Parent in Section 5.2 shall
have been true and correct in all material respects when made, and shall be true
and correct in all material respects as if originally made on and as of the
Closing Date except as such representation and warranties may be affected by
transactions or events expressly contemplated or permitted by this
agreement.

     

    (b) All
obligations of Seller and Parent to be performed hereunder on or prior to the
Closing Date shall have been duly performed in all material
respects.

     

    (c) No action
or proceeding before any court, government body or other tribunal shall have
been commenced or threatened which seeks to

     

    (i)
nullify, restrict or modify the rights and protections afforded Purchaser in
this Agreement and the Approval Order,

     

    (ii)
prevent the carrying out of this Agreement or any of the transactions
contemplated hereby,

     

    (iii)
declare unlawful the transactions contemplated by this Agreement,

     

    
      
         

      

      
        Page
18

        
          

        

      

      
         

      

    

    (iv)
cause such transactions to be rescinded or

     

    (v)
materially affect the right of Purchaser to own, operate or control the
Purchased Assets following the Closing as reasonably determined by Seller and
Seller’s counsel.

     

    (d) The
Approval Order shall have been entered by the Bankruptcy Court, the
effectiveness of the Approval Order shall not have been modified, reversed,
vacated, stayed, restrained or enjoined, and either

     

    (i) the
time to appeal, petition for certiorari, or move for a new trial, reargument, or
rehearing has expired without any such appeal, petition for certiorari, or other
proceedings for a new trial, reargument, or rehearing shall then be pending,
or

     

    (ii) if
an appeal, writ of certiorari, new trial, reargument, or rehearing thereof has
been sought, the Approval Order shall have been affirmed by the highest court to
which it was appealed, or certiorari shall have been denied, or a new trial,
reargument, or rehearing shall have been denied or resulted in no modification
of the Approval Order, and the time to take any further appeal, petition for
certiorari or move for a new trial, reargument, or rehearing shall have
expired.

     

    (e) To the
extent not addressed or covered by the Approval Order, Seller and Parent shall
have received the consent of all third parties holding Encumbrances, Claims or
interests against the Purchased Assets to the release of all such Encumbrances,
Claims and interests in the Purchased Assets as required under 11 U.S.C. § 363
(b) and (f).

     

    (f) Purchaser’s
receipt of Seller and Parent’s closing deliveries pursuant to Section 4.4. Each
of the foregoing conditions is for the benefit of Purchaser, which may waive any
of such conditions at, or prior to, the Closing.

     

    ARTICLE
8                                

     

    

     

    Other
Agreements

     

    Section
8.1. Further Assurances.
The Parties shall execute such further documents, and perform such further acts,
as may be reasonably necessary to transfer and convey the Purchased Assets to
Purchaser, on the terms herein contained, and to otherwise comply with the terms
of this Agreement and. consummate the transaction contemplated
hereby.

     

    Section
8.2. Post-Closing Access.
Purchaser agrees to Store the Business Records and, books, records and files,
for 3 years following the Closing Date and to permit Seller to have access to
the Business Records for 3 years following the Closing Date, without cost or
expense.

     

    Section
8.3. Efforts and Actions to Cause
Closings to Occur. Upon the terms and subject to the conditions of this
Agreement, each of Seller, Parent and Purchaser shall use their

     

    
      
         

      

      
        Page
19

        
          

        

      

      
         

      

    

    respective
commercially reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done and cooperate with each other in order to do, all
things necessary, proper or advisable (subject to any applicable laws) to
consummate the Closing as promptly as practicable, including, but not limited
to, the preparation and filing of all motions, forms, registrations and notices
required to be filed to consummate the Closing and the taking of such actions as
are reasonably necessary to obtain any requisite approvals, authorizations,
consents, orders, licenses, permits, exemptions or waivers by any third party or
governmental entity. In addition, no Party shall take any action after the date
hereof that could reasonably be expected to materially delay the obtaining of,
or result in not obtaining, any permission, approval or consent from any
governmental entity or other Person required to be obtained prior to
Closing.

     

    Section
8.4. Collection of Accounts
Receivable Following the Closing.  Purchaser shall promptly
remit to Seller any payments received by Purchaser following the Closing Date
with respect to Seller’s accounts receivable and Seller and Parent shall
promptly remit to Purchaser any payments received by Seller or Parent following
the Closing Date with respect to Purchaser’s accounts receivable.

     

    Section
8.5. Post-Closing
Deliveries. After the Closing, any monies, checks, instruments, invoices,
bills, receipts, notices, mail and other communications received by one Party
but directed toward or due to another Party shall be promptly delivered to the
other Party.

     

    Section
8.6. Change of
Name.  As soon as possible following Closing, Seller shall
cancel its right, title and interest to and in all registrations of business
names and trade names included in the trade-marks transferred to Purchaser and
provide Purchaser with proof of having done so. Without limiting the generality
of the foregoing, as soon as possible following Closing, Parent shall amend the
constating documents of Seller and of Parent’s other Affiliates, as necessary,
to change the name of such entities to one which does not contain "SuperStock”
or any variation thereof. 

     

    Section
8.7. Survival. Except as
specifically provided to the contrary in this Agreement, the representations and
warranties of merge on closing and shall the Parties contained in this Agreement
or any agreement delivered in connection herewith shall not survive the Closing
Date.

     

    ARTICLE
9                                

     

    

     

    Termination

     

    Section
9.1. Termination by Mutual
Consent. This Agreement may be terminated at any time prior to the
Closing Date by mutual written agreement of Seller and Parent and
Purchaser.

     

    Section
9.2. Termination by
Seller. Seller and Parent may terminate this Agreement at any time prior
to the Closing Date if:

     

    
      
         

      

      
        Page
20

        
          

        

      

      
         

      

    

    

     

    (a) there has
been a material breach by Purchaser of any of its representations or warranties
contained in this Agreement which breach is not cured within three (3) Business
Days after written notice thereof;

     

    (b) there has
been a material breach of any of the covenants or agreements set forth in this
Agreement on the part of Purchaser, which breach is not curable or, if curable,
is not cured within ten (10) days after written notice of such breach is given
by Seller and Parent to Purchaser;

     

    (c) the
conditions to the obligations of Seller and Parent set forth in Section 7.1
shall not have been waived or satisfied on or before the Termination Date or
such earlier date as may be specified therefore, including, without limitation,
an overbid by a third party that results in an Approval Order for the
transactions contemplated hereby not being entered by the Bankruptcy Court;
or

     

    (d) the
Closing Date shall not have occurred on or prior to January 31, 2009 (the “Termination Date”);
provided, however, that the right to terminate shall not be available under this
Section 9.2(d) if the Closing shall not have occurred by such date as a result
of the failure of Seller and Parent to fulfill any of its obligations under this
Agreement.

     

    Section
9.3. Termination by
Purchaser. Purchaser may terminate this Agreement at any time prior to
the Closing Date if:

     

    (a) there has
been a material breach by Seller and Parent of any of its representations or
warranties contained in this Agreement which breach is not cured within three
(3) Business Days after written notice thereof;

     

    (b) there has
been a material breach of any of the covenants or agreements set forth in this
Agreement on the part of Seller and Parent, which breach is not curable or, if
curable, is not cured within ten (10) days after written notice of such breach
is given by Purchaser to Seller and Parent;

     

    (c) the
conditions to the obligations of Purchaser set forth in Section 7.2 shall not
have been waived or satisfied on or before the Termination Date or such earlier
date as may be specified therefor;

     

    (d) the
Closing Date shall not have occurred on or prior to the Termination Date;
provided, however, that the right to terminate shall not be available under this
Section 9.3(d) if the Closing shall not have occurred by such date as a result
of the failure of Purchaser to fulfill any of its obligations under this
Agreement; or

     

    (e) the
Bankruptcy Court denies that portion of the Sale Procedures Motion with respect
to the Expense Reimbursement and Break-Up Fee in whole or in part, the Sale
Procedure Order is modified in any material respect without the consent of
Purchaser or the Bankruptcy Court approves a sale of some or all of the
Purchased Assets pursuant to a Competing Offer.

     

    
      
         

      

      
        Page
21

        
          

        

      

      
         

      

    

    

     

    Section
9.4. Effect of Termination and
Abandonment. In the event of termination of this Agreement pursuant to
this Article 9, written notice thereof shall as promptly as practicable be given
to the other Parties to this Agreement and the Deposit shall

     

               (a)
in the event of a termination under Section 9.3, be returned to Purchaser
without the requirement of Purchaser’s delivery of a written instruction or
authorization to the Foley Firm concerning the same which instruction and
authorization is hereby granted, and

     

               (b)
in the event of a termination under Section 9.2, be delivered to Seller without
the requirement of Seller’s delivery of a written instruction or authorization
to the Foley Firm concerning the same which instruction and authorization is
hereby granted. If this Agreement is terminated pursuant to this Article 9, upon
delivery of the Deposit in accordance with this Section 9.4 and, if applicable,
the payment of the Expense Reimbursement and Break-Up Fee, this Agreement shall
terminate and the transactions contemplated hereby shall be abandoned, without
further action by any of the Parties.

     

    ARTICLE
10                                

     

    

     

    Miscellaneous

     

    Section
10.1. Publicity. Except as
otherwise required by law or in connection with Seller and Parent’s bankruptcy
filings with the Bankruptcy Court and the publication of requisite notices of
sale in national and regional publications in connection with the sale of the
Purchased Assets in the bankruptcy proceedings, press releases concerning this
transaction shall be made only with the prior approval of Seller and Purchaser,
which approval shall not be unreasonably withheld.  Notwithstanding
the forgoing, the Parties acknowledge that Seller will advertise the proposed
sale as part of the Auction.

     

    Section
10.2. Notices. All notices
required or permitted to be given hereunder shall be in writing and may be
delivered by hand, by facsimile or by nationally recognized private courier.
Notices delivered by hand, by facsimile or by nationally recognized private
carrier shall be deemed given on the first Business Day following receipt;
provided, however, that a notice delivered by facsimile shall only be effective
if such notice is also delivered by hand, or deposited in the United States
mail, postage prepaid, registered or certified mail on or before two (2)
Business Days after its delivery by facsimile. All notices shall be addressed as
follows:

     

    (a) if to
Purchaser:                                Masterfile
Corporation

               3
Concorde Gate, 4th Floor

               Toronto,
Ontario

               Canada
M3C 3N7

               Fax:
416-929-9623

               Attention:
Steve Pigeon, President

    

               with
a copy to Purchaser’s U.S. counsel:

    
      
         

      

      
        Page
22

        
          

        

      

      
         

      

    

    

                                               Greenberg
Traurig, PA

                                               Suite
100, 625 East Twiggs Street

                                               Tampa,
FL

                                               U.S.A.
33602

                                               Fax:  813-318-5957

                                               Attention:                                Robert
A. Soriano

    

               and
to Purchaser’s Canadian counsel:

    

                                               Osler
Hoskin & Harcourt LLP

                                               P.O.
Box 50

                                               Suite
6100, 1 First Canadian Place

                                               Toronto
Ontario

                                               Canada
M5X 1B8

                                               Fax:  416-862-6666

                                               Attention:
Andrew J. MacDougall

    

    (b) if to
Seller and Parent:

     

    a21,
Inc.

    7660
Centurion Parkway

    Jacksonville,
FL 32256

    Fax:
(904) 641-4480

    Attention:
John Z. Ferguson

    

    SuperStock,
Inc.

    7660
Centurion Parkway

    Jacksonville,
FL 32256

    Fax:
(904) 641-4480

    Attention:
John Z. Ferguson

    

                                    with
a copy to Seller and Parent’ counsel:

    

                                                                    Foley
& Lardner LLP

                                                                    One
Independent Drive, Suite 1300

                                                                    Jacksonville,
FL 32202 USA

                                                                    Fax:
904-359-8700

                                                                    Attention:
Michael Kirwan, Esq and

                                                                         Gardner
F. Davis, Esq.

    

    or, in
each case, at such other address as may be specified in writing to the other
Party.

     

    Section
10.3. Expenses. Seller
shall be responsible for all fees, expenses, costs or other charges incurred in
obtaining any consents to the transfer of the Purchased Assets to
Purchaser.

     

    
      
         

      

      
        Page
23

        
          

        

      

      
         

      

    

    Other
than as set forth in this Agreement, each of Seller, Parent and Purchaser will
bear their respective costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the transactions contemplated
hereby.

     

    Section
10.4. Entire Agreement.
This Agreement and the instruments to be delivered by the Parties pursuant to
the provisions hereof constitute the entire agreement between the Parties. Each
Exhibit and Schedule attached hereto shall be considered incorporated into this
Agreement.

     

    Section
10.5. Applicable Law. This
Agreement shall be governed and controlled as to validity, enforcement,
interpretation, construction, effect and in all other respects by the internal
laws of the State of Florida applicable to contracts made therein, without
regard to rules of conflicts of law.

     

    Section
10.6. Binding Effect; No Third
Party Beneficiaries. This Agreement shall inure to the benefit of and be
binding upon the Parties hereto, and their successors and permitted assigns. The
Parties specifically acknowledge and agree that Seller and Parent as
debtor-in-possession under the Bankruptcy Code and any trustee appointed for
Seller and Parent under the Bankruptcy Code shall be specifically entitled to
the benefit of this Agreement.  Nothing in this Agreement, express or
implied, is intended to confer on any Person other than the Parties, and their
respective successors and permitted assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement.

     

    Section
10.7. Assignability. This
Agreement shall not be assignable by either Party without the prior written
consent of the other Party, except that at or prior to the Closing, Purchaser
may assign its rights and delegate its duties under this Agreement to one or
more Affiliates; provided that such assignment shall not discharge the
obligations and liabilities of Purchaser hereunder.

     

    Section
10.8. Amendments; Waivers.
This Agreement shall not be modified or amended except pursuant to an instrument
in writing executed and delivered on behalf of each of the Parties.  A
waiver of any default, breach or non-compliance under this Agreement is not
effective unless in writing and signed by the Party to be bound by the waiver.
No waiver shall be inferred from or implied by any failure to act or delay in
acting by a Party in respect of any default, breach or non observance or by
anything done or omitted to be done by the other Party. The waiver by a Party of
any default, breach or non-compliance under this Agreement shall not operate as
a waiver of that Party’s rights under this Agreement in respect of any
continuing or subsequent default, breach or non-observance (whether of the same
or any other nature).

     

    Section
10.9. Interpretation.  In
this Agreement:

     

    (a) Consent –
Whenever a provision of this Agreement requires an approval or consent and such
approval or consent is not delivered within the applicable time limit, then,
unless otherwise specified, the Party whose consent or approval is required
shall be conclusively deemed to have withheld its approval or
consent.

     

    
      
         

      

      
        Page
24

        
          

        

      

      
         

      

    

    

     

    (b) Currency
– Unless otherwise specified, all references to money amounts are to lawful
currency of the United States of America.

     

    (c) Including
– Where the word “including” or “includes” is used in this Agreement, it means
“including (or includes) without limitation”.

     

    (d) No Strict
Construction – The language used in this Agreement is the language chosen by the
Parties to express their mutual intent, and no rule of strict construction shall
be applied against any Party.

     

    (e) Number
and Gender – Unless the context otherwise requires, words importing the singular
include the plural and vice versa and words importing gender include all
genders.

     

    (f) Statutory
References – A reference to a statute includes all regulations and rules made
pursuant to such statute and, unless otherwise specified, the provisions of any
statute, regulation or rule which amends, supplements or supersedes any such
statute, regulation or rule.

     

    (g) Time –
Time is of the essence in the performance of the Parties’ respective
obligations.

     

    (h) Time
Periods – Unless otherwise specified, time periods within or following which any
payment is to be made or act is to be done shall be calculated by excluding the
day on which the period commences and including the day on which the period ends
and by extending the period to the next Business Day following if the last day
of the period is not a Business Day.

     

    (i) Headings
– The headings contained in this Agreement are for convenience of reference only
and shall not affect the meaning or interpretation of this
Agreement.

     

    Section
10.10. Counterparts. This
Agreement maybe executed in counterparts, each of which shall constitute an
original and both of which taken together shall constitute one and the same
Agreement. Delivery of an electric counterpart shall be effective as delivery of
a manually executed counterpart.

     

    Section
10.11. Exclusive
Jurisdiction. Purchaser and Seller and Parent agree that upon Seller and
Parent’s filing bankruptcy, all disputes arising hereunder shall, prior to the
issuance of a final decree from the Bankruptcy Court closing the Bankruptcy
Case, be resolved by the Bankruptcy Court which shall have exclusive
jurisdiction over all disputes and other matters relating to the interpretation
and enforcement of this Agreement or any ancillary document executed pursuant
hereto, and Purchaser expressly consents to and agrees not to contest such
exclusive jurisdiction. If the Bankruptcy Court does not have or abstains from
exercising such jurisdiction, Purchaser expressly consents to and agrees not to
contest the non exclusive jurisdiction of the courts of the State of Florida
and, to the extent permitted by applicable law, of any Federal Court, in each
case located in Jacksonville, Florida.

     

    
      
         

      

      
        Page
25

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the Parties have executed this Asset Purchase Agreement as of
the date first above written.

     

    SUPERSTOCK,
INC.

    

    

    By:                 /s/ John Z.
Ferguson

          Name:
John Z. Ferguson

          Title:
President

    

    “Seller”

    

    

    a21,
INC.

    

    

    By: /s/ John Z.
Ferguson

          Name:  John
Z. Ferguson

    Title:    President

    

    “Parent”

    

    

    

    MASTERFILE
CORPORATION

    

    

    By:                 /s/ Steve
Pigeon

          Name:  Steve
Pigeon

    Title:    President

    

    “Purchaser”

    

    

    
      
         

      

      
        Page
26

        
          

        

      

      
         

      

    

    TABLE
OF EXHIBITS AND SCHEDULES

     

    (to
follow)

     

    EXHIBIT A
– Approval Order

    

    EXHIBIT B
– Sale Procedures Motion, including Sale Procedures Order

    

    EXHIBIT C
– Bill of Sale and Assignment of Intellectual Property

    

    SCHEDULE
2.2(b) – List of existing operating equipment, manufacturing equipment, office
equipment, furniture, computers, computer files, software licenses and
books

    

    SCHEDULE
2.2(c) – List of trademarks, trade names, service marks and patents

    

    SCHEDULE
2.4 – Assumed Contracts

     

    SCHEDULE
2.5 – Excluded Assets

     

     

     

     

    Page 27Exhibit 10.1

 

MAGNA
ENTERTAINMENT CORP.

as Borrower

 

- and -

 

THE GUARANTORS
SET FORTH

ON THE SIGNATURE PAGES HEREOF

as Guarantors

 

- and -

 

MID
ISLANDI SF., ACTING 

THROUGH ITS ZUG BRANCH

as Lender

 

 

2008 LOAN AGREEMENT

 

 

Dated as of December 1,
2008

 

 

TABLE OF CONTENTS

 

ARTICLE 1

 

INTERPRETATION

 

	
  1.1

  	
  Definitions

  	
  4

  
	
  1.2

  	
  Gender and Number

  	
  29

  
	
  1.3

  	
  Invalidity, etc.

  	
  30

  
	
  1.4

  	
  Headings, etc.

  	
  30

  
	
  1.5

  	
  Governing Law

  	
  30

  
	
  1.6

  	
  Attornment

  	
  30

  
	
  1.7

  	
  Judgment Currency

  	
  30

  
	
  1.8

  	
  References

  	
  31

  
	
  1.9

  	
  Currency

  	
  31

  
	
  1.10

  	
  This Agreement to Govern

  	
  31

  
	
  1.11

  	
  Generally Accepted Accounting Principles

  	
  31

  
	
  1.12

  	
  Computation of Time Periods

  	
  31

  
	
  1.13

  	
  Actions on Days Other Than Banking Days

  	
  31

  
	
  1.14

  	
  Oral Instructions

  	
  32

  
	
  1.15

  	
  Incorporation of Schedules

  	
  32

  

 

ARTICLE 2

 

2008 LOAN

 

	
  2.1

  	
  Establishment of 2008 Loan

  	
  32

  
	
  2.2

  	
  Non-Revolving Nature of 2008 Loan

  	
  33

  
	
  2.3

  	
  Pre-Payment

  	
  33

  
	
  2.4

  	
  Mandatory Repayment

  	
  34

  
	
  2.5

  	
  Voluntary Reduction in Aggregate Commitment

  	
  35

  
	
  2.6

  	
  Payments Generally

  	
  36

  
	
  2.7

  	
  Tax Matters

  	
  36

  
	
  2.8

  	
  Cost Consultant

  	
  36

  

 

ARTICLE 3

 

GENERAL PROVISIONS RELATING TO THE 2008 LOAN

 

	
  3.1

  	
  Advances

  	
  37

  
	
  3.2

  	
  Advance Payments

  	
  38

  
	
  3.3

  	
  Holdbacks

  	
  38

  
	
  3.4

  	
  Holdback Advances

  	
  38

  
	
  3.5

  	
  Illegality

  	
  39

  
	
  3.6

  	
  Indemnity

  	
  39

  
	
  3.7

  	
  Proceedings in Respect of Claims

  	
  40

  
	
  3.8

  	
  Evidence of Indebtedness

  	
  42

  

 

 

ARTICLE 4

 

ADDITIONAL CONDITIONS PRECEDENT TO ADVANCES

UNDER TRANCHE 2, TRANCHE 3 AND TRANCHE 4

 

	
  4.1

  	
  Tranche 2 Conditions

  	
  43

  
	
  4.2

  	
  Tranche 3 Conditions

  	
  44

  
	
  4.3

  	
  Tranche 4 Conditions

  	
  44

  
	
  4.4

  	
  Tranche 4 First Advance

  	
  45

  
	
  4.5

  	
  Subsequent Tranche 4 Advances

  	
  48

  

 

ARTICLE 5

 

INTEREST AND FEES

 

	
  5.1

  	
  Interest Rate

  	
  51

  
	
  5.2

  	
  Calculation and Payment of Interest

  	
  52

  
	
  5.3

  	
  Fees

  	
  52

  
	
  5.4

  	
  Payment of Costs and Expenses

  	
  53

  

 

ARTICLE 6

 

REPRESENTATIONS AND WARRANTIES

 

	
  6.1

  	
  Representations and Warranties

  	
  54

  
	
  6.2

  	
  Survival of Representations and Warranties

  	
  68

  

 

ARTICLE 7

 

COVENANTS

 

	
  7.1

  	
  Affirmative Covenants

  	
  68

  
	
  7.2

  	
  Negative Covenants

  	
  79

  
	
  7.3

  	
  Environmental Matters

  	
  83

  

 

ARTICLE 8

 

CONDITIONS PRECEDENT

 

	
  8.1

  	
  Conditions Precedent to Closing

  	
  85

  
	
  8.2

  	
  Conditions Precedent to Advances

  	
  86

  

 

ARTICLE 9

 

EVENTS OF DEFAULT AND REMEDIES

 

	
  9.1

  	
  Events of Default

  	
  99

  
	
  9.2

  	
  Remedies Upon Default

  	
  101

  
	
  9.3

  	
  Distributions

  	
  102

  

 

2

 

ARTICLE 10

 

GENERAL

 

	
  10.1

  	
  Reliance and Non-Merger

  	
  102

  
	
  10.2

  	
  Confidentiality

  	
  102

  
	
  10.3

  	
  No Set-Off

  	
  103

  
	
  10.4

  	
  Employment of Experts

  	
  103

  
	
  10.5

  	
  Reliance by Lender

  	
  103

  
	
  10.6

  	
  Notices

  	
  103

  
	
  10.7

  	
  Further Assurances

  	
  106

  
	
  10.8

  	
  Assignment

  	
  106

  
	
  10.9

  	
  Disclosure of Information to Potential
  Permitted Lender Assignees

  	
  107

  
	
  10.10

  	
  Right to Cure

  	
  107

  
	
  10.11

  	
  Forbearance by the Lender Not a
  Waiver

  	
  107

  
	
  10.12

  	
  Waiver of Statute of Limitations and Other
  Defenses

  	
  108

  
	
  10.13

  	
  Relationship

  	
  108

  
	
  10.14

  	
  Time of Essence

  	
  108

  
	
  10.15

  	
  Service of Process/Venue

  	
  108

  
	
  10.16

  	
  Jury Trial Waiver

  	
  108

  
	
  10.17

  	
  Final Agreement/Modification

  	
  109

  
	
  10.18

  	
  Continuing Agreement

  	
  109

  
	
  10.19

  	
  No Third Party Beneficiaries

  	
  109

  
	
  10.20

  	
  No Brokers

  	
  109

  
	
  10.21

  	
  Execution in Counterparts

  	
  110

  
	
  10.22

  	
  Contribution by Guarantors with Respect to
  Obligations

  	
  110

  
	
  10.23

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

  	
  110

  
	
  10.24

  	
  Loss of Borrower Note

  	
  111

  
	
  10.25

  	
  Acknowledgment

  	
  111

  

 

SCHEDULE A – Borrowing Notice

 

SCHEDULE
B – Properties

 

SCHEDULE
C – Environmental Reports

 

3

 

2008 LOAN AGREEMENT

 

THIS AGREEMENT made as of the 1st day of
December, 2008.

 

BETWEEN:

 

MAGNA ENTERTAINMENT CORP.,

a corporation
incorporated under the laws of the State of Delaware

 

(hereinafter
called the “Borrower”),

 

OF THE FIRST PART,

 

- and -

 

MID ISLANDI SF.,

a
partnership formed under the laws of Iceland, acting through its Zug branch

 

(hereinafter
called the “Lender”),

 

OF THE SECOND PART,

 

- and -

 

PACIFIC RACING
ASSOCIATION,

a corporation
incorporated under the laws of the State of California

 

- and -

 

MEC LAND HOLDINGS
(CALIFORNIA) INC.,

a corporation
incorporated under the laws of the State of California

 

(hereinafter
collectively called the “Golden
Gate Fields  Guarantors”),

 

OF THE THIRD PART,

 

- and -

 

THE SANTA ANITA
COMPANIES, INC.,

a corporation
incorporated under the laws of the State of Delaware

 

- and -

 

 

LOS ANGELES TURF CLUB,
INCORPORATED,

a corporation
incorporated under the laws of the State of California

 

(hereinafter
collectively called the “Santa
Anita Guarantors”),

 

OF THE FOURTH PART,

 

- and -

 

SOUTHERN MARYLAND AGRICULTURAL ASSOCIATION,

a joint venture of PRINCE
GEORGE’S RACING, INC. 

and SOUTHERN MARYLAND RACING, INC.,

each a corporation incorporated under the laws of the State of Maryland

 

(hereinafter
called the “Bowie  Guarantor”),

 

OF THE FIFTH PART,

 

- and -

 

LAUREL
RACING ASSOCIATION LIMITED PARTNERSHIP

a
partnership formed under the laws of the State of Maryland, acting through its general
partner,

LAUREL
RACING ASSOC., INC.

 

(hereinafter called the “Laurel  Guarantor”),

 

OF THE SIXTH PART,

 

- and -

 

THE MARYLAND JOCKEY
CLUB OF BALTIMORE CITY, INC.,

a corporation incorporated under the
laws of the State of Maryland

 

(hereinafter
called the “Pimlico  Guarantor”),

 

OF THE SEVENTH PART,

 

- and -

 

2

 

MARYLAND RACING, INC.,

a corporation incorporated under the
laws of the State of Delaware

 

(hereinafter
called the “Maryland Racing Guarantor”),

 

OF THE EIGHTH PART,

 

- and -

 

THISTLEDOWN,
INC.

a corporation
incorporated under the laws of the State of Ohio

 

(hereinafter
called the “Thistledown
Guarantor”),

 

OF THE NINTH PART,

 

- and –

 

MEC
MARYLAND INVESTMENTS INC.,

a corporation incorporated under the
laws of the State of Delaware

 

- and -

 

30000
MARYLAND INVESTMENTS LLC,

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

 

(hereinafter
collectively called the “AmTote Guarantors”),

 

(the  Golden Gate Fields  Guarantors,
the Santa Anita Guarantors, the Bowie  Guarantor, the Laurel Guarantor, the
Pimlico  Guarantor, the
Maryland Racing  Guarantor, the Thistledown  Guarantor, and the AmTote
Guarantors hereinafter collectively called the “Guarantors”)

 

OF THE TENTH PART.

 

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

 

3

 

ARTICLE 1

 

INTERPRETATION

 

1.1                                                                               Definitions

 

For the
purposes of this Agreement:

 

“2008 Loan” means the secured non-revolving loan made available to
the Borrower by the Lender pursuant to Section 2.1;

 

“2008  Loan
Amount” means the aggregate of the principal amount of the 2008
Loan, being comprised of (i) the principal amount of up to $50,000,000
made available pursuant to Tranche 1, together with Lender’s Costs that are
deemed to be Advances made available pursuant to Tranche 1 and fees payable by
the Borrower in connection with Tranche 1 (collectively, the “Tranche 1 Loan Amount”); (ii) the principal amount of
up to $30,000,000 made available pursuant to Tranche 2, together with Lenders
Costs that are deemed to be Advances made available pursuant to Tranche 2 and
fees payable by the Borrower in connection with Tranche 2 (collectively, the “Tranche 2 Loan Amount”); (iii) the maximum principal
amount equal to the lesser of: (A) the amount necessary to pay out in full
the PNC Debt; and (B) $15,000,000, made available pursuant to Tranche 3,
together with Lender’s Costs that are deemed to be Advances made available
pursuant to Tranche 3 and fees payable by the Borrower in connection with
Tranche 3 (collectively, the “Tranche 3 Loan Amount”);
and (iv) the principal amount of up to $30,000,000 made available pursuant
to Tranche 4, together with Lender’s Costs that are deemed to be Advances made
available pursuant to Tranche 4 and fees payable by the Borrower in connection
with Tranche 4 (collectively, the “Tranche 4 Loan Amount”),
as each may be reduced from time to time in accordance with the terms hereof;

 

“2008 Loan Documents”
means, collectively, this Agreement and the Security and “2008 Loan Document” means any one of them;

 

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

 

4

 

“Advance”  has the meaning ascribed thereto in Section 5.1(a);

 

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

 

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

 

“Allocable Amount” has the
meaning ascribed thereto in Section 10.22;

 

“Amtote  Guarantee and Indemnity” has the meaning
ascribed thereto in Section  
8.2(j)(lx);

 

“Amtote  Guarantee Fee” has the meaning ascribed
thereto in Section 8.2(j)(lx);

 

“Amtote  Guarantors” means MEC Maryland Investments
Inc. and 30000 Maryland Investments LLC;

 

“Applicable Law” means, in
respect of any Person, property, transaction or event, all applicable laws,
statutes, rules, by-laws and regulations, and all applicable official
directives, orders, judgments and decrees of Governmental Bodies but solely to
the extent they have the force of law (and, in the case of Section 3.5
only, whether or not having the force of law but otherwise binding on such
Person or such Person’s property);

 

“Assignment of Holdback Agreement” has
the meaning ascribed thereto in Section 8.2(j)(iii);

 

“Audited Financial
Statements” means the audited consolidated financial statements of
the Borrower for the Fiscal Year ended December 31, 2007;

 

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

 

“Blocked Persons List” has
the meaning ascribed thereto in Section 6.1(cc);

 

5

 

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

 

“BMO Credit Agreement”
means the amended and restated credit agreement made as of July 22, 2005
among the Borrower, as borrower, BMO, as agent and lender, and others, as has
been and may be further amended and restated from time to time, provided that
the principal amount outstanding at any time under the BMO Credit Agreement as
so amended or restated shall not exceed $40,000,000, and includes any renewal
or refinancing of any such agreement or the indebtedness owing thereunder
provided that the principal amount of such renewed or refinanced indebtedness
does not exceed $40,000,000 and security therefor is not increased thereby;

 

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

 

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

 

“Borrower General Security Agreement”
has the meaning ascribed thereto in Section 8.2(j)(ii);

 

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

 

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

 

“Borrower’s
and Guarantors’ Delaware Agent” means Eckert Seamans Cherin &
Mellott, LLC;

 

“Borrower’s and Guarantors’ Maryland Agent” means
DLA Piper LLP (US),
or such other firm or firms of solicitors or agents in the State of Maryland  as are appointed by the Borrower from time to time and
notice of which is provided to the Lender;

 

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

 

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

 

6

 

“Borrower Incorporation Documents”
has the meaning ascribed thereto in Section 6.1(i);

 

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

 

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

 

“Bowie Assignment of Material Agreements”
has the meaning ascribed thereto in Section 8.2(j)(xxvi);

 

“Bowie Assignment of Rents
and Leases” has the meaning ascribed thereto in Section 8.2(j)(xxv);

 

“Bowie General Security Agreement” has
the meaning ascribed thereto in Section 8.2(j)(xxvii);

 

“Bowie Mortgage” has the meaning
ascribed thereto in Section 8.2(j)(xxiv);

 

“Bowie  Guarantee and Indemnity” has the meaning ascribed thereto in
Section 8.2(j)(liv) ;

 

“Bowie
Guarantee Fee” has the meaning ascribed
thereto in Section 8.2(j)(liv);

 

“Bowie
Guarantor” means Southern Maryland Agricultural
Association, a joint venture of Prince George’s Racing, Inc.
and Southern Maryland Racing, Inc., each a corporation incorporated under
the laws of the State of Maryland;

 

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

 

“Bowie Property
Environmental Indemnity” has the meaning ascribed thereto in Section 8.2(j)(xxviii)
;

 

“Bowie Security”
has the meaning ascribed thereto in Section 8.2(j)(xxxi);

 

“Bridge Loan Agreement” means the loan
agreement made as of September 12, 2007, as has been and may be amended
from time to time and as may be further amended, modified, renewed or replaced from time to
time, among the Borrower, as borrower, the Lender, as lender, and the
guarantors specified therein, as guarantors;

 

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

 

7

 

existing operating facilities or (b) required or lawfully imposed
under any Environmental Law or Safety Law, or by any Governmental Body;

 

“Capital Lease Obligations”
means the obligations of the Borrower or any Subsidiary to pay rent or other
amounts under a lease of (or other agreement conveying the right to use) real
or personal property, which obligations are required to be classified and
accounted for as a capital lease on a balance sheet of such Person under GAAP
and, for purposes of this Agreement, the amount of such obligations shall in
each case be the capitalized amount thereof, determined in accordance with
GAAP;

 

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

 

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

 

“Claim” has the
meaning ascribed thereto in Section 3.6(a);

 

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

 

“Closing Date Arrangement Fee”  has
the meaning ascribed thereto in Section 5.3(b);

 

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

 

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

 

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

 

“Commitment Fees” means, collectively, the Tranche 1 Commitment Fee,
the Tranche 2 Commitment Fee,
and the Tranche 2 Commitment
Fee, and, in the singular, any one of them;

 

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

 

“Compliance Certificate”
has the meaning ascribed thereto in Section 7.1(n)(i);

 

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

 

8

 

	
  (i)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (A)

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (B)

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (C)

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

  
	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

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

  
					

 

“Core Line of Business”
means the ownership or operation of racetracks and pari-mutuel wagering
activities, as described in the Form 10-K filed by the Borrower for the
year

 

9

 

ended December 31, 2007, and including (i) thoroughbred and
harness horse racing, (ii) off-track betting facilities, (iii) account wagering
and other gaming activities including, without limitation, poker, slot machines
and video lottery terminals, (iv) a racetrack and casino complex in
Austria, and (v) any food and beverage operations, sports bar operations, content acquisition and distribution, technology and media
services, entertainment, the ownership and management of real estate and/or
other activities, associated with or ancillary or related to (i), (ii), (iii) and/or
(iv), above, including the ownership or operation of horse training and
boarding centres, arenas and restaurants;

 

“Cost Consultant”
has the meaning ascribed thereto in Section 2.8;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“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;

 

10

 

“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
Body regarding environmental matters or under any Environmental Law;

 

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

 

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

 

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

 

	
  (i)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (v)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (vi)

  	
   

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

  

 

11

 

	
  (vii)

  	
   

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

  

 

and includes all
Environmental Consents;

 

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

 

	
  (i)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

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

 

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

 

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

 

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

 

“Excluded Taxes” means, in relation to the Lender,
(a) those Taxes which are imposed or levied on or measured by or
determined by reference to the overall net income, profits, gross receipts, net
worth or capital of the Lender or any of its branches, and all franchise taxes,
taxes on doing business or taxes measured by capital or net worth imposed on
the Lender or any of its applicable branches pursuant to the laws of the
jurisdiction in which the Lender is organized or resident or in which the
Lender’s principal office or applicable

 

12

 

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

 

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

 

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

 

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

 

“Golden Gate Fields Guarantee and Indemnity”
has the meaning ascribed thereto in Section 8.2(j)(xlviii);

 

“Golden Gate Fields Guarantee Fee” has the
meaning ascribed thereto in Section 8.2(j)(xlviii);

 

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

 

“Golden Gate Fields Property Environmental Indemnity”
has the meaning ascribed thereto in Section 8.2(j)(xx);

 

“Golden Gate Fields Third Assignment of Material Agreements”
has the meaning ascribed thereto in Section 8.2(j)(xviii);

 

“Golden Gate Fields Third Assignment of Rents and
Leases” has the meaning ascribed thereto in
Section 8.2(j)(xvii);

