Document:

Exhibit
10.4A

FAVRILLE, INC.

2005 NON-EMPLOYEE DIRECTORS’ STOCK OPTION PLAN

ADOPTED BY BOARD OF DIRECTORS DECEMBER 31, 2004

APPROVED BY STOCKHOLDERS DECEMBER 31, 2004

EFFECTIVE DATE: FEBRUARY 7, 2005

AMENDED: MARCH 23, 2006

AMENDMENT APPROVED BY STOCKHOLDERS:  JUNE
14, 2006

1.             PURPOSES.

(a)           Eligible Option
Recipients.  The persons eligible to
receive Options are the Non-Employee Directors of the Company.

(b)           Available Options.  The purpose of the Plan is to provide a means
by which Non-Employee Directors may be given an opportunity to benefit from
increases in value of the Common Stock through the granting of Nonstatutory
Stock Options.

(c)           General Purpose.  The Company, by means of the Plan, seeks to
retain the services of its current Non-Employee Directors, to secure and retain
the services of new Non-Employee Directors and to provide incentives for such
persons to exert maximum efforts for the success of the Company and its
Affiliates.

2.             DEFINITIONS.

(a)           “Additional Annual Grant”
means an Option granted annually to all Non-Employee Directors who meet the
specified criteria pursuant to Sections 6(b)(ii)—(v).

(b)           “Affiliate”
means any parent corporation or subsidiary corporation of the Company, whether
now or hereafter existing, as those terms are defined in Sections 424(e) and
(f), respectively, of the Code.

(c)           “Annual
Grant” means an Option granted annually to all Non-Employee
Directors who meet the specified criteria pursuant to Section 6(b)(i).

(d)           “Annual
Meeting” means the annual meeting of the stockholders of the
Company.

(e)           “Board”
means the Board of Directors of the Company.

(f)            “Capitalization Adjustment”
has the meaning ascribed to that term in Section 11(a).

(g)           “Change in Control”
means the occurrence, in a single transaction or in a series of related
transactions, of any one or more of the following events:

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(i)            any Exchange Act
Person becomes the Owner, directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the combined voting power of the
Company’s then outstanding securities other than by virtue of a merger,
consolidation or similar transaction. 
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur (A) on account of the acquisition of securities of the Company by an
investor, any affiliate thereof or any other Exchange Act Person from the
Company in a transaction or series of related transactions the primary purpose
of which is to obtain financing for the Company through the issuance of equity
securities or (B) solely because the level of Ownership held by any Exchange
Act Person (the “Subject
Person”) exceeds the designated percentage threshold of the
outstanding voting securities as a result of a repurchase or other acquisition
of voting securities by the Company reducing the number of shares outstanding,
provided that if a Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of voting securities by the Company,
and after such share acquisition, the Subject Person becomes the Owner of any
additional voting securities that, assuming the repurchase or other acquisition
had not occurred, increases the percentage of the then outstanding voting
securities Owned by the Subject Person over the designated percentage
threshold, then a Change in Control shall be deemed to occur;

(ii)           there is
consummated a merger, consolidation or similar transaction involving (directly
or indirectly) the Company and, immediately after the consummation of such
merger, consolidation or similar transaction, the stockholders of the Company
immediately prior thereto do not Own, directly or indirectly, either (A)
outstanding voting securities representing more than fifty percent (50%) of the
combined outstanding voting power of the surviving Entity in such merger,
consolidation or similar transaction or (B) more than fifty percent (50%) of
the combined outstanding voting power of the parent of the surviving Entity in
such merger, consolidation or similar transaction, in each case in
substantially the same proportions as their Ownership of the outstanding voting
securities of the Company immediately prior to such transaction;

(iii)         the stockholders of
the Company approve or the Board approves a plan of complete dissolution or
liquidation of the Company, or a complete dissolution or liquidation of the
Company shall otherwise occur;

(iv)          there is consummated
a sale, lease, license or other disposition of all or substantially all of the
consolidated assets of the Company and its Subsidiaries, other than a sale,
lease, license or other disposition of all or substantially all of the
consolidated assets of the Company and its Subsidiaries to an Entity, more than
fifty percent (50%) of the combined voting power of the voting securities of
which are Owned by stockholders of the Company in substantially the same
proportions as their Ownership of the outstanding voting securities of the
Company immediately prior to such sale, lease, license or other disposition; or

(v)            individuals who,
on the date this Plan is adopted by the Board, are members of the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the members of the
Board; provided, however, that if
the appointment or election (or nomination for election) of any new Board
member was approved or recommended by a majority vote of the members of the
Incumbent Board then still in office, such new member shall, for purposes of
this Plan, be considered as a member of the Incumbent Board.

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Notwithstanding the foregoing or any other provision
of this Plan, the definition of Change in Control (or any analogous term) in an
individual written agreement between the Company or any Affiliate and an
Optionholder shall supersede the foregoing definition with respect to any
Option subject to such agreement (it being understood, however, that if no
definition of Change in Control or any analogous term is set forth in such an
individual written agreement, the foregoing definition shall apply).

(h)           “Code”
means the Internal Revenue Code of 1986, as amended.

(i)            “Committee”
means a committee of one (1) or more members of the Board appointed by the
Board in accordance with Section 3(c).

(j)            “Common
Stock” means the common stock of the Company.

(k)           “Company”
means Favrille, Inc., a Delaware corporation.

(l)            “Consultant”
means any person, including an advisor, who (i) is engaged by the Company or an
Affiliate to render consulting or advisory services and is compensated for such
services or (ii) is serving as a member of the Board of Directors of an
Affiliate and is compensated for such services. 
However, service solely as a Director, or payment of a fee for such
services, shall not cause a Director to be considered a “Consultant” for
purposes of the Plan.

(m)          “Continuous
Service” means that the Optionholder’s service with the Company
or an Affiliate, whether as an Employee, Director or Consultant, is not
interrupted or terminated.    A change in
the capacity in which the Optionholder renders service to the Company or an
Affiliate as an Employee, Consultant or Director or a change in the entity for
which the Optionholder renders such service, provided that there is no
interruption or termination of the Optionholder’s service with the Company or
an Affiliate, shall not terminate a Optionholder’s Continuous Service.  For example, a change in status from a
Non-Employee Director of the Company to a Consultant of an Affiliate or an
Employee of the Company will not constitute an interruption of Continuous
Service.  The Board or the chief
executive officer of the Company, in that party’s sole discretion, may
determine whether Continuous Service shall be considered interrupted in the
case of any leave of absence approved by that party, including sick leave,
military leave or any other personal leave.  
Notwithstanding the foregoing, a leave of absence shall be treated as
Continuous Service for purposes of vesting in an Option only to such extent as
may be provided in the Company’s leave of absence policy or in the written
terms of the Optionholder’s leave of absence.

(n)           “Corporate Transaction”
means the occurrence, in a single transaction or in a series of related
transactions, of any one or more of the following events:

(i)            a sale or other
disposition of all or substantially all, as determined by the Board in its
discretion, of the consolidated assets of the Company and its Subsidiaries;

(ii)           a sale or other
disposition of at least ninety percent (90%) of the outstanding securities of
the Company;

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(iii)         a merger,
consolidation or similar transaction following which the Company is not the
surviving corporation; or

(iv)          a merger,
consolidation or similar transaction following which the Company is the
surviving corporation but the shares of Common Stock outstanding immediately
preceding the merger, consolidation or similar transaction are converted or
exchanged by virtue of the merger, consolidation or similar transaction into
other property, whether in the form of securities, cash or otherwise.

(o)           “Director”
means a member of the Board.

(p)           “Disability”
means the inability of a person, in the opinion of a qualified physician
acceptable to the Company, to perform the major duties of that person’s
position with the Company or an Affiliate of the Company because of the
sickness or injury of the person.

(q)           “Employee”
means any person employed by the Company or an Affiliate.  However, service solely as a Director, or
payment of a fee for such services, shall not cause a Director to be considered
an “Employee” for purposes of the Plan.

(r)           “Entity”
means a corporation, partnership or other entity.

(s)           “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

(t)            “Exchange Act Person”
means any natural person, Entity or “group” (within the meaning of Section
13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” shall
not include (A) the Company or any Subsidiary of the Company, (B) any employee
benefit plan of the Company or any Subsidiary of the Company or any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company or any Subsidiary of the Company, (C) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (D) an Entity
Owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their Ownership of stock of the Company.

(u)           “Fair Market
Value” means, as of any date, the value of the Common Stock
determined as follows:

(i)            If the Common
Stock is listed on any established stock exchange or traded on the Nasdaq
National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share
of Common Stock shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such exchange or market (or the
exchange or market with the greatest volume of trading in the Common Stock) on
the last market trading day prior to the day of determination, as reported in The Wall Street Journal or such other
source as the Board deems reliable.

(ii)           In the absence of
such markets for the Common Stock, the Fair Market Value shall be determined by
the Board in good faith.

(v)            “Initial
Grant” means an Option granted to a Non-Employee Director who
meets the specified criteria pursuant to Section 6(a).

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(w)           “IPO Date”
means the effective date of the initial public offering of the Common Stock.

(x)           “Non-Employee
Director” means a Director who is not an Employee.

(y)           “Nonstatutory
Stock Option” means an option to purchase Common Stock that is
not intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code and the regulations promulgated thereunder.

(z)           “Officer”
means a person who is an officer of the Company within the meaning of Section
16 of the Exchange Act and the rules and regulations promulgated thereunder.

(aa)         “Option” means
a Nonstatutory Stock Option granted pursuant to the Plan.

(bb)         “Option
Agreement” means a written agreement between the Company and an
Optionholder evidencing the terms and conditions of an individual Option
grant.  Each Option Agreement shall be
subject to the terms and conditions of the Plan.

(cc)         “Optionholder”
means a person to whom an Option is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Option.

(dd)         “Own,” “Owned,” “Owner,” “Ownership”  A person or Entity shall be deemed to “Own,”
to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of
securities if such person or Entity, directly or indirectly, through any
contract, arrangement, understanding, relationship or otherwise, has or shares
voting power, which includes the power to vote or to direct the voting, with
respect to such securities.

(ee)         “Plan”
means this Favrille, Inc. 2005 Non-Employee Directors’ Stock Option Plan.

(ff)           “Rule 16b-3”
means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule
16b-3, as in effect from time to time.

(gg)         “Securities
Act” means the Securities Act of 1933, as amended.

(hh)         “Subsidiary”
means, with respect to the Company, (i) any corporation of which more than
fifty percent (50%) of the outstanding capital stock having ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, stock of any other class or classes of
such corporation shall have or might have voting power by reason of the happening
of any contingency) is at the time, directly or indirectly, Owned by the
Company, and (ii) any partnership in which the Company has a direct or indirect
interest (whether in the form of voting or participation in profits or capital
contribution) of more than fifty percent (50%).

3.             ADMINISTRATION.

(a)           Administration by Board.  The Board shall administer the Plan unless
and until the Board delegates administration of the Plan to a Committee, as
provided in Section 3(c).

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(b)           Powers of Board.  The Board shall have the power, subject to,
and within the limitations of, the express provisions of the Plan:

(i)            To determine the
provisions of each Option to the extent not specified in the Plan.

(ii)           To construe and
interpret the Plan and Options granted under it, and to establish, amend and
revoke rules and regulations for its administration.  The Board, in the exercise of this power, may
correct any defect, omission or inconsistency in the Plan or in any Option
Agreement, in a manner and to the extent it shall deem necessary or expedient
to make the Plan fully effective.

(iii)         To effect, at any
time and from time to time, with the consent of any adversely affected
Optionholder, (1) the reduction of the exercise price of any outstanding Option
under the Plan, (2) the cancellation of any outstanding Option under the Plan
and the grant in substitution therefor of (A) a new Option under the Plan or
another equity plan of the Company covering the same or a different number of
shares of Common Stock, (B) cash and/or (C) other valuable consideration (as
determined by the Board, in its sole discretion), or (3) any other action that
is treated as a repricing under generally accepted accounting principles.

(iv)          To amend the Plan or
an Option as provided in Section 12.

(v)            To terminate or
suspend the Plan as provided in Section 13.

(vi)          Generally, to
exercise such powers and to perform such acts as the Board deems necessary or
expedient to promote the best interests of the Company and that are not in
conflict with the provisions of the Plan.

(c)           Delegation to
Committee.  The Board may delegate
some or all of the administration of the Plan to a Committee or Committees of
one (1) or more members of the Board, and the term “Committee” shall
apply to any person or persons to whom such authority has been delegated.  If administration is delegated to a
Committee, the Committee shall have, in connection with the administration of
the Plan, the powers theretofore possessed by the Board that have been
delegated to the Committee, including the power to delegate to a subcommittee
any of the administrative powers the Committee is authorized to exercise (and
references in this Plan to the Board shall thereafter be to the Committee or
subcommittee), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board.  The Board may retain the authority to
concurrently administer the Plan with the Committee and may, at any time,
revest in the Board some or all of the powers previously delegated.

(d)           Effect of Board’s Decision.  All determinations, interpretations and
constructions made by the Board in good faith shall not be subject to review by
any person and shall be final, binding and conclusive on all persons.

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4.             SHARES
SUBJECT TO THE PLAN.

(a)           Share Reserve.  Subject to the provisions of Section 11(a)
relating to Capitalization Adjustments, the shares of Common Stock that may be
issued pursuant to Options shall not exceed in the aggregate four hundred
twenty thousand (420,000) shares of Common Stock plus an annual increase to be
added on the first day of each Company fiscal year, beginning in 2006 and
ending in (and including) 2014, equal to the lesser of the following amounts:
(i) ninety thousand (90,000) shares of Common Stock, or (ii) an amount
determined by the Board.

(b)           Reversion of Shares to
the Share Reserve.  If any Option
shall for any reason expire or otherwise terminate, in whole or in part,
without having been exercised in full, the shares of Common Stock not acquired
under such Option shall revert to and again become available for issuance under
the Plan.  If any shares subject to an
Option are not delivered to an Optionholder because such shares are withheld
for the payment of taxes or the Option is exercised through a reduction of
shares subject to the Option (i.e.,
“net exercised”), the number of shares that are not delivered to the
Optionholder as a result thereof shall remain available for issuance under the
Plan.  If the exercise price of an Option
is satisfied by tendering shares of Common Stock held by the Optionholder
(either by actual delivery or attestation), then the number of shares so
tendered shall remain available for issuance under the Plan.

(c)           Source of Shares.  The shares of Common Stock subject to the
Plan may be unissued shares or reacquired shares, bought on the market or
otherwise.

5.             ELIGIBILITY.

The Options, as set forth
in Section 6, automatically shall be granted under the Plan to all Non-Employee
Directors who meet the criteria specified in Section 6.

6.             NON-DISCRETIONARY
GRANTS.

(a)           Initial Grants.  Without
any further action of the Board, each person who after the IPO Date is elected
or appointed for the first time to be a Non-Employee Director automatically
shall, upon the date of his or her initial election or appointment to be a
Non-Employee Director, be granted an Initial Grant to purchase thirty-five
thousand (35,000) shares of Common Stock on the terms and conditions set forth
herein.

(b)           Annual Grants.

(i)            Without any
further action of the Board, on the date of each Annual Meeting, commencing
with the Annual Meeting in 2006, each person who is then a Non-Employee
Director automatically shall be granted an Annual Grant to purchase twelve
thousand five hundred (12,500) shares of Common Stock on the terms and
conditions set forth herein; provided,
however, that if the person has not been serving as a Non-Employee
Director for the entire period since the preceding Annual Meeting, then the
number of shares subject to such Annual Grant shall be reduced pro rata for
each full quarter prior to the date of grant during such period for which such
person did not serve as a Non-Employee Director.

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(ii)           Without any further
action of the Board, on the date of each Annual Meeting, commencing with the
Annual Meeting in 2006, each person who is a Non-Employee Director and is then
serving as chairperson of the Board automatically shall be granted an
Additional Annual Grant to purchase ten thousand (10,000) shares of Common
Stock on the terms and conditions set forth herein; provided, however, that if the person has not been serving
as chairperson of the Board for the entire period since the preceding Annual
Meeting, then the number of shares subject to such Additional Annual Grant
shall be reduced pro rata for each full quarter prior to the date of grant
during which such person did not serve in such capacity.

(iii)         Without any further
action of the Board, on the date of each Annual Meeting, commencing with the
Annual Meeting in 2006, each person who is a Non-Employee Director and is then
serving as chairperson of the audit committee of the Board automatically shall
be granted an Additional Annual Grant to purchase seven thousand five hundred
(7,500) shares of Common Stock on the terms and conditions set forth herein; provided, however, that if the person has
not been serving as chairperson of the audit committee of the Board for the
entire period since the preceding Annual Meeting, then the number of shares
subject to such Additional Annual Grant shall be reduced pro rata for each full
quarter prior to the date of grant during which such person did not serve in
such capacity.

(iv)          Without any further
action of the Board, on the date of each Annual Meeting, commencing with the
Annual Meeting in 2006, each person who is a Non-Employee Director and is then
serving as chairperson of the compensation committee of the Board automatically
shall be granted an Additional Annual Grant to purchase two thousand five
hundred (2,500) shares of Common Stock on the terms and conditions set forth
herein; provided, however, that
if the person has not been serving as chairperson of the compensation committee
of the Board for the entire period since the preceding Annual Meeting, then the
number of shares subject to such Additional Annual Grant shall be reduced pro
rata for each full quarter prior to the date of grant during which such person
did not serve in such capacity.

(v)            Without any
further action of the Board, on the date of each Annual Meeting, commencing
with the Annual Meeting in 2006, each person who is a Non-Employee Director and
is then serving as chairperson of the nominating and corporate governance
committee of the Board automatically shall be granted an Additional Annual
Grant to purchase two thousand five hundred (2,500) shares of Common Stock on
the terms and conditions set forth herein;
provided, however, that if the person has not been serving as
chairperson of the nominating and corporate governance committee of the Board
for the entire period since the preceding Annual Meeting, then the number of
shares subject to such Additional Annual Grant shall be reduced pro rata for
each full quarter prior to the date of grant during which such person did not
serve in such capacity.

7.             OPTION
PROVISIONS.

Each Option shall be in
such form and shall contain such terms and conditions as required by the
Plan.  Each Option shall contain such
additional terms and conditions, not inconsistent with the Plan, as the Board
shall deem appropriate.  Each Option
shall include (through incorporation of provisions hereof by reference in the
Option or otherwise) the substance of each of the following provisions:

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(a)           Term.  No Option shall be exercisable after the
expiration of ten (10) years from the date on which it was granted.

(b)           Exercise Price.  The exercise price of each Option shall be
one hundred percent (100%) of the Fair Market Value of the Common Stock subject
to the Option on the date the Option is granted.

(c)           Consideration.  The purchase price of Common Stock acquired
pursuant to an Option shall be paid, to the extent permitted by applicable law,
either (i) in cash at the time the Option is exercised or (ii) at the
discretion of the Board either at the time of the grant of the Option or
subsequent thereto (1) by delivery to the Company of other Common Stock at the
time the Option is exercised, (2) by a “net exercise” of the Option (as further
described below), (3) pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board that, prior to the issuance of Common
Stock, results in either the receipt of cash (or check) by the Company or the
receipt of irrevocable instructions to pay the aggregate exercise price to the
Company from the sales proceeds or (4) in any other form of legal consideration
that may be acceptable to the Board. 
Unless otherwise specifically provided in the Option, the purchase price
of Common Stock acquired pursuant to an Option that is paid by delivery to the
Company of other Common Stock acquired, directly or indirectly from the
Company, shall be paid only by shares of the Common Stock of the Company that
have been held for more than six (6) months (or such longer or shorter period
of time required to avoid a charge to earnings for financial accounting
purposes).

In the case of a “net exercise” of an Option, the
Company will not require a payment of the exercise price of the Option from the
Optionholder but will reduce the number of shares of Common Stock issued upon
the exercise by the largest number of whole shares that has a Fair Market Value
that does not exceed the aggregate exercise price.  With respect to any remaining balance of the
aggregate exercise price, the Company shall accept a cash payment from the Optionholder.  Shares of Common Stock will no longer be outstanding
under an Option (and will therefore not thereafter be exercisable) following
the exercise of such Option to the extent of (i) shares used to pay the
exercise price of an Option under a “net exercise”, (ii) shares actually
delivered to the Optionholder as a result of such exercise and (iii) shares
withheld for purposes of tax withholding.

(d)           Transferability.  An Option
is transferable by will or by the laws of descent and distribution.  An Option also may be transferable upon
written consent of the Company if, at the time of transfer, a Form S-8
registration statement under the Securities Act is available for the exercise
of the Option and the subsequent resale of the underlying securities.  In addition, an Optionholder may, by
delivering written notice to the Company, in a form provided by or otherwise
satisfactory to the Company, designate a third party who, in the event of the
death of the Optionholder, shall thereafter be entitled to exercise the Option.

(e)           Vesting.  Options shall vest as follows:

(i)            Initial
Grants:  1/36th of the shares of Common
Stock subject to an Initial Grant shall vest monthly over three (3) years.

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(ii)           Annual Grants and
Additional Annual Grants:  1/12th of the
shares of Common Stock subject to each Annual Grant and Additional Annual Grant
shall vest monthly over one (1) year.

(f)            Termination of
Continuous Service.  In the event
that an Optionholder’s Continuous Service terminates for any reason, the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise such Option as of the date of termination of
Continuous Service) but only within such period of time ending on the
expiration of the term of the Option as set forth in the Option Agreement.  If, after termination of Continuous Service,
the Optionholder does not exercise his or her Option within the time specified
in the Option Agreement, the Option shall terminate.

8.             SECURITIES LAW COMPLIANCE.

The Company shall seek to
obtain from each regulatory commission or agency having jurisdiction over the
Plan such authority as may be required to grant Options and to issue and sell
shares of Common Stock upon exercise of the Options; provided, however, that this undertaking shall not require
the Company to register under the Securities Act the Plan, any Option or any
Common Stock issued or issuable pursuant to any such Option.  If, after reasonable efforts, the Company is
unable to obtain from any such regulatory commission or agency the authority
which counsel for the Company deems necessary for the lawful issuance and sale
of Common Stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell Common Stock upon exercise of such
Options unless and until such authority is obtained.

9.             USE
OF PROCEEDS FROM STOCK.

Proceeds from the sale of
Common Stock pursuant to Options shall constitute general funds of the Company.

10.          MISCELLANEOUS.

(a)           Acceleration of
Exercisability and Vesting.  The
Board shall have the power to accelerate the time at which an Option may first
be exercised or the time during which an Option or any part thereof will vest
in accordance with the Plan, notwithstanding the provisions in the Plan or the
Option stating the time at which it may first be exercised or the time during
which it will vest.

(b)           Stockholder Rights.  No Optionholder shall be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any shares
of Common Stock subject to such Option unless and until such Optionholder has
satisfied all requirements for exercise of the Option pursuant to its terms.

(c)           No Service Rights.  Nothing in the Plan, any Option Agreement or
other instrument executed thereunder or any Option granted pursuant thereto
shall confer upon any Optionholder any right to continue to serve the Company
as a Non-Employee Director or shall affect the right of the Company or an
Affiliate to terminate (i) the employment of an Employee with or without notice
and with or without cause, (ii) the service of a Consultant pursuant to the
terms of such Consultant’s agreement with the Company or an Affiliate or (iii)
the service of a

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Director pursuant to the Bylaws of the Company or an
Affiliate, and any applicable provisions of the corporate law of the state in
which the Company or the Affiliate is incorporated, as the case may be.

(d)           Investment Assurances.  The Company may require an Optionholder, as a
condition of exercising or acquiring Common Stock under any Option, (i) to give
written assurances satisfactory to the Company as to the Optionholder’s
knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Option; and (ii) to give
written assurances satisfactory to the Company stating that the Optionholder is
acquiring the Common Stock subject to the Option for the Optionholder’s own
account and not with any present intention of selling or otherwise distributing
the Common Stock.  The foregoing
requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (1) the issuance of the shares of Common Stock upon the exercise
or acquisition of Common Stock under the Option has been registered under a
then currently effective registration statement under the Securities Act or (2)
as to any particular requirement, a determination is made by counsel for the
Company that such requirement need not be met in the circumstances under the
then applicable securities laws.  The
Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the Common Stock.

(e)           Withholding Obligations.  To the extent provided by the terms of an
Option Agreement, the Company may in its sole discretion, satisfy any federal,
state or local tax withholding obligation relating to an Option by any of the
following means (in addition to the Company’s right to withhold from any
compensation paid to the Optionholder by the Company) or by a combination of
such means:  (i) causing the Optionholder
to tender a cash payment; (ii) withholding shares of Common Stock from the
shares of Common Stock issued or otherwise issuable to the Optionholder in
connection with the Option; or (iii) via such other method as may be set forth
in the Option Agreement.

11.          ADJUSTMENTS
UPON CHANGES IN COMMON STOCK.

(a)           Capitalization
Adjustments.  If any change is made
in, or other event occurs with respect to, the Common Stock subject to the
Plan, or subject to any Option, without the receipt of consideration by the
Company (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration by the Company (each a “Capitalization Adjustment”)), the Plan will
be appropriately adjusted in the class(es) and maximum number of securities
subject both to the Plan pursuant to Section 4 and to the nondiscretionary
Options specified in Section 6, and the outstanding Options will be
appropriately adjusted in the class(es) and number of securities and price per share
of Common Stock subject to such outstanding Options.  The Board shall make such adjustments, and
its determination shall be final, binding and conclusive.  (Notwithstanding the foregoing, the

 11
 

conversion of any convertible securities of the
Company shall not be treated as a transaction “without receipt of consideration”
by the Company.)

(b)           Dissolution or
Liquidation.  In the event of a
dissolution or liquidation of the Company, then all outstanding Options shall
terminate immediately prior to the completion of such dissolution or
liquidation.

(c)           Corporate Transaction. 
In the event of a Corporate Transaction, any surviving corporation or
acquiring corporation may assume or continue any or all Options outstanding
under the Plan or may substitute similar stock options for Options outstanding
under the Plan (including options to acquire the same consideration paid to the
stockholders of the Company, as the case may be, pursuant to the Corporate
Transaction).  In the event that any
surviving corporation or acquiring corporation does not assume or continue all
such outstanding Options or substitute similar stock options for all such
outstanding Options, then with respect to Options that have been not assumed,
continued or substituted and that are held by Optionholders whose Continuous
Service has not terminated prior to the effective time of the Corporate
Transaction, the vesting of such Options (and, if applicable, the time at which
such Options may be exercised) shall (contingent upon the effectiveness of the
Corporate Transaction) be accelerated in full to a date prior to the effective
time of such Corporate Transaction as the Board shall determine (or, if the
Board shall not determine such a date, to the date that is five (5) days prior
to the effective time of the Corporate Transaction), and such Options shall
terminate on the effective time of the Corporate Transaction if not exercised
(if applicable) at or prior to such effective time.  With respect to any other Options outstanding
under the Plan that have not been assumed, continued or substituted, the
vesting of such Options (and, if applicable, the time at which such Options may
be exercised) shall not be accelerated, unless otherwise provided in a written
agreement between the Company or any Affiliate and the Optionholder, and such
Options shall terminate if not exercised (if applicable) prior to the effective
time of the Corporate Transaction.

(d)           Change in Control.  An
Option may be subject to additional acceleration of vesting and exercisability
upon or after a Change in Control as may be provided in the Option Agreement
for such Option or as may be provided in any other written agreement between
the Company or any Affiliate and the Optionholder, but in the absence of such
provision, no such acceleration shall occur.

12.          AMENDMENT
OF THE PLAN AND OPTIONS.

(a)           Amendment of Plan.  Subject to the limitations, if any, of
applicable law, the Board, at any time and from time to time, may amend the
Plan.  However, except as provided in
Section 11(a) relating to Capitalization Adjustments, no amendment shall be
effective unless approved by the stockholders of the Company to the extent
stockholder approval is necessary to satisfy applicable law.

(b)           Stockholder Approval.  The Board, in its sole discretion, may submit
any other amendment to the Plan for stockholder approval.

 12
 

(c)           No Impairment of Rights.  Rights under any Option granted before
amendment of the Plan shall not be impaired by any amendment of the Plan unless
(i) the Company requests the consent of the Optionholder and (ii) the
Optionholder consents in writing.

(d)           Amendment of Options.  The Board, at any time, and from time to
time, may amend the terms of any one or more Options, including, but not
limited to, amendments to provide terms more favorable than previously provided
in the agreement evidencing an Option, subject to any specified limits in the
Plan that are not subject to Board discretion; provided,
however, that the rights under any Option shall not be impaired by
any such amendment unless (i) the Company requests the consent of the
Optionholder and (ii) the Optionholder consents in writing.

13.          TERMINATION
OR SUSPENSION OF THE PLAN.

(a)           Plan Term.  The Board may suspend or terminate the Plan
at any time. No Options may be granted under the Plan while the Plan is
suspended or after it is terminated.

(b)           No Impairment of Rights.  Suspension or termination of the Plan shall
not impair rights and obligations under any Option granted while the Plan is in
effect except with the written consent of the Optionholder.

14.          EFFECTIVE
DATE OF PLAN.

The Plan shall become
effective on the IPO Date, but no Option shall be exercised unless and until
the Plan has been approved by the stockholders of the Company, which approval
shall be within twelve (12) months before or after the date the Plan is adopted
by the Board.

15.          CHOICE
OF LAW.

The law of the state of California shall govern all
questions concerning the construction, validity and interpretation of this
Plan, without regard to such state’s conflict of laws rules.

 13Exhibit 10.1

 

 

 

20004 DELAWARE INC.

- and -

PALM MEADOWS ESTATES, LLC

- and -

GPRA THOROUGHBRED TRAINING CENTER, INC.

 

 

 

 

 

PALM MEADOWS

PALM BEACH COUNTY, FLORIDA

AGREEMENT OF PURCHASE AND SALE

 

TABLE OF CONTENTS

	
  ARTICLE 1

  
	
  INTERPRETATION

  
	
  1.1

  	
  Definitions

  	
  2

  
	
  1.2

  	
  Extended Meanings

  	
  6

  
	
  1.3

  	
  Headings

  	
  6

  
	
  1.4

  	
  Currency

  	
  6

  
	
  1.5

  	
  Severability

  	
  6

  
	
  1.6

  	
  Governing Law

  	
  6

  
	
  1.7

  	
  Time

  	
  6

  
	
  1.8

  	
  Schedules

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  
	
  AGREEMENT
  OF PURCHASE AND SALE

  
	
  2.1

  	
  Purchase and Sale

  	
  7

  
	
  2.2

  	
  Initial Deliveries by Vendor and GPRA

  	
  7

  
	
  2.3

  	
  Physical Inspections

  	
  9

  
	
  2.4

  	
  Purchaser’s Investigations

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  
	
  PURCHASE
  PRICE

  
	
  3.1

  	
  Method of Payment of Purchase Price

  	
  11

  
	
  3.2

  	
  Adjustments

  	
  11

  
	
  3.3

  	
  Holdback

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  
	
  CONDITIONS
  OF CLOSING

  
	
  4.1

  	
  Conditions for Vendor and GPRA

  	
  14

  
	
  4.2

  	
  Conditions for Purchaser

  	
  14

  
	
  4.3

  	
  Non-Satisfaction of Conditions

  	
  16

  
	
  4.4

  	
  Reasonable Efforts to Satisfy Conditions

  	
  16

  
	
  4.5

  	
  Separate Tax Parcel

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  
	
  TITLE

  
	
  5.1

  	
  Search of Title

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  
	
  CLOSING
  MATTERS

  
	
  6.1

  	
  Closing Arrangements

  	
  17

  
	
  6.2

  	
  Transfer of Development Rights

  	
  18

  
	
  6.3

  	
  Vendor’s Documents

  	
  18

  
	
  6.4

  	
  Purchaser’s Documents

  	
  19

  
	
  6.5

  	
  Taxes and Fees

  	
  19

  
	
  6.6

  	
  Escrow Closing

  	
  20

  

 

 i
 

 

	
  ARTICLE 7

  
	
  REPRESENTATIONS,
  WARRANTIES AND COVENANTS

  
	
  7.1

  	
  Representations, Warranties and Covenants of the
  Vendor

  	
  20

  
	
  7.2

  	
  Representations, Warranties and Covenants of GPRA

  	
  24

  
	
  7.3

  	
  Representations and Warranties of the Purchaser

  	
  27

  
	
  7.4

  	
  Survival

  	
  28

  
	
  7.5

  	
  Non-Waiver

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  
	
  INTERIM
  MATTERS

  
	
  8.1

  	
  Interim Period

  	
  29

  
	
  8.2

  	
  Approvals of the Purchaser

  	
  29

  
	
  8.3

  	
  Notice of Default

  	
  29

  
	
  8.4

  	
  Approvals

  	
  30

  
	
  8.5

  	
  Risk of Condemnation and Eminent Domain

  	
  30

  
	
  8.6

  	
  General Covenants of the Vendor

  	
  31

  
	
  8.7

  	
  General Covenants of GPRA

  	
  31

  
	
  8.8

  	
  General Covenants of the Purchaser

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  
	
  ENVIRONMENTAL
  INDEMNIFICATION

  
	
  9.1

  	
  Environmental Indemnification by the Vendor

  	
  32

  
	
  9.2

  	
  Assignability of Environmental Indemnification

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  
	
  PROFIT
  PARTICIPATION

  
	
  10.1

  	
  Profit Participation

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  
	
  GENERAL

  
	
  11.1

  	
  As-Is/Where-Is Transaction

  	
  35

  
	
  11.2

  	
  No Registration

  	
  36

  
	
  11.3

  	
  Obligations as Covenants

  	
  36

  
	
  11.4

  	
  Tender

  	
  36

  
	
  11.5

  	
  Relationship of the Parties

  	
  36

  
	
  11.6

  	
  Amendment of Agreement

  	
  36

  
	
  11.7

  	
  Notices

  	
  36

  
	
  11.8

  	
  Lawyers as Agents

  	
  37

  
	
  11.9

  	
  Confidentiality

  	
  38

  
	
  11.10

  	
  No Solicitation

  	
  38

  
	
  11.11

  	
  Further Assurances

  	
  38

  
	
  11.12

  	
  Entire Agreement

  	
  38

  
	
  11.13

  	
  Waiver

  	
  38

  
	
  11.14

  	
  Survival after Termination

  	
  38

  
	
  11.15

  	
  Survival

  	
  39

  
	
  11.16

  	
  Assignment

  	
  39

  
	
  11.17

  	
  Successors and Assigns

  	
  39

  
	
  11.18

  	
  Counterparts

  	
  39

  

 

 ii

AGREEMENT
OF PURCHASE AND SALE

MEMORANDUM OF AGREEMENT made as of the 27th day of March, 2007.

B E T W E E N:

20004 DELAWARE INC.,

(hereinafter referred to as the “Purchaser”),

OF
THE FIRST PART,

- and -

PALM MEADOWS ESTATES, LLC,

(hereinafter
referred to as the “Vendor”),

OF
THE SECOND PART,

- and -

GPRA THOROUGHBRED TRAINING CENTER, INC.,

(hereinafter
referred to as “GPRA”),

OF
THE THIRD PART.

WHEREAS the Vendor is the owner of the Subject Assets (as hereinafter
defined);

WHEREAS GPRA is the owner of the Development Rights (as hereinafter
defined);

WHEREAS the Vendor wishes to sell the Subject Assets and the Purchaser
wishes to purchase the Subject Assets from the Vendor on the terms and
conditions contained in this Agreement;

AND WHEREAS GPRA wishes to sell the Development Rights and the
Purchaser wishes to purchase the Development Rights from GPRA on the terms and
conditions contained in this Agreement;

NOW THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement and the sum of $10.00 paid by each of the Vendor,
GPRA and the Purchaser to the other and for other good and valuable
consideration (the receipt and sufficiency of which is hereby acknowledged),
the parties hereto covenant and agree as follows:

ARTICLE 1 

INTERPRETATION

1.1                                                                               Definitions

In this Agreement the terms defined in this Section 1.1 shall have the
following meanings, unless the context expressly or by necessary implication
otherwise requires:

“Adjustment
Date” means the Closing Date;

“Adjustments”
has the meaning ascribed thereto in Section 3.2;

“Agreement”, “this
Agreement”, “the Agreement”, “hereto”, “hereof”, “herein”, “hereby”, “hereunder”
and similar expressions mean or refer to this Agreement, as amended or
supplemented from time to time in writing by the parties hereto;

“Applicable
Laws” means all statutes, laws, by-laws, regulations,
ordinances and orders of governmental or other public authorities having
jurisdiction;

“Approved Contracts” means any Contracts
entered into after the date of this Agreement for which the Purchaser has been
given its approval in accordance with Section 8.2;

“Approved
Leases”  means
any Leases entered into after the date of this Agreement for which the
Purchaser has been given its approval in accordance with Section 8.2;

“Article”,
“Section”
and “Subsection”
mean and refer to the specified Article, Section and Subsection of this
Agreement;

“Balance”  has
the meaning ascribed thereto in Section 3.1;

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

“Claims”  means
claims, suits, proceedings, liabilities, obligations, losses, damages,
penalties, judgments, costs, expenses, fines, disbursements, legal fees on a
substantial indemnity basis, interest, demands and actions of any nature or any
kind whatsoever;

“Closing” means the closing of the Transaction;

“Closing Date” means March 28, 2007,
as such date may be extended in accordance with the provisions of this
Agreement, or such other date as the Vendor, GPRA and the Purchaser may agree
in writing;

“Closing Documents” means the agreements, instruments and other
deliveries to be delivered on the Closing pursuant to Sections 6.3 and 6.4;

 2
 

“Comprehensive Plan” means the Palm Beach  County 1989 Comprehensive Plan, Land Use
Element;

“Contracts” means any contracts and agreements entered
into by the Vendor or by which the Vendor is bound in respect of the severance,
development, construction, management, leasing, maintenance or operation of the
Lands;

“Deed” has the
meaning ascribed thereto in Subsection 6.3(a);

“Development Rights” means all of the
transferable rights to develop residential dwelling units available to
the Palm Meadows Training Center Lands and owned by GPRA, calculated in
accordance with Applicable Laws, including Section 5 of the ULDC;

“Due Diligence” has the meaning ascribed thereto in Section
2.4(a);

“Due Diligence Date” means March 27, 2007;

“Encumbrances” means all mortgages, pledges, charges,
liens, debentures, trust deeds, assignments by way of security, security
interests, conditional sales contracts or other title retention agreements or
similar interests or instruments charging, or creating a security interest in
the Subject Assets or any part thereof or interest therein, and any agreements,
leases, licences, occupancy agreements, options, easements, rights of way,
restrictions, executions or other encumbrances (including notices or other
registrations in respect of any of the foregoing) affecting title to the
Subject Assets or any part thereof or interest therein;

“Environmental Laws” means all applicable federal, state,
municipal and local laws, including without limitation all statutes, by-laws
and regulations and all orders, directives and decisions rendered by, and
policies, instructions, guidelines and similar guidance of, any ministry,
department or administrative or regulatory agency relating to the protection of
the environment, occupational health and safety or the manufacture, processing,
distribution, use, treatment, storage, disposal, packaging, transport,
handling, containment, clean-up or other remediation or corrective action of
any Hazardous Substances;

“Environmental Permits” means all licences, permits, approvals,
consents, certificates, registrations and other authorizations issued pursuant
to Environmental Laws;

“Environmental Reports” means reports, audits and studies of the
nature described in Subsections 2.2(i);

“Escrow
Agent” has the meaning ascribed thereto in Section 6.1;

“Estimated Remaining Environmental Costs Amount” has the meaning ascribed thereto
in Section 3.3;

“Execution Date”
means the date as of which this Agreement is made, as set out in the first page
of this Agreement;

 3
 

“Existing
Contracts”  means Contracts in force on the date of this
Agreement, which are listed on Schedule C attached hereto;

“Existing Leases” means Leases in force on the date of this
Agreement, which are listed on Schedule D attached hereto;

“Final Adjustment Date” has the meaning ascribed thereto in Section
3.2;

“Governmental Authority” means any government, regulatory authority,
government department, agency, commission, board, tribunal or court having
jurisdiction over the property;

“Hazardous Substances” means any pollutants, contaminants,
chemicals, deleterious substances, waste (including without limitation
industrial, toxic or hazardous wastes), petroleum or petroleum products,
asbestos, PCBs, underground storage tanks and the contents thereof, flammable
materials, radioactive materials, and/or molds as defined in Environmental
Laws;

“Holdback Amount”
has the meaning ascribed thereto in Section 3.3;

“Indemnity Period”
has the meaning ascribed thereto in Section 9.1;

“Interim
Closing Documents” has the meaning ascribed thereto in Section 6.6;

“IRR” has the
meaning ascribed thereto in Subsection 10.1(a);

“Lands”  means the fee simple interest in lands and
premises having an area of approximately 157 acres located
on the east side of Lyons Road, about 1⁄2 mile north of Boynton Beach
Boulevard in Unincorporated Palm Beach County, Florida and spanning from Lyons
Road westward to Florida’s Turnpike,
and legally described in the attached Schedule A, together with any and all
improvements located on or in the Lands and any and all development and density
rights, easements, rights-of-way and other rights and interests appurtenant
thereto and any and all improvements located therein;

“Leases”  means any agreements to lease, leases,
renewals of leases and other rights (including licences) granted by or on
behalf of the Vendor or its predecessors in title as owner of the Lands which
entitle any Person to possess or occupy any space on or within the Lands,
together with all security, guarantees and indemnities relating thereto, other
than the oral arrangements between the Vendor and the occupants of the
Residences;

“Non-Waiver Notice” has the meaning ascribed thereto in
Subsection 2.4(b);

“Notice” has the meaning ascribed thereto in Section
11.6;

“Palm
Meadows Training Center Lands” means the lands legally
described on Schedule B;

 4
 

“Permits” means,
to the extent assignable, all the right, title, benefit and interest of the
Vendor in any and all licenses (other than pari mutuel or other horse racing or
gaming related licenses), franchises, governmental and other approvals,
development rights and permits relating to the Lands in the Vendor’s possession
or control;

“Permitted
Encumbrances” means unregistered and registered encumbrances,
liens, agreements and other instruments affecting the Lands which have been
accepted by the Purchaser by notice in writing to the Vendor on or before the
Due Diligence Date or have been deemed to be accepted by the Purchaser as per
the terms of Subsection 4.2(l);

“Person”
means an individual, partnership, corporation, trust, unincorporated
organization, government, or any department or agency thereof, and the
successors and assigns thereof or the heirs, executors, administrators or other
legal representatives of an individual;

“Profit Participation”
has the meaning ascribed thereto in Subsection 10.1(a);

“Purchase Price” means the amount of Thirty Five Million Dollars ($35,000,000.00)
subject to the
adjustments provided for in Section 3.2 and the Holdback Amount;

“Purchaser’s Solicitors” means Davies Ward Phillips & Vineberg LLP, Suite 4400, 1 First Canadian Place,
100 King Street West, Toronto, Ontario, Canada or such other firm or firms of
solicitors acting for the Purchaser and notice of which is provided to the
Vendor in accordance with this Agreement;

“Registration Documents” has the meaning ascribed thereto in Section
6.6 hereof;

“Requisitions Notice” has the meaning ascribed thereto in Section
5.1;

“Statement
of Adjustments” has the meaning ascribed thereto in Section 3.2;

“Subject Assets” means the Lands, the Existing Leases, the
Existing Contracts, the Permits, the Environmental Permits and all other
assets, undertaking and property, tangible or intangible, of the Vendor, if
any, relating exclusively to the Lands;

“Tenants”  means all Persons having a right to possess
or occupy the Lands or any part thereof now or hereafter pursuant to a Lease;

 “Time of Closing” means 9:00 a.m. (Toronto time) on the
Closing Date, or such other time on the Closing Date as the Vendor, GPRA and
Purchaser may agree;

“Title Commitment”
has the meaning ascribed thereto in Subsection 4.2(k);

“Title Insurer”
means Fidelity National Title
Insurance Company;

“Transaction” means the transaction of purchase and sale
of the Subject Assets and the Development Rights provided for in this
Agreement;

“ULDC” means the
Unified Land Development Code for Palm Beach Country, Florida;

 5
 

“Vendor Request”
has the meaning ascribed thereto in Subsection 10.1(d); and

“Vendor’s Solicitors” means Akerman Senterfitt, One Southeast Third Avenue, 28th Floor, Miami, FL, USA 33131-1714, or such other firm or firms of solicitors
acting for the Vendor from time to time and notice of which is provided to the
Purchaser in accordance with this Agreement.

1.2                                                                               Extended
Meanings

Words importing the singular include the plural and vice versa.  Words importing the masculine gender include
the feminine and neuter genders.

1.3                                                                               Headings

The
division of this Agreement into Articles, Sections, Subsections and other
subdivisions, the insertion of headings and the inclusion of a table of
contents are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.

1.4                                                                               Currency

Unless otherwise expressly stated in this Agreement, all references to
money shall refer to U.S. currency.

1.5                                                                               Severability

If any provision contained in this Agreement which is not a fundamental
term hereof, or its application to any Person or circumstance, shall to any
extent be invalid or unenforceable, the remainder of this Agreement or the
application of such provision to Persons or circumstances other than those to
which it is held invalid or unenforceable shall not be affected, and each
provision of this Agreement shall be separately valid and enforceable to the
fullest extent permitted by law.

1.6                                                                               Governing
Law

This Agreement shall be governed by and construed in accordance with
the laws of the State of Florida and the applicable laws of the United States
of America.  References to statutes shall
be deemed to be references to such statutes as they exist on the date of this
Agreement.

1.7                                                                               Time

Time
shall be of the essence of this Agreement. 
Except as expressly set out in this Agreement, the computation of any
period of time referred to in this Agreement shall exclude the first day and
include the last day of such period.  If
the time limited for the performance or completion of any matter under this
Agreement expires or falls on a day that is not a Business Day, the time so
limited shall extend to the next following Business Day.  The time limited for performing or completing
any matter under this Agreement may be extended or

 6
 

abridged by an agreement in writing by the parties or by their
respective solicitors. All references herein to time are references to Toronto
time.

1.8                                                                               Schedules

The following schedules form part of this Agreement:

	
  

  	
  Schedule A

  	
  -

  	
  Legal Description of the Lands

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Schedule B

  	
  -

  	
  Legal Description of the Palm Meadows Training
  Center Lands

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Schedule C

  	
  -

  	
  List of Existing Contracts

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Schedule D

  	
  -

  	
  List of Existing Leases

  

 

ARTICLE 2

AGREEMENT OF PURCHASE AND SALE

2.1                                                                               Purchase
and Sale

The Purchaser hereby offers and agrees to purchase the Subject Assets
from the Vendor and the Development Rights from GPRA, and each of the Vendor
and GPRA hereby agrees to sell the Subject Assets and the Development Rights,
respectively, to the Purchaser, all for the Purchase Price (to be paid entirely
to the Vendor, on behalf of itself and GPRA, as provided herein, and allocated
by the Vendor and GPRA in their sole discretion and without the involvement of
the Purchaser) in accordance with, and subject to, the terms and conditions of
this Agreement.

2.2                                                                               Initial
Deliveries by Vendor and GPRA

No later than 5:00 p.m. on the Business Day prior to the Closing Date,
the Vendor shall have delivered to the Purchaser the following in respect of
the Subject Assets:

(a)                                  (i) copies of all Existing Leases; and (ii) a
copy of each notice of default, if any, received or sent by or on behalf of the
Vendor in respect of any Existing Lease
if the default referred to in such notice is still outstanding;

(b)                                 (i) copies of all Existing Contracts; and
(ii) a copy of each notice of default, if any, received or sent by or on behalf
of the Vendor in respect of any Existing Contract if the default referred to in such notice is still
outstanding;

(c)                                  the most current survey of the Lands, if any,
in the Vendor’s possession, which shows the Lands, as currently constituted,
together with all title deeds in respect of the Lands;

(d)                                 all plans, specifications, drawings and
operation manuals relating to the Lands in the possession or control of the
Vendor;

 7
 

(e)                                  copies of realty tax assessments, notices and
tax bills relating to the Lands in the possession or control of the Vendor and
copies of any notices of any outstanding realty tax appeals and correspondence
relating thereto;

(f)                                    a list of outstanding work orders, notices,
directives and letters of non-compliance issued by any governmental or
other authority affecting the Lands, if any, and a copy of each of them of
which the Vendor has received written notice;

(g)                                 a list of all outstanding litigation,
arbitration, mediation or other proceedings affecting or relating to the Lands
to which the Vendor is a party or in respect of which it has been formally notified
and of all threatened litigation, arbitration, mediation or other proceedings
affecting or relating to the Lands of which the Vendor has received written
notice;

(h)                                 a list of any third party consents, waivers
or assumptions which are necessary to permit the conveyance of the Subject
Assets to the Purchaser;

(i)                                     all reports, audits or studies relating to
environmental matters in respect of the Lands (including, without limitation,
compliance of the Lands with Environmental Laws) which is in the possession or
control of the Vendor (including, without limitation, any such document
prepared for any purchaser or prospective purchaser which is in the possession
or control of the Vendor);

(j)                                     copies of each report, audit or study of the
soil conditions of the Lands, or any part thereof, prepared by a Person other
than the Vendor or its manager which is in the possession or control of the
Vendor;

(k)                                  copies of each report, audit or study
relating to the physical condition of the Lands, or any part thereof, prepared
by a Person other than the Vendor or its manager which is in the possession or
control of the Vendor (including, without limitation, any such document
prepared for any purchaser or prospective purchaser which is in the possession
or control of the Vendor);

(l)                                     copies of all architectural agreements,
engineering agreements, development agreements, development permits, building
permits, occupancy permits and other operating permits and licences relating to
the Lands and all agreements with and permits and licences from federal, state
or municipal Governmental Authorities or owners of adjoining lands relating to
the development or operation of the Lands, in each case in the Vendor’s
possession or control;

(m)                               evidence, reasonably satisfactory to the Purchaser,
that the Lands constitute a properly subdivided, legally existing lot or parcel
of land that may be legally conveyed by the Vendor to the Purchaser at Closing
without any further approval by any Governmental Authority;  and

(n)                                 such other written information,
correspondence and documentation relating to the Subject Assets that is in the possession or control of the
Vendor and which the Purchaser requests, acting reasonably.

 8
 

No later than 5:00
p.m. on the Business Day prior to the Closing Date, GPRA shall have delivered
to the Purchaser such
written information, correspondence and documentation relating to the Development
Rights that is in the possession or
control of GPRA.

