EXHIBIT
      10.23

     

    


    AMENDED
      AND RESTATED OPERATING AGREEMENT

     

    OF

     

    AMERICAN
      RACING AND ENTERTAINMENT, LLC

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

    
      	 	 
	 	
              Page

            
	 	 
	
              ARTICLE
                1. ORGANIZATION AND DEFINITIONS

            	
              1

            
	
              1.1

            	
              Company
                Name

            	
              1

            
	
              1.2

            	
              New
                York Office

            	
              1

            
	
              1.3

            	
              Term

            	
              1

            
	
              1.4

            	
              Foreign
                Qualification

            	
              1

            
	
              1.5

            	
              Definitions

            	
              1

            
	 	 
	
              ARTICLE
                2. PURPOSES AND POWERS

            	
              1

            
	
              2.1

            	
              Principal
                Purposes

            	
              1

            
	
              2.2

            	
              Powers

            	
              2

            
	 	 
	
              ARTICLE
                3. MEMBERSHIP

            	
              2

            
	
              3.1

            	
              Members

            	
              2

            
	
              3.2

            	
              Rights
                of and Restrictions on Members

            	
              2

            
	
              3.3

            	
              Information.

            	
              3

            
	
              3.4

            	
              Meetings

            	
              4

            
	
              3.5

            	
              Votes
                of Members

            	
              4

            
	
              3.6

            	
              Notice
                of Meetings

            	
              4

            
	
              3.7

            	
              Actions
                Without a Meeting

            	
              4

            
	
              3.8

            	
              No
                Resignation or Retirement

            	
              4

            
	
              3.9

            	
              Addition
                of New Members

            	
              4

            
	 	 
	
              ARTICLE
                4. MANAGEMENT

            	
              5

            
	
              4.1

            	
              Management

            	
              5

            
	
              4.2

            	
              Election
                of Board of Directors.

            	
              10

            
	
              4.3

            	
              Officers.

            	
              12

            
	
              4.4

            	
              Devotion
                to Company Business; Conflicts of Interest; Non-Compete.

            	
              12

            
	
              4.5

            	
              Transactions
                between the Company and the Directors, Members and
                Affiliates

            	
              15

            
	
              4.6

            	
              Payments
                to Directors

            	
              16

            
	
              4.7

            	
              Resolution
                of Voting Deadlock

            	
              16

            
	
              4.8

            	
              Consent
                Rights of Oneida

            	
              17

            
	 	 
	
              ARTICLE
                5. PROJECT FINANCING FOR THE GAMING COMPLEXES

            	
              18

            
	
              5.1

            	
              First
                Lien Facilities

            	
              18

            
	
              5.2

            	
              Second
                Lien Facility

            	
              19

            
	
              5.3

            	
              Other
                Debt Financings

            	
              20

            
	
              5.4

            	
              Take-Out
                Loans

            	
              21

            
	 	 
	
              ARTICLE
                6. FAIR MARKET VALUE; INDEPENDENT APPRAISALS

            	
              22

            
	
              6.1

            	
              Fair
                Market Value.

            	
              22

            
	
              6.2

            	
              Independent
                Appraisals

            	
              22

            


    

     

     

    
      
        
        

      

      
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              ARTICLE
                7. CAPITAL CONTRIBUTIONS; LOANS; UNITS

            	
              23

            
	
              7.1

            	
              Initial
                Capital Contributions

            	
              23

            
	
              7.2

            	
              Additional
                Capital Contributions; Advances from Nevada Gold.

            	
              23

            
	
              7.3

            	
              No
                Withdrawal

            	
              26

            
	
              7.4

            	
              No
                Interest on Capital

            	
              26

            
	
              7.5

            	
              Loans
                by Members

            	
              26

            
	
              7.6

            	
              Capital
                Accounts

            	
              27

            
	
              7.7

            	
              Transfer

            	
              27

            
	
              7.8

            	
              Liability
                to Company

            	
              27

            
	
              7.9

            	
              Preemptive
                Right

            	
              27

            
	
              7.10

            	
              Units

            	
              28

            
	
              7.11

            	
              Reimbursement
                Obligations.

            	
              28

            
	 	 
	
              ARTICLE
                8. ALLOCATION OF PROFITS AND LOSSES

            	
              33

            
	
              8.1

            	
              Profits
                and Losses.

            	
              33

            
	
              8.2

            	
              Regulatory
                Allocations.

            	
              34

            
	
              8.3

            	
              Tax
                Credits

            	
              35

            
	 	 
	
              ARTICLE
                9. DISTRIBUTIONS

            	
              35

            
	
              9.1

            	
              Distributions

            	
              35

            
	
              9.2

            	
              Other
                Distributions

            	
              36

            
	
              9.3

            	
              Payment

            	
              36

            
	
              9.4

            	
              Withholding

            	
              37

            
	
              9.5

            	
              Tax
                Distributions

            	
              37

            
	 	 
	
              ARTICLE
                10. REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

            	
              37

            
	
              10.1

            	
              Representations
                and Warranties of Members

            	
              37

            
	
              10.2

            	
              Indemnification.

            	
              40

            
	
              10.3

            	
              Insurance

            	
              43

            
	 	 
	
              ARTICLE
                11. ACCOUNTING AND REPORTING

            	
              43

            
	
              11.1

            	
              Fiscal
                Year

            	
              43

            
	
              11.2

            	
              Accounting
                Method

            	
              43

            
	
              11.3

            	
              Tax
                Elections

            	
              44

            
	
              11.4

            	
              Returns

            	
              44

            
	
              11.5

            	
              Reports

            	
              44

            
	
              11.6

            	
              Books
                and Records

            	
              44

            
	
              11.7

            	
              Banking

            	
              44

            
	
              11.8

            	
              Tax
                Matters Partner

            	
              44

            
	
              11.9

            	
              No
                Partnership

            	
              45

            
	 	 
	
              ARTICLE
                12. DISSOLUTION OF THE COMPANY

            	
              45

            
	
              12.1

            	
              Dissolution

            	
              45

            
	
              12.2

            	
              Events
                of Withdrawal

            	
              45

            
	
              12.3

            	
              Bankruptcy

            	
              46

            


    

     

     

    
      
        
        

      

      
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              ARTICLE
                13. LIQUIDATION

            	
              47

            
	
              13.1

            	
              Liquidation

            	
              47

            
	
              13.2

            	
              Priority
                of Payment

            	
              47

            
	
              13.3

            	
              Distribution
                to Members

            	
              48

            
	
              13.4

            	
              No
                Restoration Obligation

            	
              48

            
	
              13.5

            	
              Liquidating
                Reports

            	
              48

            
	
              13.6

            	
              Articles
                of Dissolution

            	
              48

            
	 	 
	
              ARTICLE
                14. TRANSFER RESTRICTIONS

            	
              49

            
	
              14.1

            	
              General
                Restriction

            	
              49

            
	
              14.2

            	
              No
                Member Rights

            	
              49

            
	
              14.3

            	
              Permitted
                Transferee

            	
              49

            
	
              14.4

            	
              Right
                of First Refusal; Tag-Along Provisions.

            	
              50

            
	
              14.5

            	
              General
                Conditions on Transfers

            	
              51

            
	
              14.6

            	
              Rights
                of Transferees.

            	
              52

            
	
              14.7

            	
              Ownership
                Interests in Members

            	
              53

            
	 	 
	
              ARTICLE
                15. PRIVILEGED LICENSE PROTECTION

            	
              53

            
	
              15.1

            	
              No
                Unsuitability Knowledge

            	
              53

            
	
              15.2

            	
              Regulatory
                Compliance in the State of New York

            	
              53

            
	
              15.3

            	
              Gaming
                Regulations in Jurisdictions Outside of New York.

            	
              54

            
	
              15.4

            	
              Buy-Out
                Provisions.

            	
              54

            
	 	 
	
              ARTICLE
                16. GOVERNING LAW; DISPUTE RESOLUTION

            	
              56

            
	
              16.1

            	
              Governing
                Law

            	
              56

            
	
              16.2

            	
              Disputes

            	
              57

            
	
              16.3

            	
              Negotiation

            	
              57

            
	
              16.4

            	
              Arbitration

            	
              57

            
	 	 
	
              ARTICLE
                17. GENERAL PROVISIONS

            	
              58

            
	
              17.1

            	
              Covenants.

            	
              58

            
	
              17.2

            	
              Amendments

            	
              59

            
	
              17.3

            	
              Confidentiality

            	
              59

            
	
              17.4

            	
              Waiver
                of Partition Right

            	
              59

            
	
              17.5

            	
              Waivers
                Generally

            	
              59

            
	
              17.6

            	
              Equitable
                Relief

            	
              59

            
	
              17.7

            	
              Remedies
                for Breach

            	
              60

            
	
              17.8

            	
              Notices

            	
              60

            
	
              17.9

            	
              Costs

            	
              61

            
	
              17.10

            	
              Partial
                Invalidity

            	
              61

            
	
              17.11

            	
              Survivability
                of the August 24, 2005 Agreement

            	
              62

            
	
              17.12

            	
              Entire
                Agreement

            	
              62

            
	
              17.13

            	
              Binding
                Effect

            	
              62

            
	
              17.14

            	
              Further
                Assurances

            	
              62

            
	
              17.15

            	
              Headings

            	
              62

            
	
              17.16

            	
              Terms

            	
              62

            
	
              17.17

            	
              Effectiveness

            	
              62

            
	
              17.18

            	
              Counterparts

            	
              62

            
	 	 	 


    

     

     

    
      
        
        

      

      
        -iii-

        
          

        

      

      
        
        

      

    

    


    AMENDED
      AND RESTATED OPERATING AGREEMENT

     

    OF

     

    AMERICAN
      RACING AND ENTERTAINMENT, LLC

     

    This
      Amended and Restated Operating Agreement (as amended, restated, supplemented
      or
      otherwise modified from time to time, this “Agreement”) of American Racing and
      Entertainment, LLC (the “Company”), a New York limited liability company, is
      made as of the 1st day of March, 2006, by and among the Persons who have
      executed a counterpart signature page hereto on the date hereof and each other
      Person who may become a party hereto as a Member from time to time in accordance
      with the terms of this Agreement.

     

    NOW,
      THEREFORE, in consideration of the mutual promises of the parties contained
      in
      this Agreement and other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, the Members and the Company agree
      as follows:

     

    ARTICLE
      1. ORGANIZATION AND DEFINITIONS

     

    1.1 Company
      Name.
      The
      business of the Company will be conducted under the name “American Racing and
      Entertainment, LLC” or any other name selected by the Company in accordance with
      governing law.

     

    1.2 New
      York Office.
      The
      Company’s principal place of business is 125 Park Avenue, New York, New York
      10017. The Company may maintain offices at such other place or places within
      or
      outside the State of New York as the Board deems advisable.

     

    1.3 Term.
      The
      Company was formed on the date its Articles of Organization were filed with
      the
      New York Secretary of State (the “Effective Date”) and shall continue until a
      Dissolution may occur.

     

    1.4 Foreign
      Qualification.
      The
      Board shall cause the Company to apply for any required certificate of authority
      to do business in any other state or jurisdiction where it conducts business,
      as
      appropriate.

     

    1.5 Definitions.
      Terms
      used with initial capital letters will have the meanings specified in
Exhibit
      “A,”
      applicable to both singular and plural forms, for all purposes of this
      Agreement.

     

    ARTICLE
      2. PURPOSES AND POWERS

     

    2.1 Principal
      Purposes.
      The
      purposes for which the Company is organized are:

     

    (a)
      to
      own, hold, develop, operate, lease, transfer, sell, exchange, improve or
      otherwise dispose of all or any part of the Tioga Downs Complex;

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    (b)
      to
      acquire, own, hold, develop, operate, lease, transfer, sell, exchange, improve
      or otherwise dispose of all or any part of the Vernon Downs
      Complex;

     

    (c)
      to
      enter into and perform contracts of any kind necessary to, in connection with
      or
      incidental to the accomplishment of the foregoing purposes;

     

    (d)
      to
      incur Debt from any source, including without limitation any Member or Affiliate
      of a Member, to accomplish the foregoing purposes or to meet the obligations
      of
      the Company; to issue evidences of the Company’s Debt to repay such borrowings;
      and to grant security interests in the Company’s assets to secure repayment of
      such Debt; and

     

    (e)
      to do
      all other things necessary, desirable or conducive to the accomplishment of
      the
      aforesaid purposes or otherwise contemplated by this Agreement.

     

    The
      Company is a single-purpose venture and is intended to engage in no business
      or
      project other than those described above regarding the Tioga Downs Complex
      and
      the Vernon Downs Complex, subject to the terms of Section 4.4(d). Title to
      all
      Company property shall be held in the name of the Company or a subsidiary of
      the
      Company.

     

    2.2 Powers.
      The
      Company has all of the powers granted to a limited liability company under
      the
      Act, as well as all powers necessary or convenient to achieve its purposes
      and
      to further its Business.

     

    ARTICLE
      3. MEMBERSHIP

     

    3.1 Members.
      The
      Members of the Company are listed on the attached Exhibit
      3.1,
      and the
      Units held by (and the Percentage attributable thereto), and the Capital
      Contributions made and committed by, each such Member are set forth on
Exhibit
      3.1,
      as
      amended from time to time. The Board shall be required to update Exhibit 3.1
      from time to time as necessary to accurately reflect the information therein.
      Any amendment or revision to Exhibit 3.1 made in accordance with this Agreement
      shall not be deemed an amendment to this Agreement. Any reference in this
      Agreement to Exhibit 3.1 shall be deemed a reference to Exhibit 3.1 as amended
      and in effect from time to time.

     

    3.2 Rights
      of and Restrictions on Members.
      No
      Member will:

     

    (a)
      Be
      personally liable for any of the debts, obligations or losses (including
      deficits in its Capital Account except as specifically provided herein) of
      the
      Company or the other Members, except as otherwise provided in the Act or an
      agreement signed by the Member to be subjected to any individual
      liability;

     

    (b)
      Be
      assessed or required to make any Capital Contributions except as provided in
      Section 7.2 hereof;

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    (c)
      Except as specifically set forth herein or as otherwise approved by the Members,
      have the authority or power to act for or on behalf of the Company, to do any
      act that would be binding on the Company, or to incur any expenditures on behalf
      of the Company;

     

    (d)
      Except as specifically set forth herein or as otherwise approved by the Members,
      be entitled to be paid any salary or to have a Company drawing
      account;

     

    (e)
      Be
      entitled to receive any interest on any Capital Contribution or Capital
      Account;

     

    (f)
      Be
      entitled to a partition of any property of the Company;

     

    (g)
      Except as expressly provided to the contrary herein, be entitled to priority
      over any Member, either as to a return of its Capital Contribution or as to
      allocations of revenues, gains, costs, expenses, losses or Distributions;
      or

     

    (h)
      Be
      entitled to a return of, or to a withdrawal of, all or any part of its
      contributions to the Company, except to the extent that the Members may be
      entitled to Distributions pursuant to the express provisions of this Agreement,
      and (unless otherwise provided) no Member shall have any right to demand or
      receive property other than cash in return for its contributions, and its right
      to receive cash shall be, and is hereby expressly limited and controlled by
      the
      terms of this Agreement.

     

    3.3 Information.

     

    (a)
      In
      addition to the other rights specifically set forth in this Agreement, each
      Member is entitled to all information to which that Member is entitled to have
      access pursuant to the Act under the circumstances and subject to the conditions
      therein stated.

     

    (b)
      The
      Members acknowledge that, from time to time, they may receive information from
      or regarding the Company in the nature of trade secrets or that otherwise is
      confidential, the release of which may be damaging to the Company or Persons
      with which it does business. Each Member will hold in strict confidence any
      information it receives regarding the Company that is identified as being
      confidential (and if that information is provided in writing, that is so marked)
      and may not disclose it to any Person other than another Member or a Director
      except for disclosures (i) compelled by law (but the Member must notify the
      Board promptly of any request for that information, before disclosing it if
      practicable), (ii) required under the securities laws, (iii) to advisers or
      representatives of the Member or Persons to whom any of that Member’s Units may
      be transferred as permitted by this Agreement, but only if the recipients have
      agreed to be bound by the provisions of this Section 3.3(b), (iv) of information
      that such Member also has received from a source independent of the Company
      that
      the Member reasonably believes obtained that information without breach of
      any
      obligation of confidentiality (v) to obtain or renew any Gaming License or
      to
      prevent any Gaming License from being revoked, suspended or subjected to
      conditions, or (vi) as otherwise permitted under this Agreement. The Members
      acknowledge that breach of the provisions of this Section 3.3(b) may cause
      irreparable injury to the Company for which monetary damages are inadequate,
      difficult to compute, or both. Accordingly, the Members agree that the
      provisions of this Section 3.3(b) may be enforced by specific
      performance.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    3.4 Meetings.
      Special
      meetings of the Members shall be held at the Company’s principal place of
      business in New York, or such other place approved by the Members. There shall
      be no regularly scheduled meetings of the Members of the Company. A special
      meeting of the Members may be called by any Member.

     

    3.5 Votes
      of Members.
      Unless
      otherwise provided in this Agreement or in the Act or other applicable law,
      any
      decision or approval required of the Members as a group pursuant to this
      Agreement shall require approval of the Members holding at least 75% of the
      outstanding Units.

     

    3.6 Notice
      of Meetings.
      Written
      notice of a meeting of the Members shall be given to each Member not less than
      three (3) days nor more than thirty (30) days before the date of the meeting,
      unless waived by all of the Members; provided, however, if the immediate
      attention of the Members to a matter is required, then twenty four hours (24)
      notice, or such shorter notice if reasonable under the circumstances, shall
      be
      given. The notice shall state the place, date and hour of the meeting and the
      general nature of the business to be transacted.

     

    3.7 Actions
      Without a Meeting.
      Any
      action that may be taken at any meeting of Members may be taken without a
      meeting and without prior notice if a consent in writing, setting forth the
      action so taken, shall be signed and delivered to the Board by all Members.
      Any
      Member giving a written consent may revoke such consent by a writing received
      by
      the Board prior to the time that the Board has received written consents of
      all
      Members.

     

    3.8 No
      Resignation or Retirement.
      Each
      Member agrees not to voluntarily resign or retire as a Member in the Company,
      other than as a result of a Transfer of all of such Member’s Units pursuant to,
      and in accordance with, this Agreement. However, if such voluntary resignation
      or retirement occurs in contravention of this Agreement, the withdrawing Member
      will, without further act, become a Transferee of its Units (with the limited
      rights of a Transferee that is not
      a
      Permitted Transferee as set forth in Section 14.6(b) hereof). Any Member who
      resigns or retires from the Company in contravention of this Agreement will
      be
      liable to the Company and the other Members for proven monetary damages (but
      any
      such action or proposed action to resign or retire will not be subject to any
      equitable action for injunctive relief or specific performance except as
      permitted under Section 17.6).

     

    3.9 Addition
      of New Members.
      Subject
      to (a) the requisite approval of the Board in accordance with Section 4.1(b)(v)
      or Section 4.1(d)(iv) (as applicable), (b) the prior written approval of all
      of
      the Members in the case of an issuance of Units authorized by the Board pursuant
      to Section 4.1(b)(v) and (c) full compliance by the Company with Section 7.9
      in
      the case of an issuance of Units authorized by the Board pursuant to Section
      4.1(d)(iv), the Board may, from time to time in its discretion, authorize and
      cause the Company to issue and sell Units to any Person that is not a Member
      and
      admit any such Person as Member, subject to the compliance by such Person with
      the provisions of Section 14.5 hereof as if such Person was a Transferee of
      Units. Any Person that purchases Units from the Company pursuant to this Section
      3.9 and is admitted by the Company as a Member shall be considered a Permitted
      Transferee for all purposes of this Agreement.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      4. MANAGEMENT

     

    4.1 Management.
      The
      overall business and affairs of the Company shall be managed by a Board of
      Directors (the “Board”), which, except as otherwise provided in this Agreement,
      shall have full and complete charge of all facets of the overall business
      affairs of the Company, and the overall management and control of the Company’s
      business shall rest exclusively with the Board. Any decision by the Board shall
      require the affirmative vote of a majority of the directors (except as provided
      in Section 4.1(b)), and shall bind the Company and the Members; provided that
      certain decisions require the consent of Oneida pursuant to Section 4.8 hereof.
      The Board, acting as a body pursuant to this Agreement, shall constitute a
      “manager” for purposes of the Act. No Director, in such capacity, acting singly
      or with any other Director, shall have any authority or right to act on behalf
      of or bind the Company, other than by exercising the Director’s voting power as
      a member of the Board, unless (subject to the provisions of Section 4.8 hereof
      and any other provisions of this Agreement) specifically authorized by the
      Board
      in each instance. No Director shall represent himself or herself as a manager
      of
      the Company. Subject to the provisions of Section 4.8 hereof and any other
      provisions of this Agreement, the Board shall make all Unanimous Decisions,
      Major Decisions and Non-Arbitrable Decisions.

     

    (a)
      Decisions other than Unanimous Decisions, Major Decisions and Non-Arbitrable
      Decisions may be made and related acts taken, subject to the provisions of
      Section 4.8 hereof: (x) as provided in this Agreement; or (y) if not
      specifically provided in this Agreement, by the President, subject to the
      monetary limitations of the Budgets, or the Board (by majority vote unless
      unanimous vote is specifically required by this Agreement) in the event there
      is
      no President; or (z) as delegated by any contract entered into by the Company
      (including, without limitation, the Management Agreements).

     

    (b)
      “Unanimous Decisions” shall mean decisions to:

     

    (i) invest
      in
      or operate any business other than the Tioga Downs Complex and the Vernon Downs
      Complex;

     

    (ii) make
      any
      single voluntary expenditure in excess of $250,000 unless such expenditure
      is
      provided for in the Cost Budget or Annual Plan and Operating Budget (a voluntary
      expenditure shall not include an expenditure which (A) is necessary to comply
      with applicable laws, rules, regulations and orders; (B) is in defense of the
      Company’s interests in any proceedings in any court, before any governmental
      agency, or in arbitration; (C) is necessary to comply with any contractual
      or
      other Company obligations); or (D) any fee, cost or expense incurred or to
      be
      paid by the Company in connection with the RCG/VSM Loans.

     

    (iii) during
      the nine (9) month period commencing on the opening of the Tioga Downs Complex,
      approve any capital expenditure in excess of those set forth in the Cost Budget
      for the Tioga Downs Complex, it being agreed that any approved capital
      expenditures will not actually be made until twelve (12) months following the
      opening of the Tioga Downs Complex;

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    (iv) during
      the nine (9) month period commencing on the opening of the Vernon Downs Complex,
      approve any capital expenditure in excess of those set forth in the Cost Budget
      for the Vernon Downs Complex, it being agreed that any approved capital
      expenditures will not actually be made until twelve (12) months following the
      opening of the Vernon Downs Complex; and

     

    (v) issue
      Units to any Person and to establish the Price Per Unit in connection with
      any
      such issuance, the primary purpose of such issuance is any reason other than
      to
      raise additional capital required by the Company to facilitate the business
      needs of the Company or to fund the expansion of the Gaming Complexes (or either
      of them); provided that the Company shall not issue any Units that are
      authorized by this Section 4.1(b)(v) without the prior written approval of
      all
      of the Members.

     

    (c)
      “Major Decisions” shall mean decisions to:

     

    (i) select
      the president of the Company, and approve the General Manager selected by Nevada
      Gold and the Racing Manager selected by Southern Tier;

     

    (ii) approve
      the Final Plans and Specifications for improvements to the Vernon Downs Complex
      (it being acknowledged that the Final Plans and Specifications for the Tioga
      Downs Complex have been approved), a Material Modification (but a nonmaterial
      amendment or modification shall not be a Major Decision) or any change order
      to
      any construction contract relating to the Tioga Downs Complex or the Vernon
      Downs Complex;

     

    (iii) after
      the
      expiration of the nine (9) month period commencing on the opening of the Tioga
      Downs Complex, approve any capital expenditure in excess of those set forth
      in
      the Cost Budget for the Tioga Downs Complex, it being agreed that any approved
      capital expenditures will not actually be made until twelve (12) months
      following the opening of the Tioga Downs Complex;

     

    (iv) after
      the
      expiration of the nine (9) month period commencing on the opening of the Vernon
      Downs Complex, approve any capital expenditure in excess of those set forth
      in
      the Cost Budget for the Vernon Downs Complex, it being agreed that any approved
      capital expenditures will not actually be made until twelve (12) months
      following the opening of the Vernon Downs Complex;

     

    (v) approve
      the Cost Budgets, Annual Plan and Operating Budget;

     

    (vi) allocate
      a condemnation award or casualty insurance or title insurance proceeds among
      the
      various items of property taken (if not allocated by the condemnee, insurer
      or
      judicial or other authority making such award);

     

    
      
        
        

      

      
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    (vii) enter
      into a general construction contract and/or the architectural contract for
      any
      material portion of either Gaming Complex;

     

    (viii) subject
      to the provisions of Section 4.5, enter into any contracts with or pay any
      compensation to a Member or Director or any Affiliate of a Member, other than
      pursuant to the Management Agreements or other arrangements contemplated in
      this
      Agreement;

     

    (ix) commence,
      discontinue, settle, compromise, submit to arbitration, or participate in any
      single or related series of actions in the nature of legal proceedings in any
      court, before any governmental agency, or in arbitration, or, other than actions
      arising out of the ordinary course of business, involving any potential
      liabilities to, or claims by or against, the Company not covered by insurance
      or
      within the deductible amount of any insurance policy, the cost of which, if
      lost
      or settled, would not exceed One Hundred Thousand Dollars ($100,000.00),
      adjusted annually on each anniversary of the Effective Date, to provide for
      increases, but not decreases, in the Consumer Price Index;

     

    (x) select
      (or change) attorneys, accountants or other professionals to render legal,
      accounting or other professional services to the Company, it being agreed that
      the Board has selected Friedman, LLP as the accountants for the Company;
      and

     

    (xi) subject
      to the provisions of Section 4.5, approve a proposed transaction between the
      Company, on the one hand, and a Member or an Affiliate of a Member, on the
      other
      hand.

     

    (d)
      “Non-Arbitrable Decisions” shall mean decisions to:

     

    (i) elect
      to
      dissolve the Company under Section 12.1;

     

    (ii) sell,
      assign, transfer, hypothecate, pledge, lease, encumber or otherwise dispose
      of,
      in a single transaction or related series of transactions, all or any portion
      of
      either Gaming Complex (or both Gaming Complexes) or enter into any agreement
      to
      do so, except as specifically set forth in the Management Agreements and any
      easements, rights-of-way or title encumbrances incidental to the development
      of
      either Gaming Complex;

     

    (iii) incur
      Debt other than (A) Debt provided for in a Cost Budget; (B) Debt provided for
      in
      an Operating Budget; (C) Debt provided in an approved budget for future
      development; (D) trade debt incurred in the ordinary course of business; (E)
      Debt imposed by law; (F) Debt incurred under any contract, loan document, lease
      or other agreement authorized pursuant to this Agreement; (G) Debt in respect
      of
      a Take-Out Loan required to be incurred pursuant to Section 5.4(a); or (H)
      Debt
      incurred pursuant to Section 7.11 or Section 7.12.

     

    
      
        
        

      

      
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    (iv) elect
      to
      (A) have the Members make additional Capital Contributions to the Company
      pursuant to Section 7.2(a) hereof by requiring the Members to purchase
      additional Units pursuant to Section 7.2(c) hereof or (B) issue or sell
      additional Units in accordance with Section 7.9 of this Agreement, and in each
      case establish the Price Per Unit in connection with any such required purchase,
      issuance or sale;

     

    (v) construct
      any improvements on a Project Site, other than the work shown on the Final
      Plans
      and Specifications, any Material Modifications and any work approved as part
      of
      an Annual Plan or required by law;

     

    (vi) enter
      into any management agreement other than the Management Agreements; or (B)
      enter
      into any amendment or modification of the Management Agreements;
      and

     

    (vii) commence,
      discontinue, settle, compromise, submit to arbitration, or participate in any
      single or related series of actions in the nature of legal proceedings in any
      court, before any governmental agency, or in arbitration, or other than actions
      arising out of the ordinary course of business, involving any potential
      liabilities to, or claims by or against, the Company not covered by insurance
      or
      within the deductible amount of any insurance policy, the cost of which, if
      lost
      or settled, would exceed One Hundred Thousand Dollars ($100,000.00), adjusted
      annually on each anniversary of the Effective Date, to provide for increases,
      but not decreases, in the Consumer Price Index.

     

    (e)
      If
      the Board is unable to reach a majority decision with respect to a Major
      Decision, any Member may submit the matter to the procedures for resolving
      deadlocks, including binding arbitration, in accordance with Section
      4.7.

     

    (f)
      If
      the Board is unable to reach a majority decision with respect to a
      Non-Arbitrable Decision, the Company shall not undertake the related action,
      except that any Member may, after providing a Notice to the other Members and
      subject to Section 4.8 hereof and any other provisions of this Agreement, cause
      the Company to take such action to the extent it, in good faith, determines
      that
      such action: (i) is necessary to comply with applicable laws, rules, regulations
      and orders; (ii) is in defense of the Company’s interests in any proceedings in
      any court, before any governmental agency, or in arbitration; or (iii) is
      necessary to comply with any contractual or other Company
      obligations.

     

    (g)
      The
      Final Plans and Specifications (prepared by Climans, Green, Liang Architects,
      Inc.) and the Cost Budget for the Tioga Downs Complex have been approved by
      the
      Board. The Conceptual Plans and Specifications, and the Cost Budget for the
      Vernon Downs Complex have been approved by the Board. It is anticipated that
      the
      Board will (i) cause to be performed a cost benefit analysis of making capital
      improvements to the 47,700 square foot grandstand at the Vernon Downs Complex
      and, (ii) upon reviewing the results of such analysis, make a decision (under
      either Section 4.1(b)(iv) or Section 4.1(c)(iv)) as to whether to approve the
      capital expenditures for such improvements.

     

    
      
        
        

      

      
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    (h)
      The
      Management Company shall annually prepare, for the Board’s review, an Annual
      Plan for each Gaming Complex (the “Annual Plan”). Southern Tier shall have
      certain rights to approve matters in the Annual Plan affecting the Racing
      Operations as provided in Section 4.5 hereof. The Annual Plan for the first
      whole or partial Fiscal Year following the date the Company opens a Gaming
      Complex for business will be prepared by the Management Company and presented
      to
      the Board not less than sixty (60) days before the anticipated opening date
      of
      the Gaming Complex except as otherwise provided in the applicable Management
      Agreement. The Annual Plan for each subsequent Fiscal Year shall be prepared
      and
      submitted to the Board not later than sixty (60) days before the beginning
      of
      such Fiscal Year.

     

    The
      Annual Plan for each Gaming Complex will be comprised of the
      following:

     

    (i) a
      statement of the estimated income and expenses of the Gaming Complex for the
      coming Fiscal Year, such statement to reflect the estimated income and expenses
      during each month of the subject Fiscal Year;

     

    (ii) either
      as
      part of the statement of the estimated income and expenses referred to in the
      preceding clause (i), or separately, budgets for:

     

    (A) repairs
      and maintenance;

     

    (B) capital
      replacements and improvements; and

     

    (C) equipment
      purchases or leases;

     

    (iii) a
      business and marketing plan for the subject Fiscal Year including, without
      limitation:

     

    (A) room
      rates (if applicable), food and beverage pricing and other charges to persons
      using the Gaming Complex; and

     

    (B) an
      advertising and marketing plan for the Gaming Complex as a whole;
      and

     

    (iv) the
      Minimum Balance (as defined in the applicable Management Agreement) which must
      remain in the Bank Account (as defined in the applicable Management Agreement)
      as of the end of each month during the Fiscal Year to assure sufficient monies
      for working capital purposes and other expenditures authorized under the Annual
      Plan.

     

    The
      “Operating Budget” shall mean the budgeted expenses approved under clauses (i),
      (ii), and (iii) above. References to budgeted items contained in the Annual
      Plan
      shall refer to the expenses for such items set forth in the Operating
      Budget.

     

    In
      connection with the submission of the Annual Plan, the Board will meet within
      twenty (20) days after the proposed Annual Plan is delivered to have an in-depth
      review, including, after the first full Fiscal Year, a comparison with the
      previous Fiscal Year’s performance of the Gaming Complex and a discussion of
      proposed expenditures contained in the Operating Budget.

     

    
      
        
        

      

      
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    It
      is the
      intention of the Board to complete the review and approval of the proposed
      Annual Plan no later than thirty (30) days prior to: (x) the opening date of
      the
      Gaming Complex; and (y) the commencement of each Fiscal Year thereafter. The
      majority of the Board shall be required to approve each proposed Annual Plan.
      If
      a majority of the Board does not approve the proposed Annual Plan, the
      undisputed portions of the proposed Annual Plan shall be operative. In the
      case
      of any Annual Plan after the Annual Plan for the first full Fiscal Year, the
      item corresponding to the disputed item and contained in the Annual Plan for
      the
      preceding Fiscal Year shall be substituted in lieu of the disputed portions
      of
      the proposed Annual Plan. In each instance where portions of the Annual Plan
      from the preceding Fiscal Year are deemed to be the Annual Plan in effect until
      a new Annual Plan is approved, the Operating Budget expense contained in the
      Annual Plan for the preceding Fiscal Year shall be automatically increased
      by a
      percentage equal to the percent of increase in the Consumer Price Index during
      the preceding Fiscal Year. If, notwithstanding such Consumer Price Index
      increase, the Board does not reach agreement as to a mutually acceptable Annual
      Plan within thirty (30) days prior to: (x) the opening date of the Gaming
      Complex; or (y) the commencement of each Fiscal Year thereafter, as the case
      may
      be, the item(s) of the Annual Plan that are in dispute shall be submitted to
      and
      resolved by arbitration in accordance with Section 4.7.

     

    4.2 Election
      of Board of Directors. 

     

    (a)
      Number,
      Term and Qualifications.
      The
      Board of Directors shall be comprised of five members (each, a “Director”). Each
      Member (other than Nevada Gold) shall have the right to designate one member
      to
      the Board. Nevada Gold shall have the right to designate two members to the
      Board. Any individual designated as a member to the Board by a Member pursuant
      to this Section 4.2(a) shall be referred to herein as such Member’s “Designee”.
      Each of the Members agrees to vote or express consent with respect to all of
      their respective Units in favor of the election of a slate of Directors
      consisting of individuals meeting the requirements of this Section 4.2. The
      number of Directors of the Company, and the manner of designation and election
      of such Directors, may only be changed by unanimous vote of all Members, except
      as specifically provided in Section 7.2 of this Agreement or elsewhere in this
      Agreement. Notwithstanding the foregoing, no Member shall have the right to
      designate a member to the Board, and such Member’s Designee shall be removed
      from the Board, if that Member’s Percentage is less than 10%, in which event the
      number of Directors on the Board shall be reduced by a corresponding number
      of
      Directors.

     

    (b)
      Designation
      of Observer by Oneida.
      If
      Oneida elects not to designate a member to the Board or if Oneida removes its
      Designee and elects not to designate a new member to the Board, then Oneida
      shall send a Notice to the other Members of such election. After such election
      is made, Oneida shall be entitled to have a representative (an “Observer”)
      attend all meetings of the Board or any committee of the Board. In such event,
      subject to the last sentence of this clause (b), the Board shall be reduced
      to
      four members. The Observer shall be entitled to receive notice of all meetings
      of the Board (or any committee of the Board) at the same time and in the same
      manner as such notices are required to be given to members of the Board (or
      any
      committee of the Board) and all materials that are distributed to the members
      of
      the Board (or any committee of the Board), including minutes of any meeting,
      on,
      prior to or after any such meetings shall be distributed to the Observer in
      the
      same manner and at the same time that such materials are provided to members
      of
      the Board (or any committee of the Board). In addition, if the Company proposes
      to take any action by written consent in lieu of a meeting of the Board (or
      of
      any committee of the Board), the Company shall give written notice thereof
      to
      the Observer at the same time and in the same manner that it circulates or
      delivers such written consent to the members of the Board (or any committee
      of
      the Board). All out-of-pocket costs of the Observer incurred in connection
      with
      the attendance by the Observer at any meeting of the Board (or any committee
      of
      the Board) shall be paid by the Company to the same extent as the Company is
      required to pay such costs of members of the Board (or any committee of the
      Board). Any election by Oneida to have an Observer in lieu of designating a
      member to the Board shall not preclude Oneida from designating a member to
      the
      Board at any future time upon Notice to the other Members, in which event the
      Board shall automatically be increased to five members upon the effective date
      of such Notice; provided that Oneida shall only be entitled to have a Designee
      or an Observer, but not both at the same time.

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    (c)
      Resignation.
      Any
      Director may resign at any time by giving written notice to the Company. The
      resignation of any Director shall take effect three (3) business days following
      receipt of that notice or at such later time as shall be specified in the
      notice. Unless otherwise specified in the notice, the acceptance of the
      resignation shall not be necessary to make it effective.

     

    (d)
      Removal.
      Any
      Director may be removed at any time, with or without Cause, by the vote of
      the
      Member entitled to designate such Director. A finding of Cause or unsuitability
      of a Director to engage in gaming by any Gaming Authority shall result in the
      immediate removal of such Director without further action by the
      Members.

     

    (e)
      Vacancies.
      If a
      vacancy occurs for any reason in the Board, the Member who designated the
      vacated Director shall have the right to designate another person to fill that
      vacancy.

     

    (f)
      Committees.
      The
      Board may from time to time establish one or more committees of the Board,
      which
      shall have such authority as shall be determined from time to time by the Board.
      The Designee designated by Oneida shall have the right to become a member of
      any
      committee of the Board.

     

    (g)
      Meetings
      of the Board.
      Regular
      meetings of the Board shall be held on a quarterly basis. Special meetings
      of
      the Board may be called by any Director. All meetings shall be held upon at
      least two (2) days’ notice by mail, notice delivered personally or by telephone,
      telegraph, facsimile or electronic mail, to the Directors setting forth the
      time
      and location of such meeting; provided, however, if the immediate attention
      of
      the Board to a matter is required, then twenty four (24) hours notice, or such
      shorter notice if reasonable under the circumstances, shall be given. Notice
      of
      a special meeting shall also state the purpose or purposes for which such
      meeting is called. Notice of a meeting need not be given to any Director who
      signs a waiver of notice or a consent to holding the meeting (which waiver
      or
      consent need not specify the purpose of the meeting) or an approval of the
      minutes thereof, whether before or after the meeting, or who attends the meeting
      without protesting, prior to its commencement, the lack of notice to such
      Director. All such waivers, consents and approvals shall be filed with the
      Company records or made a part of the minutes of the meeting. A majority of
      the
      Directors present may adjourn any meeting to another time. If the meeting is
      adjourned for more than twenty-four (24) hours, notice of any adjournment shall
      be given prior to the time of the adjourned meeting to the Directors who are
      not
      present at the time of the adjournment. Meetings of the Board may be held at
      the
      Company’s principal place of business in New York or such other place as may be
      approved by the Board. Directors may participate in a meeting through use of
      conference telephone or similar communications equipment, so long as all
      Directors participating in such meeting can hear one another. Participation
      in a
      meeting in such manner constitutes presence in person at such meeting. Any
      Major
      Decision, any Non-Arbitrable Decision and any other decision to be made by
      the
      Board under this Agreement requires the affirmative vote of a majority of the
      entire Board cast in favor of that decision (each Director having one vote).
      Notwithstanding the foregoing, any Unanimous Decision requires the affirmative
      vote of the entire Board cast in favor of that Unanimous Decision.

     

    
      
        
        

      

      
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    (h)
      Quorum.
      A quorum
      shall exist when a majority of the Directors are present.

     

    (i)
      Written
      Consent.
      Any
      action required or permitted to be taken by the Board may be taken by the Board
      without a meeting if all of the Directors consent in writing to such action.
      Such action by written consent shall have the same force and effect as a vote
      at
      a duly constituted meeting of the Board.

     

    4.3 Officers.

     

    (a)
      Appointment
      of Officers.
      The
      Company may at any time appoint such officers as it deems necessary or advisable
      for the operation of the business of the Company. Subject to approval of all
      compensation in accordance with Section 4.1(c), Directors may serve as officers.
      The officers shall serve at the pleasure of the Company, subject to all rights,
      if any, of an officer under any contract of employment. Any individual may
      hold
      any number of offices. The officers shall exercise such powers and perform
      such
      duties as shall be determined from time to time by the Company.

     

    (b)
      Removal
      and Resignation.
      Subject
      to the rights, if any, of an officer under a contract of employment, any officer
      may be removed, either with or without cause, by the Company at any time. Any
      officer may resign at any time by giving notice to the Board. Any resignation
      shall take effect upon receipt of that notice or at any later time specified
      in
      that notice; and, unless otherwise specified in that notice, the acceptance
      of
      the resignation shall not be necessary to make it effective.

     

    4.4 Devotion
      to Company Business; Conflicts of Interest; Non-Compete.

     

    
      
        
        

      

      
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    (a)
      The
      Members and the Directors shall devote such time to the Company’s Business as
      they deem reasonably necessary in furtherance of, and shall exercise their
      best
      judgment in all matters relating to, the Company’s Business. However, except as
      provided in this Section 4.4(a) (i.e., except for gross negligence, fraud,
      bad
      faith, breach of this Agreement or criminal conduct), no Member or Director
      shall have liability to the Company or to the Members for any failure or
      misfeasance on the part of such Member or Director whatsoever including, without
      limitation, a failure or misfeasance with respect to any Member’s or Director’s
      obligations under this Agreement. Without limiting the generality of the
      foregoing, the Company recognizes that innumerable decisions will have to be
      made by the Members and the Directors during the term of the Company which
      will
      require the Members and the Directors to exercise broad discretion. Accordingly,
      each of the Members hereby waives its right to institute any legal proceeding
      of
      any kind whatsoever against another Member or a Director for any action taken
      by, or any omission of, a Member or Director in its capacity as a Member or
      Director of the Company, except for gross negligence, bad faith, fraud, breach
      of this Agreement or criminal conduct.

     

    (b)
      Each
      of the Members understands that the other Members or their Affiliates (including
      their designees to the Board) may be interested, directly or indirectly, in
      various other businesses and undertakings including those in competition with
      the Company. The Members hereby agree that the creation of the Company and
      the
      assumption by each of the Members of its duties hereunder shall be without
      prejudice to its rights (or the rights of its Affiliates) to have such other
      interests and activities and to receive and enjoy profits or compensation
      therefrom, and each Member waives any rights it might otherwise have to, by
      reason of any duty otherwise owed to the Company or its Members, prevent or
      share or participate in such other interests or activities of the other Members
      or any of the other Members’ Affiliates. The Members and their Affiliates may
      engage in or possess any interest in any other business venture of any nature
      or
      description independently or with others, including, but not limited to, the
      ownership, financing, leasing, operation, management, syndication, brokerage,
      or
      development of real property racetrack and/or and gaming facilities, and neither
      the Company nor any other Member shall have the right by virtue of this
      Agreement or otherwise to prevent or participate in any such venture or the
      income or profits derived therefrom.

     

    (c)
      No
      Member need disclose to any other Member or the Company any other business
      venture in which it or its Affiliates may have an interest or any other business
      opportunity presented to it, even if such opportunity is of a character which,
      if presented to the Company, could be taken by the Company, and each Member
      and
      its Affiliates shall have the right to take for its own account or to recommend
      to others any such particular investment opportunity or business
      venture.

     

    
      
        
        

      

      
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    (d)
      Notwithstanding the foregoing provisions of this Section 4.4, during the
      forty-eight (48) month period ending November 8, 2009 (the “Non-Compete
      Period”), but not thereafter, any and all opportunities to acquire, own,
      develop, operate and/or manage projects in the Harness Racing and VLT industry
      in New York State (“New York Harness Racing/VLT Opportunities”) shall be
      business opportunities of the Company and the Members shall owe the Company
      a
      fiduciary duty with respect to New York Harness Racing/VLT Opportunities. The
      Members each agree for themselves and their respective Affiliates, not to engage
      or invest in, independently or with others, any New York Harness Racing/VLT
      Opportunities during the Non-Compete Period, unless and until the Company,
      by
      unanimous vote of the Board has elected not to pursue such New York Harness
      Racing/VLT Opportunity (or if the Board does so unanimously approve such New
      York Harness Racing/VLT Opportunity, but Oneida does not provide its consent
      pursuant to Section 4.8); provided, that a vote of the Board shall be held
      within fifteen (15) days after receipt by the Board of all information related
      to such New York Harness Racing/VLT Opportunity from the Member(s) presenting
      the New York Harness Racing/VLT Opportunity to the Company (the “Presenting
      Member(s)”). If either (x) the Board does not unanimously approve the pursuit of
      such New York Harness Racing/VLT Opportunity within the 15-day period described
      above or (y) Oneida does not consent to such New York Harness Racing/VLT
      Opportunity pursuant to Section 4.8, then the Presenting Member(s) shall be
      free
      to pursue the New York Harness Racing/VLT Opportunity on its own behalf.
      Anything in this Section 4.4(d) or elsewhere in this Agreement or under
      applicable law to the contrary notwithstanding, Oneida and its Affiliates shall
      not be bound by the restrictions or other obligations set forth in this Section
      4.4(d) except as provided below, and each Member hereby acknowledges and agrees
      (and each Person that becomes a Member of the Company shall be deemed to have
      acknowledged and agreed upon such Person becoming a Member) that (i) Oneida
      and
      its Affiliates shall in no way be prohibited or otherwise restricted from
      acquiring, owning, developing, operating, managing or investing in any New
      York
      Harness Racing/VLT Opportunities, or (ii) engaging with, investing in, lending
      to or otherwise associating or participating with, any other Person that does
      anything described in clause (i) of this sentence, provided that Oneida and
      its
      Affiliates agree that, to the extent that either (A) each of the Designees
      of
      the Members (other than the Designee designated by Oneida (if any)) has approved
      the pursuit of a New York Harness Racing/VLT Opportunity by the Company but
      the
      Designee designated by Oneida (if any) does not so approve the transaction
      or
      (B) the Board unanimously approves the pursuit of a New York Harness Racing/VLT
      Opportunity but Oneida fails to consent to the pursuit of such New York Harness
      Racing/VLT Opportunity pursuant to Section 4.8, then Oneida and its Affiliates
      agree that they will not invest in, lend to or otherwise associate or
      participate in such New York Harness Racing/VLT Opportunity during the
      Non-Compete Period if, and only if, the Presenting Member(s) elect(s) to pursue
      such New York Harness Racing/VLT Opportunity, and continue(s) to diligently
      pursue such New York Harness Racing/VLT Opportunity, immediately after the
      expiration of the 15-day period referred to above or the date after which Oneida
      fails to provide its consent pursuant to Section 4.8 (as applicable); provided,
      however, that the restriction contained in the immediately preceding proviso
      shall not be applicable to any New York Harness Racing/VLT Opportunity of which
      Oneida can demonstrate in good faith that it had knowledge prior to the time
      the
      Presenting Member(s) has (have) presented to the Board all information related
      to such New York Harness Racing/VLT Opportunity as required above.

     

    (e)
      Anything in this Agreement to the contrary notwithstanding, in the event that
      (i) the effective date under the Third Modified Amended Joint Plan of
      Reorganization Proposed by Mid-State Raceway, Inc., Mid-State Development
      Corporation and Vernon Downs Acquisition, LLC dated as of September 13, 2005
      (the "Plan"), has not occurred on or prior to June 1, 2006, (ii) any other
      Person submits to the bankruptcy court for approval a disclosure statement
      for a
      plan of reorganization of Mid-State Raceway, Inc. and Mid-State Development
      Corporation (a “Competing Plan”), (iii) in the good faith judgment of Oneida,
      the Members (other than Oneida) are not using all commercially reasonable
      efforts to oppose and object to such Competing Plan and to diligently pursue
      the
      confirmation and effectiveness of the Plan, and (iv) Plainfield (as defined
      in
      Section 5.2(a)) is not in breach of any of its material obligations under the
      Debt Commitment Letter (as defined in Section 5.2(a)), then Oneida may (at
      its
      option) independently pursue its own plan of reorganization of Mid-State
      Raceway, Inc. and Mid-State Development Corporation; provided, however, that
      if
      Oneida elects to independently pursue its own plan of reorganization of
      Mid-State Raceway, Inc. and Mid-State Development Corporation then Plainfield
      will not be entitled to receive the Break-up Fee (as defined in the Debt
      Commitment Letter) or any similar fee that may be payable to Plainfield in
      any
      other debt financing commitment letter entered into between Plainfield and
      the
      Company after the date hereof. If Oneida elects to independently pursue its
      own
      plan of reorganization of Mid-State Raceway, Inc. and Mid-State Development
      Corporation pursuant to the immediately preceding sentence, then the Company
      may
      elect, by majority vote of the Board (excluding the Designee designated by
      Oneida (if any)), to redeem all (but not less than all) of Oneida’s Units for a
      cash purchase price equal to $5,000,000 plus any additional Capital
      Contributions made by Oneida after the date of this Agreement.

     

    
      
        
        

      

      
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    4.5 Transactions
      between the Company and the Directors, Members and
      Affiliates.
      Notwithstanding that it may constitute a conflict of interest, the Directors,
      Members and their Affiliates may provide the Company with services (e.g.
      management, accounting, legal, computer support, engineering, etc.) provided
      that such services are reasonably necessary, are at a price that is competitive
      with those available from non-affiliates in an arms-length transaction and
      the
      terms and conditions of such transaction are approved by a majority of the
      disinterested members of the Board. Directors, Members and their Affiliates
      shall fully disclose to the Company any ownership or financial interest they
      may
      have in the services provided or recommended to the Company. The Members and
      the
      Directors may also engage in any other transaction with the Company so long
      as
      such transaction is not expressly prohibited by this Agreement and so long
      as
      the terms and conditions of such transaction are approved by a majority of
      the
      disinterested members of the Board and, where applicable, by Oneida pursuant
      to
      Section 4.8 hereof. Pursuant to the terms of the Management Agreements, Nevada
      Gold, as manager under the Management Agreements, is responsible for managing
      all operations, including casino operations, racing operations (subject to
      the
      input and approval rights of Southern Tier as hereinafter provided), food and
      beverage operations, entertainment and hotel operations, of (a) the Tioga Downs
      Complex, and (b) if the acquisition of the Vernon Downs Complex is consummated,
      the Vernon Downs Complex, subject to the terms and conditions set forth in
      the
      Management Agreements. As long as Jeffrey Gural (or in the event of retirement,
      death or disability of Jeffrey Gural, an Approved Substitute Manager) is the
      managing member of Southern Tier and designated Director of Southern Tier
      pursuant to Section 4.2(a), Southern Tier shall have the right to:

     

    (a)
      designate the manager (the “Racing Manager”) for the harness racing and
      simulcast facility operations (the “Racing Operations”) of (i) the Tioga Downs
      Complex, and (ii) if the acquisition of the Vernon Downs Complex is consummated,
      the Vernon Downs Complex,

     

    
      
        
        

      

      
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    (b)
      approve the compensation and all employment decisions related to the Racing
      Manager, and

     

    (c)
      approve the operating expenses and capital expenditure allocations for the
      Racing Operations in the pre-opening budgets, start-up budgets and Annual Plans
      that are prepared by the Management Company for submission to the
      Board.

     

    The
      selection of the general manager for the Project (the “General Manager”)
      designated by Nevada Gold and the Racing Manager designated by Southern Tier
      shall be subject to the approval of the Board as a “Major Decision.” The
      compensation of the General Manager and the Racing Manager shall be an expense
      of the Company (or its subsidiary) and shall be part of the Operating Budget.
      No
      Member or Director shall represent to any party that it or he is a manager
      of
      the Tioga Downs Complex or the Vernon Downs Complex unless it or he is a manager
      under a Management Agreement or is the General Manager or Racing Manager. The
      Board will hold regular quarterly meetings with the General Manager and the
      Racing Manager to receive an update on the operations of the
      Company.

     

    4.6 Payments
      to Directors.
      Each
      Director, each member of a committee of the Board and each Observer designated
      by Oneida pursuant to Section 4.2(b) shall be reimbursed for reasonable
      out-of-pocket expenses for attending Board or committee meetings and attending
      to other Company Business. Except as specified in this Agreement, no Director
      or
      member of any committee of the Board is entitled to remuneration for services
      rendered or goods provided to the Company in his or her capacity as a Director
      or member of any such committee.

     

    4.7 Resolution
      of Voting Deadlock.
      In the
      event of a failure of the Board to approve any Major Decision, any Member may,
      by Notice to the other Members, require that the matter be decided pursuant
      to
      the terms set forth in this Section 4.7.

     

    (a)
      The
      highest ranking executive officer of each of the Members (or, in the case of
      Oneida, the highest ranking officer of Oneida, Thomas Fritsch, Joseph Bencivenga
      or Max Holmes) shall meet in person within ten (10) days following the Notice
      and attempt in good faith to resolve the disagreement in one day.

     

    (b)
      If
      the disagreement is not resolved pursuant to Section 4.7(a), then any Member
      may, by Notice to the other Members, elect to proceed with an arbitration which
      shall be conducted in accordance with the following procedures:

     

    (i) The
      Members shall endeavor to appoint a single qualified and disinterested
      Arbitrator. For purposes of this Section 4.7, an Arbitrator (the “Arbitrator”)
      shall be an individual who: (A) is independent of, and who has not performed
      work for, any Member; and who: (x) is a partner with any of the six largest
      public accounting firms in the United States; and (y) has at least five (5)
      years of auditing or accounting experience in the gaming industry; or, (B)
      if
      the Members so agree prior to the time for appointment herein provided, but
      not
      otherwise, is an expert in a field other than accounting (including casino
      management) having qualifications agreed to by the Members. Such Arbitrator,
      if
      agreed to by the Members, shall meet with the Board within thirty (30) days
      of
      such appointment to discuss the disputed decision and a vote of the Board and
      the Arbitrator shall be held, with a majority of such group authorized to make
      the decision.

     

    
      
        
        

      

      
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    (ii) If
      the
      Members cannot agree on a single Arbitrator within twenty (20) days after a
      Notice of an election to submit a Major Decision to arbitration has been
      delivered to all Members, then each of (A) Nevada Gold, (B) TrackPower and
      Southern Tier, acting as a group, and (C) Oneida shall appoint one Arbitrator
      within ten (10) days following such twenty (20) day period. The three
      Arbitrators shall meet with the Board within twenty (20) days after the
      expiration of the 10-day period referred to in the first sentence of this
      Section 4.7(b)(ii) to discuss the disputed decision and a vote of the Board
      and
      the Arbitrators shall be held, with a majority of such group authorized to
      make
      the decision.

     

    (iii) If
      any of
      (A) Nevada Gold, (B) TrackPower and Southern Tier (acting as a group)
      or (C) Oneida fails timely to appoint an Arbitrator pursuant to Section
      4.7(b)(ii), then the Arbitrator(s) so timely designated shall act as the sole
      Arbitrator(s) and shall be deemed to be the unanimously approved Arbitrator(s)
      to resolve such dispute.

     

    (iv) The
      fees
      and expenses of the Arbitrators shall be paid by the Company.

     

    (v) The
      Arbitrators shall make their decision based solely on the best interests of
      the
      Company. Unless otherwise agreed, all arbitration proceedings shall be conducted
      in New York, New York, at a law office in New York, New York, designated by
      the
      Member invoking arbitration.

     

    4.8 Consent
      Rights of Oneida.
      Anything
      in this Agreement to the contrary notwithstanding, without the prior written
      consent of Oneida or Oneida’s Designee, which consent shall not be unreasonably
      withheld or delayed, the Company shall not, and shall not permit any of its
      subsidiaries to:

     

    (a)
      make
      any capital expenditures, improvements, upgrades, refurbishments or other
      investments regarding the Vernon Downs Complex in excess of $3,000,000 in the
      aggregate (but not including the approximately $4,000,000 of capital
      expenditures contemplated by the current Cost Budget for the Vernon Downs
      Complex);

     

    (b)
      create or issue any additional class of Units or other equity, ownership or
      profits interests in the Company or any such subsidiary, or any options,
      warrants, convertible securities or other rights to acquire any Units or other
      equity, ownership or profits interests in the Company or any such subsidiary,
      other than rights of the Members to acquire Units pursuant to an issuance of
      Units authorized by the Board pursuant to Section 4.1(b)(v) or Section
      4.1(d)(iv), or in connection with the payment of all or any portion of an
      Unfunded RCG Reimbursement Amount pursuant to Section 7.11, or in connection
      with the payment of all or any portion of an Unfunded VSM Reimbursement Amount
      pursuant to Section 7.12;

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

    (c)
      amend
      its Articles of Organization or other organizational documents so as to
      adversely affect the rights of Oneida;

     

    (d)
      make
      any substantial change in the character of its Business (including pursuit
      of a
      New York Harness Racing/VLT Opportunity pursuant to the provisions of Section
      4.4(d)) or other business of any subsidiary;

     

    (e)
      own,
      purchase or acquire any stock, obligations or securities of, or any interest
      in,
      or make any contribution to, any other Person, or own, purchase or acquire
      any
      property not used in the ordinary course of business, other than investments
      and
      property owned as of the date of this Agreement;

     

    (f)
      make
      any Distributions upon any of the Units or any other ownership, equity or
      profits interests of the Company or such subsidiary, or purchase, redeem or
      otherwise acquire any of the Units or any other ownership, equity or profits
      interests of the Company or such subsidiary, or any securities convertible
      into
      Units or any other ownership, equity or profits interests of the Company or
      such
      subsidiary, except for, in the case of the Company, (i) Distributions that
      are
      made pro rata
      to the
      Members (based on each Member’s Percentage at the time of such Distribution),
      (ii) Distributions of an aggregate of $5,000,000 in Excess Cash Flow to
      TrackPower and Southern Tier pursuant to Section 9.1(a) of this Agreement,
      (iii)
      other Distributions that are specifically contemplated in this Agreement
      (i.e.,
      tax
      Distributions), (iv) any acquisition by the Company of Units pursuant to Section
      15.4 hereof) and (v) a redemption of all of Oneida’s Units pursuant to Section
      4.4(e);

     

    (g)
      enter
      into any transaction with any of its officers, directors, employees or
      Affiliates, except upon commercially reasonably terms at least as fair to the
      Company or such subsidiary as could have been obtained on an arms length basis
      and after obtaining the approval of a majority of the disinterested Directors
      (provided that each of the Management Agreements, each as in effect on January
      23, 2006, are deemed approved; provided, further that neither of the Management
      Agreements shall be amended, supplemented or otherwise modified without the
      approval of a majority of disinterested Directors and the Management
      Company);

     

    (h)
      merge
      or consolidate with any other Person, or enter into a joint venture,
      partnership, strategic alliance or other business combination with any other
      Person, or sell all or substantially all of its assets in one transaction or
      a
      series of transactions; and

     

    (i)
      enter
      into any transaction which would result in the Company directly or
      indirectly owning
      less than 100% of the Tioga Downs Complex or the Vernon Downs Complex, other
      than existing rights of certain individuals to buy up to 10% of the equity
      of
      Vernon Downs Acquisition, LLC.

     

    ARTICLE
      5. PROJECT FINANCING FOR THE GAMING COMPLEXES

     

    5.1 First
      Lien Facilities.
      The
      Members acknowledge that the Company will arrange certain senior debt financing
      from one or more lenders or one or more groups of lenders (collectively, the
      “First Lien Lenders”) in an aggregate principal amount not to exceed $60.0
      million (including any amendments, modifications, renewals, replacements,
      restatements, substitutions or refinancings thereof, collectively, the “First
      Lien Facilities”). The First Lien Facilities may include a loan from RCG
      Longview II, L.P. (“RCG”) up to $20 million (the “RCG Loan”) and loans from the
      Vestin/Scott/Mercer Group of approximately $28,560,000 (the “VSM Loans,” and
      together with the RCG Loan, the “RCG/VSM Loans”). If required by the CIBC Group
      (as defined in Section 5.2(b)), and provided that all guaranty, contribution,
      reimbursement and indemnity obligations of Nevada Gold with respect to the
      RCG/VSM Loans have been released, Nevada Gold agrees to provide a guarantee
      (the
“Nevada Gold Guarantee”) up to $5 million to such First Lien Lenders and, if
      collateral is required by such First Lien Lenders with respect to the Nevada
      Gold Guarantee, then Nevada Gold agrees to provide cash or a letter of credit
      to
      such First Lien Lenders to the extent required to collateralize the Nevada
      Gold
      Guarantee on the terms set forth below. The Nevada Gold Guarantee shall be
      treated as a loan by Nevada Gold to the Company in the maximum amount that
      Nevada Gold may be required to pay under the Nevada Gold Guarantee and shall
      be
      referred to herein as the “Nevada Gold Deemed Loan”. The Nevada Gold Deemed Loan
      shall (a) be evidenced by a Subordinated Note, (b) bear interest at the rate
      of
      one percent (1%) per annum above the highest non-default interest rate of the
      First Lien Facilities on the amount actually paid by Nevada Gold to the First
      Lien Lenders under the Nevada Gold Guarantee (whether paid directly by Nevada
      Gold or made by the First Lien Lenders drawing on the letter of credit or
      applying any amounts of the cash collateral to make such payment) until such
      amount is reimbursed by the Company, (c) be unsecured obligations of the
      Company, (d) not be guaranteed by any of the Company’s subsidiaries, (e) mature
      thirty (30) days following the latest maturity date of any of the Senior Credit
      Facilities and (f) not require the Company to collateralize (with cash or other
      security or credit support arrangements) or otherwise fund any amounts into
      escrow to support any amounts that Nevada Gold has not paid under the Nevada
      Gold Guarantee or amounts which Nevada Gold has paid under the Nevada Gold
      Guarantee but which have been reimbursed to Nevada Gold. The Company shall
      pay
      all reasonable bank fees, including issuance fees, incurred by Nevada Gold
      for
      any required letter of credit, subject to the subordination terms set forth
      in
      the Subordinated Note.

     

    
      
        
        

      

      
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    The
      Company shall proceed with the development of the Tioga Downs Complex whether
      or
      not the Company acquires the Vernon Downs Complex. If the Company does not
      acquire the Vernon Downs Complex, then the Nevada Gold Guarantee will decrease
      from $5.0 million to $2.5 million.

     

    5.2 Second
      Lien Facility. 

     

    (a)
      The
      Company and Plainfield BDC LLC, an Affiliate of Oneida (“Plainfield”), have
      entered into a letter agreement, accepted and agreed to on January 23, 2006
      (together with the Summary of Terms and Conditions attached as Schedule A
      thereto, the “Debt Commitment Letter”), whereby Plainfield agreed, subject to
      the terms and conditions in the Debt Commitment Letter, that Plainfield or
      one
      or more of its affiliates or designees would provide debt financing in an
      aggregate amount of $15,000,000 (the “Second Lien Facility”) to the Company. The
      Second Lien Facility will be on the terms set forth in the Debt Commitment
      Letter and will be secured by a second lien
      position on all of the Company’s and the Company’s subsidiaries’ assets and
      properties and a pledge of 100% of the equity interests of the Company’s
      subsidiaries (the “Collateral”); subject only to a first lien position in favor
      of the First Lien Lenders up to the Cap. The Collateral shall consist of the
      same assets and properties of the Company and its subsidiaries that secure
      the
      First Lien Facility.

     

    
      
        
        

      

      
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    (b)
      Notwithstanding the provisions set forth in Section 5.1(a), the parties
      acknowledge and agree that the Debt Commitment Letter did not contemplate the
      RCG/VSM Loans. Upon
      incurrence of the RCG/VSM Loans the Second Lien Facility shall bear interest
      at
      a rate of 13% per annum and shall contain customary representations, warranties,
      defaults, covenants, definitions and other terms acceptable to Oneida that
      in no
      event shall be less favorable to Plainfield than the terms set forth in the
      Debt
      Commitment Letter. In the event that the Company at any time enters into a
      credit facility with a group of lenders arranged by CIBC World Markets or any
      other group of lenders (collectively, the “CIBC Group”) for the purpose of
      refinancing (in whole or in part) the RCG/VSM Loans, then the interest rate
      on
      the Second Lien Facility shall immediately adjust to a floating rate equal
      to
      the greater of (i) 12% per annum and (ii) 250 basis points greater than the
      highest non-default rate that may be charged under such First Lien Facility
      as
      reset from to time in accordance with its terms, (b) mature no later than May
      1,
      2012 and (c) otherwise contain the terms set forth in the Debt Commitment
      Letter.

     

    5.3 Other
      Debt Financings.
      In the
      event the Company proposes to consummate any Debt Financing, including from
      a
      Member (other than the Nevada Gold Deemed Loan), then the Company shall first
      offer Oneida the right to provide all or any portion of such Debt Financing
      on
      the terms set forth in this Section 5.3. Any such offer shall be provided by
      the
      Company to Oneida in a Notice (the “Debt Financing Offer Notice”) which shall
      state all the material terms and conditions of the proposed Debt Financing,
      including without limitation, the maturity date, the principal amount thereof
      and the interest rate thereon, and whether the Debt Financing includes any
      equity related or equity linked features. Oneida shall have twenty (20) days
      (or
      such shorter period, not less than three (3) business days, as determined by
      the
      Board in good faith if the loan is being requested of one or more Members and
      financing is needed on an immediate basis, which shorter period shall be set
      forth in the Debt Financing Offer Notice) after its receipt of the Debt
      Financing Offer Notice (such period being the “Debt Financing Election Period”)
      to elect by delivering a Notice to the Company (a “Debt Financing Election
      Notice”) to provide all or any portion of the proposed Debt Financing on terms
      that are, in the aggregate, the same as or more favorable to the Company than
      those terms that are contained in the Debt Financing Offer Notice. Any
      determination as to whether the terms contained in a Debt Financing Election
      Notice are, in the aggregate, the same as or more favorable to the Company
      than
      those terms that are contained in the Debt Financing Offer Notice shall be
      made
      by the Board in its reasonable and good faith discretion. If either (a) Oneida
      does not deliver a Debt Financing Election Notice prior to the expiration of
      the
      Debt Financing Election Period or (b) the Company determines in its reasonable
      and good faith discretion that the terms of the proposed Debt Financing
      contained in the Debt Financing Election Notice delivered by Oneida are not,
      in
      the aggregate, the same as or more favorable to the Company than those terms
      that are contained in the Debt Financing Offer Notice and provides Notice of
      such determination to Oneida, then the Company shall have a period of ninety
      (90) days following the date of the occurrence of such event to consummate
      the
      proposed Debt Financing on terms that are, in the aggregate, the same as or
      more
      favorable to the Company than those terms that are contained in the Debt
      Financing Offer Notice delivered to Oneida. If the proposed Debt Financing
      is
      not consummated in such 90-day period or if the terms of the proposed Debt
      Financing change so that the terms thereof are less favorable, in the aggregate,
      to the Company than those terms contained in the Debt Financing Offer Notice
      delivered to Oneida, then in any such case such proposed Debt Financing shall
      again be subject to the terms of this Section 5.3.

     

    
      
        
        

      

      
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    5.4 Take-Out
      Loans.
      

     

    (a)
      Immediately following (a) the occurrence of any default, breach, violation,
      event, fact or circumstance (any of the foregoing being a “Default”) under any
      of the First Lien Facilities which, with the giving of applicable notice or
      the
      passage of time or both, would permit the applicable First Lien Lenders to
      accelerate amounts due thereunder and (b) the failure by the Company to
      permanently cure such Default within the applicable cure period (if any) after
      such First Lien Lenders have provided notice of such Default to the Company,
      then the Company shall be required to offer to Oneida the right to make a loan
      to the Company for the purpose of paying off all or any portion of such First
      Lien Facility. Any such offer shall be provided by the Company to Oneida in
      a
      Notice (the “Take-Out Loan Offer Notice”) which shall state the amount of the
      Debt under the applicable First Lien Facility that is subject to the Default
      (the “Specified Default Debt”) and all of the material terms of the Specified
      Default Debt. Oneida shall have twenty (20) days after its receipt of the
      Take-Out Loan Offer Notice to elect by delivering a Notice to the Company (a
      “Take-Out Loan Election Notice”) to provide a loan (the “Take-Out Loan”) in an
      aggregate principal amount equal to all or any portion of the Specified Default
      Debt. The Take-Out Loan shall be on terms and conditions that are mutually
      acceptable to Oneida and the Company, but in no event less favorable to Oneida
      than the terms of the Specified Default Debt or the Second Lien Facility,
      subject to the last sentence of this Section 5.4(a). In lieu of making the
      Take-Out Loan directly to the Company, at the request of Oneida, the Company
      shall use its commercially reasonable efforts to cause the First Lien Lenders
      that hold the Specified Default Debt to transfer and assign over to Oneida
      all
      or any portion of the Specified Default Debt that Oneida elects to purchase
      pursuant to the Take-Out Loan Election Notice, and if such First Lien Lenders
      agree to make such transfer and assignment then the Company shall grant all
      waivers and consents under the financing documents of the applicable First
      Lien
      Facility to permit such transfer and assignment, and shall acknowledge and
      recognize Oneida as the holder of such Specified Default Debt. During the 90-day
      period following the date Oneida makes a Take-Out Loan or the date any Specified
      Default Debt is transferred and assigned to Oneida, Oneida agrees not to take
      any Enforcement Action in respect of such Take-Out Loan or Specified Default
      Debt unless an Early Termination Event has occurred. 

     

    (b)
      Anything in Section 5.4(a) to the contrary notwithstanding, if Oneida has
      entered into an intercreditor agreement with any First Lien Lenders that permits
      Oneida to purchase, assume or otherwise acquire the Debt held by such First
      Lien
      Lenders upon the occurrence of a Default under the applicable First Lien
      Facility, then the terms of such intercreditor agreement shall govern and
      control the right of Oneida to purchase, assume or otherwise acquire such Debt
      in lieu of the provisions of Section 5.4(a).

     

    
      
        
        

      

      
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    ARTICLE
      6. FAIR MARKET VALUE; INDEPENDENT APPRAISALS

     

    6.1 Fair
      Market Value. 

     

    (a)
      The
      fair market value (“Fair Market Value”) of any property shall mean the price at
      which a willing seller would sell and a willing buyer would buy such property
      having full knowledge of the relevant facts, in an arm’s-length transaction
      without time constraints, and without being under any compulsion to buy or
      sell,
      or, in a transaction between Members, the value otherwise agreed by the selling
      Member(s) (the “Selling Member”) and the purchasing Member(s) (the “Purchasing
      Member”) to be the Fair Market Value.

     

    (b)
      The
      Fair Market Value of any property other than a Unit or the Company shall be
      determined by an independent appraisal from an independent appraiser selected
      by
      the Board.

     

    (c)
      The
      Fair Market Value of the Company or a Unit in the Company shall be determined
      in
      accordance with this Section 6.1(c). Units in the Company shall be valued
      without regard to classification of ownership, rights to Excess Cash Flow,
      incidents of ownership such as voting rights, or level of Percentage in the
      Company. The Fair Market Value of the Company shall be determined utilizing
      then
      current methods for the valuation of gaming companies (and to the extent other
      businesses represent a material portion of the Company’s business, then current
      methods for the valuation of such businesses shall be used for that portion
      of
      the business of the Company) including without limitation EBIDTA multiples,
      asset valuations or cash flow analyses, when appropriate. The Fair Market Value
      of all of the issued and outstanding Units shall be equal to the Fair Market
      Value of the Company, less all liabilities of the Company, including Debt,
      and
      Unreturned Capital Contributions. The Fair Market Value of each Member’s Units
      shall be (i) the Percentage represented by such Member’s Units, multiplied by
      the Fair Market Value of all of the issued and outstanding Units, plus
      (ii) any
      Unreturned Capital Contributions of such Member. If the Selling Member and
      the
      Purchasing Member cannot agree on a Fair Market Value of a Unit, then the
      Members shall proceed under the terms of Section 6.2 to provide for an
      independent appraisal process to determine the Fair Market Value.

     

    (d)
      Notwithstanding the foregoing, the Members have agreed on the Fair Market Value
      of the contributions of property contributed to the Company by the Members
      as
      set forth on Exhibit
      3.1
      attached hereto. In addition, the Members may mutually agree on the Fair Market
      Value of any property, including a Unit in the Company, by written
      agreement.

     

    6.2 Independent
      Appraisals.
      The
      Selling Member shall provide a Notice to the Purchasing Members, which notice
      shall include the name, mailing address and telephone number of an appraiser
      appointed by it, to determine such Fair Market Value (“First Appraiser”). The
      Purchasing Members (or the Company if the Company is the purchaser) shall then
      appoint one appraiser and furnish the name, mailing address and telephone number
      of the appraiser so appointed to the Selling Member (“Second Appraiser”). If any
      Member (or the Company) fails to appoint an appraiser to which it is otherwise
      entitled within fifteen (15) days following Notice by the other Member(s),
      the
      other appointed appraiser shall proceed to determine the Fair Market Value
      of
      the Units or interest therein to be conveyed and such determination shall be
      binding on the Selling Member and Purchasing Members (or the Company if the
      Company is the purchaser). If, however, another appraiser is appointed, then
      the
      two appraisers shall meet and attempt to reach a determination of the Fair
      Market Value. If such appraisers select Fair Market Values within five percent
      (5%) of each other, then the mathematical average of the two (2) appraisals
      shall constitute the Fair Market Value of the Units or interest therein. If
      the
      Fair Market Value is not determined pursuant to the foregoing provisions of
      this
      Section 6.2, the two appraisers shall then select a third appraiser (“Third
      Appraiser”) and the three appraisers shall then make such determination. A
      decision by any two of the appraisers (or, in instances where no two appraisers
      can agree, the mathematical average of the two closest appraisals, and the
      average of the appraisals if no two appraisals are closest) shall be final
      and
      conclusive on the Selling Member and Purchasing Members (or the Company if
      the
      Company is the purchaser) as to such Fair Market Value. In the event no Third
      Appraiser can be agreed upon by the two appraisers, or by the Selling Member
      and
      Purchasing Members (or the Company if the Company is the purchaser), the third
      appraiser shall be appointed by the then Senior Federal District Judge for
      the
      Southern District of New York, and application to such Court may be made by
      either Selling Member or Purchasing Members (or the Company if the Company
      is
      the purchaser). Each appraiser or appraisal firm appointed pursuant to this
      Section must be a member of the American Society of Appraisers with an ASA
      accreditation or must be certified as a Certified Valuation Analyst. The
      appraisers must establish the Fair Market Value consistent with the intent
      of
      the parties as established in Section 6.1 hereof and shall generally appraise
      based on American Society of Appraisers’ standards, utilizing EBIDTA multiples,
      asset valuations or cash flow analyses, when appropriate, for determination
      of
      Fair Market Value. Each Member (and the Company if the Company is the purchaser)
      shall pay the fees and expenses of its own appraiser and one-half (1/2) of
      the
      fees and expenses of any Third Appraiser. Each appraiser appointed shall have
      been engaged for at least five (5) years prior to the date of his appointment
      in
      the business of appraising gaming and entertainment businesses or the applicable
      business that is being appraised, and shall not otherwise be disqualified from
      exercising an independent judgment as to the Fair Market Value determination
      to
      be made.

     

    
      
        
        

      

      
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    ARTICLE
      7. CAPITAL CONTRIBUTIONS; LOANS; UNITS

     

    7.1 Initial
      Capital Contributions.
      The
      initial Capital Account balance of each Member (which reflects the Capital
      Contributions of each Member), the number of Units held by each Member and
      each
      Member’s Percentage is as set forth on Exhibit
      3.1.
      Oneida’s Capital Contribution is being made simultaneously with the execution of
      this Agreement. The Members hereby agree and acknowledge that any amounts set
      forth on Exhibit
      3.1
      as the
      value of real and/or personal property contributed by any Member reflects the
      value of such property as agreed to by the Members.

     

    7.2 Additional
      Capital Contributions; Advances from Nevada Gold.

     

    (a)
      In
      the event the Company requires financing to fund Cost Budget Overruns for the
      Tioga Downs Complex and/or the Vernon Downs Complex or operating deficits of
      the
      Company, then, the Board may elect to require (i) additional Capital
      Contributions by the Members or (ii) in the case of Cost Budget Overruns,
      advances from Nevada Gold in accordance with Section 7.2(b), but only on the
      terms and conditions set forth in Section 7.2(b).

     

    
      
        
        

      

      
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    (b)
      If
      all guaranty, contribution, reimbursement and indemnity obligations of Nevada
      Gold have been released, and the First Lien Lenders have not required Nevada
      Gold to provide the Nevada Gold Guarantee, or if the First Lien Lenders have
      required Nevada Gold to provide the Nevada Gold Guarantee but permit all or
      a
      portion of it to be used to fund Cost Budget Overruns (but not operating
      deficits) for the Tioga Downs Complex and/or the Vernon Downs Complex, then
      Nevada Gold shall provide financing to the Company up to the Permitted Amount
      to
      fund Cost Budget Overruns for the Tioga Downs Complex and/or the Vernon Downs
      Complex. Any and all such advances of the Permitted Amount shall be evidenced
      by
      Subordinated Notes and shall be on the same terms as described in Section 5.1.
      Notwithstanding the foregoing, for purposes of this Section 7.2(b), Cost Budget
      Overruns shall not include any design changes or changes in the construction
      work including through the use of change orders, which are not required by
      law.

     

    (c)
      If
      (i) there shall exist any operating deficits or Cost Budget Overruns (but,
      in
      the case of Cost Budget Overruns, only if Nevada Gold has already advanced
      the
      Permitted Amount to the Company pursuant to Section 7.2(b)) and (ii) the Board
      has elected to require the Members to make additional Capital Contributions
      in
      accordance with Section 4.1(d)(iv), the Company shall give written notice (a
      “Contribution Notice”) of such Cost Budget Overruns or operating deficits to all
      of the Members, which Contribution Notice shall summarize, with reasonable
      particularity, the specific Cost Budget Overruns or operating deficits, as
      the
      case may be, the Company’s actual and projected cash obligations, cash on hand,
      the projected sources and amounts of future cash flow, the number of Units
      to be
      issued and sold in connection with such required additional Capital
      Contributions and the Price Per Unit for each such Unit to be issued, and which
      Contribution Notice shall also specify a contribution date (“Contribution Date”)
      (which shall not be less than thirty (30) days following the date such
      Contribution Notice is delivered to the Members) upon which each Member shall
      have the obligation to contribute to the capital of the Company by purchasing
      Units at the Price Per Unit specified in the Contribution Notice, in cash,
      such
      Member’s Percentage (as of the Contribution Date) of such Cost Budget Overruns
      or operating deficits (“Cash Deficit Contribution”). If any Member (the
“Non-Contributing Member”) fails to contribute all or any portion of such
      Member’s portion of the Cash Deficit Contribution (such amount that is not so
      contributed by the Non-Contributing Member being the “Delinquent Contribution”),
      then each Other Member shall be entitled to contribute all or any portion of
      the
      Delinquent Contribution on a pro rata
      basis
      (based on the Percentage of such Other Member to the aggregate Percentage of
      all
      Other Members that elect to contribute any portion of the Delinquent
      Contribution). Each Other Member may elect to contribute all or any portion
      of
      its pro rata share of the Delinquent Contribution by delivering a Notice to
      the
      Company within ten (10) days after the Contribution Date. If any Other Member
      does not elect to contribute its entire pro rata share of the Delinquent
      Contribution by the expiration of such 10-day period, any Other Member that
      has
      elected to contribute its entire pro rata share of the Delinquent Contribution
      may elect to contribute any part of the remaining portion of the Delinquent
      Contribution on a pro rata
      basis
      (based on the proportionate Percentages of such Other Members) until either
      the
      Other Members elect to contribute such remaining portion or no Other Member
      elects to contribute such remaining portion (which elections described in this
      sentence shall in any event be concluded within five (5) days following the
      expiration of such 10-day period). The Members agree that if either (but not
      both) Southern Tier or TrackPower is the Non-Contributing Member, then the
      other
      shall have the first right but not the obligation to contribute 100% of the
      portion of the Cash Deficit Contribution of such Non-Contributing Member, such
      election to be exercised within five (5) days following the Contribution Date.
      Notwithstanding the foregoing sentence, Southern Tier, Oneida and Nevada Gold
      agree that the right to contribute any portion of a Delinquent Contribution
      of
      TrackPower (as a result of TrackPower being a Non-Contributing Member) that
      would dilute TrackPower below 50% of its initial Percentage in the Company
      will
      be the joint right of Southern Tier, Oneida and Nevada Gold (in the proportion
      of their respective Percentages unless otherwise agreed). With respect to the
      amount of the Delinquent Contribution contributed by a Contributing Member,
      such
      Contributing Member shall be issued a number of Units equal to the product
      of
      (i) 1.5 times
      (ii) the
      quotient obtained by dividing (x) the amount of the Delinquent Contribution
      contributed by such Contributing Member by
      (y) the
      Price Per Unit established by the Board and specified in the Contribution
      Notice. The aggregate number of Units issued to all Contributing Members under
      this Section 7.2(c) shall be referred to as the “Cash Deficit Additional
      Contribution Units”. If Other Members contribute all or any portion of the
      Delinquent Contribution, the number of Units held by the Non-Contributing Member
      shall be reduced by the total number of Cash Deficit Additional Contribution
      Units issued to the Contributing Members; provided, that if there shall be
      more
      than one Non-Contributing Member in respect of a particular Cash Deficit
      Contribution and Other Members contribute all or any portion of the Delinquent
      Contributions of such Non-Contributing Members, then the number of Units held
      by
      each Non-Contributing Member shall be reduced by a number of Units equal to
      the
      product of (A) the total number of Cash Deficit Additional Contribution Units
      issued to Contributing Members, times
      (B) a
      fraction, (x) the numerator of which is the amount of the Delinquent
      Contribution of such Non-Contributing Member and (y) the denominator of which
      is
      the aggregate amount of all Delinquent Contributions of all Non-Contributing
      Members.

     

    
      
        
        

      

      
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    (d)
      If,
      as a result of the provisions of Section 7.2(c), a Member’s (the “Diluted
      Member”) Percentage falls to or below 50% of its initial Percentage set forth in
      Exhibit 3.1, then the other Members (in the proportion of their respective
      Percentages unless otherwise agreed) shall have the right by Notice (“Purchase
      Notice”) to purchase all of the remaining Units of the Diluted Member, at a
      purchase price equal to 85% of the Fair Market Value of the remaining Units
      of
      the Diluted Member; provided, that such Purchase Notice shall not be delivered
      until November 7, 2007 or thereafter. Any transferee of a Diluted Member’s Units
      after such Member’s Percentage falls to or below 50% of its initial Percentage
      shall be subject to the purchase option unless otherwise agreed by the other
      Members. The Purchase Notice may designate any date, beginning ninety (90)
      days
      before the date of such Notice, and ending on the date of such Notice, as to
      the
      effective date on which Fair Market Value of the Units being purchased shall
      be
      determined. Upon giving of the Purchase Notice, the Fair Market Value of the
      Units shall be determined pursuant to Article 6. For purposes of clarity,
      if a Member is diluted to 50% or below its initial Percentage set forth in
      Exhibit 3.1 in March 2006, then the other Members may not deliver the Purchase
      Notice until November 7, 2007 or after and the Fair Market Value of the
      remaining Units being purchased would be determined as of a date no earlier
      than
      90 days prior to the exercise of the purchase option (on or after November
      7,
      2007). The purchase price shall be payable 50% in cash due sixty (60) days
      from
      the date upon which Fair Market Value is determined pursuant to Article 6
      (the “Valuation Date”), with the balance payable in 4 equal annual payments,
      plus interest, with the first installment due one year following the Valuation
      Date. The outstanding balance shall accrue interest at the interbank borrowing
      rate that banks charge each other for overnight loans (the “fed funds rate”) and
      shall be evidenced by a promissory note which shall contain an acknowledgment
      by
      the Diluted Member that the obligations under such promissory note are not
      obligations of the Company or the other Members except for the Member(s) that
      have elected the purchase option in this Section 7.2(d).

     

    
      
        
        

      

      
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    (e)
      If,
      as a result of this Section 7.2 or any other provisions of this Agreement,
      a
      Member’s Percentage increases to 60% or greater, then the Board shall be
      reconstituted and increased if necessary and such Member shall have the right
      to
      elect a majority of the directors on the Board, and each of the other Members
      having a Percentage of at least 10% shall have the right to elect one
      Director.

     

    (f)
      Each
      of the Members acknowledges, agrees and represents the following:

     

    (i) the
      provisions of this Section 7.2 are not intended to confer upon any lender or
      other financing source of the Company any rights or remedies against the Members
      or the Company and no such lender or financing source shall be deemed to be
      a
      third party beneficiary of this Section 7.2; and

     

    (ii) such
      Member has not represented to any lender or other financing source of the
      Company, and such Member covenants and agrees that it shall not at anytime
      represent to any lender or other financing source of the Company, that such
      lender or financing source shall be entitled to rely on the provisions of this
      Section 7.2. 

     

    7.3 No
      Withdrawal.
      Except
      as specifically provided in this Agreement, no Member will be entitled to
      withdraw all or any part of such Member’s capital from the Company or, when such
      withdrawal of capital is permitted, to demand a Distribution of property other
      than cash.

     

    7.4 No
      Interest on Capital.
      No
      Member will be entitled to receive interest on such Member’s Capital
      Contribution or Capital Account.

     

    7.5 Loans
      by Members.
      Subject
      to the last sentence of this Section 7.5, any advances by a Member to the
      Company shall constitute a loan from the Member to the Company (“Member Loan”),
      and shall (unless otherwise provided herein) bear interest at an interest rate
      agreed to by the Board, and shall not be deemed to be a Capital Contribution.
      A
      loan account shall be established and maintained for the Member making a loan
      separate from such Member’s Capital Account. Loans made by a Member to the
      Company will be credited to the Member’s loan account. A credit balance in any
      Member’s loan account shall constitute a liability of the Company to such
      Member, and all such advances and accrued interest shall be repaid prior to
      any
      Distributions to the Members unless otherwise provided by the terms of the
      loan.
      Member Loans shall be evidenced by a Subordinated Note. Notwithstanding the
      foregoing, the Company shall first offer Oneida the right to provide any
      proposed Member Loan (other than the Nevada Gold Deemed Loan and the loans
      contemplated by Section 7.11 and Section 7.12) pursuant to the terms of Section
      5.3. Neither (a) any Debt Financing provided by Oneida pursuant to Section
      5.3
      or 5.4(a) nor (b) any of the loans or other credit extensions made under the
      Senior Credit Facilities (even if a Senior Credit Facility Lender is a Member)
      shall constitute a Member Loan.

     

    
      
        
        

      

      
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    7.6 Capital
      Accounts.
      A
      Capital Account will be maintained for each Member.

     

    (a)
      Each
      Member’s Capital Account will be credited with (i) the Member’s Capital
      Contributions (net of liabilities secured by any property contributed that
      the
      Company takes subject to or assumes), (ii) the Member’s allocable share of
      Profits and (iii) all other items properly credited to the Member’s Capital
      Account.

     

    (b)
      Each
      Member’s Capital Account will be charged with (i) the amount of cash distributed
      to the Member by the Company, (ii) the Fair Market Value of property distributed
      to the Member by the Company (net of liabilities secured by such property that
      the Member takes subject to or assumes), (iii) the Member’s allocable share of
      Losses and (iv) all other items properly charged to the Member’s Capital
      Account.

     

    (c)
      Upon
      the Distribution of property in kind, all of the property of the Company,
      including the property to be distributed, will be revalued and any unrealized
      appreciation or depreciation with respect to any asset shall be allocated among
      the Members in accordance with the provisions of Article 8 as though such assets
      had been sold for their Fair Market Value on the date of Distribution. The
      Members’ Capital Accounts will be adjusted to reflect both the deemed
      realization of such appreciation or depreciation and the Distribution of such
      property in accordance with Regulations § 1.704-1(b)(2)(iv)(e),
      (f).

     

    (d)
      The
      Capital Account of each Member shall be determined and maintained in accordance
      with Code Section 704(b) and the regulations promulgated
      thereunder.

     

    7.7 Transfer.
      If all
      or any part of any Unit is transferred in accordance with this Agreement, the
      Capital Account and Membership Interest of the Transferor (including a pro-rata
      share of Capital Contributions) that is attributable to the transferred Unit
      will carry over to the Transferee, unless otherwise provided by the express
      terms of this Agreement.

     

    7.8 Liability
      to Company.
      Each
      Member is liable to the Company for any Capital Contribution or Distribution
      that has been wrongfully or erroneously returned or paid to such Member in
      violation of the Act, the Articles or this Agreement.

     

    7.9 Preemptive
      Right.
      Except
      for (i) the issuance of Company Securities by the Company upon conversion or
      exercise of any Company Securities that have been issued in compliance with
      this
      Section 7.9 and the other provisions of this Agreement (including, without
      limitation, Section 4.8 hereof) and (ii) the issuance of Units pursuant to
      Section 7.2(c), Section 7.11 or Section 7.12, if the Board (a) determines that
      additional capital is required by the Company to (A) facilitate the business
      needs of the Company, including without limitation, to pay operating deficits
      or
      Cost Budget Overruns (but only if such capital has not been contributed by
      the
      Members (or any of them) pursuant to Section 7.2(c)), (B) to fund the expansion
      of the Gaming Complexes (or either of them) or (C) to pursue a New York Harness
      Racing/VLT Opportunity that has been approved by unanimous vote of the Board
      in
      accordance with the terms of Section 4.4(d) and consented to by Oneida pursuant
      to Section 4.8, and (b) authorizes the issuance and sale of any Company
      Securities to raise such additional capital, the Company shall first offer
      to
      sell to each Member a pro rata portion of such Company Securities (based on
      the
      respective Percentages of each Member). Any such offer shall be provided by
      the
      Company to the Members in a Notice (the “Equity Financing Offer Notice”) which
      shall state the Company Securities to be offered (the “Offered Company
      Securities”), each Member’s pro rata share thereof and the price per Offered
      Company Security. Each Member shall have thirty (30) days after its receipt
      of
      the Equity Financing Offer Notice (such period being the “Equity Financing
      Election Period”) to elect to purchase such Member’s pro rata share of the
      Offered Company Securities by delivering a Notice to the Company (an “Equity
      Financing Election Notice”). In the event that any Member does not elect to
      purchase its full allocable share of any Offered Company Securities (such
      Offered Company Securities not so elected to be purchased being “Available
      Securities”), then such Available Securities may be purchased by those Members
      (the “Fully Subscribed Members”) that have elected to purchase their full
      allocable share, with any such purchase to be made by such Fully Subscribed
      Members pro rata
      (based
      on such Fully Subscribed Member’s Percentage to the aggregate Percentage of all
      Fully Subscribed Members electing to purchase Available Securities). A Fully
      Subscribed Member may elect to purchase all or any portion of its pro rata
      share
      of Available Securities by delivering a Notice to the Company within ten (10)
      days (the “Initial Equity Financing Extension Period”) after the expiration of
      the Equity Financing Election Period. If any portion of the Available Securities
      remains unallocated after the expiration of the Initial Equity Financing
      Extension Period, such remaining portion shall be allocated among the Fully
      Subscribed Members that elect to purchase such remaining portion based on the
      proportionate Percentages of such Fully Subscribed Members until either such
      remaining portion is fully subscribed for or none of the Fully Subscribed
      Members elect to purchase Available Securities (which allocation described
      in
      this sentence shall in any event be concluded within five (5) days (the
“Additional Equity Financing Extension Period”) following the expiration of the
      Initial Equity Financing Extension Period). The closing of any purchase by
      an
      Electing Member or Electing Members of Offered Company Securities pursuant
      to
      this Section 7.9 shall be held at the principal office of the Company or at
      such
      other location as the Electing Member(s) and the Company shall agree, within
      twenty (20) days following the later of the expiration of the Equity Financing
      Election Period, the Initial Equity Financing Extension Period and the
      Additional Equity Financing Extension Period. At any such closing, (x) the
      Company shall issue and sell to each Electing Member the Offered Company
      Securities purchased by such Electing Member free and clear of all liens and
      encumbrances (other than liens and encumbrances created pursuant to this
      Agreement), accompanied by all other documents necessary for the effective
      issuance thereof, as reasonably determined by such Electing Member and (y)
      each
      Electing Member shall pay the purchase price for the Offered Company Securities
      purchased by such Electing Member as determined in accordance with the Equity
      Financing Offer Notice. If at the expiration of the Equity Financing Election
      Period there are Available Securities and no Fully Subscribed Members or if
      at
      the expiration of the Initial Equity Financing Period or the Additional Equity
      Financing Period there are Available Securities and no Fully Subscribed Members
      that desire to purchase additional Available Securities, then the Company shall
      be permitted for a period of thirty (30) days following the expiration of the
      Equity Financing Election Period, the Initial Equity Financing Extension Period
      or the Additional Equity Financing Extension Period to sell such Available
      Securities to a third party on terms no more favorable to the third party than
      those terms set forth in the Equity Financing Offer Notice. If the sale of
      the
      remaining Available Securities by the Company pursuant to the immediately
      preceding sentence is not consummated in such 30-day period or if the terms
      of
      the sale change so that the terms thereof are more favorable to the third party
      purchaser than those terms contained in the Equity Financing Offer Notice
      delivered to the Members, then in any such case such proposed sale by the
      Company of Available Securities shall again be subject to the terms of this
      Section 7.9. Anything in this Section 7.9 to the contrary notwithstanding,
      the
      foregoing preemptive rights shall not be applicable to any Debt Financings,
      which Debt Financings shall be governed solely by the provisions set forth
      in
      Section 5.3 of this Agreement.

     

    
      
        
        

      

      
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    7.10 Units.
      The
      Membership Interests shall be issued in unit increments (each, a “Unit” and
      collectively, the “Units”) and fractions thereof. A fractional Unit shall
      entitle the holder thereof to the appropriate fraction of the rights and
      privileges of a whole Unit. There shall be only one class of Units unless
      otherwise agreed to by the Board and Oneida pursuant to Section 4.8 hereof.
      Unless otherwise agreed to by the Board, the Units will not be evidenced by
      certificates.

     

    7.11 RCG
      Reimbursement Obligations.

     

    (a)
      Each
      of the Members acknowledges and agrees that it is contemplated that Jeff Gural,
      a controlling member of Southern Tier (“Gural”), will provide a guarantee (the
“RCG Guarantee”) up to $20,000,000 of the First Lien Facilities provided by RCG.
      If Gural does provide the RCG Guarantee and is required to (and actually does)
      make any payments to RCG under the RCG Guarantee (the amount of any such
      payments being the “RCG Payment Amount”), then each of the Members, severally
      and not jointly, shall be required to reimburse Gural in an amount equal to
      such
      Member’s Percentage of such RCG Payment Amount (such amount being the Member’s
“RCG Reimbursement Amount”); provided, that no Member shall be required to
      reimburse Gural for any amounts in respect of a RCG Payment Amount in excess
      of
      such Member’s Percentage of $20,000,000, together with accrued and unpaid
      interest and other expenses payable under the loan documents governing the
      RCG
      Loans. 

     

    (b)
      Each
      of the Members shall pay such Member’s RCG Reimbursement Amount by advancing
      funds to the Company as a loan in an aggregate principal amount equal to the
      total amount of such Member’s RCG Reimbursement Amount (and the Company shall be
      obligated to immediately pay to Gural the total amount of the loan made by
      such
      Member). Any such loan shall be made to the Company within five (5) days (such
      fifth day being the “RCG Reimbursement Date”) after receiving a written notice
      from Gural that Gural has actually paid the RCG Payment Amount to RCG. Southern
      Tier shall automatically be deemed to have made a loan to the Company in respect
      of any of Southern Tier’s RCG Reimbursement Amounts, without a need to actually
      advance funds to the Company in respect of such loan. 

     

    (c)
      The
      terms of the loan (if any) made (or deemed made) by a Member pursuant to Section
      7.11(b) or Section 7.11(d) shall be the same as the terms of the Second Lien
      Facility (with the maturity date of such loan being the same date as the
      maturity date of the Second Lien Facility); provided that any such loan shall
      be
      evidenced by a Subordinated Note; provided, however, that any such Subordinated
      Note shall permit the Company to pay off the loan represented by such
      Subordinated Note with the proceeds received by the Company from any Debt
      Financing so long as there is no default or event of default continuing under
      the Second Lien Facility.

     

    
      
        
        

      

      
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    (d)
      If
      any Member (the “Unfunded RCG Reimbursing Member”) fails to make a loan to the
      Company in respect of all or any portion of such Member’s RCG Reimbursement
      Amount (such amount that is not so loaned by the Unfunded RCG Reimbursing Member
      being the “Unfunded RCG Reimbursement Amount”), then each Other Member
      (including Southern Tier) shall be entitled to make a loan by actually advancing
      funds to the Company equal to all or any portion of the Unfunded RCG
      Reimbursement Amount on a pro rata
      basis
      (based on the Percentage of such Other Member to the aggregate Percentage of
      all
      Other Members that elect to make a loan in respect of the Unfunded RCG
      Reimbursement Amount). Each Other Member may elect to make a loan to the Company
      in an aggregate principal amount equal to all or any portion of its pro rata
      share of the Unfunded RCG Reimbursement Amount by delivering a Notice to the
      Company within ten (10) days after the RCG Reimbursement Date. If any Other
      Member does not elect to make a loan in respect of its entire pro rata share
      of
      the Unfunded RCG Reimbursement Amount by the expiration of such 10-day period,
      any Other Member that has elected to make a loan in respect of its entire pro
      rata share of the Unfunded RCG Reimbursement Amount may elect to make a loan
      to
      the Company in an aggregate principal amount equal to any part of the remaining
      portion of the Unfunded RCG Reimbursement Amount on a pro rata
      basis
      (based on the proportionate Percentages of such Other Members) until either
      the
      Other Members elect to make loans in respect of such remaining portion or no
      Other Member elects to make loans in respect of such remaining portion (which
      elections described in this sentence shall in any event be concluded within
      five
      (5) days following the expiration of such 10-day period). With respect to the
      amount of the Unfunded RCG Reimbursement Amount loaned by a Contributing Member,
      such Contributing Member shall be issued a number of Units equal to the product
      of (i) 1.5 times
      (ii) the
      quotient obtained by dividing (x) the amount of the Unfunded RCG Reimbursement
      Amount loaned by such Contributing Member by
      (y) the
      Price Per Unit established by the Board as of the RCG Reimbursement Date. The
      aggregate number of Units issued to all Contributing Members under this Section
      7.11(d) shall be referred to as the “Unfunded RCG Reimbursement Units”. If Other
      Members make loans to the Company in respect of all or any portion of the
      Unfunded RCG Reimbursement Amount, the number of Units held by the Unfunded
      RCG
      Reimbursing Member shall be reduced by the total number of Unfunded RCG
      Reimbursement Units issued to the Contributing Members; provided, that if there
      shall be more than one Unfunded RCG Reimbursing Member in respect of a
      particular RCG Payment Amount and Other Members make loans in respect of all
      or
      any portion of the Unfunded RCG Reimbursement Amounts of such Unfunded RCG
      Reimbursing Members, then the number of Units held by each Unfunded RCG
      Reimbursing Member shall be reduced by a number of Units equal to the product
      of
      (A) the total number of Unfunded RCG Reimbursement Units issued to Contributing
      Members, times
      (B) a
      fraction, (x) the numerator of which is the amount of the Unfunded RCG
      Reimbursement Amount of such Unfunded RCG Reimbursing Member and (y) the
      denominator of which is the aggregate amount of all Unfunded RCG Reimbursement
      Amounts of all Unfunded RCG Reimbursing Members.

     

    
      
        
        

      

      
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    (e)
      If
      Gural is not reimbursed in full by the Members in respect of any RCG Payment
      Amount, then Gural agrees not to take an Enforcement Action at any time prior
      to
      the expiration of the 180-day period following the expiration of the 5-day
      period referred to in Section 7.11(d). 

