Operating Agreement of Tracknet Media Group, LLC


    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


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    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.