LIMITED LIABILITY COMPANY OPERATING AGREEMENT
 
OF
 
TRACKNET MEDIA GROUP, LLC
 

 
THIS OPERATING AGREEMENT of TRACKNET MEDIA GROUP, LLC, a Delaware limited
liability company (the “Company”), is entered into as of March 4, 2007 by and
between CHURCHILL DOWNS INCORPORATED, a Kentucky corporation (“CDI”), CD
CONTENTCO HC, LLC, a Delaware limited liability company and a wholly owned
subsidiary of CDI (“CDI Sub”), MAGNA ENTERTAINMENT CORP., a Delaware corporation
(“MEC”) and MEC CONTENT HOLDCO LLC, a Delaware limited liability company and a
wholly owned subsidiary of MEC (“MEC Sub”). (Unless otherwise indicated, each
term used in this Agreement with initial capital letters shall have the meaning
ascribed to it in Article 11.)
 
For and in consideration of the mutual promises contained herein, and for other
good and valuable consideration, the receipt and sufficiency of which are
acknowledged by the parties, CDI, CDI Sub, MEC and MEC Sub desiring to be
legally bound agree as follows:
 
ARTICLE 1
FORMATION
 
1.1  Formation and Name.
 
[a]  The Members enter into and form the Company as a limited liability company
in accordance with the Act.
 
[b]  The name of the Company shall be TrackNet Media Group, LLC.
 
1.2  Term. The “Term” of the Company shall commence on the date first above
written and shall continue as set forth in Section 8.2.
 
1.3  Purpose and Scope.
 
[a]  Within the meaning and for purposes of the Act, the purpose and scope of
the Company shall be the conduct of the Business and, in connection with
conducting the Business, shall include any lawful action or activity permitted
to a limited liability company under the Act.
 
[b]  [i] The Company, as the sole and exclusive agent for CDI, CDI Sub, MEC and
MEC Sub and their Affiliates, will on behalf of CDI, CDI Sub, MEC and MEC Sub
and their Affiliates:
 
1.  Conduct the acquisition of ADW Content Rights from all Third Parties
worldwide for ADW worldwide by CDI ADW and XpressBet.
2. Conduct the acquisition of Point to Point Content Rights from all Third
Parties worldwide for Point-to-Point Simulcasting worldwide by CDI Tracks and
MEC Tracks.
3.  Conduct the acquisition of Rebate Content Rights from all Third Parties
worldwide for Rebating worldwide by CDI and MEC.
4.  Sublicense CDI and MEC ADW Content Rights to Third Parties worldwide for ADW
worldwide.
5.  Sublicense CDI and MEC Point to Point Content Rights to Third Parties
worldwide for Point-to-Point Simulcasting worldwide.
6. Sublicense CDI and MEC Rebate Content Rights to Third Parties worldwide for
Rebating worldwide.

Each of 1-6, to the extent and at the time permitted by contractual obligations
existing as of the date hereof as set forth on Schedule C.

[ii] The Company will also:
 
7. Acquire ADW Content Rights from Third Parties worldwide for resale or
sublicensing to Third Parties worldwide for ADW worldwide.
8. Acquire Point to Point Content Rights from Third Parties worldwide for resale
or sublicensing to Third Parties worldwide for Point to Point Simulcasting
worldwide.
9. Acquire Rebate Content Rights from Third Parties worldwide for resale or
sublicensing to Third Parties worldwide for Rebating worldwide.
10. Acquire Television Rights from Third Parties worldwide for use by HRTV
Entity worldwide and for redistribution by the Company to Third Parties outside
the Territory.
11. Provide settlement and collections for CDI and MEC.
12. Improve the simulcasting production of CDI and MEC.
13. Conduct due diligence and implement wagering integrity processes with
respect to ADW, Point to Point Simulcasting, and Rebating.

Collectively 1-13, are referred to herein as the “Business”.

[c]  CDI may, at its sole cost and expense, form or purchase CDI ADW. MEC will
provide such technology and/or services in respect of the formation and
operation of CDI ADW as CDI, in its sole discretion, may reasonably request. Any
services or technology to be provided by MEC (or any affiliates thereof) shall
be provided at a rate that is mutually agreeable to the parties.
 
1.4  Principal Office. The Company shall have a single “Principal Office.” The
Principal Office initially shall be located at Churchill Downs in Louisville,
Kentucky (with a satellite office at Santa Anita Park), and may thereafter be
changed from time to time by approval of the Board of Managers upon notice to
the Members.
 
1.5  Delaware Office and Agent. The Company shall maintain a Delaware registered
office and agent for service of process as required by the Act. In the event the
registered agent ceases to act as such for any reason or the registered office
shall change, the Board of Managers shall promptly designate a replacement
registered agent or file a notice of change of address, as the case may be, in
each case as required by the Act.
 
1.6  Admission of Members and Additional Members.
 
[a]  Upon execution of this Agreement each of CDI Sub and MEC Sub is admitted as
a Member.
 
[b]  Additional Members may be admitted as Members from time to time, with the
approval of the Board of Managers and with such changes to this Agreement as
agreed to by CDI, CDI Sub, MEC and MEC Sub. The Capital Commitment (as well as
the timing of required capital contributions in respect thereof) and Allocation
Percentage of each Additional Member shall be determined by approval of the
Board of Managers and set forth on Schedule A. The Allocation Percentage of each
Additional Member shall dilute the Allocation Percentages of the previously
admitted Members in proportion to their respective Allocation Percentages as in
effect immediately prior to such dilution.
 
[c]  A Person shall not be admitted as an Additional Member prior to the
execution by such Person of a counterpart of this Agreement (including Schedule
A, as updated to reflect such Person’s Interest).
 
[d]  Notwithstanding the foregoing provisions of this Section 1.6, the
provisions of Article 7 shall apply with regard to the admission of Substitute
Members.
 
[e]  CDI and MEC shall work together to recruit mutually agreed-upon Third
Parties (such as horsemen, breeders and other industry participants) to become
Additional Members of the Company. In the event CDI and MEC are successful in
recruiting mutually agreed-upon Additional Members, CDI Sub and MEC Sub will be
diluted on a pro rata basis.
 
1.7  Names and Contact Information of the Members. Set forth below the name of
each Member on Schedule A shall be appropriate contact information for such
Member (including such Member’s mailing address as well as the name or title of
an individual to whom notices and other correspondence should be directed). Each
Member shall promptly provide the Company with the information required to be
set forth for such Member on Schedule A and shall thereafter promptly notify the
Company of any change to such information.
 
1.8  Additional Documents.
 
[a]  The Board of Managers shall cause to be executed, filed, recorded,
published, or amended any documents, as the Board of Managers in their
reasonable discretion determine to be necessary or advisable, (x) in connection
with the formation, operation, Dissolution, winding-up, or Termination of the
Company pursuant to applicable law or (y) to otherwise give effect to the terms
of this Agreement. The terms and provisions of each document described in the
preceding sentence shall be initially established and shall be amended as
necessary to cause such terms and provisions to be consistent with the terms and
provisions of this Agreement.
 
1.9  Title to Property. Title to all Company property shall be held in the name
of the Company; provided, however, that publicly traded securities may be held
in “street name” or through a similar arrangement with a reputable financial
institution.
 
ARTICLE 2
CAPITALIZATION
 
2.1  Capital Commitments.
 
[a]  Initial Capital Commitments. The Company shall be owned initially fifty
percent (50%) by CDI Sub and fifty percent (50%) by MEC Sub. Each of CDI Sub and
MEC Sub will make initial capital contributions in the amount and at such times
as set forth on Schedule A or such lesser amount as the Board of Managers may
agree. All Capital Commitments shall be made such that each of MEC Sub and CDI
Sub contributes fifty percent (50%) of the aggregate value contributed to the
Company, except as may otherwise be agreed between MEC Sub and CDI Sub. In
addition, CDI may lease certain property to the Company under the Real Property
Lease.
 
[b]  Increased Capital Commitments. In the event the Company revenues are
insufficient to allow the Company to be self funding, any additional capital
needs will be determined by the Board of Managers in accordance with Schedule A.
 
[c]  Rights Covenant. Upon execution of this Agreement, CDI Sub and MEC Sub
contribute or cause to be contributed and/or license or cause to be licensed to
the Company their respective rights (including such rights as held by their
Affiliates) as set forth on Schedule B subject to the contractual obligations
existing as of the date hereof as set forth on Schedule C.
 
2.2  Capital Contributions. Except to the extent set forth on Schedule B or
otherwise agreed by the Members after the date of this Agreement, all capital
contributions shall be in cash.
 
[a]  Capital Contributions in Respect of Initial Capital Commitments. Within
thirty (30) days of execution of this Agreement, each Member shall make a
capital contribution equal to its initial Capital Commitment as set forth on
Schedule A or such lesser amount as the Board of Managers may agree.
 
[b]  Capital Contributions in Respect of Increased Capital Commitments. The
Members shall make capital contributions in respect of, and in proportion to,
any increase in their Capital Commitments pursuant to Section 2.1(b) and
Schedule A.
 
2.3  Limitation on Capital Contributions. Except as specifically provided in
this Article 2 or Section 3.5(c), no Person shall be permitted or required to
make a contribution to the capital of the Company.
 
2.4  Penalties for Failure to Make Required Contributions. In the event that a
Member fails to timely make a capital contribution as required pursuant to this
Agreement (a “Defaulting Member”), the following provisions shall be applicable:
 
[a]  The non-Defaulting Member shall have the right (but not the obligation) to
make the capital contribution in lieu of the Defaulting Member. In such event,
the Interest and Allocation Percentage of the non-Defaulting Member in the
Company shall be proportionately increased, and the Interest and Allocation
Percentage of the Defaulting Member proportionately decreased, as appropriate to
reflect the additional capital contribution by the non-Defaulting Member. If the
default is then cured by the Defaulting Member, as permitted under this
Agreement, the Defaulting Member shall have the Interests and Allocation
Percentages of the Defaulting Member and the non-Defaulting Member reinstated to
where they were prior to the default with an appropriate distribution to the
non-Defaulting Member of the capital contribution made in lieu of the Defaulting
Member.
 
[b]  Such Defaulting Member shall be subject to any and all penalties and
remedies available at law or equity, as selected by the members of the Board of
Managers who are not appointed by the Defaulting Member.
 
2.5  Withdrawal and Return of Capital. No Member may withdraw any portion of its
Capital Contribution or Capital Account balance. Except as provided in Section
2.4[a] and in Articles 4 and 8, no Member shall be entitled to the return of
such Member’s Capital Contribution, a distribution in respect of such Member’s
Capital Account balance, or any other distribution in respect of such Member’s
Interest.
 
2.6  Loans to the Company. No Member shall be required to lend any money to the
Company or to guaranty any Company indebtedness.
 
2.7  Interest on Capital. No Member shall be entitled to interest on such
Member’s Capital Contribution, Capital Account balance, or share of unallocated
Profits.
 
2.8  Limitation of Liability; Return of Certain Distributions.
 
[a]  Except as otherwise required by applicable law, a Member shall have no
personal liability for the debts and obligations of the Company.
 
[b]  A Member that receives a distribution in violation of this Agreement or
that is required to be returned to the Company under applicable law shall return
such distribution within thirty (30) days after demand therefor by any Member.
The Company may, with the approval of the Board of Managers, elect to withhold
from any distributions otherwise payable to a Member amounts due to the Company
from such Member.
 
[c]  Nothing in this Section 2.8 shall be applied to release any Member from
(i) its obligation to make capital contributions or other payments specifically
required under this Agreement or (ii) its obligations pursuant to any
contractual relationship between the Company and such Member acting in a
capacity other than as a Member (including, for example, as a borrower or
independent contractor).
 
2.9  Contributed Property. With respect to any property contributed by a Member
to the Company, such Member shall provide to the Company any information
reasonably requested by the Company for purposes of determining the Company’s
tax basis in such property.
 
2.10  Seconded Personnel. MEC and CDI shall agree on their respective personnel
to be seconded or transferred to the Company and the terms thereof. Schedule 11
of the Business Plan sets forth the organizational chart of the Company,
including the names of certain personnel who are expected to fill various
positions and several open positions for which no candidates have yet been
identified by the Members. CDI and MEC intend to second the personnel listed on
Schedule 11 of the Business Plan immediately upon execution of this Agreement
and CDI and MEC shall cooperate in good faith to determine whether they mutually
agree in the future to transfer such employees to the Company instead of
seconding them to the Company. On or before the tenth (10th) day of each month,
each of CDI and MEC will bill the Company for the Employee Costs incurred by CDI
and MEC during the immediately preceding month for its employees seconded to the
Company, prorated as appropriate for any employees seconded on a less than full
time basis. The Company shall promptly pay to CDI and MEC the amount set forth
in such bills.
 
ARTICLE 3
PROFITS AND LOSSES
 
3.1  Allocations of Company Profits and Losses.
 
[a]  General Allocation Provisions.
 
[i] Hypothetical Liquidation. The items of income, expense, gain and loss of the
Company comprising Profits or Losses for a fiscal year shall be allocated among
the Members in a manner that will, as nearly as possible, cause the Capital
Account balance of each Member at the end of such fiscal year to equal the
excess (which may be negative) of:
 
[A] the hypothetical distribution (if any) that such Member would receive if, on
the last day of the fiscal year, (i) all Company assets, including cash, were
sold for cash equal to their Fair Market Values, taking into account any
adjustments thereto for such fiscal year, (ii) all Company liabilities were
satisfied in cash according to their terms (limited, with respect to each
nonrecourse liability, to the Fair Market Value of the assets securing such
liability), and (iii) the net proceeds thereof (after satisfaction of such
liabilities) were distributed in full pursuant to Section 8.3[d]; over
 
[B] the sum of (x) the amount, if any, which such Member is obligated to
contribute to the capital of the Company, (y) such Member’s share of the Company
Minimum Gain determined pursuant to Treasury Regulation Section 1.704-2(g), and
(z) such Member’s share of Member Minimum Gain determined pursuant to Treasury
Regulation Section 1.704-2(i)(5), all computed immediately prior to the
hypothetical sale described above.
 
[ii] Determination of Items Comprising Allocations.
 
[A] In the event that the Company has Profit for a fiscal year,
 
[1] for any Member as to whom the allocation under Section 3.1(a)(i) would
reduce its Capital Account, such allocation shall be comprised of a
proportionate share of each of the Company’s items of expense or loss entering
into the computation of Profit for such fiscal year; and
 
[2] the allocation for all other Members shall be comprised of a proportionate
share of each Company item of income, gain, expense and loss entering into the
computation of Profit for such fiscal year (other than the portion of each
Company item of expense and loss, if any, that is allocated in (ii)(A)(1)
above).
 
[B] In the event that the Company has Loss for a fiscal year,
 
[1] for any Member as to whom the allocation under Section 3.1(a)(i) would
increase its Capital Account, such allocation shall be comprised of a
proportionate share of the Partnership’s items of income and gain entering into
the computation of Loss for such fiscal year; and
 
[2] the allocation for all other Members shall be comprised of a proportionate
share of each Company item of income, gain, expense and loss entering into the
computation of Loss for such fiscal year (other than the portion of each Company
item of income and gain, if any, that is allocated in (ii)(B)(1) above).
 
[b]  Allocation Adjustments Required to Comply With Section 704(b) of the Code.
 
[i]  Limitation on Allocation of Losses. There shall be no allocation of Losses
to any Member to the extent that such allocation would create a negative balance
in the Member’s Capital Account (or increase the amount by which the Member’s
Capital Account balance is negative) unless such allocation would be treated as
valid under Section 704(b) of the Code. Any Losses that, pursuant to the
preceding sentence, cannot be allocated to a Member shall be reallocated to the
other Members (but only to the extent that such other Members can be allocated
Losses without violating the requirements of the preceding sentence) in
proportion to their respective Allocation Percentages.
 
[ii]  Qualified Income Offset. If in any Fiscal Year a Member receives (or is
reasonably expected to receive) a distribution, or an allocation or adjustment
to the Member’s Capital Account, that creates a negative balance in such Account
(or increases the amount by which the balance in such Account is negative),
there shall be allocated to the Member such items of Company income or gain as
are necessary to satisfy the requirements of a “qualified income offset” within
the meaning of Treasury Regulation Section 1.704-1(b).
 
[iii]  Member Nonrecourse Deductions. In accordance with the provisions of
Treasury Regulation Section 1.704-2(i), each item of Member Nonrecourse
Deduction shall be allocated among the Members in proportion to the economic
risk of loss that the Members bear with respect to the nonrecourse liability of
the Company to which such item of Member Nonrecourse Deduction is attributable.
 
[iv]  Minimum Gain Chargeback. This Section 3.1(b)(iv) hereby incorporates by
reference the “minimum gain chargeback” provisions of Treasury Regulation
Section 1.704-2. In general, upon a reduction of the Company’s Minimum Gain, the
preceding sentence shall require that items of income and gain be allocated
among the Members in a manner that reverses prior allocations of Nonrecourse and
Member Nonrecourse Deductions as well as reductions in the Members’ Capital
Account balances resulting from distributions that, notwithstanding Section 3.2,
are allocable to increases in the Company’s Minimum Gain. Subject to the
provisions of Section 704 of the Code and the Treasury Regulations thereunder,
if the Board of Managers determine at any time that operation of such “minimum
gain chargeback” provisions likely will not achieve such a reversal by the
conclusion of the liquidation of the Company, such Members shall adjust the
allocation provisions of this Section 3.1 as necessary to accomplish that
result.
 
[v]  Allocations Subsequent to Certain Allocation Adjustments. Any special
allocations of items of Profit or Loss pursuant to Section 3.1(b)(i) or (ii)
shall be taken into account in computing subsequent allocations pursuant to
Section 3.1(a) so that, for each Member, the net amount of any such special
allocations and all allocations pursuant to Section 3.1(a) shall, to the extent
possible and taking into account any adjustments previously made pursuant to
Section 3.1(g), be equal to the net amount that would have been allocated to
such Member pursuant to the provisions of Section 3.1(a) without application of
Section 3.1(b)(i) or (ii).
 
[c]  Book - Tax Accounting Disparities. If Company property is reflected in the
Capital Accounts of the Members at a value that differs from the adjusted tax
basis of such property (whether because such property was contributed to the
Company by a Member or because of a revaluation of the Members’ Capital Accounts
under Treasury Regulation Section 1.704-1(b)), allocations of depreciation,
amortization, income, gain or loss with respect to such property shall be made
among the Members in a manner which takes such difference into account in
accordance with Code Section 704(c) and the Treasury Regulations issued
thereunder.
 
[d]  Allocations in Event of Transfer. If an Interest is Transferred in
accordance with this Agreement, allocations of Profits and Losses as between the
transferor and transferee shall be made using any method selected by the Board
of Managers and permitted under Section 706 of the Code.
 
[e]  Adjustment to Capital Accounts for Distributions of Property. If property
distributed in kind is reflected in the Capital Accounts of the Members at a
book value that differs from the Fair Market Value of such property at the time
of distribution, the difference shall be treated as Profit or Loss on the sale
of the property and shall be allocated among the Members in accordance with the
provisions of this Section 3.1.
 
[f]  Tax Credits and Similar Items. Any tax credits or similar items not
allocable pursuant to Section 3.1(a) through (e) shall be allocated to the
Members in proportion to their respective Allocation Percentages.
Notwithstanding the preceding sentence, if Company expenditures that give rise
to tax credits also give rise to Member Nonrecourse Deductions, the tax credits
attributable to such expenditures shall be allocated in accordance with Treasury
Regulation Section 1.704-1(b)(4)(ii).
 
[g]  Reallocation of Certain Losses. To the extent that: (i) Losses which
otherwise would have been allocated to a Member under this Section 3.1 were
allocated to one or more other Members pursuant to Section 3.1(b)(i) or any
other provision of this Agreement that prohibits the allocation to a Member of
Losses which would reduce such Member’s Capital Account balance below a
specified amount; (ii) such allocation has not been reversed pursuant to the
subsequent operation of Section 3.1(b)(v) or this Section 3.1(g); and (iii) the
Member thereafter returns a distributed amount as required under Section 2.8 or
otherwise makes a contribution to the capital of the Company, the Capital
Accounts of the Members shall be adjusted in connection with such return or
contribution (to the extent of the value thereof) to effect a reallocation, in
reverse order, of such Losses to the Member. The foregoing adjustment shall be
made in an equitable manner on a going forward basis, without amending any prior
tax return that has already been filed.
 
3.2  Compliance with Regulations. In allocating gains, losses and other items,
the Company shall comply with the applicable provisions of the Treasury
Regulations under Section 704 of the Code.
 
3.3  Allocation of Liabilities. Solely for purposes of determining the Members’
respective shares of the nonrecourse liabilities of the Company within the
meaning of Treasury Regulation Section 1.752-3(a)(3), each Member’s interest in
Company Profits shall be equal to the ratio that such Member’s Allocation
Percentage bears to the aggregate Allocation Percentages of the Members.
 
3.4  Modifications to Preserve Underlying Economic Objectives. If, in the
opinion of counsel to the Company, there is a change in the Federal income tax
law (including the Code as well as the Treasury Regulations, rulings, and
administrative practices thereunder) which makes it necessary or prudent to
modify the allocation provisions of this Article 3 in order to preserve the
underlying economic objectives of the Members as reflected in this Agreement,
the Board of Managers shall make the minimum modification necessary to achieve
such purpose.
 
3.5  Withholding Taxes.
 
[a]  The Company shall withhold taxes from distributions to, and allocations
among, the Members to the extent required by law (as determined by the Board of
Managers in their reasonable discretion). Except as otherwise provided in this
Section 3.5, any amount so withheld by the Company with regard to a Member shall
be treated for purposes of this Agreement as an amount actually distributed to
such Member pursuant to Section 4.1. An amount shall be considered withheld by
the Company if, and at the time, remitted to a governmental agency without
regard to whether such remittance occurs at the same time as the distribution or
allocation to which it relates; provided, however, that an amount actually
withheld from a specific distribution or designated by the Board of Managers as
withheld from a specific allocation shall be treated as if distributed at the
time such distribution or allocation occurs.
 
[b]  To the extent that operation of Section 3.5(a) would create a negative
balance in a Member’s Updated Capital Account or increase the amount by which
such Updated Capital Account balance is negative, the amount of the deemed
distribution shall instead be treated as a loan by the Company to such Member,
which loan shall be payable upon demand by the Company and shall bear interest
at a floating rate equal to the prime rate as announced from time to time by the
Bank, compounded daily.
 
[c]  In the event that the Board of Managers determine in their reasonable
discretion that the Company lacks sufficient cash available to pay withholding
taxes in respect of a Member, one or more of the Members may, in their sole and
absolute discretion (but only with the consent of the Board of Managers), make a
loan or capital contribution to the Company to enable the Company to pay such
taxes. Any such loan shall be full-recourse to the Company and shall bear
interest at a floating rate equal to the prime rate as announced from time to
time by the Bank, compounded daily. Notwithstanding any provision of this
Agreement to the contrary, any loan (including interest accrued thereon) or
capital contribution made to the Company by a Member pursuant to this
Section 3.5(c) shall be repaid or returned as promptly as is reasonably
possible.
 
[d]  Each Member hereby agrees to indemnify the Company and the other Members
for any liability they may incur for failure to properly withhold taxes in
respect of such Member; moreover, each Member hereby agrees that neither the
Company nor any other Member shall be liable for any excess taxes withheld in
respect of such Member’s Interest and that, in the event of overwithholding, a
Member’s sole recourse shall be to apply for a refund from the appropriate
governmental authority.
 
[e]  Taxes withheld by third parties from payments to the Company shall be
treated as if withheld by the Company for purposes of this Section 3.5. Such
withholding shall be deemed to have been made in respect of all the Members in
proportion to their respective allocative shares under this Article 3 of the
underlying items of Profit to which such third party payments are attributable.
In the event that the Company receives a refund of taxes previously withheld by
a third party from one or more payments to the Company, the economic benefit of
such refund shall be apportioned among the Members in a manner reasonably
determined by the Board of Managers to offset the prior operation of this
Section 3.5(e) in respect of such withheld taxes.
 
[f]  In the event that the Company is required to recognize income or gain for
income tax purposes under Section 684 of the Code (or a similar provision of
State or local law) in respect of an in-kind distribution to a Member, then,
solely for such income tax purposes, to the maximum extent permitted by
applicable law (as determined by the Board of Managers in their reasonable
discretion), the income or gain shall be allocated entirely to such Member.
 
ARTICLE 4
DISTRIBUTIONS
 
4.1  Operating Distributions. Except as otherwise provided in this Agreement,
distributions prior to the Dissolution of the Company shall be made in
accordance with this Section 4.1 and each Member actually receiving amounts
pursuant to a specific distribution by the Company shall receive a pro rata
share of each item of cash or other property of which such distribution is
constituted (based upon such Member’s Allocation Percentage).
 
[a]  Mandatory Tax Distributions.
 
[i]  The Company shall distribute to each Member, not later than 90 days after
the close of each Fiscal Year, an amount of cash equal to the sum of the
following.
 
[A]  The product of the Tax Percentage for such Fiscal Year and such Member’s
allocated share of the Company’s net long-term capital gain (as defined in
Section 1222(7) of the Code) for such Fiscal Year as shown on the Company’s
Federal income tax return (subject to the modification described in Section
4.1(a)(iii)); and
 
[B]  The product of the Tax Percentage for such Fiscal Year and such Member’s
allocated share of the Company’s net ordinary income and net short-term capital
gain (as defined in Section 1222(5) of the Code) for such Fiscal Year as shown
on the Company’s Federal income tax return (subject to the modification
described in Section 4.1(a)(iii)).
 
[ii]  For purposes of this Section 4.1(a): (x) the “Tax Percentage” with respect
to each specific item of net long-term capital gain shall be the highest blended
Federal and State marginal income tax rate applicable to such specific item of
net long-term capital gain recognized by a corporation doing business, in the
State with the highest marginal corporate income tax rate applicable to items of
net long-term capital gain; and (y) the “Tax Percentage” with respect to items
of net ordinary income and net short-term capital gain shall be the highest
blended Federal and State marginal income tax rate applicable to ordinary income
recognized by a corporation doing business, in the State with the highest
marginal corporate income tax rate applicable to items of ordinary income. In
all cases, the highest marginal income tax rate shall be the highest statutory
rate applicable to the specific type of income or gain in question and shall be
determined without regard to phaseouts of deductions or similar adjustments;
moreover, a corporate franchise tax imposed in lieu of an income tax shall be
treated as an income tax. The Board of Managers, acting in their reasonable
discretion, may adjust the determination of Tax Percentages pursuant to this
Section 4.1(a)(ii): (x) as necessary to ensure that the distribution required to
be made to each Member pursuant to Section 4.1(a)(i) for any Fiscal Year is not
less than such Member’s actual Federal and State income tax liability in respect
of allocations made to such Member by the Company for such Fiscal Year; or (y)
to reflect any city or other local income tax to which any Member or Members may
be subject; provided, however, that the Tax Percentage with regard to a
particular type of income or gain shall in all events be the same percentage for
all Members.
 
[iii]  For purposes of calculating the Company’s net income and gain under
clause (i), above, there shall be disregarded any items of loss, expense or
deduction the ultimate deductibility of which may, in respect of any Member or
equityholder of a Member, be subject to limitation under Section 67 of the Code.
 
[iv]  For purposes of determining whether the Company has satisfied its
distribution obligation under Section 4.1(a)(i), all cash distributions made
during a Fiscal Year shall be treated as distributions made pursuant to Section
4.1(a)(i) in respect of such Fiscal Year (except to the extent that such
distributions were required to satisfy the obligations of the Company under
Section 4.1(a)(i) in respect of one or more prior Fiscal Years, in which case
such distributions shall be treated as having been made pursuant to Section
4.1(a)(i) in respect of such prior Fiscal Year or Years).
 
[v]  At the election of the Board of Managers, no distribution shall be required
pursuant to Section 4.1(a)(i) in respect of any Fiscal Year if the Company does
not have the funds necessary to make the distributions.
 
[b]  Discretionary Distributions. In addition to the distributions provided for
in Section 4.1(a), the Board of Managers may cause the Company to distribute
cash or property to the Members, in proportion to the Members’ respective
Allocation Percentages, at such times and in such amounts as the Board of
Managers shall determine.
 
4.2  Liquidating Distributions. Notwithstanding the provisions of Section 4.1,
cash or property of the Company available for distribution upon the Dissolution
of the Company (including cash or property received upon the sale or other
disposition of assets in anticipation of or in connection with such Dissolution)
shall be distributed in accordance with the provisions of Section 8.3.
 
4.3  Limitation on Distributions. No distribution shall be made to a Member
pursuant to Section 4.1 if and to the extent that such distribution would: (i)
create a negative balance in the Updated Capital Account of such Member or
increase the amount by which such Updated Capital Account balance is negative;
(ii) cause the Company to be insolvent; (iii) render the Member liable for a
return of such distribution under applicable law; or (iv) result in a Member
receiving rights with respect to ADW Content Rights, Point to Point Content
Rights or Rebate Content Rights it did not contribute to the Company.
 
4.4  No Right to Distributions of Property. Except as otherwise provided in this
Agreement, a Member shall have no right to require that distributions to such
Member consist of any specific item or items of property.
 
ARTICLE 5
MANAGEMENT AND ADMINISTRATION
 
5.1  Management Powers and Authority of the Board of Managers. Except as
otherwise specifically provided in this Agreement:
 
[a]  The Company and its business shall be managed, controlled and operated
exclusively by the Board of Managers consisting of four (4) Managers, who shall
be the “managers” of the Company within the meaning Section 18-101(10) of the
Act and shall have all of the powers and authority in respect of the Company
permitted to managers under the Act;
 
[b]  CDI Sub and MEC Sub shall each appoint two (2) Managers to serve on the
Board of Managers who shall be employees of CDI and MEC, respectively; provided
that no such appointee may be the chairman of either CDI or MEC.
 
[c]  CDI Sub shall have the right to designate the first chairperson who shall
serve until December 31, 2008. After December 31, 2008, the chairperson of the
Board of Managers shall rotate annually between a Manager designated by CDI Sub
and a Manager designated by MEC Sub, unless the party with the right to
designate the chairperson agrees otherwise. The chairperson shall preside at
meetings of the Board of Managers and Members, but the chairperson will be a
non-executive position and will not have any operational or management duties.
 
5.2  Wagering Security and Integrity Standards. Within sixty (60) days of
formation, the management of the Company will provide to the Board of Managers
for review and approval the Wagering Security and Integrity Standards. The
Wagering Security and Integrity Standards will be revisited and updated by the
Board of Managers on an annual basis.
 
5.3  Management and Operations. The Company shall generally conduct its business
as follows:
 
[a]  All actions taken and decisions made by the Board of Managers must be
approved unanimously by all members of the Board of Managers. In taking such
actions and making such decisions, the Board of Managers and each member thereof
shall act in their sole and absolute discretion, except as otherwise expressly
stated in this Agreement. The Board of Managers shall make all decisions that
are customarily made by a board of directors of a corporation and shall
authorize the management of the Company to operate the Company in accordance
with the terms set forth in this Agreement.
 
[b]  The Board of Managers shall each year approve an annual operating budget
and annual capital budget (the 2007 annual budgets will commence as of the date
of this Agreement, with calendar year budgets thereafter). Any modification to
the annual operating budget or annual capital budget must be approved by the
Board of Managers. The initial annual budget is set forth as Schedules 1 and 1-1
of the Business Plan. The capital budget shall be agreed to by the Members
within sixty (60) days of the execution of this Agreement and set forth as
Schedule 1-2 of the Business Plan.
 
[c]  As an agent of HRTV Entity, the Company shall use its Best Efforts to
collect fees to help cover the costs of producing and distributing television
and other video (the “Television Fees”) with respect to the ADW Content Rights,
Point to Point Content Rights and Rebate Content Rights it sublicenses to Third
Parties as specifically set forth in this Agreement or the Business Plan or as
otherwise agreed by the Board of Managers. In connection with approving the
annual budgets, the Board of Managers after consultation with HRTV Entity shall
determine the percentage amount to be charged as Television Fees to be
calculated as a percentage of handle or takeout or otherwise. The Television
Fees shall be revisited and updated on an annual basis by the Board of Managers.
The Television Fees for 2007 (for all race meets commencing after the date
hereof but on or prior to November 15, 2007) are addressed or set forth on
Schedules 2, 3 and 4 of the Business Plan. The Television Fees will be collected
by the Company on behalf of HRTV Entity and paid over to HRTV Entity.
 
[d]  The Board of Managers must approve any modifications to the Wagering
Security and Integrity Standards.
 
[e]  The Board of Managers must approve any modifications to the Territory Point
to Point Distribution Policies and Procedures, the Territory ADW Distribution
Policies and Procedures, the Rebate Distribution Policies and Procedures, the
Territory Point to Point Acquisition Policies and Procedures, the Territory ADW
Acquisition Policies and Procedures, the Territory Rebate Acquisition Policies
and Procedures, the Territory Television Acquisition Policies and Procedures,
the Non-Territory Policies and Procedures, and the Policies and Procedures for
Acquiring Territory Content for use Outside the Territory, as set forth in
Schedules 2-10 of the Business Plan.
 
[f]  The approval of the Board of Managers shall be required for (i) the
appointment of the Chief Executive Officer (who may be the same as the chief
executive officer of HRTV Entity), the Chief Financial Officer and any employee
or consultant who will earn total compensation in a year in excess of $50,000,
whether hired by the Company or seconded to the Company, and (ii) any increase
in Employee Costs for any employee, whether such employee has been seconded to
or is employed by the Company.
 
[g]  The approval of the Board of Managers shall be required for any contract
obligating the Company in an amount greater than $50,000 or without a ninety
(90) day right of termination, in each case other than contracts which are
consistent with the Territory Point to Point Distribution Policies and
Procedures, the Territory ADW Distribution Policies and Procedures, the Rebate
Distribution Policies and Procedures, the Territory Point to Point Acquisition
Policies and Procedures, the Territory ADW Acquisition Policies and Procedures,
the Territory Rebate Acquisition Policies and Procedures, the Territory
Television Acquisition Policies and Procedures, the Non-Territory Policies and
Procedures, and the Policies and Procedures for Acquiring Territory Content for
use Outside the Territory.
 
[h]  The approval of the Board of Managers shall be required for the standard
form simulcast agreement used by the Company and any simulcast contract that is
not consistent with the Territory Point to Point Distribution Policies and
Procedures, the Territory ADW Distribution Policies and Procedures, the Rebate
Distribution Policies and Procedures, the Territory Point to Point Acquisition
Policies and Procedures, the Territory ADW Acquisition Policies and Procedures,
the Territory Rebate Acquisition Policies and Procedures, the Territory
Television Acquisition Policies and Procedures, the Non-Territory Policies and
Procedures, and the Policies and Procedures for Acquiring Territory Content for
use Outside the Territory.
 
[i]  All simulcast import agreements for ADW Import Content, Point to Point
Import Content and Rebate Import Content, and simulcast export agreements for
ADW Export Content, Point to Point Export Content and Rebate Export Content
entered into pursuant to this Agreement shall not be executed by the Company on
its own behalf, but rather shall be executed by the Company as agent for the
applicable CDI Track(s), MEC Track(s), XpressBet and/or CDI ADW. All rights and
obligations under the simulcast import agreements and simulcast export
agreements entered into pursuant to this Agreement shall be rights and
obligations of the applicable CDI Track(s), MEC Track(s), XpressBet and/or
CDI/ADW, and shall not be rights or obligations of the Company.
 
[j]  The approval of the Board of Managers shall be required for any expansion
of the scope of the Business of the Company.
 
[k]  The approval of the Board of Managers shall be required for the initiation
or settlement of any litigation.
 
[l]  The approval of the Board of Managers shall be required for any
acquisitions or dispositions of significant assets or businesses or the
formation of any partnerships or joint ventures.
 
5.4  Content Rights Pricing. Subject to applicable regulatory approvals,
approvals that may be required from the relevant party’s horsemen’s group and
contractual obligations existing as of the date hereof as set forth on Schedule
C, the pricing parameters set forth in Schedules 2, 3, 4, 5, 6, and 7 of the
Business Plan shall be used to determine pricing for (i) CDI and MEC ADW Content
Rights, CDI and MEC Point to Point Content Rights and CDI and MEC Rebate Content
Rights provided to Third Parties worldwide for ADW, Point to Point Simulcasting
and Rebating worldwide and (ii) ADW Content Rights, Point to Point Content
Rights, and Rebate Content Rights acquired from Third Parties worldwide for ADW,
Point to Point Simulcasting, and Rebating by CDI and MEC worldwide.
 
5.5  Simulcast Production. By September 30, 2007, the management of the Company
will deliver to the Board of Managers for review and approval a plan to improve
the simulcast production of CDI and MEC ADW Content Rights, Point to Point
Content Rights and Rebate Content Rights including through the pooling of
resources, equipment and personnel into the Company.
 
5.6  Host and Related Fees.
 
[a]  The Company shall not be responsible for paying host, source market, or
sub-licensing fees with respect to ADW Content Rights, Point to Point Content
Rights, and Rebate Content Rights it acquires for CDI or MEC. Notwithstanding
the foregoing, the Company, in connection with the settlement functions
described in Section 5.18, may act as agent for CDI, MEC or their respective
racetracks and/or advance deposit wagering operations in connection with the
payment or collection of such fees.
 
[b]  The Company shall promptly pay to CDI and MEC, as applicable, any host and
source market fees received by the Company with respect to their respective ADW
Export Content, Point to Point Export Content and Rebate Export Content.
 
5.7  Management Team. The Company shall have a full time management team that is
separate from its Members headed by a Chief Executive Officer and such other
officers as determined by the Board of Managers and shall operate in accordance
with the parameters set by the Board of Managers. In addition to executing the
tasks identified above in Section 1.3(b)(1) through (13), the Company’s
management team shall also be responsible for such other tasks as determined by
the Board of Managers.
 
5.8  Managers’ Power to Bind the Company.
 
[a]  Notwithstanding any provision of this Agreement to the contrary, any
contract, agreement, deed, lease, note or other document or instrument executed
on behalf of the Company by the Chief Executive Officer and another officer of
the Company shall be deemed to have been duly executed; no Member’s or Manager’s
signature shall be required in connection with the foregoing and Third Parties
shall be entitled to rely upon the aforesaid power to bind the Company without
otherwise ascertaining that the requirements of this Agreement have been
satisfied.
 
[b]  The Company is authorized to file with any governmental entity, on behalf
of itself and the Members, a certificate or similar instrument that evidences
the power of the Chief Executive Officer and another officer to bind the Company
as set forth in the preceding paragraph (a).
 
5.9  Duties to the Company.
 
[a]  A Member shall not utilize any assets of the Company other than for the
exclusive benefit of the Company, a purpose reasonably related to protecting
such Member’s Interest (in a manner not inconsistent with the interests of the
Company), or to comply with the requirements of applicable law.
 
[b]  The Managers shall devote to the Company such time, effort and attention as
shall be reasonably necessary to ensure that the Company and its business are
diligently and prudently managed.
 
5.10  Officers. The Board of Managers may appoint, replace and remove, from time
to time, Company officers, who shall otherwise serve in office until the next
succeeding December 31 and to whom the Board of Managers shall delegate such
powers, authority and duties in respect of the Company as the Board of Managers
shall determine consistent with this Agreement.
 
5.11  Manager and Member Expenses.
 
[a]  General. Except as otherwise provided in Section 2.10 or this Section 5.11,
neither CDI, MEC nor any Member shall be reimbursed for expenses incurred on
behalf of, or otherwise in connection with, the Company. Any reimbursement paid
by a third party for expenses actually reimbursed by the Company shall be
retained by (or paid over by the recipient thereof to) the Company.
 
[b]  Managers. Managers shall be reimbursed for expenses incurred on behalf of
the Company only with the approval of the Board of Managers.
 
5.12  Tax Matters Partner.
 
[a]  General. The Tax Matters Partner is hereby designated the “tax matters
partner” of the Company within the meaning of Section 6231(a)(7) of the Code.
Except to the extent specifically provided in the Code or the Treasury
Regulations (or the laws of other relevant taxing jurisdictions), the Tax
Matters Partner (after receiving the approval of the Board of Managers) shall
have exclusive authority to act for or on behalf of the Company with regard to
tax matters, including the authority to make (or decline to make) any available
tax elections.
 
[b]  Partnership Classification for Tax Purposes. Except to the extent otherwise
required by applicable law (disregarding for this purpose any requirement that
can be avoided through the filing of an election or similar administrative
procedure), the Tax Matters Partner shall cause the Company to take the position
that the Company is a “partnership” for Federal, State and local income tax
purposes and shall cause to be filed with the appropriate tax authorities any
elections or other documents necessary to give due legal effect to such
position. A Member shall not file (and represents that it has not filed) any
income tax election or other document that is inconsistent with the Company’s
position regarding its classification as a “partnership” for applicable Federal,
State and local income tax purposes.
 
[c]  Notice of Inconsistent Treatment of Company Item. No Member shall file a
notice with the United States Internal Revenue Service under Section 6222(b) of
the Code in connection with such Member’s intention to treat an item on such
Member’s Federal income tax return in a manner which is inconsistent with the
treatment of such item on the Company’s Federal income tax return unless such
Member has, not less than thirty (30) days prior to the filing of such notice,
provided the Tax Matters Partner with a copy of the notice and thereafter in a
timely manner provides such other information related thereto as the Tax Matters
Partner shall reasonably request.
 
[d]  Notice of Settlement Agreement. Any Member entering into a settlement
agreement with the United States Department of the Treasury which concerns a
Company item shall notify the Tax Matters Partner of such settlement agreement
and its terms within 60 days after the date thereof.
 
5.13  Records and Financial Statements; Compliance with Laws
 
[a]  The Company shall maintain true and proper books, records, reports, and
accounts in accordance with generally accepted principles and practices of
accounting consistently applied, in which shall be entered all transactions of
the Company. The Company shall also maintain all schedules referenced in this
Agreement and shall update such schedules promptly upon receipt of new
information relating thereto, subject to the approval of the Board of Managers.
Copies of such books, records, reports, accounts and schedules shall be located
at the Principal Office and shall be available to any Member for inspection and
copying, upon at least two business days’ notice, during reasonable business
hours; provided, however, that items of highly confidential Company information
may be withheld from a Member to the extent reasonably necessary to protect
Company interests as determined by the Board of Managers in their reasonable
discretion.
 
[b]  Within forty-five (45) days after the end of each Fiscal Year, the Company
shall furnish to each Member the following, which shall be audited by a firm of
independent certified public accountants approved by the Board of Managers: (i)
a balance sheet of the Company, (ii) an income statement of the Company, (iii) a
statement of cash flows of the Company, and (iv) the Capital Account balance of
each Member. In addition, within sixty (60) days after the end of each Fiscal
Year, the Company shall supply all information reasonably necessary to enable
the Members to prepare their Federal and State income tax returns and (upon
request therefor) to comply with other reporting requirements imposed by law.
Within twenty (20) days after the end of each quarter, the Company shall furnish
to each Member the following, which shall be unaudited but prepared in
accordance with generally accepted accounting principles and practices
consistently applied: (i) a balance sheet of the Company, (ii) an income
statement of the Company, (iii) a statement of cash flows of the Company, and
(iv) the Capital Account balance of each Member.
 
[c]  The Company shall conduct its Business in compliance with applicable laws
and shall provide such information, and shall grant to the Members and their
attorneys, accountants and other representatives such access to the books,
records, other information and personnel of the Company, as is reasonably
necessary for the Members to comply with applicable laws, including without
limitation, the securities laws in general and the Sarbanes-Oxley Act of 2002 in
particular.
 
5.14  Valuation of Company Assets and Interests.
 
[a]  General. In the event that the fair market value of a Company asset or
Interest must be determined for purposes of this Agreement, such value shall be
determined by the Board of Managers, acting in good faith.
 
[b]  Dispute. In the event that the Board of Managers is unable to determine
such value, the matter shall be submitted for determination to a qualified Third
Party valuation expert acceptable to the Board of Managers.
 
[c]  Binding Effect. The value of any Company asset or Interest determined
pursuant to this Section 5.14 shall be binding upon the Company and the Members
and shall establish the “Fair Market Value” of such asset or Interest for all
purposes under this Agreement.
 
5.15  Removal or Resignation of Managers. A Manager may be removed for any
reason upon the notice of such removal by the Member appointing such Manager and
may voluntarily resign as a Manager upon providing thirty (30) days advance
written notice of such resignation to the Board of Managers.
 
5.16  Vacancies. A vacancy in the Board of Managers caused by the removal,
resignation or Permanent Incapacity of a Manager shall be filled by the Member
who originally appointed the Manager.
 
5.17  Meetings of the Board of Managers.
 
[a]  Meetings of the Board of Managers may be called by any Manager. Any such
meeting shall be held at a reasonable time and place on not less than two (2)
days notice, which notice shall include an agenda of items to be considered at
the meeting. Reasonable accommodation shall be made for any Manager who elects
to attend a meeting via telephonic or similar means pursuant to which all
Persons attending the meeting can hear one another. Minutes of the meeting shall
be prepared at the direction of the Board of Managers.
 
[b]  Any action of the Board of Managers may be taken by written consent of all
the Managers.
 
5.18  Settlement and Collections. Within one hundred twenty (120) days of
formation of the Company, the management of the Company will provide to the
Board of Managers for review a proposal pursuant to which the Company will
provide settlement services to CDI, MEC and other members of the pari-mutuel
industry. After review and consideration of the proposal, the Board of Managers
shall determine whether or not to accept the proposal.
 
ARTICLE 6
REPRESENTATIONS, WARRANTIES AND COVENANTS
 
6.1  Wagering Security and Integrity Standards. CDI represents and warrants that
it will cause CDI ADW and the CDI Tracks to comply with the Wagering Security
and Integrity Standards within ninety (90) days after approval of the Wagering
Security and Integrity Standards by the Board of Managers. MEC represents and
warrants that it will cause XpressBet and the MEC Tracks to comply with the
Wagering Security and Integrity Standards within ninety (90) days after approval
of the Wagering Security and Integrity Standards by the Board of Managers.
 
6.2  Other Ventures and Activities.
 
[a]  Each Member acknowledges that the other Members and their respective
Affiliates are involved in other business, financial, investment and
professional activities other than the Business and activities within the scope
of Section 1.3(b). Except as specifically set forth in Section 5.9: (i) neither
the Company, CDI, MEC nor the Members shall have any right by virtue of this
Agreement or the existence of the Company in and to such ventures or activities
or to the income or profits derived therefrom; and (ii) the Members and their
Affiliates shall have no duty or obligation to make any reports to the Members
or the Company with respect to any such ventures or activities.
 
[b]  The Members acknowledge that a Member may be prohibited from taking action
for the benefit of the Company: (i) due to confidential information acquired or
obligations incurred in connection with a permitted outside activity under this
Section 6.2; or (ii) in connection with activities undertaken prior to the date
of such Member’s admission to the Company. No Person shall be liable to the
Company, CDI, MEC or any Member for any failure to act for the benefit of the
Company in consequence of a prohibition described in the preceding sentence.
 
6.3  Confidentiality. All information provided to the Members or their
Affiliates by or on behalf of the Company or a Member concerning the business or
assets of the Company or any Member or its Affiliates in connection with the
activity of the Company shall be deemed strictly confidential and shall not,
without the prior consent of the Board of Managers, be (i) disclosed to any
Person (other than a Member, CDI or MEC) or (ii) used by a Member other than for
a Company purpose or a purpose reasonably related to protecting such Member’s
Interest or the business of such Member (in either case in a manner not
inconsistent with the interests of the Company). The Board of Managers consent
to the disclosure by each Member of Company information to such Member’s
accountants, attorneys and similar advisors bound by a duty of confidentiality.
The foregoing requirements of this Section 6.3 shall not apply to a Member with
regard to any information that is currently or becomes: (i) required to be
disclosed pursuant to applicable law, including the rules and regulations of the
Securities and Exchange Commission or the rules of Nasdaq, the Toronto Stock
Market or any other stock market on which securities of a Member, CDI or MEC are
listed (but only to the extent of such requirement); (ii) required to be
disclosed in order to protect such Member’s Interest (but only to the extent of
such requirement and only after consultation with the Board of Managers);
(iii) publicly known or available in the absence of any improper or unlawful
action on the part of such Member; or (iv) known or available to such Member
other than through or on behalf of the Company or a Member. For purposes of this
Section 6.3, Company information provided by one Member to another shall be
deemed to have been provided on behalf of the Company. The Company and the Board
of Managers shall similarly refrain from disclosing any confidential information
furnished by a Member pursuant to this Section 6.3.
 
6.4  Disclosures. Each Member shall furnish to the Company upon request any
information with respect to such Member reasonably determined by the Board of
Managers to be necessary or convenient for the formation, operation,
Dissolution, winding-up, or Termination of the Company, and any such information
which is confidential shall be treated as such by the Company and the Members.
 
6.5  ADW Licenses. Recognizing that some states require an ADW platform to be
licensed in order to process or accept wagers from residents of such state and
that some states require an ADW platform to enter into a contract with a
racetrack and/or horsemen’s group within such state in order to obtain a
license, CDI and MEC shall each use its Best Efforts to cooperate such that such
licenses for CDI ADW and XpressBet are obtained and, if reasonably necessary,
its Controlled racetracks shall serve as “host” tracks for the other’s ADW
platform.
 
6.6  Racing Cooperatives. MEC shall cause the MEC Tracks to withdraw from any
racing cooperative in which any MEC Track is a member at the earliest practical
date following execution of this Agreement and in any event by no later than
June 30, 2007, provided, however, with respect to the Meadows no later than
seven (7) months after the date of this Agreement. CDI shall cause the CDI
Tracks to withdraw from any racing cooperative in which any CDI Track is a
member at the earliest practical date following execution of this Agreement and
in any event by no later than June 30, 2007.
 
6.7  Rebate Platform. CDI and MEC shall cooperate to develop a plan on or before
September 30, 2007 to jointly enter Rebating during 2007. CDI and MEC shall not
conduct Rebating individually during 2007 without prior approval of the other
party.
 
6.8  Fee Payment. Each of CDI and MEC acknowledges that it is directly
responsible for and shall pay directly its proportion of any host, source market
or sublicensing fees with respect to ADW Content Rights, Point to Point Content
Rights or Rebate Content Rights acquired by the Company for CDI or MEC,
respectively, and shall indemnify and hold harmless the Company from and against
any damage, deficiency, loss, action, judgment, cost or expense (including
reasonable attorneys’ fees) arising out of or related to such fees. For greater
clarity, the proportion of host, source market or sub-licensing fees paid by CDI
and MEC will be determined by the amount of handle wagered through CDI Outlets
and MEC Outlets rather than by CDI and MEC’s Allocation Percentages.
 
6.9  Florida Alternative Gaming. MEC covenants that it will not fund or
otherwise support, directly or indirectly, any organization or initiative in
opposition to an Article X Referendum. MEC further covenants that it will not
make any public statement in opposition to an Article X Referendum. The term
“Article X Referendum” shall mean a county-wide referendum conducted in
Miami-Dade County, Florida in accordance with Article X, Section 23 of the
Florida Constitution seeking to authorize slot machines at Calder Race Course
and such other pari-mutuel facilities as conducted live racing or games within
Miami-Dade County in calendar years 2002 and 2003. The covenants of MEC set
forth in this Section 6.9 shall terminate immediately if: (a) Calder Race Course
ceases to be a CDI Track, or CDI or any Affiliate of CDI enters into a
definitive sale or other disposition agreement (including without limitation any
option agreement) which if consummated or exercised will result in Calder Race
Course ceasing to be a CDI Track, or (b) this Agreement terminates for any
reason.
 
6.10  Florida Legislation. CDI and MEC shall cooperate in proposing a single
bill to the 2007 Florida legislature concerning horse racing industry issues in
the State of Florida that seeks to accomplish the following: [i] permit
thoroughbred horse race tracks which act as the Hub Distributor to contract with
and distribute Point to Point Content Rights to other pari-mutuel wagering
facilities in South Florida ( i.e. Dade and Broward Counties) including all
horse race tracks on a year round basis, [ii] permit thoroughbred horse race
tracks in Florida to conduct live racing after 7:00 p.m. local Florida time, and
[iii] permit the operation of card rooms at pari-mutuel wagering facilities in
Florida including all horse race tracks on all days, including days on which
live pari-mutuel races or games do not take place and at all times of the day.
 
6.11  California Import Covenant.
 
[a]  CDI and MEC will work together and use Best Efforts to change the existing
California horse racing simulcasting law to eliminate the existing restriction
on the number of simulcast horse races that can be imported into California.
 
[b]  When MEC has the two race track votes (Northern and Southern California)
regarding import simulcasting of horse races under California law, (x) MEC will
coordinate with the Company and use its Best Efforts to cause the importing into
California of Point to Point Export Content consisting of a number of horse
races greater than was imported in 2006 (or in the case of Fair Grounds, in
2005) (prioritized based on the Host Track Groups in Schedule 12 of the Business
Plan but with equal priority within each such Host Track Group), and (y) MEC
will import into California no less than the number of CDI horse races imported
into California during the same period in 2006 (or in the case of Fair Grounds,
in 2005), provided in either case of (x) and (y) there is no significant change
in the race dates, post times or quality of such races.
 
[c]  Schedule 13 of the Business Plan also sets forth certain other policies and
procedures of the Company related to California horse racing. For purposes of
this Section 6.11, the B and B+ Host Track Groups (as set forth on Schedule 12
of the Business Plan) will be considered a single Host Track Group.
 
6.12  Certain Member Representations and Covenants.
 
[a]  Each Member hereby represents that, with respect to its Interest: (i) it is
acquiring or has acquired such Interest for purposes of investment only, for its
own account (or a trust account if such Member is a trustee), and not with a
view to resell or distribute the same or any part thereof; and (ii) no other
Person has any interest in such Interest or in the rights of such Member under
this Agreement (other than a shareholder or other owner of an interest in the
Member by virtue thereof or a spouse having a community property or similar
interest under applicable law.) Each Member also represents that it has the
business and financial knowledge and experience necessary to acquire its
Interest on the terms contemplated herein and that it has the ability to bear
the risks of such investment (including the risk of sustaining a complete loss
of all its capital contributions) without the need for the investor protections
provided by the registration requirements of the Securities Act.
 
[b]  Except to the extent set forth in a notice provided to the Company, each
Member hereby represents that allocations, distributions and other payments to
such Member by the Company are not subject to tax withholding under the Code.
Each Member shall promptly notify the Company in the event that any allocation,
distribution or other payment previously exempt from such withholding becomes or
is anticipated to become subject thereto.
 
[c]  Each Member acknowledges that certain provisions of this Agreement
(including Sections 6.2 and 9.1) have the effect of limiting the fiduciary
duties or obligations of some or all Members to the Company and the other
Members under applicable law. Each Member hereby represents that it has
carefully considered and fully understands each such provision and has made an
informed decision to consent thereto.
 
[d]  Each Member hereby represents that: (i) it is a corporation or limited
liability company validly existing and in good standing under the laws of its
jurisdiction of incorporation or formation and has all requisite power and
authority to own, lease and use its assets and carry on its business as and in
the places where such assets are owned, leased or used or such business is
conducted; (ii) it has full corporate or limited liability company power and
authority to enter into this Agreement and consummate the transactions
contemplated hereby and this Agreement and the other documents contemplated by
this Agreement have been duly authorized by all requisite corporate or limited
liability company action of such Member, have been duly executed and delivered
by such Member and constitute the valid and binding obligation of such Member
enforceable in accordance with their terms; and (iii) it is and shall be during
the Term in compliance with all material laws, statutes, rules or regulations
applicable to such Member or its assets or business and it shall not be under
indictment or grand jury subpoena with respect to any criminal investigation
pursuant to which it has been identified as a target.
 
6.13  Avoidance of Publicly Traded Partnership Status.
 
[a]  Except to the extent otherwise set forth in a notice provided to the
Company, each Member hereby represents that at least one of the following
statements with respect to such Member is true and will continue to be true
throughout the period during which such Member holds an Interest:
 
[i]  Such Member is not a partnership, grantor trust or S corporation for
Federal income tax purposes;
 
[ii]  With regard to each Beneficial Owner of such Member, the principal
purposes for the establishment and/or use of such Member do not include
avoidance of the one hundred (100) partner limitation set forth in Treasury
Regulation Section 1.7704-1(h)(1)(ii); or
 
[iii]  With regard to each Beneficial Owner of such Member, not more than 75
percent of the value of such Beneficial Owner’s interest in such Member is
attributable to such Member’s Interest.
 
[b]  In the event that a Member’s representation pursuant to Section 6.13(a)
shall at any time fail to be true, or the information set forth in a notice
provided by such Member to the Company pursuant to Section 6.13(a) shall change,
such Member shall promptly (and in any event within 10 days) notify the Company
of such fact and shall promptly thereafter deliver to the Company any
information regarding such Member and its Beneficial Owners reasonably requested
by counsel to the Company for purposes of determining the number of the
Company’s “partners” within the meaning of Treasury Regulation Section
1.7704-1(h).
 
[c]  Each Member acknowledges that the Board of Managers will rely upon such
Member’s representations, notices and other information as set forth in this
Section 6.13 for purposes of determining whether proposed Transfers of Interests
may cause the Company to be treated as a “publicly traded partnership” within
the meaning of Section 7704 of the Code and that failure by a Member to satisfy
its obligations under this Section 6.13 may cause the Company to be treated as a
corporation for Federal, State or local tax purposes.
 
6.14  Acquired ADW Platform. If CDI or MEC directly or indirectly acquires 5% or
more of the ownership interest of an ADW platform or business, any ADW Content
Rights, Point to Point Content Rights, Rebate Content Rights or Television
Rights owned or licensed by the acquired ADW platform or business (collectively,
the “Acquired Rights”) shall be licensed or transferred to the Company under the
terms and conditions of this Agreement such that the Acquired Rights would be
available to both CDI and MEC (and HRTV Entity in the case of Television Rights)
under the same terms and conditions. If all or any portion of the Acquired
Rights may not be so licensed or transferred to the Company because of
contractual restrictions binding on the acquired ADW platform or business, the
acquiring party shall cause the acquired ADW platform or business, and CDI ADW
or XpressBet, as applicable, to (i) not process or accept any wagers on the
applicable Acquired Rights and (ii) not license or transfer the applicable
Acquired Rights to any Third Party, in each case, until such contractual
restrictions have been eliminated and the Acquired Rights licensed or
transferred to Company.
 
6.15  Permitted Communications. Neither CDI, CDI Sub, MEC nor MEC Sub shall make
any public statement(s) without prior approval of the other parties with regard
to (i) the Company, or (ii) any other party in connection with any business
venture or proposed business venture between the parties, except as may be
required by law or regulation or the disclosure rules and regulations of the
SEC, NASDAQ or the Toronto Stock Exchange.
 
6.16  ADW Name. Without the prior approval of the Board of Managers, which
consent may be withheld in the Board of Managers’ sole and absolute discretion,
neither CDI nor MEC shall operate its advance deposit wagering business under a
name similar to the name under which the Company or HRTV Entity is now or
hereafter operated. In addition, MEC covenants that on or before April 27, 2007
MEC will cause Horse Racing TV, Inc. to change its name to a name that is not
similar to “Horse Racing TV” or “HRTV”.
 
6.17  CDI Guaranty; MEC Guaranty.  
 
[a] CDI hereby absolutely and unconditionally guarantees to the Company, MEC and
MEC Sub, their respective successors and permitted assigns, the due prompt and
punctual performance of all obligations of, and the prompt payment when due at
all times hereafter of any and all amounts owed by, CDI Sub under this Agreement
(including any extensions, modifications and amendments hereof) to the Company,
MEC or MEC Sub (the “CDI Sub Obligations”). Each of the Company, MEC and MEC Sub
shall have the right of immediate recourse against CDI for full and immediate
performance or payment of the CDI Sub Obligations at any time after the CDI Sub
Obligations, or any part thereof, have not been performed or paid in full when
due. This is a guaranty of payment, not of collection, and CDI therefore agrees
and acknowledges that the Company, MEC and MEC Sub shall not be obligated, prior
to seeking recourse against or receiving payment from CDI, to take any of the
following actions (although any of the Company, MEC or MEC Sub may, at its
option, do so in whole or in part) all of which CDI hereby unconditionally
waives: [i] take any steps whatsoever to collect from CDI Sub or file any claim
of any kind against CDI Sub, take any steps whatsoever to accept, perfect a
security interest in, or foreclosure or realize on, collateral security, if any,
securing or for payment of the CDI Sub Obligations or any guaranty of the CDI
Sub Obligations; or [ii] in any other respect exercise diligence in collecting
or attempting to collect any of the CDI Sub Obligations by any means. CDI
unconditionally and irrevocably waives each and every defense which, under
principles of guaranty or surety law, would operate to impair or diminish the
liability of CDI to the Company, MEC or MEC Sub hereunder. CDI unconditionally
waives: [i] any subrogation to the rights of the Company, MEC or MEC Sub against
CDI Sub until all of the CDI Sub Obligations have been satisfied in full; and
[ii] any acceptance of this guaranty. This guaranty by CDI is personal to the
Company, MEC and MEC Sub and cannot be assigned without the express written
approval of CDI, which may be withheld in CDI’s sole discretion.
 
[b] MEC hereby absolutely and unconditionally guarantees to the Company, CDI and
CDI Sub, their respective successors and permitted assigns, the due prompt and
punctual performance of all obligations of, and the prompt payment when due at
all times hereafter of any and all amounts owed by, MEC Sub under this Agreement
(including any extensions, modifications and amendments hereof) to the Company,
CDI or CDI Sub (the “MEC Sub Obligations”). Each of the Company, CDI and CDI Sub
shall have the right of immediate recourse against MEC for full and immediate
performance or payment of the MEC Sub Obligations at any time after the MEC Sub
Obligations, or any part thereof, have not been performed or paid in full when
due. This is a guaranty of payment, not of collection, and MEC therefore agrees
and acknowledges that the Company, CDI and CDI Sub shall not be obligated, prior
to seeking recourse against or receiving payment from MEC, to take any of the
following actions (although any of the Company, CDI or CDI Sub may, at its
option, do so in whole or in part) all of which MEC hereby unconditionally
waives: [i] take any steps whatsoever to collect from MEC Sub or file any claim
of any kind against MEC Sub, take any steps whatsoever to accept, perfect a
security interest in, or foreclose or realize on, collateral security, if any,
securing or for payment of the MEC Sub Obligations or any guaranty of the MEC
Sub Obligations; or [ii] in any other respect exercise diligence in collecting
or attempting to collect any of the MEC Sub Obligations by any means. MEC
unconditionally and irrevocably waives each and every defense which, under
principles of guaranty or surety law, would operate to impair or diminish the
liability of MEC to the Company, CDI or CDI Sub hereunder. MEC unconditionally
waives: [i] any subrogation to the rights of the Company, CDI or CDI Sub against
MEC Sub until all of the MEC Sub Obligations have been satisfied in full; and
[ii] any acceptance of this guaranty. This guaranty by MEC is personal to the
Company, CDI and CDI Sub and cannot be assigned without the express written
approval of MEC, which may be withheld in MEC’s sole discretion.
 
6.18  Termination. Each of CDI and MEC agrees to serve notice to terminate any
existing agreement related to ADW Export Content set forth on Schedule C that
has provisions allowing termination by CDI or MEC upon thirty (30) days notice,
at the earliest possible date but in any case by no later than May 5, 2007.
 
6.19  Breeders’ Cup. In the event that any CDI Track or any MEC Track is host to
the Breeders’ Cup Championship Day races, CDI and MEC, as the case may be, shall
cause the applicable CDI Track or MEC Track to include in its agreement with
Breeders’ Cup that the ADW Content Rights, Point to Point Content Rights and
Rebate Content Rights for the Breeders’ Cup Championship Day races will be
licensed and made available to all CDI Outlets and all MEC Outlets at pricing no
less advantageous to the CDI or MEC Outlets than the pricing provided to a
comparable distribution channel of any other Third Party.
 
6.20  Ownership. Each of CDI and MEC agrees to directly or indirectly
beneficially own all of the ownership interests in CDI Sub and MEC Sub,
respectively.
 
ARTICLE 7
TRANSFERS AND WITHDRAWALS

7.1  Transfers of Interests.
 
[a]  A Member shall not Transfer all or any portion of its Interest without the
prior consent of the Board of Managers, which consent may be withheld in the
Board of Managers’ sole and absolute discretion.
 
[b]  Unless admitted as a Member in accordance with the provisions of this
Agreement, the transferee of all or any portion of an Interest shall not be a
Member, but instead shall be subject to the provisions of Section 7.4.
 
[c]  In connection with each Transfer of an Interest: (i) the transferor and
transferee shall execute and deliver to the Company a written instrument of
transfer in form and substance reasonably satisfactory to the Board of Managers
and (ii) the transferee shall execute and deliver to the Company a written
instrument pursuant to which the transferee assumes all obligations of the
transferor associated with the transferred Interest and otherwise agrees to
comply with the terms and provisions of this Agreement.
 
[d]  In connection with each Transfer, the transferring Member shall provide to
the Company either: (i) an opinion of counsel to such transferring Member
satisfactory in form and substance to counsel for the Company with respect to
the matters referred to in Section 7.1(j); or (ii) sufficient information to
allow counsel to the Company to make a determination that the proposed Transfer
will not result in any of the consequences referred to in Section 7.1(j).
 
[e]  In the event of any Transfer which results in multiple ownership of a
Member’s Interest, the Board of Managers may require that one or more trustees
or nominees be designated to represent all or a portion of the Interest
transferred for the purpose of receiving all notices which may be given and all
payments which may be made under this Agreement and for the purpose of
exercising all rights of the transferees under this Agreement.
 
[f]  In the event a Member Transfers (or proposes to Transfer) all or any
portion of its Interest, all reasonable legal and other out-of-pocket expenses
incurred by the Company on account of the Transfer (or proposed Transfer) shall
be paid by such Member. Following the effective date of any Transfer, the
transferor and transferee shall be jointly and severally liable for all such
expenses.
 
[g]  Except as otherwise specifically provided in this Agreement or with the
consent of the Board of Managers, all economic attributes of a transferor
Member’s Interest (such as the Member’s Capital Commitment, Capital
Contribution, Allocation Percentage, Capital Account balance, and obligation to
return distributions or make other payments to the Company) shall carry over to
a transferee in proportion to the percentage of the Interest so transferred.
 
[h]  Once all other conditions to the Transfer of a Member’s Interest have been
satisfied, such Transfer shall be effective as of: (x) the Close of Business on
the last day of the next ending fiscal quarter of the Company; or (y) such other
time as shall be jointly selected by the Board of Managers, the transferor and
the transferee.
 
[i]  Notwithstanding any provision of this Agreement to the contrary, a Member
or Withdrawn Member shall not, by virtue of having Transferred all or any
portion of its Interest, be relieved of any obligations arising under this
Agreement; provided, however, that a Member or Withdrawn Member shall be
relieved of such obligations to the extent that: (x) such relief is approved by
the Board of Managers (which approval may be withheld by the Board of Managers
in their sole and absolute discretion); and (y) such obligations are assumed by
another Member or Person admitted to the Company as a Substitute Member.
 
[j]  Notwithstanding any provision of this Agreement to the contrary, there
shall be no Transfer of an Interest unless such Transfer will not: (i) give rise
to a requirement that the Company register under the Securities Act;
(ii) otherwise subject the Company, a Member, or any equityholder, member,
director, officer, or employee of a Member to additional regulatory requirements
under Federal, State, local or foreign law, compliance with which would subject
the Company or such other Person to material expense or burden (unless each such
affected Person consents to such Transfer); (iii) constitute a transaction
effected through an “established securities market” within the meaning of
Treasury Regulation Section 1.7704-1(b) or otherwise cause the Company to be a
“publicly traded partnership” within the meaning of Section 7704 of the Code;
(iv) effect a termination of the Company under Section 708 of the Code (but only
if such termination would result in material adverse consequences to the Company
or any Member under Federal, state or local law); or (v) violate any law,
regulation or other governmental rule, or result in a violation thereof by the
Company, a Member, or any equityholder, member, director, officer, or employee
of a Member.
 
[k]  Any Transfer in violation of this Article 7: (i) shall be null and void as
against the Company and the other Members; and (ii) shall not be recognized or
permitted by, or duly reflected in the official books and records of, the
Company. The preceding sentence shall not be applied to prevent the Company from
enforcing any rights it may have in respect of a transferee arising under this
Agreement or otherwise (including any rights arising under Section 10.8).
 
[l]  Solely for purposes of this Article 7 (other than Section 7.1(g)), an
Interest shall be deemed to include any Derivative Company Interest held, issued
or created by a Member, Assignee or other Person.
 
7.2  Withdrawal/Removal of a Member.
 
[a]  A Member shall not withdraw from the Company or otherwise elect to cease to
be a Member without the approval of the Board of Managers.
 
[b]  A Member shall not be removed from the Company without its consent.
 
7.3  Procedures Following Member Withdrawal/Removal. A Member that withdraws or
is removed from the Company (including via a deemed withdrawal) in accordance
with the provisions of Section 7.2 or otherwise ceases to be a member of the
Company under the Act (each a “Withdrawal Event” and a “Withdrawn Member”) shall
be treated as an Assignee and, accordingly, shall have the rights and
obligations of an Assignee as described in Section 7.4. Subject to the preceding
sentence, a Withdrawn Member shall not be entitled to any redemption of its
Interest, distribution or payment in connection with its Withdrawal Event or
otherwise in consequence of its status as a Withdrawn Member.
 
7.4  Status of Assignees.
 
[a]  Notwithstanding any provision of this Agreement to the contrary, an
Assignee shall not be admitted to the Company as a Substitute Member without the
consent of the Board of Managers, which consent may be withheld in the Board of
Managers’ sole and absolute discretion.
 
[b]  All rights and privileges associated with an Assignee interest in the
Company shall be derived solely from the Member interest of which such rights
and privileges were previously a component part. No Assignee shall hold, by
virtue of such Assignee’s interest in the Company, any rights and privileges
that were not specifically transferred to such Assignee by the prior holder of
such interest. No Member, Assignee or other rights or privileges arising under
this Agreement or the Act shall apply with respect to a notional or constructive
interest in the Company, without regard to whether such interest constitutes a
Derivative Company Interest.
 
[c]  Subject to Section 3.1(d), an Assignee that holds an interest in the
Company shall be entitled to receive the allocations attributable to such
interest pursuant to Article 4, to receive the distributions attributable to
such interest pursuant to Articles 4 and 8, and to Transfer such interest in
accordance with the terms of this Article 7. Notwithstanding the preceding
sentence, the Company and the Members shall incur no liability for allocations
and distributions made in good faith to a transferor until a valid written
instrument of Transfer has been received by the Company and recorded on its
books and the effective time of the Transfer has passed.
 
[d]  To the extent otherwise applicable to the interest in the Company that has
been transferred to an Assignee, the Assignee shall be subject to, and bound by,
all of the terms and provisions of this Agreement that inure to the benefit of
the Company or any Member (without regard to whether such Assignee has executed
a written instrument of Transfer as described in Section 7.4(c) or an assumption
of obligations as described in Section 7.1(c)). Without limitation on the
preceding sentence, an Assignee that holds an interest in the Company shall be
responsible for any unpaid Capital Commitment and obligation to return
distributions or make other payments to the Company associated with such
interest and shall comply with the provisions of Sections 6.3, 6.4 and 10.14.
 
[e]  Solely to the extent necessary to give effect to the Assignee rights and
obligations set forth in Section 7.4(c) and (d), an Assignee shall be treated as
a Member for purposes of this Agreement.
 
[f]  An Assignee shall not, solely by virtue of its status as such, hold any
non-economic rights in respect of the Company. Without limitation on the
preceding sentence, an Assignee’s interest in the Company shall not entitle such
Assignee to participate in the management, control or operation of the Company
or its business, act for the Company, bind the Company under agreements or
arrangements with third parties, or vote on Company matters. An Assignee shall
not have any right to receive or review Company books, records, reports or other
information. An Assignee shall not hold itself out as a Member in any forum or
for any purpose; provided, however, that, to the extent necessary to maintain
consistency with the Company’s income tax returns, reports, and other filings,
an Assignee shall take the position that it is a Member (or “partner”) solely
for income tax purposes.
 
7.5  Transfers of Racetracks. In the event CDI or MEC voluntarily divests its
Control of the racing and wagering activities of Churchill Downs Racetrack or
Arlington Park, in the case of CDI, or Gulfstream Park or Santa Anita, in the
case of MEC (such party, a “Divesting Party”), to a Third Party who continues to
operate such track as a horse racing track, the Divesting Party shall require,
as a condition of the voluntary divestiture, that the party assuming Control of
the racing and wagering activities of such CDI Track or MEC Track, as the case
may be, agree in writing to comply with all terms and conditions of this
Agreement as if the divested track were still a CDI Track or MEC Track, as the
case may be, for the shorter of (i) twenty four months following the
consummation of the divestiture, or (ii) such time as such party assuming
Control permanently ceases to conduct live horse racing at such track. The
provisions of this Section 7.5 shall apply to all voluntary divestitures of
Control, including without limitation, the sale of a racetrack or of an equity
interest in the entity operating the racetrack, the voluntary termination of a
lease, management agreement or other contractual arrangement, or any other
voluntary action that results in a loss of Control.
 
ARTICLE 8
DISSOLUTION AND LIQUIDATION
 
8.1  Dissolving Events. The Company shall be Dissolved upon the occurrence of
any of the following events:
 
[a]  Expiration of the Company’s Term;
 
[b]  Failure of the Company to have at least one Member;
 
[c]  Permanent cessation of the Company’s Business;
 
[d]  An election to Dissolve the Company executed by all members of the Board of
Managers;
 
[e]  Any other event which results in a mandatory Dissolution of the Company
under the Act;
 
[f]  The continuation of a Deadlock of the Board of Managers or the Members, as
applicable, for a period of twelve (12) consecutive months;
 
[g]  At the election of a Member when another Member or its ADW business is
subject to a Change of Control Transaction, which election may be made only
within the ninety (90) day period following such event;
 
[h]  At the election of the other Member, upon the Bankruptcy, Dissolution or
Termination of a Member, which election may be made only within the ninety (90)
day period following such event;
 
[i]  At the election of the other Member, if a Member or its Affiliate has
materially breached this Agreement or any of the Auxiliary Agreements or the
Business Plan, which election may be made only within the ninety (90) day period
following notice of such event under Section 10.13 and such breach is not cured
as provided in Section 10.13 hereof; or
 
[j]  Any other event or circumstance agreed to by the Members.
 
8.2  Term and Unwind Provision.
 
[a] The term of this Agreement shall be until five (5) years after the date of
this Agreement (the “Initial Term”), subject to such earlier termination as the
parties may mutually agree or as set forth in this Article 8. The Initial Term
plus the applicable Twelve Month Extension or the One Hundred Twenty Day
Extension (as defined below) is the “Term”.
 
[b] In the event that the Company is not extended beyond the Initial Term, then
the parties shall continue to operate the Company and to exchange content
pursuant to the terms hereof and pursuant to the CDI/MEC Content Exchange
Agreement for a period of twelve (12) months after the Initial Term (the “Twelve
Month Extension”).
 
[c] In the event that the Company is Dissolved in accordance with the terms
hereof prior to the expiration of the Initial Term, then the parties shall
continue to operate the Company and to exchange content pursuant to the terms
hereof and pursuant to the CDI/MEC Content Exchange Agreement for a period of
one hundred twenty (120) days from the date of such Dissolution (the “One
Hundred Twenty Day Extension”). During the One Hundred Twenty Day Extension, the
parties shall arrange for the orderly liquidation of the Company as set forth in
Section 8.3 of this Agreement.
 
[d] During the Twelve Month Extension, the parties shall arrange for the orderly
liquidation of the Company as set forth in Section 8.3 of this Agreement. During
the first three months of the Twelve Month Period, CDI and MEC will determine
who between them will have the exclusive right of first negotiation for the
services of the existing employees and executives of the Company (i.e. the
nonseconded personnel of the Company) as follows: MEC will identify one
executive / employee of the Company for whom MEC will have exclusive right of
first negotiation. Then CDI will identify two executives / employees of the
Company for whom CDI will have exclusive right of first negotiation. Then MEC
and CDI will alternate identifying one executive / employee of the Company for
whom either CDI or MEC will have exclusive right of first negotiation until all
the executives / employees of the Company have been so identified. CDI and MEC
will each then have the exclusive right as between each other to negotiate the
employment by CDI or MEC, as appropriate, of the identified executives /
employees of the Company until the conclusion of the eighth month of the Twelve
Month Period. Beginning on the first day of the ninth month of the Twelve Month
Period, either CDI or MEC may attempt to negotiate the employment of any
executive / employee of the Company who has not yet been retained by either CDI
or MEC.
 
8.3  Winding Up and Liquidation.
 
[a]  Upon Dissolution of the Company, the Board of Managers shall promptly wind
up the affairs of, liquidate and Terminate the Company. In furtherance thereof,
the Board of Managers shall: (i) have all of the administrative and management
rights and powers of the Board of Managers (including the power to bind the
Company); and (ii) be reimbursed for Company expenses it reasonably incurs.
Following Dissolution, the Company shall sell or otherwise dispose of assets
determined by the Board of Managers to be unsuitable for distribution to the
Members, but shall engage in no business activities other than the Business
except as may be necessary, in the reasonable discretion of the Board of
Managers, to preserve the value of the Company’s assets during the period of
winding-up and liquidation. In any event, the Board of Managers shall use its
Best Efforts to prevent the period of winding-up and liquidation of the Company
from extending beyond the date which is two (2) years after the Company’s date
of Dissolution. At the conclusion of the winding-up and liquidation of the
Company, the Board of Managers shall: (i) designate one Person (who shall be a
Member unless the parties otherwise agree) to hold the books and records of the
Company (and to make such books and records available to the Members on a
reasonable basis) for not less than six years following the Termination of the
Company under the Act; and (ii) execute, file and record, as necessary, a
certificate of termination or similar document to effect the Termination of the
Company under the Act and other applicable laws.
 
[b]  Distributions to the Members in liquidation may be made in cash or in kind,
or partly in cash and partly in kind, as determined by the Board of Managers,
provided, however, the rights granted to the Company by the Members under
Section 2.1(c) shall terminate and vest in the contributing Member along with
the relevant export and import agreements entered into by the Company as agent
related thereto. Distributions in kind shall be valued at Fair Market Value as
determined by the Board of Managers in accordance with the provisions of Section
5.14 and shall be subject to such conditions and restrictions as may be
necessary or advisable in the reasonable discretion of the Board of Managers to
preserve the value of the property so distributed or to comply with applicable
law.
 
[c]  The Profits and Losses of the Company during the period of winding-up and
liquidation shall be allocated among the Members in accordance with the
provisions of Article 3. If any property is to be distributed in kind, the
Capital Accounts of the Members shall be adjusted with regard to such property
in accordance with the provisions of Section 3.1(e).
 
[d]  Upon Dissolution, the assets of the Company (including proceeds from the
sale or other disposition of any assets during the period of winding-up and
liquidation) shall be applied as follows:
 
[i]  First, to repay any indebtedness of the Company, whether to third parties
or the Members, in the order of priority required by law;
 
[ii]  Next, to any reserves which the Board of Managers reasonably deems
necessary for contingent or unforeseen liabilities or obligations of the Company
(which reserves when they become unnecessary shall be distributed in accordance
with the provisions of clause (iii), below); and
 
[iii]  Next, to the Members in proportion to their respective positive Capital
Account balances (after taking into account all adjustments to the Members’
Capital Accounts required under Section 8.3(c)).
 
[e]  Except as otherwise specifically provided in this Agreement, a Member shall
have no liability to the Company or to any other Member or to any Third Party in
respect of a negative balance in such Member’s Capital Account during the term
of the Company or at the conclusion of the Company’s Termination.
 
ARTICLE 9
LIABILITY AND INDEMNIFICATION
 
9.1  Liability. Except as otherwise specifically provided in this Agreement, no
Indemnified Person shall be personally liable for the return of any
contributions made to the capital of the Company by the Members or the
distribution of Capital Account balances. Except to the extent that Material
Misconduct on the part of an Indemnified Person shall have given rise to the
matter at issue, such Indemnified Person shall not be liable to the Company or
the Members for any act or omission concerning the Company. Without limitation
on the preceding sentence, except to the extent that such action constitutes
Material Misconduct, an Indemnified Person shall not be liable to the Company or
to any Member in consequence of voting for, approving, or otherwise
participating in the making of a distribution by the Company pursuant to Article
4 or 8. An Indemnified Person shall not be liable to the Company or the Members
for losses due to the acts or omissions of any independent contractor, employee
or other agent of the Company unless such Indemnified Person was or should have
been directly involved with the selection, engagement or supervision of such
Person and the actions or omissions of such Indemnified Person in connection
therewith constituted Material Misconduct.
 
9.2  Indemnification.
 
[a]  Except to the extent that Material Misconduct on the part of an Indemnified
Person shall have given rise to the matter at issue, the Company shall indemnify
and hold such Indemnified Person harmless from and against any loss, expense,
damage or injury suffered or sustained by such Indemnified Person by reason of
any actual or threatened claim, demand, action, suit or proceeding (civil,
criminal, administrative or investigative) in which such Indemnified Person may
be involved, as a party or otherwise, by reason of its actual or alleged
management of, or involvement in, the affairs of the Company. This
indemnification shall include, but not be limited to: (i) payment as incurred of
reasonable attorneys fees and other out-of-pocket expenses incurred in
investigating or settling any claim or threatened action (where, in the case of
a settlement, such settlement is approved by the Board of Managers), or incurred
in preparing for, or conducting a defense pursuant to, any proceeding up to and
including a final non-appealable adjudication; (ii) payment of fines, damages or
similar amounts required to be paid by an Indemnified Person; and (iii) removal
of liens affecting the property of an Indemnified Person.
 
[b]  Indemnification payments shall be made pursuant to this Section 9.2 only to
the extent that the Indemnified Person is not entitled to receive (or will not
in any event receive) from a third party equal or greater indemnification
payments in respect of the same loss, expense, damage or injury. In the event,
however, that the Board of Managers determine that an Indemnified Person would
be entitled to receive indemnification payments from the Company but for the
operation of the preceding sentence, the Board of Managers may cause the Company
to advance indemnification payments to the Indemnified Person (with repayment of
such advance to be secured by the Indemnified Person’s right to receive
indemnification payments from the applicable third party).
 
[c]  As a condition to receiving an indemnification payment pursuant to this
Section 9.2, an Indemnified Person shall execute an undertaking in form and
substance acceptable to the Board of Managers in their reasonable discretion
providing that, in the event it is subsequently determined that such Person was
not entitled to receive such payment (whether by virtue of such Person’s
Material Misconduct or otherwise), such Person shall return such payment to the
Company promptly upon demand therefor by any Member.
 
[d]  Notwithstanding the foregoing provisions of this Section 9.2, the Company
shall be under no obligation to indemnify an Indemnified Person from and against
any reduction in the value of such Person’s interest in the Company that is
attributable to losses, expenses, damages or injuries suffered by the Company or
to any other decline in the value of the Company’s assets.
 
[e]  The indemnification provided by this Section 9.2 shall not be deemed to be
exclusive of any other rights to which any Indemnified Person may be entitled
under any agreement, as a matter of law, in equity or otherwise.
 
9.3  Insurance.
 
[a] The Company shall obtain and keep in force officers and directors liability
insurance insuring the officers, employees and Managers of the Company against
claims by third parties as to their activities for and on behalf of the Company,
unless the Board of Managers determines in good faith that there is sufficient
insurance coverage for such Persons under the separate insurance coverage
maintained by CDI and MEC. The specific coverages, limits of liability and other
terms of such insurance shall be determined by the Board of Managers in their
reasonable discretion.
 
[b] The Company shall carry general business and liability insurance in such
form and amounts as are determined from time to time by the Board of Managers.
Unless the non-MEC Sub members of the Board of Managers determine otherwise, MEC
shall be obligated to procure such insurance on behalf of the Company; provided,
however, that the Company shall be obligated either to pay for such insurance
directly or to reimburse MEC for MEC’s costs in procuring such insurance.
 
ARTICLE 10
GENERAL PROVISIONS
 
10.1  Meetings. Meetings of the Members may be called by any Member as well as
by the Board of Managers. Any such meeting shall be held at a reasonable time
and place on not less than two (2) nor more than sixty (60) days notice, which
notice shall include an agenda of items to be considered at the meeting.
Reasonable accommodation shall be made for any Member that elects to attend a
meeting via telephonic or similar means pursuant to which all Persons attending
the meeting can hear one another. No action may be taken at a meeting of the
Members without the unanimous vote or consent of all of the Members. Minutes of
the meeting shall be prepared at the direction of the Board of Managers. Except
as specifically provided in this Agreement, there shall be no requirement of
annual or periodic meetings of the Members or Board of Managers within the
meaning of the Act.
 
10.2  Action Without a Meeting of All Members.
 
[a]  Any action of the Members may be taken by written consent of all of the
Members required for such action under this Agreement.
 
[b]   A Member may authorize another Person to vote or otherwise act on its
behalf through a written proxy or power of attorney.
 
[c]  In order to facilitate the determination of whether any action of the
Members has been taken by or with the consent of the requisite number or
percentage of the Members under this Agreement, the Board of Managers may adopt,
from time to time upon not less than ten (10) days notice to the Members,
reasonable procedures for establishing the Members of record entitled to vote,
consent or otherwise take action on any matter; provided, however, that any date
as of which Members of record is determined shall not precede the date of the
related action by more than sixty (60) days.
 
10.3  Entire Agreement. This Agreement, together with the Auxiliary Agreements
and the Business Plan, contains the entire understanding among the Members, CDI
and MEC concerning the subject matter thereof and supersedes any prior written
or oral agreement among them respecting the Company and such matters. There are
no representations, agreements, arrangements, or understandings, oral or
written, among the Members, CDI and MEC relating to the Company which are not
fully expressed in this Agreement or the Auxiliary Agreements or the Business
Plan.
 
10.4  Amendments.
 
[a]  Except as otherwise provided in this Section 10.4, this Agreement may be
amended, in whole or in part, only through a written amendment executed by all
of the Members, CDI and MEC. Each Member, CDI and MEC shall be promptly notified
of any amendment to this Agreement made pursuant to this Section 10.4.
 
[b]  Except with regard to amendments otherwise specifically required under this
Agreement, there shall be no amendment to this Agreement except as authorized by
Sections 10.4[a] or 10.4[d]. Without limitation of the foregoing, and subject to
Section 2.1(b), there shall be no amendment that: (i) increases a Member’s
obligation to make capital contributions to the Company or (ii) imposes personal
liability upon a Member for any debts or obligations of the Company unless, in
each case, the amendment is consented to by such Member.
 
[c]  An Assignee shall not, solely by virtue of its status as such, have any
right to consent or withhold consent in respect of an amendment to this
Agreement.
 
[d]  Notwithstanding the foregoing provisions of this Section 10.4, the Board of
Managers may, without the consent of the other Members, amend this Agreement in
any manner determined by the Board of Managers to be necessary or advisable to
reflect the admission of an Additional Member in accordance with this Agreement,
comply with applicable law, supply a missing term or provision, or resolve an
ambiguity in the existing terms and provisions of this Agreement. The Board of
Managers shall not have the authority under this Section 10.4(d) to amend this
Agreement in a manner that is materially adverse to any Member; provided,
however, that a Member’s right to object to an amendment pursuant to this
Section 10.4(d) on the grounds that such amendment is materially adverse to such
Member shall expire at the Close of Business on the thirtieth (30th) day
following notice to such Member of such amendment.
 
10.5  Governing Law. The interpretation and enforceability of this Agreement and
the rights and liabilities of the Members, CDI and MEC as such shall be governed
by the laws of the State of Delaware as such laws are applied in connection with
limited liability company operating agreements entered into and wholly performed
in Delaware by residents of Delaware. To the extent permitted by the Act and
other applicable law, the provisions of this Agreement shall supersede any
contrary provisions of the Act or other applicable law.
 
10.6  Severability. In the event that any provision of this Agreement is
determined to be invalid or unenforceable, such provision shall be deemed
severed from the remainder of this Agreement and replaced with a valid and
enforceable provision as similar in intent as reasonably possible to the
provision so severed, and shall not cause the invalidity or unenforceability of
the remainder of this Agreement.
 
10.7  Counterparts; Binding upon Members and Assignees. This Agreement may be
executed in any number of counterparts and, when so executed, all of such
counterparts shall constitute a single instrument binding upon all parties
notwithstanding the fact that all parties are not a signatory to the original or
to the same counterpart. In addition, to the maximum extent permitted by
applicable law and without limitation on any other rights of the Members or the
Company, a non-Member shall become bound as an Assignee under this Agreement if
such Person holds an interest in the Company and seeks to exercise, assert,
confirm or enforce any of its rights as an Assignee under this Agreement or the
Act.
 
10.8  Survival of Certain Obligations. Except as specifically provided in this
Agreement, or to the extent specifically approved by the Board of Managers
(which approval may be withheld by the Board of Managers in their sole and
absolute discretion), as applicable, a Member, CDI and MEC shall continue to be
subject to all of its obligations to make capital contributions or other
payments arising under this Agreement (including obligations attributable to a
breach of this Agreement), as well as its obligations to maintain the
confidentiality of information pursuant to Section 6.3 and to provide
information pursuant to Section 6.4, without regard to any Transfer of all or
any portion of such Member’s Interest or any event that terminates such Member’s
status as such or the Termination of the Company. Each Member’s Capital
Commitment shall terminate at the time of the final Termination of the Company
under the Act, but such termination shall not release a Defaulting Member from
obligations arising under Section 2.4.
 
10.9  No Third Party Beneficiaries. Except with regard to the Company’s
obligation to Indemnified Persons as set forth in Article 9, the provisions of
this Agreement are not intended to be for the benefit of or enforceable by any
Third Party and shall not give rise to a right on the part of any Third Party to
(i) enforce or demand enforcement of a Member’s Capital Commitment, obligation
to return distributions, or obligation to make other payments to the Company as
set forth in this Agreement or (ii) demand that the Company or the Board of
Managers issue any capital call.
 
10.10  Notices, Consents, Elections, Etc. All notices, consents, agreements,
elections, amendments, and approvals provided for or permitted by this Agreement
or otherwise relating to the Company shall be in writing and signed copies
thereof shall be retained with the books of the Company.
 
[a]  Notice to Members. Except as otherwise specifically provided in this
Agreement, notice to a Member shall be deemed duly given upon the earliest to
occur of the following: (i) personal delivery to such Member, to the address set
forth on Schedule A for such Member, or to any other address which such Member
has provided to the Company for purposes of this Section 10.10(a); (ii) the
Close of Business on the third day after being deposited in the United States
mail, registered or certified, postage prepaid and addressed to such Member at
the address set forth on Schedule A for such Member, or at any other address
which such Member has provided to the Company for purposes of this Section
10.10(a); (iii) the Close of Business on the first business day after being
deposited in the United States with a nationally recognized overnight delivery
service, for next Business Day delivery, with delivery charges prepaid and
addressed as provided in the preceding clause; or (iv) actual receipt by such
Member via any other means (including public or private mail, electronic mail,
facsimile, telex or telegram); provided, however, that notice sent via
electronic mail shall be deemed duly given only when actually received and
opened by the Member to whom it is addressed. Notices to CDI shall be provided
as set forth above to the address of CDI Sub. Notices to MEC shall be provided
as set forth above to the address of MEC Sub.
 
[b]  Notice to the Company. Notice to the Company shall be deemed duly given
when clearly identified as such and duly given to the Board of Managers in
accordance with the procedures set forth in Section 10.10(a).
 
10.11  No Usury. Notwithstanding any provision of this Agreement to the
contrary, the rate of interest charged by the Company to any Member in
connection with an obligation of the Member to the Company shall not exceed the
maximum rate permitted by applicable law. To the extent that any interest
otherwise paid or payable by a Member to the Company shall have been finally
adjudicated to exceed the maximum amount permitted by applicable law, such
interest shall be retroactively deemed to have been a required repayment of
principal (and any such amount paid in excess of the outstanding principal
amount shall be promptly returned to the payor Member).
 
10.12  Dispute Resolution.
 
[a]  Forum and Venue. Any litigation involving any controversy or claim arising
out of or relating to this Agreement or the Auxiliary Agreements or Business
Plan shall be brought and prosecuted solely in the Courts of the State of
Delaware or the United States District Court for the District of Delaware
sitting in Wilmington, Delaware, and in such appellate courts having
jurisdiction over appeals from such courts. The Company, CDI, CDI Sub, MEC and
MEC Sub (i) consent to the exclusive jurisdiction and venue of the aforesaid
courts; (ii) shall not assert forum inconvenience or any other similar defense
to the jurisdiction and venue of such courts; and (iii) waive the right to trial
by jury in any such litigation. If needed to enforce a decision made by a court
in Delaware, litigation may be commenced and prosecuted in any other courts
having jurisdiction.
 
[b]  Fees and Costs. The prevailing party or parties in any proceeding arising
out of or relating to this Agreement shall be reimbursed by the party or parties
who do not prevail for their reasonable third party or out of pocket attorneys,
accountants and experts fees and related third party or out of pocket expenses
and for the costs of such proceeding. The court shall be asked to direct the
amounts to be paid and the party to pay the expenses and costs. In the event
that two or more parties are deemed liable for a specific amount payable or
reimbursable under this Section 10.12(b), such parties shall be jointly and
severally liable therefor.
 
10.13  Cure of Breaches. In the event of any breach by CDI, CDI Sub, MEC, MEC
Sub or the Company of any provision of this Agreement or of any Auxiliary
Agreement or the Business Plan, the party claiming the breach shall give
reasonable notice thereof to the others within a reasonable time after becoming
aware of such breach or such other notice as required under the Auxiliary
Agreement or the Business Plan. The alleged breaching party shall have, unless
otherwise specifically provided in this Agreement or such Auxiliary Agreement or
the Business Plan, a period of thirty (30) days from receipt of such notice to
cure the alleged breach; provided that if the alleged breach cannot reasonably
be cured within such period of time, but such breach is susceptible of being
cured it shall not be considered a breach so long as the alleged breaching party
has begun and diligently pursues curing the alleged breach and completes the
cure within not more than an additional thirty (30) days.
 
10.14  Remedies for Breach of this Agreement.
 
[a]  General. Except as otherwise specifically provided in this Agreement, the
remedies set forth in this Agreement are cumulative and shall not exclude any
other remedies to which a Person may be lawfully entitled.
 
[b]  Specific Performance. Without limiting the rights and remedies otherwise
available to the Company, CDI, MEC or any Member, each Member, CDI and MEC
hereby: (i) acknowledges that the remedy at law for damages resulting from its
default under Article 3, or Sections 6.3, 6.4 or 10.14 is inadequate; and
(ii) consents to the institution of an action for specific performance of its
obligations in the event of such a default in accordance with Section 10.12[a]
above.
 
[c]  Exercise of Discretion by the Board of Managers. In determining what
action, if any, shall be taken against a Member in connection with such Member’s
breach of this Agreement, the Board of Managers shall seek to obtain the best
result for the Company and the non-breaching Members. In the event a Member
violates the terms of this Agreement, such Member shall not be entitled to claim
that the Company or any of the other Members is precluded, on the basis of any
fiduciary or other duty arising in respect of such Member’s status as such, from
seeking any of the penalties or other remedies permitted under this Agreement or
applicable law.
 
10.15  Timing. All dates and times specified in this Agreement are of the
essence and shall be strictly enforced. Except as otherwise specifically
provided in this Agreement, all actions that occur after the Close of Business
on a given day shall be deemed for purposes of this Agreement to have occurred
at 9:00 a.m. on the following day. In the event that the last day for the
exercise of any right or the discharge of any duty under this Agreement would
otherwise be a day that is not a business day, the period for exercising such
right or discharging such duty shall be extended until the Close of Business on
the next succeeding business day.
 
10.16  Status Under the Act. This Agreement is the “limited liability company
agreement” of the Company within the meaning of Section 18-101(7) of the Act.
 
10.17  Partnership for Tax Purposes. As set forth in Section 1.1, the Members
hereby form the Company as a limited liability company under the Act. The
Members expressly do not intend hereby to form a partnership under the laws of
any State but intend that the Company shall be treated as a partnership for tax
purposes.
 
10.18  Miscellaneous. No failure or delay by any party in exercising any right,
power or privilege under this Agreement shall operate as a waiver thereof; any
actual waiver shall be contained in a writing signed by the party against whom
enforcement of such waiver is sought. This Agreement shall not be construed for
or against any party by reason of the authorship or alleged authorship of any
provisions hereof or by reason of the status of the respective parties.
 
10.19  No Grant. Except as set forth on Schedule B, each Member and its
Affiliates retains and has not granted to the Company or the other Member or its
Affiliates any rights to its intellectual property or other assets.
 
10.20  General Usage. The section headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement. Except where the context clearly requires to the contrary: (i)
all references in this Agreement to designated Articles are to the designated
Articles and other subdivisions of this Agreement; (ii) instances of gender or
entity-specific usage (e.g., “his” “her” “its” “person” or “individual”) shall
not be interpreted to preclude the application of any provision of this
Agreement to any individual or entity; (iii) the word “or” shall not be applied
in its exclusive sense; (iv) “including” shall mean “including, without
limitation”; (v) references to laws, regulations and other governmental rules,
as well as to contracts, agreements and other instruments, shall mean such rules
and instruments as in effect at the time of determination (taking into account
any amendments thereto effective at such time without regard to whether such
amendments were enacted or adopted after the effective date of this Agreement)
and shall include all successor rules and instruments thereto; (vi) references
to “$” or “dollars” shall mean the lawful currency of the United States; (vii)
references to “Federal” or “federal” shall be to laws, agencies or other
attributes of the United States (and not to any State or locality thereof);
(viii) the meaning of the terms “domestic” and “foreign” shall be determined by
reference to the United States; (ix) references to “days” shall mean calendar
days; references to “business days” shall mean all days other than Saturdays,
Sundays and days that are legal holidays in the State of Delaware; (x)
references to monthly or annual anniversaries shall be to the actual calendar
months or years at issue (taking into account the actual number of days in any
such month or year); and (xi) days, business days and times of day shall be
determined by reference to local time in Wilmington, Delaware.
 
ARTICLE 11
DEFINITIONS
 
As used in this Agreement, the following terms shall have the following
meanings:
 
Act shall mean the Delaware Limited Liability Company Act, Title 6, Delaware
Code Ann., Section 18-101 et seq., as amended.
 
Additional Member shall mean any Person, other than a Substitute Member,
admitted to the Company as a Member after the date first above written.
 
ADW shall mean advance deposit wagering.
 
ADW Content Rights shall mean solely for purposes of ADW all wagering, audio,
video, data and replay rights related to horse racing or dog racing whether
distributed through internet, wireless, telephone, satellite, television,
broadband, mobile or video streaming.
 
ADW Export Content shall mean CDI and MEC’s and their Affiliates’ ADW Content
Rights sold or distributed or sublicensed to Third Parties.
 
ADW Import Content shall mean ADW Content Rights acquired from Third Parties for
ADW by CDI ADW and XpressBet or for sublicensing or other resale to Third
Parties.
 
Affiliate shall mean, with respect to any Person, any other Person with regard
to which the Person is directly or indirectly Controlling, Controlled by or
commonly Controlled with.
 
Agreement shall mean this Operating Agreement of TrackNet Media Group, LLC, a
Delaware limited liability company, including all schedules and exhibits hereto,
as amended from time to time in accordance with the terms hereof.
 
Allocation Percentage shall mean, for each Member, the percentage specified for
such Member on Schedule A.
 
Asset Transfer and Contribution Agreement shall mean the Asset Transfer and
Contribution Agreement of even date herewith between HRTV Entity and Horse
Racing TV, Inc., a wholly owned subsidiary of MEC, as thereafter amended.
 
Assignee shall mean a Person that has acquired all or any portion of an Interest
(including by means of a Transfer permitted under Article 7), but that has not
been admitted as a Member.
 
Auxiliary Agreements shall mean the following agreements entered into or to be
entered into between CDI and MEC as provided in this Agreement:
 
(a) HRTV Entity Limited Liability Company Operating Agreement of even date
herewith, as thereafter amended;
(b) CDI/MEC Content Exchange Agreement;
(c) Asset Transfer and Contribution Agreement;
(d) Any other agreement entered into between CDI and MEC or by CDI or MEC for
the benefit of the other which is designated as an Auxiliary Agreement.

Bank shall mean the bank selected by the Board of Managers from time to time (or
any successor entity thereto).
 
Bankruptcy shall mean, with respect to a Member: (i) an assignment of all or
substantially all of the assets of such Member for the benefit of its creditors
generally; (ii) the commencement of any bankruptcy or insolvency case or
proceeding against such Member which shall continue and remain unstayed and in
effect for a period of 60 consecutive days; (iii) the filing by such Member of a
petition, answer or consent seeking relief under any bankruptcy, insolvency or
similar law; or (iv) the occurrence of any other event that is deemed to
constitute bankruptcy for purposes of the Act.
 
Beneficial Owner shall mean, with respect to a Member, any Person that holds an
equity interest in such Member, either directly or indirectly through a nominee
or agent or through one or more intervening entities qualifying as partnerships,
grantor trusts or S corporations, in each case as determined for Federal income
tax purposes.
 
Best Efforts shall mean commercially reasonable good faith efforts that a
prudent person would use under similar circumstances without being required to
expend an unreasonable amount of funds when considering the benefit likely to be
attained.
 
Board of Managers shall mean the individuals appointed by the Members as the
Managers as provided in this Agreement , taken together or acting unanimously,
as appropriate.
 
Broadband and Mobile Rights shall mean, other than with respect to ADW, all
audio, video, data and replay rights related to horse racing or dog racing for
purposes that are unrelated to ADW and are distributed through any broadband or
mobile technologies, including the internet, wireless technologies, or any other
on-line system or computer network, now known or hereafter devised. For purposes
of greater clarity, an entity which has been granted a license to Broadband and
Mobile Rights (but not ADW Content Rights) shall not be permitted to present or
exploit the Broadband and Mobile Rights if such presentation or exploitation
contains, includes, references, or is in any way associated with, wagering, or
the promotion or advertising of wagering, in any manner. By way of example, a
website which has been granted a license to Broadband and Mobile Rights (but not
ADW Content Rights) shall not be permitted to advertise, promote, or utilize a
click-through to any ADW platform or service.
 
Business shall have the meaning given it in Section 1.3(b).
 
Business Plan shall mean the initial business plan adopted and approved by CDI,
CDI Sub, MEC, MEC Sub and the Board of Managers simultaneously with entering
into this Agreement, as thereafter updated, modified or amended by the Board of
Managers.
 
Capital Account shall mean, for each Member, a separate account that is:
 
(a)  Increased by: (i) the amount of such Member’s Capital Contribution and
(ii) allocations of Profit to such Member pursuant to Article 3;
 
(b)  Decreased by: (i) the amount of cash distributed to such Member by the
Company, (ii) the Fair Market Value of any other property distributed to such
Member by the Company (determined as of the time of distribution, without regard
to Section 7701(g) of the Code, and net of liabilities secured by such property
that the Member assumes or to which the Member’s ownership of the property is
subject) and (iii) allocations of Loss to such Member pursuant to Article 3;
 
(c)  Revalued in connection with any event described in Treasury Regulation
Section 1.704-1(b)(2)(iv)(f); and
 
(d)  Otherwise adjusted so as to conform to the requirements of Sections 704(b)
and (c) of the Code and the Treasury Regulations issued thereunder.
 
Capital Commitment shall mean the cash and personal property committed by CDI
Sub and MEC Sub to be contributed to the Company.
 
Capital Contribution shall mean, for any Member, the sum of the net amount of
cash and the Fair Market Value of any other property (determined as of the time
of contribution, without regard to Section 7701(g) of the Code, and net of
liabilities secured by such property that the Company assumes or to which the
Company’s ownership of the property is subject) contributed by such Member to
the capital of the Company. The term “capital contribution” (where not
capitalized) shall mean any contribution to the capital of the Company valued in
accordance with the rules set forth in the preceding sentence. For purposes of
this Agreement, each capital contribution shall be deemed to have been made at
the later of: (i) the Close of Business on the due date of such capital
contribution as determined in accordance with this Agreement; or (ii) the Close
of Business on the date on which such capital contribution is actually received
by the Company.
 
CDI ADW shall mean any advance deposit wagering service that is Controlled by
CDI.
 
CDI/MEC Content Exchange Agreement shall mean the Content Exchange Agreement of
even date herewith between CDI and MEC, as thereafter amended.
 
CDI Outlets shall mean CDI Controlled wagering outlets, including CDI ADW and
CDI Tracks.
 
CDI Premium Content shall mean with respect to Churchill Downs Racetrack:
Kentucky Derby Day, Kentucky Oaks Day, Stephen Foster Day, Derby Trial Day; with
respect to Arlington Park: Arlington Million Day; with respect to Fair Grounds
Race Course: Louisiana Derby Day, Louisiana Champions Day; and with respect to
Calder Race Course: Summit of Speed Day and Festival of the Sun Day. CDI may
from time to time elect to (i) replace a CDI Premium Content day with another
day, and (ii) designate up to ten (10) additional days and/or special wagering
products as CDI Premium Content. Any such election shall take effect upon the
giving of written notice to MEC, and the definition of CDI Premium Content shall
thereafter be deemed amended.
 
CDI Premium ADW Content shall mean the ADW Content Rights with respect to CDI
Premium Content, provided, however, that all video rights with respect to the
Kentucky Derby are excluded.
 
CDI Premium Point to Point Content shall mean the Point to Point Content Rights
with respect to CDI Premium Content
 
CDI Premium Rebate Content shall mean the Rebate Content Rights with respect to
CDI Premium Content, provided, however, that all video rights with respect to
the Kentucky Derby are excluded.
 
CDI Tracks shall mean race tracks and off track betting facilities Controlled by
CDI.
 
Change of Control Transaction shall mean with respect to a Person the first to
occur of the following events:
 
(a) the acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of the then-outstanding
voting interests of the Person (the “Outstanding Voting Interests”);
 
(b) the consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Person or the
acquisition of assets of another entity (a “Transaction”), in each case, unless
immediately following such Transaction, (i) all or substantially all of the
individuals and entities who were the beneficial owners of the Outstanding
Voting Interests immediately prior to such Transaction beneficially own,
directly or indirectly, more than 50% of the then-outstanding voting interest of
the company resulting from such Transaction (including, without limitation, an
entity which as a result of such transaction owns the Person or all or
substantially all of the Person’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Transaction, of the Outstanding Voting Interests, (ii)
no Person (excluding any employee benefit plan (or related trust) of the subject
Person or such entity resulting from such Transaction) beneficially owns,
directly or indirectly, 50% or more of the Outstanding Voting Interests
resulting from such Transaction, except to the extent that such ownership
existed prior to the Transaction, and (iii) at least a majority of the members
of the governing body of the company resulting from such Transaction were
members of the Incumbent Board at the time of the execution of the initial plan
or action of the governing body of the Person providing for such Transaction; or
 
(c) approval by the equity owners of such Person of a complete liquidation or
dissolution of the Person.
 
Notwithstanding anything to the contrary contained in this Agreement, a Change
of Control Transaction shall be deemed not to have occurred as a result of any
transaction or group of transactions that result in direct or indirect voting
control of the applicable Person being transferred to any one or more of the
Stronach Trust, Frank Stronach, members of Frank Stronach’s immediate family
(i.e. spouse and children), or any of their respective heirs or any subsidiaries
or other entities Controlled by any of the foregoing.
 
Close of Business shall mean 5:00 p.m., local time, in Wilmington, Delaware.
 
Code shall mean the United States Internal Revenue Code of 1986, as amended.
 
Company shall mean TrackNet Media Group, LLC, a Delaware limited liability
company.
 
Control and derivatives thereof such as “Controlled” or “Controlling”, shall
mean, (i) with respect to any racetrack or off-track betting facility, the
ability to conduct the day-to-day wagering operations of such race track or
facility, directly or through a lease, management agreement or other contractual
arrangement; and (ii) with respect to any Person (including CDI ADW and
XpressBet), (a) the beneficial ownership of 50% or more of the then outstanding
voting interests of the Person, or (b) the power to direct the principal
business management and activities of the Person, whether through ownership of
voting interests, by agreement or otherwise.
 
Deadlock shall mean the inability to reach agreement on an issue or matter
material to the Company.
 
Defaulting Member shall have the meaning set forth in Section 2.4.
 
Derivative Company Interest shall mean any actual, notional or constructive
interest in, or right in respect of, the Company (other than a Member’s total
interest in the capital, profits and management of the Company) that, under
Treasury Regulation Section 1.7704-1(a)(2), is treated as an interest in the
Company for purposes of Section 7704 of the Code. Pursuant to the foregoing,
“Derivative Company Interest” shall include any financial instrument that is
treated as debt for Federal income tax purposes and (i) is convertible into or
exchangeable for an interest in the capital or profits of the Company or
(ii) provides for one or more payments of equivalent value.
 
Dissolution or Dissolved shall mean, with respect to a legal entity other than a
natural person, that such entity has “dissolved” within the meaning of the
partnership, corporation, limited liability company, trust or other statute
under which such entity was organized.
 
Employee Costs shall mean the actual cash salary, other cash compensation, and
other cash expense directly attributable to an employee, including base salary,
bonus, FICA, FUTA, health benefits, life and disability benefits and retirement
benefits, but specifically shall not include any non-cash compensation such as
equity grants or stock options.
 
Fair Market Value shall have the meaning set forth in Section 5.14(c).
 
Fiscal Year shall mean the period from January 1 through December 31 of each
year (unless otherwise required by law).
 
GAAP shall mean United States generally accepted accounting principles,
consistently applied.
 
HRTV shall mean the television network operated by the Members pursuant to the
Limited Liability Company Operating Agreement of HRTV Entity which broadcasts,
transmits or displays horse racing and related activities.
 
HRTV Entity shall mean HRTV, LLC.
 
Hub Distributor shall mean a simulcasting facility which receives Point to Point
Content Rights in a given jurisdiction and has the sole or exclusive
responsibility, under the laws or regulations of that jurisdiction, to
redistribute such Point to Point Content Rights to other simulcasting facilities
within that jurisdiction.
 
iTV shall mean any application which enhances traditional television
exploitation by enabling ADW, provided that such application is limited to cable
television (including traditional television provided by telephone companies)
and direct broadcast or satellite service television.
 
Indemnified Person shall mean CDI, MEC, each Member and each equityholder,
member, director, officer, employee, or agent of CDI, MEC, or a Member. In
addition, “Indemnified Person” shall mean any Manager or officer of the Company.
A Person that has ceased to hold a position that previously qualified such
Person as an Indemnified Person shall be deemed to continue as an Indemnified
Person with regard to all matters arising or attributable to the period during
which such Person held such position.
 
Initial Term shall have the meaning given to it in Section 8.2.
 
Interest shall mean, for each Member, such Member’s rights, duties and interest
in respect of the Company in such Member’s capacity as such (as distinguished
from any other capacity such as employee, debtor or creditor) and shall include
such Member’s right, if any, to vote on Company matters, or receive
distributions as well as such Member’s obligation, if any, to provide services,
make capital contributions or take any other action. In the case of an Interest
held by an Assignee, such Interest shall be limited in the manner set forth in
Section 7.4.
 
Manager shall mean each Person listed on Schedule A as such, for so long as such
Person does not become a Removed Manager.
 
Material Misconduct shall mean, with respect to an Indemnified Person, gross
negligence, willful and material breach of this Agreement, fraud, or the
commission of a felony (except in the case of a felony where the Indemnified
Person reasonably believed that no such felony would occur in consequence of
such Indemnified Person’s action or inaction, as the case may be). For purposes
of the preceding sentence: (i) an Indemnified Person shall be deemed to have
acted in good faith and without negligence with regard to any action or inaction
that is taken in accordance with the advice or opinion of an attorney,
accountant or other expert advisor so long as such advisor was selected with
reasonable care and the Indemnified Person made a good faith effort to inform
such advisor of all the facts pertinent to such advice or opinion; and (ii) an
Indemnified Person’s reliance upon the truth and accuracy of any written
statement, representation or warranty of a Member shall be deemed to have been
reasonable and in good faith absent such Indemnified Person’s actual knowledge
that such statement, representation or warranty was not, in fact, true and
accurate.
 