 

“Golden Gate Fields Third General Security Agreement” has the
meaning ascribed thereto in Section 8.2(j)(xix);

 

“Golden Gate Fields Third Mortgage” has the
meaning ascribed thereto in Section 8.2(j)(xvi);

 

“Golden Gate Fields Security” has the
meaning ascribed thereto in Section 8.2(j)(xix);

 

13

 

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

 

“Guarantor Incorporation Documents” has the meaning ascribed
thereto in Section 6.1(j);

 

“Guarantors” means, collectively,
(i) the Golden Gate Fields Guarantors, (ii) the Santa Anita
Guarantors, (iii) the Thistledown Guarantor, (iv) the AmTote
Guarantors and, subject to Sections 8.1(j)(lvi), 8.1(j)(xxxix), and
8.1(j)(xlvii), (v) the Bowie Guarantor, (vi) the Laurel Guarantor,
(vii) the Pimlico Guarantor, and (viii) the Maryland Racing
Guarantor, and, in the singular, any one of them;

 

“Guarantor Payment” has the meaning ascribed
thereto in Section 10.22;

 

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

 

“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 Mortgaged
Properties or any part thereof and any other act, business or operation that
poses a material risk of harm to Persons or property on or off the Mortgaged
Properties;

 

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

 

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

 

“Indebtedness” has the meaning ascribed
thereto in Section 8.2(j);

 

14

 

“Indemnified Person” has the meaning
ascribed thereto in Section 3.6(a);

 

“Indemnifying Party” has the meaning
ascribed thereto in Section 3.6(a);

 

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

 

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

 

“Interest Rate” has the meaning ascribed
thereto in Section 5.1(a);

 

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

 

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

 

“Laurel Assignment of Material Agreements” has the meaning
ascribed thereto in Section 8.2(j)(xxxiv);

 

“Laurel Assignment of Rents and Leases” has the meaning
ascribed thereto in Section 8.2(j)(xxxiii);

 

“Laurel General Security Agreement” has the meaning ascribed
thereto in Section 8.2(j)(xxxv);

 

“Laurel  Guarantee
and Indemnity” has the meaning ascribed thereto in 8.2(j)(lv);

 

“Laurel  Guarantee
Fee” has the meaning ascribed thereto in Section 8.2(j)(lv);

 

“Laurel Guarantor” means the Laurel Racing
Association Limited Partnership a partnership formed under the laws of the
State of Maryland, acting through its general partner, Laurel Racing
Assoc., Inc.;

 

“Laurel Mortgage” has the meaning ascribed thereto in
Section 8.2(j)(xxxii);

 

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

 

“Laurel Property Environmental Indemnity”
has the meaning ascribed thereto in Section 8.2(j)(xxxvi);

 

“Laurel Security” has the meaning ascribed thereto in
Section 8.2(j)(xxxix);

 

“Laurel  Slots
Facilities” means the temporary slots facilities to be constructed
and operated on the Laurel Property;

 

15

 

“Laurel  Slots
Facilities Capital Budget”  means
the capital budget in respect of the construction of the Laurel Slots
Facilities, prepared by the Borrower and/or the Laurel Guarantor and approved
by the Lender;

 

“Laurel  Slots
Facilities Costs” means the Borrower’s and/or the Laurel Guarantor’s costs, not to
exceed $30,000,000, in
respect of the Laurel Slots
Facilities;

 

“Laurel  Slots
Facilities Contracts” means  all
contracts entered into by the Borrower and/or the Laurel Guarantor and/or their
or its agents with Persons for the supply by such Persons of construction
services or materials for the Laurel Slots Facilities or any part thereof or
services or materials related thereto;

 

“Laurel  Slots
Facilities FF&E” means the slot machines, furniture, fixtures,
and equipment relating thereto to be installed in the Laurel Slots Facilities;

 

“Laurel  Slots
Facilities Holdback” has the meaning ascribed thereto in
Section 3.3;

 

“Laurel  Slots
Facilities Holdback Advance” has the meaning ascribed thereto in
Section 3.3;

 

“Laurel  Slots
Facilities Plans and Specifications” has the meaning ascribed
thereto in Section 7.1(z);

 

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

 

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

 

“Lender’s Costs” has the meaning ascribed
thereto in Section 5.4;

 

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

 

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

 

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

 

“Lender’s New York Agent” means the New York office of Davies
Ward Phillips & Vineberg LLP, or such other firm or firms of
solicitors or agents in the State of New York

 

16

 

as are appointed by the
Lender from time to time and notice of which is provided to the Borrower and
the Guarantors;

 

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

 

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

 

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

 

“Maryland Racing Guarantor” means Maryland Racing, Inc.;

 

“Maryland Racing Guarantee Fee” the meaning ascribed thereto in
Section 8.2(j)(lvii);

 

“Maryland Racing Guarantee and Indemnity” the meaning ascribed
thereto in Section  8.2(j)(lvii);

 

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

 

“Material Adverse Effect” means material adverse effect on
(a) the business, condition (financial or otherwise), operations,
properties, assets, liabilities or prospects of the Borrower (taken as a whole
together with all of its Subsidiaries on a consolidated basis) or any of the
Guarantors or any of the Mortgaged Properties, or (b) the ability of the
Borrower or any of the Guarantors to perform its Obligations under any 2008
Loan Document to which it is or is to be a party, or (c) the rights and
remedies of the Lender under the Agreement or any of the other 2008 Loan
Documents or the Intercreditor Agreements, or (d) the Lender’s security
interest in the Collateral or the perfection or priority thereof;

 

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

 

“Material Authorization” means any approval, permit, licence,
order, consent or similar authorization from, and any filing, registration,
qualification or recording with, any

 

17

 

Governmental Body, domestic
or foreign, required by the Borrower or any of its Subsidiaries, the absence of
which could reasonably be expected to result in a Material Adverse Effect;

 

“Maturity Date” means, with respect to Tranche 1, the Tranche 1
Maturity Date (or such later date or dates as may be determined in writing from
time to time by the Lender in its sole discretion, with such later date or
dates being subject to such conditions as may be determined by the Lender in
its sole discretion), with respect to Tranche 2, the Tranche 2 Maturity Date
(or such later date or dates as may be determined in writing from time to time
by the Lender in its sole discretion, with such later date or dates being
subject to such conditions as may be determined by the Lender in its sole
discretion), with respect to Tranche 3, the Tranche 3 Maturity Date (or such
later date or dates as may be determined in writing from time to time by the
Lender in its sole discretion, with such later date or dates being subject to
such conditions as may be determined by the Lender in its sole discretion), and
with respect to Tranche 4, the Tranche 4 Maturity Date (or such later date or
dates as may be determined in writing from time to time by the Lender in its
sole discretion, with such later date or dates being subject to such conditions
as may be determined by the Lender in its sole discretion);

 

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

 

“MJC Guarantors” means, collectively, the Bowie Guarantor, the
Laurel Guarantor, Pimlico Guarantor, and the Maryland Racing Guarantor;

 

“MJC Mortgaged Properties” means, collectively, the Bowie
Property, the Laurel Property, and Pimlico Property;

 

“MJC Security” means, collectively, the Bowie Security, the
Laurel Security, and Pimlico Security;

 

“Mortgages” means, collectively, the Golden Gate Fields Third
Mortgage, the Santa Anita Fourth Mortgage, the Bowie Mortgage, the Laurel
Mortgage and the Pimlico Mortgage; and, in the singular, any one of them;

 

“Mortgaged Properties” means, as of the date of this Agreement,
collectively, the Golden Gate Fields Property, and the Santa Anita Property,
and at any time after the Tranche 2 Conditions Date, in addition to the
foregoing two properties, the Bowie Property, the Laurel Property and the
Pimlico Property all of which are legally described in Schedule B attached
hereto; and, in the singular, any one of them;

 

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

 

“Non-Excluded Taxes” has the meaning
ascribed thereto in Section 2.7;

 

18

 

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

 

“Obligations” means all indebtedness, liabilities and other
obligations of the Borrower and Guarantors to the Lender under any other 2008
Loan Document (including any amendments or supplements thereto), whether actual
or contingent, direct or indirect, matured or not, now existing or arising
hereafter and includes, without limitation, all unpaid principal, interest,
fees, costs and other amounts payable by the Borrower and Guarantors to the
Lender hereunder or under any other 2008 Loan Document;

 

“Occupancy Agreements” has the meaning
ascribed thereto in Section 6.1(nn);

 

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

 

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

 

“Organizational Documents” has the meaning ascribed thereto in
Section 6.1(j);

 

“Permitted Debt” means (i) indebtedness
under the Bridge Loan Agreement; (ii) indebtedness under the 2008 Loan;
(ii) indebtedness under the Santa Anita Senior Facility; (iv) indebtedness
under the BMO Credit Agreement; (v) indebtedness under the SunTrust Credit
Agreement; (vi) indebtedness under the Remington Construction Loan
Agreement; (vii) indebtedness under the Gulfstream Construction Loan
Agreement; (viii) indebtedness of GPRA Commercial Enterprises Inc.
relating to a loan agreement among, inter
alia, Keybank National Association, as principal lender, and The
Village at Gulfstream Park, LCC, as borrower, where such indebtedness is
non-recourse to the Borrower and the Gulfstream Guarantor (as defined in the
Bridge Loan Agreement) and arises under the May 1, 2005 limited liability
company agreement, as amended, by which The Village at Gulfstream Park, LLC,
was formed; (vix) indebtedness of MEC Grundstucksentwicklungs GmbH existing on
the date hereof; (x) indebtedness under the PNC Debt existing as of the
date hereof; (xi) the lease between a non-guarantor entity and an entity
associated with the City of Grand Prairie, pursuant to which Lone Star Park is
operated; (xii) indebtedness owing under, and not exceeding the amounts
permitted to be outstanding under and secured by, Permitted Liens and
extensions, renewals or replacements of any indebtedness permitted under this
clause (other than that listed in items (iv) and (v) of this
definition which shall not be replaced following repayment); provided the
principal amount of such indebtedness thereunder or security therefor is not
thereby increased beyond the original principal amount of such indebtedness;
(xiii) unsecured trade and other accounts payable incurred in the ordinary
course of business

 

19

 

for the
purpose of carrying on the same including the “Construction” (as defined in the Remington Construction Loan
Agreement) and the “Reconstruction”
(as defined in the Gulfstream Construction Loan Agreement); (xiv) indebtedness
under interest rate or currency hedging agreements entered into for the purpose
of managing interest rate and currency risks of the Borrower or any of its
Subsidiaries and not for speculative purposes; (xv) indebtedness under letters
of credit, performance bonds, instalment insurance and insurance premium
financing contracts, and similar instruments in respect of land transfer tax
claims, land development charges, gaming permits and other obligations of the
Borrower or its Subsidiaries incurred in the ordinary course of business; (xvi)
secured indebtedness between the Borrower (as lender) and Laurel Racing
Association Limited Partnership (as borrower) up to $3,000,000 and previously
consented to by the Lender; (xvii) the Subordinated Debt; (xviii) unsecured
intercompany indebtedness of the Borrower to any of its Subsidiaries or of any
of the Subsidiaries to the Borrower, provided that such unsecured intercompany
indebtedness is existing as of the date hereof or is entered into on customary
terms and in the ordinary course of the Borrower’s cash management activities
consistent with past practice; (xvix) other obligations and indebtedness
(including Capital Lease Obligations (other than that listed in item (xi) of
this definition) and Contingent Liabilities, but excluding item (xiii)
listed in this definition) existing on the date hereof and relating to
Subsidiaries which are not Guarantors, and all of which are disclosed in the
Audited and Unaudited Financial Statements including the notes thereto, in the
aggregate amount of not more than $2,000,000 (which amount includes
indebtedness denominated in foreign currencies and is therefore subject to
fluctuation from time to time due to exchange rate fluctuations); and (xx)
other obligations and indebtedness (including Capital Lease Obligations and
Contingent Liabilities) of up to $5,000,000 in the aggregate, provided that
none of such other obligations and indebtedness is secured by any of the
Mortgaged Properties;

 

“Permitted Liens” means any:

 

	
  (i)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  construction,
  mechanics’, workers’, repairers’, carriers’, warehousemen’s and materialmen’s
  Liens and Liens in respect of vacation pay, workers’ compensation, social
  security, old age pension, employment insurance or

  

 

20

 

	
   

  	
   

  	
  similar
  statutory obligations, provided the obligations secured by such Liens are not
  yet due and payable and, in the case of construction Liens, which have not
  yet been filed or for which the Borrower or a Subsidiary has not received
  written notice of a Lien or for which a construction lien has been filed and
  the Borrower or a Subsidiary is contesting such Lien diligently and in good
  faith;

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (v)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (vi)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (vii)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (viii)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (ix)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (x)

  	
   

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

  

 

21

 

	
  (xi)

  	
   

  	
  Liens granted by the Borrower to any Guarantor or by any Guarantor to
  the Borrower or any other Guarantor;

  
	
   

  	
   

  	
   

  
	
  (xii)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (xiii)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (xiv)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (xv)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (xvi)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (xvii)

  	
   

  	
  applicable municipal by-laws, development agreements, subdivision
  agreements, site plan agreements, zoning laws and building restrictions which
  do not in the aggregate materially adversely affect the current use of the
  property affected thereby and provided that the same have been complied with
  in all material respects;

  
	
   

  	
   

  	
   

  
	
  (xviii)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (xix)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (xx)

  	
   

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

  

 

22

 

	
  (xxi)

  	
   

  	
  the Liens granted pursuant to the Security;

  
	
   

  	
   

  	
   

  
	
  (xxii)

  	
   

  	
  any registered Lien existing as of November 26, 2008 that is
  disclosed in the title insurance commitments issued in respect of the
  Mortgaged Properties in connection with this Agreement;

  
	
   

  	
   

  	
   

  
	
  (xxiii)

  	
   

  	
  Purchase Money Security Interests existing as of the Closing Date;

  
	
   

  	
   

  	
   

  
	
  (xxiv)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (xxv)

  	
   

  	
  any other Lien which the Lender approves in writing as a Permitted
  Lien;

  

 

“Permitted Lender Assignee” has the meaning
ascribed thereto in Section 10.8;

 

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

 

“Pimlico Assignment of Material Agreements”
has the meaning ascribed thereto in Section 8.2(j)(xlii);

 

“Pimlico Assignment of Rents and Leases” has
the meaning ascribed thereto in Section 8.2(j)(xli);

 

“Pimlico  General
Security  Agreement” has
the meaning ascribed thereto in Section 8.2(j)(xliii);

 

“Pimlico Guarantee Fee” has the meaning
ascribed thereto in Section 8.2(j)(lvi);

 

“Pimlico Guarantee and Indemnity” has the
meaning ascribed thereto in Section Section 8.2(j)(lvi);

 

“Pimlico Guarantor” means The Maryland
Jockey Club of Baltimore City, Inc.;

 

“Pimlico Mortgage” has the meaning ascribed
thereto in Section 8.2(j)(xl);

 

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

 

“Pimlico Property Environmental Indemnity”
has the meaning ascribed thereto in Section 8.2(j)(xliv);

 

“Pimlico Security” has the meaning ascribed
thereto in Section 8.2(j)(xlvii);

 

23

 

“PNC Debt” means the indebtedness of the applicable
MJC Guarnators to PNC Bank, National Association or a predecessor thereof,
existing on the date hereof;

 

“PNC Lender” means the lender in respect of
the PNC Debt;

 

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

 

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

 

“Proposed  Transactions”
means the transactions contemplated in the Transaction Agreement;

 

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

 

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

 

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

 

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

 

“Released Persons” has the meaning ascribed
thereto in Section 8.1(f);

 

“Releasing Persons” has the meaning ascribed
thereto in Section 8.1(f);

 

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

 

“Remington Borrower”  means Remington Park, Inc.;

 

“Replacement Cost” means, with respect to
any property or asset, the cost of repairing, replacing or reinstating such
property or asset with materials of like kind and quality and

 

24

 

for
like occupancy (where applicable) on the same or a similar site, in accordance
with the requirements of any applicable municipal by-laws and without deduction
for depreciation;

 

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

 

“Request for Tranche 4 Advance” means a
request for Tranche 4 Advance to be submitted by the Borrower in a form
acceptable to the Lender;

 

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

 

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

 

“Santa Anita
Fourth General Security Agreement” has the meaning ascribed thereto
in Section 8.2(j)(xi);

 

“Santa Anita
Guarantee and Indemnity” has the meaning ascribed thereto in
Section 8.2(j)(li);

 

“Santa Anita
Guarantee Fee” has the meaning ascribed thereto in
Section 8.2(j)(li);

 

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

 

“Santa Anita Property Environmental Indemnity”
has the meaning ascribed thereto in Section 8.2(j)(xii);

 

“Santa Anita Security” has the meaning
ascribed thereto in Section 8.2(j)(xi);

 

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

 

“Santa Anita Fourth Assignment of Material Agreements”
has the meaning ascribed thereto in Section 8.2(j)(x);

 

“Santa Anita Fourth Assignment of Rents and Leases”
has the meaning ascribed thereto in Section 8.2(j)(ix);

 

25

 

“Santa Anita Fourth Mortgage” has the
meaning ascribed thereto in Section 8.2(j)(viii);

 

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

 

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

 

“Security”
has the meaning ascribed thereto in Section 8.2(j);

 

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

 

“Subsequent Tranche 4 Advance Date”  has the meaning ascribed thereto in
Section 4.5;

 

“Subsequent Tranche 4 Advances”  has the meaning ascribed thereto in
Section 4.5;

 

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

 

“SunTrust Credit Agreement” means the loan
and security agreement made as of May 11, 2007 among AmTote
International, Inc., as borrower, and SunTrust, as lender, as has been and
may be further amended and restated from time to time, provided that the
principal amount outstanding at any time under the SunTrust Credit Agreement as
so amended or restated shall not exceed 
$4.5 million, and includes any renewal or refinancing of any such
agreement or the indebtedness owing thereunder provided that the principal
amount of such renewed or refinanced indebtedness does not exceed $4.5 million
and security therefor is not increased thereby;

 

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

 

“Termination Date”  means: (i) in respect of Tranche 1: (x) the earlier
of the Tranche 1 Maturity Date; and (y) such earlier date as the entire
balance of the 2008 Loan may become due hereunder, whether by acceleration or
otherwise; (ii) in respect of Tranche 2:

 

26

 

(x) the
earlier of the Tranche 2 Maturity Date; and (y) such earlier date as the
entire balance of 2008 Loan may become due hereunder, whether by acceleration
or otherwise; (iii) in respect of Tranche 3: (x) the earlier of the
Tranche 3 Maturity Date; and (y) such earlier date as the entire balance
of the 2008 Loan may become due hereunder, whether by acceleration or
otherwise; and (iv) in respect of Tranche 4: (x) the earlier of the
Tranche 4 Maturity Date; and (y) such earlier date as the entire balance
of the 2008 Loan may become due hereunder, whether by acceleration or
otherwise;

 

“Thistledown  Guarantee and Indemnity” has the meaning ascribed thereto in
Section 8.2(j)(lix);

 

“Thistledown  Guarantee Fee” has the meaning ascribed thereto in
Section 8.2(j)(lix);

 

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

 

“Title
Company” means Fidelity National Title Insurance Company of New York
(or any other title company acceptable to the Lender);

 

“Title
Policies” means each title policy required to be delivered hereunder
by the Borrower or any of the Guarantors to the Lender in connection with the
Mortgaged Properties;

 

“Tranche 1”
has the meaning ascribed thereto in Section 2.1(d);

 

“Tranche 1 Commitment Fee”   has
the meaning ascribed thereto in Section 5.3(a);

 

“Tranche 1 Maturity Date”  means March 31, 2009, subject to
accelerated maturity in the event that the Lender delivers a Transaction
Termination Event Notice, in which event the Tranche 1 Maturity Date shall be
the date which is thirty (30) days following the delivery of the Transaction
Termination Event Notice;

 

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

 

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

 

“Tranche 2 Commitment Fee”   has
the meaning ascribed thereto in Section 5.3(a);

 

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

 

“Tranche 2 Conditions Date”  has the meaning ascribed thereto in
Section 2.1(d);

 

“Tranche 2 Maturity Date”  means December 31, 2011, provided
that the Tranche 2 Maturity Date shall be accelerated to the earlier of:
(i) the date which is ninety (90) days following the date on which:
(A) the Borrower and/or the Laurel Guarantor, as

 

27

 

the
case may be, has been advised by the relevant Governmental Body that the slots
application in respect of the Laurel Property submitted by the Borrower and/or
the Laurel Guarantor, as the case may be, has been denied; or (B) the
slots application in respect of the Laurel Property submitted by the Borrower
and/or the Laurel Guarantor has been withdrawn, (ii) the date of the
closing of any sale of all or any part of the Laurel Property, or
(iii) the date of the closing of any financing not provided by the Lender
or the Borrower in connection with the Laurel Slots Facilities;

 

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

 

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

 

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

 

“Tranche 3 Conditions Date”  has the meaning ascribed thereto in
Section 2.1(e);

 

“Tranche 3 Maturity Date”  means December 31, 2011, provided
that the Tranche 3 Maturity Date shall be accelerated to the earlier of:
(i) the date which is ninety (90) days following the date on which:
(A) the Borrower and/or the Laurel Guarantor, as the case may be, has been
advised by the relevant Governmental Body that the slots application in respect
of the Laurel Property submitted by the Borrower and/or the Laurel Guarantor,
as the case may be, has been denied; or (B) the slots application in
respect of the Laurel Property submitted by the Borrower and/or the Laurel
Guarantor has been withdrawn, (ii) the date of the closing of any sale of
all or any part of the Laurel Property, or (iii) the date of the closing
of any financing not provided by the Lender or the Borrower in connection with
the Laurel Slots Facilities;

 

“Tranche 4”
has the meaning ascribed thereto in Section 2.1(g);

 

“Tranche 4 Advances”  means Advances in respect of Tranche 4 and
“Tranche 4 Advance” means any
advance in respect of Tranche 4;

 

“Tranche 4 First Advance”  has the meaning ascribed thereto in
Section 4.4;

 

“Tranche 4 First Advance Date”  has the meaning ascribed thereto in
Section 4.4;

 

“Tranche 4 Arrangement Fee”  has the meaning ascribed thereto in
Section 5.3(b);

 

“Tranche 4 Commitment Fee”  has the meaning ascribed thereto in
Section 5.3(a);

 

“Tranche 4 Conditions”  has the meaning ascribed thereto in
Section 4.3;

 

“Tranche 4 Conditions Date”  has the meaning ascribed thereto in
Section 2.1(f);

 

“Tranche 4 Maturity Date”  means December 31, 2011, provided
that the Tranche 4 Maturity Date shall be accelerated to the earlier of:
(i) the date which is ninety (90) days following the date on which:
(A) the Borrower and/or the Laurel Guarantor, as the case may be, has been
advised by the relevant Governmental Body that the slots application in respect
of the Laurel Property submitted by the Borrower and/or the Laurel Guarantor,
as the case may be, has been denied; or (B) the slots application in
respect of the Laurel

 

28

 

Property
submitted by the Borrower and/or the Laurel Guarantor has been withdrawn,
(ii) the date of the closing of any sale of all or any part of the Laurel
Property, or (iii) the date of the closing of any financing not provided
by the Lender or the Borrower in connection with the Laurel Slots Facilities;

 

“Transaction Agreement” means transaction
agreement dated November 26, 2008 between MID, Magna Entertainment Corp.,
Stronach Trust, 445327 Ontario Limited, and Fair Enterprise Limited;

 

“Transaction Termination Event Notice”  means a written notice from the Lender to
the Borrower advising that MID has advised it that: (i) the Proposed
Transactions will not proceed to a vote of MID shareholders at a special
meeting (as a result of the MID Board of Directors failing to call such a
meeting, or for any other reason); (ii) the Proposed Transactions have not
received the requisite approvals at a special meeting called to consider the
Proposed Transactions; or (iii) that a court of competent jurisdiction has
not approved a plan of arrangement implementing the Proposed Transactions;

 

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

 

“Unaudited
Financial Statements” means the unaudited consolidated financial
statements of the Borrower for the Fiscal Quarter ended September 30, 2008;

 

“Unutilized Tranche 1 Amount” has the
meaning ascribed thereto in Section 5.3(a);

 

“Unutilized Tranche 2 Amount” has the
meaning ascribed thereto in Section 5.3(a);

 

“Unutilized Tranche 4 Amount” has the
meaning ascribed thereto in Section 5.3(a);

 

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

 

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

 

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

 

1.2                                                                               Gender and Number

 

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

 

29

 

1.3                                                                               Invalidity, etc.

 

Each of the provisions contained in any 2008
Loan Document is distinct and severable and a declaration of invalidity, illegality
or unenforceability of any such provision or part thereof by a court of
competent jurisdiction shall not affect the validity or enforceability of any
other provision of such 2008 Loan Document or of any other 2008 Loan Document. Without
limiting the generality of the foregoing, if any amounts on account of interest
or fees or otherwise payable by the Borrower or the Guarantors to the Lender
hereunder exceed the maximum amount recoverable under Applicable Law, the
amounts so payable hereunder shall be reduced to the maximum amount recoverable
under Applicable Law.

 

1.4                                                                               Headings, etc.

 

The division of a 2008 Loan Document into
articles, Sections and clauses, the inclusion of a table of contents and the
insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of such 2008 Loan Document.

 

1.5                                                                               Governing Law

 

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

 

1.6                                                                               Attornment

 

Each of the parties hereto irrevocably and
unconditionally submits and attorns, for itself and its property, to the
non-exclusive jurisdiction of any court of the State of New York or federal
court of the United States of America sitting in the County and State of New
York, and any appellate court therefrom for all matters arising out of or in
connection with this Agreement or any of the other 2008 Loan Documents to which
it is a party, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard in any such
State of New York court or, to the extent permitted by law, in such federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. Nothing
in this Agreement shall affect any right that any party may otherwise have to
bring any action or proceeding relating to this Agreement or any of the other
2008 Loan Documents in the courts of any jurisdiction.

 

1.7                                                                               Judgment Currency

 

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

 

30

 

connection
with the purchase of, or conversion into, the relevant currency with or from
U.S. dollars.

 

1.8                                                                               References

 

Except as otherwise specifically provided,
reference in any 2008 Loan Document to any contract, agreement or any other
instrument (including, without limitation, any other 2008 Loan Document) shall
be deemed to include references to the same as varied, amended, restated,
supplemented or replaced from time to time and reference in any 2008 Loan
Document to any enactment, including without limitation, any statute, law,
by-law, regulation, ordinance or order, shall be deemed to include references
to such enactment as re-enacted, amended or extended from time to time.

 

1.9                                                                               Currency

 

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

 

1.10                                                                        This Agreement to Govern

 

If there is any inconsistency between the terms
of this Agreement and the terms of any other 2008 Loan Document, the provisions
hereof shall prevail.

 

1.11                                                                        Generally Accepted Accounting Principles

 

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

 

1.12                                                                        Computation of Time Periods

 

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

 

1.13                                                                        Actions on Days Other Than Banking Days

 

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

 

31

 

	
  1.14

  	
  Oral Instructions

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Notwithstanding
  any other provision herein regarding the delivery of notices, including
  Borrowing Notices, by the

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

  
	
   

  	
   

  	
   

  	
   

  
	
  1.15

  	
  Incorporation of Schedules

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

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

  

 

	
  Schedule
  A

  	
  Borrowing
  Notice

  
	
  Schedule
  B

  	
  Mortgaged
  Properties

  
	
  Schedule
  C

  	
  Environmental
  Reports

  

 

ARTICLE 2 

 

2008 LOAN

 

	
  2.1

  	
  Establishment of 2008 Loan

  
	
   

  	
   

  	
   

  	
   

  
	
  (a)  Subject to the terms and
  conditions of this Agreement, the Lender hereby establishes in favour of the
  Borrower a secured non-revolving loan of up to the principal amount of
  $125,000,000, available in up to four tranches on the terms and conditions
  set out herein.

  
	
   

  	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  
	
  (c)  At no time shall the amount
  of the 2008 Loan exceed the 2008 Loan Amount available to the Borrower at
  such time.

  
	
   

  
	
  (d)

  	
  During
  the period from the Closing Date to the first Banking Day on or after the
  satisfaction of the Tranche 2

  
	
  Conditions
  (the “Tranche 2 Conditions Date”),
  the maximum principal amount of the first tranche (“Tranche 1”) of the 2008 Loan that shall
  be available to the Borrower shall be the Tranche 1 Loan Amount.

  
	
   

  
	
  (e)

  	
  On
  the first Banking Day on or after the Tranche 2 Condition Date, the maximum
  principal amount of the 2008 

  
	
  Loan
  that shall be available to the Borrower shall be increased by way of a second
  tranche (“Tranche 2”), and the
  maximum principal amount of Tranche 2 that shall be available to the Borrower
  shall be the Tranche 2 Loan Amount, subject to the satisfaction of the
  Tranche 2 Conditions set out in Section 4.1, for a total maximum
  principal availability as of such date of the aggregate of Tranche 1 Loan
  Amount and the Tranche 2 Loan Amount.

  

 

32

 

In
the event that the PNC Lender will not permit subsequent-ranking encumbrances
to be registered against the assets securing the PNC Debt, then on or after the
satisfaction of the Tranche 3 Conditions (the “Tranche 3 Conditions Date”), the maximum principal amount of
the 2008 Loan that shall be available to the Borrower shall be increased  by way of a third tranche (“Tranche 3”), and the maximum principal
amount of Tranche 3 that shall be available to the Borrower shall be the
Tranche 3 Loan Amount, subject to the satisfaction of the Tranche 3 Conditions
set out in Section 4.1 for a total maximum principal availability as of
such date of the aggregate of Tranche 1 Loan Amount, the Tranche 2 Loan Amount
and the Tranche 3 Loan Amount.

 

	
  (f)       On the first Banking Day
  on or after the satisfaction of the Tranche 4 Conditions (the “Tranche 4 Conditions Date”), the maximum
  principal amount of the 2008 Loan that shall be available to the Borrower
  shall be increased by way of a fourth tranche (“Tranche 4”), and the maximum principal amount of Tranche 4
  that shall be available to the Borrower shall be the Tranche 4 Loan Amount,
  subject, for a total maximum principal availability as of such date of the
  aggregate of Tranche 1 Loan Amount, the Tranche 2 Loan Amount, the Tranche 3
  Loan Amount (if the Tranche 3 Conditions set out in Section 4.1 are
  satisfied), and the Tranche 4 Loan Amount.

  
	
   

  	
   

  	
   

  
	
  (g)  For greater certainty,
  except as expressly set out herein, the Borrower is not required to draw down
  a Tranche or any portion thereof upon its first day of availability nor by
  the date that the next successive Tranche is available, availability of all
  Tranches being, without duplication, cumulative. The failure of the Borrower
  to draw down any particular Tranche (or any portion thereof) before the next
  Tranche availability (or the next following thereafter in the case of Tranche
  1) shall not terminate the Borrower’s right to such undrawn Tranche or
  portion thereof provided all conditions precedent to such Tranche have been
  satisfied within the time prescribed.

  
	
   

  	
   

  	
   

  
	
  2.2

  	
   

  	
  Non-Revolving Nature of 2008 Loan

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The
  2008 Loan is a non-revolving facility and any portion of the 2008 Loan that
  is repaid shall reduce the 2008 

  
	
  Loan
  Amount and may not be re-borrowed.

  
	
   

  	
   

  	
   

  
	
  2.3

  	
   

  	
  Pre-Payment

  
	
   

  	
   

  	
   

  
	
  (a)  Subject to LIBOR contract
  maturity dates with respect to any Advance, the Borrower may from time to
  time (without premium or penalty) on any Banking Day repay to the Lender any
  portion of the 2008 Loan, provided that any such repayment (a) shall be
  in an amount of at least $500,000 and any greater amount shall be an integral
  multiple of $50,000 and (b) shall be effected on at least ten Banking
  Days notice in writing to the Lender; provided that such notice, once given,
  shall be irrevocable and binding upon the Borrower. The 2008 Loan Amount
  shall be automatically and permanently reduced by the amount of any such
  repayment.

  
	
   

  	
   

  	
   

  
	
  (b)  The Borrower shall also
  have the right to pre-pay the entire 2008 Loan at any time, provided that the
  Borrower repays to the Lender the 2008 Loan then outstanding (including, for
  greater certainty, all accrued and unpaid interest, fees and other amounts
  owing as of such date)

  
	
   

  	
   

  	
   

  
					

33

 

(the
“Pre-Payment Amount”), and the Borrower
cancels any undrawn portion of the 2008 Loan. 
Notice of such voluntary pre-payment shall be given by the Borrower
(which notice shall be irrevocable when given) to the Lender not later than 10
Banking Days prior to the date of such pre-payment, specifying the date of such
pre-payment.  On receipt of full payment
of the Pre-Payment Amount, the Lender shall promptly execute and deliver a full
release of the Security held by it with respect to the transactions and
obligations contemplated herein, but in no event shall such release operate as
a release of any indemnities which are stated to survive a termination and/or
release of any such security or obligation. 
There shall be no make-whole payment by the Borrower to the Lender in
connection with any pre-payment.

 

	
  2.4

  	
   

  	
  Mandatory Repayment

  
	
   

  	
   

  	
   

  
	
  (a)  The 2008 Loan (or, in the
  case of Section 2.4(a)(iii), the relevant Tranche) shall be repaid in
  the following amounts and circumstances:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  in
  the event that the outstanding principal amount of the 2008 Loan at any time
  shall exceed the 2008 Loan Amount at such time, the Borrower shall forthwith
  make a repayment on account of the 2008 Loan such that, after giving effect
  to such repayment, the aggregate principal amount of the 2008 Loan
  outstanding will be not more than the 2008 Loan Amount;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (A)

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (B)

  	
  asset
  and/or real property sales by the Borrower or any of its Subsidiaries out of
  the ordinary course of business consistent with past practice (which ordinary
  course of business includes the sale of individual residential lots at market
  prices), provided that the proceeds of such asset and/or real property sales
  that are made to MID as part of the Proposed Transaction may be retained by
  the Borrower and used by the Borrower or any of its Subsidiaries to repay the
  amounts owing: (x) under the BMO Credit Agreement up to $40 million
  (which the Borrower hereby covenants to do or cause its do Subsidiaries to);
  and/or (y) amounts owing under the SunTrust Credit Agreement up to $4.5
  million (which the Borrower hereby covenants to do or cause its do
  Subsidiaries to) and/or (z) for operational and working capital purposes
  in accordance with the restrictions on use of proceeds set forth for Tranche
  1 as described in this Agreement;

  

 

34

 

	
   

  	
   

  	
   

  	
  (C)

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (D)

  	
  any
  expropriation or condemnation of the whole or any part of its real property
  or other assets,

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  an
  amount equal to 100% of such net proceeds shall be applied to repay the 2008
  Loan, subject, to the extent applicable, to the terms of the Bridge Loan
  Agreement and/or the BMO Intercreditor Agreement; and

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
  Tranche
  1 shall be paid in full on the Termination Date applicable to Tranche 1.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)  Without limiting the
  provisions of Section 2.4(a), in the event that the slots application in
  respect of the Laurel Property is denied or withdrawn, any refunds, to the
  Borrower or any of its Subsidiaries, of any license fees and license
  application fees paid in respect of the Laurel Slots Facilities
  application shall be applied to repay any amounts owing in respect of Tranche
  2 and/or Tranche 3.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)  The repayments referred to
  in items (A) to (D) inclusive of Section 2.4(a)(ii) shall
  be made as promptly as practicable (and in any event within three Banking
  Days) following the receipt by any of the Borrower and/or its Subsidiaries of
  the net proceeds referred to therein. Notwithstanding the foregoing, the
  Borrower and/or its Subsidiaries shall direct all purchasers of the assets
  and/or real property specified in Section 2.4(a)(ii)(B) to pay the
  applicable amount of net proceeds arising therefrom and due to the Lender
  pursuant to this Agreement directly to the Lender. Upon the repayment of the
  principal amount of the 2008 Loan or interest pursuant to
  Section 2.4(a), the 2008 Loan Amount shall be permanently reduced by an
  amount equal to the principal paid.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (d)   For the purposes of
  this Section 2.4, net proceeds from any sale or other transaction
  referred to herein means the proceeds (including any cash received in respect
  of non-cash proceeds (including any cash payments received by way of deferred
  payment of principal pursuant to a note or instalment receivable or purchase price
  adjustment receivable or otherwise, but excluding any interest payments) but
  only as and when received) received by the Borrower and/or any of its
  Subsidiaries therefrom net of all reasonable professional fees, brokers fees
  paid on an arm’s-length market basis, filing fees, commissions, sales tax and
  other direct costs and expenses of such transaction, together with, where
  applicable, in respect of any sale or other disposition of assets, the
  amounts necessary to repay or otherwise satisfy all Permitted Liens attaching
  to such assets ranking in priority to the Security or arising by virtue of
  this Agreement.

