SIXTEENTH AMENDING AGREEMENT

Exhibit 10.1

SIXTEENTH AMENDING AGREEMENT

THIS AGREEMENT is made as of August 13th, 2008,

BETWEEN:

MAGNA ENTERTAINMENT CORP.

as Borrower (the “Borrower”)

- and -

THE GUARANTORS SET FORTH

ON THE SIGNATURE PAGES HEREOF

as Guarantors (collectively, the “Guarantors”)

- and -

BANK OF MONTREAL, ACTING THROUGH ITS

CHICAGO LENDING OFFICE

as Lender (the “Lender”)

- and -

BANK OF MONTREAL, ACTING THROUGH ITS

CHICAGO LENDING OFFICE

as Agent (the “Agent”)

RECITALS:

A.                                   The Lender has made a certain credit facility available to the Borrower in accordance with the terms and conditions set out in an amended and restated credit agreement (the “Loan Agreement”) dated as of July 22, 2005, between the Borrower, the Guarantors, the Lender, the Agent and BMO Nesbitt Burns Inc., a Division of Bank of Montreal, as arranger, and as amended from time to time.

B.                                     The Borrower, the Lender and the Agent have agreed to further amend the Loan Agreement by extending the Maturity Date and making certain other changes in connection with a possible MID Reorganization (as defined below) on the terms and conditions set out herein.

C.                                     The Guarantors have agreed to confirm the guarantees and security granted by them in connection with the Loan Agreement.

D.                                    Article 7 of the Loan Agreement sets out certain affirmative and negative obligations which the Borrower has covenanted to be bound by and has agreed to follow unless the Agent, on behalf of the Lender, waives in writing.

NOW THEREFORE in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged) the parties agree as follows:

1.                                                                                      Interpretation

Capitalized terms not defined in this Sixteenth Amending Agreement have the meaning given to such terms in the Loan Agreement.

2.                                                                                      Loan Agreement Amendments

The parties hereto agree to amend the Loan Agreement by:

a)              Adding a new definition in Section 1.1 as follows: “Bridge Loan Agreement means  the US$110,000,000 credit agreement  dated as of September 12, 2007 amongst the Borrower, as borrower, MID Islandi SF, as lender and certain other parties listed therein, as such agreement has been amended on the date hereof and as may be amended from time to time;”

b)             adding a new definition in Section 1.1 as follows: “MID Reorganization means any reorganization transaction, including, without limitation,  a plan of arrangement, purchase, consolidation, liquidation, merger or amalgamation, under which,  MI Developments Inc. transfers, consolidates or liquidates any part of its ownership interest in the Borrower which results in MI Developments Inc. being the beneficial holder, directly or indirectly, of less than 51% of the votes attaching to all Voting Interests of the Borrower.”

c)              deleting the definition of “Termination Date” in section 1.1.120 and replacing it with the following new definition of Termination Date:

“Termination Date means September 15th, 2008, or such earlier date as the entire balance of the Loans under the Credit Facility may become due hereunder, whether by acceleration or otherwise; or, in each case, such later date to which the Credit Facility has been extended pursuant to section 2.5. For greater certainty, the Lender and the Borrower agree that  if the maturity date under the Bridge Loan Agreement is amended such that it occurs prior to  September 15th, 2008 for any reason (other than an Event of Default thereunder), the Termination Date hereunder will be deemed to be  such date that is 14 days prior to such amended maturity date under the Bridge Loan Agreement.”

d)             adding  a new paragraph 2.3.4 (Repayment under Credit Facility) as follows: