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Exhibit 5
[LETTERHEAD OF SIDLEY AUSTIN BROWN & WOOD]
September 28, 2001
Magna Entertainment Corp.
337 Magna Drive
Aurora, Ontario L4G 7K1
Canada
Re: Registration Statement on Form S-3
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Ladies and Gentlemen:
We have acted as special counsel in connection with the Registration
Statement on Form S-3 (the "Registration Statement") filed by Magna
Entertainment Corp. (the "Company") on the date hereof with the Securities and
Exchange Commission, pursuant to the Securities Act of 1933, for the
registration of the sale by the Company from time to time of up to $400,000,000
in aggregate amount of (i) senior debt securities and subordinated debt
securities (collectively, "Debt Securities"), (ii) Class A Subordinate Voting
Stock, par value $0.01 per share, of the Company ("Class A Subordinate Voting
Stock") and (iii) warrants to purchase Debt Securities and warrants to purchase
Class A Subordinate Voting Stock (collectively, "Warrants"; together with the
Debt Securities and Class A Subordinate Voting Stock, the "Securities"). Senior
Debt Securities issued by the Company are to be issued pursuant to a senior
indenture between the Company and a trustee to be determined (the "Senior Debt
Indenture"), and subordinated Debt Securities are to be issued pursuant to a
separate indenture between the Company and a separate trustee (the "Subordinated
Debt Indenture"; together with the Senior Debt Indenture, the "Indentures"). Any
shares of Class A Subordinate Voting Stock issued by the Company may be issued
pursuant to a firm commitment underwriting agreement in customary form between
the Company and an underwriter to be determined (the "Underwriting Agreement").
Any Warrants issued by the Company are to be issued pursuant to a warrant
agreement in customary form between the Company and a warrant agent to be
determined (the "Warrant Agreement").
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SIDLEY AUSTIN BROWN & WOOD NEW YORK
September 28, 2001
Page 2
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments as we have deemed necessary for the
purpose of rendering this opinion.
Based on the foregoing, we are of the opinion that:
1. When the Indentures and any supplemental indentures to be entered
into in connection with the issuance of Debt Securities have been duly
authorized, executed and delivered by the Company and the respective
trustees, the specific terms of particular Debt Securities have been
duly authorized and established by the Company in accordance with the
applicable Indenture and such Debt Securities have been duly
authorized, executed, authenticated, issued and delivered in accordance
with the applicable Indenture and any applicable underwriting or other
agreement, such Debt Securities will constitute valid and binding
obligations of the Company, enforceable in accordance with their terms,
subject to applicable bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium or similar laws now or hereafter in
effect relating to or affecting the enforcement of creditors' rights
generally and to general principles of equity (regardless of whether
considered in a proceeding at law or in equity).
2. When necessary corporate action on the part of the Company has been
taken to authorize the issuance and sale of such shares of Class A
Subordinate Voting Stock proposed to be sold by the Company, and when
such shares are issued and delivered in accordance with the
Underwriting Agreement, such shares of Class A Subordinate Voting Stock
will be validly issued, fully paid and non-assessable.
3. When any Warrants have been duly authorized by the Company and the
Warrant Agreement and the applicable certificates representing such
Warrants have been duly executed and delivered in accordance with the
Warrant Agreement and any applicable underwriting or other applicable
agreement in customary form, such Warrants will constitute valid and
binding obligations of the Company, enforceable in accordance with
their terms, subject to applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or similar laws now or
hereafter in effect relating to or affecting the enforcement of
creditors' rights generally to general principles of equity (regardless
of whether considered in a proceeding at law or in equity).
In connection with the opinions expressed above, we have assumed that,
at or prior to the time of the delivery of any Securities, (i) the board of
directors of the Company shall have duly established the terms of such
Securities and duly authorized the issuance and sale of such Securities and such
authorization shall not have been modified or rescinded; (ii) the Registration
Statement shall have been declared effective and such effectiveness shall not
have been terminated or rescinded; (iii) the Securities will have the terms
described in and will
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SIDLEY AUSTIN BROWN & WOOD NEW YORK
September 28, 2001
Page 3
otherwise be issued as described in the Registration Statement and the Debt
Securities and the Warrants will be governed by the laws of the State of New
York; and (iv) there shall not have occurred any change in law affecting the
validity or enforceability of such Securities. We have also assumed that none of
the terms of any Securities to be established subsequent to the date hereof, nor
the issuance and delivery of such Securities, nor the compliance by the Company
with the terms of such Securities will violate any applicable law or will result
in a violation of any provision of any instrument or agreement then binding upon
the Company, or any restriction imposed by any court or governmental body having
jurisdiction over the Company.
This opinion is limited to the laws of the State of New York, the
federal laws of the United States of America and the General Corporation Law of
the State of Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Sidley Austin Brown & Wood