  

 

	
  2.5

  	
   

  	
  Voluntary Reduction in Aggregate Commitment

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The
  Borrower shall have the right at any time and from time to time, by giving at
  least ten Banking Days’ notice to 

  
	
  the
  Lender, which notice, once given, shall be irrevocable and

  

 

35

 

	
  binding
  upon the Borrower, to reduce the 2008 Loan Amount to a lower amount that is
  not less than the principal amount of the 2008 Loan then outstanding.  Such notice shall specify the amount of the
  reduction, which shall be in an integral multiple of $250,000.  The amount of any such reduction so made by
  the Borrower shall be permanent and irrevocable and the 2008 Loan Amount
  shall be reduced accordingly.

  
	
   

  	
   

  	
   

  
	
  2.6

  	
   

  	
  Payments Generally

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  All
  payments in respect of the 2008 Loan (in respect of principal, interest, fees
  or otherwise) shall be made by the 

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

  

 

2.7                                                                               Tax Matters

 

Each  party to this Agreement agrees to treat the
2008 Loan as debt for all tax purposes. 
All payments made by the Borrower pursuant to the 2008 Loan shall be
made free and clear  of, and without
deduction or withholding for or on account of, any present or future  income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by the United States or any
political subdivision or taxing authority thereof or therein, excluding net
income  taxes and franchise taxes
(imposed in lieu of net income taxes) imposed on the Lender as a result of a
present or former connection between the Lender and the United States or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from  the
Lender having executed, delivered or performed its obligations or receive a
payment under, or enforced, this Agreement). 
If any such non-excluded taxes, levies, imposts, duties, charges, fees
deductions or withholdings (“Non-Excluded
Taxes”) are required to be withheld from any amounts payable to the
Lender hereunder, the amounts so payable to the Lender shall be increased to
the extent necessary to yield to the Lender (after payment of all Non-Excluded
Taxes) interest or any such other amounts payable pursuant to the 2008 Loan at
the rates or in the amounts specified in the 2008 Loan.  Whenever any Non-Excluded Taxes are payable
by the Borrower, as promptly  as  possible thereafter the Borrower shall send
to the Lender a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any
Non-Excluded  Taxes when due to the
appropriate taxing authority or fails to remit to the Lender the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Lender for any incremental taxes, interest or penalties that may become
payable by the Lender as a result of any such failure.  The agreements in this section shall survive
the termination of this Agreement and the payment of the 2008 Loan.

 

2.8                                                                               Cost Consultant

 

In connection with the transactions contemplated
hereunder and under the other 2008 Loan Documents, the Lender shall have the
right (but not the duty) to employ such internal and/or external 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 

 

36

 

pursuant
to the Laurel Slots Facilities Contracts, (b) inspect the Laurel Property
from time to time to ensure that the Laurel Slots Facilities are being duly
constructed in accordance with the Laurel Slots Facilities Contracts and the
2008 Loan Documents, (c) review and make recommendations regarding any
elements of a request for disbursement, (d) obtain information and
documentation respecting the acquisition of the Laurel Slots Facilities
FF&E, and the construction of the Laurel Slots Facilities, and attend
meetings respecting the acquisition of the Laurel Slots Facilities FF&E,
and the construction of the Laurel Slots Facilities and formulate reports for
the Lender pertaining to the acquisition of the Laurel Slots Facilities
FF&E, and the construction of the Laurel Slots Facilities and
(e) perform such other construction-related services with respect to the
Laurel 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.

 

ARTICLE 3 

 

GENERAL PROVISIONS RELATING TO
THE 2008 LOAN

 

3.1                                                                               Advances

 

(a)          General.                         Each
request by the Borrower for an Advance under the 2008 Loan shall be made by the
delivery of a duly completed and executed Borrowing Notice to the Lender on the
third Banking Day prior to the proposed Borrowing Date or such shorter time as
the Lender may accept.  Any notice in
respect of a proposed Advance shall be irrevocable and binding on the
Borrower.  All Advances shall be in an
amount of at least $250,000 each, other than the last Tranche 4 Advance, which
may be for a lesser amount and other than Laurel Slots Holdback Advances, each
of which shall be in an amount of not less than One Hundred Thousand Dollars
($100,000);

 

(b)         Advances
– Tranche 1.  All requests
for Advances in respect of Tranche 1 shall be consistent (to be determined by
the Lender in its sole and absolute discretion) with the weekly cash flow
forecast reports that the Borrower is required to deliver to the Lender and MID
and used solely to fund: (i) operations; (ii) mandatory payments of
principal or interest and costs, fees and expenses due and owing to the Lender
under this Agreement and/or any other loans or credit facilities provided by
the Lender to the Borrower and/or its Subsidiaries, including,

 

37

 

without
limitation, the Bridge Loan Agreement, the Gulfstream Construction Loan
Agreement and the Remington Construction Loan Agreement; (iii) mandatory
payments of interest in connection with Permitted Debt, provided that the
making of any such payment is not prohibited by this Agreement and shall not
result in an Unmatured Event or Default or an Event of Default under this
Agreement; (iv) Maintenance Capital Expenditures; and (v) Capital
Expenditures required pursuant to the terms of the joint venture arrangements
with Forest City Enterprises, Inc. and Caruso Affiliated;

 

(c)          Availability
– Tranche 2.  All Advances
in respect of Tranche 2 shall be used solely to fund: (i) the initial
license fee and (ii) any additional slots license application costs and
fees in respect of the Laurel Property; and

 

(d)         Availability
– Tranche 3.  All Advances
in respect of Tranche 3 shall be used solely for the purposes of paying out the
PNC Debt.

 

(e)          Availability
– Tranche 4.  All Advances
in respect of Tranche 4 shall be used solely for the purposes of funding the construction of the Laurel Slots
Facilities.

 

3.2                                                                               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 proceeds in respect of any
Advance directly to a third party to the extent of any amounts owed to such
party which are the subject of such Advance. 
At its discretion, the Lender may make payment of all or part of
proceeds in respect of any Advance 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 7.2(g).

 

3.3                                                                               Holdbacks

 

Each Tranche 4 Advance (other than a Laurel
Slots Facilities 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 the Laurel Slots Facilities Contracts
(each such holdback in respect of Tranche 4 being referred to herein as a “Laurel  Slots
Facilities Holdback”), all of which holdbacks shall be advanced to
the Borrower in accordance with the provisions of Sections 3.2 and 3.4.

 

3.4                                                                               Holdback Advances

 

Upon notification to the Lender by the Cost
Consultant of the expiry of all applicable lien periods that relate to the
Laurel Slots Facilities or any discrete portion of the Laurel Slots Facilities
or any contract or subcontract relating to the Laurel Slots Facilities, the
Borrower shall be entitled to obtain, as an Advance (herein called a “Laurel  Slots
Facilities Holdback Advance”), the amounts held back pursuant to
Section 3.3 in respect of such Laurel 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:

 

38

 

(a)                                  the
Borrower shall have delivered a Request for Advance which shall reflect
compliance with this Section 3.4 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 Liens (other than Permitted Liens) 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 Laurel 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 Laurel Slots Facilities  Holdback
Advance shall only be made contemporaneously with the payment of another
Advance other than another Laurel Slots Facilities  Holdback Advance or a deemed Advance referred to in
Section 5.4; provided that this Section 3.4(d) shall not apply
to any Laurel Slots Facilities  Holdback
Advance to be made after the completion of the Laurel Slots Facilities.

 

3.5                                                                               Illegality

 

If
the introduction of or change to any present or future Applicable Law, or any
change in the interpretation or application thereof by any Governmental Body,
shall make it unlawful for the Lender to make or maintain the 2008 Loan or any
relevant portion thereof or to give effect to its obligations in respect of the
2008 Loan as contemplated hereby, the Lender may, by notice to the Borrower,
declare that its obligations hereunder in respect of the 2008 Loan shall be
terminated, and thereupon, subject as hereinafter provided in this
Section 3.5, the Borrower shall prepay to the Lender forthwith (or at the
end of such period to which the Lender shall in its discretion have agreed) all
of the Obligations to the Lender in respect of the 2008 Loan, including all
amounts payable in connection with such prepayment pursuant to
Section 3.6.  Any repayments made
under this Section 3.5 shall permanently reduce the 2008 Loan Amount.

 

3.6                                                                               Indemnity

 

(a)          The Borrower and each
of the Guarantors (each, an “Indemnifying
Party”) shall indemnify the Lender and its officers, directors and
employees (each, an “Indemnified Person”)
and shall hold each of them harmless from and against any and all losses,
liabilities, damages, claims and reasonable costs and out-of-pocket expenses
(including reasonable legal fees on a solicitor and his own client basis) (in
each case, a “Claim”) that may be
incurred by or asserted as a result of a claim by any third party or awarded in
favour of a third party against any of them, 

 

39

 

in
each case, arising out of, related to, or in connection with, or by reason of
(i) the transactions contemplated hereby, (ii) any Acquisition
undertaken by the Borrower or any of its Subsidiaries, or (iii) any
Environmental Law, including (A) the claim of any Lien thereunder,
(B) the presence of any Hazardous Substance affecting any Mortgaged
Properties or any adjacent real estate to the Mortgaged Properties, or
(C) the Release by the Borrower or a Subsidiary of any Hazardous Substance
into the environment.  Notwithstanding
the foregoing provisions of this Section 3.6(a), an Indemnifying Party
shall not be obligated to indemnify an Indemnified Person under this
Section 3.6(a) for any Claim to the extent that such Claim is solely
attributable to:

 

	
   

  	
  (i)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  the
  failure on the part of any Indemnified Person to perform any of its material
  covenants or obligations contained in any 2008 Loan Document to which it is a
  party, or a representation or warranty made by any Indemnified Person under
  the 2008 Loan Documents to which it is a party or in any certificate or other
  document delivered by any Indemnified Person pursuant hereto or in connection
  with any 2008 Loan Document being found to be false or incorrect in any
  material respect so as to make it materially misleading when made;

  
	
   

  	
   

  	
   

  
	
   

  	
  (iii)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (iv)

  	
  a
  Claim to the extent arising from the act of offering, selling, disposing or
  transferring by any Indemnified Person of all or part of its interest in the
  2008 Loan Documents.

  

 

(b)         The obligations and
indemnification of the Borrower and each of the Guarantors under this
Section 3.6 shall survive the payment and satisfaction of all Obligations
and the termination of this Agreement. 
The Lender shall hold the benefit of this indemnity in trust for those
Indemnified Persons who are not parties to this Agreement.

 

3.7                                                                               Proceedings in Respect of Claims

 

(a)                                  If a Claim
is made against an Indemnified Person as to which an Indemnifying Party may
have an indemnification obligation under Section 3.6(a), such Indemnified
Person shall notify the Indemnifying Party of the Claim; provided that the
failure to provide such notice promptly shall not release the Indemnifying
Party from any of its obligations to indemnify unless (and only to the extent)
such failure shall prevent the Indemnifying Party from contesting, or
materially and adversely affects the ability of the Borrower to conduct a
contest of, such Claim.

 

(b)                                 The
Indemnified Person shall be entitled, in its discretion, to require the
Indemnifying Party to prosecute, at the Indemnifying Party’s own cost and
expense, the entire defence of such Indemnified Person against any Claim by a
third party for which such Indemnified Person is indemnified under
Section 3.6(a).  In addition, upon
delivery by the Indemnifying Party to such Indemnified Person of a written
acknowledgement of the Indemnifying Party’s obligations to indemnify such
Indemnified Person in accordance with the 

 

40

 

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

 

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

 

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

 

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

 

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

 

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

 

Notwithstanding the first paragraph of this
Section 3.7(b), in any of the circumstances set out in
Section 3.7(b)(i) or (ii), the Indemnified Person shall be entitled
to assume the defence of such Claim with counsel selected by it (provided that
all Indemnified Parties shall use the same counsel) and the reasonable fees and
out-of-pocket expenses of such counsel shall be borne by the Indemnifying
Party; provided, that the Indemnifying Party shall in any event remain liable
hereunder in respect of the indemnified Claim.

 

(c)                                  Except in
the circumstances described in Section 3.7(b)(i)(C), the Indemnifying
Party may enter into any settlement or other compromise with respect to any
Claim in respect of which it has an indemnity payment obligation under
Section 3.7(a) without the prior written consent of the Indemnified
Person, except in the case of a settlement involving an admission of liability
of such Indemnified Person, in which case the prior written consent of the
Indemnified 

 

41

 

Person
shall be obtained, provided that if such Indemnified Person withholds its
consent to such settlement and the required admission of liability of such
Indemnified Person is not in favour of a Governmental Body other than a court,
would not give rise to the imposition of any penalty or sanction against the
Indemnified Person by any Governmental Body, is not in respect of any criminal
liability and would not otherwise impair the reputation of the Indemnified
Person in any material respect, the maximum amount of liability of the
Indemnifying Party to the Indemnified Person with respect to such Claim shall
not exceed the amount of the proposed settlement rejected by such Indemnified
Person.  Unless an Event of Default shall
have occurred and be continuing, no Indemnified Person shall enter into any
settlement or other compromise with respect to any Claim for which the
Indemnifying Party has in writing agreed to fully indemnify under
Section 3.7(a) without the prior written consent of the Indemnifying
Party, which consent may be withheld in the Borrower’s sole discretion, unless
such Indemnified Person waives its right to be indemnified under
Section 3.7(a), with respect to such Claim.

 

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

 

(e)                                  Upon
payment in full of any Claim pursuant to Section 3.7(a) to or on
behalf of an Indemnified Person, the Indemnifying Party, without any further
action, shall be subrogated to any and all claims that such Indemnified Person
may have relating thereto (other than claims in respect of insurance policies
maintained by such Indemnified Person at its own expense). Each Indemnified
Person agrees, at the Indemnifying Party’s reasonable request and expense, to
give such further assurances or agreements and to otherwise cooperate with the
Indemnifying Party to enable the Indemnifying Party to vigorously pursue such
claims.

 

(f)                                    Any amount
payable to an Indemnified Person pursuant to Section 3.7(a) shall be
paid to such Indemnified Person within 30 days of the receipt (or deemed
receipt) by the Indemnifying Party of a written request therefor from such
Indemnified Person, accompanied by a written statement describing in reasonable
detail the basis for such indemnity and the computation of the amount so
payable; provided that payment of an indemnity in respect of a third party
Claim need not be made until payment is due, whether by compromise, settlement,
court proceedings, arbitration or otherwise, from the Indemnified Person in
respect of such third party Claim.

 

3.8                                                                               Evidence of Indebtedness

 

The Lender shall maintain and keep accounts
showing the amount of all 2008 Loan Amounts advanced or deemed to be advanced
by the Lender, from time to time and the dates thereof and the interest, fees
and other charges accrued thereon or applicable thereto from time to time, and all
payments of principal (including prepayments), interest and fees and other
payments made by the Borrower to the Lender from time to time under the 2008
Loan.  Such accounts maintained by the
Lender shall be prima facie
evidence of the matters recorded therein.

 

42

 

ARTICLE 4 

ADDITIONAL CONDITIONS PRECEDENT TO ADVANCES

UNDER TRANCHE 2, TRANCHE 3 AND TRANCHE 4

 

	
  4.1

  	
   

  	
  Tranche
  2 Conditions

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Without derogating from the
  provisions of Sections 3.1 and 8.2, the Borrower shall only be entitled to
  advances

  
	
  under Tranche 2 if the
  following conditions (the “Tranche 2
  Conditions”) shall have been satisfied:

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Laurel
  License Application and Slots Operations: The Lender is
  satisfied, in its sole and absolute discretion, with the Borrower’s plan for
  the slot license application at the Laurel Property;

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  MJC
  Security: subject to 4.1(c) below, (i) the delivery, by the Borrower and the
  MJC Guarantors to the Lender, of fully executed copies of the MJC Security; (ii) the
  Lender having received evidence that the registrable MJC Security has been
  registered against title to the relevant MJC Mortgaged Properties or a title
  commitment thereof has been issued by the Title Company, all at the expense
  of the Borrower; (iii) the Lender shall have received a title insurance commitment,
  in from and substance satisfactory to the Lender, committing the Title
  Company to issue Title Policies, in an amount to be determined by the Lender,
  acting reasonably, insuring the relevant MJC Guarantor’s fee ownership of the
  relevant MJC Mortgaged Properties, the adequacy of the legal descriptions of
  the MJC Mortgaged Properties, the marketability of title of the MJC Mortgaged
  Properties and that the mortgages forming part of the MJC Security are valid
  Liens on the MJC Mortgaged Properties, free and clear of Liens other than the
  Permitted Liens and exceptions to title approved in writing by the Lender,
  the validity and effectiveness of any such Liens on the exercise by the
  Lender of its rights and remedies upon the occurrence of an Event of Default
  under this Agreement, and evidencing zoning compliance of the MJC Mortgaged
  Properties (in the form of a zoning endorsement to the Title Policy),
  together with any other endorsements required by the Lender; and (iv) the
  Lender having received the share pledges, partnership unit pledges, or
  negative pledges, as the case may be, in respect of the shares and/or
  partnership units of the MJC Guarantors (and any entities comprising such MJC
  Guarantors);

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Discharge
  of PNC Security: In the event that the
  lender in respect of the PNC Debt will not permit subsequent-ranking
  encumbrances to be registered against the assets securing the PNC Debt, the
  MJC Security shall be registered after the Borrower has secured and
  registered discharges of all security in respect of the PNC Debt, and Tranche
  2 shall be available for drawdown (subject to the satisfaction of the other
  conditions set out in this Section 4.1) after the Tranche 3 conditions
  have been satisfied; and

  
				

 

43

 

	
   

  	
  (d)

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

  
	
   

  	
   

  	
   

  
	
  4.2

  	
   

  	
  Tranche
  3 Conditions

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Without derogating from the
  provisions of Sections 3.1 and 8.2, the Borrower shall only be entitled to
  advances 

  
	
  under Tranche 3 if the
  following conditions (the “Tranche 3
  Conditions”) shall have been satisfied:

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Laurel
  License Application and Slots Operations: The Lender is
  satisfied, in sole and absolute discretion, with the Borrower’s plan for the
  slot license application at the Laurel Property;

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Refusal of
  PNC Lender to Permit Guarantees by MJC Guarantors or the MJC Security:
  The PNC Lender shall have advised the Borrower, the Laurel Guarantor, or the
  Lender, that it will not permit the granting of the guarantees by the MJC
  Guarantors or the MJC Security or after reasonable commercial efforts have
  been made by the Borrower to obtain such consent, the Borrower has not
  secured any positive or negative indication from the PNC Lender of its
  decision to provide or decline such consent;

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Payment and
  Release of the PNC Debt: The Borrower shall have
  delivered to the Lender: (i) a copy of an irrevocable direction
  delivered by the Borrower to the MJC Guarantors to pay all amounts
  outstanding in respect of the PNC Debt, and a further direction from the MJC
  Guarantors to pay such amount to the title insurer; (ii) a mortgage
  discharge statement, from the PNC Lender, in respect of the PNC Debt;
  (iii) a commitment to  insure  title  or an
  endorsement to an existing Title Policy issued by the title insurer in
  respect of the applicable MJC Security, which commitment  or
  endorsement shall not contain exceptions to, and/or references to, the
  PNC Debt; and (iv) a release, in favour of the Laurel Guarantor and all
  of its Affiliates that are parties to any documentation in respect of the PNC
  Debt, irrevocably releasing the MJC Guarantors and such Affiliates from their
  obligations under the PNC Debt (which release shall be delivered in escrow
  and released therefrom subject only to payment of all amounts outstanding in
  respect of the PNC Debt); and

  
	
   

  	
   

  	
   

  
	
   

  	
  (d)

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

  
	
   

  	
   

  	
   

  
	
  4.3

  	
   

  	
  Tranche
  4 Conditions

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Without derogating from the
  provisions of Sections 3.1 and 8.2, the Borrower shall only be entitled to
  advances 

  
	
  under Tranche 4 if the
  following conditions (the “Tranche 4
  Conditions”) shall have been satisfied:

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Tranche 2
  Conditions: The Tranche 2 Conditions shall have been
  satisfied;

  

 

44

 

	
   

  	
  (b)

  	
  Laurel
  Slots License:  The Borrower or the Laurel Guarantor shall have received a
  slots license in respect of the Laurel Slots Facilities, and the Lender is
  satisfied, in its
  sole and absolute discretion, with the terms of such slots license;

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Laurel
  Slots Facilities: The Lender is satisfied, in its sole and absolute discretion,
  with: (i) the status and terms of all approvals required from Governmental
  Bodies in connection with the construction and operation of the Laurel Slots
  Facilities; (ii) the design of the Laurel Slots Facilities; (iii) the
  Laurel Slots Facilities Plans and Specifications; (iv) the Laurel Slots
  Facilities Capital Budget; and (v) the status and terms of all Laurel Slots
  Facilities Contracts;
  and

  
	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Tranche 4
  Arrangement Fee: The Lender shall have
  received payment in full of the Tranche 4 Arrangement Fee.

  
	
   

  	
   

  	
   

  
	
  4.4

  	
   

  	
  Tranche 4 First Advance

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Without derogating from any
  other provisions of this Agreement (including, without limiting the
  generality of the 

  
	
  foregoing, the provisions of
  Section  4.3), the Borrower shall be entitled to obtain the first
  Advance under Tranche 4 (herein called the “Tranche
  4 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 4 First Advance
  shall occur upon a date (herein called the “Tranche
  4 First Advance Date”) determined by the Borrower, provided that
  the Borrower shall have delivered to the Lender a complete and accurate
  Request for Tranche 4 Advance, which Request for Tranche 4 Advance shall
  reflect compliance by the Borrower with the provisions of this
  Section 4.4 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 Laurel Slots Facilities Costs paid or incurred and payable by the
  Borrower and/or the Laurel Guarantor at the date thereof which are the
  subject of the Request for Tranche 4 Advance in question;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  show any construction lien
  holdback;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
  certify that all such Laurel
  Slots Facilities Costs are in accordance with the Laurel Slots Facilities
  Capital Budget and the Laurel Slots Facilities Plans and Specifications and
  that the amount remaining to be advanced under Tranche 4 for the Laurel Slots
  Facilities is not less than the remaining Laurel Slots Facilities Costs that
  will be required to achieve completion of the Laurel Slots Facilities; 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, the Laurel Slots Facilities
  Capital Budget, and the Laurel Slots Facilities Plans and 

  

 

45

 

	
   

  	
   

  	
   

  	
  Specifications, and that
  there are no material infractions in respect thereof whatsoever.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Such certificate, as part of the Request for Tranche
  4 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 Laurel Slots
  Facilities Costs forming part of the Tranche 4 Advance requested, which shall
  be verified by and acceptable to the Lender. In addition, if so requested by
  the Lender, the Request for Tranche 4 Advance shall be accompanied by:
  (a) copies of all lien waivers or releases for all lienable work
  performed on the Laurel 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 Laurel Slots Facilities Contracts, each
  together with supporting documentation evidencing to the Lender’s
  satisfaction payment of all Laurel Slots Facilities Costs to date and funded
  under Tranche 4, (c) a report in form and content satisfactory to the
  Lender from the Cost Consultant, and (d) such other documents supporting
  the Request for Tranche 4 Advance as the Lender may reasonably request;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  if so requested by the
  Lender, the Borrower shall have made available to the Lender true copies,
  where available, or otherwise photocopies of all Laurel Slots Facilities
  Contracts;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  if so requested by the
  Lender, the Borrower shall have made available to the Lender an
  acknowledgement from each party to a Laurel Slots Facilities Contract that is
  a Material Agreement concerning the status of same, in each case in form and
  substance satisfactory to the Lender;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  the representations and
  warranties set forth in Section 6.1 shall be true and accurate in all
  material respects as of Tranche 4 First Advance Date, and the Borrower and
  each of the Guarantors shall have delivered to the Lender a certificate of
  senior officers of the Borrower and each of the Guarantors to the foregoing
  effect;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  if so requested by the
  Lender, the Borrower and the Laurel Guarantor shall have made available to
  the Lender true copies of all of the Material Agreements in respect of the
  Laurel Property then in existence, all of which shall be satisfactory to the
  Lender and its counsel, acting reasonably;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  if so requested by the
  Lender, 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 Liens and Material Agreements;

  

 

46

	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (g)

  	
  the Lender shall be
  satisfied, acting reasonably, with the Laurel Slots Facilities Capital Budget
  and the Laurel Slots Facilities Plans and Specifications;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (h)

  	
  the Borrower shall have made
  available to the Lender tax certificates in respect of the Laurel Property,
  evidencing that all municipal taxes due in respect thereof up to the Tranche
  4 First Advance Date have been paid in full;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
  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,
  including the Laurel Slots Facilities;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (j)

  	
  without derogating from the
  Borrower’s representations, warranties and covenants herein and under the
  2008 Loan Documents, the Lender shall be satisfied with: (i) its due
  diligence review of the Laurel 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 the Laurel
  Property and actual or potential environmental liabilities of the Borrower
  and its subsidiaries, including any appropriate insurance;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (k)

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (l)

  	
  if so requested by the
  Lender, 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 Guarantors pursuant to Section 7.1(v);

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (m)

  	
  if so requested by the
  Lender, the Borrower shall have made available to the Lender surveys with
  respect to the Laurel Property certified by independent, duly qualified,
  Maryland Land Surveyors, satisfactory in substance and form to the Lender and
  the Lender’s Maryland Agent, which surveys shall evidence no title defects
  other than Permitted Liens;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (n)

  	
  if so requested by the
  Lender, the Borrower shall have made available to the Lender certificates of
  an architect or a professional engineer responsible for the design of the
  Laurel Slots Facilities in substance and form satisfactory to the Lender and
  to the counsel for the Lender to the effect that:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  such architect or
  professional engineer, as the case may be, is responsible for the preparation
  of the Laurel Slots Facilities Plans and Specifications;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  the Laurel Slots Facilities
  Plans and Specifications have been approved by all authorities having
  jurisdiction and the Laurel Slots Facilities have been constructed to date
  substantially in accordance with the Laurel Slots Facilities Plans and
  Specifications; and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
  all permits, licences or
  other evidence of authorization required for such Laurel Slots Facilities to
  date have been obtained;

  

 

47

	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (o)

  	
  if so requested by the
  Lender, the Borrower shall have made available to the Lender evidence that
  the Laurel Slots Facilities, to the extent constructed to date, comply in all
  material respects with all applicable zoning and building by-laws and
  regulations;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (p)

  	
  the Lender shall be
  satisfied with the zoning and other by-law and regulatory requirements for
  the Laurel Slots Facilities;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (q)

  	
  the Borrower shall have
  delivered to the Lender an opinion of the Borrower’s and Guarantor’s Maryland Agent addressed
  to the Lender, the Lender’s Counsel and the Lender’s Maryland Agent, in form,
  scope and substance satisfactory to the Lender and its counsel, acting
  reasonably;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (r)

  	
  all proceedings to be taken
  in connection with the transactions contemplated by this Agreement in
  connection with the Tranche 4 First Advance, and all documents incidental
  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 4 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;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (s)

  	
  the Borrower shall, prior to
  such Tranche 4 First Advance and, in accordance with
  Section 7.1(c) have funded at its own cost and expense, any cost
  overruns which have been identified by the Cost Consultant;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (t)

  	
  no Event of Default or
  Unmatured Event of Default shall have occurred and be continuing or will
  result from the making of the Tranche 4 First Advance.

  
	
   

  	
   

  	
   

  	
   

  
	
  4.5

  	
   

  	
  Subsequent Tranche 4 Advances

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Borrower shall be
  entitled to obtain subsequent advances of funds (herein called “Subsequent Tranche 4 

  
	
  Advances”)
  under Tranche 4, upon the following terms and conditions:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  except with respect to
  Advances deemed to be made hereunder, Subsequent Tranche 4 Advances shall
  occur upon a date which is a Business Day (herein called a “Subsequent Tranche 4 Advance Date”)
  determined by the Borrower by way of written notice to the Lender in the form
  of a Request for Tranche 4  Advance
  given at least three (3) Business Days prior to the Subsequent Tranche 4  Advance Date in question, which Request
  for Tranche 4  Advance shall
  reflect compliance with this Section 4.5 and, in particular, shall
  contain the same form of officer’s certificate and supporting documentation
  as is required for a Request for Tranche 4  Advance
  pursuant to Section 4.3 and shall otherwise be complete and acceptable
  to the Lender, acting reasonably;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  the amount of any Subsequent
  Tranche 4  Advance shall be in an
  amount which, together with the aggregate of all previous Advances for the
  Laurel Slots

  

 

48

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Facilities, does not exceed
  the value of the work in place for the Laurel Slots Facilities, as determined
  by the Cost Consultant, provided that the amount remaining to be advanced
  under the 2008 Loan for the Laurel Slots Facilities shall never be less than
  the remaining Laurel Slots Facilities Costs that will be required to achieve
  completion of the Laurel Slots Facilities, as estimated by the Cost
  Consultant;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  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;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  the Borrower shall, prior to
  such Tranche 4 Advance and in accordance with Section 7.1(c) have
  funded at its own cost and expense any cost overruns which have been
  identified by the Lender or the Cost Consultant;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  in respect of any Subsequent
  Tranche 4 Advance, Subsections 4.4(c), (f), (k), (q), and (r) shall have
  been satisfied and shall continue to be true and accurate and in full force
  and effect as of the Subsequent Tranche 4 Advance Date in question;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  the representations and
  warranties set forth in Article 6 shall be true and accurate in all
  material respects as of the date of the Subsequent Tranche 4 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;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (g)

  	
  from and after the earlier
  of (i) the completion of construction of the Laurel Slots Facilities
  and; (ii) March 31, 2011, the Lender will not be required to make
  any Subsequent Tranche 4 Advances, other than Laurel Slots Facilities
  Holdback Advances;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (h)

  	
  the final Tranche 4 Advance
  for sums due on the Laurel Slots Facilities Contracts shall be made following
  completion of the work contemplated thereby to the satisfaction of the Lender
  and the Cost Consultant and, as 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 Laurel Slots
  Facilities Contracts and the Borrower, (ii) a certificate from the
  Borrower certifying that the applicable work was completed in accordance with
  the Laurel Slots Facilities Plans and Specifications, (iii) final
  releases or lien waivers, which may be conditional only upon payment of a
  specific amount as provided in Applicable Laws, from all applicable
  contractors, subcontractors, suppliers, 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

  

 

49

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  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 Laurel Slots Facilities Plans and Specifications (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 Applicable Laws in respect of the Laurel Slots
  Facilities have been satisfied and that direct connection has been made for
  all utility services to the Laurel Property, (v) a certificate of
  occupancy for the Laurel Slots Facilities if issued by the applicable
  Governmental Body, any required approval by the Board of Fire Underwriters or
  its equivalent having jurisdiction over the Laurel Property, and any other
  approval required by any Governmental Body to the extent that any such
  approval is a condition to the lawful use and occupancy of the Laurel
  Property and the opening of same to the public, (vi) a final certified
  “as-built” survey of the Laurel Property satisfactory to the Lender and the
  Cost Consultant, and (vii) the final endorsement to the Title Policy, reflecting
  no exceptions from coverage except the Permitted Liens;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
  a if so requested by the
  Lender, 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 Liens;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (j)

  	
  no Event of Default or
  Unmatured Event of Default shall have occurred and be continuing or will
  result from the making of the Subsequent Tranche 4 Advance;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (k)

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (l)

  	
  the amount remaining to be
  Advanced under Tranche 4 is not less than the remaining Laurel Slots
  Facilities Costs that will be required to achieve completion of the Laurel
  Slots Facilities, as estimated by the Cost Consultant; and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (m)

  	
  in respect of any request
  for a Subsequent Tranche 4 Advance, the Lender shall have received from the
  Cost Consultant a report satisfactory to the Lender as to the progress of the
  Laurel Slots Facilities as of the Subsequent Tranche 4 Advance Date in
  question.

  

 

50

 

ARTICLE 5 

INTEREST AND FEES

 

5.1                                                                               Interest Rate

 

(a)                                  From and
after the Closing Date, advances under the 2008 Loan (each such advance being
referred to as an “Advance”)
shall, subject to Applicable Laws, bear interest at a fixed rate per annum
equal to LIBOR plus 1,200  basis
points (the “Interest Rate”), with
interest in each case payable at maturity of each separate Advance.

 

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

 

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

 

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

 

(ii)          if any of the
circumstances in Section 5.1(c) shall occur, the Borrower and the
Lender shall, following the giving of notice by the Lender under this
Section 5.1(c), endeavour to determine an alternative basis, which may, if
such parties agree, include (without limitation) alternative rates of interest,
alternative Interest Periods, alternative currencies or any combination
thereof, for Advances.  If the Borrower
and the Lender are unable to agree 

 

51

 

on such alternative basis within a period of 30
days from the date of such notice by the Lender (provided that in any event
such period shall not extend beyond the last day specified for giving a
Borrowing Notice in respect of any Advance then outstanding or three Banking
Days before any repayment date required under Applicable Law, as the case may
be), the Lender shall determine an interest rate and specify an Interest Period
(not exceeding one month) in respect of each Advance then outstanding, which
interest rate shall be the cost to the Lender (as certified by the Lender to
the Borrower) of funding any such Advance for the Interest Period so specified
from such sources as it may reasonably select and the amount of any such
Advance shall bear interest at the rate so determined.  The provisions of this
Section 5.1(c) shall apply only for so long as the circumstances in
Section 5.1(c) shall exist.

 

5.2                                                                               Calculation and Payment of Interest

 

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

 

5.3                                                                               Fees

 

(a)          Commitment Fee. 
The Borrower shall pay to the Lender on the last Banking Day
of each Fiscal Quarter and on the Termination Date (each a “Commitment Fee Payment Date”), in arrears,
a non-refundable commitment fee (the “Tranche
1 Commitment Fee”) equal to 1% per annum of the amount, if any, by
which Tranche 1 (taking into account any repayments or cancellations that have
been made by the Borrower in accordance with the terms hereunder) exceeds the
amount of the 2008 Loan advanced in respect of Tranche 1 (the “Unutilized Tranche 1 Amount”) on each day
in such Fiscal Quarter or the part thereof ending on the Termination Date, as
applicable.  From and after the date, if
any, on which Tranche 2 is made available to the Borrower, the Borrower shall
also pay to the Lender on each Commitment Fee Payment Date thereafter, in
arrears, a non-refundable commitment fee (the “Tranche 2 Commitment Fee”) equal to 1% per annum of the
amount, if any, by which Tranche 2 (taking into account any repayments or
cancellations that have been made by the Borrower in accordance with the terms
hereunder) exceeds the amount of the 2008 Loan advanced in respect of Tranche 2
(the “Unutilized Tranche 2 Amount”)
on each day in such Fiscal Quarter or the part thereof ending on the
Termination Date, as applicable.  From
and after the date, if any, on which Tranche 4 is made available to the
Borrower, the Borrower shall also pay to the Lender on each Commitment Fee
Payment Date thereafter, in arrears, a non-refundable commitment fee (the “Tranche 4 Commitment Fee”) equal to 1% per
annum of the amount, if any, by which Tranche 4 (taking into account any
repayments or cancellations that have been made by the Borrower in accordance
with the terms hereunder) exceeds the amount of the 2008 Loan advanced in
respect of Tranche 4 (the “Unutilized Tranche
4 Amount”) on each day in such Fiscal Quarter or the part thereof
ending on the Termination Date, as applicable. Each Commitment Fee payable on
any Commitment Fee Payment Date shall be payable in respect of the period from
and including the Closing Date or the preceding Commitment Fee Payment 

 

52

 

Date,
as the case may be, to but excluding the next Commitment Fee Payment Date, and
shall be calculated on a daily basis on the Unutilized Amount on each day
during such period on the basis of the number of days elapsed and a year of 365
or 366 days, as the case may be.

 

(b)          Arrangement Fee.  The Borrower shall pay to the Lender:
(i) on the Closing Date an arrangement fee (the “Closing  Date
Arrangement Fee”) of $1,000,000, being 2% of Tranche 1; (ii) on
the date, if any, on which all or part of Tranche 2 is made available to the
Borrower, an arrangement fee (the “Tranche 2
Arrangement Fee”) of $600,000,
being 2% of Tranche 2; (iii) on the date, if any, on which all or part of
Tranche 3 is made available to the Borrower, an arrangement fee (the “Tranche 3  Arrangement
Fee”) equal to 2% of Tranche 3; (iv) on the date, if any, on
which all or part of Tranche 4 is made available to the Borrower, an
arrangement fee (the “Tranche 4  Arrangement Fee”) of $600,000, being 2% of
Tranche 4.