     

    7.12 VSM
      Reimbursement Obligations.

     

    (a)
      Gural
      will be required to guarantee up to 100% of the Scott Increased Payments (the
      “Gural SIP Guarantee”) and Nevada Gold will be required to guarantee up to 50%
      of the Scott Increased Payments (the “Nevada Gold SIP Guarantee”).  In
      addition, if the Company accepts the VSM Loans, Gural will be required to
      guarantee up to 100% of the VSM Loans (the “Gural VSM Guarantee”) and Nevada
      Gold will be required to guarantee up to 50% of the VSM Loans (the “Nevada Gold
      VSM Guarantee,” and together with the Gural VSM Guarantee, the Gural SIP
      Guarantee and the Nevada Gold SIP Guarantee, each a “VSM Guarantee”). To the
      extent that Gural or Nevada Gold provides a VSM Guarantee, such Person shall
      be
      referred to in this Section 7.12 as a “VSM Guarantor”. If a VSM Guarantor is
      required to (and actually does) make any payments to VSM or All Vernon
      Acquisition, LLC (in the case of the Scott Increased Payments) under a VSM
      Guarantee (the amount of any such payments with respect to such VSM Guarantor
      being such VSM Guarantor’s “VSM Payment Amount”), then each of the Members
      (other than Oneida) (each a “VSM Guarantee Reimbursing Member”), severally and
      not jointly, shall be required to reimburse such VSM Guarantor in an amount
      equal to such VSM Guarantee Reimbursing Member’s Percentage of such VSM Payment
      Amount (such amount being the VSM Guarantee Reimbursing Member’s “VSM
      Reimbursement Amount”); provided, that (i) no VSM Guarantee Reimbursing Member
      shall be required to reimburse Gural for any amounts in respect of a VSM Payment
      Amount in excess of such VSM Guarantee Reimbursing Member’s Percentage of
      $28,560,000, together with accrued and unpaid interest and other expenses
      payable under the loan documents governing the VSM Loans, in the case of the
      VSM
      Loans or $1,800,000 in the case of the Scott Increased Payments and (ii) no
      VSM
      Guarantee Reimbursing Member shall be required to reimburse Nevada Gold for
      any
      amounts in respect of a VSM Payment Amount in excess of such VSM Guarantee
      Reimbursing Member’s Percentage of $28,560,000, together with accrued and unpaid
      interest and other expenses payable under the loan documents governing the
      VSM
      Loans, multiplied by 0.5, in the case of the VSM Loans or $1,800,000 multiplied
      by 0.5, in the case of the Scott Increased Payments multiplied by 0.5 .


     

    (b)
      Each
      of the VSM Guarantee Reimbursing Members shall pay such VSM Guarantee
      Reimbursing Member’s VSM Reimbursement Amount by advancing funds to the Company
      as a loan in an aggregate principal amount equal to the total amount of such
      VSM
      Guarantee Reimbursing Member’s VSM Reimbursement Amount (and the Company shall
      be obligated to immediately pay to the applicable VSM Guarantor the total amount
      of the loan made by such VSM Guarantee Reimbursing Member). Any such loan shall
      be made to the Company within five (5) days (such fifth day being the “VSM
      Reimbursement Date”) after receiving a written notice from the applicable VSM
      Guarantor that such VSM Guarantor has actually paid the VSM Payment Amount
      to
      VSM. If Gural is the VSM Guarantor, then Southern Tier shall automatically
      be
      deemed to have made a loan to the Company in respect of any of Southern Tier’s
      VSM Reimbursement Amounts, without a need to actually advance funds to the
      Company in respect of such loan, and the amount of such loan shall be deemed
      paid to Gural in respect of such VSM Reimbursement Amount. If Nevada Gold is
      the
      VSM Guarantor, then Nevada Gold shall automatically be deemed to have made
      a
      loan to the Company in respect of any of Nevada Gold’s VSM Reimbursement
      Amounts, without a need to actually advance funds to the Company in respect
      of
      such loan, and the amount of such loan shall be deemed paid to Nevada Gold
      in
      respect of such VSM Reimbursement Amount.

     

    
      
        
        

      

      
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    (c)
      The
      terms of the loan (if any) made (or deemed made) by a VSM Guarantee Reimbursing
      Member pursuant to Section 7.12(b) or Section 7.12(d) shall be the same as
      the
      terms of the Second Lien Facility (with the maturity date of such loan being
      the
      same date as the maturity date of the Second Lien Facility); provided that
      any
      such loan shall be evidenced by a Subordinated Note; provided, however, that
      any
      such Subordinated Note shall permit the Company to pay off the loan represented
      by such Subordinated Note with the proceeds received by the Company from any
      Debt Financing so long as there is no default or event of default continuing
      under the Second Lien Facility.

     

    (d)
      If
      any VSM Guarantee Reimbursing Member (the “Unfunded VSM Reimbursing Member”)
      fails to make a loan to the Company in respect of all or any portion of such
      VSM
      Guarantee Reimbursing Member’s VSM Reimbursement Amount (such amount that is not
      so loaned by the Unfunded VSM Reimbursing Member being the “Unfunded VSM
      Reimbursement Amount”), then each Other Member (including Southern Tier and
      Nevada Gold) shall be entitled to make a loan by actually advancing funds to
      the
      Company equal to all or any portion of the Unfunded VSM Reimbursement Amount
      on
      a pro rata
      basis
      (based on the Percentage of such Other Member to the aggregate Percentage of
      all
      Other Members that elect to make a loan in respect of the Unfunded VSM
      Reimbursement Amount). Each Other Member may elect to make a loan to the Company
      in an aggregate principal amount equal to all or any portion of its pro rata
      share of the Unfunded VSM Reimbursement Amount by delivering a Notice to the
      Company within ten (10) days after the VSM Reimbursement Date. If any Other
      Member does not elect to make a loan in respect of its entire pro rata share
      of
      the Unfunded VSM Reimbursement Amount by the expiration of such 10-day period,
      any Other Member that has elected to make a loan in respect of its entire pro
      rata share of the Unfunded VSM Reimbursement Amount may elect to make a loan
      to
      the Company in an aggregate principal amount equal to any part of the remaining
      portion of the Unfunded VSM Reimbursement Amount on a pro rata
      basis
      (based on the proportionate Percentages of such Other Members) until either
      the
      Other Members elect to make loans in respect of such remaining portion or no
      Other Member elects to make loans in respect of such remaining portion (which
      elections described in this sentence shall in any event be concluded within
      five
      (5) days following the expiration of such 10-day period). With respect to the
      amount of the Unfunded VSM Reimbursement Amount loaned by a Contributing Member,
      such Contributing Member shall be issued a number of Units equal to the product
      of (i) 1.5 times
      (ii) the
      quotient obtained by dividing (x) the amount of the Unfunded VSM Reimbursement
      Amount loaned by such Contributing Member by
      (y) the
      Price Per Unit established by the Board as of the VSM Reimbursement Date. The
      aggregate number of Units issued to all Contributing Members under this Section
      7.12(d) shall be referred to as the “Unfunded VSM Reimbursement Units”. If Other
      Members make loans to the Company in respect of all or any portion of the
      Unfunded VSM Reimbursement Amount, the number of Units held by the Unfunded
      VSM
      Reimbursing Member shall be reduced by the total number of Unfunded VSM
      Reimbursement Units issued to the Contributing Members; provided, that if there
      shall be more than one Unfunded VSM Reimbursing Member in respect of a
      particular VSM Payment Amount and Other Members make loans in respect of all
      or
      any portion of the Unfunded VSM Reimbursement Amounts of such Unfunded VSM
      Reimbursing Members, then the number of Units held by each Unfunded VSM
      Reimbursing Member shall be reduced by a number of Units equal to the product
      of
      (A) the total number of Unfunded VSM Reimbursement Units issued to Contributing
      Members, times
      (B) a
      fraction, (x) the numerator of which is the amount of the Unfunded VSM
      Reimbursement Amount of such Unfunded VSM Reimbursing Member and (y) the
      denominator of which is the aggregate amount of all Unfunded VSM Reimbursement
      Amounts of all Unfunded VSM Reimbursing Members.

     

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

     

    (e)
      If a
      VSM Guarantor is not reimbursed in full by the Members in respect of any VSM
      Payment Amount, then such VSM Guarantor agrees not to take an Enforcement Action
      at any time prior to the expiration of the 180-day period following the
      expiration of the 5-day period referred to in Section 7.12(d).

     

    (f)
      For
      the avoidance of doubt, neither Oneida nor any of its Affiliates have any
      obligations or responsibilities under this Section 7.12, and each VSM Guarantor
      and each Member acknowledges and agrees that Oneida shall have no obligation
      to
      purchase, assume, participate in, provide any reimbursement for, or indemnify
      any VSM Guarantor, Member or any other Person in respect of, any VSM Payment
      Amount or any VSM Reimbursement Amount or any other amounts under or in respect
      of a VSM Guarantee or the VSM Loans. 

     

    7.13 No
      Reliance.
      Each of
      the Members and Gural acknowledge, agree and represent the following:


     

    (a)
      the
      provisions of Section 7.11 and 7.12 hereof are solely for the benefit of Gural
      (in the case of Section 7.11) and the VSM Guarantors (in the case of Section
      7.12), and it is not intended that RCG or VSM shall have any rights or remedies
      against the Members on account of the provisions of Section 7.11 or Section
      7.12
      or otherwise, or by or through Gural or the VSM Guarantors; and

     

    (b)
      no
      such Person has represented to RCG or VSM that RCG or VSM shall be entitled
      to
      rely on the provisions of Section 7.11 or Section 7.12, or otherwise pursue
      any
      rights or remedies against the Members on account of the provisions of Section
      7.11 or Section 7.12 or otherwise, or by or through Gural or the VSM
      Guarantors.

     

    
      
        
        

      

      
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    ARTICLE
      8. ALLOCATION OF PROFITS AND LOSSES

     

    8.1 Profits
      and Losses.

     

    (a)
      Allocation
      of Losses.

     

    Losses
      for any Fiscal Year shall be allocated in accordance with the following order
      and priority:

     

    (i) first,
      to
      those Members who were allocated Profits (or portions thereof) under
      Section 8.1(b)(v) in proportion to such Profits until the cumulative Losses
      allocated pursuant to this Section 8.1(a)(i) to such Members are equal to the
      total of such Profits allocated to such Members for all prior
      periods;

     

    (ii) second,
      to the Members in proportion to their respective Percentages until such time
      as
      the Capital Account balances of each of TrackPower and Southern Tier has been
      reduced to $2,500,000;

     

    (iii) third,
      to
      Nevada Gold and Oneida in proportion to their respective Percentages until
      such
      time as each of their Capital Account balances has been reduced to
      zero;

     

    (iv) fourth,
      to TrackPower and Southern Tier in proportion to their respective Percentages
      until such time as each of their Capital Account balances has been reduced
      to
      zero; and

     

    (v) fifth,
      to
      the Members in proportion to their respective Percentages.

     

    (b)
      Allocation
      of Profits.
      

     

    Profits
      for any Fiscal Year shall be allocated in accordance with the following order
      and priority:

     

    (i) first,
      to
      those Members who were allocated Losses (or portions thereof) under
      Section 8.1(a)(v) in proportion to such Losses until the cumulative Profits
      allocated pursuant to this Section 8.1(b)(i) to such Members are equal to the
      total of such Losses allocated to such Members for all prior
      periods;

     

    (ii) second,
      to those Members who were allocated Losses (or portions thereof) under
      Section 8.1(a)(iv) in proportion to such Losses until the cumulative
      Profits allocated pursuant to this Section 8.1(b)(ii) to such Members are equal
      to the total of such Losses allocated to such Members for all prior
      periods;

     

    (iii) third,
      to
      those Members who were allocated Losses (or portions thereof) under
      Section 8.1(a)(iii) in proportion to such Losses until the cumulative
      Profits allocated pursuant to this Section 8.1(b)(iii) to such Members are
      equal
      to the total of such Losses allocated to such Members for all prior
      periods;

     

    
      
        
        

      

      
        -33-

        
          

        

      

      
        
        

      

    

     

    (iv) fourth,
      to those Members who were allocated Losses (or portions thereof) under
      Section 8.1(a)(ii) in proportion to such Losses until the cumulative
      Profits allocated pursuant to this Section 8.1(b)(iv) to such Members are equal
      to the total of such Losses allocated to such Members for all prior
      periods;

     

    (v) fifth,
      to
      the Members in proportion to their respective Percentages.

     

    8.2 Regulatory
      Allocations.

     

    (a)
      Notwithstanding any of the foregoing provisions of Section 8.1 to the
      contrary:

     

    (i) If
      during
      any Fiscal Year of the Company there is a net increase in Minimum Gain
      attributable to a Member Nonrecourse Debt that gives rise to Member Nonrecourse
      Deductions, each Member bearing the economic risk of loss for such Member
      Nonrecourse Debt shall be allocated items of Company deductions and losses
      for
      such year equal to such Member’s share of Member Nonrecourse Deductions, as
      determined in accordance with applicable Regulations.

     

    (ii) If
      for
      any Fiscal Year of the Company there is a net decrease in Minimum Gain
      attributable to Company Nonrecourse Liabilities, each Member shall be allocated
      items of Company income and gain for such year equal to such Member’s share of
      such net decrease, as determined in accordance with applicable
      Regulations.

     

    (iii) If
      for
      any Fiscal Year of the Company there is a net decrease in Minimum Gain
      attributable to a Member Nonrecourse Debt, each Member bearing the economic
      risk
      of loss for such Member Nonrecourse Debt shall be allocated items of Company
      income and gain for such year equal to such Member’s share of such net decrease,
      as determined in accordance with applicable Regulations.

     

    (b)
      The
      Losses allocated pursuant to this Article 8 shall not exceed the maximum amount
      of Losses that can be allocated to a Member without causing or increasing a
      deficit balance in the Member’s Adjusted Capital Account. All Losses in excess
      of the limitations set forth in this Section 8.2(b) shall be allocated to
      Members with positive Adjusted Capital Account balances remaining at such time
      in proportion to such balances.

     

    (c)
      In
      the event that a Member unexpectedly receives any adjustment, allocation or
      Distribution described in Regulations section 1.704-1(b)(2)(ii)(d)(4)-(6) that
      causes or increases a deficit balance in such Member’s Adjusted Capital Account,
      items of Company income and gain shall be allocated to that Member in an amount
      and manner sufficient to eliminate the deficit balance as quickly as
      possible.

     

    (d)
      The
      allocations set forth in subsections (b), (c), and (d) (collectively, the
“Regulatory Allocations”) are intended to comply with certain requirements of
      the Regulations. It is the intent of the Members that, to the extent possible,
      all Regulatory Allocations that are made be offset either with other Regulatory
      Allocations or with special allocations pursuant to this Section 8.1(d).
      Therefore, notwithstanding any other provisions of this Article 8 (other than
      the Regulatory Allocations), the Board shall make such offsetting special
      allocations in whatever manner it determines appropriate so that, after such
      offsetting allocations are made, each Member’s Adjusted Capital Account balance
      is, to the extent possible, equal to the Adjusted Capital Account balance such
      Member would have had if the Regulatory Allocations were not part of this
      Agreement and all Company items were allocated pursuant to the remaining
      sections of this Article 8.

     

    
      
        
        

      

      
        -34-

        
          

        

      

      
        
        

      

    

     

    (e)
      In
      accordance with Section 704(c) of the Code and the Regulations, income and
      deductions with respect to any property contributed to or revalued by the
      Company shall, solely for federal income tax purposes, be allocated among the
      Members in a manner to take into account any variation between the adjusted
      tax
      basis of such property to the Company and its fair market value at the time
      of
      contribution or revaluation. In making such allocations, the Board shall use
      the
      remedial allocation method unless the Members agree to the
      contrary.

     

    (f)
      Except as otherwise provided in this Section 8.2, if a Unit is transferred
      during any Fiscal Year (whether by Transfer or liquidation of a Unit, or
      otherwise), the books of the Company will be closed as of the effective date
      of
      Transfer. The Profits or Losses attributed to the period from the first day
      of
      such Fiscal Year through the effective date of Transfer will be allocated to
      the
      Transferor, and the Profits or Losses attributed to the period commencing on
      the
      effective date of Transfer will be allocated to the Transferee. In lieu of
      an
      interim closing of the books of the Company and with the agreement of the
      Transferor and Transferee, the Company may agree to allocate Profits and Losses
      for such Fiscal Year between the Transferor and Transferee based on a daily
      proration of items for such Fiscal Year or any other reasonable method of
      allocation (including an allocation of extraordinary Company items, as
      determined by the Company, based on when such items are recognized for federal
      income tax purposes).

     

    8.3 Tax
      Credits.
      Any tax
      credit, and any tax credit recapture, will be allocated to the Members in the
      same ratio that the federal income tax basis of the asset (to which such tax
      credit relates) is allocated to the Members under the Section 46 Regulations,
      and if no basis is allocated, in the same manner as Profits are allocated to
      the
      Members under Section 8.1.

     

    ARTICLE
      9. DISTRIBUTIONS

     

    9.1 Distributions.
      Unless
      the Members unanimously agree otherwise, the Company will make Distributions
      to
      its Members of 100% of Excess Cash Flow (as defined below) no later than
      forty-five (45) days after the end of each fiscal quarter in the following
      order
      of priority:

     

    (a)
      First, the Company will make Distributions to TrackPower and Southern Tier,
      on a
      50/50 basis, until each has received the cumulative amount of $2,500,000 (the
      cumulative amount of which represents the $5,000,000 in increased value of
      the
      Tioga Downs Contributed Assets).

     

    
      
        
        

      

      
        -35-

        
          

        

      

      
        
        

      

    

     

    (b)
      Second, the Company will make Distributions to the Members in proportion to
      their Capital Contributions until the Unreturned Capital Contributions of all
      of
      the Members equal zero.

     

    (c)
      Third, the Company will distribute the remaining Excess Cash Flow to the Members
      in proportion to their respective Percentages.

     

    (d)
      Distributions made pursuant to the Dissolution and Liquidation of the Company
      will be made pursuant to Article 13.

     

    Notwithstanding
      the foregoing, the Distributions to Members (other than tax Distributions under
      Section 9.5) shall not be made until all Member Loans (including the Nevada
      Gold
      Deemed Loan) have been fully repaid; provided, however, that the Company shall
      not be prohibited from making any Distributions to Members at any time an
      Unfunded Member Loan is outstanding. Distributions, including tax Distributions
      under Section 9.5, shall not be in excess of that entitled to be made pursuant
      to any indenture or credit facility entered into by the Company, including
      the
      Senior Credit Facilities or other Debt Financing pursuant to Section 5.3,
      5.4(a), 7.11 or 7.12. As used herein, “Excess Cash Flow” means EBIDTA
      less:

     

    (i) management
      fees (to the extent not taken into account in the calculation of
      EBIDTA),

     

    (ii) capital
      expenditures approved by the Board and actually paid,

     

    (iii) interest,

     

    (iv) tax
      Distributions made pursuant to Section 9.5 actually paid to Members within
      forty-five (45) days after the end of each fiscal quarter,

     

    (v) scheduled
      principal payments on debt of the Company, including the Senior Credit
      Facilities, and

     

    (vi) Reserves.

     

    9.2 Other
      Distributions.
      Unless
      the Members otherwise unanimously agree, the Members intend that all
      Distributions, except for Distributions under Section 9.5, will be made to
      the
      Members in accordance with Section 9.1. In the event any Distribution is made
      otherwise than in accordance with Sections 9.1 or 9.5, without the unanimous
      consent of the Members, any excess Distribution to a Member will be treated
      as
      an advance or loan made by the Company to such Member, payable to the Company
      with interest payable at the Interest Rate and on demand and shall be evidenced
      by a promissory note.

     

    9.3 Payment.
      Any
      Distribution will be made to a Member only if such Person owns a Unit on the
      date of Distribution, as reflected on the books of the Company.

     

    
      
        
        

      

      
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    9.4 Withholding.
      Each
      Member agrees to timely file any agreement that is required by any taxing
      authority in order to avoid any withholding obligation that would otherwise
      be
      imposed on the Company. Each Member hereby authorizes the Company to withhold
      from or pay on behalf of or with respect to such Member any amount of federal,
      state, local or foreign taxes that the Tax Matters Partner determines that
      the
      Company is required to withhold or pay with respect to any amount distributable
      or allocable to such Member pursuant to this Agreement, including, without
      limitation, any taxes required to be withheld or paid by the Company pursuant
      to
      sections 1441, 1442, 1445, or 1446 of the Code. Any amount paid on behalf of
      or
      with respect to a Member shall constitute a loan by the Company to such Member,
      which loan shall be repaid by such Member within fifteen (15) days after notice
      from the Tax Matters Partner that such payment must be made unless the Company
      withholds such payment from a Distribution which would otherwise be made to
      the
      Member. Any amounts withheld pursuant to the foregoing sentence shall be treated
      as having been distributed to such Member. In the event that a Member fails
      to
      pay any amounts owed to the Company pursuant to this Section 9.4 when due (i.e.
      fifteen (15) days after demand), the Company may exercise any and all rights
      and
      remedies the Company may have against such Member, including instituting lawsuit
      to collect the unpaid amount (together with interest thereon from the date
      such
      amount is due (i.e. fifteen (15) days after the demand) calculated at the lower
      of (i) the Interest Rate, and (ii) the highest rate permitted by
      law.

     

    9.5 Tax
      Distributions.
      Unless
      the Members unanimously agree otherwise, the Company will make Distributions
      to
      its Members no later than forty-five (45) days after the end of each fiscal
      quarter of an amount equal to 40% of the Profits of the Company allocated to
      each Member. Any payments made under this Section 9.5 to a Member shall be
      deemed to be a draw against such Member’s share of future Distributions under
      Section 9.1, so that such Member’s share of such future Distributions shall be
      reduced by the amounts previously drawn under this Section 9.5 until the
      aggregate reductions in such Distributions equal the aggregate draws made under
      this Section 9.5.

     

    ARTICLE
      10. REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

     

    10.1 Representations
      and Warranties of Members.
      As used
      in this Article 10, the term “Agreement” includes this Agreement and, in the
      case of Nevada Gold only, the Management Agreements. Each of the Members
      represents and warrants (which representations and warranties shall survive
      the
      execution hereof) to the Company and each of the other Members that, as of
      the
      signing of this Agreement:

     

    (a)
      i) Such
      Member is duly organized, validly existing and in good standing under the laws
      of the jurisdiction where it purports to be organized, and is a United States
      Person;

     

    (ii) Such
      Member has full power and authority to enter into and perform this
      Agreement;

     

    (iii) All
      actions necessary to authorize the signing and delivery of this Agreement and
      the performance of the respective obligations of the Member to this Agreement,
      have been duly taken;

     

    
      
        
        

      

      
        -37-

        
          

        

      

      
        
        

      

    

     

    (iv) This
      Agreement has been duly signed and delivered by a duly authorized officer or
      other representative of each of the Members that are signatories thereto, and
      this Agreement constitutes the legal, valid and binding obligation of each
      such
      Member enforceable in accordance with its terms (except as such enforceability
      may be affected by applicable bankruptcy, insolvency or other similar laws
      effecting creditors’ rights generally, and except that the availability of
      equitable remedies is subject to judicial discretion);

     

    (v) No
      consent or approval of any other Person is required in connection with the
      signing, delivery and performance of this Agreement by the Members;

     

    (vi) The
      signing, delivery and performance of this Agreement do not violate the
      organizational documents of such Member, or any material agreement to which
      such
      Member is a party or by which such Member is bound;

     

    (vii) It
      is not
      in violation or default under any agreement with any Person, or under any law,
      judgment, order, decree, license, permit, approval, rule, or regulation of
      any
      court, arbitrator, administrative agency, or other governmental authority to
      which it may be subject which could reasonably be anticipated to have a material
      adverse impact on the Company, and hereafter shall take no action which shall
      be
      in violation or cause a default under any agreement with any Person, or under
      any law, judgment, order, decree, license, permit, approval, rule, or regulation
      of any court, arbitrator, administrative agency, or other governmental authority
      to which it may be subject which could reasonably be anticipated to have a
      material adverse impact on the Company;

     

    (b)
      with
      respect to its investment in the Company and the Units:

     

    (i) it
      acknowledges that the Units are being offered and sold without registration
      under the Securities Act of 1933, as amended, or under similar provisions of
      state law;

     

    (ii) it
      has
      knowledge and experience in financial and business matters in general, and
      in
      investments of this type;

     

    (iii) it
      is
      capable of evaluating the merits and risks of such investment;

     

    (iv) it
      has
      either secured independent tax advice with respect to such investment, upon
      which it is solely relying, or it is sufficiently familiar with the income
      taxation of partnerships that it has deemed such independent advice
      unnecessary;

     

    (v) it
      has
      received or has access to all material information and documents with respect
      to
      such investment and has had an opportunity to ask questions and receive answers
      thereto and to verify and clarify the information available;

     

    (vi) notwithstanding
      any financial projections which may have been prepared by any other Person,
      it
      has relied solely upon its independent investigation, and not on any financial
      projections, statements, actions or representations of the other Members or
      any
      Affiliate of the other Members, in making the decision to acquire such
      investment;

     

    
      
        
        

      

      
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    (vii) it
      understands that no Federal or State agency has reviewed or passed upon the
      adequacy or accuracy of the information set forth in the documents submitted
      to
      it or made any finding or determination as to the fairness for investment,
      or
      any recommendation or endorsement of such investment;

     

    (viii) it
      understands that there are restrictions on the transferability of its Units
      set
      forth in this Agreement and under applicable law;

     

    (ix) it
      understands that there will be no public market for its Units Interests, and,
      accordingly, it may not be possible to liquidate such investment;

     

    (x) it
      understands that any anticipated Federal or state income tax benefits applicable
      to its Units may be lost through changes in, or adverse interpretations of,
      existing laws and regulations;

     

    (xi) it
      has
      entered into this Agreement freely and voluntarily, without coercion, duress,
      distress, or undue influence by any other Persons or their respective
      shareholders, members, directors, officers, partners, agents or employees;
      and

     

    (xii) it
      understands that this Agreement may affect legal rights and it has received
      legal advice from counsel of its choice in connection with the negotiation
      and
      execution of this Agreement and is satisfied with its legal counsel and the
      advice received from it.