As used in this Section 2.2, the terms “control of
the Vendor” and “control of GPRA”
shall be limited to, in addition to the Vendor and GPRA, as applicable,
materials in the possession of management of Magna Entertainment Corp., legal
counsel to the Vendor and GPRA, as applicable, or any consultants, advisors or
other third party professionals commissioned, retained or instructed by the
Vendor or GPRA, as applicable.  Notwithstanding
any other provision in this Agreement to the contrary, it is acknowledged and
agreed that the Vendor has specifically excluded from the foregoing materials
contemplated in Subsections 2.2(a) — (n), and thereby has not provided to the
Purchaser, the Vendor’s financial projections, forecasts, budgets, appraisals
and internal memoranda relating to the Lands.

The Vendor will execute and deliver to the Purchaser within two (2)
Business Days after receipt of a written request from the Purchaser or the
Purchaser’s Solicitors, authorizations that may be sent by the Purchaser or the
Purchaser’s Solicitors to Governmental Authorities that authorizes such
Governmental Authorities to reveal to the Purchaser and the Purchaser’s
Solicitors all information, if any, on any files they have in respect of the
Lands.

Upon compliance by the
Vendor with all of its obligations set out in the preceding paragraphs of this
Section 2.2, the Vendor shall deliver to the Purchaser a notice stating that it
has done so.

Any lists, documentation or other information provided by the Vendor or
GPRA pursuant to this Section shall be amended or supplemented, as necessary
from time to time, until 5:00 p.m. on the second (2nd)
Business Day immediately preceding the Due Diligence Date.  In addition, if either the Vendor or GPRA
becomes aware of a failure to provide any document or other information that it
is required to provide in accordance with this Section at any time prior to the
Due Diligence Date, it shall forthwith advise the Purchaser in writing of such
failure and deliver such information to the Purchaser.  In the event of any such failure by either
the Vendor or GPRA, at the Purchaser’s discretion, the Due Diligence Date and
the Closing Date shall each automatically be extended to the date which is five
(5) Business Days after the Purchaser receives such document or information
from the Vendor or GPRA, as applicable.

2.3                                                                               Physical
Inspections

(a)          At any time, and from time to time
prior to Closing, and upon prior notice in writing to the Vendor from the
Purchaser of at least one (1) Business Day (or, in respect of the physical
inspections of particular premises that are leased on or within the Lands, such
longer notice period as the Vendor advises the Purchaser is necessary to comply
with the terms of the relevant Existing Leases or the Approved Leases (if
any)), the Purchaser and/or its representatives shall be entitled to enter onto
the Lands on any Business Day, at the Purchaser’s sole risk and expense, for
the purpose of conducting examinations, investigations, inspections, tests and
audits relating to the Subject Assets. 
Without limiting the generality of the foregoing, such examinations,
investigations, inspections, tests and audits may include:

(i)             environmental audits,
assessments or inspections of the Lands; and

 9
 

(ii)          tests relating to soil, groundwater and underground conditions of the
Lands.

Notwithstanding the
foregoing, the Purchaser agrees not to conduct any invasive tests relating to
soil, groundwater and underground conditions of the Lands.

(b)          The Vendor shall execute such
authorizations as are submitted by the Purchaser’s Solicitors to the Vendor’s
Solicitors in order to enable the Purchaser’s Solicitors to obtain information
from Governmental Authorities concerning the Lands, which authorizations are to be
executed and delivered within two (2) Business Days after submission to the
Vendor’s Solicitors, and which authorizations may request information but shall
not request or suggest inspections by any Authority.

(c)          Unless
the Vendor otherwise agrees in writing, the Purchaser and its representatives
shall not enter onto the Lands and
perform such investigations, inspections, tests or audits unless accompanied by
a representative of the Vendor, provided that the Vendor shall make a
representative available on a reasonable basis upon receiving such notice.  For greater certainty, nothing herein shall
restrict the Purchaser from enjoying the same access to the Lands as would any other member of the
public enjoying lawful access to the Lands.  The Purchaser shall pay all costs of any
repairs required to be made to the Lands
as a result of the aforesaid investigations, inspections, tests and
audits, and shall fully indemnify the Vendor from all costs of repairing any
damage caused by such inspections, tests or audits and all Claims relating to
any such inspections, tests and audits and from all Claims incurred by the
Vendor as a result thereof including, without limitation, any builders’ liens
registered against the Lands as
a result thereof.  This indemnity shall
survive termination of this Agreement regardless of the cause of such
termination. If the Purchaser does not
perform such repairs, the Vendor shall have the right to perform, or cause to
be performed, such work and to obtain reimbursement for the reasonable, out-of-pocket
costs of such work from the Purchaser, provided that the Vendor shall, if
possible in the circumstances, provide the Purchaser with advance written
notice of the work to be done, but the failure to give such notice shall not
affect the rights of the Vendor hereunder or otherwise render the Vendor liable
to the Purchaser.

(d)          The provisions of this Section 2.3 shall
survive the termination of this Agreement.

2.4                                                                               Purchaser’s
Investigations

(a)          On
or before 5:00 p.m. on
the Due Diligence Date the Purchaser may conduct (subject to compliance with
other relevant provisions of this Agreement) all investigations, inspections,
reviews, tests and audits relating to the Lands (including, without limitation,
title to the Subject Assets and compliance with Applicable Laws) and the
Transaction (collectively referred to herein as the “Due Diligence”) which the Purchaser deems necessary or
desirable in its discretion.

(b)          The
obligation of the
Purchaser to complete the Transaction pursuant to this Agreement is subject to
the condition that the Purchaser is satisfied with the Due Diligence in its
sole and absolute discretion on or before 5:00 p.m. on the Due Diligence
Date.  The Purchaser shall be deemed to
be satisfied with the results of its Due Diligence unless it delivers to the
Vendor on or before 5:00 p.m. on the Due Diligence Date a written notice (the “Non-Waiver

 10
 

Notice”) stating that it does not waive the condition contained in this
Subsection 2.4(b).  If the Purchaser
delivers the Non-Waiver Notice to the Vendor prior to 5:00 p.m. on the Due
Diligence Date, then this Agreement shall automatically terminate at such time
and, upon such termination, the Purchaser and the Vendor shall be released from
all obligations under this Agreement (except for those obligations which are
expressly stated to survive the termination of this Agreement).

ARTICLE 3

PURCHASE PRICE

3.1                                                                               Method
of Payment of Purchase Price

               On Closing, the Purchase Price
shall be satisfied by payment to the Vendor, or as the Vendor directs in
writing, by wire transfer of an amount (the “Balance”)
equal to the Purchase Price, as adjusted pursuant to Section 3.2, less the
Holdback Amount.

               Each of the Vendor and GPRA
acknowledges that the Purchase Price represents full payment for both the Lands
and the Development Rights, is to be paid entirely to the Vendor, as provided herein, on behalf of itself and
GPRA, and is to allocated by the Vendor and GPRA in their sole discretion and
without the involvement of the Purchaser.

3.2                                                                               Adjustments

(a)          The
Purchase Price shall be adjusted as set out in this Section (such adjustments
being referred to herein as the “Adjustments”).  Adjustments shall be made as of the
Adjustment Date and the Adjustment Date itself shall be for the account of the
Purchaser, such that except as herein otherwise provided: (i) the Vendor shall
be responsible for all expenses and entitled to all revenues accrued from the
Lands for the period ending on the day prior to the Adjustment Date; and (ii)
the Purchaser shall be responsible for all expenses and shall be entitled to
all revenues accruing from the Lands from and including the Adjustment Date.

(b)          The
Vendor (or its or the Purchaser’s agent) shall prepare and deliver to the
Purchaser at least one (1) Business Day prior to Closing a statement (the “Statement of Adjustments”) of the
Adjustments to be made on Closing with all Adjustments made as of the Closing
Date. The Statement of Adjustments shall have annexed to it complete details of
the calculations used by the Vendor to arrive at all debits and credits on the
Statement of Adjustments.  The Vendor
shall give to the Purchaser access to the Vendor’s working papers and back up
materials in order to confirm the Statement of Adjustments.

               If
the final cost or amount of any item which is to be adjusted on Closing cannot
be determined at Closing, then an initial Adjustment for such item shall be
made at Closing, such amount to be estimated by the Vendor and the Purchaser,
each acting reasonably, on the basis of the best evidence available at the
Closing as to what the final cost or amount of such item will be.  In each case when such cost or amount is determined
the Vendor or the Purchaser, as the case may be, shall within thirty (30) days
thereafter provide a complete statement of such final determination to the
other and within thirty (30) days thereafter (or if there is a dispute over
such amount, within thirty (30) days after the matter is determined by the
accountants pursuant to Subsection 3.2(d)) the necessary adjusting payment
shall be made.

 11
 

(c)          The
Purchaser shall provide the Vendor and its auditors, during normal business
hours at any time and from time to time after Closing upon reasonable prior
notice to the Purchaser, access to the books, files and records of the
Purchaser, for the purpose of calculating or verifying the amount of any
Adjustments.  In the absence of agreement
by the parties hereto, the final cost or amount of an item shall be determined
by a firm of chartered accountants appointed jointly by the Vendor and the
Purchaser within ten (10) Business Days after the issue is referred by one of
the parties to the accountants for such determination.  The cost of such accountants’ determination
shall be shared equally between the parties hereto.

(d)          No
Adjustments (including readjustments of amounts initially adjusted for at
Closing) may be claimed by either party after the first anniversary of the
Closing (the “Final Adjustment Date”).  Based solely upon the Adjustments (including
readjustments) claimed by either party before the Final Adjustment Date, the
Purchaser shall prepare and deliver to the Vendor on or before the twentieth
(20th) day of the calendar month following the
month in which the Final Adjustment Date occurs (or, if such day is not a
Business Day on the next following Business Day) a statement of Readjustments
which shall set out all final Adjustments (including readjustments) that have
not previously been determined and paid and also setting out the amount of the
adjusting payment to be made by the Vendor or the Purchaser, as the case may
be, within thirty (30) days after such statement of Readjustments is delivered
to the Vendor (or if there is a dispute over such statement, within thirty (30)
days after all disputes with respect to such statement are determined by the
accountants pursuant to Subsection 3.2(c)) the necessary adjusting payment
shall be made by the Vendor or the Purchaser, as the case may be.

(e)          The
Vendor shall assign to the Purchaser on Closing all of the Vendor’s rights,
title and benefit to all existing realty tax appeals and reassessments and all
refunds of realty taxes for the Lands, if any, together with a direction to the
applicable Government Authority to pay any refund of realty taxes to the
Purchaser and, if any appeal is pending, the authorization and appointment of
the Purchaser to continue such pending appeal; provided that:

(i)             any refund of realty taxes for the Lands in
respect of the period ending on the day preceding the Closing Date shall remain
the property of the Vendor;

(ii)          the Vendor shall make any payments in respect of realty or business
taxes for the period prior to the Closing Date arising from such reassessments
or appeals to the applicable Governmental Authorities;

(iii)       any refund or reassessment for the 2007 calendar year (after deduction
of out-of-pocket expenses in conducting any such appeal or reassessment,
including any commissions payable to agents or consultants) shall be readjusted
as of the Closing Date after the conclusion of any assessment appeal and
notwithstanding such readjustment occurs after the Final Adjustment Date;

(iv)      to the extent the Purchaser receives payment of any refund or
reassessment for the period prior to the Closing Date, the Purchaser shall hold
such refund or reassessment payment in trust for the Vendor and shall pay to
the Vendor the amount of any such refund or reassessment after

 12
 

                        deducting all reasonable costs and expenses
incurred by the Purchaser in connection with such appeal or reassessment; and

(v)         if, after Closing, the Purchaser wishes to discontinue any realty tax
appeal or reassessment in respect of realty taxes paid or payable for the Lands
during the period ending on the day preceding the Closing Date, the Purchaser
shall give notice to the Vendor and if requested by the Vendor, the Purchaser
shall re-assign to the Vendor all of the Purchaser’s right, title and benefit
to such appeals and reassessments with a direction to the municipality to pay
any resulting rebate of realty taxes to the Vendor.

Notwithstanding any other
provision in this Agreement to the contrary, in the event the Vendor pursues
any realty tax appeals and/or reassessments in respect of the Lands on or after
the Closing Date, any payments received by the Vendor in connection with such
appeals and/or reassessments that relate to the period prior to the Closing
Date shall be for the account of the Vendor. 
To the extent the Vendor receives any payments in connection with such
appeals and/or reassessments that relate to the period from and after the
Closing Date, the Vendor shall hold such payments in trust for the Purchaser
and forthwith remit them to the Purchaser.

3.3                                                                               Holdback

On Closing, Two
Hundred Thousand Dollars ($200,000.00) of the Purchase Price (the “Holdback Amount”) shall be retained by the
Purchaser and applied (subject to this Section 3.3) by the Purchaser towards
any costs that the Purchaser, acting in its sole discretion, incurs in
connection with bringing the Lands into compliance with Environmental Laws
and/or removing Hazardous Substances from the Lands (collectively, the “Environmental Remediation”) to the extent
that, as of the Closing Date, there exists a state of noncompliance with
Environmental Laws or Hazardous Substance on the Lands.  Prior to the 18-month anniversary of the
Closing Date, the Purchaser shall engage an environmental consultant to conduct
an environmental audit to determine the state of the Environmental Remediation
of the Lands, with such audit being commissioned at a time sufficient to permit
the environmental consultant to complete its work and deliver its report no
later than the 18-month anniversary of the Closing Date.  In the event such environmental audit (a
written copy of which shall be provided to the Vendor) concludes that no
further Environmental Remediation of the Lands is required, the Purchaser shall
pay to the Vendor, prior to the 18-month anniversary of the Closing Date, any
remaining Holdback Amount which has not been used to pay for the Environmental
Remediation.  In the event that the
environmental audit indicates that further Environmental Remediation is or may
be required, the costs thereof will be estimated by the environmental
consultant and such amount shall be deducted from the remaining Holdback Amount
at such time (if any) and shall remain the property of the Purchaser (and the
Vendor shall have no rights in respect thereof or entitlement thereto), with
the remaining balance of the Holdback Amount (if any) paid to the Vendor prior
to the 18-month anniversary of the Closing Date (it being acknowledged and
agreed that in the event that such environmental consultant determines that the
amount required to complete the Environmental Remediation is greater than or
equal to the remaining Holdback Amount at such time (if any), then the whole of
the remaining balance of the Holdback Amount shall remain the property of the
Purchaser and the Vendor shall have no rights in respect thereof or entitlement
thereto).

 13

ARTICLE 4 

CONDITIONS OF CLOSING

4.1                         Conditions for
Vendor and GPRA

The obligation of each of the Vendor and GPRA to complete the
Transaction shall be subject to the satisfaction of the following conditions:

(a)                                  by Closing, all of the terms, covenants and conditions
of this Agreement to be complied with or performed by the Purchaser shall have
been complied with or performed in all material respects;

(b)                                 on the Closing Date, the representations,
warranties and covenants of the Purchaser set out in Section 7.3 shall be true
or fulfilled, as the case may be; and

(c)                                  by Closing, each of the Vendor and GPRA shall
have obtained the approval of the Board of Directors of Magna Entertainment
Corp.

The conditions set forth in this Section 4.1 are for the sole benefit
of the Vendor and GPRA and each condition may be waived in whole or in part by
the Vendor or GPRA by notice to the Purchaser on or before the applicable date
referred to above.

