The following descriptions of the Transaction Agreement (defined below) and the Senior Bank Facility Amending Agreement (defined below), do not purport to be complete and are qualified in their entirety by reference, respectively, to Exhibits 10.1 and 10.2 hereto that are incorporated by reference herein.

Transaction Agreement

On November 26, 2008, the Registrant entered into a transaction agreement (the "Transaction Agreement") with MI Developments Inc. ("MID"), the Registrant's controlling shareholder, and entities affiliated with the Registrant's Chairman and Chief Executive Officer, Frank Stronach (the "Stronach Group"), to implement a proposed reorganization of MID that includes the spin-off of the Registrant to MID's existing shareholders. The Transaction Agreement contemplates, among other things, a multi-step series of proposed transactions designed to recapitalize and reposition the Registrant to enable it to pursue its strategy of horse racing, gaming and entertainment on a standalone basis. The proposed transactions include:

Stage One - Immediate Transactions

† new financing being made available to the Registrant by MID in an aggregate principal amount of up to $50 million (the "New Loan First Tranche") to fund the Registrant's operations and up to $75 million (the "New Loan Second Tranche") to fund the Registrant's Laurel Park video lottery terminals ("VLTs" or "slots") license application and related matters and, if Laurel Park is awarded a slots license, the construction of a temporary slots facility;

† MID has extended to March 31, 2009, subject to certain acceleration provisions, (i) the maturity date of the existing bridge loan (the "Bridge Loan") from an MID subsidiary (the "MID Lender"), (ii) the repayment deadline for $100 million under the project financing facility from the MID Lender for Gulfstream Park (the "Gulfstream Facility") and (iii) the date until which repayments under the Gulfstream Facility and the project financing facility from the MID Lender for Remington Park (the "Remington Facility") will not be subject to a make-whole payment;

† the Registrant has covenanted to use commercially reasonable efforts to sell or enter into joint ventures in respect of its assets, including its core racetrack assets;

Stage Two - Transactions following MID Shareholder Approval

† sales of real estate assets in California and Florida by the Registrant to MID for their fair market value;

† further extensions of the Bridge Loan, the New Loan First Tranche and the Gulfstream Facility $100 million repayment obligation to December 14, 2009;

† an increase in the amount of the New Loan First Tranche by $25 million to up to $75 million;

† amendments to the New Loan First Tranche, the Bridge Loan, the Gulfstream Facility and the Remington Facility to, among other things, enable the Registrant to repay such facilities in full with, at the Registrant's option, cash and/or MEC Class A Subordinate Voting Stock ("MEC Class A Stock");

† a forbearance agreement that prohibits new transactions between MID and the Registrant unless such transactions are approved by a majority of the minority holders of Class A Subordinate Voting Shares of MID ("MID Class A Shares");

Stage Three - Transactions following Retirement of Convertible Subordinated Notes

† provided that the Registrant has fully retired its outstanding 7.25% Convertible Subordinated Notes due December 15, 2009 and 8.55% Convertible Subordinated Notes due June 15, 2010 (collectively, the "MEC Subordinated Notes") by December 14, 2009:

† all of the Registrant's indebtedness to MID (other than the New Loan Second Tranche) will be repaid, at the Registrant's option, either in cash or MEC Class A Stock (or a combination of the two), and MID will distribute all such cash and MEC Class A Stock to MID's shareholders;

† the Registrant will sell to the Stronach Group $30 million of Class B Stock of MEC ("MEC Class B Stock"); and

† the Registrant will be controlled directly by the Stronach Group and MID will no longer have any ownership interest in MEC.

Certain of the transactions are proposed to be effected by way of a statutory plan of arrangement involving MID, the Registrant and the Stronach Group that would be subject to approval by MID's shareholders and the Ontario Superior Court of Justice. The Registrant understands that MID's shareholder meeting to consider the reorganization proposal is expected to take place in the first quarter of 2009.

The transactions proposed to be undertaken by the Registrant following MID shareholder approval and the retirement of the MEC Subordinated Notes are subject to regulatory approval, including the approval of the Toronto Stock Exchange.

Additional Details

Immediate Transactions

(i) MEC Asset Sales and Joint Ventures

Pursuant to the Transaction Agreement, the Registrant has agreed to use its commercially reasonable efforts to sell or enter into joint ventures in respect of its assets, including its core racetrack assets, that will result in the Registrant receiving net sale proceeds or joint venture payments sufficient to retire the MEC Subordinated Notes no later than December 14, 2009.

(ii) MID Loans to the Registrant

The maturity dates and repayment deadlines under all existing loans from the MID Lender to the Registrant and its subsidiaries (comprised of the Bridge Loan and the Gulfstream Facility and Remington Facility) will be extended to March 31, 2009. In the event that the reorganization transaction does not receive the requisite MID shareholder approval or is abandoned or withdrawn, the maturity dates and repayment deadlines will be accelerated to thirty days following such event. In connection with the extension to March 31, 2009 of the Bridge Loan maturity date and the Gulfstream Facility $100 million repayment obligation, the Registrant incurred fees of $2.5 million and $2.0 million, respectively.

MID will make available to the Registrant a new loan in two tranches (collectively the "New Loan"). The New Loan First Tranche will be in the amount of up to $50 million (plus costs and fees) and is intended to support the Registrant's operations through to the special meeting of MID's shareholders to consider the reorganization proposal. The funds are to be used solely to fund
(i) operations, (ii) payments of principal or interest and other costs under the New Loan and under other loans provided by MID to the Registrant,
(iii) mandatory payments of interest in connection with other of the . . .

The information set forth under "Item 1.01 Entry into a Material Definitive Agreement" is incorporated by reference into this Item 3.02.

The amount of MEC Class A Stock to be issued, if any, in connection with the future conversion of MID Debt and the amount of MEC Class B Stock to be issued to the Stronach Group cannot be determined at this time. The Registrant expects that the issuance of any such securities will be made pursuant to an exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended. The use of any proceeds received from the sale of the Class B Stock will be determined at the time of such sale.

Special Committee Process

The terms of the Transaction Agreement were considered by the Special Committee of MEC's board of directors consisting of Jerry D. Campbell (Chairman), Anthony Campbell and William J. Menear. The Transaction Agreement was unanimously approved by MEC's board following a favorable recommendation of the Special Committee. The Special Committee retained independent legal and financial advisors to assist in its deliberations in respect of the Transaction Agreement.

(d) Exhibits

Exhibit                                     Index
10.1        Transaction Agreement dated November 26, 2008 between The Stronach
            Trust, Fair Enterprise Limited and their respect Subsidiaries
            (including 445327 Ontario Limited but excluding MI Developments Inc.,
            Magna Entertainment Corp. and Magna International Inc. and their
            respective Subsidiaries)

10.2        Amending Agreement between the Registrant, the Guarantors set forth
            therein and the Bank of Montreal, made as of November 26, 2008 to
            amend the Senior Bank Facility.