     

    (c)
      each
      of the following is true and correct:

     

    (i) none
      of
      it or any of its Affiliates is a party to any other agreement or other
      arrangement which would interfere with the development or operation of the
      Gaming Complexes;

     

    (ii) performance
      of this Agreement will not violate any other material agreement or other
      arrangement to which it or its Affiliates is a party;

     

    (iii) it
      and
      its Affiliates have not received notice of any claim which would interfere
      with
      its or their performance of this Agreement;

     

    (iv) none
      of
      it or its Affiliates has incurred any material liabilities or obligations on
      behalf of the Company or has knowledge of any liabilities or obligations of
      the
      Company, the Tioga Downs Complex or the Vernon Downs Complex other than those
      described on Exhibit
      “B”
to
      the
      Contribution Agreement and agrees hereafter that it or they, as the case may
      be,
      will not, nor cause any of its Affiliates, to incur any liability or obligation
      on behalf of the Company, except as otherwise expressly provided
      herein;

     

    
      
        
        

      

      
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    (v) it
      knows
      of no actions or lawsuits, pending, planned or threatened, by or against it
      or
      its Affiliates, or the Company or the Company’s Affiliates, which could create
      an obligation or liability for the Company or any of the other Members other
      than those described on Exhibit
      “B”
      to the
      Contribution Agreement; and

     

    (vi) none
      of
      such Member, its Affiliates or any officers or directors of any of them has
      been
      determined by any gambling commission or authority to be unsuitable, has been
      convicted of a crime (other than traffic offenses), and had any application
      for
      any gambling license or permit rejected, or has had any gambling licenses or
      permit, once having been issued, rescinded, suspended, revoked or not renewed
      or
      reinstated, and no Member has knowledge that its affiliation with any other
      Member will threaten any gambling license, permit, entitlement or approval
      in
      any jurisdiction of any other Member or Affiliate of a Member.

     

    (d)
      the
      execution, delivery and performance of this Agreement will not:

     

    (i) violate
      any law, judgment, order, decree, license, permit, approval, rule or regulation
      of any court, arbitrator, administrative agency, or other governmental authority
      to which it may be subject;

     

    (ii) result
      in
      a breach or default under any contract or other binding commitment or any
      provision of the charter or by-laws or partnership agreement, limited liability
      company agreement or other organizational documents, as the case may be, of
      such
      Member; or

     

    (iii) require
      any consent, approval or vote of any court or governmental authority or of
      any
      Person that, as of the date hereof, has not been given or taken, and does not
      remain effective.

     

    10.2 Indemnification.

     

    (a)
      To
      the fullest extent permitted by applicable laws, regulations, rules or orders,
      each Member and its Indemnified Persons shall not be liable, responsible or
      accountable in damages or otherwise to the Company, or to any of the other
      Members or any of the other Indemnified Persons, for any act or omission
      performed or omitted by them in good faith on behalf of the Company and in
      a
      manner reasonably believed by them to be within the scope of their authority
      and
      in the best interests of the Company; provided, however, that this exculpation
      shall not apply to acts or omissions which are determined, by a final decision
      of a court of competent jurisdiction, to constitute either fraud, bad faith,
      breach of this Agreement, gross negligence, or criminal conduct.

     

    (b)
      (i) Each
      Member shall and does hereby indemnify, defend and hold harmless the Company,
      the other Members and the Indemnified Persons of the other Members, and each
      of
      them separately, from and against all liability, loss, cost, or damage
      whatsoever (including reasonable attorneys’ fees) resulting from or arising out
      of (x) any act, claim or omission of or by such Member or any Affiliates of
      such
      Member prior to the date hereof and (y) any breach by such Member of the
      representations and warranties under Section 10.1 hereof, or any losses or
      expenses as a result of or in connection with any breach of this Agreement
      by
      such Member.

     

    
      
        
        

      

      
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    (ii) Anything
      in this Section 10.2 or elsewhere in this Agreement to the contrary
      notwithstanding, no Member nor any of its Affiliates shall be required to
      indemnify, defend or hold harmless the Company, the other Members or any of
      the
      Indemnified Persons of the other Members for any liability, loss, cost or damage
      (including attorneys’ fees) resulting from or arising out of (whether directly
      or indirectly) the bankruptcy cases of Mid-State Raceway, Inc. and Mid-State
      Development Corporation under chapter 11 of title 11 of the United States Code
      (the “Bankruptcy Code”) or any transaction or other matter relating to such
      bankruptcy cases (any such liabilities, losses, costs or damages being “Released
      Claims”) and each Member, on behalf of itself and each of its Affiliates and the
      successors and assigns of each of them, hereby releases, acquits and forever
      discharges the Company, the other Members or any of the Indemnified Persons
      of
      the other Members from any of the Released Claims; provided, that this Section
      10.2(b)(ii) shall not operate to waive or release any claim, right or remedy
      of
      any Member or any of its Affiliates (whether now existing or hereafter arising)
      under or in respect of the Debt Commitment Letter or the Second Lien
      Facility.

     

    (c)
      To
      the fullest extent permitted by law, the Company shall indemnify, defend and
      hold harmless each Member and its Indemnified Persons from and against any
      and
      all loss, cost, damage, expense or liability (other than a loss of any equity
      contributions, loan or other investment in the Company), which relate to or
      arise out of the Company, the Gaming Complexes, the Company’s business and
      affairs, regardless of whether the Members continue to be Members, an Affiliate
      of a Member, or an agent, officer, member, director, stockholder or employee
      of
      such Member or such Affiliate at the time any such liability or expense is
      paid
      or incurred, if such Member’s or its Indemnified Persons’ conduct did not
      constitute fraud, bad faith, breach of this Agreement, gross negligence or
      criminal conduct. With respect to the expenses actually and reasonably incurred
      by a Member or Indemnified Person who is a party to a Proceeding, the Company
      shall provide funds to such Member or Indemnified Person for its documented
      costs of defense in advance of the final disposition of the Proceeding if the
      Member or Indemnified Person furnishes the Company with such Person’s written
      affirmation of a good-faith belief that such Person has met the standard of
      conduct described herein, and such Person agrees in writing to repay the advance
      if it is subsequently determined that such Person has not met such standard
      of
      conduct.

     

    (d)
      To
      the extent that, at law or in equity, a Member or its Indemnified Persons have
      duties (including fiduciary duties) and liabilities relating thereto to the
      Company or to the Members, each Member and its Indemnified Persons acting under
      this Agreement or otherwise shall not be liable to the Company or to any Member
      for its good faith reliance on the provisions of this Agreement. The provisions
      of this Section 10.2, to the extent that they expand or restrict the duties
      and
      liabilities of a Member or its Indemnified Persons otherwise existing at law
      or
      in equity, are agreed by the Members to replace such other duties and
      liabilities of such Member and its Indemnified Person.

     

    
      
        
        

      

      
        -41-

        
          

        

      

      
        
        

      

    

     

    (e)
      (i)
      (A) Promptly
      after the assertion of any claim by a third party which may give rise to a
      claim
      for indemnification from an Indemnifying Member or the Company under this
      Agreement, an Indemnified Person shall notify the Indemnifying Member or the
      Company (as applicable) in writing of such claim and advise the Indemnifying
      Member or the Company (as applicable) whether the Indemnified Person intends
      to
      contest such claim.

     

    (B) The
      Indemnified Person shall permit the Indemnifying Member or the Company (as
      applicable) to contest and defend against such claim, at the Indemnifying
      Member’s or the Company’s (as applicable) expense, if the Indemnifying Member or
      the Company (as applicable) has confirmed to the Indemnified Person in writing
      that it agrees that the Indemnified Person is entitled to indemnification
      hereunder in respect of such claim, unless the Indemnified Person can establish,
      by reasonable evidence, that the conduct of its defense by the Indemnifying
      Member or the Company (as applicable) could be reasonably likely to prejudice
      such Indemnified Person due to the nature of the claims presented or by virtue
      of a conflict between the interests of such Indemnified Person and such
      Indemnifying Member or the Company (as applicable) or another Indemnified Person
      whose defense has been assumed by the Indemnifying Member or the Company (as
      applicable). Notwithstanding a determination by the Indemnifying Member or
      the
      Company (as applicable) to contest such claim, the Indemnified Person shall
      have
      the right to be represented by its own counsel and accountants at its own
      expense. In any case, the Indemnified Person shall make available to the
      Indemnifying Member or the Company (as applicable) and its attorneys and
      accountants, at all reasonable times during normal business hours, all books,
      records, and other documents in its possession relating to such claim. The
      party
      contesting any such claim shall be furnished all reasonable assistance in
      connection therewith by the other party (with reimbursement of reasonable
      expenses by the Indemnifying Member or the Company (as applicable)). If the
      Indemnifying Member or the Company (as applicable) fails to undertake the
      defense of or to settle or pay any such third-party claim within fifteen (15)
      days after the Indemnified Person has given Notice to the Indemnifying Member
      or
      the Company (as applicable) advising the Indemnifying Member or the Company
      (as
      applicable) of such claim, or if the Indemnifying Member or the Company (as
      applicable), after having given Notice to the Indemnified Person that it intends
      to undertake the defense, fails forthwith to defend, settle or pay such claim,
      then the Indemnified Person may take any and all necessary action to dispose
      of
      such claim including, without limitation, the settlement or full payment thereof
      upon such terms as it shall deem appropriate, in its sole
      discretion.

     

    (C) The
      Indemnifying Member or the Company (as applicable) shall not consent to the
      terms of any compromise or settlement of any third-party claim defended by
      the
      Indemnifying Member or the Company (as applicable) in accordance herewith (other
      than terms related solely to the payment of money damages and only after the
      Indemnifying Member or the Company (as applicable) has furnished the Indemnified
      Person with such evidence as the Indemnified Person may reasonably request
      of
      the Indemnifying Member’s or the Company’s (as applicable) capacity and
      capability (financial and otherwise) to pay promptly the amount of such money
      damages at such times as provided in the compromise or settlement) without
      the
      prior written consent of the Indemnified Person if as a result of such
      compromise or settlement such Indemnified Person could be adversely
      affected.

     

    
      
        
        

      

      
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    (D) Any
      claim
      for indemnification under this Agreement which does not result from the
      assertion of a claim by a third party shall be asserted by Notice given by
      the
      Indemnified Person to the Indemnifying Member or the Company (as applicable).
      Such Indemnifying Member or the Company (as applicable) shall have a period
      of
      thirty (30) days within which to respond thereto. If such Indemnifying Member
      or
      the Company (as applicable) does not respond within such thirty (30) day period,
      such Indemnifying Member or the Company (as applicable) shall be deemed to
      have
      accepted responsibility to make payment, and shall have no further right to
      contest the validity of such claim. If the Indemnifying Member or the Company
      (as applicable) does respond within such thirty (30) day period and rejects
      such
      claim in whole or in part, such Indemnified Person shall be free to pursue
      such
      remedies as may be available to such party under applicable laws, regulations,
      rules or orders.

     

    (ii) Mitigation

     

    Each
      Indemnifying Member or the Company (as applicable) and each Indemnified Person
      shall use reasonable efforts and shall consult and cooperate with each other
      with a view towards mitigating claims, losses, liabilities, damages,
      deficiencies, costs and expenses that may give rise to claims for
      indemnification.

     

    (iii) Payment

     

    Each
      Indemnifying Member agrees to pay any amounts due hereunder (A) within ten
      (10)
      days of written notice in respect of its indemnity obligations which it has
      accepted or which it has been deemed to accept; (B) within five (5) days of
      any
      final adjudication by a court of competent jurisdiction of any indemnity
      obligations as to which it has not so accepted; and (C) as reasonable attorneys’
fees and other costs of defense are incurred and invoiced.

     

    10.3 Insurance.
      The
      indemnification provisions of this Article do not limit a Member’s or other
      Indemnified Person’s right to recover under any insurance policy or other
      financial arrangement by the Company (including any self-insurance, trust fund,
      letter of credit, guaranty or surety). If, with respect to any liability, any
      Member or other Indemnified Person receives an insurance or other
      indemnification payment which, together with any indemnification payment made
      by
      the Indemnifying Member or Company (as applicable) exceeds the amount of such
      liability, then such Member or Indemnified Person will immediately repay such
      excess to the Indemnifying Member or the Company (as applicable).

     

    ARTICLE
      11. ACCOUNTING AND REPORTING

     

    11.1 Fiscal
      Year.
      For
      income tax and accounting purposes, the Fiscal Year of the Company shall end
      on
      December 31 or as otherwise determined by the Board.

     

    11.2 Accounting
      Method.
      For
      accounting purposes, the Company will use United States generally accepted
      accounting principles as in effect from time to time, applied on a consistent
      basis using the accrual method of accounting (“GAAP”) and all financial
      statements will be prepared in accordance with GAAP.

     

    
      
        
        

      

      
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    11.3 Tax
      Elections.
      The
      Company will have the authority to make such tax elections, and to revoke any
      such election, as the tax matters partner may from time to time determine.
      No
      Director or Member shall have the right to file an election to treat the Company
      as an association taxable as a corporation for federal income tax
      purposes.

     

    11.4 Returns.
      The
      Company will cause the preparation and timely filing of all tax returns required
      to be filed by the Company pursuant to the Code, as well as all other tax
      returns required in each jurisdiction in which the Company does
      business.

     

    11.5 Reports.
      The
      Company will furnish a Profit or Loss statement and a balance sheet to each
      Member within a reasonable time after the end of each fiscal quarter. The
      Company books will be closed at the end of each Fiscal Year and audited
      financial statements prepared showing the financial condition of the Company
      and
      its Profits or Losses from operations. Copies of these statements will be given
      to each Member. In addition, as soon as is practicable after the close of each
      Fiscal Year (and in any event within 90 days following the end of each Fiscal
      Year), the Company will provide each Member with all necessary tax reporting
      information.

     

    11.6 Books
      and Records.
      Full and
      accurate books of the Company shall be maintained by the Company, at the
      Company’s principal place of business, showing all receipts and expenditures,
      assets and liabilities, Profits and Losses and all other records necessary
      for
      recording the Company’s business and affairs. The books and records of the
      Company will be available for inspection and examination at reasonable times
      by
      all Members or their duly authorized representatives who have executed
      confidentiality agreements.

     

    11.7 Banking.
      The
      Company may establish one or more bank or financial accounts and safe deposit
      boxes. The Company may authorize one or more individuals to sign checks on
      and
      withdraw funds from such bank or financial accounts and to have access to such
      safe deposit boxes, and may place such limitations and restrictions on such
      authority as the Company deems advisable.

     

    11.8 Tax
      Matters Partner.
      Until
      further action by the Company, Nevada Gold is designated as the tax matters
      partner (the “Tax Matters Partner”) under Section 6231(a)(7) of the Code. The
      Tax Matters Partner will be responsible for notifying all Members of ongoing
      proceedings, both administrative and judicial, and will represent the Company
      throughout any such proceeding. The Members will furnish the Tax Matters Partner
      with such information as it may reasonably request to provide the Internal
      Revenue Service with sufficient information to allow proper notice to the
      Members. If an administrative proceeding with respect to a partnership item
      under the Code has begun, and the Tax Matters Partner so requests, each Member
      will notify the Tax Matters Partner of its treatment of any partnership item
      on
      its federal income tax return, if any, which is inconsistent with the treatment
      of that item on the partnership return for the Company. Any settlement agreement
      with the Internal Revenue Service will be binding upon the Members only as
      provided in the Code. The Tax Matters Partner will not bind any other Member
      to
      any extension of the statute of limitations or to a settlement agreement without
      such Member’s written consent. Any Member who enters into a settlement agreement
      with respect to any partnership item will notify the other Members of such
      settlement agreement and its terms within 30 days from the date of settlement.
      If the Tax Matters Partner does not file a petition for readjustment of the
      partnership items in the Tax Court, Federal District Court or Claims Court
      within the 90-day period following a notice of a final partnership
      administrative adjustment, any notice partner or 5-percent group (as such terms
      are defined in the Code) may institute such action within the following 60
      days.
      The Tax Matters Partner will timely notify the other Members in writing of
      its
      decision. Any notice partner or 5-percent group will notify any other Member
      of
      its filing of any petition for readjustment.

     

    
      
        
        

      

      
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    11.9 No
      Partnership.
      The
      classification of the Company as a partnership will apply only for federal
      (and,
      as appropriate, state and local) income tax purposes. This characterization,
      solely, for tax purposes, does not create or imply a general partnership between
      the Members for state law or any other purpose. Instead, the Members acknowledge
      the status of the Company as a limited liability company formed under the
      Act.

     

    ARTICLE
      12. DISSOLUTION OF THE COMPANY

     

    12.1 Dissolution.
      Dissolution of the Company will occur only upon the happening of any of the
      following events:

     

    (a)
      The
      occurrence of any act or omission by a Member which results in the dissolution
      of the Company by operation of law under the provisions of the Act;

     

    (b)
      The
      sale or other disposition of all or substantially all of the assets of the
      Company and the collection of all sales proceeds, including any involuntary
      “sale” as a result of condemnation or casualty that is not
      restored;

     

    (c)
      By
      unanimous written agreement of the Members;

     

    (d)
      The
      election of the remaining Members to dissolve as permitted by Section 15.4(f)
      of
      this Agreement; or

     

    (e)
      The
      entry of a decree of judicial dissolution pursuant to Section 702 of the
      Act.

     

    The
      withdrawal, retirement, resignation, bankruptcy or dissolution of any Member
      or
      the occurrence of any event that terminates the continued membership of any
      Member in the Company shall not, in and of itself, cause the Company’s
      dissolution.

     

    12.2 Events
      of Withdrawal.
      An event
      of Withdrawal of a Member occurs when any of the following occurs:

     

    (a)
      With
      respect to any Member, upon the Transfer of all or any part of such Member’s
      Units to any Person other than a Permitted Transferee that is not approved
      by
      the Members;

     

    
      
        
        

      

      
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    (b)
      With
      respect to any Member, upon the voluntary withdrawal of the Member (including
      any resignation or retirement in contravention of Section 3.8) by notice to
      all
      other Members;

     

    (c)
      With
      respect to any Member that is a corporation, upon filing of articles of
      dissolution of the corporation;

     

    (d)
      With
      respect to any Member that is a partnership or a limited liability company,
      upon
      dissolution of such entity;

     

    (e)
      With
      respect to any Member who is an individual, upon either the death or retirement
      of the individual, or upon such individual’s insanity or the entry by a court of
      competent jurisdiction of an order adjudicating the individual to be incompetent
      to manage such individual’s person or estate;

     

    (f)
      With
      respect to any Member that is a trust, upon termination of the
      trust;

     

    (g)
      With
      respect to any Member that is an estate, upon final distribution of the estate’s
      Units;

     

    (h)
      Any
      other event which terminates the continued membership of a Member in the
      Company; or

     

    (i)
      With
      respect to any Member, the bankruptcy of the Member, so long as there is one
      or
      more remaining Members.

     

    Within
      30
      days following the happening of any event of Withdrawal with respect to a
      Member, such Member (or its, his or her legal representative) must give notice
      of the date and the nature of such event to the Company. Any Member failing
      to
      give such notice will be liable in damages for the consequences of such failure
      as otherwise provided in this Agreement. Upon the occurrence of an event of
      Withdrawal with respect to a Member, such Member (and its designated Director(s)
      will cease to have voting rights hereunder, and such Member will, without
      further act, become a Transferee of its Units (with only the limited rights
      of a
      Transferee that is not a Permitted Transferee as set forth in Section 14.6).
      Any
      Member who withdraws from the Company in contravention of this Agreement will
      be
      liable to the Company and the other Members for proven monetary damages (but
      any
      such action or proposed action to resign or retire will not be subject to any
      equitable action for injunctive relief or specific performance except as
      permitted under Section 17.6).

     

    12.3 Bankruptcy.
      The
      bankruptcy of a Member will not dissolve the Company. The bankruptcy of a Member
      will be deemed to occur when such Person:

     

    (a)
      files
      a voluntary petition in bankruptcy,

     

    (b)
      is
      adjudged a bankrupt or insolvent, or has entered against such Person an order
      for relief in any bankruptcy or insolvency proceeding,

     

    
      
        
        

      

      
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    (c)
      files
      a petition or answer seeking for such Person any reorganization, arrangement,
      composition, readjustment, liquidation, dissolution or similar relief under
      any
      statute, law or regulation,

     

    (d)
      files
      an answer or other pleading admitting or failing to contest the material
      allegations of a petition filed against such Person in any insolvency proceeding
      of this nature, or

     

    (e)
      seeks, consents to or acquiesces in the appointment of a trustee, receiver
      or
      liquidator of all or any substantial part of such Person’s properties. In
      addition, the bankruptcy of a Member will be deemed to occur if any proceeding
      filed against a Member seeking reorganization, arrangement, composition,
      readjustment, liquidation, dissolution or similar relief under any statute,
      law
      or regulation is not dismissed within 120 days or if the appointment without
      the
      Member’s consent (or acquiescence of a trustee, receiver or liquidator of the
      Member or of all or any substantial part of such Person’s properties) is not
      vacated or stayed within 90 days (or if after the expiration of any stay, if
      the
      appointment is not vacated within 90 days).

     

    ARTICLE
      13. LIQUIDATION

     

    13.1 Liquidation.
      Upon
      Dissolution of the Company, the Company will immediately proceed to wind up
      its
      affairs and liquidate. The Board will appoint a liquidating trustee which may
      be
      one or more of the Directors or a Member. The winding up and Liquidation of
      the
      Company will be accomplished in a businesslike manner as determined by the
      liquidating trustee and this Article 13. A reasonable time will be allowed
      for
      the orderly Liquidation of the Company and the discharge of liabilities to
      creditors so as to enable the Company to provide for any losses reasonably
      anticipated to be attendant upon Liquidation. Any gain or loss on disposition
      of
      any Company assets in Liquidation will be allocated to Members and credited
      or
      charged to Capital Accounts in accordance with the provisions of Articles 7
      and
      8. With respect to all Company property that has not been sold, the Fair Market
      Value of that property shall be determined and the Capital Accounts of the
      Members shall be adjusted to reflect the manner in which the unrealized income,
      gain, loss, and deduction inherent in property that has not been reflected
      in
      the Capital Accounts previously would be allocated among the Members if there
      were a taxable disposition on that property for the Fair Market Value of that
      property on the date of Distribution in accordance with the provisions of
      Articles 7 and 8. Any liquidating trustee is entitled to reasonable compensation
      for services actually performed, and may contract for such assistance in the
      liquidation process as such Person deems necessary. Until the filing of articles
      of dissolution as provided in Section 13.6, the liquidating trustee may settle
      and close the Company’s business, prosecute and defend suits, dispose of its
      property, discharge or make provision for its liabilities, and make
      Distributions in accordance with the priorities set forth in Section
      13.2.

     

    13.2 Priority
      of Payment.
      The
      assets of the Company will be distributed in Liquidation of the Company in
      the
      following order:

     

    (a)
      First, to non-Member creditors of the Company (including any of the Senior
      Credit Facility Lenders, whether or not such Senior Credit Facility Lenders
      are
      Members of the Company) in order of priority as provided by law in payment
      of
      unpaid liabilities of the Company to the extent required by law or under
      agreements with such creditors;

     

    
      
        
        

      

      
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    (b)
      Second, to the setting up of any reserves which the Board reasonably deems
      necessary for any anticipated, contingent or unforeseen liabilities or
      obligations of the Company arising out of or in connection with the conduct
      of
      the Company’s Business. At the expiration of such period as the Board reasonably
      deem advisable, the balance thereof shall be distributed in accordance with
      this
      Section 13.2;

     

    (c)
      Third, to any Member for any other loans or debts owing to such Member by the
      Company; and

     

    (d)
      Fourth, to the Members in accordance with Section 9.1.

     

    13.3 Distribution
      to Members.
      Distributions in Liquidation due to the Members may be made by either or a
      combination of the following methods: selling the Company assets and
      distributing the net proceeds, or by distributing the Company assets to the
      Members at their net Fair Market Value in kind. Any liquidating Distribution
      in
      kind to the Members may be made either by a pro-rata Distribution of undivided
      interests or, upon the affirmative vote of all Members, by non pro-rata
      Distribution of specific assets at Fair Market Value on the effective date
      of
      Distribution. Any Distribution in kind may be made subject to, or require
      assumption of, liabilities to which such property may be subject, but in the
      case of any non pro-rata Distribution only upon the express written agreement
      of
      the Member receiving the Distribution. Each Member hereby agrees to save and
      hold harmless the other Members from such Member’s share of any and all such
      liabilities which are taken subject to or assumed. Appropriate and customary
      prorations and adjustments shall be made incident to any Distribution in kind.
      The Members will look solely to the assets of the Company for the return of
      their Capital Contributions, and if the assets of the Company remaining after
      the payment or discharge of the debts and liabilities of the Company are
      insufficient to return such contributions, they will have no recourse against
      any other Member.