4.2                         Conditions for
Purchaser

The obligation of the Purchaser to complete the Transaction shall be
subject to the satisfaction of the following conditions:

(a)                                  by 5:00 p.m. on the Due Diligence Date, the
Purchaser shall not have delivered a Non-Waiver Notice, it being agreed that
the decision of the Purchaser to deliver such Non-Waiver Notice shall be made
by the Purchaser in its sole and absolute discretion;

(b)                                 by Closing, each of the Vendor and GPRA shall
have obtained the approval of the Board of Directors of Magna Entertainment
Corp. and the Purchaser shall have obtained the approval of the Board of
Directors of MI Developments Inc.;

(c)                                  by Closing, all of the terms, covenants and
conditions of this Agreement to be complied with or performed by each of the
Vendor and GPRA shall have been complied with or performed in all material respects;

(d)                                 on Closing, the representations, warranties
and covenants of each of the Vendor and GPRA set out in this Agreement shall be
true or fulfilled, as the case may be, in all material respects;

(e)                                  on the Closing Date, no material adverse
change shall have occurred with respect to the Development Rights or the
financial, legal or physical condition of the Subject Assets prior to the Due
Diligence Date;

 14
 

(f)                                    on or before the Closing Date, the Vendor
shall have caused the delivery of all consents and approvals and execution of
all assumptions required in connection with the Transaction under the Permitted
Encumbrances, the Existing Leases, the Approved Leases (if any), the Existing
Contracts and the Approved Contracts (if any);

(g)                                 by the Closing Date, no action or proceeding,
at law or in equity, shall have been commenced by any Person to enjoin,
restrict or prohibit the Closing which has not, by the Closing Date, been
dismissed, quashed or permanently stayed without any further right of appeal or
right to seek leave to appeal;

(h)                                 on the Closing Date there shall not exist any
default or any event which, with the passage of time or the giving of notice or
both, would constitute a default in the performance and/or observance of the
obligations on the part of the Vendor under any of the Existing Leases, the
Approved Leases (if any), the Existing Contracts, the Approved Contracts (if
any) or the Permitted Encumbrances;

(i)                                     on Closing there shall not exist:

(i)             any information or documentation relating to
the Lands or the Development Rights which was not disclosed or made available
by the Vendor or GPRA, as applicable, to the Purchaser as required by Section
2.2; or

(ii)          any incompleteness of the information or documentation provided to the
Purchaser pursuant to Section 2.2 with respect to the subject matter of such
information or documentation; or

(iii)       any inaccuracy in any of the information or documentation provided to
the Purchaser pursuant to Section 2.2,

the
effect of which lack of disclosure, incompleteness or inaccuracy is that the
Purchaser was not aware of facts or circumstances which result, or could be
reasonably expected to result, in a material adverse change in the value of the
Lands or the Development Rights;

(j)                                     the Purchaser shall have received evidence
that the Lands constitute a properly subdivided, legally existing lot or parcel
of land that may be legally conveyed by the Vendor to the Purchaser at Closing
without any further approval by any Governmental Authority;

(k)                                  on Closing the Vendor shall have delivered
vacant possession of the Lands to the Purchaser, subject to the rights of the
Tenants under the Existing Leases and the Approved Leases (if any);

(l)                                     on Closing, the Vendor shall transfer to the
Purchaser good and marketable title in fee simple to the Lands, and the
Purchaser shall have obtained a title insurance commitment (the “Title Commitment”) in favour of the Purchaser, in form and
content satisfactory to the Purchaser, each free from any Encumbrances, other

 15
 

                                                than Permitted Encumbrances, it being
understood that an owner’s title insurance policy (the “Title Policy”)
in favour of the Purchaser for the full amount of the Purchase Price will be
issued as soon as practical thereafter. For greater certainty, to the extent
the Vendor is unable or unwilling to cure, prior to Closing, any objection to
the title exceptions raised in the draft Title Commitment delivered to the
Purchaser, and the Transaction contemplated hereunder is nevertheless
completed, the Purchaser shall be conclusively deemed to have accepted such
exceptions as Permitted Encumbrances; and

(m)                               if so requested prior to Closing, GPRA shall
have delivered to the Purchaser evidence, reasonably satisfactory to the
Purchaser, confirming (i) the number of Development Rights available to GPRA,
(ii) that GPRA is currently the valid, lien free owner of the Development
Rights, (iii) that GPRA has the ability and legal entitlement to convey and
transfer the Development Rights to the Purchaser at Closing in accordance with
the ULDC and any other Applicable Laws.

The conditions set forth in this Section 4.2 are for the sole benefit
of the Purchaser and each condition may be waived in whole or in part by the
Purchaser by notice to the Vendor and GPRA on or before the applicable date referred
to above.

4.3                         Non-Satisfaction of
Conditions

In the event any condition set forth in Section 4.1 or 4.2 is not
satisfied or waived on or before the applicable date and time referred to
therein, then this Agreement shall be terminated and of no further force or
effect whatsoever without any further action by either party hereto, and
neither party to this Agreement shall have a Claim against any other party
hereto with respect to this Agreement unless the reason for the condition not
being satisfied is the breach by such other party of an obligation under this
Agreement, in which case a Claim may be made against such other party.
Notwithstanding any other provisions of this Agreement, if by 5:00 p.m. on the
applicable date referred to in Section 4.1 or 4.2, as the case may be, the
party having the benefit of the relevant condition has not given notice to the
other party that such condition has been satisfied or waived, then it shall be
conclusively deemed for the purpose of this Agreement to have neither been
satisfied nor waived.

4.4                         Reasonable Efforts
to Satisfy Conditions

Each of the Vendor and GPRA shall act in good faith and use reasonable
efforts in the circumstances to satisfy or cause to be satisfied those
conditions set out in Section 2.3 and 4.2 which are within its reasonable
control and the Purchaser shall act in good faith and use reasonable efforts in
the circumstances to satisfy or cause to be satisfied those conditions set out
in Sections 4.1 that are within its reasonable control.

4.5                         Separate Tax Parcel

In the event that on
Closing the Lands do not constitute a separate tax parcel, the Transaction
shall be completed and the parties shall pro rate the realty taxes with the
Purchaser providing a cheque payable to the taxing authority for its pro rata
share of realty taxes in respect of the Lands accruing after the Closing Date
to the Vendor within ten (10) Business Days of the

 16
 

receipt of an
invoice from the Vendor for such amount. 
The Vendor undertakes to forward such cheque, along with its pro rata
share of the taxes, to the taxing authority on or before the date such taxes
are due. The parties agree to cooperate with each other in order to have the
separate tax parcel for the Lands created, if it is not already a separate tax
parcel at the Closing Date, as soon as reasonably possible after the Closing
Date.

ARTICLE 5 

TITLE

5.1                         Search of Title

The Purchaser shall be allowed until 5:00 p.m. on the Due Diligence
Date, at its own expense, to examine title to the Lands and the other matters
referred to in the next paragraph and to submit to the Vendor its objections to
the title to the Lands and such matters.

If the Purchaser has any valid objections based on, if applicable: (a)
title to the Lands, (b) the Lands not complying with all Applicable Laws
(including Environmental Laws and zoning and building laws, by-laws and
codes), or (c) the existence of any outstanding municipal or other governmental
work orders or deficiency notices relating to the Lands, then the Purchaser
shall deliver a notice in writing to the Vendor (the “Requisitions Notice”) listing any and all
such objections in reasonable detail on or before 5:00 p.m. on the Due
Diligence Date.  If any such objections
cannot be satisfied or corrected prior to the Closing Date, then the Purchaser
may, by written notice to the Vendor, waive such objections; and if such waiver
is not so made then either party may terminate this Agreement by delivering
notice to the other party to such effect and this Agreement, notwithstanding
any intermediate act or negotiations in respect of such objection, shall be
terminated, upon delivery of notice by either party.

Except for any valid objection so made, and except for any objection
going to the root of title or for any other matter or thing arising on or
before the Due Diligence Date, the Purchaser shall be conclusively deemed to
have accepted the Vendor’s title to the Lands and satisfied itself with respect
to the other matters referred to in this Section 5.1.

ARTICLE 6 

CLOSING MATTERS

6.1                         Closing Arrangements

Provided that all
conditions precedent to the Purchaser’s obligations to close as set forth in
this Agreement have been satisfied and fulfilled, or waived by the Purchaser,
as the case may be, the Purchaser shall pay the Purchase Price, subject to the
pro-rations adjustments described in Section 3.2 herein, in cash by wire
transfer of immediately available U.S. currency to the Title Insurer, acting as
Escrow Agent (the “Escrow Agent”),
in accordance with the terms and conditions of this Agreement. The Purchaser
shall deposit the Purchase Price with the Escrow Agent, to be held in escrow,
as early as reasonably practicable on the Closing Date. The Escrow Agent shall
hold and disburse the Purchase Price per the terms of this Agreement and
pursuant to and in accordance with the Statement of Adjustments mutually agreed
to and executed by the Vendor (or behalf of itself and GPRA) and the Purchaser.

 17
 

6.2                         Transfer of
Development Rights

GPRA hereby
acknowledges that upon payment of the Purchase Price by the Purchaser pursuant
to the terms hereof, GPRA does hereby remise, release and quit-claim to the
Purchaser all right, title, interest, claim and demand which GPRA has in and to
all of the Development Rights. At the Closing, GPRA shall deliver or cause to
be delivered such documentation as the Purchaser may reasonably require to
effect and evidence such transfer duly executed by GPRA in registrable form.
GPRA further acknowledges that once the Development Rights are transferred to
the Purchaser, the Purchaser is free to use such Development Rights (on the
Lands or on a “Receiving Area” (as such term is used in the ULDC) apart from
the Lands) or sell the Development Rights to a third party.

6.3                         Vendor’s Documents

The Vendor shall deliver or cause to be delivered at the Closing the
following:

(a)                                  a special warranty deed containing
covenants of further assurance (the “Deed”) in
respect of the Lands, in favour of the
Purchaser, duly executed by the Vendor;

(b)                                 such notices as the Purchaser may reasonably
require be given to the Tenants under the Existing Leases and the Approved
Leases (if any) and other parties to the assigned Existing Contracts and the
Approved Contracts (if any) of their assignment to the Purchaser, together with
directions relating to the payment of rent under the Existing Leases and the
Approved Leases (if any), and payment of other amounts under the assigned
Existing Contracts and the Approved Contracts (if any), all executed by the
Vendor in such form as the Purchaser may reasonably require;

(c)                                  a direction of the Vendor as to the payment
of the Balance, if there is any payee other than the Vendor;

(d)                                 an undertaking by the Vendor to re-adjust the
Adjustments as provided in Section 3.2;

(e)                                  subject to the terms of Subsection 4.2(l),
good and valid discharges or releases in registrable form of all Encumbrances,
other than Permitted Encumbrances;

(f)                                    all agreements, notices and other documents
required to be executed and delivered by the Vendor pursuant to the terms of
the Existing Leases, the Approved Leases (if any), the Existing Contracts, the
Approved Contracts (if any), the Permitted Encumbrances and all consents and
approvals from, and notifications to, any other Persons required thereunder in
connection with this Transaction;

(g)                                 copies of all records (including computer
records), documents, information and data (including computer data) relating to
the Lands in the possession or control of the Vendor, including without
limitation, all title documents and accounting and payment records;

(h)                                 the assignment of realty tax appeals
contemplated in Subsection 3.2(e);

 18
 

(i)                                     if
so requested by the Purchaser, reliance letters, in form and content acceptable
to the Purchaser, acting reasonably, from each Person who has issued the
reports delivered pursuant to Subsection 2.2;

(j)                                     affidavits
in favour of the Title Insurer, in form and content satisfactory to the Title
Insurer, to remove standard exceptions in the Title Commitment, or as may
otherwise be required by the Title Insurer; and

(k)                                  all other conveyances and other documents
which are required and which the Purchaser has reasonably requested to give
effect to this Transaction, including the proper transfer, assignment and
conveyance of the Subject Assets by the Vendor to the Purchaser, subject to the
Permitted Encumbrances.

6.4                         Purchaser’s
Documents

The Purchaser shall deliver or cause to be delivered at the Closing the
following:

(a)                                  a wire transfer for the amount payable to the
Vendor on Closing pursuant to Section 3.1;

(b)                                 an undertaking by the Purchaser to re-adjust
the Adjustments as provided in Section 3.2; and

(c)                                  all other documents which the Vendor has
reasonably requested to give effect to this Transaction.

6.5                         Taxes and Fees

On the Closing
Date, the Vendor and the
Purchaser shall have the responsibility of equally splitting all state or
county transfer taxes and documentary stamps, if any, including those payable
in connection with the recording of the Deed, occasioned by the conveyance of
the Lands from the Vendor to the Purchaser, as well as any notary fees incurred
in connection therein. On the Closing Date, the Vendor shall pay all costs and
expenses arising from the Purchaser’s search of title to the Lands. GPRA shall
be responsible for, and shall pay, all costs and expenses associated with any
registrations or recordings associated with the transfer of the Development
Rights or the restrictive covenant referred to in  Section 8.7(d).  On the Closing Date, the Purchaser shall pay
the cost of recording the Deed. The cost of removing any Encumbrances from
title to the Lands shall be at the Vendor’s expense. All unpaid ad valorem taxes due and payable within the calendar year of
the Closing shall be pro-rated between the Vendor and the Purchaser as of the
Closing Date. Any deferred taxes, roll-back taxes and/or realty taxes
(including local improvement charges and assessments) owing or accrued in
respect of the Lands that would have
been due by the Vendor prior to the Closing Date shall be paid by the Vendor on
or prior to the Closing Date. The Vendor agrees to promptly forward to the
Purchaser any realty tax statements for the Lands received by the Vendor after
Closing for the period following the Closing Date, and if the Vendor fails to
do so, the Vendor shall be liable for any penalties the Purchaser has to pay
because of the Vendor’s failure.  Each
party shall pay its own legal fees with respect to this Agreement and the
Transaction.  The Purchaser shall be
responsible for costs and expenses, including the premium, incurred in
connection with the Title

 19
 

Policy. The Vendor shall be responsible for
all costs and expenses incurred in obtaining: (i) any consents or approvals
required to subdivide and legally convey the Lands to the Purchaser (or to
confirm that the Lands are presently subdivided and legally conveyable); and
(ii) an updated survey of the Lands, as commissioned by the Purchaser.  Escrow Closing costs, if any, shall be shared
equally between the Vendor and the Purchaser.

6.6                         Escrow Closing

All deliveries to be made pursuant to Section 6.3 and 6.4 on the
Closing Date (with the exception of the Registration Documents (as defined
below)) (the “Interim Closing Documents”)
shall be delivered into escrow at the offices of the Purchaser’s Solicitors on
or before the Closing Date.  The
Registration Documents shall be delivered into escrow at the offices of the
Escrow Agent on or before the Closing Date. Such Closing Documents shall be
held by the Purchaser’s Solicitors and the Escrow Agent, as the case may be, in
escrow until the Vendor and the Purchaser, each acting reasonably, are
satisfied that all conditions set forth in Sections 4.1 and 4.2 to be satisfied
on or before Closing have been satisfied other than the registration of the
Deed and any other documents, instruments or agreements required to evidence
the transfer of legal title to the Lands from the Vendor in favour of the
Purchaser (collectively, the “Registration
Documents”).  At such time as
all the conditions set forth in Sections 4.1 and 4.2 to be satisfied on or
before Closing have been satisfied, the Vendor and the Purchaser shall provide
written instructions to the Escrow Agent confirming same and instructing the
Escrow Agent to release the Registration Documents from escrow for the purposes
of registration.  Upon (i) such registrations
being completed, or (ii) the Title Insurer receiving a gap indemnity from the
Vendor in form and content satisfactory to the Title Insurer, all other Closing
Documents (and funds) shall thereupon be released from escrow by the Purchaser’s
Solicitors and the Escrow Agent, as the case may be, and delivered to the
parties entitled thereto.

ARTICLE 7 

REPRESENTATIONS, WARRANTIES AND COVENANTS

7.1                         Representations,
Warranties and Covenants of the Vendor

The Vendor hereby represents, warrants and covenants to and in favour
of the Purchaser, as of the Closing Date, as follows:

(a)                                  the Vendor is a limited liability company
duly formed and subsisting under the laws of the State of Delaware, is properly
qualified to do business in the State of Florida, and has the corporate power,
authority, right and capacity to own the Lands and to enter into, execute and
deliver this Agreement and to carry out the transactions contemplated by this
Agreement in the manner contemplated by this Agreement;

(b)                                 the transactions contemplated by this
Agreement have been duly and validly authorized by all requisite corporate
proceedings, and subject to Section 4.1(c), upon execution and delivery by the
Vendor and the Purchaser, this Agreement and all other documents and agreements
to be delivered by the Vendor pursuant to this Agreement shall constitute
legal, valid and binding obligations of the Vendor;

 20
 

(c)                                  neither the execution of this Agreement nor
its performance by the Vendor will result in a breach of any term or provision
or constitute a default under the constating documents or by-laws of the
Vendor or any indenture, mortgage, deed of trust or any other agreement to
which the Vendor is a party or by which it is bound and no approval or other
documentation is necessary to enable the Vendor to complete the Transaction
pursuant to this Agreement in compliance with all existing obligations of the
Vendor and in compliance with all Permitted Encumbrances and any other
obligations or agreements which affect the Lands;

(d)                                 there are no actions, suits or proceedings
pending or threatened against the Vendor which affect the Subject Assets or the
occupancy or use of the Lands by the Vendor or by the Tenants, in law or in
equity, which could affect the validity of this Agreement or any transaction
provided for in this Agreement, the title to the Subject Assets or any part of
the Subject Assets, the value of the Subject Assets or the conveyance of any of
the Subject Assets to the Purchaser;

(e)                                  no Person has any right of first refusal or
option to purchase the Lands, or any part of the Lands; the Vendor has obtained
all consents necessary to this sale of the Lands and no further consents or
approvals are required in connection therewith;

(f)                                    the Vendor is the sole registered owner of
the Lands, has not transferred (or agreed to transfer) any development or
density rights from the Lands and acknowledges that all development or density
rights available or attributable to the Lands are being transferred to the
Purchaser pursuant to the terms of this Agreement;

(g)                                 to the best knowledge of the Vendor, after
due inquiry of all its directors, officers and employees who could reasonably
be expected to have relevant information, neither the Vendor nor any prior
owner of the Lands has (i) made any commitments to any Person relating to the
Lands that would impose an obligation on the Purchaser to make contributions of
money or land, or to install or maintain any improvements thereon, or (ii)
executed or caused to be executed any document with, or for the benefit of, any
Governmental Authority restricting the use, development or occupancy of the
Lands;