MEC Outlets shall mean MEC Controlled wagering outlets, including XpressBet and
MEC Tracks.
 
MEC Premium Content shall mean with respect to Gulfstream Park: Donn Handicap
Day, Florida Derby Day, Sunshine Millions Day; with respect to Santa Anita:
Santa Anita Handicap Day, Santa Anita Derby Day, Sunshine Millions Day; with
respect to Laurel Park: Maryland Millions Day, Frank DeFrancis Memorial Day;
with respect to Lone Star: Lone Star Derby Day; and with respect to Pimlico:
Preakness Day, Black-eyed Susan Day. MEC may from time to time elect to (i)
replace a MEC Premium Content day with another day, and (ii) designate up to ten
(10) additional days and/or special wagering products as MEC Premium Content.
Any such election shall take effect upon the giving of written notice to CDI,
and the definition of MEC Premium Content shall thereafter be deemed amended.
 
MEC Premium ADW Content shall mean the ADW Content Rights with respect to MEC
Premium Content, provided, however, that all video rights with respect to the
Preakness are excluded.
 
MEC Premium Point to Point Content shall mean the Point to Point Content Rights
with respect to MEC Premium Content.
 
MEC Premium Rebate Content shall mean the Rebate Content Rights with respect to
MEC Premium Content, provided, however, that all video rights with respect to
the Preakness are excluded.
 
MEC Tracks shall mean race tracks and off track betting facilities Controlled by
MEC.
 
Member shall mean any Person (i) listed on Schedule A as a Member or
(ii) admitted to the Company pursuant to the terms of this Agreement as an
Additional Member or a Substitute Member, but in each case only if such Person
has not become a Withdrawn Member. A Member shall not cease to be a Member or
lose its non-economic rights in respect of the Company solely by virtue of
having Transferred to one or more Persons its entire economic interest in the
Company. Except where the context requires otherwise, a reference in this
Agreement to “the Members” shall mean all of the Members (taken together or
acting unanimously, as appropriate).
 
Member Nonrecourse Deduction shall mean an item of loss, expense or deduction
attributable to a nonrecourse liability of the Company for which a Member bears
the economic risk of loss within the meaning of Treasury Regulation Section
1.704-2(i).
 
Minimum Gain of the Company shall, as provided in Treasury Regulation Section
1.704-2, mean the total amount of gain the Company would realize for Federal
income tax purposes if it disposed of all assets subject to nonrecourse
liability for no consideration other than full satisfaction thereof.
 
Nonrecourse Deduction shall mean an item of loss, expense or deduction (other
than a Member Nonrecourse Deduction) attributable to a nonrecourse liability of
the Company within the meaning of Treasury Regulation Section 1.704-2(b).
 
Permanent Incapacity shall mean, with respect to an individual, that such
individual suffers a mental or physical disability which, as of the time of
determination, renders such individual incapable of performing such individual’s
duties under this Agreement and is substantially certain to continue to render
such individual incapable of performing such duties for a continuous period of
at least six months following the date of determination.
 
Person shall mean an individual, partnership, corporation, limited liability
company, unincorporated organization, trust, joint venture, governmental agency,
or other entity, whether domestic or foreign.
 
Point to Point Content Rights shall mean all wagering, audio, video, data and
replay rights related to horse racing or dog racing for purposes of pari-mutuel
wagering at a race track or other location which constitutes a simulcasting
facility (i.e., a race track, off track betting facility or other fixed “brick
and mortar” facility open to the general public) for use at such receiving
location.
 
Point to Point Export Content shall mean CDI and MEC’s and their Affiliates’
Point to Point Content Rights sold, distributed or sublicensed to Third Parties
for Point to Point Simulcasting.
 
Point to Point Import Content shall mean Point to Point Content Rights acquired
from Third Parties for use by CDI and MEC Tracks or for sublicensing or other
resale to Third Parties.
 
Point to Point Simulcasting shall mean the distribution, transmission or receipt
of Point to Point Content Rights.
 
Principal Office shall have the meaning set forth in Section 1.4.
 
Profit and Loss or Profits and Losses means, for each taxable year of the
Company (or other period for which Profit or Loss must be computed), the
Company’s taxable income or loss determined in accordance with Code Section
703(a), with the following adjustments:
 
(i) all items of income, gain, loss, deduction, or credit required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in computing
taxable income or loss;
 
(ii) any tax-exempt income of the Company, not otherwise taken into account in
computing Profit or Loss, shall be included in computing taxable income or loss;
 
(iii) any expenditures of the Company described in Code Section 705(a)(2)(B) (or
treated as such pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(i))
and not otherwise taken into account in computing Profit or Loss, shall be
subtracted from taxable income or loss;
 
(iv) gain or loss resulting from any taxable disposition of Company property
shall be computed by reference to the adjusted book value of the property
disposed of, notwithstanding the fact that the adjusted book value differs from
the adjusted basis of the property for federal income tax purposes;
 
(v) in lieu of the depreciation, amortization, or cost recovery deductions
allowable in computing taxable income or loss, there shall be taken into account
the depreciation computed based upon the adjusted book value of the asset; and
 
(vi) notwithstanding any other provision of this definition, any items which are
specially allocated pursuant to Section 3.1[b] shall not be taken into account
in computing Profit or Loss.
 
Real Property Lease shall mean the Real Property Sublease Agreement which may be
entered into between CDI and the Company, as thereafter amended.
 
Rebating shall mean the practice by an entity that conducts ADW of providing
volume based incentives (i) exceeding two percent (2%) of the total handle
wagered through such entity, or (ii) to any ADW customer in excess of four
percent (4%) of the total handle wagered by such ADW customer.

Rebate Content Rights shall mean all wagering, audio, video, data, and replay
rights related to horse racing or dog racing for purposes of Rebating.

Rebate Export Content shall mean CDI and MEC’s and their Affiliates’ Rebate
Content Rights sold or distributed or sublicensed to Third Parties.

Rebate Import Content shall mean Rebate Content Rights acquired from Third
Parties for use by CDI and MEC or for sublicensing or other resale to Third
Parties.

Receiving Location shall mean a simulcast facility which receives Point to Point
Content Rights from a Hub Distributor.

Removed Manager shall be a Manager who has been removed pursuant to Section 5.15
of this Agreement.

Securities Act shall mean the United States Securities Act of 1933, as amended,
including the rules and regulations promulgated thereunder.
 
State shall mean any constituent state of the United States, as well as the
District of Columbia.
 
Substitute Member shall mean a transferee of all or a portion of a Member’s
Interest that becomes a Member and succeeds, to the extent of the Interest
transferred, to the rights and powers and becomes subject to the restrictions
and liabilities of the transferor Member.
 
Tax Matters Partner shall mean the Member identified as such, from time to time,
by the Members. The initial Tax Matters Partner shall be CDI Sub, and CDI Sub
and MEC Sub shall alternate serving as the Tax Matters Partner each calendar
year.
 
Tax Percentage shall have the meaning set forth in Section 4.1(a)(ii).
 
Television Fees shall have the meaning set forth in Section 5.3.
 
Television Rights shall mean, other than with respect to Point to Point
Simulcasting, all audio, video, data and replay rights related to horse racing
or dog racing for purposes of traditional television exploitation, including by
means of UHF and VHF television broadcast, cable television, “over-the-air”
television, subscription television, pay television, pay per view television,
iTV, video on demand television, hotel and other institutional service
television, satellite master antennae television (SMATV), multi-channel
multi-point distribution services television (MMDS), and direct broadcast
satellite service, provided however Television Rights shall not include
Broadband and Mobile Rights.
 
Term shall have the meaning set forth in Section  1.2. Where not capitalized,
“term” shall mean the entire period of the Company’s existence, including any
period of winding-up and liquidation following the Dissolution of the Company
pursuant to Article  8.
 
Termination shall mean, with respect to a legal entity other than a natural
person, that such entity has Dissolved, completed its process of winding-up and
liquidation, and otherwise ceased to exist.
 
Territory shall mean the United States and Canada and whatever additional
geographic region, if any, as the Board of Managers shall determine from time to
time.
 
Third Party shall mean any person or entity other than CDI, CDI Sub, MEC or MEC
Sub, or any entity Controlled by CDI or MEC, respectively.
 
Transfer shall mean any direct or indirect sale, exchange, transfer, gift,
encumbrance, assignment, pledge, mortgage, hypothecation or other disposition,
whether voluntary or involuntary.
 
Treasury Regulation shall mean a regulation issued by the United States Treasury
Department and relating to a matter arising under the Code.
 
United States shall mean the United States of America.
 
Updated Capital Account shall mean, with respect to a Member, such Member’s
Capital Account determined as if, immediately prior to the time of
determination, all of the Company’s assets had been sold for Fair Market Value
and any previously unallocated Profits or Losses had been allocated pursuant to
Article 3.
 
Wagering Security and Integrity Standards shall mean those standards approved by
the Board of Managers for the wagering security and integrity operations of the
Company and Third Parties.
 
Withdrawal Event shall have the meaning set forth in Section 7.3.
 
Withdrawn Member shall have the meaning set forth in Section  7.3.
 
XpressBet shall mean any advance deposit wagering service that is Controlled by
MEC.
 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
 
CHURCHILL DOWNS INCORPORATED
 
By:_/s/ William C. Carstanjen___________
                                Name: William C. Carstanjen
                                Title: Executive Vice President
 
 
 
CD CONTENTCO HC, LLC
 
By:__/s/ William C. Carstanjen__________
          Name: William C. Carstanjen
          Title: Vice President
 
 
MAGNA ENTERTAINMENT CORP.
 
By:__/s/ Michael Newman_____________
                                Name: Michael Newman
                                Title: Chief Executive Officer
 
By:___/s/ Joseph DeFrancis____________
                   Name: Joseph DeFrancis
                                Title: Executive Vice President
 
 
MEC CONTENT HOLDCO LLC
 
By:__/s/ Michael Newman_____________
                                Name: Michael Newman
                                Title: Chief Executive Officer
 
By:___/s/ Joseph DeFrancis____________
                                Name: Joseph DeFrancis
                                Title: Executive Vice President
 
15179407.19

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SCHEDULE A
 
MEMBER INFORMATION
 

 
Name and Contact Information
 
Allocation Percentage
 
Initial Capital Commitment
 
CD CONTENTCO HC, LLC; Attn: President
700 Central Avenue
Louisville, Kentucky 40208
 
50
 
$300,000
 
MEC CONTENT HOLDCO LLC; Attn: President
337 Magna Drive
Aurora, Ontario L4G
7K1 Canada
50
 
$300,000
 

 
Before the beginning of each quarter the Board of Managers shall determine the
capital needed by the Company for such quarter and will provide a notice of this
determination to each Member specifying the amount and time of the contribution
for such additional capital (to be borne by CDI Sub and MEC Sub in proportion to
their Allocation Percentages). Both CDI Sub and MEC Sub must make the
contribution required by such capital call on the indicated due date, and
delinquent amounts shall bear interest at a floating rate equal to the prime
rate as announced from time to time by the Bank, compounded daily.
 

 
MANAGERS
 

 
William Carstanjen.
Joseph DeFrancis.
James E. Gay
Michael Neuman.
 

 

 
 

--------------------------------------------------------------------------------

 
 

SCHEDULE B
Licensed Rights
 
A. From the date of the Agreement through the end of the Term, each of CDI and
MEC and their Affiliates shall, for all race meets of each of its race tracks
that commence during the Term, (i) exclusively license to the Company under the
terms of the Agreement such track’s ADW Content Rights, Point to Point Content
Rights and Rebate Content Rights, and (ii) grant to the Company the exclusive
right to sublicense such track’s respective ADW Content Rights, Point to Point
Content Rights and Rebate Content Rights, to any Third Party worldwide, or any
direct or indirect sublicensee of a Third Party, in the case of (i) and (ii)
subject to the contractual obligations existing as of the date hereof as set
forth on Schedule C. For greater clarity the preceding sentence is not intended
to limit the ability of any Member and its Affiliates to use their own ADW
Content Rights, Point to Point Content Rights and Rebate Content Rights, or use
as a permitted licensee the ADW Content Rights, Point to Point Content Rights or
Rebate Content Rights of the other Member and its Affiliates, (i) with respect
to CDI ADW or XpressBet or (ii) with respect to the CDI Tracks or MEC Tracks,
all as more fully set forth in the CDI/MEC Content Exchange Agreement.
 
B. From the date of the Agreement through the end of the Term, CDI and MEC and
their Affiliates grant and license to the Company the right to conduct the
following activities, as the sole and exclusive agent for CDI and MEC and their
Affiliates, subject to the contractual obligations existing as of the date
hereof as set forth on Schedule C:
 

 
1.
Conduct the acquisition of ADW Content Rights from all Third Parties worldwide
for ADW worldwide by CDI ADW and XpressBet

 
2.
Conduct the acquisition of Point to Point Content Rights from all Third Parties
worldwide for Point-to-Point Simulcasting worldwide at CDI Tracks and MEC
Tracks.

 
3.
Conduct the acquisition of Rebate Content Rights from all Third

   
Parties worldwide for Rebating worldwide by CDI and MEC.

 
4.
Sublicense any Third Party Point to Point Content Rights, ADW Content Rights or
Rebate Content Rights made available to CDI, MEC or any of their Affiliates.

 
5.
Sublicense CDI and MEC ADW Content Rights to Third Parties

   
worldwide for ADW worldwide.

 
6.
Sublicense CDI and MEC Point to Point Content Rights to Third

   
Parties worldwide for Point-to-Point Simulcasting worldwide.

 
7.
Sublicense CDI and MEC Rebate Content Rights to Third Parties worldwide for
Rebating worldwide.

 
8.
Conduct the acquisition of Television Rights and Broadband and Mobile Rights
from all Third Parties worldwide for:

   
a. use by HRTV Entity worldwide

   
b. sublicensing outside the Territory as the Board of Managers may determine

 
9.
Sublicense CDI, MEC and Third Party Television Rights and Broadband and Mobile
Rights to Third Parties worldwide; provided, however, that each of CDI and MEC
shall be permitted to sublicense directly its own Broadband and Mobile Rights to
Third Parties worldwide.

 

 
 
 

--------------------------------------------------------------------------------

 

SCHEDULE C
Existing Contractual Obligations
 

 
Date of Expiration
   
Churchill Downs Incorporated
     
ODS Technologies (dba TVG Network) - Hoosier
March 13, 2007
ODS Technologies (dba TVG Network) - Churchill Downs
March 14, 2007
ODS Technologies (dba TVG Network) - Fair Grounds
March 30, 2007
ODS Technologies (dba TVG Network) - Arlington
August 6, 2007
ODS Technologies (dba TVG Network) - Calder
April 15, 2008
   
New York City OTB
December 31, 2007
Western Region OTB
December 31, 2007
Southern Region OTB
December 31, 2007
Catskills Regional OTB
December 31, 2007
Capital Regional OTB
December 31, 2007
Nassau Regional OTB
December 31, 2007
   
Nevada Pari-Mutuel Association
March 31, 2009
   
Customary Simulcast Agreements for Fair Grounds’ 2006/2007 Meet
April 30, 2007

 
 

Magna Entertainment Corp.
     
Ladbroke Xtra
December 31, 2007
SIS
December 31, 2007
Admiral Bet Shops
August 31, 2007
Wettpunk Bet Shops
Month to Month
   
Youbet
30 day notice given anytime after May 1, 2007
AmericaTAB
April 22, 2007
Philly PhoneBet
April 22, 2007
Connecticut OTB
April 22, 2007
   
Customary Simulcast Agreements for the following:
 
     
Gulfstream Park’s 2007 Meet
April 22, 2007
Santa Anita Park’s 2006-07 Meet
April 22, 2007
Golden Gate Field’s 2006-07 Meet
February 11, 2007
Laurel Park’s 2006-07 Meet
April 15, 2007
Portland Meadows’ 2006-07 Meet
May 5, 2007
The Meadows 2006-07 Meet
September 1, 2007
Remington Park’s 2007 Spring Quarterhorse Meet
June 31, 2007
Magna Racino
December 31, 2007
   
CDI and MEC
 
 
Racing World
April 15, 2009

 
The above contractual obligations of CDI and MEC shall not be renewed or
extended after the date of this Agreement, except Racing World may be extended
upon approval of the Board of Managers.