 

5.4                                                                               Payment of Costs and Expenses

 

Whether
or not the Borrower takes advantage of the 2008 Loan, the Borrower shall pay to
the Lender, on demand, the following costs and expenses (collectively, the “Lender’s Costs”):

 

(a)                                  all
reasonable expenditures and expenses which may be paid or incurred by or on
behalf of the Lender (in the case of solicitors’ costs, on a full indemnity
basis) in connection with the preparation, negotiation and execution of the
2008 Loan Documents, the Intercreditor Agreements, any actual or proposed
amendment or modification hereof or thereof or any waiver hereunder or thereunder
and all instruments supplemental or ancillary thereto and all reasonable
documented due diligence expenses incurred in connection therewith (including
any surveys or appraisals of the Mortgaged Properties reasonably undertaken by
the Lender);

 

(b)                                 all reasonable
expenditures and expenses which may be paid or incurred by or on behalf of the
Lender (in the case of solicitors’ costs, on a full indemnity basis) in
connection with obtaining advice as to the rights and responsibilities of the
Lender under the 2008 Loan Documents and the Intercreditor Agreements; and

 

(c)                                  all
reasonable expenditures and expenses which may be paid or incurred by or on
behalf of the Lender (in the case of solicitors’ costs, on a full indemnity
basis) in connection with the defence, establishment, protection or enforcement
of any of the rights or remedies of the Lender under the 2008 Loan Documents or
the Intercreditor Agreements including, without limitation, all costs and
expenses of establishing the validity and enforceability of, or of collection
of amounts owing under, any of the 2008 Loan Documents or the Intercreditor
Agreements and all reasonable costs and expenses of any receiver or
receiver-manager appointed by the Lender or any of the Lender or by a court in
connection with the enforcement of the 2008 Loan Documents or the Intercreditor
Agreements; and

 

(d)                                 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, 

 

53

 

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 Mortgaged 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 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,

 

including, without
limitation, all of the reasonable fees and disbursements of advisors to the
Lender, its agents, and any such receiver or receiver-manager, on a full
indemnity basis, incurred in connection therewith, including all sales, goods
and services or value-added taxes payable by any of them on all such costs,
expenses and compensation. All such Lenders Costs shall be deemed for all
purposes to have been paid through deemed Advances by the Lender to the Borrower
under this Agreement.

 

For purposes of
Section 5.4(a), (b) and (c) and the immediately preceding
clause, “Lender” means the Lender
and MID and its Subsidiaries (other than the Borrower and its Subsidiaries),
including, without limitation, the Board of Directors of MID and any committee
thereof.

 

ARTICLE 6 

REPRESENTATIONS AND WARRANTIES

 

6.1                                                                               Representations and Warranties

 

To
induce the Lender to enter into the 2008 Loan Documents and to make the 2008
Loan, the Borrower hereby makes the following representations and warranties
with respect to itself and its Subsidiaries taken as a whole on a consolidated
basis, and each of the Guarantors hereby makes the following representations
and warranties with respect to itself and its Subsidiaries taken as a whole on
a consolidated basis, as of the date hereof (provided that certain of the
representations and warranties are qualified by the Disclosure Schedule (as
specifically set out therein) delivered by the Borrower and the Guarantors to
the Lender concurrently with the execution by them of this Agreement):

 

(a)   Incorporation and Status.  Each of the Borrower and the Guarantors is
duly incorporated, formed or organized, as the case may be, and validly
existing under the laws of its jurisdiction of incorporation, formation or
organization, as the case may be, and has the power and capacity to own its
properties and assets and to carry on its business as presently carried on by
it or as contemplated hereunder to be carried on by it.  Each of the Guarantors is wholly-owned by the
Borrower.  The Borrower does not carry on
any material business other than the

 

54

 

Core
Line of Business.  None of the Guarantors
carries on any business other than the Core Line of Business and other than the
ownership or operation of casinos, hotels, resorts, card clubs, sports bars,
restaurants and theatres, all of which activities are associated with or ancillary
or related to the Core Line of Business, and the ownership and management of a
portfolio of real estate properties held for development or sale.  Except where the failure to have such
Material Authorization could not reasonably be expected to have a Material
Adverse Effect, the Borrower and each Guarantor holds all Material
Authorizations necessary to own or lease, as applicable, each Property or
Mortgaged Properties owned or leased by it or to carry on its Core Line of
Business (including, without limitation, all environmental and other permits,
licences and other authorizations required for the Borrower and each Guarantor
to own or lease such Property or Mortgaged Properties or to carry on its Core
Line of Business in accordance with Applicable Law and further including,
without limitation, all licensing requirements of the Racing and Gambling
Regulatory Authorities in relation to the Borrower or any Guarantor) in each
jurisdiction in which it does so, all of which are in good standing;

 

(b)   Power and Capacity.  Each of the Borrower and the Guarantors has
the power and capacity to enter into each of the 2008 Loan Documents to which
it is a party, and to do all acts and things as are required or contemplated
hereunder or thereunder to be done, observed and performed by it;

 

(c)   Due Authorization.  Each of the Borrower and the Guarantors has
taken all necessary action to authorize the execution, delivery and performance
of each of the 2008 Loan Documents to which it is a party;

 

(d)   No Contravention.  The execution and delivery of each of the
2008 Loan Documents to which each of the Borrower and the Guarantors is a
party, and the performance by each of the Borrower and the Guarantors of its
obligations thereunder (i) do not and will not contravene, breach or result
in any default under (A) the articles, by-laws, constating documents or
other organizational documents of the Borrower or any Guarantor, (B) any
Material Authorization, (C) any Applicable Law, except where the failure
to comply with such Applicable Law could not reasonably be expected to have a
Material Adverse Effect, or (D) any Material Agreement, (ii) do not
and will not oblige the Borrower or any of its Subsidiaries to grant any Lien
to any Person other than the Lender, and (iii) do not and will not result
in or permit the acceleration of the maturity of any indebtedness, liability or
obligation of the Borrower or any Guarantor under any mortgage, lease,
agreement or other legally binding instrument of or affecting the Borrower or
any Guarantor;

 

(e)   No Consents Required  Other than filings with the Securities
Commission, no Material Authorization is required, and no consents, approvals
or further documentation of any kind whatsoever is required to be obtained
from, or provided by, any Person in connection with (i) the execution,
delivery or performance of any of the 2008 Loan Documents to which it is a
party by the Borrower or any Guarantor, (ii) the creation of the Security,
and (iii) the perfection of such Security;

 

(f)    Enforceability.  Each of the 2008 Loan Documents constitutes,
or upon execution and delivery will constitute, a valid and binding obligation
of the Borrower and each Guarantor which is a party to it, enforceable against
it in accordance with its terms, subject only to the

 

55

 

qualifications
set out in the opinion of the Borrower’s and Guarantors’ Local Agents delivered
pursuant to Section 8.2(i)(i);

 

(g)   Financial Statements.

 

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

 

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

 

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

 

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

 

(j)    Guarantors’ Organizational Documents.  True and complete copies of the
certificates of formation, certificates of authority to transact business,
certificates of formation, articles of incorporation, by-laws and all other documents
creating and relative to the organization of each of the Guarantors
(collectively, the “Guarantor Incorporation
Documents”) have been made available to the Lender. There are no
other agreements, oral or written, among any of the shareholders of each of the
Guarantors relating to the Guarantors. The Guarantor Incorporation Documents
are in full force and effect, and are binding upon and

 

56

 

enforceable
in accordance with their terms. No breach exists under the Guarantor
Incorporation Documents and no act has occurred and no condition exists which,
with the giving of notice or the passage of time would constitute a breach
under the Guarantor Incorporation Documents. The Borrower Incorporation
Documents and the Guarantor Incorporation Documents are herein collectively
referred to as the “Organizational Documents”;

 

(k)   Authorized Capital.  The authorized capital of the Borrower
consists of 310,000,000 Class A Subordinate Voting Stock, par value of
$0.01 per share, of which 2,928,455 were issued and outstanding as at
September 30, 2008, and 90,000,000 shares of Class B stock, par value
of $0.01 per share, of which 2,923,302 were issued and outstanding.

 

The
Bowie Guarantor is a joint venture, the interest of which are held as follows:

 

	
  Partner

  	
   

  	
  Units

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Prince
  George’s Racing, Inc. (joint venture member)

  	
   

  	
  51

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Southern
  Maryland Racing, Inc. (joint venture member)

  	
   

  	
  50

  	
   

  

 

The
partnership interest in Laurel
Racing Association Limited Partnership is as follows:

 

	
  Partner

  	
   

  	
  Interest

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Laurel
  Racing Assoc. Inc. (general partner)

  	
   

  	
  1

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Maryland
  Racing, Inc. (limited partner)

  	
   

  	
  99

  	
  %

  

 

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

 

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

 

	
  Beneficial Holder

  	
   

  	
  Class of Shares

  	
   

  	
  Number of Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Magna Entertainment Corp.*

  	
   

  	
  Common

  	
   

  	
  1,100

  	
   

  

 

57

 

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

 

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

 

	
  Beneficial Holder

  	
   

  	
  Class of Shares

  	
   

  	
  Number of Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Magna
  Entertainment Corp.*

  	
   

  	
  Common

  	
   

  	
  25

  	
   

  

 

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

 

	
  Beneficial Holder

  	
   

  	
  Class of Shares

  	
   

  	
  Number of Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Magna
  Entertainment Corp.

  	
   

  	
  Common

  	
   

  	
  100

  	
   

  

 

The
authorized capital of the Pimlico Guarantor consists of 90,800 common shares of
which 382 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

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pimlico
  Racing Association, Inc.

  	
   

  	
  Common

  	
   

  	
  382

  	
   

  

 

The
authorized capital of the Maryland Racing 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

  	
   

  

 

58

 

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

 

	
  Beneficial Holder

  	
   

  	
  Class of Shares

  	
   

  	
  Number of Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Magna
  Entertainment Corp.

  	
   

  	
  Common

  	
   

  	
  69,347

  	
   

  

 

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

 

	
  Beneficial Holder

  	
   

  	
  Class of Shares

  	
   

  	
  Number of Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Magna
  Entertainment Corp.

  	
   

  	
  Common

  	
   

  	
  250

  	
   

  

 

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

 

	
  Beneficial Holder

  	
   

  	
  Class of Shares

  	
   

  	
  Number of Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Magna
  Entertainment Corp.

  	
   

  	
  Common

  	
   

  	
  100

  	
   

  

 

30000
Maryland is held by:

 

	
  Member

  	
   

  	
  Interest

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Magna
  Entertainment Corp.

  	
   

  	
  1

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  MEC Maryland
  Investments, Inc.

  	
   

  	
  99

  	
  %

  

 

(l)    Legal Name and Chief Executive Office.  The Borrower and each Guarantor has advised,
or will advise within five Banking Days of the Closing Date, the Lender in
writing of

 

59

 

their
respective chief executive offices and places of business.  None of the Borrower nor any of the
Guarantors conducts business under any corporate names other than its legal
name, and the Borrower and each of the Guarantors have, in the past, held
themselves out as separate entities and have conducted operations under their
own respective names;

 

(m)  Solvency.  The Borrower has not entered into the
transactions hereunder or any 2008 Loan Document with the actual intent to
hinder, delay or defraud any creditor, and the Borrower has received reasonably
equivalent value in exchange for its obligations under the 2008 Loan
Documents.  Taking into account the 2008
Loan (and assuming Advances requested by the Borrower are advanced by the
Lender), the Proposed Transactions,
the Borrower and each of the Guarantors is solvent (as such term is used in all
applicable laws relating to bankruptcy, fraudulent transfers and conveyances),
able to pay its debts as such debts become due, has capital sufficient to carry
on its businesses and transactions and all businesses and transactions in which
it anticipates engaging, and the value of its property at a fair valuation is
greater than the sum of its debts. 
Neither the Borrower nor any of the Guarantors will be rendered
insolvent by the execution and delivery to the Lender of the 2008 Loan
Documents or by the transactions contemplated thereunder, and no:
(i) assignment for the benefit of the creditors of any of them;
(ii) appointment of a receiver for any of them or for the property of any
of them; or (iii) bankruptcy, reorganization, or liquidation proceeding,
is pending or threatened (whether voluntary or involuntary) or has been
instituted by or against any of them;

 

(n)   Consideration.  The 2008 Loan Documents were executed and
delivered by the Borrower and the Guarantors to the Lender in good faith and in
exchange for a reasonably equivalent value without any intent to hinder, delay
or defraud any creditor of the Borrower or any of the Guarantors;

 

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

 

(p)   No Litigation.  There is no court, administrative, regulatory
or similar proceeding (whether civil, quasi-criminal, or criminal), arbitration
or other dispute settlement procedure; investigation or enquiry by any
Governmental Body, or any similar matter or proceeding (collectively “proceedings”) against or involving the
Borrower or any Guarantor (whether in progress or threatened), which, if
determined adversely to the Borrower or any Guarantor, could reasonably be
expected to have a Material Adverse Effect or which purports to affect the
legality, validity and enforceability of any 2008 Loan Document to which the
Borrower or any of the Guarantors is a party; to the Borrower’s knowledge, no
such proceedings are threatened or contemplated by any Governmental Body or
other Person; to the Borrower’s knowledge, no event has occurred which could
reasonably be expected to give rise to any such proceedings; and there was no
judgment, decree, injunction, rule, award or order of any Governmental Body
outstanding against the Borrower or any of the Guarantors which has had, or
could reasonably be expected to have, a Material Adverse Effect;

 

60

 

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

 

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

 

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

 

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

 

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

 

(v)   Material Agreements. 
The list of Material Agreements included on the Disclosure Schedule (as
the same may be supplemented and amended from time to time) constitutes all of
the Material Agreements now in existence for the Borrower and the Guarantors.
Neither the Borrower nor the Guarantors nor, to the best knowledge of the
Borrower and the Guarantors, any other party thereto, is in breach of or in
default of any material obligation thereunder except those in respect of which
the Borrower has advised the Lender in writing from time to time and of which  the Lender has indicated in writing its
satisfaction.  To the best knowledge of
the

 

61

 

Borrower and the Guarantors,
the Material Agreements are in good standing and no event has occurred which,
with the passage of time or the giving of notice or both, would constitute an
event of default under any of the Material Agreements;

 

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

 

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

 

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

 

(z)   Margin Regulations. 
Neither the Borrower nor any Guarantor is engaged, nor will any of them
engage, principally or as one of its primary activities, in the business of
extending credit for the purpose of “purchasing”
or “carrying” any “margin stock” within the respective
meanings of each of the quoted terms under Regulation U, and neither  the Borrower nor any of the Guarantors
owns margin stock which, in each case, in the aggregate, would constitute over
25% of the assets of such Person and no proceeds of the 2008 Loan will be used
to purchase or carry, directly or indirectly, any margin stock or to extend
credit, directly or indirectly, to any Person for the purpose of purchasing or carrying
any margin stock;

 

(aa)      Foreign Ownership.  Neither the Borrower nor any of the
Guarantors is or will be a “foreign
corporation”, “foreign partnership”,
“foreign trust”, “foreign estate”, “foreign person”, “affiliate” of a “foreign person” or a “United
States intermediary” of a “foreign
person” within the meaning of the IRC, Sections 897 and 1445, the Foreign Investments in Real Property Tax Act of 1980,
the International Foreign Investment Survey
Act of 1976, the Agricultural
Foreign Investment Disclosure Act of 1978, or the regulations
promulgated pursuant to such Acts or any amendments to such Acts;

 

62

 

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

 

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

 

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

 

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

 

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

 

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

 

63

 

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

 

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

 

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

 

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

 

(ll)        Flood Hazards/Wetlands.  None of the Mortgaged Properties
is situated in an area designated as having special flood hazards as defined by
the Flood Disaster Protection Act of

 

64

 

1973, as
amended, or as wetlands by any Governmental Body having jurisdiction over any
of the Mortgaged Properties;

 

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

 

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

 

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

 

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

 

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

 

(v)                                 to the
knowledge of the Borrower and each of the Guarantors, there is no material
amount of Hazardous Materials present at, near or from any of the Mortgaged
Properties, including any Hazardous Materials contained in barrels, aboveground
or underground storage tanks, landfills, land

 

65

 

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 Bodies;

 

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

 

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

 

(viii)                      to the
knowledge of the Borrower and each of the Guarantors, none of the Mortgaged
Properties contains any wetlands or other sensitive, endangered or protected
areas or species or flora or fauna including any that would materially impede
the construction of the Laurel Slots Facilities;

 

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

 

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

 

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

 

66

 

(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 Mortgaged Properties, the operations and approval of development of any of
the Mortgaged Properties, compliance by the Borrower and each of the Guarantors
with Environmental Laws and Safety Laws or any actual or potential
Environmental or Safety Liability of any of the Subsidiaries;

 

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

 

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

 

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

 

(oo)         Casualty.  There is no damage or destruction to any part
of the Mortgaged Properties by fire or other casualty that has not been
repaired;

 

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

 

(qq)         Disclosure.  All information provided to the Lender
relating to the financial condition, business, affairs and prospects of the
Borrower and the Subsidiaries (other than financial projections), consisting of
those documents and materials made available for review by the Borrower and
referenced in binders of materials compiled by the Borrower to assist the
Lender and the Lender’s counsel in connection with their due diligence review
(but, for greater certainty, excluding any work product of the Lender or the
Lender’s counsel), together with any information set out in the Disclosure
Schedule, was true, accurate and complete in all material respects and omits no
material fact necessary to make such information not misleading in light of the
circumstances under which such information was provided.  All information (other than 

 

67

 

financial projections)
furnished or made available by the Borrower and/or any of the Guarantors to the
Lender to induce the Lender to enter into or maintain this Agreement is true,
accurate and complete in all material respects and does not omit to state any
material fact.  All financial projections
furnished or made available by the Borrower and/or any of the Guarantors to the
Lender have been prepared in good faith, on the basis of all known facts and
using reasonable assumptions and the Borrower and each of the Guarantors
believes such projections to be fair and reasonable and neither the Borrower
nor any of the Guarantors has any knowledge or information which would
materially adversely affect such financial projections.  The Borrower and each of the Guarantors has
disclosed in the Disclosure Schedule everything to which it has knowledge
regarding the business, operations, property, financial condition, or business
prospects of itself, and each of the Mortgaged Properties, which could result
in a Material Adverse Change.

 

6.2                                                                               Survival of Representations and Warranties

 

All representations and
warranties of the Borrower and the Guarantors in this Agreement, the 2008 Loan
Documents and all representations and warranties in any certificate delivered
by the Borrower pursuant hereto and thereto, shall survive execution of the
2008 Loan Documents and the making of the 2008 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 2008 Loan is fully and irrevocably
paid, notwithstanding any investigation made at any time by the Lender or on
its behalf, including, without limitation, the due diligence review referred to
in Section 6.1(qq).  Without
derogating from the foregoing, the representations and warranties of the
Borrower and each of the Guarantors set out in Section 6.1(mm) shall
survive the payment and performance of the Indebtedness, liabilities and
obligations of the Borrower under, and the termination and release by the
Lender of, this Agreement and the other 2008 Loan Documents.

 

ARTICLE 7 

COVENANTS

 

7.1                                                                               Affirmative Covenants

 

The Borrower and each of the
Guarantors covenants and agrees with the Lender that it shall, and, except
where the failure to cause any Subsidiary could not reasonably be expected to
have a Material Adverse Effect, shall cause its Subsidiaries to, from and after
the Closing Date until the 2008 Loan (including interest thereon) and all fees
and expenses to be paid by the Borrower to the Lender hereunder are paid in
full:

 

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

 

(b)   Laurel Slots Facilities. 
The Laurel Slots Facilities will be constructed in a good and
workmanlike manner by the Borrower and its subsidiaries and its and their
agents using quality materials in accordance with the Laurel Slots Facilities
Plans and Specifications.

 

(c)   Construction Cost Overruns: 
The Borrower shall promptly fund, at its own cost and expense, all cost
overruns for the Laurel Slots Facilities, such
that the principal amount yet 

 

68

 

to be advanced hereunder for
the Laurel Slots Facilities, shall not be less than the remaining cost to
complete the  Laurel Slots
Facilities.

 

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

 

(e)   Use of Proceeds.  Use the proceeds of the 2008 Loan
only as authorized in Section 2.1 hereof and subject to the terms and
provisions of the 2008 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 2008 Loan shall
be used by the Borrower to pay any amounts to any Affiliate, and in no event
shall any amounts be paid in any manner that might cause the borrowing or the
application of such proceeds to violate Regulation G, Regulation U, Regulation
T or Regulation X or any other regulation of the Board of Governors of the
Federal Reserve System or to violate the Securities Acts;

 

(f)    Hold Disbursements in Trust. 
Other than the proceeds of the 2008 Loan that will be
used for the purposes set forth herein, the Borrower will receive and hold in
trust for the Lender all advances made hereunder directly to the Borrower and
the Borrower will not apply the same for any other purposes;

 

(g)   Use of Specific Asset Sale Proceeds. 
The Borrower and its Subsidiaries will use the net proceeds
from any asset and/or real property sales in the manner set forth in
Section 2.4 hereof, including, without limitation, by providing directions
to the purchasers thereof to pay the applicable amount of net proceeds arising
therefrom and due to the Lender pursuant to this Agreement directly to the
Lender;

 

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

 

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

 

(j)    Compliance with Applicable Law, Material Agreements, etc.  (i) Except where any such
failure could not reasonably be expected to have a Material Adverse Effect, comply
with (A) the requirements of all Applicable Laws, with all obligations,
which, if contravened, could give rise to a Lien (other than a Permitted Lien)
over any of the Collateral, and with all insurance policies required to be
maintained under Section 7.1(s), and (B) all Material Agreements to
which it is a party or by which it or its properties are bound;
(ii) except where any such changes could not reasonably be expected to
have a Material Adverse Effect, obtain the Lender’s prior written consent (which
consent may be withheld in the Lender’s sole and absolute 

 

69

 

discretion) before making,
permitting or allowing any material amendments or other material changes to, or
the termination of, any Material Agreement (excluding leases of space in
respect of the Mortgaged Properties of less than two thousand, five hundred
(2,500) square feet) or any other agreement affecting the Security, except
pursuant to an ordinary course renewal thereof consistent with past practice;
(iii) notify the Lender of any default by any party with respect to such
Material Agreements and take all commercially reasonable steps to cure any such
default; (iv) obtain the Lender’s prior written consent before entering
into any agreement containing any provision which would be violated or breached
by the performance of its obligations hereunder or under the 2008 Loan
Documents or under any instrument or document delivered or to be delivered by
it hereunder or in connection herewith, or which would violate or breach any
provision hereunder or under the 2008 Loan Documents or under any instrument or
document delivered or to be delivered by it hereunder or in connection
herewith; and (v) obtain the Lender’s prior written consent before making
any material amendments to its constating documents;

 

(k)   Payment of Obligations. 
Subject to the right to contest legitimate disputes, and subject, where
applicable to the provisos in Section 7.1(x), 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;

 

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

 

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

 

(n)   Books and Records; Reporting.  Keep and maintain (and provide the Lender and
its representatives and agents with reasonable access and copies of same if so
requested by the Lender) at all times at the Borrower’s address (in the case of
the Borrower) or at each Guarantor’s address (in the case of the Guarantors),
or at the Borrower’s address, or at such other place as the Lender may approve
in writing, complete and accurate books of accounts and records adequate to
reflect the results of the operation of each of the Mortgaged Properties, any
financial statements required to be provided to the Lender pursuant to any of
the Mortgages, and copies of all written contracts, correspondence, and other
documents affecting any of the Mortgaged

 

70

 

Properties.  Without limiting the foregoing, the Borrower
and each Guarantor agrees to deliver the following to the Lender, in duplicate:

 

(i)             upon the written
request of the Lender, and contemporaneously with the Fiscal Quarter and Fiscal
Year financial statements required under this Section 7.1(n), a
certificate (a “Compliance Certificate”)
signed by an officer of the Borrower and an officer of each Guarantor stating
that to the best of his or her knowledge after having made reasonable inquiry
and without personal liability to such officer:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

71

 

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

 

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

 

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

 

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

 

72

 

(o)         Reporting
Requirements.  The
Borrower shall deliver to the Lender reasonably detailed monthly progress
reports on the 30th day of each month, with the first such report to
be delivered on December 30, 2008. 
The monthly progress reports shall include (i) monthly financial
statements, including up-to-date cash flow forecasts, summary of capital
expenditures incurred in the month and planned, and revised or amended budgets,
(ii) an updated marketing plan for all asset sales (including, without
limiting the generality of the foregoing, the asset sales contemplated in the
Transaction Agreement), including expected dates for retaining sales
agents/brokers, distributing sales materials, receiving offers, executing
documentation and closing and summaries of any offers and/or expressions of
interest received, (iii) a reconciliation of deviations (if any) from the
previously delivered monthly progress report, and (iv) such other
information as the Lender requests, acting reasonably;

 

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

 

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

 

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

 

(s)          Maintenance
of Insurance.  The
Borrower shall maintain on behalf of itself and its Subsidiaries or shall cause
its Subsidiaries to maintain, insurance with responsible and reputable

 

73

 

insurance companies or
associations in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties in the
same general areas in which the Borrower or such Subsidiary operates, with the
Lender having approved the present insurers and insurance; provided, however,
that the Borrower and its Subsidiaries may self-insure to the same extent as
other companies engaged in similar businesses and owning similar properties in
the same general areas in which the Borrower or such Subsidiary operates and to
the extent consistent with prudent business practice;

 

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

 

	
  (i)

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

  
	
   

  	
   

  
	
  (ii)

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

  
	
   

  	
   

  
	
  (iii)

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

  

 

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

 

(u)         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 2008 Loan and on the first day of each month thereafter until the earlier
of (i) the date that the Indebtedness is fully paid and (ii) the
Unmatured Event of Default or Event of Default has been cured, a sum equal to
one-twelfth (1/12) of the total annual taxes and assessments (general and
special) respecting each of the Mortgaged Properties and the costs of insurance
premiums, based upon the Lender’s reasonable estimate as to the amount of the
taxes, assessments and premiums to be levied, assessed and incurred (except to
the extent, and only to the extent, that, in respect of the Golden Gate
Property and/or the Santa Anita Property, the Borrower or any Guarantor is making
such payments to BMO and/or Wells Fargo, as the case may be, pursuant to the
BMO Credit Agreement and/or the Santa Anita Senior Credit Facility). The
Borrower’s initial deposit shall be increased by an amount equal to the Lender’s
reasonable estimate of the amount of such taxes and insurance premiums to
become owing on the due dates for the payment of such taxes and insurance
premiums less the monthly payments to be deposited hereunder prior to such due
dates. If any such taxes or insurance premiums relating to each of the
Mortgaged Properties are also related to other premises, the amount of any
deposit

 

74

 

hereunder shall be based upon
the Borrower’s and/or any Guarantor’s share of the taxes, assessments or
insurance premiums, the Borrower shall apportion the total amount of the taxes,
assessments or premiums levied or assessed as between such other premises and
each of the Mortgaged Properties for the purposes of computing the amount of
any deposit hereunder. Such deposits shall be held without any allowance of
interest. Such deposits shall be used for the payment of such taxes,
assessments and insurance premiums on each of the Mortgaged Properties on the
earliest possible date when such payments become due. If the funds so deposited
are insufficient to pay any such taxes, assessments and insurance premiums for
any year when the same shall become due and payable, the Borrower shall, within
10 Banking Days after receipt of demand therefor from the Lender, deposit such
additional funds as may be necessary to pay such taxes, assessments and
insurance premiums in full. If the funds so deposited exceed the amount
required to pay such taxes, assessments and insurance premiums for the year,
the excess shall be applied on a subsequent deposit or deposits. Said deposits
shall be kept in a separate, non-interest bearing account created by and in the
name of the Lender. Upon the occurrence of an Unmatured Event of Default or an
Event of Default, the Lender may, at its option, without being required to do
so, apply any monies at the time on deposit pursuant to this Section 7.1(u) 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(u), 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;

 

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

 

(w)       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;

 

(x)           Defense of
Collateral.  The
Borrower and the Guarantors shall pay when due all obligations, lawful claims
or demands with respect to each of the Mortgaged Properties which, if unpaid,
might result in, or permit the creation of, any Lien on such Mortgaged
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

 

75

 

the Borrower or such Guarantor
posts a bond acceptable to the Lender to protect the Lender’s interest in such
Mortgaged Property, and, in general, do or cause to be done everything
necessary to fully preserve the rights and interests of the Lender under this
Agreement and the other 2008 Loan Documents in respect of such Mortgaged
Property. The Borrower and the Guarantors shall at all times defend the Lender’s
interest in and to the Mortgaged Properties, and the priority position of said
interest subject to the Permitted Liens, against any and all claims of any
Person adverse to the Lender.  The
Borrower and the Guarantors shall take all actions reasonably deemed necessary
or appropriate by the Lender to give effect to the Lender’s priority of
interests contemplated by this Agreement and the other 2008 Loan Documents;

 

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

 

(z)           Laurel Slots
Facilities Completion:  Except as otherwise agreed to by the Lender
in writing, the Borrower or the Laurel Guarantor shall at all times remain the
operating company for the Laurel Property and shall diligently cause to be done
all things necessary to carry out to completion the Laurel Slots Facilities in
accordance with plans and specifications therefor as are approved by the
Lender, subject to such changes thereto as the Borrower or the Laurel Guarantor
may consider necessary and the Lender shall have approved, acting reasonably
(the “Laurel Slots Facilities Plans and
Specifications”), and in accordance with all development and
construction agreements related thereto, subject to such changes thereto as the
Borrower or the Laurel Guarantor 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 Laurel Slots Facilities Plans and Specifications
and such agreements in each case to the extent amended as aforesaid. Without
derogating from the foregoing, all applications for authorizations from
Governmental Bodies in respect of the Laurel Slots Facilities Plans and
Specifications and/or the Laurel Slots Facilities shall, to the extent that the
scope, form and substance or terms thereof are inconsistent or otherwise not in
accordance with the Laurel Slots Facilities Plans and Specifications, be
submitted to the Lender for its review and approval.

 

(aa)              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;

 

(bb)            Notice of
Default.  The Borrower and
each of the Guarantors shall promptly provide the Lender with a copy of all
written notices and reports received or delivered by the Borrower or such
Guarantor (including notices of default) under any of the Organizational
Documents, Occupancy Agreements, Construction Contracts or Material Agreements
or any

 

76

 

other agreement providing for
the borrowing of money or other extension of credit, and notices of violations
of Applicable Law received by the Borrower or any of the Guarantors relating to
any of the Mortgaged Properties that might have a Material Adverse Effect,
including, without limitation, all racing and/or gaming licenses.  The Borrower shall furnish, or cause to be
furnished, to the Lender, immediately upon becoming aware of the existence of
an Event of Default or any Unmatured Event of Default, written notice of the
existence of any such event or the existence of any such condition;

 

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

 

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

 

	
  (i)

  	
  the commencement of any
  action, proceeding, arbitration or investigation against or in any other way
  relating adversely to the Borrower or any of the Guarantors or any of their
  respective properties, assets or businesses by any Person (including any
  Governmental Body) which, if adversely determined, could singly or when
  aggregated with all other such actions, proceedings, arbitrations and
  investigations reasonably be expected to have a Material Adverse Effect;

  
	
   

  	
   

  
	
  (ii)

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

  
	
   

  	
   

  
	
  (iii)

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

  
	
   

  	
   

  
	
  (iv)

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

  
	
   

  	
   

  
	
  (v)

  	
  any Default or Event of
  Default;

  

 

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

 

(ee)              Surveys.  After the recording
of any subdivision, plan of subdivision or small-scale planned development with
respect to any of the Mortgaged Properties, the Borrower and

 

77

 

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 Mortgaged Property showing such Property as so subdivided; and (ii) an
endorsement to the Title Policy confirming the new legal description created by
said subdivision and affirmative insurance that the Mortgage in respect of such
Mortgaged Property continues to encumber such Mortgaged Property, as subdivided
and newly described;

 

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

 

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

 

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

 

	
  (i)

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

  
	
   

  	
   

  
	
  (ii)

  	
  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;

  
	
   

  	
   

  
	
  (v)

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

  
	
   

  	
   

  
	
  (vi)

  	
  not commingle or permit to
  be commingled its funds or other assets with those of any other Person;

  

 

78

 

	
  (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 2008 Loan Documents, the Bridge Loan Agreement, the Gulfstream
  Construction Loan Agreement and the Remington Construction Loan Agreement,
  not guarantee or otherwise hold itself or its assets out to be responsible or
  available for the debts or obligations of any Person, including any
  Affiliate;

  
	
   

  	
   

  
	
  (ix)

  	
  conduct business in its own
  name;

  
	
   

  	
   

  
	
  (x)

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

  
	
   

  	
   

  
	
  (xi)

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

  
	
   

  	
   

  
	
  (xii)

  	
  maintain adequate capital in
  light of its contemplated business operations;

  

 

(ii)           Additional
Security.  The Borrower
shall use, and shall cause its Subsidiaries to use, commercially reasonable
efforts to provide such additional security as the Lender, in its sole and
absolute discretion, requests.

 

	
  7.2

  	
  Negative
  Covenants

  
	
   

  	
   

  
	
  The Borrower and
  each of the Guarantors covenants and agrees with the Lender that, except as
  expressly permitted under this Agreement and the other 2008 Loan Documents,
  it shall not, nor shall it permit any of its respective Subsidiaries to, from
  and after the Closing Date until the 2008 Loan (including interest thereon)
  and all fees and expenses to be paid by the Borrower to the Lender hereunder
  are paid in full:

  

 

(a)   Encumber Property.  Create, grant,
assume or suffer to exist any Lien upon any of its or their properties or
assets, other than Permitted Liens and Liens arising in connection with
financial assistance permitted by Section 7.2(i);

 

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

 

(c)   Transactions with Affiliates.  Repay any existing indebtedness or
liabilities owed to, or otherwise enter into any transaction or agreement with,
any Affiliate (or any corporation

 

79

 

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

 

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

 

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

 

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

 

(g)   Restricted Payments:  Without in any way limiting the generality of
the restrictions and limitations contained within the covenants referenced in
this Agreement, for so long as the 2008 Loan and/or any Guarantees and
Indemnities delivered in connection therewith remains outstanding, the Borrower
and each of its Subsidiaries (except for Gulfstream Park Racing Association
Inc., GPRA Thoroughbred Training Center, Inc., and Remington Park, Inc.
which entities shall be permitted to make restricted payments in accordance
with and subject to the provisions set forth in the Gulfstream Construction
Loan Agreement and the Remington Construction Loan Agreement) is prohibited
from undertaking the following without the express prior written consent of the
Lender in its sole and absolute discretion:

 

	
  (i)

  	
  making any payments on, in
  respect of or arising under or in connection with any indebtedness pari passu with or subordinated to the
  2008 Loan or indebtedness owed to any Affiliate, including any indebtedness
  owing to a shareholder or a Subsidiary (other than the Lender), other than
  payments of interest due and owing where the making of such payments will not
  result in an Unmatured Event of Default or an Event of Default under this

  

 

80

 

	
   

  	
  Agreement; provided,
  however, that the Borrower may make payments of principal on its existing
  unsecured indebtedness in favour of MEC Grundstucksentwicklungs GmbH;

  
	
   

  	
   

  
	
  (ii)

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

  
	
   

  	
   

  
	
  (iii)

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

  
	
   

  	
   

  
	
  (iv)

  	
  creating any sinking fund or
  entering into any analogous arrangement whereby cash is set aside or
  segregated for the payment of any indebtedness, other than the 2008 Loan, or
  for the acquisition of any equity securities of the Borrower;

  
	
   

  	
   

  
	
  (v)

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

  
	
   

  	
   

  
	
  (vi)

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

  
	
   

  	
   

  
	
  (vii)

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

  
	
   

  	
   

  
	
  (viii)

  	
  entering into any
  transactions with any Affiliate for the purposes of undertaking indirectly
  any transaction or activity that is otherwise prohibited by this
  Section 7.2(g);

  

 

(h)   Debt.  Directly or indirectly, incur, assume or
suffer to exist any indebtedness (including Capital Lease Obligations and
Contingent Liabilities) or enter into any guarantees, hypothecation, contracts
or other agreements which would make the Borrower or such Subsidiary liable for
any indebtedness (including Capital Lease Obligations and Contingent
Liabilities) or expense other than (i) Permitted Debt or (ii) indebtedness
arising in connection with financial assistance permitted by Section 7.2(i);

 

(i)    Financial Assistance.  Provide financial assistance, either directly
or indirectly, by means of a guarantee, provision of security or otherwise to
any Person, except for (i) Permitted Debt or Permitted Liens and any other
obligations which the Borrower may enter into in favour of the Lender, (ii) financial
assistance given by the Borrower to any Guarantor, or by any

 

81

 

Guarantor to the Borrower or
any other Guarantor and (iii) financial assistance given to a Subsidiary
in connection with an acquisition or investment expressly permitted by this
Agreement;

 

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

 

(k)   ERISA.  Following the Closing Date, (i) adopt or
institute any Employee Benefit Plan that is an employee pension benefit plan
within the meaning of Section 3(2) of ERISA, (ii) take any action which will
result in the partial or complete withdrawal, within the meanings of Sections
4203 and 4205 of ERISA, from a Multiemployer Plan except in the case of a
closure of the businesses or facilities of an ERISA Affiliate, (iii) engage or
permit any Person to engage in any non-exempt transaction prohibited by Section
406 of ERISA or Section 4975 of the IRC involving any Employee Benefit Plan or
Multiemployer Plan which would subject Borrower, any of the Guarantors or any
ERISA Affiliate to any tax, penalty or other liability including a liability to
indemnify, (iv) incur or allow to exist any accumulated funding deficiency
(within the meaning of Section 412 of the IRC or Section 302 of ERISA), except
for any funding deficiencies that relate to a Multiemployer Plan caused by a
third party (other than an Affiliate of the Borrower), (v) fail to make full
payment when due of all amounts due as contributions to any Employee Benefit
Plan or Multiemployer Plan, (vi) fail to comply with the requirements of Section
4980B of the IRC or Part 6 of Title I(B) of ERISA, (vii) adopt any amendment to
any Employee Benefit Plan which would require the posting of security pursuant
to Section 401(a)(29) of the IRC or (viii) permit any ERISA Affiliate to do any
of the things referred to in items (i) to (vii) above, where singly or
cumulatively, the above could be reasonably likely to have a Material Adverse
Effect;

 

(l)    Assertion of Certain Claims
and Defenses.  To the
extent permitted by Applicable Law, assert in any judicial proceeding any
lender liability claim or counterclaim, the defense of lack of consideration or
violation of any applicable usury laws or any similar legal or equitable
defense to the validity or enforceability of this Agreement or any other 2008
Loan Document;

 

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

 

82

 

Guarantor to any Person other
than the Borrower or a Guarantor in connection with such lease; and

 

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

 

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

 

(p)   Material Agreements.  Enter into, nor
permit to be entered into, any new Material Agreements without the prior
written consent of the Lender, which consent may be withheld by the Lender in
its sole and absolute discretion;

 

(q)   Use.  Use or develop a
Mortgaged Property for any purposes other than as contemplated under this
Agreement, the Gulfstream Development Agreement, the Gulfstream Construction
Contracts (as defined in the Gulfstream Construction Loan Agreement), the
Remington Construction Contracts  (as
defined in the Remington Construction Loan Agreement) and other permitted
related purposes. Neither the Borrower nor any of the Guarantors shall permit a
Mortgaged Property or any portion thereof to be converted or take any
preliminary actions which could lead to a conversion to condominium or
cooperative form of ownership until such time as the 2008 Loan is paid in full,
together with all interest thereon;

 

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

 

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

 

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

 

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

 

7.3                          Environmental Matters

 

(a)   The Borrower and each of the Guarantors shall
maintain, for itself and its Subsidiaries, a system to ensure and monitor
continued compliance with Environmental Laws, which shall include reviews of
such compliance, and the maintenance, in all material respects, of

 

83

 

environmental documents and
records relating to their respective businesses as required by Environmental
Law.