(h)                                 subject to the terms of Subsection 4.2(l),
with the exception of the Permitted Encumbrances and obligations which may
arise under the Existing Leases or the Approved Leases, on the Closing Date,
there will be no Encumbrances on the title to the Subject Assets or any part
thereof;

(i)                                     (i) the Existing Leases disclosed to the
Purchaser pursuant to Section 2.2 and the Approved Leases (if any) are the only
Leases and constitute, in each case, the entire agreement between the Vendor
and the Tenants with respect to the lease or occupancy of space on or within
the Lands; (ii) the Existing Contracts disclosed to the Purchaser pursuant to
Section 2.2 and the Approved Contracts (if any) are the only Contracts relating
to or affecting the Lands as of the date hereof; (iii) the Existing Leases and
the Approved Leases (if any) will be the only Leases

 21
 

                                                affecting the Lands on Closing; (iv) the
Existing Contracts disclosed to the Purchaser on the list delivered pursuant to
Section 2.2 and Approved Contracts (if any) will be the only Contracts
affecting the Lands on Closing; and (vi) each of the Existing Leases, Approved
Leases (if any), Existing Contracts (including Permitted Encumbrances) and
Approved Contracts (if any) is in full force and effect and there is no default
under any of them other than as disclosed in writing to the Purchaser pursuant
to Section 2.2;

(j)                                     as of the date of this Agreement, the Vendor
has not received any written request from any Tenant to assign the Existing
Leases, other than as disclosed in writing to the Purchaser pursuant to Section
2.2;

(k)                                  the documents and information delivered or
made available to the Purchaser pursuant to Section 2.2 constitute all of the
material documentation with respect to the Subject Assets within the Vendor’s
possession or control;

(l)                                     the Lands constitute a properly subdivided,
legally existing lot or parcel of land that may be legally conveyed by the
Vendor to the Purchaser at Closing without any further approval by any
Governmental Authority;

(m)                               to
the best knowledge of the Vendor, after due inquiry of all its directors,
officers and employees who could reasonably be expected to have relevant
information, the Boundary Survey, prepared by John A. Grant, Jr., Inc. and
dated March 12, 2007 describes the Lands as it exists today, and there have
been no material alterations or additions to the Lands since the date of the
survey which would have materially affected the outline or setbacks of same,
nor have there been any buildings erected on the Lands therein;

(n)                                 the Vendor is not 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;

(o)                                 the Vendor and each Person owning an interest
(directly or indirectly) in the Vendor is not: (i) identified on the “Specially
Designated Nationals or Blocked Persons List” maintained by the Office of
Foreign Assets Control, Department of Treasury (the “OFAC”) and/or any other
similar list maintained by the OFAC or the United States Department of
Commerce, Bureau of Industry and Security of any other United States
Governmental Authority pursuant to Applicable Laws; and (ii) a person or entity
with whom a United States person is prohibited to engage in transactions pursuant
to any trade embargo, economic sanction, or other prohibition of Applicable
Laws, or Executive Order of the President of the United States or United
Nations decree or resolution, provided however that this Subsection shall not
apply to any Person to the extent that such Person’s interest in the Vendor is
through a U.S. Publicly-Traded Entity and as used in this

 22
 

                                                Agreement,
“U.S. Publicly-Traded Entity” means a
Person (other than an individual) whose securities are listed on a national
securities exchange, or quoted on an automated quotation system, in the United
States, or a wholly-owned subsidiary of such a Person;

(p)                                 there are no outstanding obligations relating
to any written notice or order issued by any Governmental Authority in respect
of the Lands alleging any deficiency or non-compliance with any
agreements (including any development or site plan agreements), zoning laws or
by-laws or Environmental Laws of which the Vendor has received written
notice except as have been or will be made available to the Purchaser pursuant
to Section 2.2, and other than as disclosed in writing to the Purchaser, there
shall not be any such outstanding obligations as of the Closing Date, and as of
the Closing Date there are no threatened nor, to the best knowledge of the
Vendor, after due inquiry of all of its directors, officers and employees who could
reasonably be expected to have relevant information, pending notices or orders
relating to any such deficiency or non-compliance;

(q)                                 any fee due to any real estate broker or
agent in respect of this Agreement or the Transaction shall be paid by the Vendor
and the Vendor shall indemnify the Purchaser for any such fees to the extent a
claim is made against the Purchaser relating thereto;

(r)                                    to the best knowledge of the Vendor, after
due inquiry of all of its directors, officers and employees who could reasonably
be expected to have relevant information, the Lands and use thereof have been,
are in compliance with, Environmental Laws, except as specifically disclosed in
Environmental Reports delivered to the Purchaser pursuant to Section 2.2;

(s)                                  except as have been or will be made available
to the Purchaser pursuant to Section 2.2, there are no environmental
investigations, assessments or audit reports relating to the Lands (including,
without limiting the generality of the foregoing, any Phase I, II or III
environmental assessment reports) undertaken by the Vendor or any other Person
of which the Vendor has knowledge which are in the possession or control of the
Vendor and, to best knowledge of the Vendor, after due inquiry of all of its
directors, officers and employees who could reasonably be expected to have
relevant information, except as specifically disclosed in Environmental Reports
delivered to the Purchaser pursuant to Section 2.2, no underground storage
tanks are or have been located on the Lands;

(t)                                    except as specifically disclosed in
Environmental Reports delivered to the Purchaser pursuant to Section 2.2: (i)
the Vendor has not received any written notice from any competent authority of,
or been prosecuted for, non-compliance with Environmental Laws in respect of
the Lands or use thereof nor has the Vendor or (to the best knowledge of the
Vendor, after due inquiry of all of its directors, officers and employees who
could reasonably be expected to have relevant information) any previous owner of
the Lands settled any allegation of such non-compliance prior to prosecution;  (ii) there are no notices, orders or
directions relating to environmental matters received by the Vendor requiring,
or

 23
 

                                                notifying the Vendor that it is or may be
responsible for, any containment, clean-up, remediation, or corrective action
or any work, repairs, construction or capital expenditures to be made under any
Environmental Laws with respect to the Lands; and (iii) neither the Vendor nor
(to the best knowledge of the Vendor, after due inquiry of all its directors,
officers and employees who could reasonably be expected to have relevant
information) any tenant of the Lands, past or present, has caused or permitted,
nor has there been, any release, emission, spill or discharge in any manner
whatsoever, of any Hazardous Substance on, in, around, from or in connection
with the Lands, or its use or operation which would reasonably be expected to
adversely affect the value of the Lands or in respect of which the owner or
occupant of the Lands would reasonably be expected to incur any liability;

(u)                                 the Vendor has not used, or permitted to be
used, except in compliance with all Environmental Law, the Lands to generate,
manufacture, process, distribute, use, treat, store, dispose of, transport or
handle any Hazardous Substance;

(v)                                 the Vendor has not received any written
notice of any, and there is no threatened nor, to the best knowledge of the
Vendor (after due inquiry of all its directors, officers and employees who
could reasonably be expected to have relevant information) pending eminent
domain, condemnation or rezoning proceedings with respect to the Lands or any
part of the Lands;

(w)                               to
the best knowledge of the Vendor, after due inquiry of all its directors,
officers and employees who could reasonably be expected to have relevant
information, the Vendor has not taken
any action that would reasonably be expected to serve as an impediment to the
Purchaser receiving approval of a development plan pursuant to the
Comprehensive Plan and ULDC provisions dealing with the 60/40 Planned
Development Option for AgR-PDD involving both the Lands and the Palm Meadows
Training Center Lands.

7.2                         Representations,
Warranties and Covenants of GPRA

GPRA hereby represents, warrants and covenants to and in favour of the
Purchaser, as of the Closing Date, as follows:

(a)                                  GPRA
is a limited liability company duly formed and subsisting under the laws of the
State of Delaware, is properly qualified to do business in the State of
Florida, and has the corporate power, authority, right and capacity to enter
into, execute and deliver this Agreement and to carry out the transactions
contemplated by this Agreement in the manner contemplated by this Agreement;

(b)                                 the transactions contemplated by this
Agreement have been duly and validly authorized by all requisite corporate
proceedings, and subject to Section 4.1(c), upon execution and delivery by the
Vendor, GPRA and the Purchaser, this Agreement and all other documents and
agreements to be delivered by GPRA pursuant to this Agreement shall constitute
legal, valid and binding obligations of GPRA;

 24
 

(c)                                  neither the execution of this Agreement nor
its performance by GPRA will result in a breach of any term or provision or
constitute a default under the constating documents or by-laws of GPRA or
any indenture, mortgage, deed of trust or any other agreement to which GPRA is
a party or by which it is bound and no approval or other documentation is
necessary to enable GPRA to complete any transaction or covenant pursuant to
this Agreement in compliance with all existing obligations of GPRA and in
compliance with any other obligations or agreements which affect the
Development Rights or the Palm Meadows Training Center Lands;

(d)                                 there are no actions, suits or proceedings pending
or threatened against GPRA which affect the Development Rights or the Palm
Meadows Training Center Lands, in law or in equity, which could affect the
validity of this Agreement or any transaction or covenant provided for in this
Agreement, the title to the Development Rights or the Palm Meadows Training
Center Lands, the value of the Development Rights or the conveyance of the
Development Rights to the Purchaser;

(e)                                  no Person has any right of first refusal or
option to purchase the Development Rights or the Palm Meadows Training Center
Lands; GPRA has obtained all consents necessary to this sale of the Development
Rights and no further consents or approvals are required in connection
therewith;

(f)                                    GPRA is the sole registered owner of the Palm
Meadows Training Center Lands, which comprise approximately 305 acres;

(g)                                 neither GPRA nor, to the best knowledge of
GPRA, after due inquiry of all its directors, officers and employees who could
reasonably be expected to have relevant information, any prior owner of the
Palm Meadows Training Center Lands has (i) made any commitments to any Person
relating to the Palm Meadows Training Center Lands that would reasonably be
expected to impair GPRA’s ability to complete the Transaction, abide by the
terms of this Agreement or perform any of the covenants contained in this
Agreement, or that would impose any obligation on GPRA that is inconsistent
with the terms of this Agreement, or (ii) executed or caused to be executed any
document with, or for the benefit of any Person or Governmental Authority
restricting the use, development or occupancy of the Palm Meadows Training
Center Lands;

(h)                                 on the Closing Date, there will be no
encumbrances on the title to the Palm Meadows Training Center Lands or any part
thereof that would impair GPRA’s ability to complete the Transaction, abide by
the terms of this Agreement or perform any of the covenants contained in this
Agreement;

(i)                                     the documents and information delivered or
made available to the Purchaser pursuant to Section 2.2 constitute all of the
material documentation with respect to the Development Rights within GPRA’s
possession or control;

 25
 

(j)                                     GPRA is not 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;

(k)                                  GPRA and each Person owning an interest
(directly or indirectly) in GPRA is not: (i) identified on the “Specially Designated
Nationals or Blocked Persons List” maintained by the Office of Foreign Assets
Control, Department of Treasury (the “OFAC”) and/or any other similar list
maintained by the OFAC or the United States Department of Commerce, Bureau of
Industry and Security of any other United States Governmental Authority
pursuant to Applicable Laws; and (ii) a person or entity with whom a United
States person is prohibited to engage in transactions pursuant to any
trade embargo, economic sanction, or other prohibition of Applicable Laws, or
Executive Order of the President of the United States or United Nations decree
or resolution, provided however that this Subsection shall not apply to any
Person to the extent that such Person’s interest in GPRA is through a U.S. Publicly-Traded
Entity and as used in this Agreement,

(l)                                     GPRA has not received any written notice of
any, and there is no threatened nor, to the best knowledge of GPRA (after due
inquiry of all its directors, officers and employees who could reasonably be expected
to have relevant information) pending eminent domain, condemnation or rezoning
proceedings with respect to the Palm Meadows Training Center Lands or any part
of the Palm Meadows Training Center Lands;

(m)                               to the best knowledge of GPRA, after due inquiry
of all its directors, officers and employees who could reasonably be expected
to have relevant information,

(n)                                 to the best knowledge of GPRA, after due
inquiry of all its directors, officers and employees who could reasonably be
expected to have relevant information, under the Comprehensive Plan and ULDC
provisions dealing with the 60/40 Planned Development Option for AgR-PDD, there
are transferable development rights to develop up to 309 residential
dwelling units available to the Palm
Meadows Training Center Lands and the Lands under the applicable provisions of
the Comprehensive Plan, ULDC and other Applicable Laws (it being noted, for
greater certainty, that all of Development Rights are being transferred to the
Purchaser pursuant to the terms of this Agreement regardless of the number
finally determined to exist);

(o)                                 consistent with clauses (q) and (r) below,
GPRA is the valid, lien free owner of the Development Rights, which are all of
the transferable development rights that are available to GPRA or the Palm
Meadows Training Center Lands, and has the ability and legal entitlement to
convey and transfer the Development Rights to the Purchaser in accordance with
the Comprehensive Plan, ULDC and any other Applicable Laws; the provisions of
Section 6.2 of this Agreement are sufficient to

 26
 

                                                fully convey and transfer all of the Vendor’s
right, title, interest, claim and demand in and to the Development Rights to
the Purchaser;

(p)                                 the Palm Meadows Training Center Lands are an
“Eligible Sending Area” in accordance with Article 5 of the ULDC;

(q)                                 GPRA acknowledges that the Purchaser intends
to make use of the Comprehensive Plan and ULDC provisions dealing with the
60/40 Planned Development Option for AgR-PDD and that the required planning
application will involve both the Lands and the Palm Meadows Training Center
Lands; on the Closing Date, there shall not exist any prior agreement,
commitment or obligation which could reasonably be expected to act as an
impediment to GPRA designating a minimum of 305 acres (or such other amount as
GPRA and the Purchaser agree prior to the Closing Date) of the Palm Meadows
Training Center Lands as “preserve area”, as such term is used in the
Comprehensive Plan and ULDC provisions dealing with the 60/40 Planned
Development Option for AgR-PDD, with such designated acres conforming as of the
Closing Date to the required specifications and usages for preserve area as
specified in the Comprehensive Plan and ULDC; and

(r)                                    to the best knowledge of GPRA, after due
inquiry of all of its directors, officers and employees who could reasonably be
expected to have relevant information, there is no impediment to the Purchaser
receiving approval of a development plan pursuant to the Comprehensive Plan and
ULDC provisions dealing with the 60/40 Planned Development Option for AgR-PDD
involving both the Lands and the Palm Meadows Training Center Lands.

7.3                         Representations and
Warranties of the Purchaser

The Purchaser represents and warrants to and in favour of each of the
Vendor and GPRA, as of the Closing Date, as follows:

(a)                                  the Purchaser is a corporation duly existing
under the laws of the State of Delaware and has the corporate power, authority, right and capacity through its
general partner,  to enter into
this Agreement and to carry out the transactions contemplated by this Agreement
in the manner contemplated by this Agreement;

(b)                                 the transactions contemplated by this
Agreement will, by the Closing Date, have been duly and validly authorized by
all requisite corporate proceedings; upon execution and delivery by the Vendor
and the Purchaser, this Agreement and all other documents and agreements to be
delivered by the Purchaser pursuant to this Agreement shall constitute legal,
valid and binding obligations of the Purchaser; and

(c)                                  the Purchaser has not dealt with, used or
engaged any real estate broker or agent in respect of this Agreement or the
Transaction.

 27

7.4                         Survival

(a)           The representations, warranties and
covenants of the each of Vendor the GPRA set out in Sections 7.1 and 7.2 shall
be true or fulfilled, as the case may be, in all material respects on Closing.
The representations, warranties and covenants of the Purchaser set out in
Section 7.3 shall be true or fulfilled, as the case may be, in all material
respects on Closing.

(b)           The representations, warranties and
certifications contained in this Agreement or in any Closing Documents shall
not merge on Closing but shall survive for a period of twelve (12) months after
the Closing Date (the “Survival Period”).  The representations and warranties in
Subsections 7.1(r) — 7.1(u) shall survive the Closing for a period of two (2)
years.  The party which has received a
representation, warranty or certification, whether in this Agreement or in any
Closing Document, shall give written notice to the other party of each breach
of the representation, warranty or certification, together with details
thereof, promptly after becoming aware of the breach and no later than the last
day of the Survival Period. 
Notwithstanding any other provision of this Agreement or of any Closing
Document, no Claim may be asserted or pursued against any party hereto, or any
action, suit or other proceedings commenced or pursued, for or in respect of
any breach of any representation, warranty or certification made by such party
in this Agreement or in any Closing Document unless written notice of such
Claim is received by such party describing in detail the facts and
circumstances with respect to the subject matter of such Claim on or prior to
the last day of the Survival Period, irrespective of whether the subject matter
of such Claim shall have occurred before or after such date; and upon the
expiry of the Survival Period all such representations, warranties and
certifications shall cease to have any effect except to the extent a written
notice of Claim has been previously given in respect thereof in accordance with
this Subsection.