     

    13.4 No
      Restoration Obligation.
      Except
      as otherwise specifically provided in Section 7.8, nothing contained in this
      Agreement imposes on any Member an obligation to make a Capital Contribution
      in
      order to restore a deficit Capital Account upon Liquidation of the Company.
      Furthermore, each Member will look solely to the assets of the Company for
      the
      return of such Member’s Capital Contribution and Capital Account.

     

    13.5 Liquidating
      Reports.
      A report
      will be submitted with each liquidating Distribution to Members, showing the
      collections, disbursements and Distributions during the period which is
      subsequent to any previous report. A final report, showing cumulative
      collections, disbursements and Distributions, will be submitted upon completion
      of the liquidation process.

     

    13.6 Articles
      of Dissolution.
      Upon
      Dissolution of the Company and the completion of the winding up of its business,
      the Company will file articles of dissolution (to cancel its Articles) with
      the
      New York Secretary of State pursuant to the Act. At such time, the Company
      will
      also file an application for withdrawal of its certificate of authority in
      any
      jurisdiction where it is then qualified to do business.

     

    
      
        
        

      

      
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    ARTICLE
      14. TRANSFER RESTRICTIONS

     

    14.1 General
      Restriction.
      No
      Member may Transfer all or any part of its Units in any manner whatsoever (and
      no constituent owner of a Member shall be permitted to transfer its interests
      in
      such Member) except to a Permitted Transferee as set forth in Section 14.3
      and
      only if the requirements of Section 14.5 have also been satisfied. Any other
      Transfer of all or any part of its Units is null and void, and of no effect.
      Any
      Member who makes a Transfer of all of such Member’s Units will be treated as
      resigning from the Company on the effective date of such Transfer. Any Member
      who makes a Transfer of part (but not all) of such Member’s Units will continue
      as a Member (with respect to the Units retained), and such partial Transfer
      will
      not constitute an event of Withdrawal of such Member. The rights and obligations
      of any resigning Member or of any Transferee of a Units will be governed by
      the
      other provisions of this Agreement. For purposes of this Article 14, the term
      Unit or Units shall mean and include Units and all other Company Securities
      owned or held by a Member from time to time.

     

    14.2 No
      Member Rights.
      No
      Member has the right or power to confer upon any Transferee (other than a
      Permitted Transferee described in Sections 14.3(a) through 14.3(h)) the
      attributes of a Member in the Company. The Transferee of all or any part of
      a
      Unit by operation of law (except as contemplated by Section 14.3) does not,
      by
      virtue of such Transfer, succeed to any rights as a Member in the Company except
      for the limited rights set forth in Section 14.6(b).

     

    14.3 Permitted
      Transferee.
      Subject
      to the requirements set forth in Section 14.5, a Person may Transfer all or
      any
      part of such Person’s Units without the consent of any other
      Member:

     

    (a)
      To a
      wholly-owned subsidiary of such Person;

     

    (b)
      To
      the Company;

     

    (c)
      To a
      Person approved by all the Members;

     

    (d)
      In
      the case of Nevada Gold, to another Person as part of a change in control,
      merger, reorganization, consolidation or sale of all or substantially all of
      the
      assets of its parent company;

     

    (e)
      In
      the case of TrackPower, (i) TrackPower may transfer to Southern Tier up to
      15,165.16 Units on or before May 14, 2006 and (ii) to another Person as
      part of a change in control, merger, reorganization, consolidation or sale
      of
      all or substantially all of its assets;

     

    (f)
      In
      the case of Southern Tier only, ownership interests within Southern Tier may
      be
      transferred provided that (i) Jeffrey Gural remains the managing member, (ii)
      Jeffrey Gural, together with his immediate family members or family trusts
      for
      the benefit of his immediate family members, retains ownership of at least
      35%
      of the ownership interests of Southern Tier and (iii) Jeffrey Gural has the
      ability, by ownership of voting securities or membership interests, contract
      or
      otherwise, to direct the management and affairs of Southern Tier; provided,
      that
      upon the retirement, death or disability of Jeffrey Gural, the provisions of
      Section 14.7 shall be applicable;

     

    
      
        
        

      

      
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    (g)
      In
      the case of Oneida or any Permitted Transferee described in this clause (g)
      that
      has received Units in accordance with the terms of this Agreement, any of the
      Plainfield Funds or any Person controlled by any of the Plainfield
      Funds;

     

    (h)
      To
      any Person after full compliance with the right of first refusal set forth
      in
      Section 14.4;

     

    (i)
      To
      any Person purchasing a Member’s Units pursuant to and in full compliance with
      Article 15;

     

    (j)
      A
      pledge or encumbrance of a Unit in favor of one or more lenders to secure a
      loan
      provided by such lender(s) to such Member or its Affiliates, provided that
      a
      foreclosure upon such pledge or encumbrance shall not be a Permitted Transfer
      and shall be subject to the provisions of Section 14.4.

     

    Each
      of
      the foregoing Transferees shall be a “Permitted Transferee” and shall, except
      for a Transferee identified in Section 14.3(i) and a Transferee (as pledgee)
      identified in Section 14.3(j) become a Member of the Company in accordance
      with
      Section 602 of the Act.

     

    14.4 Right
      of First Refusal; Tag-Along Provisions.

     

    (a)
      Prior
      to any proposed Transfer of all or any part of a Unit of a Member, other than
      to
      a Permitted Transferee pursuant to Section 14.3(a) through 14.3(g), the
      Transferor must obtain a Third Party Offer. For purposes of this Section 14.4,
      a
      Transfer of the Units of a Member shall be deemed to occur upon any change
      in
      control of such Member other than to a Permitted Transferee pursuant to Section
      14.3(d) or (e). The Third Party Offer must not be subject to unstated conditions
      or contingencies or be part of a larger transaction such that the price for
      the
      Units stated in such Third Party Offer does not accurately reflect Fair Market
      Value (reduced by the amount of associated liabilities of such Units). The
      Third
      Party Offer must contain a description of all of the consideration, material
      terms and conditions of the proposed Transfer. The Transferor will give Notice
      of the Third Party Offer to the Company and the other Members (such Members
      called the “Offeree Members”), together with a written offer to sell the Units
      which are the subject of the Third Party Offer (the “Offered Units”) to the
      Offeree Members on the same price and terms as the Third Party Offer as provided
      herein. The Offeree Members (or any of them) shall have the right to purchase,
      in whole but not in part, the Offered Units in accordance with the terms of
      the
      Third Party Offer by giving Notice to the Transferor (with a copy to all other
      Offeree Members) within 30 days after receipt of the Notice of such Third Party
      Offer (the “ROFR Election Period”). The Offeree Members shall each have the
      right to purchase a proportionate part of the Offered Units, equal to a
      percentage determined by dividing its Percentage by the total Percentages of
      all
      Electing Members. In the event that any Electing Member does not elect to
      purchase its full allocable share of any Offered Units (such Offered Units
      not
      so purchased being “Available Units”), then such Available Units may be
      purchased by the Fully Elected Members, with any such purchase to be made by
      the
      Fully Elected Members pro rata (based on such Fully Elected Member’s Percentage
      to the aggregate Percentage of all Fully Elected Members electing to purchase
      Available Units). A Fully Elected Member may elect to purchase Available Units
      by delivering a Notice to the Transferor within ten (10) days (the “Initial ROFR
      Extension Period”) after the expiration of the ROFR Election Period. If any
      portion of the Available Units remains unsubscribed for after the expiration
      of
      the Initial ROFR Extension Period, such remaining portion shall be allocated
      among the Fully Electing Members that elect to purchase such remaining portion
      based on the proportionate Percentages of such Fully Electing Members until
      either such remaining portion is fully subscribed for or none of the Fully
      Electing Members elects to purchase Available Units (which allocation described
      in this sentence shall in any event be concluded within five (5) days (the
      “Additional ROFR Extension Period”) following the expiration of the Initial ROFR
      Extension Period). Unless otherwise agreed, the closing of such sale will be
      held at the Company’s principal place of business in New York on a date to be
      specified by the Electing Members which is not later than 60 days after the
      expiration of the ROFR Election Period, the Initial ROFR Extension Period or
      the
      Additional ROFR Extension Period (as applicable). At the closing, the Electing
      Members will deliver the consideration in accordance with the terms of the
      Third
      Party Offer, and the Transferor will by appropriate documents assign to the
      Electing Members the Units to be sold, free and clear of all liens, claims
      and
      encumbrances other than any liens, claims and encumbrances created under this
      Agreement. If at the expiration of the ROFR Election Period, the Initial ROFR
      Extension Period or the Additional ROFR Extension Period there are Available
      Units and no Fully Electing Members that desire to purchase additional Available
      Units, in which case no Electing Member shall be entitled to purchase any of
      the
      Offered Units, or if the acceptance of the right of first refusal is not closed
      in accordance with this Section 14.4(a) (the date of the expiration of the
      ROFR
      Election Period, the Initial ROFR Extension Period or the Additional ROFR
      Extension Period (as applicable), or the date the right of first refusal is
      not
      closed in accordance with this Section 14.4(a), being the “Expiration Date”),
      the Transferor will be free for a period of 60 days after the applicable
      Expiration Date to sell all, but not less than all, of the Offered Units, but
      only to the Third Party for a price and on terms no more favorable to the Third
      Party than the Third Party Offer and subject to Section 14.4(b) and Section
      14.5. If such Units are not so sold within such 60-day period (or within any
      extensions of such period agreed to in writing by the Company), all rights
      to
      sell such Offered Units pursuant to such Third Party Offer (without making
      another offer to the Offeree Members pursuant to this Section 14.4(a)) will
      terminate and the provisions of this Article will continue to apply to any
      proposed future Transfer.

     

    
      
        
        

      

      
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    (b)
      Upon
      any Transfer of any Units pursuant to a Third Party Offer by any Member (a
      “Transferring Member”) (other than to a Permitted Transferee identified in any
      of Sections 14.3(a) through 14.3(g), 14.3(i) or 14.3(j)), the other Members
      (the
“Non-Transferring Members”) shall have the right to participate on a pro rata
      basis (based on such Non-Transferring Member’s Percentage to the aggregate
      Percentage of the Transferring Member and all Non-Transferring Members electing
      to participate in such Transfer) in such Transfer upon the terms described
      in
      the Third Party Offer; provided, that the Non-Transferring Members shall not
      be
      required to make any representations or warranties other than as to their
      ownership of the Units and authorization to Transfer. Each Non-Transferring
      Member must elect to participate in the Third Party Offer within 10 days
      following the expiration of the applicable Expiration Date described in Section
      14.4(a) by delivering a Notice of such election to the Transferring Member
      prior
      to the expiration of such 10-day period. The provisions of this Section 14.4(b)
      shall not apply to any Transfer by Melillo Investments (“Melillo”) of Units
      pledged to Melillo by TrackPower in connection with any foreclosure sale;
      provided, however, that the provisions of this Section 14.4(b) shall apply
      to
      any Transfer of Units by Melillo at any time following Melillo becoming a Member
      under this Agreement.

     

    14.5 General
      Conditions on Transfers.
      No
      Transfer of a Unit after the date of this Agreement will be effective unless
      all
      of the conditions set forth below are satisfied:

     

    (a)
      Unless waived by the Company, the Transferor signs and delivers to the Company
      an undertaking in form and substance satisfactory to the Company to pay all
      reasonable expenses incurred by the Company in connection with the Transfer
      (including, but not limited to, reasonable fees of counsel and accountants
      and
      the costs to be incurred with any additional accounting required in connection
      with the Transfer, and the cost and fees attributable to preparing, filing
      and
      recording such amendments to the organizational documents or filings as may
      be
      required by law);

     

    (b)
      Such
      Transfer does not require the registration of such transferred Units pursuant
      to
      any applicable federal or state securities laws, and the Transferor delivers
      to
      the Company an opinion of counsel for the Transferor satisfactory in form and
      substance to the Company to the effect that the Transfer of the Units is in
      compliance with the applicable federal and state securities laws, and a
      statement of the Transferee in form and substance satisfactory to the Company
      making appropriate representations and warranties in respect to compliance
      with
      the applicable federal and state securities laws and as to any other matter
      reasonably required by the Company;

     

    (c)
      The
      Company receives an opinion from its counsel that (i) the Transfer does not
      cause the Company to lose its classification as a partnership for federal or
      state income tax purposes, and (ii) unless waived by the Company, the Transfer,
      together with all other Transfers within the preceding twelve months, does
      not
      cause a termination of the Company for federal or state income tax
      purposes;

     

    (d)
      The
      Transferor signs and delivers to the Company a copy of the assignment of the
      Units to the Transferee, together with the certificates (if issued by the
      Company) representing such Units, duly executed for assignment;

     

    (e)
      The
      Transferee signs and delivers to the Company its agreement to be bound by this
      Agreement;

     

    (f)
      Such
      Transfer does not cause the Company to become a “Publicly Traded Partnership,”
as such term is defined in Sections 469(k)(2) or 7704(b) of the
      Code;

     

    (g)
      Such
      Transfer does not subject the Company to regulation under the Investment Company
      Act of 1940, the Investment Advisers Act of 1940 or the Employee Retirement
      Income Security Act of 1974, each as amended;

     

    
      
        
        

      

      
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    (h)
      Such
      Transfer is in compliance with any and all gaming acts and regulations now
      or
      hereafter existing in the State of New York, including a finding of suitability
      of such Transferee or any owners or beneficial owners of a
      Transferee;

     

    (i)
      Such
      Transfer is not made to any Person who lacks the legal right, power or capacity
      to own such Units; and

     

    (j)
      The
      Transfer is in compliance with the other provisions of this
      Article.

     

    Except
      as
      the Company and the Transferee may otherwise agree, the Transfer of a Unit
      will
      be effective as of 12:01 a.m. (Eastern Time) on the first day of the month
      following the Transfer.

     

    Notwithstanding
      anything to the contrary expressed or implied in this Agreement, the sale,
      assignment, transfer, pledge or other disposition of any direct or indirect
      interest in the Company is subject to the laws of the State of New York and
      the
      requirements, limitations and decisions of any gaming commission or other gaming
      regulatory body for the State of New York.

     

    14.6 Rights
      of Transferees.

     

    (a)
      A
      Permitted Transferee (other than a Permitted Transferee identified in Sections
      14.3(i) and 14.3(j)) shall become a Member of the Company in accordance with
      Section 602 of the Act and shall be entitled to all of the rights of a Member
      in
      respect of Units acquired by such Permitted Transferee provided that the
      Permitted Transferee executes and delivers such instruments, in form and
      substance satisfactory to the Board, as the Board may deem reasonably necessary
      to effect such substitution and to confirm the agreement of the Permitted
      Transferee to be bound by all of the terms and provisions of this
      Agreement.

     

    (b)
      Any
      Transferee (other than a Permitted Transferee identified in any of Sections
      14.3(a) through 14.3(h) or deemed a Permitted Transferee pursuant to Section
      3.9) of a Unit will, on the effective date of the Transfer, have only those
      rights of an assignee as specified in the Act and this Agreement unless and
      until such Transferee is admitted as a substitute Member by unanimous written
      consent of all of the Members. This provision limiting the rights of a
      Transferee will not apply if such Transferee is already a Member; provided
      that,
      any Member who withdraws from the Company pursuant to an event of Withdrawal
      described in Section 12.2 will have only the rights of an assignee as specified
      in the Act and this Agreement. Any Transferee (other than a Permitted Transferee
      identified in any of Sections 14.3(a) through 14.3(h) or deemed a Permitted
      Transferee pursuant to Section 3.9) of all or any part of a Unit who is not
      admitted as a substitute Member by unanimous written consent of all of the
      Members has no right (a) to participate or interfere in the management or
      administration of the Company’s Business or affairs, (b) to vote or agree on any
      matter affecting the Company or any Member, (c) to require any information
      on
      account of Company transactions, or (d) to inspect the Company’s books and
      records. The only right of a Transferee (other than a Permitted Transferee
      identified in any of Sections 14.3(a) through 14.3(h) or deemed a Permitted
      Transferee pursuant to Section 3.9) of all or any part of a Unit who is not
      admitted as a substitute Member by unanimous written consent of all of the
      Members is to receive the allocations and Distributions to which the Transferor
      was entitled (to the extent of the Units transferred) and to receive required
      tax reporting information. However, each Transferee of all or any part of a
      Unit
      (including both immediate and remote Transferees) will be subject to all of
      the
      obligations, restrictions and other terms contained in this Agreement as if
      such
      Transferee were a Member. To the extent of any Units transferred, the Transferee
      or Member does not possess any right or power as a Member and may not exercise
      any such right or power directly or indirectly on behalf of the Transferee.
      The
      Members acknowledge that these provisions may differ from the rights of an
      assignee as set forth in the Act, and the Members agree that they intend, to
      that extent, to vary those provisions by this Agreement.

     

    
      
        
        

      

      
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    14.7 Ownership
      Interests in Members.
      Each
      Member represents and warrants that on the date of this Agreement its directors,
      officers and owners (and in the case of Nevada Gold and TrackPower, shareholders
      owning five percent (5%) or more of stock in their parent companies) in such
      Member is listed on Exhibit ”B”
      to this
      Agreement. Southern Tier further represents that no transfers or assignments
      of
      ownership interests in Southern Tier will be made except in compliance with
      Article 14, it being agreed that a transfer of a Unit by Southern Tier (or
      its
      Permitted Transferee) shall include a transfer of ownership interests within
      Southern Tier (or its Permitted Transferee) by its members and shall require
      compliance with the provisions of this Article 14. In the event the retirement,
      death or disability of Jeffrey Gural causes a Transfer of the Units of Southern
      Tier, then Southern Tier shall thereafter have only the rights of an assignee
      pursuant to Section 14.6; provided, however, such Transfer shall be considered
      a
      Permitted Transfer if and for so long as Southern Tier’s managing member and
      designated director pursuant to Section 4.2 is either an Approved Substitute
      Manager or approved by a majority in interest of the remaining Members. The
      Members shall have a continuing obligation to update the list on Exhibit ”B”,
      within
      thirty (30) days following the end of each quarter during the term of this
      Agreement.

     

    ARTICLE
      15. PRIVILEGED LICENSE PROTECTION

     

    15.1 No
      Unsuitability Knowledge.
      Each
      Member represents to the other Members that it is not aware of any facts or
      circumstances which would make it an Unsuitable Person.

     

    15.2 Regulatory
      Compliance in the State of New York.
      Each
      Member acknowledges that it and its Affiliated Persons will be subject to
      licensing and other regulatory review and approval procedures by New York
      Regulatory Authorities. Each Member agrees to cooperate fully and to cause
      its
      Affiliated Persons to cooperate fully with the representatives of all New York
      Regulatory Authorities. If any New York Regulatory Authority determines at
      any
      time that a necessary Gaming License will not be issued or renewed for the
      Company, or must be revoked, as a result of a Member’s, or a Member’s Affiliated
      Person’s relationship to the Company or a Member, then such Member shall, if
      possible, remedy or cause its Affiliated Person to remedy the condition that
      gave rise to such determination to the satisfaction of the New York Regulatory
      Authority. If the Member (the “Non-Compliant Member”) does not remedy the
      condition that gave rise to such determination prior to the expiration of the
      period prescribed by the New York Regulatory Authority, then the Licensed
      Members (or any of them) may provide written notice to the Non-Compliant Member
      that it is an Unsuitable Person, and of their intention to exercise the
      provisions set forth in Section 15.4.

     

    
      
        
        

      

      
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    15.3 Gaming
      Regulations in Jurisdictions Outside of New York.

     

    (a)
      Each
      Member acknowledges that each other Member and its Affiliated Persons may or
      will be a Licensed Member because of Gaming Licenses related to Gaming
      Authorities other than New York Regulatory Authorities. Each Member acknowledges
      that the issuance and maintenance of Gaming Licenses are highly regulated by
      these other Gaming Authorities and that the laws of applicable jurisdictions
      may
      require a Licensed Member to disclose private or otherwise confidential
      information about the other Members and their respective Affiliated Persons.
      If
      requested to do so by a Licensed Member, any other Member shall obtain any
      Gaming License, qualification, clearance or the like which shall be requested
      or
      required of such other Member by any Gaming Authority having jurisdiction over
      the Licensed Member.

     

    (b)
      All
      Members acknowledge and agree that if a Gaming Authority shall determine that
      any Member or any of its Affiliated Persons (a) is or might be engaged in,
      or is about to be engaged in, any activity or activities, or (b) was or is
      involved in a relationship with any Person, and if as a result of such
      determination any Gaming Authority (i) fails to issue a Gaming License,
      (ii) fails to grant or renew any required or requested Gaming License or
      related application upon terms and conditions which are in the Licensed Member’s
      reasonable discretion acceptable to the Licensed Member, (iii) unreasonably
      delays any Gaming License sought by the Licensed Member, (iv)  conditions
      any Gaming License sought by the Licensed Member upon terms and conditions
      which
      are in the Licensed Member’s reasonable discretion not acceptable to the
      Licensed Member, (v) revokes any Gaming License, or (vi) disciplines,
      in any manner, the Licensed Member, then such other Member (the “Non-Compliant
      Member”) shall immediately (A) terminate any relationship with the Person
      which is the source of the problem, or (B) cease the activity creating the
      problem. In the event that the Non-Compliant Member does not comply with item
      (A) or (B) above, then the Licensed Member may provide written notice to the
      Non-Compliant Member that it is an Unsuitable Person, and of its intention
      to
      exercise the provisions set forth in Section 15.4.

     

    15.4 Buy-Out
      Provisions.

     

    (a)
      In
      the event of an unremedied finding that a Member is an Unsuitable Person and
      the
      sending of notice by a Licensed Member of its intention to exercise the rights
      set forth in this Section 15.4, the provisions of this Section 15.4 shall apply,
      notwithstanding any other provision herein to the contrary.

     

    (b)
      During the period commencing with the Trigger Date and ending with the transfer
      or sale of the Affected Member’s Units pursuant to a subsection of this Section
      15.4, (i) the Company shall not be required or permitted to pay any
      Distribution or interest with regard to such Units and the amount of such
      Distributions or interest shall be held in escrow by the Company, (ii) the
      holder of such Units (and its designee, if any, to the Board) shall not be
      entitled to vote on any matter, and (iii) the Company shall not pay any
      remuneration in any form to the holder of the Units (in its capacity as a holder
      of Units) except in exchange for such Units as provided in this Section 15.4.
      Upon any sale or transfer of the Affected Member’s Units in accordance herewith,
      all voting rights shall be reinstated with respect to the Units and all amounts
      held in escrow shall be applied to pay to the Affected Member the purchase
      price
      of the Units.

     

    
      
        
        

      

      
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    (c)
      For a
      period of 120 days following the Trigger Date (or such shorter period of time
      as
      the New York Regulatory Authority or the Gaming Authority, as applicable,
      otherwise allows), the Affected Member shall have the right to sell its Units
      to
      a third party for cash, subject to the provisions of
      Section 14.5 and
      the
      right of first refusal in favor of the other Members pursuant to and in
      accordance with the terms of Section 14.4(a). If the Affected Member has given
      Notice to the other Members on or before 120 days following the Trigger Date
      that a third party (who is permitted to receive an assignment of the Units
      pursuant to Section 14.5), has entered into a binding agreement to purchase
      the Units for cash, then the 120-day period shall be extended by a period of
      time required to comply with the requirements of Section 14.4(a) (provided
      that
      the New York Regulatory Authority or the Gaming Authority, as applicable, does
      not require a shorter period of time).