 

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

 

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

 

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

 

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

 

(f)    The Borrower and each of the Guarantors shall
provide the Lender with an environmental audit report (which shall include a
report arising from an environmental site assessment, investigation, compliance
audit or environmental review) with respect to any real property or an update
of such audit (i) upon the written request of the Lender documenting its
reasonable opinion that the Borrower or any Guarantor may not be in material
compliance with this Section 7.3; (ii) if such audit is required by
any Governmental Body or (iii) if an Event of Default relating to an
environmental matter has occurred, and the Lender has made a reasonable written
request to the Borrower for such audit or update to address the Event of
Default within 60 days after such request, and all such audits or updates
thereof shall be at the Borrower’s expense.

 

(g)   If the Borrower, any Guarantor or any Subsidiary (i) receives
notice that any violation of any Environmental Law may have been committed or
is about to be committed by it, (ii) receives notice that any
administrative or judicial complaint or order has been filed or is about to be
filed against it alleging violations of any Environmental Law or requiring it to
take any action in connection with the release of Hazardous Substances into the
environment, or (iii) receives any notice from a Governmental Body or
other Person alleging that the Borrower or any Guarantor may be liable or
responsible for any Environmental or Safety Liability, in each case

 

84

 

where the ultimate liability
of the Borrower and/or any of the Guarantors or any Subsidiary which may arise
from such notice could reasonably be expected to have a Material Adverse
Effect, the Borrower shall, and shall cause each Subsidiary to, provide the
Lender with a copy of such notice within five days of receipt thereof.  The Borrower and each of the Guarantors
shall, and shall cause each Subsidiary to, also provide to the Lender, as soon
as practicable after it becomes available, a copy of any environmental audit
report (including any report arising from an environmental site assessment,
investigation, compliance audit or environmental review), including any report
required to be submitted to any Governmental Body.  If any such report estimates the cost of any
clean-up or remedial action, including any approved by a Governmental Body, to
be in excess of $500,000, the Borrower and each of the Guarantors shall, and
shall cause each Subsidiary to, provide evidence satisfactory to the Lender,
acting reasonably, of disbursements made from time to time to effect and
complete such clean-up or remedial action, including within such time as may be
prescribed by a Governmental Body.  The
Borrower and each of the Guarantors shall, and shall cause each Subsidiary to,
provide written evidence to the Lender, including a report which the Lender
shall expressly be entitled to rely on, confirming the completion of the
clean-up or remediation of a site with a cost in excess of $500,000, including
any investigations and monitoring.

 

(h)   The Borrower shall, and shall cause each Subsidiary
to, permit the Lender and its authorized employees, representatives and agents,
at reasonable times and during normal business hours and at the Borrower’s own
cost, upon giving reasonable notice, to visit, inspect and investigate
(including intrusive investigations) any real property where the Lender, in its
reasonable opinion, believes that the Borrower or any Subsidiary may not be in
compliance with Section 7.3(g).

 

ARTICLE 8 

CONDITIONS PRECEDENT

 

8.1                                                                               Conditions Precedent to Closing

 

The obligations of the Lender
to make available the 2008 Loan or any part thereof to the Borrower are subject
to compliance, on or before the Closing Date, with each of the following
conditions precedent, which conditions precedent are for the sole and exclusive
benefit of the Lender and may be waived in writing by the Lender:

 

(a)                                 the representations
and warranties set out in Section 6.1 shall be true and correct in all
material respects on the Closing Date as if made on and as of such date;

 

(b)                                no Default or Event
of Default shall have occurred and be continuing nor shall it be reasonably
anticipated that there be any Default or Event of Default immediately after
giving effect to the execution of the 2008 Loan Documents;

 

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

 

(d)                                each of the
Borrower, the Lender and MID shall have received the approval of their
respective board of directors to enter into this Agreement;

 

85

 

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

 

	
  (i)

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

  

 

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

 

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

 

(C)           a certificate of
incumbency including sample signatures of officers and directors of the Borrower
and each Guarantor who have executed any of the 2008 Loan Documents, or any
other document delivered to the Lender under this Article; and

 

(D)          the resolutions or
other documentation evidencing that all necessary action, corporate or
otherwise, has been taken by the Borrower and each Guarantor to authorize the
execution, delivery and performance of the 2008 Loan Documents to which it is a
party;

 

	
  (ii)

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

  
	
   

  	
   

  
	
  (iii)

  	
  the Disclosure Schedule; and

  
	
   

  	
   

  
	
  (iv)

  	
  such other documentation or
  information as the Lender shall have reasonably requested; and

  

 

(f)            the Lender shall
have received from the
Borrower, the Guarantors, and each of the Guarantors (as
defined in the Bridge Loan Agreement) (collectively, the “Releasing Persons”), a release, in form
and substance satisfactory to the Lender, given by the Borrower, the Guarantors,
and each of the Guarantors (as defined in the Bridge Loan Agreement) to, inter alios, the Lender, MID and its
Subsidiaries (other than MEC and its Subsidiaries) and their respective
directors, officers, employees and advisors (collectively, the “Released Persons”), with respect to any
Claims that any of the Releasing Parties may have against any of the Released
Persons.

 

8.2                                                                               Conditions Precedent to Advances

 

The obligation of the Lender
to make any Advances is subject to compliance, on or before the relevant
Borrowing Date, with each of the following conditions precedent, which

 

86

 

conditions precedent are for
the sole and exclusive benefit of the Lender and may be waived in writing by
the Lender in its sole discretion:

 

	
  (a)

  	
  the representations and
  warranties set out in Section 6.1 hereof shall be true and correct on
  the relevant Borrowing Date as if made on and as of such date and the
  Borrower and the Guarantors shall have delivered a certificate to that
  effect;

  
	
   

  	
   

  
	
  (b)

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

  
	
   

  	
   

  
	
  (c)

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

  
	
   

  	
   

  
	
  (d)

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

  
	
   

  	
   

  
	
  (e)

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

  
	
   

  	
   

  
	
  (f)

  	
  the BMO Credit Agreement
  shall have been amended in form and substance satisfactory to the Lender, in
  its sole and absolute discretion, to provide for (i) this Agreement
  (unless a consent from BMO, in form and substance satisfactory to the Lender,
  shall have been received to provide for this Agreement), and (ii) an
  extension of the term of the credit facility therein such that it expires no
  earlier than March 16, 2009 (subject to accelerated maturity under the
  BMO Credit Agreement);

  
	
   

  	
   

  
	
  (g)

  	
  the Lender shall have
  received and be satisfied, in its sole and absolute discretion, with updated
  environmental reports for each of the Mortgaged Properties owned or leased by
  the Guarantors to be delivered pursuant to Section 7.1(r).

  
	
   

  	
   

  
	
  (h)

  	
  as a condition precedent to
  the initial Advance only, the Lender shall have received payment in full of
  (i) all reasonable invoiced fees and reimbursable out-of-pocket expenses
  payable by the Borrower on or prior to the date of such initial Advance in
  respect of this Agreement or under any other 2008 Loan Document, including
  payment of all reasonable fees, disbursements and out-of-pocket expenses of
  counsel to the Lender and (ii) the Closing Date Arrangement Fee. For
  greater certainty, the Lender acknowledges that such amounts may be paid to
  the Lender by the Borrower using proceeds from the initial Advance;

  
	
   

  	
   

  
	
  (i)

  	
  as a condition precedent to
  the initial Advance only (or to such subsequent Advance as the Lender may
  determine, in its sole and absolute discretion), the

  

 

87

 

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

 

	
  (i)

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

  
	
   

  	
   

  
	
  (ii)

  	
  the Lender shall have
  received, at the expense of the Borrower, a Title Policy (or a commitment to
  the issuance thereof) and evidence of zoning compliance (in the form of a
  zoning endorsement to the Title Policy ) in respect of each of the
  Mortgaged Properties, all in form, scope and substance satisfactory the
  Lender;

  
	
   

  	
   

  

(j)            as a condition
precedent to the initial Advance only (or to such subsequent Advance as the
Lender may determine, in its sole and absolute discretion), as evidence of, and
security for, the 2008 Loan and all other obligations, liability and
indebtedness of the Borrower hereunder and under the other 2008 Loan Documents,
both present and future (the “Indebtedness”),
the Borrower shall have delivered to the Lender, in form satisfactory to the
Lender and its counsel, all of the deliveries set out below:

 

	
  (i)

  	
  a grid promissory note from
  the Borrower in favour of the Lender (the “Borrower
  Note”);

  
	
   

  	
   

  
	
  (ii)

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

  
	
   

  	
   

  
	
  (iii)

  	
  a third  assignment of the right, title and
  interest of the Borrower in, to and under the Holdback Agreement of even date
  with the Bridge Loan Agreement from the Borrower to the Lender; provided that
  in connection with such assignment, the Borrower shall have complied with all
  notice requirements under the Holdback Agreement and shall have obtained all
  consents and waivers necessary to assign to the Lender such Holdback Agreement
  (the “Assignment of Holdback Agreement”);

  
	
   

  	
   

  
	
  (iv)

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

  

 

88

 

	
   

  	
  (v)

  	
  a second specific assignment to the Lender of the policies of
  insurance referred to in Section 6.1(ee) and the proceeds thereof,
  together with endorsements thereof in form and terms satisfactory to the
  Lender reflecting the Lender as a loss payee or additional insured, as
  applicable;

  
	
   

  	
   

  	
   

  
	
   

  	
  (vi)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (vii)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (viii)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (ix)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (x)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (xi)

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

  

 

89

 

	
   

  	
   

  	
  “Santa Anita Security”)
  is security for the Indebtedness, and not as security for the Santa Anita
  Guarantee and Indemnity;

  
	
   

  	
   

  	
   

  
	
   

  	
  (xii)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (xiii)

  	
  related UCC financing statements;

  
	
   

  	
   

  	
   

  
	
   

  	
  (xiv)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (xv)

  	
  any other collateral or security described in this Agreement or in any
  of the other 2008 Loan Documents, and such other assignments, mortgages,
  security agreements and undertakings relating to the Santa Anita Property and
  other documentation in support thereof as the Lender and its counsel shall
  reasonably require;

  
	
   

  	
   

  	
   

  
	
   

  	
  (xvi)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (xvii)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (xviii)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (xix)

  	
  a perfected third priority Lien in all personal property of the Golden
  Gate Fields Guarantors now owned and hereafter acquired (excluding licences
  and permits), in each case to the extent permitted by Applicable Law, and a negative
  pledge in respect of all such personal property (excluding

  

 

90

 

	
   

  	
   

  	
  licences and permits), pursuant to a general security agreement from
  the Golden Gate Fields Guarantors to the Lender (the “Golden Gate Fields Third General Security Agreement”),
  it being acknowledged and agreed that the Golden Gate Fields Third  Mortgage, the Golden Gate Fields Third  Assignment of Rents and Leases, the
  Golden Gate Fields Third  Assignment
  of Material Agreements and the Golden Gate Fields Third  General Security Agreement  (collectively, the “Golden Gate Fields  Security”) is security for the
  Indebtedness, and not as security for the Golden Gate Fields Guarantee and
  Indemnity;

  
	
   

  	
   

  	
   

  
	
   

  	
  (xx)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (xxi)

  	
  related UCC financing statements;

  
	
   

  	
   

  	
   

  
	
   

  	
  (xxii)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (xxiii)

  	
  any other collateral or security described in this Agreement or in any
  of the other 2008 Loan Documents, and such other assignments, mortgages,
  security agreements and undertakings relating to the Golden Gate Fields
  Property and other documentation in support thereof as the Lender and its
  counsel shall reasonably require including, without limiting the generality
  of the foregoing, a title insurance commitment, in from and substance
  satisfactory to the Lender, committing the Title Company to issue Title
  Policies, in an amount to be determined by the Lender, acting reasonably,
  from the Title Company, insuring the relevant Guarantor’s fee ownership of
  the relevant Mortgaged Properties (other than the MJC Mortgaged Properties
  (the “Non-MJC Mortgaged Properties”),
  the adequacy of the legal descriptions of the Non-MJC Mortgaged Properties,
  the marketability of title of the Non-MJC Mortgaged Properties and that the
  mortgages forming part of the Security (other than the MJC Security) are
  valid Liens on the Non-MJC Mortgaged Properties, free and clear of Liens
  other than the Permitted Liens and exceptions to title approved in writing by
  the Lender, the validity and effectiveness of any such Liens on the exercise
  by the Lender of its rights and remedies upon the occurrence of an Event of
  Default under this Agreement;

  
	
   

  	
   

  	
   

  
	
   

  	
  (xxiv)

  	
  a perfected Lien on the Bowie Property pursuant to a mortgage from the
  Bowie  Guarantor in favour of the
  Lender, ranking subsequent in priority only to Permitted Liens in respect of
  the Bowie Property (the “Bowie Mortgage”);

  

 

91

 

	
   

  	
  (xxv)

  	
  an assignment of rents and leases generated by the use and occupancy
  of the Bowie  Property pursuant
  to an assignment of rents and lessor’s interest in the Occupancy Agreements
  relating to the Bowie  Property
  from the Bowie  Guarantor in
  favour of the Lender, ranking subsequent in priority only to Permitted Liens
  in respect of the Bowie Property (the “Bowie
  Assignment of Rents and Leases”);

  
	
   

  	
   

  	
   

  
	
   

  	
  (xxvi)

  	
  a general assignment of the Bowie  Guarantor’s
  interest in the Material Agreements relating to the Bowie  Property, where permitted, ranking
  subsequent in priority only to Permitted Liens in respect of the Bowie
  Property; provided that if the assignment of any such Material Agreements is
  not permitted, the Bowie  Guarantors
  shall use commercially reasonable efforts to obtain all consents and waivers
  necessary to assign to the Lender such Material Agreement and further agrees that
  if such consents and waivers are not obtained, such Material Agreement shall
  be held by the Bowie  Guarantor
  for the benefit of and in trust for the Lender (the “Bowie Assignment of Material Agreements”);

  
	
   

  	
   

  	
   

  
	
   

  	
  (xxvii)

  	
  a perfected Lien in all personal property of the Bowie  Guarantor now owned and hereafter
  acquired (excluding licenses and permits), in each case to the extent
  permitted by Applicable Law, and a negative pledge in respect of all such
  personal property (excluding licenses and permits), pursuant to a general
  security agreement from the Bowie  Guarantor
  to the Lender, ranking subsequent in priority only to Permitted Liens in
  respect of the Bowie Property (the “Bowie
  General Security Agreement”);

  
	
   

  	
   

  	
   

  
	
   

  	
  (xxviii)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (xxix)

  	
  related UCC financing statements;

  
	
   

  	
   

  	
   

  
	
   

  	
  (xxx)

  	
  a specific assignment by the Bowie  Guarantor
  of the policies of insurance in respect of the Bowie Property and the
  proceeds thereof, ranking subsequent in priority only to Permitted Liens in
  respect of the Bowie Property, together with endorsements thereof in form and
  terms satisfactory to the Lender reflecting the Lender as a loss payee or
  additional insured, as applicable;

  
	
   

  	
   

  	
   

  
	
   

  	
  (xxxi)

  	
  any other collateral or security described in this Agreement or in any
  of the other 2008 Loan Documents, and such other assignments, mortgages,
  security agreements and undertakings relating to the Bowie  Property and other documentation in
  support thereof as the Lender and its counsel shall reasonably require (all
  of the deliveries in Section 8.2(j)(xxiv) through (xxxi) being defined
  herein as the “Bowie Security”,
  it being agreed that the Bowie Security shall be delivered to the Lender
  following the Closing Date in escrow and shall become effective in the event
  that the PNC Debt

  

 

92

 

	
   

  	
   

  	
  is repaid in full or in the event that the PNC Lender consents to the
  Bowie Security);

  
	
   

  	
   

  	
   

  
	
   

  	
  (xxxii)

  	
  a perfected Lien on the Laurel Property pursuant to a mortgage from
  the Laurel Guarantor in favour of the Lender, ranking subsequent in priority
  only to Permitted Liens in respect of the Laurel Property (the “Laurel Mortgage”);

  
	
   

  	
   

  	
   

  
	
   

  	
  (xxxiii)

  	
  an assignment of rents and leases generated by the use and occupancy
  of the Laurel Property pursuant to an assignment of rents and lessor’s
  interest in the Occupancy Agreements relating to the Laurel Property from the
  Laurel Guarantor in favour of the Lender, ranking subsequent in priority only
  to Permitted Liens in respect of the Laurel Property (the “Laurel Assignment of Rents and Leases”);

  
	
   

  	
   

  	
   

  
	
   

  	
  (xxxiv)

  	
  a general assignment of the Laurel Guarantor’s interest in the Material
  Agreements relating to the Laurel Property, where permitted, ranking
  subsequent in priority only to Permitted Liens in respect of the Laurel
  Property; provided that if the assignment of any such Material Agreements is
  not permitted, the Laurel 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 Laurel
  Guarantor for the benefit of and in trust for the Lender (the “Laurel Assignment of Material Agreements”);

  
	
   

  	
   

  	
   

  
	
   

  	
  (xxxv)

  	
  a perfected Lien in all personal property of the Laurel Guarantor now
  owned and hereafter acquired (excluding licenses and permits), in each case
  to the extent permitted by Applicable Law, and a negative pledge in respect
  of all such personal property (excluding licenses and permits), pursuant to a
  general security agreement from the Laurel Guarantor to the Lender, ranking
  subsequent in priority only to Permitted Liens in respect of the Laurel
  Property (the “Laurel General Security
  Agreement”);

  
	
   

  	
   

  	
   

  
	
   

  	
  (xxxvi)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (xxxvii)

  	
  related UCC financing statements;

  
	
   

  	
   

  	
   

  
	
   

  	
  (xxxviii)

  	
  a specific assignment by the Laurel Guarantor of the policies of
  insurance in respect of the Laurel Property and the proceeds thereof, ranking
  subsequent in priority only to Permitted Liens in respect of the Laurel
  Property, together with endorsements thereof in form and terms satisfactory
  to the Lender reflecting the Lender as a loss payee or additional insured, as
  applicable;

  

 

93

 

	
   

  	
  (xxxix)

  	
  any other collateral or security described in this Agreement or in any
  of the other 2008 Loan Documents, and such other assignments, mortgages,
  security agreements and undertakings relating to the Laurel Property and
  other documentation in support thereof as the Lender and its counsel shall
  reasonably require (all of the deliveries in Section 8.2(j)(xxxii)
  through (xxxix) being defined herein as the “Laurel Security”, it being agreed that the Laurel Security
  shall be delivered to the Lender following the Closing Date in escrow and
  shall become effective in the event that the PNC Debt is repaid in full or in
  the event that the PNC Lender consents to the Laurel  Security);

  
	
   

  	
   

  	
   

  
	
   

  	
  (xl)

  	
  a perfected Lien on the Pimlico Property pursuant to a mortgage from
  the Pimlico Guarantor in favour of the Lender, ranking subsequent in priority
  only to Permitted Liens in respect of the Pimlico Property (the “Pimlico Mortgage”);

  
	
   

  	
   

  	
   

  
	
   

  	
  (xli)

  	
  an assignment of rents and leases generated by the use and occupancy
  of the Pimlico Property pursuant to an assignment of rents and lessor’s
  interest in the Occupancy Agreements relating to the Pimlico Property from
  the Pimlico Guarantor in favour of the Lender, ranking subsequent in priority
  only to Permitted Liens in respect of the Pimlico Property (the “Pimlico Assignment of Rents and Leases”);

  
	
   

  	
   

  	
   

  
	
   

  	
  (xlii)

  	
  a general assignment of the Pimlico Guarantor’s interest in the
  Material Agreement relating to the Pimlico Property, where permitted;
  provided that if the assignment of any such Material Agreements is not
  permitted, the Pimlico 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 Pimlico
  Guarantor for the benefit of and in trust for the Lender, ranking subsequent
  in priority only to Permitted Liens in respect of the Pimlico Property (the “Pimlico Assignment of Material Agreements”);

  
	
   

  	
   

  	
   

  
	
   

  	
  (xliii)

  	
  a perfected Lien in all personal property of the Pimlico Guarantor now
  owned and hereafter acquired (excluding licenses and permits), in each case
  to the extent permitted by Applicable Law, and a negative pledge in respect
  of all such personal property (excluding licenses and permits), pursuant to a
  general security agreement from the Pimlico Guarantor to the Lender, ranking
  subsequent in priority only to Permitted Liens in respect of the Pimlico Property
  (the “Pimlico General Security Agreement”);

  
	
   

  	
   

  	
   

  
	
   

  	
  (xliv)

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

  

 

94

 

	
   

  	
  (xlv)

  	
  related UCC financing statements;

  
	
   

  	
   

  	
   

  
	
   

  	
  (xlvi)

  	
  a specific assignment by the Pimlico Guarantor of the policies of
  insurance in respect of the Pimlico Property and the proceeds thereof,
  ranking subsequent in priority only to Permitted Liens in respect of the Pimlico
  Property, together with endorsements thereof in form and terms satisfactory
  to the Lender reflecting the Lender as a loss payee or additional insured, as
  applicable;

  
	
   

  	
   

  	
   

  
	
   

  	
  (xlvii)

  	
  any other collateral or security described in this Agreement or in any
  of the other 2008 Loan Documents, and such other assignments, mortgages,
  security agreements and undertakings relating to the Pimlico Property and
  other documentation in support thereof as the Lender and its counsel shall
  reasonably require (all of the deliveries in Section 8.2(j)(xl) through
  (xlvii) being defined herein as the “Pimlico
  Security”, it being agreed that the Pimlico Security shall be
  delivered to the Lender following the Closing Date in escrow and shall become
  effective in the event that the PNC Debt is repaid in full or in the event
  that the PNC Lender consents to the Pimlico Security);

  
	
   

  	
   

  	
   

  
	
   

  	
  (xlviii)

  	
  in consideration of the guarantee and indemnity fees paid by the
  Borrower to the Golden Gate Fields Guarantors collectively in the amount of
  $15,000 (the “Golden Gate Fields Guarantee
  Fee”),  the direct and
  indirect financial and other support that the Borrower has provided, and such
  direct and indirect financial and other support as the Borrower intends in
  the future to provide, to the Golden Gate Fields Guarantors, and in order to
  induce the Lender to enter into the Agreement, the guarantee and indemnity
  (the “Golden Gate Fields  Guarantee and Indemnity”) of the Golden
  Gate Fields Guarantors, under which the Golden Gate Fields Guarantors
  unconditionally guarantee the payment and performance of the Indebtedness
  outstanding from time to time, as well as interest and other amounts owing
  hereunder or under the other 2008 Loan Documents and the performance of all
  other obligations of the Borrower under the 2008 Loan and the 2008 Loan
  Documents;

  
	
   

  	
   

  	
   

  
	
   

  	
  (xlix)

  	
  related UCC financing statements;

  
	
   

  	
   

  	
   

  
	
   

  	
  (l)

  	
   

  	
  any other collateral or security described in this Agreement or in any
  of the other 2008 Loan Documents, and such other assignments, mortgages,
  security agreements and undertakings relating to the Golden Gate Fields
  Property and other documentation in support thereof as the Lender and its
  counsel shall reasonably require;”

  
	
   

  	
   

  	
   

  
	
   

  	
  (li)

  	
   

  	
  in consideration of the guarantee and indemnity fees paid by the
  Borrower to the Santa Anita  Guarantors
  collectively in the amount of $15,000 (the “Santa
  Anita Guarantee Fee”),  the
  direct and indirect financial and other support that the Borrower has
  provided, and such direct and indirect

  

 

95

 

	
   

  	
   

  	
  financial and other support as the Borrower intends in the future to
  provide, to the Santa Anita  Guarantors,
  and in order to induce the Lender to enter into the Agreement, the guarantee
  and indemnity (the “Santa Anita Guarantee
  and Indemnity”) of the Santa Anita Guarantors, under which the
  Santa Anita Guarantors unconditionally guarantee the payment and performance
  of the Indebtedness outstanding from time to time, as well as interest and
  other amounts owing hereunder or under the other 2008 Loan Documents and the
  performance of all other obligations of the Borrower under the 2008 Loan and
  the 2008 Loan Documents;

  
	
   

  	
   

  	
   

  
	
   

  	
  (lii)

  	
   

  	
  related UCC financing statements;

  
	
   

  	
   

  	
   

  
	
   

  	
  (liii)

  	
   

  	
  any other collateral or security described in this Agreement or in any
  of the other 2008 Loan Documents, and such other assignments, mortgages,
  security agreements and undertakings relating to the Santa Anita Property and
  other documentation in support thereof as the Lender and its counsel shall
  reasonably require;”

  
	
   

  	
   

  	
   

  
	
   

  	
  (liv)

  	
   

  	
  in consideration of the guarantee and indemnity fees paid by the
  Borrower to the Bowie  Guarantor
  in the amount of $10,000 (the “Bowie
  Guarantee Fee”),  the
  direct and indirect financial and other support that the Borrower has
  provided, and such direct and indirect financial and other support as the
  Borrower intends in the future to provide, to the Bowie  Guarantor, and in order to induce the
  Lender to enter into the Agreement, the guarantee and indemnity (the “Bowie Guarantee and Indemnity”) of the
  Bowie Guarantor, under which the Bowie 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 2008 Loan Documents, and the
  performance of all other obligations of the Borrower under the 2008 Loan and
  the 2008 Loan Documents (it being agreed that the Bowie Guarantee and
  Indemnity shall be delivered to the Lender on the Closing Date in escrow and
  shall become effective in connection with the satisfaction of the Tranche 2
  Conditions (and Tranche 3 Conditions, if applicable);

  
	
   

  	
   

  	
   

  
	
   

  	
  (lv)

  	
   

  	
  in consideration of the guarantee and indemnity fees paid by the
  Borrower to the Laurel Guarantor in the amount of $10,000 (the “Laurel  Guarantee
  Fee”),  the direct and
  indirect financial and other support that the Borrower has provided, and such
  direct and indirect financial and other support as the Borrower intends in
  the future to provide, to the Laurel Guarantor, and in order to induce the
  Lender to enter into the Agreement, the guarantee and indemnity (the “Laurel  Guarantee
  and Indemnity”) of the Laurel Guarantor, under which the Laurel
  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 2008 Loan Documents, and the performance of all other obligations
  of the Borrower under the 2008 Loan and the 2008 Loan

  

 

96

 

	
   

  	
   

  	
  Documents (it being agreed that the Laurel Guarantee and Indemnity
  shall be delivered to the Lender on the Closing Date in escrow and shall
  become effective in connection with the satisfaction of the Tranche 2 Conditions
  (and Tranche 3 Conditions, if applicable);

  
	
   

  	
   

  	
   

  
	
   

  	
  (lvi)

  	
   

  	
  in consideration of the guarantee and indemnity fees paid by the
  Borrower to the Pimlico Guarantor in the amount of $10,000 (the “Pimlico  Guarantee
  Fee”),  the direct and
  indirect financial and other support that the Borrower has provided, and such
  direct and indirect financial and other support as the Borrower intends in
  the future to provide, to the Pimlico Guarantor, and in order to induce the
  Lender to enter into the Agreement, the guarantee and indemnity (the “Pimlico  Guarantee
  and Indemnity”) of the Pimlico Guarantor, under which the Pimlico
  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 2008 Loan Documents, and the performance of all other obligations
  of the Borrower under the 2008 Loan and the 2008 Loan Documents (it being
  agreed that the Pimlico Guarantee and Indemnity shall be delivered to the
  Lender on the Closing Date in escrow and shall become effective in connection
  with the satisfaction of the Tranche 2 Conditions (and Tranche 3 Conditions,
  if applicable);

  
	
   

  	
   

  	
   

  
	
   

  	
  (lvii)

  	
   

  	
  in consideration of the guarantee and indemnity fees paid by the
  Borrower to the Maryland Racing Guarantor in the amount of $10,000 (the “Maryland Racing  Guarantee Fee”),  the direct and indirect financial and
  other support that the Borrower has provided, and such direct and indirect
  financial and other support as the Borrower intends in the future to provide,
  to the Pimlico Guarantor, and in order to induce the Lender to enter into the
  Agreement, the guarantee and indemnity (the “Maryland Racing  Guarantee
  and Indemnity”) of the Maryland Racing Guarantor, under which the
  Maryland Racing 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 2008 Loan Documents, and the performance of all other
  obligations of the Borrower under the 2008 Loan and the 2008 Loan Documents;

  
	
   

  	
   

  	
   

  
	
   

  	
  (lviii)

  	
   

  	
  any other collateral or security described in this Agreement or in any
  of the other 2008 Loan Documents, and such other assignments, mortgages,
  security agreements and undertakings relating to any of the Mortgaged
  Properties and other documentation in support thereof as the Lender and its
  counsel shall reasonably require;

  
	
   

  	
   

  	
   

  
	
   

  	
  (lix)

  	
   

  	
  in consideration of the guarantee and indemnity fees paid by the
  Borrower to the Thistledown Guarantor in the amount of $2,500 (the “Thistledown  Guarantee Fee”),  the
  direct and indirect financial and other support that

  

 

97

 

	
   

  	
   

  	
  the Borrower has provided, and such direct and indirect financial and
  other support as the Borrower intends in the future to provide, to the Laurel
  Guarantor, and in order to induce the Lender to enter into the Agreement, the
  guarantee and indemnity (the “Thistledown
  Guarantee and Indemnity”) of the
  Thistledown Guarantor, under which the Thistledown Guarantor unconditionally
  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 2008 Loan
  Documents, and the performance of all other obligations of the Borrower under
  the 2008 Loan and the 2008 Loan Documents;

  
	
   

  	
   

  	
   

  
	
   

  	
  (lx)

  	
   

  	
  in consideration of the guarantee and indemnity fees paid by the
  Borrower to the Amtote  Guarantors
  in the amount of $2,500 (the “Amtote
  Guarantee Fee”),  the direct
  and indirect financial and other support that the Borrower has provided, and
  such direct and indirect financial and other support as the Borrower intends
  in the future to provide, to the Amtote  Guarantors,
  and in order to induce the Lender to enter into the Agreement, the guarantee
  and indemnity (the “Amtote Guarantee and
  Indemnity”) of the Amtote  Guarantors,
  under which the Amtote  Guarantors
  unconditionally guarantee the payment and performance of the Indebtedness
  outstanding from time to time, as well as interest and other amounts owing
  hereunder or under the other 2008 Loan Documents and the performance of all
  other obligations of the Borrower under the 2008 Loan and the 2008 Loan
  Documents;

  
				

 

At all times from and after the Execution Date
to and including the date that the Tranche 2 Conditions (and Tranche 3
Conditions, if applicable) have been satisfied, the security set out above in
this Section 8.2(j) (save and except the Borrower Note and the MJC
Security) is herein called the “Security”.
At all times from and after the date that the Tranche 2 Conditions (and Tranche
3 Conditions, if applicable) have been satisfied, the security set out above in
this Section 8.2(j) (save and except the Borrower Note) is herein
called the “Security”. All of the
foregoing documents and instruments shall have been properly registered,
recorded and filed in all places which, searches shall have been conducted in
all jurisdictions which, and deliveries of all consents, approvals,
acknowledgements, undertakings, non-disturbance agreements, directions,
negotiable documents of title and other documents and instruments to the Lender
shall have been made which, in the opinion of the Lender’s counsel, are
desirable or required to make effective the Security created or intended to be
created in favour of the Lender to ensure the perfection and the intended
priority of the Security.

 

98

 

ARTICLE 9

 

EVENTS OF DEFAULT AND REMEDIES

 

9.1                                                                               Events of Default

 

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

 

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

 

(b)                                 default by
the Borrower or any Guarantor in the performance or observance of any covenant,
condition or obligation contained in any 2008 Loan Document to which it is a
party that does not require the payment of money to the Lender, and such
default continues for a period of 20 days (or such longer period as the Lender
may in its sole discretion determine) after the earliest of (x) receipt of
notice from the Lender of such default, and (y) knowledge of the existence
of such default by any officer of the Borrower;

 

(c)                                  any
representation, warranty, certificate, information or other statement
(financial or otherwise) made, deemed to be made, or furnished by or on behalf
of the Borrower or any Guarantor in, or in connection with, this Agreement or
any of the other 2008 Loan Documents (i) that is not or has not been
qualified by reference to “material”,
“in all material respects” or “Material Adverse Effect”, or any other
materiality standard, shall be found to be false, incorrect, incomplete or
misleading in any material respect when made, deemed to be made, or furnished
or (ii) that is or has been qualified by reference to “material”, “in all material respects” or “Material Adverse Effect”, or any other materiality standard,
shall be found to be false, incorrect, incomplete or misleading when made,
deemed to be made, or furnished, where, in all such cases, the consequences of
such misrepresentation or breach of warranty could reasonably be expected to
have a Material Adverse Effect;

 

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

 

99

 

Borrower or applicable Guarantor or applicable
Subsidiary is diligently contesting such acceleration or declaration in good
faith by appropriate proceedings or has fully repaid the indebtedness
accelerated or declared due;

 

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

 

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

 

	
  (i)

  	
   

  	
  seeking
  to adjudicate it a bankrupt or insolvent, or

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

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

  

 

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

 

	
  (i)

  	
   

  	
  seeking
  to adjudicate it a bankrupt or insolvent;

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

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

  

 

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

 

(h)                                 any
creditor of the Borrower or any other Person shall privately appoint a
receiver, trustee or similar official for any Property or any substantial part
of the Borrower’s properties and assets having a Replacement Cost greater than

 

100

 

$10,000,000 and such appointment is not stayed
and is not being contested in good faith by appropriate proceedings or, if so
contested, such appointment is not terminated within 45 days from the original
date of such appointment; provided, in each case, the Borrower and any of the
Guarantors remain current on their respective payroll obligations during such
contest;

 

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

 

(j)                                     if, at any
time after execution and delivery thereof, other than by reason of a wilful act
or omission of the Lender, (i) any 2008 Loan Document ceases to be in full
force and effect (ii) any 2008 Loan Document is declared by a court or
tribunal of competent jurisdiction to be null and void; or (iii) the validity
or enforceability of any 2008 Loan Document is contested by the Borrower or any
Guarantor; or (iv) the Borrower or any Guarantor denies in writing that it
has any or further liability or obligations under any 2008 Loan Document; or

 

(k)                                  except in
connection with a transaction permitted under Section 7.2(d), the Borrower
or any Guarantor ceases or threatens in writing or by way of public or press
announcement to cease to carry on business in the ordinary course; or

 

(l)                                     any event
shall occur or condition shall exist, and shall continue after the applicable
grace period, if any, specified in any note or indenture relating to the
Subordinated Debt, and the effect of such event or condition is to enable the
holders of Subordinated Debt to accelerate the maturity of the Subordinated
Debt (whether or not the Subordinated Debt is accelerated), or any Subordinated
Debt shall be declared to be due and payable or the Borrower shall be required
to repurchase any Subordinated Debt prior to the stated maturity thereof; or

 

(m)                               a Material
Adverse Change occurs; or

 

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

 

9.2                                                                               Remedies Upon Default

 

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

 

(a)                                  declare
the unutilized portion of the 2008 Loan to be terminated (whereupon the Lender
shall not be required to make any further Advances);

 

101

 

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

 

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

 

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

 

9.3                                                                               Distributions

 

During
the occurrence and continuance of an Event of Default, all distributions under
or in respect of any of the 2008 Loan Documents shall be held by the Lender on
account of the Obligations without prejudice to any claim by the Lender for any
deficiency after such distributions are received by the Lender, and the
Borrower shall remain liable for any such deficiency.  All such distributions may be applied to such
part of the Obligations as the Lender may see fit in its sole discretion.  The Lender may at any time change any such
appropriation of any such distributions or other moneys received by the Lender
and may reapply the same to any other part of the Obligations as the Lender may
from time to time in its sole discretion see fit, notwithstanding any previous
application.

