Exhibit 10.3
THIRD AMENDING AGREEMENT IN
RESPECT OF THE THIRD AMENDED AND
RESTATED GULFSTREAM PARK LOAN AGREEMENT
THIS
AGREEMENT made as of the 23 rd day of May,
2008,
BETWEEN:
GULFSTREAM PARK RACING
ASSOCIATION, INC. ,
a
corporation incorporated under the laws of the State of
Florida
(being hereinafter called the “
Borrower ”),
OF
THE FIRST PART,
-
and -
MID ISLANDI SF.
,
a
partnership formed under the laws of Iceland, acting through its
Zug branch
(being hereinafter called the “
Lender ”),
OF
THE SECOND PART,
- and -
REMINGTON PARK,
INC. ,
a
corporation incorporated under the laws of the State of
Oklahoma
(being hereinafter called the “
Remington Guarantor ”),
OF
THE THIRD PART,
-
and -
GPRA THOROUGHBRED TRAINING
CENTER, INC. ,
a
corporation incorporated under the laws of the State of
Delaware
(being hereinafter called the “
Palm Meadows Guarantor ”),
-
and -
MAGNA ENTERTAINMENT
CORP. ,
a
corporation incorporated under the laws of the State of
Delaware
(being hereinafter called “
MEC ”), (the Remington Guarantor, the Palm Meadows
Guarantor and MEC being hereinafter collectively called the “
Original Guarantors ”),
OF
THE FOURTH PART,
-
and -
GPRA COMMERCIAL
ENTERPRISES, INC. ,
a
corporation incorporated under the laws of the State of
Florida
(being hereinafter called the “
Gulfstream Commercial
Guarantor ” (the Original Guarantors and the
Gulfstream Commercial Guarantor being hereinafter called the
“ Guarantors ”),
OF
THE FIFTH PART.
WHEREAS the Lender, as lender, the
Borrower, as borrower, and the Original Guarantors, as guarantors,
are parties to a Third Amended and Restated Gulfstream Park Loan
Agreement made as of December 22, 2006 (such Third Amended and
Restated Gulfstream Park Loan Agreement, as amended by a First
Amending Agreement in respect of the Third Amended and Restated
Gulfstream Park Loan Agreement dated as of August 3, 2007, and
as amended by a Second Amending Agreement (the “ Second
Amending Agreement ”) in respect of the Third Amended and
Restated Gulfstream Park Loan Agreement dated as of
September 11, 2007, and as the Third Amended and Restated
Gulfstream Park Loan Agreement may be further extended, modified,
renewed or replaced from time to time, being referred to herein the
“ Gulfstream Park Loan Agreement
”);
AND WHEREAS on September 11,
2007, MEC’s Board of Directors approved and adopted a
plan (the “ MEC Debt Elimination Plan ”)
(referenced in the Second Amending Agreement as the “Borrower
Restructuring Plan”) to restructure MEC’s balance sheet
through the sale of certain assets and entering into strategic
partnerships or joint ventures to allow MEC to substantially
eliminate its debt by December 31, 2008, and to pursue a
business plan focused on achieving sustainable profitability;
AND
WHEREAS the MEC Debt Elimination Plan contemplated the sale of
assets including, without limiting the generality of the foregoing,
certain of those Properties owned by the Borrower that constitute
collateral for the Loan;
AND
WHEREAS the sale of assets under the MEC Debt Elimination Plan has
taken longer than originally contemplated;
2
AND
WHEREAS on March 31, 2008, the Board of Directors of MI
Developments Inc. (“ MID ”), an affiliate of the
Lender and the controlling shareholder of MEC, received a
reorganization proposal on behalf of various shareholders of MID
that would, among other things, alter the relationship between MID
and MEC;
AND
WHEREAS the Lender has agreed, inter alia , to amend
the Gulfstream Park Loan Agreement to: (i) revise
certain representations and covenants relating to implementation of
the MEC Debt Elimination Plan; (ii) to extend from
May 31, 2008 to August 31, 2008 the deadline for
repayment of $100 million required under Section 7.1 of the
Gulfstream Park Loan Agreement; (iii) to extend from
May 31, 2008 to August 31, 2008 the date prior to which
the Lender shall not charge, and the Borrower shall not be
obligated to pay, a Pre-Payment Make-Whole Amount in respect of any
valid pre-payments made under the Gulfstream Park Loan Agreement,
all on the terms and conditions set out herein;
AND
WHEREAS all capitalized terms used herein and not defined herein
shall have the respective meanings given to such terms in the
Gulfstream Park Loan Agreement;
NOW THEREFORE , in
consideration of the mutual covenants and agreements set forth in
this Agreement and the sum of Ten Dollars ($10.00) paid by each of
the parties hereto to the other and for other good and valuable
consideration (the receipt and sufficiency of which are hereby
acknowledged), the parties hereto covenant and agree as
follows:
1.
Definitions . Unless
otherwise defined herein, all capitalized terms used in this
agreement (this “ Agreement ”) shall have the
respective meanings ascribed to them in the Gulfstream Park Loan
Agreement.
2.
Representations and
Warranties . The Borrower and the Guarantors jointly
and severally represent and warrant to and in favour of the Lender,
with the intent that the Lender shall be entitled to rely upon such
representations and warranties in entering into this Agreement and
notwithstanding the completion of the transactions contemplated
herein, that: (i) all of the recitals to this Agreement are
true and complete in all material respects; (ii) except as
specifically qualified in the Disclosure Schedule, all of the
representations and warranties of the Borrower in Article 6 of
the Gulfstream Park Loan Agreement are true and correct on the date
hereof as if made on and as of the date hereof; and
(iii) there are no facts, conditions or circumstances that are
known to the Borrower or any of the Guarantors and that may
reasonably be considered relevant to the Lender’s decision to
enter into this Agreement that have not been disclosed in writing
to the Lender.
3.
Amendments . The
Gulfstream Park Loan Agreement is hereby amended as follows:
(a)
by adding, in proper alphabetical order, the following definition
of “ MEC Debt Elimination Plan ” to
Section 1.1 of the Gulfstream Park Loan Agreement:
3
““ MEC Debt Elimination Plan
” means the plan approved and adopted by MEC’s Board of
Directors as of September 11, 2007 to restructure MEC
’s balance sheet through the sale of certain assets and
entering into strategic partnerships or joint ventures to allow MEC
to substantially eliminate its debt by December 31, 2008, and
to pursue a business plan focused on achieving sustainable
profitability, including any amendments, revisions or modifications
thereto approved by MEC&
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