(c)           Each indemnity contained in any
Closing Documents shall not merge on Closing, and there shall be no limitation
upon the period for making a Claim in respect of any indemnity in any Closing
Documents and such indemnities shall survive Closing for an unlimited period,
unless otherwise expressly provided in this Agreement.

(d)           The provisions of this Section 7.4
shall survive and not merge upon Closing.

Notwithstanding anything
contained in this Agreement to the contrary, all of the representations,
warranties and certifications (the “Representations”)
which are made by the Vendor or GPRA and set forth in this Agreement or in any
of the documents or instruments required to be delivered by the Vendor or GPRA
under this Agreement shall be subject to the following conditions and
limitation: in the event that prior to the Closing, the Purchaser gains current
actual knowledge of a fact or circumstance which, by its nature and plainly on
its face, indicates that a Representation is, was or has become untrue or
inaccurate, then the Purchaser shall not have the right to bring any lawsuit or
other legal action against the Vendor or GPRA, nor pursue any other remedies
against the Vendor or GPRA, as a result of the breach of the Representation
caused thereby, but the Purchaser’s sole right shall be to terminate this
Agreement and not proceed with Closing, in which event there shall be no
liability on the part of the Vendor or GPRA for breaches of Representations of
which the Purchaser had current actual knowledge prior to Closing. For greater
certainty and notwithstanding the foregoing, the parties hereto acknowledge and
agree that the mere delivery by the Vendor or GPRA to the Purchaser, and
possession by the Purchaser, of the documents 
and instruments contemplated in Section 2.2 shall not be sufficient

 28
 

to constitute actual
knowledge on the part of the Purchaser that a Representation is, was or has
become untrue or inaccurate.

7.5                         Non-Waiver

Each of the Vendor and GPRA agrees that the Purchaser’s right to do
searches, reviews, examinations, investigations, inspections, assessments,
audits and analyses, and the exercise of such right, shall not affect, reduce
or mitigate any of the representations, warranties and covenants of the Vendor
or GPRA contained in this Agreement or any of the damages and costs owing by
the Vendor or GPRA to the Purchaser as a result of any breach of such
representations, warranties and covenants.

ARTICLE 8 

INTERIM MATTERS

8.1                         Interim Period

Upon acceptance of this Agreement and thereafter so long as this
Agreement is in effect, (a) the Vendor shall not offer the Subject Assets or
any part of the Subject Assets or any interest therein for sale to any Person
other than the Purchaser nor will it solicit, directly or indirectly, or deal
with any offers to purchase the Subject Assets or any part of the Subject
Assets or any interest therein and (b) GPRA shall not offer the Development
Rights or any interest therein for sale to any Person other than the Purchaser
nor will it solicit, directly or indirectly, or deal with any offers to
purchase the Development Rights or any interest therein.

8.2                         Approvals of the
Purchaser

While this Agreement is in effect, the Vendor agrees that it shall not
amend, cancel or accept a surrender or forfeiture of any Leases or Contracts
without the prior written approval of the Purchaser, which may arbitrarily and
unreasonably be withheld, and it shall not enter into any Lease or Contract
without the prior written approval of the Purchaser, which may arbitrarily and
unreasonably be withheld.

The Vendor shall provide
the Purchaser with a complete copy of any Approved Lease or Approved Contract
and of any document which creates, amends, cancels, surrenders or forfeits any
Lease or Contract within three (3) Business Days after it is entered into by
the parties thereto.

8.3                         Notice of Default

The Vendor shall forthwith provide to the Purchaser (i) a copy of any
notices that it receives in respect of the Existing Leases, Approved Leases (if
any), Existing Contracts and/or Approved Contracts (if any) alleging default on
the part of the Vendor or requesting the Vendor to perform any obligation
thereunder and any notice alleging default under the Leases, or any Contract
that it sends to another Person, in either case after the date this Agreement
is executed and delivered by the parties hereto; (ii) a copy of any work
orders, state or federal environmental orders or deficiency notices of any
nature issued by any Governmental Authorities having jurisdiction relating to
the Lands; and (iii) a copy of any notice from a Tenant received after the date
of this Agreement by the Vendor which indicates the intention of a Tenant to
vacate or

 29
 

assign, as the case may be, its interest in
the Lands prior to the scheduled expiry date of its Existing Lease or requests
an abatement or deferral of rent.

8.4                         Approvals

(a)           Whenever in this Agreement it is
stated that the approval or consent of a party is required, it is understood
that, except where otherwise specifically so stated, such approval or consent
shall be in writing, and shall not be unreasonably withheld or delayed.  Furthermore, with respect to such approvals
or consents, unless specifically otherwise stated:

(i)             the party whose approval or consent is
required shall, within three (3) Business Days after receipt of request for
approval or consent, together with available background information relating to
the required decision to enable an informed decision, advise the requesting
party in writing either that it consents or approves, or that it withholds its consent
or approval and in which case it shall set forth, in reasonable details, its
reasons for such withholding; and

(ii)          in the event the notification mentioned in paragraph (i) above is not
delivered within the applicable time limit, the party whose consent or approval
is requested shall conclusively be deemed not to have given its consent or
approval in writing.

8.5                         Risk of Condemnation
and Eminent Domain

Each of the Vendor and GPRA shall promptly notify the Purchaser in the
event that it receives a notice of condemnation and/or exercise of eminent
domain in respect of all or any material part of the Lands or the Palm Meadows
Training Center Lands, as applicable, and such notice shall include a copy of
the notice of condemnation and/or exercise of eminent domain and copies of all
correspondence relating thereto in the possession of the Vendor or GPRA, as
applicable. If notice of condemnation and/or exercise of eminent domain is
given prior to Closing, the Purchaser may elect by notice in writing given to
the Vendor and GPRA within ten (10) Business Days after receipt from the Vendor
or GPRA of notice of the proposed condemnation and/or exercise eminent domain
either:

(a)                                  to complete the Transaction, in which case
the Purchaser shall continue to be bound by this Agreement except that any
compensation awarded for expropriation and all right and claim of the Vendor or
GPRA to any such proceeds and compensation not paid by the Closing Date shall
be assigned to the Purchaser; or

(b)                                 to terminate this Agreement, in which event
none of the parties shall have any further liability to the other arising out
of this Agreement.

If
the notice of the proposed condemnation and/or exercise of eminent domain is
received by the Vendor or GPRA at such time that there would be insufficient
time for the Purchaser to make its election hereunder, the Closing Date shall
be postponed to a date which is five (5) Business Days after the Purchaser’s
election.

 30
 

8.6                         General Covenants of
the Vendor

The Vendor covenants and agrees with the Purchaser that from and after
the date hereof:

(a)                                  the Vendor shall diligently make all payments
to be made and otherwise observe and perform or cause to be observed or
performed all covenants and obligations to be observed or performed by the
Vendor under the Contracts and the Leases;

(b)                                 the Vendor shall not (i) create or permit to
exist any encumbrance against or affecting the Lands or any part thereof or
interest therein or (ii) amend any of the Permitted Encumbrances, except in
each case with the prior written approval of the Purchaser, which approval
shall not be unreasonably withheld by the Purchaser in respect of Permitted
Encumbrances; and

(c)                                  the Vendor shall not consent to or initiate
any amalgamation, winding-up, dissolution, liquidation, reorganization,
reconstruction, arrangement, consolidation, merger or other corporate procedure
whatsoever without the prior written consent of the Purchaser, which consent
may be withheld by the Purchaser in its sole and absolute discretion..

8.7                         General Covenants of
GPRA

GPRA covenants and agrees with the Purchaser that from and after the
date hereof:

(a)                                  GPRA shall not consent to or initiate any
amalgamation, winding-up, dissolution, liquidation, reorganization,
reconstruction, arrangement, consolidation, merger or other corporate procedure
whatsoever without the prior written consent of the Purchaser, which consent
may be withheld by the Purchaser in its sole and absolute discretion;

(b)                                 from the Closing Date, GPRA shall not take
any action inconsistent with the fact that the Purchaser owns the Development
Rights and shall not take any action to interfere with any future use, sale or
transfer of the Development Rights by the Purchaser;

(c)                                  GPRA will fully and promptly cooperate with
the Purchaser (or the Purchaser’s designee in the event that any of the
Development Rights are sold to a third party) as may be reasonably required in
connection with the Purchaser’s efforts to obtain permits, approvals and/or
authorizations relating to the Development Rights or the development of the
Lands and, in furtherance thereof, GPRA shall promptly execute and deliver such
applications and other documentation as the Purchaser deems necessary in
connection with such permits, approvals and/or authorizations, including the
required applications or joint submissions in relation to the Comprehensive
Plan’s and ULDC’s 60/40 Planned Development Option for AgR-PDD, with the
Purchaser promptly reimbursing GPRA for all reasonable

 31
 

                                                costs and expenses incurred in the
preparation, execution and delivery of any such applications or documentation;

(d)                                 when reasonably requested by the Purchaser,
GPRA shall execute and deliver a restrictive covenant (in form satisfactory to
the Purchaser acting reasonably) in relation to, and make the necessary filings
and recordings required by the Comprehensive Plan, ULDC and any other
Applicable Laws in connection with, the designation of a minimum of 305 acres
(or such other amount as GPRA and the Purchaser agree prior to the Closing
Date) of the Palm Meadows Training Center Lands as “preserve area”, as such
term is used in the Comprehensive Plan and ULDC provisions dealing with the
60/40 Planned Development Option for AgR-PDD; and

(e)                                  prior to the execution and delivery of the
restrictive covenant referred to in clause (d) above, GPRA will ensure that a
minimum of 305 acres (or such other amount as GPRA and the Purchaser agree
prior to the Closing Date) conform at all times to the required specification
and usages for preserve area as specified in the Comprehensive Plan and ULDC
and GPRA will refrain from taking any actions that might in any way prevent it
from executing and delivering the appropriate restrictive covenant when so
requested by the Purchaser.

8.8                         General Covenants of
the Purchaser

The Purchaser covenants and agrees with GPRA that from and after the
date hereof:

(a)                                  the Purchaser will not at any time in the
future challenge GPRA’s right to use the Palm Meadows Training Center Lands for
any legally permitted use, subject to Section 8.7, and including, without
limitation, the boarding and running of horses, composting and the housing of
the Palm Meadows Training Center workers; and

(b)                                 the Purchaser will include in any agreements
of sale with third-party buyers of residential property on the Lands a provision
in which the third-party acknowledges and accepts the existence of the Palm
Meadows Training Center and the current and existing condition, use and
operation of the Palm Meadows Training Center.

The provisions of this
Section 8.8 shall survive Closing.

ARTICLE 9 

ENVIRONMENTAL INDEMNIFICATION

9.1                         Environmental
Indemnification by the Vendor

For a period of two (2)
years after the Closing Date and no longer (the “Indemnity
Period”) the Vendor agrees to indemnify and save harmless each of
the Purchaser, its directors, officers, employees and agents and any successor
to the Purchaser’s interest in the Lands (including, without limitation,
persons to whom this indemnity is assigned) and all directors, officers,
employees and agents of such successors, from and against any and all Claims

 32
 

suffered or
incurred by any such person as a result of or arising directly or indirectly
out of or in connection with any one or more of the following:

(a)                                  any
event occurring or any condition existing on or prior to the Closing Date
relating to the Lands which now or hereafter constitutes a violation of, or
gives rise to any liability under, Environmental Laws; and

(b)                                 any
generation, manufacture, processing, distribution, use, presence, treatment,
storage, disposal, release, transport or handling of any Hazardous Substance
in, on, under or from the Lands, whether by the Vendor or any tenant or any
other person prior to the Time of Closing, and whether or not known at the Time
of Closing.

For greater certainty,
the Vendor’s obligation to indemnify and save harmless as provided above exists
regardless of whether there has been a breach of any of the provisions
contained in Section 7.1 hereof and regardless of the current actual knowledge
of the Purchaser as at the Closing Date and shall not be limited in any way by
Section 3.3 hereof.

To the extent that
any amounts are owing from the Vendor to the Purchaser pursuant to the
environmental indemnification provisions of this Article 9, the Purchaser shall
be entitled to withhold and use as set-off any amounts due to MEC pursuant to
the profit participation provisions of Article 10 hereof.

9.2                         Assignability of
Environmental Indemnification

During the Indemnity
Period, the Purchaser may, at any time and from time to time, assign all or any
part of the benefit of the indemnity set out in Section 9.1 to any purchaser
of, or lender to the Purchaser in respect of, the Lands, by delivering a notice
in writing to the Vendor setting out the Purchaser’s intention to assign all or
part of the benefit of the indemnity and the identity of the person or persons
to whom the assignment is to be made. 
Upon any such assignment, the Vendor shall be bound to indemnify the
person or persons named in such notice to the extent of the assignment of the
indemnity as if such person or persons were a party to this Agreement as the
Purchaser.  No such assignments shall
relieve the Vendor of the obligation to indemnify under Section 9.1 and such
obligations shall continue unaffected by the assignment for the Indemnity
Period. Any such assignee may make a further assignment during the Indemnity
Period in accordance with the foregoing provisions, as if all references
therein to the Purchaser were to such assignee.

ARTICLE 10 

PROFIT PARTICIPATION

10.1                       Profit Participation

(a)           It is acknowledged that following
Closing, the Purchaser may sell or develop the Lands or a portion thereof
(either independently for the Purchaser’s own account or through a joint
venture with a third party).  In
addition, it is acknowledged that following Closing, the Purchaser may sell the Development Rights to a third party
or transfer the Development Rights to a joint venture with a third party.
In connection with the foregoing, the Purchaser hereby

 33
 

covenants and
agrees that it shall grant to the Vendor an unsecured long-term profit
participation of fifteen percent (15%) (the “Profit
Participation”) of the net revenue of the Property or the
Development Rights (as calculated below), if any, after the Purchaser has
achieved an internal rate of return (the “IRR”)
of fifteen percent (15%).  The Purchaser
shall be deemed to have received a fifteen percent (15%) IRR when the total
capital contributions made from time to time by the Purchaser with respect to
the Lands and the Development Rights are returned to the Purchaser together
with an annual return thereon equal to fifteen percent (15%), calculated
commencing on the date such capital contributions are made or deemed to have
been made and compounded annually to the extent not paid on a current basis,
taking into account the timing and amounts of all capital contributions by the
Purchaser and all revenues of any kind (including “net revenue” as discussed
below) derived from or attributable to the Lands or the Development Rights and
paid (or treated as paid) to the Purchaser. For greater certainty, (i) the
capital contributions by the Purchaser shall include (without limitation), the
Purchase Price, all costs incurred by the Purchaser (and its affiliates) to
rezone or redevelop the Lands and to market and sell the Lands and/or the
Development Rights, and any and all carrying costs derived from the Closing and
(ii) any and all internal Purchaser fees, charges, allocations or overheads
shall be excluded from any calculation of the IRR.

(b)           For the purposes hereof, in the event
the Purchaser sells the Lands or the Development Rights, “net revenue”
shall mean the net cash proceeds received (or treated as received) by the
Purchaser (or, as provided for in paragraph (g) below, one or more of its
affiliates) from such sale, less all third party costs arising in connection
therewith.  In the event the Purchaser
determines not to sell the Lands and/or the Development Rights, but instead
either (i) transfers the Lands and/or the Development Rights to a joint venture
or (ii) develops the Lands, “net revenue”
shall mean the value attributed to the Lands and the Development Rights at the
time of transfer to the joint venture, in the former case, or the value
attributed to the Lands by a third party independent appraisal, in the latter
case.

(c)           The Purchaser shall deliver to the
Vendor Profit Participation calculations not later than February 15 of each
fiscal year commencing with fiscal year 2008 if so requested in writing by the
Vendor prior to January 1 of the applicable fiscal year. In addition, the
Purchaser shall (i) deliver to the Vendor Profit Participation calculations not
later than forty-five (45) days after the final parcel of the Lands and the
final Development Right has been sold, transferred to a joint venture or
developed and appraised, as applicable and (ii) pay to the Vendor the Profit
Participation, if any, sixty (60) days after the final parcel of the Lands and
the final Development Right has been sold, transferred to a joint venture or
developed and appraised, as applicable.

(d)           In the event the Purchaser has only
partially sold, transferred or developed the Lands and the Development Rights,
as applicable, the Vendor may make a one-time request of payment (the “Vendor Request”) based on a Profit
Participation to be calculated using the net revenue, if any, derived to such
date from that portion of the Lands and Development Rights sold, transferred to
a joint venture or developed, as applicable, together with the value of the
remaining portion of the Lands and the Development Rights on the basis of an
appraisal of such portion of the Lands (with any then-existing improvements and
entitlements) and the Development Rights by a third party independent appraiser
selected by the Purchaser and acceptable to the Vendor, acting reasonably.  The Vendor Request may be made at any point
six (6) months following the Closing Date. The Purchaser shall deliver to the
Vendor Profit Participation calculations not later than forty-five (45) days
after receipt of the Vendor Request and, where such calculations

 34
 

call for a payment
of a Profit Participation to the Vendor, such payment shall be made no later
than fifteen (15) days after delivery of the calculations.