 

ARTICLE 10

 

GENERAL

 

10.1                                                                        Reliance and Non-Merger

 

All
covenants, agreements, representations and warranties of the Borrower made
herein or in any other 2008 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 2008 Loan Documents until there are no
amounts outstanding under the 2008 Loan and the Lender 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 2008 Loan Document which by their
terms are stated to survive termination of this Agreement.

 

10.2                                                                        Confidentiality

 

The
Lender will maintain on a confidential basis (except as otherwise permitted
hereunder or as required by Applicable Law) all information relating to the
Borrower and its Subsidiaries provided to it hereunder by and on behalf of the
Borrower or any of its Subsidiaries or obtained in respect of any diligence
conducted in respect hereof; provided, however, that this Section 10.2
shall not apply to any information which (i) was lawfully in the public
domain at

 

102

 

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 of the Guarantors
shall make all payments hereunder regardless of, but without prejudice to or
otherwise releasing the Lender of or from, any liability, defense or
counterclaim, including, without limitation, any defense or counterclaim based
on any law, rule or policy which is now or hereafter promulgated by any
Governmental Body which may adversely affect the Borrower’s and each of the
Guarantor’s obligation to make, or the Lender’s right to receive, such payments.
The Borrower and each of the Guarantors grants to the Lender the right to set
off all accounts, credits or balances owed by the Lender to the Borrower and/or
any of the Guarantors against the aggregate amount of principal, interest, fees
and other amounts due hereunder or under any other 2008 Loan Document when any
such amount shall become due and payable, whether at maturity, upon
acceleration of maturity thereof or otherwise.

 

10.4                                                                        Employment of Experts

 

The Lender may, at any time and from time to
time, at the Borrower’s cost, retain and employ legal counsel, independent
accountants and other experts in order to perform or assist it in the
performance of its rights and powers under this Agreement, the other 2008 Loan
Documents or the Intercreditor Agreements and will advise the Borrower at any
time that it elects to do so.

 

10.5                                                                        Reliance by Lender

 

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

 

10.6                                                                        Notices

 

Any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be given by facsimile or other means of electronic
communication or by hand-delivery or courier as hereinafter provided.  Any such notice, if delivered by courier,
shall be deemed to be received on the next Banking Day after the date of
delivery thereof, or if sent by facsimile or other means of electronic
communication, shall be deemed to have been received on the day sent if sent
prior to 2:00 p.m. (Toronto time) on any Banking Day or otherwise on the
next succeeding Banking Day.  Notice of
change of address shall also be governed by this Section 10.6.  Notices and other communications shall be
addressed as follows:

 

103

 

	
  (a)

  	
  if
  to the Borrower:

  
	
   

  	
   

  
	
   

  	
  Magna
  Entertainment Corp.

  
	
   

  	
  337
  Magna Drive

  
	
   

  	
  Aurora,
  Ontario

  
	
   

  	
  L4G
  7K1

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Chief
  Financial Officer, Finance

  
	
   

  	
  Facsimile
  number:

  	
  (905)
  726-7448

  
	
   

  	
   

  
	
  (b)

  	
  if
  to the Guarantors:

  
	
   

  	
   

  
	
   

  	
  Pacific
  Racing Association

  
	
   

  	
  c/o
  Magna Entertainment Corp.

  
	
   

  	
  337
  Magna Drive

  
	
   

  	
  Aurora,
  Ontario

  
	
   

  	
  L4G
  7K1

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Chief
  Financial Officer, Finance

  
	
   

  	
  Facsimile
  number:

  	
  (905)
  726-7448

  
	
   

  	
   

  
	
   

  	
  MEC
  Land Holdings (California) Inc.

  
	
   

  	
  c/o
  Magna Entertainment Corp.

  
	
   

  	
  337
  Magna Drive

  
	
   

  	
  Aurora,
  Ontario

  
	
   

  	
  L4G
  7K1

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Chief
  Financial Officer, Finance

  
	
   

  	
  Facsimile
  number:

  	
  (905)
  726-7448

  
	
   

  	
   

  
	
   

  	
  The
  Santa Anita Companies, Inc.

  
	
   

  	
  c/o
  Magna Entertainment Corp.

  
	
   

  	
  337
  Magna Drive

  
	
   

  	
  Aurora,
  Ontario

  
	
   

  	
  L4G
  7K1

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Chief
  Financial Officer, Finance

  
	
   

  	
  Facsimile
  number:

  	
  (905)
  726-7448

  
	
   

  	
   

  
	
   

  	
  Los
  Angeles Turf Club, Incorporated

  
	
   

  	
  c/o
  Magna Entertainment Corp.

  
	
   

  	
  337
  Magna Drive

  
	
   

  	
  Aurora,
  Ontario

  
	
   

  	
  L4G
  7K1

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Chief
  Financial Officer, Finance

  
	
   

  	
  Facsimile
  number:

  	
  (905)
  726-7448

  

 

104

 

	
   

  	
  Laurel Racing Association
  Limited Partnership, Southern

  Maryland
  Agricultural Association,
  Maryland Racing, Inc.,

  
	
   

  	
  c/o
  Magna Entertainment Corp.

  
	
   

  	
  337
  Magna Drive

  
	
   

  	
  Aurora,
  Ontario

  
	
   

  	
  L4G
  7K1

  
	
   

  	
   

  
	
   

  	
  Attention:
  

  	
  Chief
  Financial Officer, Finance

  
	
   

  	
   

  	
   

  
	
   

  	
  Fax:

  	
  905.726.2585

  
	
   

  	
   

  
	
   

  	
  Thistledown, Inc.,

  
	
   

  	
  c/o
  Magna Entertainment Corp.

  
	
   

  	
  337
  Magna Drive

  
	
   

  	
  Aurora,
  Ontario

  
	
   

  	
  L4G
  7K1

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Chief
  Financial Officer, Finance

  
	
   

  	
  Facsimile
  number:

  	
  (905)
  726-7448

  
	
   

  	
   

  
	
   

  	
  MEC
  Maryland Investments Inc.

  
	
   

  	
  c/o
  Magna Entertainment Corp.

  
	
   

  	
  337
  Magna Drive

  
	
   

  	
  Aurora,
  Ontario

  
	
   

  	
  L4G
  7K1

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Chief
  Financial Officer, Finance

  
	
   

  	
  Facsimile
  number:

  	
  (905)
  726-7448

  
	
   

  	
   

  
	
   

  	
  30000
  Maryland Investments LLC

  
	
   

  	
  c/o
  Magna Entertainment Corp.

  
	
   

  	
  337
  Magna Drive

  
	
   

  	
  Aurora,
  Ontario

  
	
   

  	
  L4G
  7K1

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Chief
  Financial Officer, Finance

  
	
   

  	
  Facsimile
  number:

  	
  (905)
  726-7448

  
	
   

  	
   

  
	
   

  	
  in
  each case with a copy to:

  
	
   

  	
   

  
	
   

  	
  Magna
  Entertainment Corp.

  
	
   

  	
  337
  Magna Drive

  
	
   

  	
  Aurora,
  Ontario

  
	
   

  	
  L4G
  7K1

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Chief
  Financial Officer, Finance

  
	
   

  	
  Facsimile
  number:

  	
  (905)
  726-4448

  

 

105

 

	
  (c)

  	
  if
  to the Lender:

  
	
   

  	
   

  
	
   

  	
  MID
  Islandi sf. Zug Branch

  
	
   

  	
  Baererstrasse
  16, CH-6304

  
	
   

  	
  Zug
  Switzerland

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Thomas
  Schultheiss

  
	
   

  	
   

  	
  Branch
  Manager

  
	
   

  	
  Facsimile
  number:

  	
  +41
  41725 2725

  
	
   

  	
   

  
	
   

  	
  with
  a copy to:

  
	
   

  	
   

  
	
   

  	
  MI
  Developments Inc.

  
	
   

  	
  455
  Magna Drive

  
	
   

  	
  Aurora,
  Ontario

  
	
   

  	
  L4G
  7A9

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  General
  Counsel

  
	
   

  	
  Facsimile
  number:

  	
  (905)
  726-2095

  

 

10.7                                                                        Further Assurances

 

Whether
before or after the happening of an Event of Default, the Borrower shall at its
own expense do, make, execute or deliver, or cause to be done, made, executed
or delivered by its Subsidiaries or other Persons, all such further acts,
documents and things in connection with the 2008 Loan and the 2008 Loan
Documents as the Lender may reasonably require from time to time for the
purpose of giving effect to the 2008 Loan Documents all within a reasonable
period of time following the request of the Lender.

 

10.8                                                                        Assignment

 

The
2008 Loan Documents shall enure to the benefit of the Lender, its successors
and assigns, and shall be binding upon the Borrower and the Guarantors, and
their respective successors and assigns. 
Neither the Borrower nor either of the Guarantors shall assign, sell,
convey or otherwise transfer any of its rights or obligations under the 2008
Loan or the 2008 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 2008 Loan and
the 2008 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 2008 Loan and the 2008 Loan Documents and
shall be entitled to enforce all the rights and remedies of the Lender under the
2008 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

 

106

 

Borrower
and the Guarantors expressly agrees that it will assert no claims or defenses
that it may have against the Lender against any Permitted Lender Assignee,
except those specifically available under this Agreement.  In the event that the Borrower or any Guarantor
shall become directly liable for any additional charges or levies by any
governmental or regulatory authority in consequence of the operation of this Section 10.8,
the Borrower shall give the Lender notice thereof and thereafter the Lender
shall indemnify the Borrower or the Guarantor, as applicable, in full for any
such charges or levies.  The Borrower and
the Guarantors shall be given written notice of any such assignment.  The Borrower and the Guarantors shall
cooperate with and perform the reasonable requirements of the Permitted Lender
Assignee, but the costs and expenses, including reasonable legal fees and
disbursements relating directly to or arising directly out of any such
assignment shall not be the expense of the Borrower or the Guarantors.

 

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 2008 Loan Documents, provided such disclosure is not in violation of any
applicable securities laws, rules or regulations and such potential
Permitted Lender Assignee enters into a typical and customary confidentiality
agreement in favour of the Borrower and the Guarantors.

 

10.10                                                                 Right to Cure

 

The
Lender may from time to time, in its sole and absolute discretion (but shall
have no obligation to do so), for the Borrower’s account and at the Borrower’s
expense, pay any amount or do any act required of the Borrower or a Guarantor
hereunder or required under the 2008 Loan Documents or requested by the Lender
to preserve, protect, maintain or enforce any 2008 Loan, any of the Mortgaged
Properties or any other Collateral, and which the Borrower or a Guarantor fails
to pay or do or cause to be paid or done, including, without limitation,
payment of insurance premiums, taxes or assessments, warehouse charge,
finishing or processing charge, landlord’s claim, and any other lien upon or
with respect to the Mortgaged Properties or any other Collateral.  Any payment made or other action taken by the
Lender pursuant to this Section shall be without prejudice to any right to
assert an Event of Default hereunder and to pursue the Lender’s other rights
and remedies with respect thereto.

 

10.11                                                                 Forbearance by the Lender Not a Waiver

 

Any
forbearance by the Lender in exercising any right or remedy under any of the
2008 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 2008 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 2008
Loan, nor shall the Lender’s receipt of any awards, proceeds or damages operate
to cure or waive the Borrower’s or any of the Guarantors’ default in payment or
sums secured by any of the 2008 Loan Documents. With

 

107

 

respect
to all 2008 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 2008 Loan Documents or to any action brought to enforce
any obligation secured by any of the 2008 Loan Documents.

 

10.13                                                                 Relationship

 

The
relationship between the Lender and the Borrower and the Guarantors shall be
that of creditor-debtor only. No term in this Agreement or in the other 2008
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.

 

10.14                                                                 Time of Essence

 

Time
is of the essence of this Agreement and each of the other 2008 Loan Documents
and the performance of each of the covenants and agreement contained herein and
therein.

 

10.15                                                                 Service of Process/Venue

 

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

 

10.16                                                                 Jury Trial Waiver

 

THE
BORROWER, THE GUARANTORS AND THE LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO
A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THE
SUBJECT MATTER OF THIS AGREEMENT AND THE BUSINESS RELATIONSHIP THAT IS BEING
ESTABLISHED. THIS WAIVER IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY
THE BORROWER, THE GUARANTORS AND THE LENDER, THE BORROWER AND EACH GUARANTOR
ACKNOWLEDGES THAT NEITHER THE LENDER NOR ANY PERSON ACTING ON BEHALF OF THE
LENDER HAS MADE ANY REPRESENTATIONS OF FACT TO INCLUDE THIS WAIVER OF TRIAL BY
JURY OR

 

108

 

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 2008 Loan Documents is intended as the final
expression of the agreement between the Borrower, the Guarantors and the
Lender. All prior discussions, negotiations and agreements are of no further
force and effect. This Agreement can be modified only in writing executed by
all parties and the written agreement may not be contradicted by any evidence
of any alleged oral agreement.

 

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,
incompetence or dissolution of any of the Borrower or any of the Guarantors).

 

10.19                                                                 No Third Party Beneficiaries

 

This
Agreement, the Security and the other 2008 Loan Documents are made for the sole
benefit of the Lender, the Borrower and the Guarantors, and no other party
shall have any legal interest of any kind under or by reason of any of the
foregoing. Whether or not the Lender elects to employ any or all the rights,
powers or remedies available to it under any of the foregoing, the Lender shall
have no obligation or liability of any kind to any third party by reason of any
of the foregoing or any of the Lender’s actions or omissions pursuant thereto
or otherwise in connection with this transaction.

 

10.20                                                                 No Brokers

 

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

 

109

 

10.21                                                                 Execution in
Counterparts

 

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

 

10.22                                                                 Contribution by
Guarantors with Respect to Obligations.

 

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

 

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

 

This Section 10.22
is intended only to define the relative rights of the Guarantors, and nothing
set forth in this Section 10.22 is intended to or shall impair the
obligations of the Guarantors, jointly and severally, to pay any amounts as and
when the same shall become due and payable in accordance with the terms of the
respective Guarantees and Indemnity given by each of them in connection with
this Agreement.

 

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

 

The rights of
the indemnifying Guarantors against other Guarantors under this Section 10.22
shall be exercisable only upon the full and irrevocable payment of the
Obligations in cash and the termination of this Agreement, including, without
limitation, the termination of the 2008 Loan commitment hereunder.

 

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

 

The covenants
and agreements contained in the 2008 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

 

110

 

Section 10.22,
all covenants and agreements of the Borrower and the Guarantors shall be joint
and several. In exercising any rights under the 2008 Loan Documents or taking
any actions provided for therein, the Lender may act through its employees,
agents or independent contractors as authorized by the Lender.

 

10.24                                                                 Loss
of Borrower Note

 

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

 

10.25                                                                 Acknowledgment

 

THE BORROWER AND EACH GUARANTOR ACKNOWLEDGES THAT IT HAS THOROUGHLY READ
AND REVIEWED THE TERMS AND PROVISIONS OF THIS AGREEMENT, THE ATTACHED SCHEDULES
AND THE 2008 LOAN DOCUMENTS AND IS FAMILIAR WITH THE TERMS OF SAME; THAT THE
TERMS AND PROVISIONS CONTAINED IN THIS AGREEMENT HAVE BEEN THOROUGHLY READ BY
THE BORROWER AND EACH GUARANTOR AND ARE CLEARLY UNDERSTOOD AND FULLY AND
UNCONDITIONALLY CONSENTED TO BY THE BORROWER AND EACH GUARANTOR. THE BORROWER
AND EACH GUARANTOR HAS HAD FULL BENEFIT AND ADVICE OF COUNSEL OF ITS SELECTION,
IN REGARD TO UNDERSTANDING THE TERMS, MEANING, AND EFFECTS OF THIS AGREEMENT.
THE BORROWER AND EACH GUARANTOR FURTHER ACKNOWLEDGES THAT ITS EXECUTION OF THIS
AGREEMENT AND THE 2008 LOAN DOCUMENTS IS DONE FREELY, VOLUNTARILY AND WITH FULL
KNOWLEDGE, AND WITHOUT DURESS, AND THAT IN EXECUTING THIS AGREEMENT AND THE
2008 LOAN DOCUMENTS, THE BORROWER AND EACH GUARANTOR HAS RELIED ON NO OTHER
REPRESENTATIONS, EITHER WRITTEN OR ORAL, EXPRESS OR IMPLIED, MADE TO IT BY ANY
OTHER PARTY TO THE AGREEMENT; AND THAT THE CONSIDERATION RECEIVED BY THE
BORROWER AND EACH GUARANTOR UNDER THIS AGREEMENT AND THE 2008 LOAN DOCUMENTS
AND HAS BEEN ACTUAL AND ADEQUATE.

 

[Intentionally
Left Blank]

 

111

 

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

 

	
   

  	
  MAGNA ENTERTAINMENT CORP.,

  as Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   Name:

  	
  Blake Tohana

  
	
   

  	
   

  	
   Title:

  	
  Executive Vice President

  and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   Name:

  	
  William Ford

  
	
   

  	
   

  	
   Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  We have authority to bind the Corporation.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PACIFIC RACING ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   Name:

  	
  Blake Tohana

  
	
   

  	
   

  	
   Title:

  	
  Executive Vice President

  and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   Name:

  	
  William Ford

  
	
   

  	
   

  	
   Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  We have authority to bind the Corporation.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MEC LAND HOLDINGS

  (CALIFORNIA) INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   Name:

  	
  Blake Tohana

  
	
   

  	
   

  	
   Title:

  	
  Executive Vice President

  and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   Name:

  	
  William Ford

  
	
   

  	
   

  	
   Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  We have authority to bind the Corporation.

  

 

 

	
   

  	
  THE SANTA ANITA COMPANIES,

  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   Name:

  	
  Blake Tohana

  
	
   

  	
   

  	
   Title:

  	
  Executive Vice President

  and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   Name:

  	
  William Ford

  
	
   

  	
   

  	
   Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  We have authority to bind the Corporation.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LOS ANGELES TURF CLUB,

  INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   Name:

  	
  Blake Tohana

  
	
   

  	
   

  	
   Title:

  	
  Executive Vice President

  and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   Name:

  	
  William Ford

  
	
   

  	
   

  	
   Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  We have authority to bind the Corporation.

  

 

 

	
   

  	
  SOUTHERN MARYLAND AGRICULTURAL ASSOCIATION,
  a joint venture formed under the laws of the State of Maryland, by its
  members, PRINCE GEORGE’S RACING, INC. and
  SOUTHERN MARYLAND RACING, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  PRINCE GEORGE’S RACING, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Blake Tohana

  
	
   

  	
   

  	
  Title:

  	
  Executive
  Vice President,

  
	
   

  	
   

  	
  Finance

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Name:

  	
  William Ford

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  SOUTHERN MARYLAND RACING,

  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Blake Tohana

  
	
   

  	
   

  	
  Title:

  	
  Executive
  Vice President,

  
	
   

  	
   

  	
  Finance

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Name:

  	
  William Ford

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  We have authority to bind the Association.

  

 

 

	
   

  	
  LAUREL RACING ASSOCIATION LIMITED PARTNERSHIP
  a partnership formed under
  the laws of the State of Maryland, acting through its General Partner, LAUREL RACING ASSOC., INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Blake Tohana

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President,

  Finance

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  William Ford

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  We have authority to bind the Corporation.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE MARYLAND JOCKEY CLUB

  OF BALTIMORE CITY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Blake Tohana

  
	
   

  	
   

  	
  Title:

  	
  Title:  Executive Vice

  President, Finance

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  William Ford

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  We have authority to bind the Corporation.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MARYLAND RACING, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Blake Tohana

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  William Ford

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  We have authority to bind the Corporation.

  

 

 

	
   

  	
  THISTLEDOWN, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Blake Tohana

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  William Ford

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  We have authority to bind the Corporation.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MEC MARYLAND INVESTMENTS

  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Blake Tohana

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  William Ford

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  We have authority to bind the Corporation.

  

 

 

	
   

  	
  30000 MARYLAND INVESTMENTS

  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Blake Tohana

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  William Ford

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  We have authority to bind the Corporation.

  

 

 

	
   

  	
  MID ISLANDI SF., acting through its

  Zug Branch

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Thomas Schultheiss

  
	
   

  	
   

  	
  Title:

  	
  Branch Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Peter Nideroest

  
	
   

  	
   

  	
  Title:

  	
  Branch Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  We have authority to bind the Partnership.

  

 

 

SCHEDULE A

 

Borrowing Notice

 

TO:                            MID Islandi sf., acting through its Zug Branch

 

RE:                              Magna Entertainment Corp.

 

Reference is
made to a loan agreement (the “2008 Loan Agreement”)
dated as of December     , 2008 between Magna
Entertainment Corp., as Borrower, the Guarantors and the Lender.  All terms used in this Borrowing Notice which
are defined in the 2008 Loan Agreement have the meanings attributed thereto in
the Bridge Loan Agreement.

 

The Borrower
hereby requests an Advance as follows:

 

	
  1.

  	
  Amount of Advance:

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Borrowing Date:

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Payment instructions (if any):

  	
   

  

 

Except as
specifically qualified in the Disclosure Schedule, all of the representations
and warranties of the Borrower in Article 5 of the 2008 Loan Agreement are
true and correct on the date hereof as if made on and as of the date hereof.

 

No Default or
Event of Default has occurred and is continuing nor is it reasonably
anticipated that any Default or Event of Default will occur immediately after
giving effect to the aforementioned Advance.

 

Except as
disclosed in writing by the Borrower to the Lender, no Material Adverse Change
since the date of the last Advance (or, in the case of the initial Advance, the
Closing Date) has occurred.

 

DATED this
         day of
                        ,
              .

 

	
   

  	
  MAGNA ENTERTAINMENT CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
    Name:

  	
  Blake Tohana

  
	
   

  	
   

  	
    Title:

  	
  Executive Vice President and

  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    Name:

  	
  William Ford

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
    Title:

  	
  Secretary

  

 

 

SCHEDULE B

 

Properties

 

1.                                                                                      Golden Gate Fields Property

 

Owner: MEC Land Holdings (California) Inc.

 

Description: See Exhibit B-1

 

2.                                                                                      Santa Anita Property

 

Owner:
The Santa Anita
Companies, Inc.

 

Description:
See Exhibit B-2

 

3.                                                                                      Bowie Property

 

Owner:
Southern Maryland Agricultural Association

 

Description:
See Exhibit B-3

 

4.                                                                                      Laurel Property

 

Owner:
Laurel Racing Association
Limited Partnership,  acting
through its general partner, Laurel Racing Assoc., Inc.

 

Description:
See Exhibit B-4

 

5.                                                                                      Pimlico Property

 

Owner:
The Maryland Jockey Club of Baltimore City, Inc.

 

Description: See
Exhibit B-5

 

 

EXHIBIT
B-1

 

DESCRIPTION
OF THE GOLDEN GATE FIELDS PROPERTY

 

THE LAND
REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF ALBANY/BERKELEY, COUNTY OF
ALAMEDA, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

 

Parcel D:

 

Real property
partly in the city of Albany, and partly in the city of Berkeley, County of
Alameda, State of California .

 

An irregular
shaped parcel of land in the cities of Albany and Berkeley, County of Alameda,
State of California, being portions of Lots 13, 14, 22 through 26, In section
33, Township 1 North, Range 4, West, Mount Diablo Base and Meridian, and the
uplands, formerly called South Cerrito, now known as Point Fleming and adjacent
Marsh Lands easterly of the Meander line of ordinary high tide, as shown on
that certain Map entitled “Map No. 4 of Salt Marsh and Tide Lands situated
in the County of Alameda, State of California “certified copies of which are on
file with the State Lands, Commission of California and with the Recorder of
the City and Count of San Francisco; portions of lots 5 and 6, section 4,
Township 1 South Range 4 west; Mount Diablo Base & Meridian and a
portion of the land granted to Berkeley Waterfront Company described in Article II
of Agreement dated March 10, 1936, recorded in Book 3306 Page 437,
Official Records of said County, said Parcel being more particularly described
as follows:

 

Commencing at
the intersection of the boundary. line between the cities of Berkeley and
Albany with the westerly line of said section 33; thence north 75°39’55” east,
154.82 feet to a line that is parallel with and distant easterly 150.00 feet at
right angles from said westerly section line, which point is the true point of
beginning for this description; thence from said true point of beginning, along
said parallel line due north, a distance of 3171.10 feet, to its intersection
with the southerly line of Buchanan Street (80.00 feet wide); thence due east
thereon, a distance of 1095.46 feet to the beginning of a tangent curve therein
concave southwesterly having a radius of 580.00 feet; thence southeasterly
along said line of said Street, tangent to said curve south 36°09’00” east
63.49 feet; thence along a northwesterly line of said Street, which is the
northeasterly prolongation of a radial line of a curve therein concave southwesterly
having a radius of 765.00 feet, south 53°44’02” west, 5.89 feet; thence
southeasterly, along said last mentioned curve Street line, a distance of
326.67 feet; thence along a westerly line of said Street, tangent to said
curve, south 11°47’58” east, 596.12 feet to the beginning of a non-tangent
curved westerly line of east shore state highway, which is a curve concave
easterly, having a radius of 3060.00 feet (radial to said point bears south
83°00’49” west) thence southerly along said last mentioned westerly curved
line, a distance of 206.19 feet to the end thereof (radial to said point bears
south 79°09’11” west); thence continuing along said westerly highway line, the
following described courses: south 12°01’20 east, 97.96 feet to the beginning
of a non-tangent curve concave easterly, having a radius of 5052.0 feet (a
radial to said point bears south 80°03’14” west); thence southerly along said
last mentioned curve, a distance of 266.64 feet; thence tangent to said curve,
south 12°58’12” east 33.08 feet to the beginning of a tangent curve concave
westerly, having a radius of 9948.0 feet; thence southerly, along said last
mentioned curve, a 

 

 

distance of
202.56 feet; thence tangent to said curve, south 11°48’12” east, 367.34 feet;
thence south 9°53’35” east 679.01 feet; thence south 4°16’44” east, 597.54 feet
to the beginning of a tangent curve concave easterly, having a radius of
3052.00 feet; thence southerly along said last mentioned curve, a distance of
418.62 feet; thence tangent to said curve south 12°08’16” east, 43.12 feet to
the beginning of a tangent curve concave northwesterly, having a radius of
40.00 feet; thence along said last mentioned curve, a distance or 61.29 feet;
thence along northerly line of said highway, tangent to said curve, south 75°39’25”
west 80.63 feet to a westerly line of said highway; thence south 14°20’35” east
thereon, 23.00 feet to its intersection with a northerly line of Gilman Street
(80.00 feet wide); thence south 75°39’25” west thereon, 400.00 feet to the
easterly line of Parcel 1, described in the Deed to the City of Berkeley,
recorded as Reel 195, Image 217, Official Records of said County; thence north
14°20’35” west thereon, 90 feet to the northerly line of said Parcel 1, thence
south 75°30’25” west thereon, 446.78 feet; thence north 25°59’00” west, 1418.53
feet to said boundary line between the cities of Berkeley and Albany; thence
south 75°39’55” west thereon, 770.00 feet to the true point of beginning

 

Excepting
therefrom, that portion lying within the land described in that certain final
order of condemnation recorded. March 17, 1949, Book 5753, Page 171,
Official Records

 

	
  A. P. Nos.

  	
   

  	
  066-2680-003-01

  
	
   

  	
   

  	
  066-2680-3-3

  
	
   

  	
   

  	
  066-2680-3-4

  
	
   

  	
   

  	
  066-2686-016

  
	
   

  	
   

  	
  066-2686-017

  
	
   

  	
   

  	
  066-2535-001

  
	
   

  	
   

  	
   

  
	
  APN:     
  66-2686-17/60-2535-01

  

 

 

EXHIBIT
B-2

 

DESCRIPTION
OF THE SANTA ANITA PROPERTY

 

Parcel A:

 

Those portions
of Lots 1 and 5 of Tract 949, in the City of Arcadia, as shown on map recorded
in Book 17 Page 13 of maps; in the office of the County Recorder of said
county, described as follows:

 

Beginning at
the Southeast corner of Parcel Map. No. 4626, as shown on map filed in
Book 51 Page 50 of Parcel Maps, in the office of the County Recorder of
said county, being a point on the North line of Huntington Drive, 195.00 feet
in width; thence along the Easterly and Northeasterly boundary of said Parcel
Map as follows:

 

North 3E 53’00”
East 475.168 feet to the beginning of tangent curve, concave to the East and
having a radius of 1200.00 feet; thence Northerly along said curve through a
central angle of 15E 31’48” an arc distance of 325.26 feet; thence tangent to
said curve North 19E 24’48” East 534.43 feet to the beginning of a tangent
curve, concave to the West and having a radius of 350.00 feet; thence Northerly
and Northwesterly along said curve through a central angle of 71E 22’48” an arc
distance of 436.03 feet; thence tangent to said curve North 51E 58’00” West
873.36 feet; thence continuing along said boundary of Parcel Map No, 4626 North
66E 58’00” West 154.55 feet and North 51E 58’00” West 437.83 feet to the most
Northerly corner of said Parcel Map, being a point on the Southeasterly line of
Baldwin Avenue, 100.00 feet in width; thence Northeasterly along said
Southeasterly line of Baldwin Avenue, as it now exists, to the intersection with
the Westerly prolongation of the Southerly boundary line of Tract 15318 as
shown on map recorded in Book 427 Pages 34 and 35 of said Maps, shown
thereon as having a bearing of North 88E 57’33” East; thence North 88E 57’33”
East along said Southerly boundary line to the angle point in the Southerly
line of Lot 38 of said Tract 15318; thence continuing along the boundary line
of said Tract 15318, and the Southerly boundary line of Tract 14940 as shown on
map recorded in Book 350 Pages 48 to 50 inclusive of maps, North 68E 46’53”
East 2265.62 feet to the most Easterly corner of Lot 81 of said Tract 14940,
being a point on the Southwesterly line of Colorado Place; thence South 30E 33’16”
East 2171.20 feet along said Southwest line of Colorado Place, 80.00 feet in
width, as it now exist, to the beginning of a tangent curve therein, concave to
the Northeast and having a radius of 756.78 feet; thence Southeasterly along
said curve 554.82 feet to the intersection with the curved Northwesterly line
of Huntington Drive, 80.00 feet in width, said curve being concave to the
Southeast having a radius of 995.37 feet; thence Southwesterly along said curve
607.48 feet; thence Southwesterly along the Northwesterly line of said
Huntington Drive, as it may exists, 2843.30 feet to the beginning of a tangent
curve therein concave to the Northwest and having a radius of 915.20 feet;
thence Southwesterly and Westerly along said curve 883.99 feet; thence Westerly
along the Northerly line of said Huntington Drive, as it now exists to the
point of beginning.

 

Except
therefrom that portion of said land lying within Parcel 1 of Parcel Map No. 15852,
in the City of Arcadia, as per map recorded in Book 179 Pages 93 and 94 of
Parcel Maps, in the office of the County Recorder of said county.

 

 

Also except
therefrom those portions of the above described parcel lying within Parcels 3
and 4 of Parcel Map No. 23862, in the City of Arcadia, as per map filed in
Book 261 Pages 91 through 95 inclusive of maps, in the office of the
County Recorder of said county.

 

Parcel B: (Includes Parcels B1 and B2)

 

Parcel B1:

 

An easement
for ingress and egress and access, as reserved in the certain Short form lease
(the “Lease”), dated April 6, 1972, recorded September 14, 1973 as
Instrument No. 824, as amended by an American Short form of Lease III,
recorded January 25, 1974 as Instrument No. 473, and as amended by a
Second Amended, Short Form of Lease III, recorded January 9, 1978 as
Instrument No. 78-71478, Official Records, Official Records the term and upon
and subject to all the Provisions contained in the lease, as amended, across
that portion of Parcel 3 of Parcel Map No. 6374, in the City of Arcadia,
as per map recorded in Book 89 Pages 76 and 77 of Parcel Maps, in the
office of the County Recorder of said county, described in the lease as
Easement No. 2 on Exhibit “D-4” attached thereto.

 

Parcel B2a:

 

An easement
for ingress and egress and access, as reserved in that certain Short form lease
(the “Lease”), dated April 6, 1972, recorded September 14, 1973 as
Instrument No. 824, as amended by an Amended Short Form of Lease 1,
recorded January 25, 1974 as Instrument No. 472, as amended by a
Short Form of Lease IV, recorded January 19, 1978 as Instrument No. 78-71479,
Official Records, and as amended by an Amendment to Short Form of Lease
IV, recorded December 30, 1993 as Instrument No. 93-2542579, Official
Records, for the term and upon and subject to all the provisions contained in
the lease, as amended, across that portion of Parcel 3, of Parcel Map No. 23862,
in the City of Arcadia, as per map filed in book 261 Pages 91 to 95
inclusive of Parcel Maps, in the office of the County Recorder of said county,
described in the lease as Easement No. 1 on Exhibit “D-6” attached
thereto, lying below an Elevation of 466.34 feet.

 

Parcel C:

 

Non-exclusive
easements, as created by a Declaration of Covenants, Conditions and
Restrictions and Grant of Easements, recorded April 4, 1988 as Instrument No. 88-453704,
Official Records, as amended by a document recorded December 14, 1993 as
Instrument No. 93-2439878, for:

 

1)             Ingress and egress for pedestrian
and vehicular traffic within areas improved from time to time for use as
parking facilities and for pedestrian and vehicular access for parking motor
vehicles in the described parking areas.

 

2)             Sanitary sewer system located
within the area described on Exhibit “B” attached thereto.

 

3)             Ingress and egress for pedestrian
and vehicular traffic located within the area described on Exhibit “D”
attached thereto, and

 

4)             Surface water drainage;

 

 

All as
described and defined in said Declaration, within portions of Parcel 1 of
Parcel Map No. 15852, in the City of Arcadia, as per map filed in book 179
Pages 93 and 94 of Parcel Maps in the office of the County Recorder of
said county.

 

Assessor’s
Parcel No: 5775-001-021/025

 

 

EXHIBIT B-3

 

DESCRIPTION OF
BOWIE PROPERTY

 

PART 1:

 

BEGINNING for the same at a point on the easterly right of way line of
Race Track Road (variable width R/W) as shown on Prince George’s County Right
of Way Plat No. 1394, said point being 25.00 feet easterly of and
perpendicular to baseline of right of way station 4+38.73 and running with and
along said right way line

 

1)                                    North 17°40’24” East 410.15 feet to
a point being 25.00 feet easterly of and perpendicular to baseline station
8+48.88; thence

 

2)                                    North 18°58’27” East 191.80 feet to
a point; thence

 

3)                                    North 45°38’48” West 130.29 feet to
a point; thence

 

4)                                    North 32°32’09” West 12.94 feet to a
point; thence

 

5)                                    North 45°35’24” West 67.09 feet to a
point being 18.00 feet northeasterly of and perpendicular to baseline station
I+84.84 (Ahead) or 11+84.84 (Back); thence

 

6)                                    North 45°35’22” West 915.34 feet to
a point; thence

 

7)                                    North 46°00’48” West 650.01 feet to
a point; thence

 

8)                                    North 45°23’36” West 143.88 feet to
a point being 22.00 feet northeasterly of and perpendicular to baseline station
18+94.51 (Ahd) or 18+93.87 (Bk) as shown on P.G. Co. Right of Way Plat No. 1396;
thence

 

9)                                    North 45°54’04” West 98.24 feet to a
point; thence

 

10)                              270.81 feet along the arc of a curve
deflecting to the left having a radius of 1927.74 feet and a chord bearing and
distance of North 53°08’07” West 270.58 feet to a point being 25.00 feet
northerly of and perpendicular to baseline station 22+58.81; thence

 

11)                              204.25 feet along the arc of a curve
deflecting to the left having a radius of 3025.00 feet and a chord bearing and
distance of North 59°05’39” West 204.21 feet to a point being 25.00 feet
northerly of and perpendicular to baseline station 24+61.37; thence

 

12)                              North 61°01’42” West 176.96 feet to
a point being 25.00 feet northerly of and perpendicular to baseline station
26+38.33; thence

 

13)                              88.58 feet along the arc of a curve
deflecting to the right having a radius of 875.00 feet and a chord bearing and
distance of North 58°07’42” West 88.54 feet to a point being

 

25.00 feet northerly of and
perpendicular to baseline station 27+29.51 (Ahd) or 27+29.44 (Bk) as shown on
P.G. Co. Right of Way Plat No. 1397; thence

 

 

14)                              North 55°13’41” West 21.28 feet to a
point; thence leaving said right of way line of Race Track Road and running
with the southeasterly line of Lots 3 and 4 as shown on a plat of subdivision
entitled.

 

This commitment is invalid unless the insuring provisions and Schedules
A and B are attached.