(e)           For greater certainty, upon payment
to the Vendor of Profit Participation pursuant to the terms of either of the
preceding two paragraphs, the Vendor shall have no further right to any Profit
Participation and no further payments shall be due to the Vendor in relation to
the Lands or the Development Rights, as applicable.

(f)            The Purchaser shall, upon completing
any Profit Participation calculation, provide all information and materials to
the Vendor in respect of such Profit Participation calculation used to
determine the same in order that the Vendor may audit the calculation.  The Vendor shall be entitled to conduct an
audit any time within 90 days of receiving the Profit Participation calculation
materials from the Purchaser and shall be entitled to audit all aspects of
Profit Participation calculations completed by the Purchaser or at the
Purchaser’s direction.  Notwithstanding
the Vendor’s acceptance of any payment from the Purchaser with respect to such
Profit Participation calculations, in the event the Vendor completes an
independent audit of the Profit Participation and it is determined by the
Vendor’s independent auditors that the actual calculation of Profit
Participation is incorrect, then the Purchaser and the Vendor shall negotiate
in good faith to resolve the discrepancy, failing which, the parties shall
enter into binding arbitration with respect thereto.

(g)           In the event that the Purchaser
transfers all or a portion of the Lands and the Development Rights to one or
more of its affiliates (not including Magna Entertainment Corp. or any of its subsidiaries),
the calculation of IRR shall take into account and include such transferred
portion(s).

(h)           Notwithstanding the foregoing, the
Purchaser does not represent or warrant that any Profit Participation will be
available for payment to the Vendor following the Closing.

(i)            The provisions of this Section 10.1
shall survive the Closing.

ARTICLE 11 

GENERAL

11.1                       As-Is/Where-Is
Transaction

The
Purchaser acknowledges and agrees that except as expressly provided in this Agreement or in any Closing
Documents provided by the Vendor to the Purchaser at Closing, and without
derogating from any indemnities provided by the Vendor herein or in any Closing
Documents, the Vendor makes no representation, warranty or covenant, express,
implied or statutory, of any kind whatsoever with respect to the Subject
Assets, including, without limitation, representation, warranty or covenant as
to title, survey conditions, use of the Subject Assets for the Purchaser’s
intended use, the condition of the Subject Assets, past or present use,
development, investment potential, tax ramifications or consequences,
compliance with any Applicable Laws, present or future zoning, the presence or
absence of Hazardous Substances, the availability of utilities, habitability,
merchantability, fitness or suitability for any purpose, or any other matter
with respect to the Subject Assets, all of which are (without derogating from
any indemnities provided by the Vendor herein or in any Closing Documents),
except as otherwise

 35
 

expressly provided in this Agreement or in any Closing Documents
provided by the Vendor to the Purchaser at Closing, hereby expressly disclaimed
by the Vendor. The provisions of this Section shall survive Closing and the
delivery of the Deed or any expiration or termination of this Agreement without
limitation as to time.

11.2                       No Registration

The parties hereto
acknowledge and agree that none of the parties shall register, or cause to be
registered, any instrument, agreement or other document evidencing any part of
Article 10 hereof against title to the Lands and/or the Development Rights (or
any part thereof).  Furthermore, the
parties hereto acknowledge and agree that the Purchaser’s obligations under
Article 10 hereof are personal to the Purchaser (and its successors and permitted
assigns), and the Vendor’s rights in respect thereof shall not be effective to
create an interest in the Lands and/or the Development Rights (or any part
thereof).

11.3                       Obligations as
Covenants

Each agreement and obligation of each party hereto in this Agreement,
even though not expressed as a covenant, shall be considered for all purposes
to be a covenant.

11.4                       Tender

Any tender of documents or money may be made upon the party being
tendered or upon its solicitors and money may be tendered by certified cheque
or bank draft drawn on or from one of the five largest Schedule I Canadian
chartered banks or a first class bank of the United States of America, or by
wire transfer.  All cheques to be
tendered shall be drawn upon one of the five largest Schedule I Canadian
chartered banks, measured by reference to authorized capital.

11.5                       Relationship of the
Parties

Nothing in this Agreement shall be construed so as to make the
Purchaser a partner of the Vendor or GPRA and nothing in this Agreement shall
be construed so as to make the Purchaser (i) an owner of the Lands for any
purpose until the Closing Date or (ii) an owner of the Palm Meadows Training
Center Lands.

11.6                       Amendment of Agreement

No supplement, modification or waiver of this Agreement, or any provision
thereof, shall be binding unless executed in writing by both parties hereto.

11.7                       Notices

Any notice, request, consent, acceptance, waiver or other communication
required or permitted to be given under this Agreement (the “Notice”) shall be in writing and shall be
given by delivery or telecopy addressed or sent as set out below:

 36
 

(a)                                  in the case of the Purchaser addressed to it
at:

	
  

  	
  c/o MI Developments Inc.

  
	
   

  	
  455 Magna Drive

  
	
   

  	
  Aurora, Ontario, Canada L4G 7A9

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
  Fax:

  	
  905-726-2095

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Davies Ward Phillips & Vineberg LLP

  
	
   

  	
  Suite 4400, 1 First Canadian Place

  
	
   

  	
  100 King Street West

  
	
   

  	
  Toronto, Ontario, Canada M5X 1B1

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Kent F. Beattie

  
	
   

  	
   

  	
   

  
	
   

  	
  Fax:

  	
  416-863-0871

  

 

(b)                                 and in the case of the Vendor and GPRA
addressed to it at:

	
  

  	
  c/o Magna Entertainment Corp.

  
	
   

  	
  337 Magna Drive

  
	
   

  	
  Aurora, Ontario, Canada L4G 7K1

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Blake S. Tohana

  
	
   

  	
   

  	
   

  
	
   

  	
  Fax:

  	
  905-726-2585

  

 

Any Notice which is delivered or is sent by telecopy in accordance with
the foregoing shall be deemed to have been validly and effectively given and
received on the date it is delivered or sent, unless it is delivered or sent
after 5:00 p.m. on any given day or on a day which is not a Business Day, in
which case it shall be deemed to have been validly and effectively given and
received on the Business Day next following the day it was delivered or sent,
provided that in the case of a Notice sent by telecopy it shall not be deemed
to have been sent unless there has been confirmation of transmission. By giving
to the other party at least three Business Days’ prior Notice, either party
may, at any time and from time to time, change its address for delivery or
communication for the purposes of this Section 10.6.

11.8                       Lawyers as Agents

Notices, approvals, waivers and other documents permitted, required or
contemplated by this Agreement may be given or delivered by the parties or by
their respective solicitors on their behalf.

 37

11.9                                                                        Confidentiality

The parties agree that this Agreement and the transaction of purchase
and sale referred to herein, and any information provided by either party to
the other with respect to this transaction, or the Lands, shall be kept
strictly confidential and no public announcements will be made in respect
thereof without the prior consent of the other party, provided that the parties
may give such information on a confidential basis to their advisors and
consultants and as may be required by Applicable Laws.  Notwithstanding any other provision of this Agreement, if the
Transaction is completed, no party shall have any further rights, obligations
or liability under this Section 10.8, regardless of whether any such rights,
obligations or liability relate to the period prior to or after the Closing.

11.10                                                                 No
Solicitation

The
Vendor agrees that during the term of this Agreement the Vendor will not
solicit a possible sale of all or any part of the Lands with any other party.
GPRA agrees that during the term of this Agreement GPRA will not solicit a
possible sale of all or any part of the Development Rights with any other
party.

11.11                                                                 Further
Assurances

Each
of the parties hereto shall, at its own cost, from time to time hereafter and
upon any reasonable request of the other, execute and deliver, make or cause to
be made all such further acts, deeds, assurances and things as may be required
or necessary to more effectually implement and carry out the true intent and
meaning of this Agreement.

11.12                                                                 Entire
Agreement

This
Agreement constitutes the entire agreement between the parties hereto
pertaining to the agreement of purchase and sale of the Lands and the
Development Rights provided for herein and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, with
respect thereto, and there are no other warranties or representations and no
other agreements between the parties hereto in connection with the agreement of
purchase and sale provided for herein except as specifically set forth in this
Agreement.

11.13                                                                 Waiver

No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision (whether or not similar) nor
shall any waiver constitute a continuing waiver unless otherwise expressed or
provided.

11.14                                                                 Survival
after Termination

Notwithstanding the termination of this Agreement or this Agreement
becoming of no further force or effect whatsoever for any reason, the
provisions of Sections 2.4 and 4.3, shall continue to be applicable.

 38
 

11.15                                                                 Survival

This Agreement shall survive the Closing of the Transaction and shall
remain in full force and effect thereafter in accordance with its terms.

11.16                                                                 Assignment

Except for the Purchaser’s
right to assign the Development Rights (and any associated rights and benefits)
at any time, neither the Vendor nor the Purchaser shall assign its rights
and/or obligations hereunder (or agree to do so) without the prior written
consent of the other party, which consent may be withheld by such party in its
sole and absolute discretion.

11.17                                                                 Successors
and Assigns

All of the covenants and agreements in this Agreement shall be binding
upon the parties hereto and their respective successors and assigns and shall
enure to the benefit of and be enforceable by the parties hereto and their
respective successors and their permitted assigns pursuant to the terms and
conditions of this Agreement.

11.18                                                                 Counterparts

This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original hereof, and all of which shall constitute a single agreement
effective as of the date hereof.  Any
delivery of an executed copy of this Agreement by way of telecopy shall
constitute delivery hereof, provided that any party delivering by way of telecopy
shall, as soon as reasonably practicable, deliver an originally executed
counterpart of this Agreement to the other parties.

 39

IN WITNESS WHEREOF the parties have executed this Agreement as of the
day and year first above written.

	
  

  	
  20004 DELAWARE INC.

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John Simonetti

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  c/s

  
	
   

  	
   

  	
  Name:

  	
  Richard J. Crofts

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice-President, Corporate Development,
  General Counsel and Secretary

  	
   

  
	
   

  	
  I/We have authority to bind the Corporation.

  
	
   

  	
   

  
	
   

  	
  PALM MEADOWS ESTATES, LLC

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  c/s

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
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  GPRA THOROUGHBRED TRAINING CENTER, INC.

  
	
   

  	
   

  
	
   

  	
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  I/We have authority to bind the Corporation

  

 

SCHEDULE A

LEGAL DESCRIPTION OF THE LANDS

All of Parcel B and the
South 80 Feet of Parcel A, PALM BEACH THOROUGHBRED TRAINING FARM, according to
the Plat thereof, as recorded in Plat Book 96, pages 164-171, of the Public
Records of Palm Beach County, Florida.

SCHEDULE B

LEGAL DESCRIPTION OF THE PALM MEADOWS TRAINING CENTER
LANDS

PARCEL 1:

All of the Plat of PALM
BEACH THOROUGHBRED TRAINING FARM, according to the plat thereof, as recorded in
Plat Book 96, page 164 through 171, inclusive, Public Records Palm Beach
County, Florida.

LESS AND EXCEPT:

All of Parcel B and the
South 80.00 feet of Parcel A, PALM BEACH THOROUGHBRED TRAINING FARM, according
to the plat thereof, as recorded in Plat Book 96, page 164 through 171,
inclusive, Public Records Palm Beach County, Florida.

PARCEL 2:

That part of Tracts 55,
86, 87 and 118, Block 46, THE PALM BEACH FARMS CO. PLAT NO. 3, according to the
plat thereof, as recorded in Plat Book 2, pages 45 through 54, inclusive,
Public Records Palm Beach County, Florida.

AND

That part of Tracts 1 and
32, Block 50, THE PALM BEACH FARMS CO. PLAT NO. 3, according to the plat
thereof, as recorded in Plat Book 2, pages 45 through 54, inclusive, Public
Records Palm Beach County, Florida, lying East of the Florida’s Turnpike.

TOGETHER WITH THE FOLLOWING
RIGHTS OF WAY:

The South 1⁄2 of the 30
foot platted right of way as shown on the said Plat of THE PALM BEACH FARMS
COMPANY PLAT NO. 3, lying North of and adjacent to Tract 55, Block 46,
according to the said Plat of THE PALM BEACH FARMS COMPANY PLAT NO. 3 bounded
on the East by a line lying 25 feet East of the Northerly extension of the East
line of Tract 55 of said Block 46, and bounded on the West by the East right of
way line of the Florida State Turnpike as described in Deed Book 1113, pages 434
and 435 of the Public Records Palm Beach County, Florida.

AND ALSO

All of that certain 30
foot right of way lying between Tracts 86 and 87, Block 46, THE PALM BEACH
FARMS COMPANY PLAT NO. 3, bounded on the West by the East right of way line of
that certain right of way for the Florida State Turnpike as descried in Deed
Book 1113, pages 434 and 435 of the Public Records Palm Beach County, Florida
and bounded on the East by a line lying 25 feet East of the Northerly extension
of the East line of said Tract 87.

AND ALSO

The North 1⁄2 of the 50
foot right of way lying South of Tract 118, Block 46, according to the said
Plat of THE PALM BEACH FARMS COMPANY PLAT NO. 3 bounded on the West by the East
right of way line of the Florida State Turnpike as described in Deed Book 1113,
pages 434 and 435 of the Public Records Palm Beach County, Florida, and bounded
on the East by a line lying 25 feet East of the Southerly extension of the East
line of said Tract 118.

AND ALSO

The South 1⁄2 of the 50
foot platted right of way as shown on said Plat of THE PALM BEACH FARMS COMPANY
PLAT NO. 3, lying North of and adjacent to Tract 1, Block 50, according to the
said Plat of THE PALM BEACH FARMS COMPANY PLAT NO. 3 bounded on the East by a
line lying 25 feet East of the Northerly extension of East line of Tract 1 of
said Block 50, and bounded on the West by the East right of way line of the
Florida State Turnpike as described in Deed Book 1113, pages 434 and 435, of
the Public Records Palm Beach County, Florida.

AND ALSO

All that part of the
North 1⁄2 of a 30 foot right of way lying South of Tract 32, Block 50, according
to the said Plat of THE PALM BEACH FARMS COMPANY PLAT NO. 3 and its Easterly
extension to a line lying 25 foot East of and parallel with the East line of
said Tract 32, all lying East of the East right of way line of the Florida’s
Turnpike as described in Deed Book 1113, pages 434 and 435 of the Public
Records Palm Beach County, Florida.

AND ALSO

The West 1⁄2 of that
certain 50 foot road right of way lying adjacent to the East line of Tracts 1
and 32, Block 50, according to the said Plat of PALM BEACH FARMS COMPANY PLAT
NO. 3.

AND ALSO

All of that certain 25
foot road right of way lying adjacent to the East line of Tracts 55, 86, 87 and
118, Block 46, according to the said Plat of PALM BEACH FARMS COMPANY PLAT NO.
3.

LESS AND EXCEPT THE
FOLLOWING DESCRIBED PROPERTY:

A portion of the North 1⁄2
of the 30 foot Platted road right of way lying South of Tracts 17 through 32,
Block 50; portions of Tracts 32 and 1, Block 50; a portion of the 50 foot
platted road right of way lying between Blocks 50 and 48; portions of tracts
115 and 87, Block 46; a portion of the 30 foot platted road right of way lying
between Tracts 87 and 88 of said Block 46; portions of Tracts 86 and 65; a
portion of the South 1⁄2 of the 30 foot platted road lying North of Tracts 55
through 70, Block 46, all of PALM BEACH FARMS COMPANY PLAT NO. 3, according to
the Plat thereof, as recorded in Plat Book 2, pages 45 through 54, of the
Public Records Palm Beach County, Florida, described as follows:

 2
 

Begin at the intersection
of the West right of way of the Sunshine State Parkway (Miami to Fort Pierce
Section) according to the right of way map station 2016+27.78 to 2126+18.91
Palm Beach County (Contract 3.2, sheets 6 and 7 of 13) with the South line of
the said North 1⁄2 of the 30 foot platted road right of way lying South of Tracts
17 through 32, Block 50 of said PALM BEACH FARMS COMPANY PLAT NO. 3; thence
South 89 degrees 59 minutes 00 seconds West, along said South line, a distance
of 7.58 feet thence North 00 degrees 06 minutes 36 seconds West, along the West
boundaries of said Tracts 32 and 1, Block 50 and the Northerly and Southerly
extensions thereof, also along the West boundaries of said Tracts 118, 87, 86
and 55, Block 46 and the Northerly and Southerly extensions thereof, a distance
of 4075.16 feet to the North boundary of the said South 1⁄2 of the 30 foot
platted road right of way lying North of Tracts 55 through 70, Block 46; thence
North 89 degrees 57 minutes 42 seconds East, along said North boundary a
distance of 6.80 feet to the said West right of way of said Sunshine State
Parkway; thence South 00 degrees 07 minutes 15 seconds East, along said West
right of way a distance of 4075.17 feet to the POINT OF BEGINNING.

 3

SCHEDULE C

LIST OF EXISTING CONTRACTS

None.

SCHEDULE D

LIST OF EXISTING LEASES

None.

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