“Addition to Bowie, Lots 3 and 4” recorded in Plat Book VJ 189 as Plat No. 69
and the southwesterly extension thereof

 

15)                              North 47°24’13’ East 287.88 feet to
an iron pipe found, said point being the northeast corner of said Lot 4; thence
running with and along the northerly line of said Lot 4 and Lot 1 as shown on a
plat of subdivision entitled “Lots 1 and 2, Addition to Bowie” recorded in Plat
Book WWW 78 as Plat No. 31

 

16)                              North 60°29’43” West 302.60 feet to
a point, said point being the northerly most corner of said Lot 1; thence
running with and along the easterly outline of the land of the
Maryland-National Capital Park & Planning Commission (MNCPPC) as
described as Parcel 2 in a deed recorded in Liber 13708 Folio 619

 

17)                              446.88 feet along the arc of a curve
deflecting to the left having a radius of 4844.19 feet and a chord bearing and
distance of North 57°56’33” East 446.72 feet to a point at the northeast corner
of said parcel; thence running with and along the southerly outline of the land
of the MNCPPC as described as Parcel B in a deed recorded in Liber 14469 Folio
673 the following courses and distances:

 

18)                              221.78 feet along the arc of a curve
deflecting to the right having a radius of 378.50 feet and a chord bearing and
distance of South 62°40’07” East 218.62 feet to a point; thence

 

19)                              South 50°14’57” East 265.00 feet to
a point; thence

 

20)                              South 48°55’47” East 147.73 feet to
a point; thence

 

21)                              South 51°35’47” East 29.61 feet to a
point; thence

 

22)                              North 33°11’03” East 60.00 feet to a
point on the outline of the land of MNCPPC as described as Parcel 1 in a deed
recorded in Liber 13708 Folio 619; thence running with and along said property
the following courses and distances:

 

23)                              South 51°31’43” East 3.55 feet to an
iron pipe found; thence

 

24)                              North 32°17’12” East 6.06 feet to an
iron pipe found; thence

 

25)                              South 70°45’50” East 119.15 feet to
an iron pipe found; thence

 

26)                              North 66°39’51” East 1719.20 feet to
a point on the southerly bank of the Patuxent River; thence running with and
along the said southerly bank of the Patuxent River the following eleven (11)
courses and distances:

 

27)                              South 17°18’30” East 131.92 feet to
a point; thence

 

28)                              South 24°01’21” East 115.09 feet to
a point; thence

 

29)                              South 38°14’19” East 93.53 feet to a
point; thence

 

30)                              North 86°58’13” East 106.68 feet to
a point; thence

 

 

31)                              South 25°04’22” East 91.l8 feet to a
point; thence

 

32)                              South 08°28’21” West 115.62 feet to
a point; thence

 

33)                              South 21°55’ 13” East 243.26 feet to
a point; thence

 

34)                              South 41°35’37” East 173.63 feet to
a point; thence

 

35)                              South 16°26’25” East 134.83 feet to
a point; thence

 

36)                              South 35°58’09” East 114.34 feet to
a point; thence

 

37)                              South 45°01 ‘43” East 140.73 feet to
a point on the westerly outline of Parcel H as shown on a plat of subdivision
entitled “Plat Twenty, Saddlebrook” recorded in Plat Book VJ 171 as Plat No. 82;
thence leaving said bank of the Patuxent River and running with and along the
said westerly outline of Parcel H as shown on said “Plat Twenty, Saddlebrook”
and a plat entitled “Plat Eighteen, Saddlebrook” recorded in Plat Book VJ 172
as Plat No. 48 the following seven (7) courses and distances:

 

38)                              South 42”08’43” West 253.81 feet to
a point; thence

 

39)                              South 07°21’ 17” East 460.00 feet to
a point; thence

 

40)                              South 23°08’43” West 215.00 feet to
a point; thence

 

41)                              South 40°58’03” East 327.90 feet to
a point; thence

 

42)                              South 02°12’48” West 337.96 feet to
a point; thence

 

43)                              South 45°28’41” West 471 feet to a
point; thence

 

44)                              South 02°07’55” West 150.43 feet to
a point; thence running with the northerly outline of Parcel D as shown on
plats of subdivision entitled “Plat Five, Saddlebrook” recorded in Plat Book No. 72
the following three (3) courses and distances:

 

45)                              North 88°10’24” West 342.41 feet to
a point; thence

 

46)                              South 79°20’ 16” West 329.69 feet to
a point; thence

 

47)                              South 67°45’27” West 405.81 feet to
the point of beginning.

 

CONTAINING 5,604,297 square feet or 128.6570 acres of land.

 

PART 2:

 

BEGININNG for the same at a point, said point being at the northerly
end of the division line between Lot 56 and Lot 59, Block F as shown on plats
of subdivision entitled “Plat Sixteen, Saddlebrook West” recorded in Plat Book
VJ 179 as Plat No. 32 and “Plat Seventeen, Saddlebrook West” recorded in
Plat Book VJ 179 as Plat No. 33 and running with the northerly outline of
said “Plat Sixteen” and plats entitled “Plat Fifteen, Saddlebrook West” and “Plat
Fourteen, Saddlebrook West” recorded in Plat Books VJ 179 as Plat Nos. 31 and
30, respectively

 

 

North 65°56’41”
West 1719.11 feet to a point being the northwest corner of Lot 37, Block F as
shown on said “Plat Fourteen”; thence running with the easterly outline of
subdivision plats entitled” Plat Thirteen, Saddlebrook West” and “Plat
Thirty-two, Saddlebrook West” recorded in Plat Books VJ 179 as Plat Nos. 29 and
48, respectively

 

48)                              North 09°32’42” East 66.64 feet to a
point; thence

 

49)                              North 28°50’20” East 427.02 feet to
a point; thence

 

50)                              North 86°20’41” East 117.11 feet to
a point; thence

 

51)                              South 85°45’54” East 166.25 feet to
a point; thence

 

52)                              North 31°24’21” East 216.13 feet to
a point; thence

 

53)                              North 60°34’43” East 276.67 feet to
a point; thence

 

54)                              North 60°34’43” East 16.74 feet to a
point on the southerly right of way line of Race Track Road (variable width
R/W) as shown on P.G. Co. Right of Way Plat No. 1396; thence running with
and along said right of way line the following courses and distances:

 

55)                              20.28 feet along the arc of a curve
deflecting to the right having a radius of 2975.00 feet and a chord bearing and
distance of South 57°21’18” East 20.28 feet to a point being 25.00 feet
southerly of and perpendicular to baseline station 22+58.81; thence

 

56)                              359.52 feet along the arc of a curve
deflecting to the right having a radius of 1877.74 feet and a chord bearing and
distance of South 51°40’29” East 358.97 feet to a point being 25.00 feet
southerly of and perpendicular to base line station 18+94.51 (Ahd) or 18+93.87
(Bk); thence

 

57)                              South 46°11’23” East 793.56 feet to
a point; thence

 

58)                              South 45°35’22” East 283.89 feet to
a point; thence leaving said southerly road right of way line and running with
the westerly outline of said “Plat Seventeen, Saddlebrook West” the following
courses and distances:

 

59)                              South 45°18’24” West 278.92 feet to
a point; thence

 

60)                              South 42°09’34” West 100.41 feet to
a point; thence

 

61)                              South 34°52’32” West 67.65 feet to a
point; thence

 

62)                              South 23°25’24” West 170.69 feet to
the point of beginning.

 

CONTAINING 1,436,571 square feet or 32.9791 acres of land.

As shown on an ALTA/ACSM Land Title Survey prepared by
Greenman-Pedersen, Inc. entitled “Property of Southern Maryland
Agricultural Association” dated April 26, 2002

(Drawing: ABO12015-bowie.dwg).

 

 

EXHIBIT B-4

 

DESCRIPTION OF
LAUREL PROPERTY

 

PART 1

 

Part of the Property of

 

Laurel Racing Association Limited Partnership

 

Anne Arundel County, Maryland

 

West of Brock Bridge Road

 

BEING A PORTION OF
THE LAND ACQUIRED BY LAUREL RACING ASSOCIATION LIMITED PARTNERSHIP, A MARYLAND
LIMITED PARTNERSHIP, BY TWO DEEDS; THE FIRST FROM LAUREL RACE COURSE, INC., A
MARYLAND CORPORATION, BY DEED DATED DECEMBER 10, 1984 AND RECORDED IN LIBER
3826 FOLIO 310, AND THE SECOND FROM WINDOM CARLETON MILLER, JR., ET AL, BY DEED
DATED JUNE 8, 2001 AND RECORDED IN LIBER 10472 FOLIO 22; ALL AMONG THE LAND
RECORDS OF ANNE ARUNDEL COUNTY, MARYLAND.

 

BEGINNING
FOR THE SAME AT A POINT ON THE NORTHERLY RIGHT OF WAY LINE OF MARYLAND ROUTE
198, SAID POINT BEING LOCATED 130.00 FEET RIGHT OF PC STATION 74+23.41 BK =
74+23.43 AHD, AS SHOWN ON STATE ROADS COMMISSION PLAT 48211; THENCE, BINDING ON
SAID RIGHT OF WAY, WITH COURSES REFERRED TO THE MARYLAND STATE PLANE COORDINATE
SYSTEM (NAD 83)

 

63)                                SOUTH 58°09’45” WEST
743.37 FEET TO A POINT; THENCE LEAVING SAID NORTHERLY RIGHT OF WAY LINE AND
RUNNING

 

64)                                NORTH 32°19’15” WEST
280.53 FEET TO A POINT; THENCE

 

65)                                NORTH 36°31’15” WEST
1309.18 FEET TO A POINT; THENCE

 

66)                                NORTH 70°16’15” WEST
72.00 FEET TO A POINT; THENCE

 

67)                                SOUTH 36°31’15” EAST
1367.58 FEET TO A POINT; THENCE

 

 

68)                                SOUTH 32°19’15” EAST
278.72 FEET TO A POINT ON THE SAID NORTHERLY RIGHT OF WAY LINE OF MARYLAND
ROUTE 198; THENCE RUNNING WITH AND ALONG SAME

 

69)                                SOUTH 58°09’45” WEST
832.97 FEET TO A POINT ON THE 3RD OR NORTH 80°06’57” WEST 267.98
FOOT LINE OF THE ABOVE SAID FIRST CONVEYANCE, SAID POINT ALSO BEING ON THE
EASTERN MOST BANK OF THE PATUXENT RIVER; THENCE RUNNING WITH AND ALONG SAID
BANK

 

70)                                NORTH 80°06’47” WEST
67.37 FEET TO THE END OF THE SAID THIRD LINE ; 
THENCE, BINDING ON THE 4TH THROUGH THE 22ND, LINE, ALONG THE
SAID BANK

 

71)                                SOUTH 82°28’44” WEST
213.84 FEET TO A POINT; THENCE,

 

72)                                NORTH 58°23’23” WEST
122.11 FEET TO A POINT; THENCE,

 

73)                                NORTH 34°01’00” WEST
96.52 FEET TO A POINT; THENCE,

 

74)                                NORTH 00°21’44” WEST
314.01 FEET TO A POINT; THENCE,

 

75)                                NORTH 14°02’00” WEST
239.14 FEET TO A POINT; THENCE,

 

76)                                NORTH 35°45’13” EAST
280.74 FEET TO A POINT; THENCE,

 

77)                                NORTH 03°24’51” EAST
184.49 FEET TO A POINT; THENCE,

 

78)                                NORTH 18°45’55” WEST
217.57 FEET TO A POINT; THENCE,

 

79)                                NORTH 03°10’57” EAST
162.25 FEET TO A POINT; THENCE

 

80)                                NORTH 41°33’49” WEST
141.68 FEET TO A POINT; THENCE,

 

81)                                NORTH 76°48’51” WEST
228.01 FEET TO A POINT; THENCE,

 

82)                                NORTH 47°14’35” WEST
144.36 FEET TO A POINT; THENCE,

 

 

83)                                NORTH 15°56’33” WEST
160.16 FEET TO A POINT; THENCE,

 

84)                                NORTH 29°38’31” WEST
349.97 FEET TO A POINT; THENCE,

 

85)                                NORTH 40°12’13” WEST
99.70 FEET TO A POINT ON THE SOUTHERLY RIGHT OF WAY LINE OF THE CSX
TRANSPORTATION RAILROAD (LIBER 89, FOLIO 94 AND LIBER 19, FOLIO 310); THENCE
RUNNING WITH AND ALONG SAME

 

86)                                NORTH 52°38’25” EAST
89.68 FEET TO A POINT; THENCE

 

87)                                NORTH 54°38’25” EAST
100.00 FEET TO A POINT; THENCE

 

88)                                NORTH 44°38’25” EAST
105.90 FEET TO A POINT; THENCE

 

89)                                NORTH 51°38’25” EAST
96.50 FEET TO A POINT; THENCE

 

90)                                NORTH 58°38’25” EAST
102.90 FEET TO A POINT; THENCE

 

91)                                NORTH 58°08’25” EAST
103.90 FEET TO A POINT; THENCE

 

92)                                NORTH 57°53’25” EAST
97.00 FEET TO A POINT; THENCE

 

93)                                NORTH 59°08’25” EAST
99.00 FEET TO A POINT; THENCE

 

94)                                SOUTH 29°51’13” EAST
10.00 FEET TO A POINT; THENCE

 

95)                                350.00 FEET ALONG THE
ARC OF A CURVE DEFLECTING TO THE RIGHT HAVING A RADIUS OF 3729.83 FEET AND A
CHORD BEARING AND DISTANCE OF NORTH 62°50’05” EAST 349.87 FEET TO A POINT;
THENCE

 

96)                                SOUTH 24°28’38” EAST
10.00 FEET TO A POINT; THENCE

 

97)                                650.00 FEET ALONG THE
ARC OF A CURVE DEFLECTING TO THE RIGHT HAVING A RADIUS OF 3719.83 FEET AND A
CHORD BEARING AND DISTANCE OF NORTH 70°31’44” EAST 649.17 FEET TO A POINT;
THENCE

 

 

98)                                NORTH 14°38’19” WEST
20.02 FEET TO A POINT; THENCE

 

99)                                NORTH 75°21’41” EAST
250.00 FEET TO A POINT; THENCE

 

100)                          NORTH 14°38’19” WEST 10.00
FEET TO A POINT; THENCE

 

101)                          NORTH 75°21’41” EAST 54.15
FEET TO A POINT; THENCE

 

102)                          NORTH 71°53’41” EAST 701.38
FEET TO A POINT; THENCE

 

103)                          NORTH 66°40’52” EAST 144.01
FEET TO A POINT; THENCE

 

104)                          NORTH 25°03’57” WEST 10.00
FEET TO A POINT; THENCE

 

105)                          NORTH 62°29’54” EAST 199.94
FEET TO A POINT; THENCE

 

106)                          NORTH 29°56’16” WEST 20.00
FEET TO A POINT; THENCE

 

107)                          NORTH 52°18’34” EAST 69.91
FEET TO A POINT; THENCE

 

108)                          NORTH 60°23’35” EAST 98.00
FEET TO A POINT; THENCE

 

109)                          NORTH 50°23’35” EAST 97.00
FEET TO A POINT; THENCE

 

110)                          NORTH 53°23’35” EAST 101.50
FEET TO A POINT; THENCE

 

111)                          NORTH 50°08’35” EAST 106.90
FEET TO A POINT; THENCE

 

112)                          NORTH 48°08’35” EAST 101.50
FEET TO A POINT; THENCE

 

113)                          NORTH 43°53’35” EAST 102.90
FEET TO A POINT; THENCE

 

114)                          NORTH 43°23’35” EAST 105.90
FEET TO A POINT; THENCE

 

 

115)                          NORTH 41°25’01” EAST 96.00
FEET TO A POINT; THENCE

 

116)                          NORTH 38°12’01” EAST 114.80
FEET TO A POINT; THENCE

 

117)                          NORTH 37°25’01” EAST 93.00
FEET TO A POINT; THENCE

 

118)                          NORTH 31°55’01” EAST 99.00
FEET TO A POINT; THENCE

 

119)                          NORTH 32°40’01” EAST 102.80
FEET TO A POINT; THENCE

 

120)                          NORTH 26°40’01” EAST 98.00
FEET TO A POINT; THENCE

 

121)                          NORTH 28°12’01” EAST 68.35
FEET TO A POINT ON THE SOUTHERLY RIGHT OF WAY LINE OF WHISKEY BOTTOM ROAD
(VARIABLE WIDTH R/W); THENCE RUNNING WITH AND ALONG SAID SOUTHERLY ROAD RIGHT
OF WAY LINE

 

122)                          SOUTH 62°54’57” EAST 98.61
FEET TO A POINT; THENCE

 

123)                          SOUTH 71°05’02” EAST 206.56
FEET TO A POINT; THENCE

 

124)                          229.96 FEET ALONG THE ARC OF
A CURVE DEFLECTING TO THE LEFT HAVING A RADIUS OF 1472.39 FEET AND A CHORD
BEARING AND DISTANCE OF SOUTH 64°28’24” EAST 229.72 FEET TO A POINT; THENCE

 

125)                          SOUTH 68°56’51” EAST 95.56
FEET TO A POINT; THENCE

 

126)                          SOUTH 26°14’41” EAST 40.69
FEET TO A POINT ON THE WESTERLY RIGHT OF WAY LINE OF BROCK BRIDGE ROAD (80’
R/W) AS DESCRIBED IN A DEED RECORDED IN LIBER 14201 AT FOLIO 501; THENCE
RUNNING WITH AND ALONG SAID WESTERLY ROAD RIGHT OF WAY LINE

 

127)                          SOUTH 16°27’30” WEST 149.56
FEET TO A POINT; THENCE\

 

128)                          310.17 FEET ALONG THE ARC OF
A CURVE DEFLECTING TO THE LEFT HAVING A RADIUS OF 2040.00 FEET AND A CHORD
BEARING AND DISTANCE OF SOUTH 12°06’09” WEST 309.87 FEET TO A POINT; THENCE

 

 

129)                          SOUTH 07°44’49” WEST 2141.48
FEET TO A POINT; THENCE

 

130)                          SOUTH 10°03’09” WEST 300.10
FEET TO A POINT; THENCE

 

131)                          SOUTH 34°40’39” WEST 26.60
FEET TO A POINT ON THE SAID NORTHERLY RIGHT OF WAY LINE OF MARYLAND ROUTE 198;
THENCE RUNNING WITH AND ALONG SAID NORTHERLY ROAD RIGHT OF WAY LINE

 

132)                          956.24 FEET ALONG THE ARC OF
A CURVE DEFLECTING TO THE LEFT HAVING A RADIUS OF 5408.89 FEET AND A CHORD
BEARING AND DISTANCE OF SOUTH 71°10’35” WEST 955.00 FEET TO A POINT; THENCE

 

133)                          NORTH 23°53’18” WEST 10.00
FEET TO A POINT; THENCE

 

134)                          344.75 FEET ALONG THE ARC OF
A CURVE DEFLECTING TO THE LEFT HAVING A RADIUS OF 5418.89 FEET AND A CHORD
BEARING AND DISTANCE OF SOUTH 64°17’20” WEST 344.69 FEET TO A POINT; THENCE

 

135)                          296.70 FEET ALONG THE ARC OF
A CURVE DEFLECTING TO THE LEFT HAVING A RADIUS OF 3949.72 FEET AND A CHORD
BEARING AND DISTANCE OF SOUTH 60°18’52” WEST 296.63 FEET TO THE POINT OF
BEGINNING;  CONTAINING 229.304 ACRES OF LAND.

 

PART 2

 

Part of the Property of

 

Laurel Racing Association Limited Partnership

 

Anne Arundel County, Maryland

 

East of Brock Bridge Road

 

BEING A PORTION OF
THE LAND ACQUIRED BY LAUREL RACING ASSOCIATION LIMITED PARTNERSHIP, A MARYLAND
LIMITED PARTNERSHIP, BY TWO DEEDS; THE FIRST FROM LAUREL RACE COURSE, INC., A
MARYLAND CORPORATION, BY DEED DATED DECEMBER 10, 1984 AND RECORDED IN LIBER
3826 FOLIO 310, AND THE SECOND FROM WINDOM CARLETON MILLER, JR., ET AL, BY DEED
DATED JUNE 8, 2001 AND RECORDED IN LIBER 10472 FOLIO 22; ALL AMONG THE LAND RECORDS
OF ANNE ARUNDEL COUNTY, MARYLAND.

 

BEGINNING
FOR THE SAME AT A POINT ON THE EASTERLY RIGHT OF WAY LINE OF BROCK BRIDGE ROAD
(80’ R/W), SAID POINT BEING AT THE END OF THE 13TH OR SOUTH 07°44’49”

 

 

WEST 1347.88
FOOT LINE AS DESCRIBED IN A DEED RECORDED IN LIBER 14201 FOLIO 501 (PART 1)
AND RUNNING WITH AND ALONG SAID ROAD RIGHT OF WAY LINE WITH COURSES REFERRED TO
THE MARYLAND STATE PLANE COORDINATE SYSTEM (NAD 83)

 

1)      NORTH
07°44’49” EAST 1347.89 FEET TO A POINT; THENCE

 

2)      54.97
FEET ALONG THE ARC OF A CURVE DEFLECTING TO THE RIGHT HAVING A RADIUS OF
1960.00 FEET AND A CHORD BEARING AND DISTANCE OF NORTH 08°33’01” EAST 54.97
FEET TO A POINT; THENCE

 

3)      SOUTH
80°49’13” EAST 32.92 FEET TO A POINT; THENCE

 

4)      NORTH
09°10’47” EAST 190.20 FEET TO A POINT; THENCE

 

5)      189.56
FEET ALONG THE ARC OF A CURVE DEFLECTING TO THE RIGHT HAVING A RADIUS OF
2929.28 FEET AND A CHORD BEARING AND DISTANCE OF NORTH 11°02’00” EAST 189.53
FEET TO A POINT; THENCE

 

6)      NORTH
66°03’31” EAST 46.68 FEET TO A POINT ON THE SOUTHERLY RIGHT OF WAY LINE OF
WHISKEY BOTTOM ROAD (VARIABLE WIDTH R//W); THENCE RUNNING WITH AND ALONG SAID
ROAD RIGHT OF WAY LINE

 

7)      SOUTH
70°02’32” EAST 348.71 FEET TO A POINT; THENCE

 

8)      SOUTH
71°02’30” EAST 702.33 FEET TO A POINT; THENCE

 

9)      SOUTH
65°07’35” EAST 297.96 FEET TO A POINT; THENCE

 

10)    SOUTH
69°08’53” EAST 160.55 FEET TO A POINT; THENCE

 

11)    SOUTH
71°35’33” EAST 137.33 FEET TO A POINT; THENCE

 

12)    SOUTH
72°10’39” EAST 175.34 FEET TO A POINT; THENCE LEAVING SAID SOUTHERLY ROAD RIGHT
OF WAY LINE AND RUNNING WITH AND ALONG THE WESTERLY

 

 

OUTLINE  OF  THE  LAND  OF  AUGUST  B.  PIPER  (LIBER  7242  FOLIO  384)  THE  FOLLOWING  TWO  (2)  COURSES  AND  DISTANCES  VIZ.:

 

13)    SOUTH
14°22’10” EAST 238.83 FEET TO A POINT; THENCE

 

14)    SOUTH
48°54’43” EAST 162.17 FEET TO AN IRON PIPE FOUND AT           THE END THEROF; THENCE RUNNING WITH AND ALONG THE WESTERLY
OUTLINE OF THE LAND OF ST. JACOBS LODGE NO. 28

 

15)    SOUTH
22°39’07” WEST 459.90 FEET TO A STONE FOUND; THENCE RUNNING WITH AND ALONG THE
NORTHERLY LINE OF THE LANDS OF MARYLAND CITY ACQUISITION CORP. (LIBER 6392
FOLIO 384), LAURELDALE BUSINESS CENTER (LIBER 4594 FOLIO 441) AND ANNE ARUNDEL
DEVELOPMENT GROUP, LLC (LIBER 12021 FOLIO 329)

 

16)    SOUTH
79°15’01” WEST 2082.14 FEET TO THE POINT OF BEGINNING, PASSING THRU AN IRON
PIPE FOUND 1051.10 FEET FROM THE BEGINNING THEREOF; CONTAINING 58.045 ACRES OF LAND.

 

 

EXHIBIT B-5

 

DESCRIPTION OF PIMLICO
PROPERTY

 

Metes
and Bounds Description

Being Partly the Lands
Conveyed to

The Maryland Jockey Club of
Baltimore City, Inc.

And

Being Partly Lots 1-10,
16-19, 29, 46-50, 59-65 & 80-83

C.J. Hull’s Subdivision of
Land

Adjoining Fair Ground at
Pimlico

And

Being Partly Lots 6-36,
47-73 & 103-146

AVONDALE PARK

And

Being Partly Lots 23; P/O
26, 29, 30; 35, 37; P/O 56; 57 & 58

MT. WASHINGTON HEIGHTS

 

BEING I5 certain parcels of
land, generally situated along Belvedere Avenue, Park Heights Avenue, Hayward
Avenue, Winner Avenue, Rogers Avenue, Northern Parkway and Preakness Way, in
the City of Baltimore; said parcels being, partly, all the lands conveyed by
various grantors to The Maryland Jockey Club of Baltimore City, Inc. by
the following deeds recorded among the Land Records of Baltimore City, Maryland
(unless otherwise noted, all title references hereinafter refer to said Land
Records): Liber MLP7201 at Folio 194, Liber MLP6849 at Folio 206, Liber RHB3414
at Folio 81, LiberCWM4132 at Folio 774, Liber RHB2594 at Folio 50, Liber
JFC1142 at Folio 377, Liber CWM4248 at Folio 355, Liber RHB3429 at Folio 842,
Liber CWM4184 at Folio 150, Liber RHB3064 at Folio 569, Liber SEB667 at Folio
81, Liber RHB3104 at Folio 173, Liber SEB897 at Folio 258, Liber SEB2613 at
Folio 418, Liber SEB319 at Folio 6, Liber RHB2406 at Folio 154, Liber SCL3400
at Folio 185, Liber RHB3210 at Folio 376, Liber SEB270 at Folio 581, Liber
RHB3551 at Folio 622, Liber RHB3599 at Folio 493, Liber WA3958 at Folio 566,
Liber WA3701 at Folio 677, Liber RHB3057 at Folio 722, Liber RHB3465 at Folio
127, Liber RHB3071 at Folio 58, Liber RHB2628 at Folio 601, Liber RHB3529 at
Folio 259, Liber RHB3545 at Folio 27, Liber WA3695 at Folio 86 and Liber
SEBl627 at Folio 260, said parcels also being, partly, Lots 1-10, 16-19 , 29,
46-50, 59-65 and 80-83 as shown on a plat of record titled “C.J. Hull’s
Subdivision of Land Adjoining Fair Ground at Pimlico” dated December 29,
1874 and recorded in Liber JB89 at Folio 41, said parcels also being, partly,
Lots 6-36, 47·73 and 103-146 as shown on a plat of record titled “Plat No. 2,
AVONDALE PARK” dated March 1917 and recorded among the Land Records of
Baltimore County, Maryland in Plat Book 6 at Page 117, said parcels also
being, partly, Lots 23; parts of 26, 29, 30; 35, 37; part of 56; 57 and 58 as
shown on a plat of record titled “MT. WASHINGTON HEIGHTS” dated January 22,
1907 and recorded in Plat Book JWS2 at Page 272; said parcels are more
particularly described as follows, in accordance with an ALTAIACSM Land Title
Survey prepared by Patton Harris Rust & Associates, pc dated June 2002:

 

 

PARCEL
1

 

BEGINNING for the same at a
point in the existing asphalt paving at the intersection of the centerline of
Belvedere Avenue and the centerline of the old Pimlico Road, said point also
being the point of beginning of the lands conveyed by Henry Cohen and Jeannette
Beck to The Maryland Jockey Club of Baltimore City, Inc. by deed dated January 9,
1946 and recorded in Liber MLP6849 at Folio 206, said point also being at the
beginning of the third, or South 62° 11’ West, 1,668 feet 9 inches, line of the
lands conveyed by the Safe Deposit and Trust Company of Baltimore to The
Maryland Jockey Club of Baltimore City, Inc. by deed dated August 21,
1947 and recorded in Liber MLP7201 at Folio 194; thence leaving the outlines of
said Liber MLP6849 at Folio 206 and running with the third line of Liber
MLP7201 at Folio 194 and with the centerline of Belvedere Avenue the following
course:

 

1.                                      South 54° 39’ 44” West, 1,676.25 feet to a
point at the beginning of the fourth, or North 15° 34’ 52” West, 8 feet 101⁄2
inches, line of the aforesaid Liber MLP7201 at Folio 194; thence leaving the
centerline of Belvedere Avenue and running with the fourth through sixth lines
of said Liber MLP7201 at Folio 194 and crossing Belvedere Avenue the following
three courses:

 

2.                                      North 23° 34’ 18” West, 8.88 feet to a point,

 

3.                                      South 54° 46’ 35” West, 196.46 feet to a
point, and

 

4.                                      North 35° 43’ 25” West, 20.92 feet to a point
on the northerly side of Belvedere Avenue, said point also being at the
beginning of the second, or South 57° 19’ 50” West, 119.30 feet (chord), line
of the lands conveyed by The Maryland Jockey Club of Baltimore City, Inc.
to the Mayor and City Council of Baltimore by deed dated August 16, 1951
and recorded in Liber MLP8563 at Folio 166; thence leaving the outlines of the
aforesaid Liber MLP7201 at Folio 194 and running with the second and third
lines of said Liber MLP8563 at Folio 166 and continuing with the northerly side
of Belvedere Avenue the following two courses:

 

136)                        By a tangent curve to the right having a
radius of 1,272.88 feet, an arc distance of 119.35 feet, a central angle of 05°
22’ 20” and subtended by a chord bearing and distance of South 57° 20’ 54”
West, 119.31 feet to a point, and

 

137)                        South 60° 01’ 53” West, 96.18 feet to a point
on the northerly side of Park Heights Avenue; thence running with the northerly
side of Park Heights Avenue the following two courses:

 

138)                        By a curve to the left having a radius of
2,084.60 feet, an arc distance of 350.40 feet, a central angle of 09° 31’ 51”
and subtended by a chord bearing and distance of North 65° 36’ 11” West, 349.98
feet to a point, and

 

139)                        North 70° 25’ 01” West, 320.65 feet to the
southeasterly face of an existing building, said point also being on the
northwesterly outline of Lot 59 as shown on the aforesaid plat of C.J. Hull’s
Subdivision recorded in Liber JB89 at Folio 41; thence leaving the northerly
side of Park Heights Avenue and running with said outline of Lot 59 and with
said building face the following course:

 

140)                        North 18° 10’ 11” East, 90.18 feet to a point
on the southerly side of a fifteen feet wide alley as laid out on the aforesaid
Liber JB89 at Folio 41; thence running with said alley and with the northerly
and westerly outlines of Lots 59, 60, 61 and 49 the following two courses:

 

2

 

141)                        South 70°
25’ 07” East, 49.86 feet to a point, and

 

142)                        North 50°
22’ 43” East, 89.48 feet to a point on the southerly side of Ethelbert Avenue
as laid out on the aforesaid Liber JB89 at Folio 41; thence running with said
Ethelbert Avenue and with the northerly and westerly outlines of Lots 49-46 and
66-73 the following two courses:

 

143)                        South 39°
37’ 17 East, 150.12 feet to a point, and

 

144)                        South 70°
25’ 07” East, 116.66 feet to a point on the southerly side of Washington Avenue
as laid out on the aforesaid Liber JB89 at Folio 41; thence running with said
Washington Avenue and with the northwesterly outlines of Lots 76-83 the
following course:

 

145)                        North 50°
22’ 43” East, 195.27 feet to a point on the southerly side of Maple Avenue as
laid out on the aforesaid Liber JB89 at Folio 41; thence running with the
outlines of Maple Avenue the following three courses and continuing with the
outlines of the aforesaid Lot 83 the following course:

 

146)                        South 39°
37’ 17 East, 108.00 feet to a point,

 

147)                        North 50°
22’ 43” East, 40.00 feet to a point on the southwesterly outline of Lot 19 as
shown on the aforesaid Liber JB89 at Folio 41; thence running with the
southwesterly outlines of Lots 19-5 the following course

 

148)                        North 39°
37’ 17” West, 373.00 feet to a point on the southeasterly side of a fifteen
feet wide alley as laid out on the aforesaid Liber JB89 at Folio 41; thence
running with the outlines of said alley the following three courses and
continuing with the outlines of the aforesaid Lot 5 the following course:

 

149)                        North 50°
22’ 43” East, 88.07 feet to a point,

 

150)                        North 35°
43’ 25” West, 15.03 feet to a point on the southeasterly outline of Lot 1 as
shown on the aforesaid Liber JB89 at Folio 41; thence running with the
southeasterly outlines of Lots 1-4 the following course

 

151)                        South 50°
22’ 43” West, 89.09 feet to a point on the northerly outline of Maple Avenue as
laid out on the aforesaid Liber JB89 at Folio 41; thence running with the
outlines of Maple Avenue and continuing with the outlines of the aforesaid Lot
4 the following course:

 

152)                        North 39°
37’ 17” West, 100.00 feet to a point on the southeasterly side of Hayward
Avenue; thence running with the southeasterly side of Hayward Avenue and with
the northwesterly outlines of the aforesaid Lots 4-1 the following course:

 

153)                        North 50°
22’ 43” East, 95.91 feet to a point on the tenth, or North 28° 12’ 33” West,
529 feet 2 inches, line of the aforesaid Liber MLP7201 at Folio 194; thence
leaving the

 

3

 

outlines of the aforesaid Liber JB89 at Folio
41 and running with part of said tenth and part of the eleventh lines of Liber
MLP7201 at Folio 194 the following two courses:

 

154)                        North 35°
43’ 25” West, 35.08 feet to a point in or near the centerline of the existing
asphalt paving of Hayward Avenue; thence running with the centerline of Hayward
Avenue

 

155)                        North 50°
22’ 43” East, 158.76 feet to a point on the easterly side of Winner Avenue,
said point being on the closing line of Parcel No. 1 of the lands conveyed
by the Mayor and City Council of Baltimore to The Maryland Jockey Club of
Baltimore City, Inc. by deed dated July 12, 1967 and recorded in
Liber JFC1142 at Folio 377; thence running, in part, with a part of said
closing line and, in part, with the easterly side of Winner Avenue as shown on
the aforesaid plat of AVONDALE PARK recorded in Plat Book WPC6 at Page 117
the following course:

 

156)                        North 34°
25’ 36” West, 1,149.43 feet to a point on the southerly side of Rogers Avenue
as shown on the aforesaid Plat Book WPC6 at Page 117; thence leaving the
easterly side of Winner Avenue and running with the southerly side of Rogers
Avenue and with the northerly outlines of Lots 6-21 and a fifteen feet wide
alley as shown on said Plat Book WPC6 at Page 117 the following course:

 

157)                        North 62°
00’ 20” East, 428.79 feet to a point on the fifteenth, or North 16° 16’ West,
1002 feet 9 1⁄4 inches, line of the aforesaid Liber MLP7201 at Folio 194, said
point also being on the closing, or North 23° 37’ 37” West, 5.00 feet, line of
the lands conveyed by The Maryland Jockey Club of Baltimore City, Inc. to
the Mayor and City Council of Baltimore by deed dated April 17, 1964 and
recorded in Liber JFCI678 at Folio 226, said point also being on the easterly
outline of the aforesaid fifteen feet wide alley as shown on Plat Book WPC6 at Page 117;
thence running with said alley line and, reversely, with a part of said
fifteenth line and, reversely, with a part of said closing line

 

158)                        South 23°
34’ 18” East, 0.70 feet to a point at the end of the third, or South 61° 38’ 00”
West, 21.17 feet, line of the aforesaid Liber JFC1678 at Folio 226; thence
leaving the outlines of the aforesaid Plat Book WPC6 at Page 117, leaving
the outlines of the aforesaid Liber MLP7201 at Page 194 and running,
reversely with the third and second lines, respectively, of said Liber JFC1678
at Folio 226 and with the southerly side of Rogers Avenue the following two
courses:

 

159)                        North 61°
37’ 41” East, 21.17 feet to a point, and

 

160)                        North 56°
50’ 54’ East, 60.01 feet to a point at the end of the first, or North 61° 38’
00” East, 80.55 feet, line of the aforesaid Liber JFC1678 at Folio 226; thence
leaving the southerly side of Rogers Avenue and running, reversely, with said
line

 

161)                        South 61°
37’ 41” West, 80.55 feet to a point on the aforesaid fifteenth line of Liber
MLP at Folio 194; thence running with a part of said line

 

162)                        North 23°
34’ 18” West, 20.07 feet to a point in or near the centerline of the existing
asphalt paving of Rogers Avenue, said point also being at the beginning of the
sixteenth,

 

4

 

or North 69° 10’ East, 1,441 feet 9 inches,
line of the aforesaid Liber MLP7201 at Folio 194; thence running with said
sixteenth line and with the centerline of Rogers Avenue the following course:

 

163)                        North 61°
37’ 41” East, 1,441.75 feet to a point at the beginning of the seventeenth, or
North 82° 34’ East, 79 feet, line of the aforesaid Liber MLP7201 at Folio 194;
thence leaving the centerline of Rogers Avenue and running with said
seventeenth and part of the eighteenth lines of Liber MLP7201 at Folio 194 and
crossing Rogers Avenue the following two courses:

 

164)                        North 75°
01’ 41” East, 79.00 feet to a point in the existing asphalt paving of Rogers
Avenue, and

 

165)                        South 87°
46’ 19” East, 22.97 feet to a point on the southerly side of Rogers Avenue,
said point also being on the fourth, or North 61° 38’ 00” East, 56.05 feet,
line of Parcel No. 2 of the aforesaid Liber JFC1142 at Folio 377; thence
leaving the outlines of the aforesaid Liber MLP7201 at Folio 194 and running,
reversely, with a part of said fourth line and with the southerly side of
Rogers Avenue the following course:

 

166)                        South 61°
37’ 41” West, 56.05 feet to a point at the end of the second, or North 75° 38’
50” East, 41.30 feet, line of Parcel No. 3 of the aforesaid Liber JFC1142
at Folio 377; thence leaving the outlines of the aforesaid Parcel No. 2
and running, reversely, with the second and first lines, respectively, of said
Parcel No. 3 the following two courses:

 

167)                        South 75°
38’ 27” West, 41.30 feet to a point in the existing asphalt paving of Rogers
Avenue, and

 

168)                        South 61°
37’ 41” West, 153.88 feet to a point on the southerly side of Rogers Avenue,
said point also being the point of beginning of the aforesaid Parcel No. 3
of Liber JFC1142 at Folio 377; thence running, reversely, with the fourth and
third lines, respectively, of said Parcel No. 3 and with the southerly
side of Rogers Avenue the following two courses:

 

169)                        South 28°
22’ 19” East, 10.00 feet to a point, and

 

170)                        North 61°
37’ 41” East, 193.95 feet to a point at the end of the above described 37th
line, said point also being at the end of the aforesaid fourth line of Parcel No. 2
of Liber JFC1142 at Folio 377; thence leaving the outlines of the aforesaid
Parcel No. 3 of Liber JFC1142 at Folio 377 and running with said fourth
line and continuing with the southerly side of Rogers Avenue and, in part,
reversing said 37th line as described above the following course:

 

171)                        North 61°
37’ 41” East, 56.64 feet to a point at the beginning of the fifth, or North 77°
35’ 50” East, 29.03 feet, line of the aforesaid Parcel No. 2 of Liber
JFC1142 at Folio 377; thence running with said fifth line and continuing with
the southerly side of Rogers Avenue the following course:

 

5

 

172)                        North 77°
35’ 31” East, 29.11 feet to a point on the southerly side of Northern Parkway,
said point also being at the beginning of the sixth, or South 79° 00’ 00” East,
186.38 feet, line of the aforesaid Parcel No. 2 of Liber JFC1142 at Folio
377; thence running with the southerly side of Northern Parkway the following
two courses and, in part, with said sixth line the following course:

 

173)                        South 78°
59’ 51” East, 1,151.98 feet to a point, and

 

174)                        South 79°
17’ 51” East, 23.23 feet to a point on the westerly side of Preakness Way, said
point being at the end of the closing, or North 35° 02’ 36” West, 26.97 feet,
line of the lands conveyed by The Maryland Jockey Club of Baltimore City to the
Mayor and City Council of Baltimore by deed dated September 16, 1975 and
recorded in Liber RHB3289 at Folio 498; thence leaving the southerly side of
Northern Parkway and running, reversely, with the twelfth through second lines,
respectively, of said Liber RHB3289 at Folio 498 the following eleven courses:

 

175)                        South 35°
03’ 46” East, 27.00 feet to a point,

 

176)                        South 04°
19’ 10” East, 224.68 feet to a point of curvature,

 

177)                        By a
tangent curve to the left having a radius of 1,462.40 feet, an arc distance of
239.99 feet, a central angle of 09° 24’ 10” and subtended by a chord bearing
and distance of South 09° 01’ 16” East, 239.73 feet to a point,

 

178)                        South 13°
43’ 22” East, 682.38 feet to a point,

 

179)                        South 34°
13’ 56” West, 26.74 feet to a point on the northerly side of Belvedere Avenue;
thence running with the northerly side of Belvedere Avenue

 

180)                        North 76°
18’ 21” East, 99.86 feet to a point; thence leaving the northerly side of
Belvedere Avenue

 

181)                        North 61°
48’ 46” West, 26.88 feet to a point,

 

182)                        North 13°
43’ 22” West, 682.29 feet to a point of tangency,

 

183)                        By a
tangent curve to the right having a radius of 1,402.40 feet, an arc distance of
230.16 feet, a central angle of 09° 24’ 12” and subtended by a chord bearing
and distance of North 09° 01’ 16” West, 229.90 feet to a point,

 

184)                        North 04°
19’ 10” West, 197.88 feet to a point, and

 

185)                        North 44°
11’ 26” East, 35.06 feet to a point on the southerly side of Northern Parkway,
said point also being the point of beginning of the lands conveyed by
Associated Jewish Charities of Baltimore to The Maryland Jockey Club of
Baltimore City by deed dated October 15, 1976 and recorded in Liber
RHB3414 at Folio 81; thence leaving the outlines of the aforesaid Liber RHB3289
at Folio 498 and running with the first and second lines

 

6

 

of said Liber RHB3414 at Folio 81 and with the
southerly side of Northern Parkway the following two courses:

 

186)                        South 79°
17’ 51” East, 174.15 feet to a point, and

 

187)                        By a
tangent curve to the right having a radius of 3,545.08 feet, an arc distance of
115.86 feet, a central angle of 01o 52’ 21” and subtended by a chord bearing and
distance of South 78o 21’ 40” East, 115.85 feet to a point at the
beginning of the third, or South 22o 32’ 14” West, 205.48 feet, line of the
aforesaid Liber RHB3414 at Folio 81; thence leaving the southerly side of
Northern Parkway and running, in part, with said third line and, in part,
reversely, with the second, or North 22° 32’ 14” East, 275.11 feet, line of the
lands conveyed by The Maryland Jockey Club of Baltimore City, Inc. to
Associated Jewish Charities of Baltimore by deed dated October 15, 1976
and recorded in Liber RHB3414 at Folio 79 the following course:

 

188)                        South 22o 32’ 24”
West, 480.48 feet to a point at the beginning of the eleventh, or South 05o 30’ East,
664 feet, line of the lands conveyed by Henry Cohen and Jeannette Beck to The
Maryland Jockey Club of Baltimore City, Inc. by deed dated January 9,
1946 and recorded in Liber MLP6849 at Folio 206; thence leaving the outlines of
the aforesaid Liber RHB3414 at Folio 79 and running with the eleventh and
twelfth lines of said Liber MLP6849 at Folio 206 the following two courses and,
in part, reversely, with the first, or North 13o 42’ 12”
West, 383.00 feet, line of the lands conveyed by Associated Jewish Charities of
Baltimore to Concord Apartments, Inc. by deed dated February 26, 1968
and recorded in Liber JFC2342 at Folio 438 the following course:

 

189)                        South 13o 43’ 22”
East, 664.19 feet to a point in or near the centerline of the existing asphalt
paving of Belvedere Avenue; thence running with the centerline of Belvedere
Avenue

 

190)                        South 76o 18’ 21”
West, 766.99 feet to the place of beginning.

 

THE
area of land contained by the foregoing amounts to 5,130,807 square feet or
117.7871 acres, more or less, together with and subject to appurtenances and
encumbrances of record or in use.

 

PARCEL
2

 

BEGINNING
for the same at a point on the northeast side of Park Heights Avenue, said
point also being on the southeast side of Hayward Avenue, said point also being
the point of beginning of the lands conveyed by Lee N. Sachs to The Maryland
Jockey Club of Baltimore City, Inc. by deed dated October 27, 1982
and recorded in Liber CWM4248 at Folio 355; thence leaving Park Heights Avenue
and running, reversely, with the outlines of said Liber CWM4248 at Folio 355
the following six courses and with the southeast side of Hayward Avenue the
following course:

 

North 50° 22’ 43” East,
104.96 feet to a point on the southwest side of a fifteen feet wide alley as
shown on the aforesaid Liber JB89 at Folio 41; thence leaving Hayward Avenue
and running with said alley

 

191)                        South 70o 25’ 07”
East, 76.58 feet to the northwesterly face of an existing building; thence
leaving the aforesaid fifteen feet wide alley and running with said building
face

 

7

 

192)                        South 19°
09’ 01” West, 63.79 feet to a point; thence leaving the aforesaid building face
and running

 

193)                        North 70°
25’ 07” West, 0.25 feet to a point,

 

194)                        South 19°
34’ 53” West, 26.37 feet to a point on the northeasterly side of Park Heights
Avenue, and

 

195)                        North 70°
25’ 07” West, 130.55 feet to the place of beginning.

 

THE
area of land contained by the foregoing amounts to 9,348 square feet or 0.2146
acres, more or less, together with and subject to appurtenances and
encumbrances of record or in use.

 

PARCEL
3

 

BEGINNING
for the same at a point on the southeasterly side of Hayward Avenue, said point
being at the end of the first, or Southwesterly, 40.1 feet, line of the second
parcel of the lands conveyed by Clarence W. Schanberger and Ollye M.
Schanberger to The Maryland Jockey Club of Baltimore City, Inc. by deed
dated April 15, 1977 and recorded in Liber RHB3465 at Folio 127, said
point also being the northwesterly corner of Lot 54 as shown on the aforesaid
Liber JB89 at Folio 41; thence running with the outlines of Lots 50-54 the
following four courses and with the southeasterly side of Hayward Avenue the
following course:

 

North 50° 22’ 43” East,
149.29 feet to a point on the southwesterly side of Ethelbert Avenue as laid
out on the aforesaid Liber JB89 at Folio 41; thence leaving Hayward Avenue and
running with the southwesterly side of Ethelbert Avenue

 

196)                        South 39°
37’ 17” East, 114.67 feet to a point on the northerly side of the aforesaid
fifteen feet wide alley; thence leaving Ethelbert Avenue and running with the
northerly side of said alley the following two courses:

 

197)                        South 50°
22’ 43” West, 80.98 feet to a point, and

 

198)                        North 70°
24’ 14” West, 133.47 feet to the place of beginning.

 

THE
area of land contained by the foregoing amounts to 13,202 square feet or 0.3031
acres, more or less, together with and subject to appurtenances and
encumbrances of record or in use.

 

PARCEL
4

 

BEGINNING
for the same at a point on the southeasterly side of Hayward Avenue, said point
being the northwesterly comer of the land conveyed by Abraham L. Adler and
Lester Ellin to The Maryland Jockey Club of Baltimore City, Inc. by deed
dated April 13, 1978 and recorded in Liber RHB3599 at Folio 493, said
point also being the northwesterly comer of Lot 36 as shown on the aforesaid
Liber JB89 at Folio 41; thence running with the outlines of Lots 29-36 the
following four courses and with the southeasterly side of Hayward Avenue the
following course:

 

199)                        North 50°
22’ 43” East, 215.00 feet to a point on the southwesterly side of Maple Avenue
as laid out on the aforesaid JB89 at Folio 41; thence leaving Hayward Avenue
and running with the southwesterly side of Maple Avenue

 

200)                        South 39°
37’ 17” East, 100.0 feet to a point on the northerly side of a fifteen feet
wide alley as shown on the aforesaid Liber JB89 at Folio 41; thence leaving
Maple Avenue and running with the northerly side of said alley

 

8

 

201)                        South 50o 22’ 43”
West, 215.00 feet to a point on the northeasterly side of Ethelbert Avenue as
laid out on the aforesaid Liber JB89 at Folio 41; thence leaving the aforesaid
fifteen feet wide alley and running with the northeasterly side of Ethelbert
Avenue

 

202)                        North 39°
37’ 17” West, 100.00 feet to the place of beginning.

 

THE
area of land contained by the foregoing amounts to 21,500 square feet or 0.4936
acres, more or less, together with and subject to appurtenances and
encumbrances of record or in use.

 

PARCEL
5

 

BEGINNING
for the same at a point on the northeasterly side of Ethelbert Avenue as laid
out on the aforesaid Liber JB89 at Folio 41, said point also being at the
northwesterly comer of the lands conveyed by Grace M. Crowther to The Maryland
Jockey Club of Baltimore City, Inc. by deed dated December 16, 1969
and recorded in Liber RHB2594 at Folio 50, said point also being the
northwesterly comer of Lot 37 as shown on said Liber JB89 at Folio 41; thence
running with the outlines of Lots 37-45 the following six courses and with the
southeasterly side of a fifteen feet wide alley as laid out on said Liber JB89
at Folio 41 the following course:

 

203)                        North 50°
22’ 43” East, 95.00 feet to a point on the southwesterly side of a fifteen feet
wide alley as laid out on the aforesaid Liber JB89 at Folio 41; thence leaving
the first mentioned alley and running with the second mentioned alley the
following two courses:

 

204)                        South 84°
31’ 17” East, 7.07 feet to a point, and

 

205)                        South 39o 37’ 17”
East, 220.00 feet to a point on the northwesterly side of Washington Avenue as
laid out on the aforesaid Liber JB89 at Folio 41; thence leaving the second
above mentioned alley and running with the northwesterly side of Washington
Avenue

 

206)                        South 50o 22’ 43”
West, 57.62 feet to a point on the northeasterly side of Ethelbert Avenue;
thence leaving Washington Avenue and running with the northeasterly side of
Ethelbert Avenue the following two courses:

 

207)                        North 70°
25’ 07” West, 82.77 feet to a point, and

 

208)                        North 39°
37’ 17” West, 153.90 to the place of beginning.

 

THE
area of land contained by the foregoing amounts to 20,981 square feet or 0.4817
acres. more or less, together with and subject to appurtenances and
encumbrances of record or in use.

 

PARCEL
6

 

BEGINNING
for the same at a point on the southwesterly side of Maple Avenue as laid out
on the aforesaid Liber JB89 at Folio 41, said point also being at the
northeasterly comer of the lands conveyed by Charles E. Hargett to The Maryland
Jockey Club of Baltimore City, Inc. by deed dated December 1, 1978
and recorded in Liber WA3695 at Folio 86, said point also being the
northeasterly comer of Lot 28 as shown on said Liber JB89 at Folio 41; thence running
with the outlines of Lots 20-28 the following five courses and with the
southwesterly side of Maple Avenue the following course:

 

209)                        South 39°
37’ 17” East, 225.00 feet to a point on the northwesterly side of Washington
Avenue as laid out on the aforesaid Liber JB89 at Folio 41; thence leaving
Maple Avenue and running with the northwesterly side of Washington Avenue

 

9

 

210)                        South 50°
22’ 43” West, 100.00 feet to a point on the northeasterly side of a fifteen
feet wide alley as shown on the aforesaid Liber JB89 at Folio 41; thence
leaving Washington Avenue and running with the northeasterly side of said alley
the following two courses:

 

211)                        North 39°
37’ 17” West, 220.00 feet to a point, and

 

212)                        North 05°
22’ 43” East, 7.07 feet to a point on the southeasterly side of a fifteen feet
wide alley as laid out on the aforesaid Liber JB89 at Folio 41; thence leaving
the first mentioned alley and running with the second mentioned alley

 

213)                        North 50°
22’ 43” East, 95.00 to the place of beginning.

 

THE
area of land contained by the foregoing amounts to 22,487 square feet or 0.5162
acres, more or less, together with and subject to appurtenances and
encumbrances of record or in use.

 

PARCEL
7

 

BEGINNING
for the same at a point at the intersection of the northwesterly side of Rogers
Avenue and the northeasterly side of Winner Avenue, said point also being at
the point of beginning of the lands conveyed by Saul Baer to The Maryland
Jockey Club of Baltimore City, Inc. by deed dated December 23, 1976
and recorded in Liber RHB3429 at Folio 842; thence running with the outlines of
said Liber RHB3429 at Folio 842, reversely, the following four courses and with
the northeasterly side of Winner Avenue the following course:

 

214)                        North 35°
58’ 33” West, 102.05 feet to a point; thence leaving Winner Avenue and running

 

215)                        North 57°
23’ 38” East, 50.25 feet to a point,

 

216)                        South 35°
58’ 06” East, 106.13 feet to a point on the northwesterly side of Rogers
Avenue; thence running with the northwesterly side of Rogers Avenue

 

217)                        South 62°
00’ 20” West, 50.64 feet to the place of beginning.

 

THE
area of land contained by the foregoing amounts to 5,221 square feet or 0.1199
acres, more or less, together with and subject to appurtenances and
encumbrances of record or in use.

 

PARCEL
8

 

BEGINNING
for the same at a point at the intersection of the northwesterly side of Rogers
Avenue and the southwesterly side of Bland Avenue, said point also being at the
point of beginning of the lands conveyed by Marcia Kramer to The Maryland
Jockey Club of Baltimore City, Inc. by deed dated May 10, 1982 and
recorded in Liber CWM4184 at Folio 150; thence running with the outlines of
said Liber CWM4184 at Folio 150, the following two courses and with the
northwesterly side of Rogers Avenue the following course:

 

218)                        South 62°
00’ 20” West, 50.62 feet to a point; thence leaving Rogers Avenue and running

 

219)                        North 35°
56’ 06” West, 118.35 feet to a point on the fourth line of the lands conveyed
by Albert Weinstein to The Maryland Jockey Club of Baltimore City, Inc. by
deed dated September 21, 1973 and recorded in Liber RHB3064 at Folio 569;
thence leaving the outlines of the aforesaid Liber CWM4184 at Folio 150 and
running, reversely, with a part of said fourth, and all of the third and second
lines, respectively, the following three courses:

 

10

 

220)                        South 57°
23’ 38” West, 75.76 feet to a point,

 

221)                        North 35°
58’ 33” West, 50.18 feet to a point, and

 

222)                        North 57°
23’ 38” East, 126.03 feet to a point on the southwesterly side of Bland Avenue;
thence running, in part, reversely, with the first, or Northwesterly, 50.09
feet, line of the aforesaid Liber RHB3064 at Folio 569 and, in part, with the
fourth, or South 38° 54’ 20” East, 122.43 feet, line of the aforesaid Liber
CWM4184 at Folio 150, and with the southwesterly side of Bland Avenue the
following course:

 

223)                        South 35°
55’ 43” East, 172.60 feet to the place of beginning.

 

THE
area of land contained by the foregoing amounts to 12,348 square feet or 0.2835
acres, more or less, together with and subject to appurtenances and
encumbrances of record or in use.

 

PARCEL
9

 

BEGINNING
for the same at a point at the intersection of the northwesterly side of Rogers
Avenue and the northeasterly side of Bland Avenue, said point also being at the
point of beginning of the lands conveyed by Irene Paoli to The Maryland Jockey Club
of Baltimore City Inc. by deed dated October 1 1985 and recorded in Liber
SEB667 at 81; thence running, reversely, with the outlines of said Liber SEB667
at Folio 81, the following four courses and with the northeasterly side of
Bland Avenue the following course:

 

224)                        North 35°
55’ 43” West, 125.59 feet to a point; thence leaving Bland Avenue and running

 

225)                        North 57°
27’ 06” East, 50.22 feet to a point,

 

226)                        South 35°
50’ 21” East, 129.57 feet to a point on the northwesterly side of Rogers
Avenue; thence running with the northwesterly side of Rogers Avenue

 

227)                        South 61°
59’ 01” West, 50.41 to the place of beginning.

 

THE
area of land contained by the foregoing amounts to 6,383 square feet or 0.1465
acres, more or less, together with and subject to appurtenances and
encumbrances of record or in use.

 

PARCEL
10

 

BEGINNING
for the same at an iron pipe found on the northwesterly side of Rogers Avenue,
said pipe also being at the point of beginning of the lands conveyed by Irving
Citrenbaum and David Seidman to R.W. Small Racing Stable, Inc. by deed
dated December 23, 1993 and recorded in Liber SEB4053 at Folio 124, said
pipe also being at the southwesterly comer of Lot 58 as shown on the aforesaid
plat of MT. WASHINGTON HEIGHTS recorded in Plat Book JWS2 at Page 272;
thence leaving Rogers Avenue and running with the first, or Northerly, 160
feet, line of said Liber SEB4053 at Folio 124 and with the westerly outline of
said Lot the following course:

 

228)                        North 28°
22’ 19” West, 160.00 feet to a point on the third, or North 61° 37’ 00” East,
76.62 feet, line of the land conveyed by Mildred R. Chermock to The Maryland
Jockey Club of Baltimore City, Inc. by deed dated June 10, 1986 and
recorded in Liber SEB897 at Folio 258; thence running with the second, or
Westerly, 51 feet, line of the aforesaid Liber SEB4053 at Folio 124 and,
reversely, with part of said third line of Liber SEB897 at Folio 258 the
following course:

 

11

 

229)                        South 61°
37’ 41” West, 44.51 feet, passing over an iron pipe found at a distance of 0.25
feet thereon, to a point on the second, or Southeasterly, 138.5 feet, line of
the lands conveyed by Allen M. Brooks and Ruth N. Brooks to The Maryland Jockey
Club of Baltimore, Inc. by deed dated February 25, 1974 and recorded
in Liber RHB3104 at Folio 173; thence leaving the outlines of the aforesaid
Liber SEB897 at Folio 258 and running with a part of the third, or Southerly,
160 feet 3 inches, line of the aforesaid Liber SEB4053 at Folio 124 and with a
part of said second line of Liber RHB3104 at Folio 173 the following course:

 

230)                        South 23°
34’ 09” East, 26.59 feet to a point; thence leaving the outlines of the
aforesaid Liber SEB4053 at Folio 124 and running with the third and fourth
lines of the aforesaid Liber RHB3104 at Folio 173 the following two courses:

 

231)                        South 57°
27’ 06” West, 60.85 feet to a point, and

 

232)                        North 33°
57’ 30’ West, 140.66 feet to a point southeasterly side of Northern Parkway:
thence running with the southeasterly side of Northern Parkway

 

233)                        North 58°
34’ 33” East, 271.25 feet to a point on the closing, or North 28° 23’ 00” West,
150 feet, line of the lands conveyed by Isadore Glass and Stella Glass to The
Maryland Jockey Club of Baltimore, Inc. by deed dated October 1, 1984
and recorded in Liber SEB310 at Folio 6; thence leaving Northern Parkway and
running with a part of said closing line

 

234)                        South 28°
22’ 19” East, 23.52 feet to a point on the northerly outline of Lot 61 as shown
on the aforesaid Plat Book JWS2 at Page 272; thence leaving the outlines
of the aforesaid Liber SEB3l0 at Folio 6 and running with said outline of Lot
61

 

235)                        North 61°
31’ 41” East, 150.00 feet to a point on the southwesterly side of Key Avenue;
thence running with the easterly outlines of Lots 54, 60 and 61 as shown on the
aforesaid Plat Book JWS2 at Page 272 and, in part, with the easterly
outlines of the Third and First Parcels of the lands conveyed by Kathryn M.T.
Caprio and James T. Caprio to The Maryland Jockey Club of Baltimore, Inc.
by deed dated July 26, 1968 and recorded in Liber RHB2406 at Folio 154,
and with the southwesterly side of Key Avenue the following course:

 

236)                        South 28°
22’ 19’ East, 260.00 feet to a point on the northwesterly side of Rogers
Avenue; thence leaving Key Avenue and running with the southerly outlines of
Lots 54-58 as shown on the aforesaid Plat Book JWS2 at Page 272 and with
the southerly outlines of the First, Second, Fourth and Fifth Parcels of the
aforesaid Liber RHB2406 at Folio 154 the following course:

 

237)                        South 61°
31’ 41” West, 300.05 feet to the place of beginning.

 

THE
area of land contained by the foregoing amounts to 95,778 square feet or 2.1988
acres, more or less, together with and subject to appurtenances and
encumbrances of record or in use.

 

12

 

PARCEL
11

 

BEGINNING
for the same at a point at the intersection of the northwesterly side of Rogers
Avenue and the northeasterly side of Key Avenue, said point also being at the
southwesterly corner of Lot 47 as shown on the aforesaid plat of MT. WASHINGTON
HEIGHTS recorded in Plat Book JWS2 at Page 272; thence leaving Rogers
Avenue and running the westerly outline of said Lot 47 and with the
northeasterly side of Key Avenue the following course:

 

238)                        North 28°
22’ 19” West, 160.00 feet to a point; thence leaving Key Avenue and running
with the northerly outlines of Lots 43-47 and, in part, with the third, or
Northeasterly, 120 feet, line of the lands conveyed by the Manhattan Land
Corporation of Baltimore County to The Maryland Jockey Club of Baltimore City, Inc.
by deed dated June 27, 1919 and recorded in Liber SCL3400 at Folio l85 the
following course:

 

239)                        North 61°
37’ 41” East, 300.00 feet to a point on the southwesterly side of Woodcrest
Avenue: thence running with the easterly outline of the aforesaid Lot 43 and
with the fourth, or Southeasterly, 160 feet, line of the aforesaid Liber
SCL3400 at Folio 185 and with the southweserly side of Woodcrest Avenue the
following course:

 

240)                        South 28°
22’ 19” East, 160.00 feet to a point on the northwesterly side of Rogers
Avenue; thence leaving Woodcrest Avenue and running with southerly outlines of
the aforesaid Lots 43-47 and with the northwesterly side of Rogers Avenue the
following course:

 

241)                        South 61°
37’ 41” West, 300.00 feet to the place of beginning.

 

THE
area of land contained by the foregoing amounts to 48,000 square feet or 1.1019
acres, more or less, together with and subject to appurtenances and
encumbrances of record or in use.

 

PARCEL
12

 

BEGINNING
for the same at an iron pipe found at the intersection of the northwesterly
side of Rogers Avenue and the southwesterly side of Merville Avenue, said point
also being at the point of beginning of the lands conveyed by Catherine Stuller
Myers to The Maryland Jockey Club of Baltimore City, Inc. by deed dated February 27,
1975 and recorded in Liber RHB3210 at Folio 376, said point also being at the
southeasterly comer of Lot 32 as shown on the aforesaid plat of MT. WASHINGTON
HEIGHTS recorded in Plat Book JWS2 at Page 272; thence leaving Merville
Avenue and running, in part, with the first, or Westerly, 60 feet, line of said
Liber RHB3210 at Folio 376 and with the southerly outlines of Lots 32-36 as
shown on said Plat Book JWS2 at Page 272 and, in part, reversely, with the
first, or Northeasterly, 60 feet, line of the lands conveyed by Lillie S.
Hillary to The Maryland Jockey Club of Baltimore City, Inc. by deed dated August 2,
1984 and recorded in Liber SEB270 at Folio 581, and with the northwesterly side
of Rogers Avenue the following course:

 

242)                        South 61°
37’ 41” West, 300.00 feet to a point on the northeasterly side of Woodcrest
Avenue; thence leaving Rogers Avenue and running with the westerly outline of
the aforesaid Lot 36 and, reversely, with the fourth, or Southeasterly, 160
feet, line of the aforesaid Liber SEB270 at Folio 581 and with the
northeasterly side of Woodcrest Avenue the following course:

 

243)                        North 28°
22’ 19” West, 158.31 feet to a point; thence leaving Woodcrest Avenue and
running with the northerly outlines of the aforesaid Lots 36, 35 and a part of
34 and, in

 

13

 

part, reversely, with the
third, or Southwesterly, 60 feet, line of the aforesaid Liber SEB270 at Folio
the following course:

 

244)                        North 61°
37’ 41” East, 150.00 to a point at the southwesterly corner of Lot 37 as shown
on the aforesaid Plat Book JWS2 at Page 272; thence running with the
westerly outlines of Lots 37, 38 and a part of 39 as shown on said Plat Book
JWS2 at Page 272 the following course:

 

245)                        North 28°
22’ 19” West, 150.85 feet to a point on the southeasterly side of Northern
Parkway; thence running with the southeasterly side of Northern Parkway

 

246)                        By a curve
to the right having a radius of 850.00 feet, an arc distance of 153.26 feet, a
central angle of 10° 19’ 50” and subtended by a chord bearing and distance of
North 73° 04’ 01” East, 153.05 feet to a point on the southwesterly side of
Merville Avenue; thence leaving Northern Parkway and running, in part, with the
fourth, or Southerly, 60 feet, line of the aforesaid Liber RHB3210 at Folio 376
and with the southwesterly side of Merville Avenue the following course:

 

247)                        South 28°
22’ 19” East, 278.81 feet to the place of beginning.

 

THE
area of land contained by the foregoing amounts to 68,200 square feet or 1.5657
acres, more or less, together with and subject to appurtenances and
encumbrances of record or in use.

 

PARCEL
13

 

Beginning
for the same at an iron rebar found on the northwesterly side of Rogers Avenue,
said rebar also being at the end of the first, or Easterly, 60 feet, line of
the lands conveyed by Louis J. Berman and Theodore S. Miller to The Maryland
Jockey Club of Baltimore City, Inc. by deed dated November 21, 1977
and recorded in Liber RHB3551 at Folio 622, said point also being at the
southeasterly corner of Lot 22 as shown on the aforesaid plat of MT. WASHINGTON
HEIGHTS recorded in Plat Book JWS2 at Page 272; thence running, in part,
reversely, with said first line of Liber RHB3551 at Folio 622 and with the
southerly outlines of Lots 22-25 as shown on said Plat Book JWS2 at Page 272,
and with the northwesterly side of Rogers Avenue the following course:

 

248)                        South 61°
37’ 41” West, 240.00 feet to a point on the northeasterly side of Merville
Avenue; thence leaving Rogers Avenue and running with the westerly outline of
the aforesaid Lot 25 and with the northeasterly side of Merville Avenue the
following course:

 

249)                        North 28°
22’ 00” West, 262.19 feet to a point on the southeasterly side of Northern
Parkway; thence leaving Merville Avenue and running with the southeasterly side
of Northern Parkway

 

250)                        By a curve
to the right having a radius of 850.00 feet, an arc distance of 276.92 feet, a
central angle of 18° 39’ 59” and subtended by a chord bearing and distance of
South 88° 52’ 51” East, 275.70 feet to a point on the second, or Northerly, 160
feet 1⁄2 inch, line of the aforesaid Liber RHB3551 at Folio 622; thence leaving
Northern Parkway and running, reversely, with a part of said second line

 

251)                        South 28°
22’ 19” East, 126.47 feet to the place of beginning.

 

14

 

THE
area of land contained by the foregoing amounts to 48,708 square feet or 1.1182
acres, more or less, together with and subject to appurtenances and
encumbrances of record or in use.

 

PARCEL
14

 

BEGINNING
for the same at a point on the southerly side of Rogers Avenue, said point also
being at the beginning of the fourth, or North 86° 17’ East, 456.9 feet, line
of the aforesaid lands conveyed to The Maryland Jockey Club of Baltimore City, Inc.
in Liber MLP6849 at Folio 206; thence running with the fourth through seventh
lines of said Liber MLP6849 at Folio 206 the following four courses and with
the southerly side of Rogers Avenue the following three courses:

 

252)                        North 77°
52’ 20” East, 455.01 feet to a point,

 

253)                        South 40°
01’ 21” East, 11.31 feet to a point, and

 

254)                        North 77°
52’ 20” East, 165.25 feet to a point; thence leaving Rogers Avenue and running

 

255)                        South 12°
03’ 30” East, 277.84 feet to a point on the northeasterly side of Northern
Parkway; thence leaving the outlines of the aforesaid Liber MLP6849 at Folio
206 and running with the northeasterly side of Northern Parkway the following
two courses:

 

256)                        North 79°
17’ 51” West, 29.52 feet to a point, and

 

257)                        North 78°
59’ 51” West, 647.36 feet to point on the easterly side of Pimlico Road, said
point being at the end of the third, or Southerly, 7.80 feet, line of Parcel No. 4
of the aforesaid Liber JFC1142 at Folio 377; thence leaving Northern Parkway
and running with the third, second and first lines, reversely, the following
three courses, respectively:

 

258)                        North 08°
56’ 13” West, 5.81 feet to point,

 

259)                        North 38°
54’ 43” East, 10.00 feet to a point, and

 

260)                        South 77°
52’ 20” West, 11.50 feet to a point on the third, or North 00° 36” West, 140
feet, line of the aforesaid Liber MLP6849 at Folio 206; thence leaving the
outlines of the aforesaid Parcel No. 4 of Liber JFC1142 at Folio 377 and
running with a part of said third line

 

261)                        North 08°
02’ 25” West, 10.03 feet to the place of beginning.

 

THE
area of land contained by the foregoing amounts to 94,892 square feet or 2.1784
acres, more or less, together with and subject to appurtenances and encumbrances
of record or in use.

 

15

 

SCHEDULE C

 

Environmental Reports

 

	
  Property

  	
   

  	
   

  	
  Environmental Assessments / Remediation Reports / Permits /
  Compliance Audits

  
	
  Santa Anita,

  Los Angeles,

  	
   

  	
  ·

  	
  Final
  Phase 1 Environmental Site Assessment and Environmental Compliance Audit,
  site visit October 16-17, 2002, report dated February 10, 2003. 

  
	
  California

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Environmental
  Inspection Report (U.S. Divisions), site visit January 21-22, 2004. 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Phase
  I Environmental Site Assessment Update, site visit September 21-22,
  2004, report dated October 1, 2004.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Environmental
  Inspection Report and Environmental Action Plan, site visit October 6-7,
  2004, report dated February 11, 2005.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Environmental
  Inspection Report, site visit February 28-March 1, 2006.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Environmental
  Compliance Audit, site visit February 27-28, 2007, report dated
  June 12, 2007.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Phase
  I Environmental Site Assessment, site visit June 13, 2007, report dated
  June, 2007.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Phase
  II Environmental Site Assessment Report dated July 2007.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Environmental
  Inspection Report and EAP – site visit March 5-6, 2008

  
	
   

  	
   

  	
   

  	
   

  
	
  Golden Gate

  	
   

  	
  ·

  	
  Phase
  II Environmental Site Assessment, site visit September 10, 1999, report
  dated February, 2000. 

  
	
  Fields,

  	
   

  	
   

  	
   

  
	
  Albany,

  	
   

  	
  ·

  	
  Environmental
  Compliance Audit, site visit January 23, 2003, report dated
  April 10, 2003.

  
	
  California

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Environmental
  Inspection Report, site visit February 24-25, 2004.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Environmental
  Inspection and EAP, site visit January 25-26, 2005, report dated
  February 23, 2005.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Phase
  I Environmental Site Assessment, site visit August 25, 2005, report
  dated October 28, 2005. 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Environmental
  Inspection Report, site visit March 2-3, 2006.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Environmental
  Action Plan, last updated January 23, 2003, date of most recent EAP
  activity, March 23, 2006. 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Environmental
  Compliance Audit Report, site visit May 8-9, 2007, report dated
  August 8, 2007.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Phase
  I Environmental Site Assessment, site visit June 14, 2007, report dated
  June, 2007.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Environmental
  Action Plan (EAP) dated May 9, 2007 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Environmental
  Inspection Report and EAP – site visit June 17-18, 2008

  
	
   

  	
   

  	
   

  	
   

  
	
  Laurel Park, 

  	
   

  	
  ·

  	
  Preliminary
  Site Assessment of Subsurface investigations and Geotechnical Engineering
  Services 

  
	
  Anne Arundel 

  	
   

  	
   

  	
  Report
  dated May 17, 2000.

  
	
  County, Maryland

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Water
  Monitoring Schedule dated March 9, 2001

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Phase
  I Environmental Site Assessment and Environmental Compliance Audit Report,
  site visit December 17 -18, 2001, report dated February 11, 2002.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Phase
  I Environmental Site Assessment Report dated February 28, 2002.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Report
  of Preliminary Geotechnical Exploration dated February 28, 2002.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Environmental
  Inspection Report, site inspection November 14-15, 2007.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Envirovision
  Report on Soil Sampling for Lead dated February 19, 2008.

  
	
   

  	
   

  	
   

  	
   

  
	
  Pimlico,

  	
   

  	
  ·

  	
  Phase
  I Environmental Site Assessment and Environmental Compliance Audit Report,
  site visit 

  
	
  Baltimore,

  	
   

  	
   

  	
  December
  13, 2001, report dated February 14, 2002.

  
	
  Maryland

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Phase
  II Environmental Site Assessment and Environmental Compliance Audit Report,
  site visit April 8-10, 2002, report dated May 22, 2002.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Environmental
  Compliance Audit Report, site visit May 31, - June 1, 2007, report dated
  August 14, 2007.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Environmental
  Inspection Report, site inspection May 27-29, 2008.

  
	
   

  	
   

  	
   

  	
   

  
	
  Bowie Training

  	
   

  	
  ·

  	
  Phase
  I Environmental Site Assessment and Environmental Compliance Audit Report,
  site visit 

  
	
  Center, Maryland

  	
   

  	
   

  	
  December
  18, 2001, report dated February 13, 2002.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Consent
  Agreement between the State of Maryland, Department of the Environment and
  Southern Maryland Agricultural Association, effective dated February 25,
  2005.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Environmental
  Compliance Audit Report, site visit May 30 -31, 2007, report dated September
  4, 2007.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Maryland
  Department of Environment Site Inspection dated January 31, 2007.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  Environmental
  Inspection Report, site inspection May 27-29, 2008.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00150-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00150-of-00352.parquet"}]]