     

    (d)
      If
      the Affected Member has not (i) sold its Units in accordance with Section
      15.4(c), (ii) given notice to the other Members on or before 120 days following
      the Trigger Date (or such shorter period of time as the New York Regulatory
      Authority or the Gaming Authority, as applicable, otherwise allows) that a
      third
      party (who is permitted to receive an assignment of the Units pursuant to
      Section 14.5) has entered into a binding agreement to purchase the Units
      for cash, or (iii) consummated such cash purchase described in clause (ii)
      of
      this Section 15.4(d) within the period provided in Section 14.4(a) (or such
      shorter period of time as the New York Regulatory Authority or the Gaming
      Authority, as applicable, otherwise allows) (the date of the occurrence of
      any
      of the events described in clause (i), (ii) or (iii) being a “Buy-Out Date”),
      any one or more of the remaining Members may purchase all or any portion of
      the
      Units by giving a Notice of such Member’s or Members’ purchase intent to the
      Company and the Affected Member within ten (10) days (or such shorter period
      of
      time as the New York Regulatory Authority or the Gaming Authority, as
      applicable, otherwise allows) (such period being the “Buy-Out Election Period”).
      Each Member (other than the Affected Member) shall have the right to purchase
      a
      proportionate part of the Affected Member’s Units, equal to a percentage
      determined by dividing such Member’s Percentage by the total Percentages of all
      Electing Members. In the event that any Electing Member does not elect to
      purchase its full allocable share of the Affected Member’s Units (such Units not
      so purchased being “Remaining Units”), then such Remaining Units may be
      purchased by each of the Fully Elected Members on a pro rata
      basis
      (based on such Fully Elected Member’s Percentage to the aggregate Percentage of
      all Fully Elected Members electing to purchase Remaining Units). A Fully Elected
      Member may elect to purchase Remaining Units by delivering a Notice to the
      Company and the Affected Member within ten (10) days (or such shorter period
      of
      time as the New York Regulatory Authority or the Gaming Authority, as
      applicable, otherwise allows) (the “Initial Buy-Out Extension Period”) after the
      expiration of the Buy-Out Election Period. If any portion of the Remaining
      Units
      remains unsubscribed for after the expiration of the Initial Buy-Out Extension
      Period, such remaining portion shall be allocated among the Fully Electing
      Members that elect to purchase such remaining portion based on the proportionate
      Percentages of such Fully Electing Members until either such remaining portion
      is fully subscribed for or none of the Fully Electing Members elects to purchase
      Remaining Units (which allocation described in this sentence shall in any event
      be concluded within five (5) days (the “Additional Buy-Out Extension Period”)
      following the expiration of the Initial Buy-Out Extension Period). The purchase
      price to be paid by each Electing Member shall be an amount equal to the product
      of (A) a fraction, (I) the numerator of which is the number of Units of the
      Affected Member to be purchased by such Electing Member and (II) the denominator
      of which is the total number of Units of the Affected Member, times
      (B) the
      sum of (I) the outstanding principal balance of and accrued and unpaid
      interest on the Affected Member’s Member Loans, if any, to the Company as of the
      closing date, plus
      (II) the Fair Market Value of all of the Affected Member’s Units as of the
      Trigger Date. The closing of any purchase by an Electing Member or Electing
      Members of an Affected Member’s Units and Member Loans pursuant to this Section
      15.4(d) shall be held at the principal office of the Company or at such other
      location as the Electing Member(s) and the Affected Member shall agree, within
      twenty (20) days (or such shorter period of time as the New York Regulatory
      Authority or the Gaming Authority, as applicable, otherwise allows) following
      the later of the expiration of the Buy-Out Election Period, the Initial Buy-Out
      Extension Period and the Additional Buy-Out Extension Period. At any such
      closing, (x) the Affected Member shall deliver to the Electing Member(s) all
      or
      any part of the Units and Member Loans purchased by the Electing Member(s)
      free
      and clear of all liens and encumbrances (other than liens and encumbrances
      created pursuant to this Agreement and any subordination terms included in
      any
      Subordinate Note), accompanied by all other documents necessary for the
      effective transfer thereof, as reasonably determined by the Buy-Out Member(s)
      (it being understood that all of the Affected Member’s right, title and interest
      in and to the Units and Member Loans (other than the right of the Affected
      Member to receive the purchase price therefor) shall pass to, and vest in,
      the
      Electing Member(s) effective as of the date of the closing) and (y) the Buy-Out
      Member(s) shall pay the purchase price, without interest thereon, by directing
      the Company to pay to the Affected Member the Distributions payable pursuant
      to
      Section 9.1 (as modified by Section 7.5) (but not Section 9.5) on account of
      the
      Units and the Member Loans of the Affected Member purchased by the Electing
      Member(s), until the purchase price has been paid in full, provided that any
      remaining balance shall be paid by the Electing Member(s) at the end of five
      (5)
      years following the Trigger Date.

     

    
      
        
        

      

      
        -55-

        
          

        

      

      
        
        

      

    

     

    (e)
      If a
      Buy-Out Date occurs and if any portion of the Affected Member’s Units is not
      purchased by the other Members as provided for in Section 15.4(d) (such portion
      of Units being the “Unpurchased Units”), the majority in interest of the
      remaining Members may choose to continue the business of the Company. In such
      event, the Company shall repurchase all Unpurchased Units and any Affected
      Member’s Member Loans that the other Members did not purchase pursuant to
      Section 15.4(d) (the “Unpurchased Member Loans”). The purchase price to be paid
      by the Company shall be an amount equal to the product of (i) a fraction, (A)
      the numerator of which is the number of Unpurchased Units and (B) the
      denominator of which is the total number of Units of the Affected Member,
times
      (i) the
      sum of (A) the outstanding principal balance of and accrued and unpaid
      interest on the Unpurchased Member Loans, if any, as of the closing date,
plus
      (B) the Fair Market Value of all of the Affected Member’s Units as of the
      Trigger Date. The closing of any such repurchase by the Company of an Affected
      Member’s Unpurchased Units and Unpurchased Member Loans pursuant to this Section
      15.4(e) shall be held at the principal office of the Company or at such other
      location as the Company and the Affected Member shall agree, within twenty
      (20)
      days (or such shorter period of time as the New York Regulatory Authority or
      the
      Gaming Authority, as applicable, otherwise allows) following the date the
      remaining Members agree to continue the business of the Company. At any such
      closing, (x) the Affected Member shall deliver to the Company the Unpurchased
      Units and the Unpurchased Member Loans free and clear of all liens and
      encumbrances (other than liens and encumbrances created pursuant to this
      Agreement and any subordination terms included in any Subordinate Note),
      accompanied by all other documents necessary for the effective transfer thereof,
      as reasonably determined by the Company (it being understood that all of the
      Affected Member’s right, title and interest in and to the Unpurchased Units and
      the Unpurchased Member Loans (other than the right of the Affected Member to
      receive the purchase price therefor) shall pass to, and vest in, the Company
      effective as of the date of the closing) and (y) the Company shall agree to
      pay
      the repurchase price for the Unpurchased Units and the Unpurchased Member Loans,
      without interest, in accordance with the following three sentences of this
      Section 15.4(e). The Company shall repay the Affected Member’s Unpurchased
      Member Loans to the Company, if any, when the Company receives revenues that
      the
      Company would have been required to use to repay Member Loans made by the
      Affected Member, had the Affected Member remained a Member. The Fair Market
      Value of the Affected Member’s Unpurchased Units shall be payable when the
      Company receives cash payments that the Company would have been required to
      distribute to the Affected Member under Article 9 had the Affected Member
      remained a Member. Anything in the preceding two sentences to the contrary
      notwithstanding, any remaining balance of the purchase price shall be paid
      by
      the Company at the end of five (5) years following the Trigger
      Date.

     

    (f)
      In
      the event that the remaining Members decide not to continue the business of
      the
      Company, the Company shall be dissolved.

     

    ARTICLE
      16. GOVERNING LAW; DISPUTE RESOLUTION

     

    16.1 Governing
      Law.
      THIS
      AGREEMENT IS GOVERNED BY AND WILL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF
      THE
      STATE OF NEW YORK, EXCLUDING ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT
      REFER THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER
      JURISDICTION. In the event of a direct conflict between the provisions of this
      Agreement and any mandatory provision of the Act, the applicable provision
      of
      the Act will control.

     

    16.2 Disputes.
      Except
      as to any disputes for which injunctive relief may be available, in the event
      a
      dispute of any kind arises in connection with this Agreement (including any
      dispute concerning its construction, performance or breach), the parties to
      the
      dispute (who may be any combination of the Company and any one or more of the
      Members) will attempt to resolve the dispute as set forth in Section 16.3 before
      proceeding to arbitration as provided in Section 16.4. All documents, discovery
      and other information related to any such dispute, and the attempts to resolve
      or arbitrate such dispute will be kept confidential to the fullest extent
      possible. This Article 16 shall not apply to disputes arising under the
      Management Agreements.

     

    
      
        
        

      

      
        -56-

        
          

        

      

      
        
        

      

    

     

    16.3 Negotiation.
      If a
      dispute arises, any party to the dispute will give notice to each other party.
      If the Company is not a party to the dispute, notice will be given to the
      Company. After notice has been given, the parties in good faith will attempt
      to
      negotiate a resolution of the dispute.

     

    16.4 Arbitration.
      If,
      within 30 days after the notice provided in Section 16.3, a dispute is not
      resolved through negotiation or mediation, the dispute will be arbitrated.
      The
      parties to the dispute agree to be bound by the selection of an arbitrator,
      and
      to settle the dispute exclusively by binding arbitration in accordance with
      the
      following provisions:

     

    (a)
      All
      parties to the dispute will collectively select one arbitrator. If they fail
      to
      do so within 45 days after the notice provided in Section 16.3, one or more
      parties will request the American Arbitration Association to submit a panel
      of
      five arbitrators who are qualified to resolve the matters in dispute from which
      the choice will be made. The party requesting the arbitration will strike first,
      followed by alternative striking until one name remains. A similar procedure
      will be followed if there are more than two parties. The parties may by
      agreement reject one entire list, and request a second list. If selection by
      the
      above method is not completed within 90 days after the notice provided in
      Section 16.3, or if there are more than four parties, then an arbitrator will
      be
      selected by the American Arbitration Association. The arbitrator so selected
      will then arbitrate the dispute in New York, New York, and issue an
      award.

     

    (b)
      To
      the extent consistent with the provisions of this Article, the arbitration
      will
      be conducted under the Commercial Arbitration Rules of the American Arbitration
      Association and in accordance with New York law. The arbitrator’s decision will
      be made pursuant to the relevant substantive law of the State of New York.
      The
      award of the arbitrator will be final, binding and non-appealable. Judgment
      on
      the award may be entered in any court, state or federal court having
      jurisdiction.

     

    (c)
      The
      fees and expenses of the arbitrator, and the other direct costs of the
      arbitration, will be shared by the parties to the dispute in equal proportions.
      Each party to the dispute will bear all other costs and expenses as provided
      in
      Section 17.9. If one or more Members are included in the arbitration because
      of
      their membership or former membership in the Company, such group will
      collectively be treated as one party to the dispute (through the Company as
      a
      party).

     

    (d)
      The
      arbitrator(s) shall have the authority to award equitable relief and
      compensatory damages. The arbitrator(s) shall not have any authority to award
      punitive damages or other non-compensatory damages against the Company, its
      Members, or any Transferee or Permitted Transferee notwithstanding any action
      based on gross negligence, bad faith, fraud, breach of this Agreement, or any
      other conduct that might give rise to a claim for punitive damages or other
      non-compensatory damages.

     

    (e)
      The
      decision of the arbitrator(s) shall be rendered within ninety (90) calendar
      days
      after the date of the selection of the arbitrator(s) or within such period
      as
      the parties may otherwise agree.

     

    
      
        
        

      

      
        -57-

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      17. GENERAL PROVISIONS

     

    17.1 Covenants.

     

    (a)
      Securities
      Law Requirements.
      The
      Members acknowledge that Nevada Gold’s parent company and TrackPower are
      publicly held corporations, and that trading in the securities of such
      corporations based upon non-public information or unauthorized disclosure or
      other use of material developments could expose such publicly held corporations
      to liability. Each of the Members shall take appropriate precautions to inform
      its employees and agents of such fact and to prevent such persons from making
      any such disclosures.

     

    (b)
      Regulatory
      Information.
      Each
      Member shall provide to the Company or regulatory agency, as the case may be,
      as
      required by applicable laws, regulations, rules or orders, all information
      pertaining to the Company, the Gaming Complexes, and each Member’s officers,
      directors, shareholders, financial sources, and associations as shall be
      required by any Federal or state securities law or any regulatory authority
      with
      jurisdiction over the Company, the Gaming Complexes, or any Member or any
      Affiliates of such Person, including but not limited to the regulatory
      authorities in the states of New York, Colorado, California, Oklahoma, New
      Mexico and Texas. Specifically and without limitation, each Member shall provide
      the other Members with all information necessary to determine such Member’s and
      its Affiliates’ suitability for licensing applications and renewals, including
      information regarding their ownership structure, corporate structure, officers
      and directors, stockholders, members, and partners’ identity, financing,
      transfers of interest, etc., as shall be required by any regulatory authority
      with jurisdiction over the other Members or any of their Affiliates, whether
      foreign or domestic, including, without limitation, New York, Colorado,
      California, Oklahoma, New Mexico and Texas, or with respect to any federal,
      state or other security law requirement. The obligations of the Members
      contained in this Section 17.1(b) shall continue throughout the term of this
      Agreement.

     

    (c)
      Prohibited
      Payments.

     

    Each
      Member agrees that it and its Affiliated Persons will conduct all activities
      that affect the Company, and will cause any activities affecting the Company
      conducted on their behalf, to be conducted in a lawful manner and specifically
      will not engage in the following transactions:

     

    (i) payments
      or offers of payment, directly or indirectly, to any domestic or foreign
      government official or employee in order to obtain business, retain business
      or
      direct business to others, or for the purpose of inducing such government
      official or employee to fail to perform or to perform improperly his official
      functions;

     

    (ii) receive,
      pay or offer anything of value, directly or indirectly, from or to any private
      party in the form of a commercial bribe, influence payment or kickback for
      any
      such purpose; or

     

    
      
        
        

      

      
        -58-

        
          

        

      

      
        
        

      

    

     

    (iii) use,
      directly or indirectly, any funds or other assets of the Company for any
      unlawful purpose including, without limitation, political contributions in
      violation of applicable laws, regulations, rules or orders.

     

    17.2 Amendments.
      This
      Agreement may be amended by the unanimous written agreement of the Members.
      Any
      amendment will become effective upon such approval, unless otherwise provided.
      Notice of any proposed amendment must be given at least 5 days in advance of
      the
      meeting at which the amendment will be considered (unless the approval is
      evidenced by duly signed minutes of action). Any duly adopted amendment to
      this
      Agreement is binding upon, and inures to the benefit of, each Person who holds
      a
      Unit at the time of such amendment. Notwithstanding any other provision of
      this
      Agreement, with respect to any Transferee that is not a Permitted Transferee
      identified in any of Sections 14.3(a) through 14.3(h) or deemed a Permitted
      Transferee pursuant to Section 3.9, any amendment to Article 8 (relating to
      allocation of Profits or Losses), Article 9 (relating to Distributions), Section
      13.2 (relating to Distributions in Liquidation) and Section 17.2 (relating
      to
      amendment of this Agreement) will not be effective if it adversely affects
      such
      Transferee’s rights under such Articles or Sections, nor will such Transferee be
      required to make any Capital Contribution, without such Transferee’s written
      consent. Anything in this Agreement to the contrary notwithstanding, Section
      4.8
      shall not be amended, supplemented or otherwise modified, and no provision
      or
      right set forth therein shall be deemed waived, and no consent thereunder shall
      be deemed given, unless such amendment, supplement, modification, waiver or
      consent is in writing and signed by Oneida. Non-material amendments relating
      to
      this Agreement or that are necessary for compliance with applicable law may
      be
      made by the Board.

     

    17.3 Confidentiality.
      In
      addition to and as provided in Section 3.3 and Article 17, the Members
      shall consult with each other as to the form, substance and timing of all public
      announcements regarding the Company or this Agreement, and no public
      announcements regarding the Company or this Agreement shall be made by one
      Member without the consent of the Board. Notwithstanding the foregoing, a Member
      may make such announcements, file such documents (including this Agreement)
      with
      the Securities and Exchange Commission and other regulatory authorities, and
      take other actions to comply with the requirements of federal and state
      securities laws as it deems necessary.

     

    17.4 Waiver
      of Partition Right.
      Each
      Member waives and renounces any right that such Person may have prior to
      Dissolution and Liquidation to institute or maintain any action for partition
      with respect to any real property owned by the Company.

     

    17.5 Waivers
      Generally.
      No
      course of dealing will be deemed to amend or discharge any provision of this
      Agreement. No delay in the exercise of any right will operate as a waiver of
      such right. No single or partial exercise of any right will preclude its further
      exercise. A waiver of any right on any one occasion will not be construed as
      a
      bar to, or waiver of, any such right on any other occasion.

     

    17.6 Equitable
      Relief.
      If any
      Person proposes to Transfer all or any part of such Person’s Units in violation
      of the terms of this Agreement, the Company or any Member may apply to any
      court
      of competent jurisdiction for an injunctive order prohibiting such proposed
      Transfer except upon compliance with the terms of this Agreement, and the
      Company or any Member may institute and maintain any action or proceeding
      against the Person proposing to make such Transfer to compel the specific
      performance of this Agreement. Any attempted Transfer in violation of this
      Agreement is null and void, and of no force and effect. The Person against
      whom
      such action or proceeding is brought waives the claim or defense that an
      adequate remedy at law exists, and such Person will not urge in any such action
      or proceeding the claim or defense that such remedy at law exists.

     

    
      
        
        

      

      
        -59-

        
          

        

      

      
        
        

      

    

     

    17.7 Remedies
      for Breach.
      The
      rights and remedies of the Members set forth in this Agreement are neither
      mutually exclusive nor exclusive of any right or remedy provided by law, in
      equity or otherwise. The Members agree that all legal remedies (such as monetary
      damages) as well as all equitable remedies (such as specific performance) will
      be available for any breach or threatened breach of any provision of this
      Agreement.

     

    17.8 Notices.
      All
      notices, consents, waivers and other communications required or permitted by
      this Agreement shall be in writing and shall be deemed given to a party when
      (a)
      delivered to the appropriate address by hand or by nationally recognized
      overnight courier service (costs prepaid); (b) sent by facsimile or e-mail
      with
      confirmation of transmission by the transmitting equipment; or (c) received
      or
      rejected by the addressee, if sent by certified mail, return receipt requested,
      in each case to the following addresses, facsimile numbers or e-mail addresses
      and marked to the attention of the person (by name or title) designated below
      (or to such other address, facsimile number, e-mail address or person as a
      party
      may designate by notice to the other parties):

     

    
      	
              If
                to Nevada Gold:

            
	 
	
              Nevada
                Gold NY, Inc.

              3040
                Post Oak Blvd., Suite 675

              Houston,
                Texas 77056

              Attention:
                Chief Executive Officer

              Fax
                no.: (713) 621-6919

              E-mail
                address: twinn@nevadagold.com

            
	 
	
              With
                a copy to:

            
	 
	
              Thompson
                & Knight, LLP

              333
                Clay St., Suite 3300

              Houston,
                Texas 77002-4499

              Attention:
                Cathryn L. Porter, Esq.

              Fax
                No.: 713-654-1871

              E-mail
                address:

            
	
              If
                to Southern Tier:

            
	 
	
              Southern
                Tier Acquisition II LLC

              125
                Park Avenue

              New
                York, NY 10017

              Attention:
                Mr. Jeffrey Gural

              Fax
                no.: 212-372-2409

              E-mail
                address: Jgural@newmarkre.com

            


    

     

     

    
      
        
        

      

      
        -60-

        
          

        

      

      
        
        

      

    

     

     

    
      	
              With
                a copy to:

               

              Goldberg
                Weprin & Ustin LLP

              1501
                Broadway - 22nd Floor

              New
                York, New York 10036

              Attention:
                Andrew W. Albstein, Esq.

              Fax
                no.: 212-730-4518

              E-mail
                address: aalbstein@gwulaw.com

            
	 
	
              If
                to TrackPower:

            
	 
	
              TrackPower,
                Inc.

              765
                15th Side Road

              King
                City, Ontario Canada L7B1K5

              Attention:
                John Simmonds

              Fax:
                905-773-1241

              E-mail
                address: jgs@trackpower.com

               

            


    

     

    
      	
              With
                a copy to:

               

              Towne
                Law Firm

              421
                New Karner Rd

              P.O.
                Box 15072

              Albany,
                NY 12212-5072

              Attention
                Jim Towne, Esq.

              Fax:
                518-452-6435

              E-mail
                address:

               

            
	
              If
                to Oneida:

               

              Oneida
                Entertainment, LLC

              c/o
                Plainfield Asset Management LLC

              55
                Railroad Avenue

              Greenwich,
                Connecticut 06830

              Attention:
                Thomas Fritsch

              Fax:
                203-302-1779

              E-mail
                address: thomas.fritsch@plainfieldfunds.com

               

            
	
              With
                a copy to:

               

              Stroock
                & Stroock & Lavan, L.L.P.

              180
                Maiden Lane

              New
                York, NY 10038

              Attn:
                Christopher Donoho, Esq.

              Fax :
                212-806-6006

              Email :
                cdonoho@stroock.com

            


    

     

    17.9 Costs.
      If the
      Company or any Member retains counsel for the purpose of enforcing or preventing
      the breach or any threatened breach of any provision of this Agreement or for
      any other remedy relating to it, then the prevailing party will be entitled
      to
      be reimbursed by the non-prevailing party for all costs and expenses so incurred
      (including reasonable attorneys’ fees, costs of bonds, and fees and expenses for
      expert witnesses) unless the arbitrator or other trier of fact determines
      otherwise in the interest of fairness.

     

    17.10 Partial
      Invalidity.
      Wherever
      possible, each provision of this Agreement will be interpreted in such manner
      as
      to be effective and valid under applicable law. However, if for any reason
      any
      one or more of the provisions of this Agreement are held to be invalid, illegal
      or unenforceable in any respect, such action will not affect any other provision
      of this Agreement. In such event, this Agreement will be construed as if such
      invalid, illegal or unenforceable provision had never been contained in
      it.

     

    
      
        
        

      

      
        -61-

        
          

        

      

      
        
        

      

    

     

    17.11 Survivability
      of the August 24, 2005 Agreement.
      This
      Agreement hereby amends, restates and supersedes in its entirety any and all
      of
      the provisions of the (a) letter agreement dated August 24, 2005, by and among
      Tioga Downs Racetrack, LLC, Vernon Downs Acquisition, LLC, Nevada Gold &
Casinos, Inc., TrackPower, Inc. and Southern Tier Acquisition, LLC, (b) the
      Operating Agreement of the Company dated November 8, 2005, and (c) the First
      Amendment to the Operating Agreement dated November 29, 2005.

     

    17.12 Entire
      Agreement.
      This
      Agreement the Exhibits attached hereto, the Contribution Agreement, the
      Management Agreements and the Debt Commitment Letter, contain the entire
      agreement and understanding of the Members with respect to its subject matter,
      and it supersedes all prior or other contemporaneous understandings,
      correspondence, negotiations, or agreements between them respecting the within
      subject matter. No amendment, modification or interpretations hereof shall
      be
      binding unless in writing and signed by all the Members unless it is made in
      accordance with Section 17.2.

     

    17.13 Binding
      Effect.
      This
      Agreement is binding upon, and inures to the benefit of, the Members and their
      permitted successors and assigns; provided that, any Transferee will have only
      the rights specified in Section 14.6 unless it is a Permitted
      Transferee.

     

    17.14 Further
      Assurances.
      Each
      Member agrees, without further consideration, to sign and deliver such other
      documents of further assurance as may reasonably be necessary to effectuate
      the
      provisions of this Agreement.

     

    17.15 Headings.
      Article
      and section titles have been inserted for convenience of reference only. They
      are not intended to affect the meaning or interpretation of this
      Agreement.

     

    17.16 Terms.
      Terms
      used with initial capital letters will have the meanings specified, applicable
      to both singular and plural forms, for all purposes of this Agreement. All
      pronouns (and any variation) will be deemed to refer to the masculine, feminine
      or neuter, as the identity of the Person may require. The singular or plural
      include the other, as the context requires or permits. The word include (and
      any
      variation) is used in an illustrative sense rather than a limiting
      sense.

     

    17.17 Effectiveness.
      This
      Agreement shall automatically, without further action by any of the parties,
      become effective and enforceable according to its terms immediately upon
      execution hereof.

     

    17.18 Counterparts.
      This
      Agreement may be executed in any number of counterparts, (including by
      facsimile) each of which shall be an original for all purposes, but all of
      which
      taken together shall constitute only one agreement. The production of any
      executed counterpart of this Agreement shall be sufficient for all purposes
      without producing or accounting for the other counterparts hereof. 

     

    17.19 Third
      Party Beneficiaries.
      Without
      limiting the provisions of Sections 7.2(f) and 7.13, nothing express or implied
      in this Agreement is intended or shall be construed, to confer upon or give
      any
      Person other than the parties hereto and the Company, any rights, remedies,
      obligations or liabilities under or by reason of this Agreement, or results
      in
      their being deemed a third party beneficiary of this Agreement; provided,
      however,
      that
      any Indemnified Person not a party hereto shall be a third party beneficiary
      of
      Section 10.2 hereof. 

     

    [BALANCE
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    SIGNATURE
      PAGE FOLLOWS

     

    
      
        
        

      

      
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    COUNTERPART
      SIGNATURE PAGE TO THE

     

    AMENDED
      AND RESTATED OPERATING AGREEMENT

     

    OF
      AMERICAN RACING AND ENTERTAINMENT, LLC

     

    DATED
      MARCH 1, 2006

     

    IN
      WITNESS WHEREOF, each of the undersigned has executed this Agreement effective
      as of the 1st day of March, 2006 but to be effective as of the date first set
      forth above.

    


    
      	
              NEVADA
                GOLD:

            
	 
	
              NEVADA
                GOLD NY, INC.

            
	 
	 
	
              By:
                ______________________________

            
	
              H.
                Thomas Winn, President

            
	 
	 
	
              SOUTHERN
                TIER:

            
	 
	
              SOUTHERN
                TIER ACQUISITION II LLC

            
	 
	 
	
              By:
                ______________________________

            
	
              Jeffrey
                Gural, Manager

            
	 
	 
	
              TRACKPOWER:

            
	 
	
              TRACKPOWER,
                INC.

            
	 
	 
	
              By:
                ______________________________

            
	
              John
                Simmonds, Chairman

            
	 
	 
	
              By:
                ______________________________

            
	
              Ed
                Tracy

            
	
              President
                and Chief Executive Officer

            


    

     

     

    
      
        
        

      

      
        -63-

        
          

        

      

      
        
        

      

    

     

    
      	 
	
               

              ONEIDA:

               

              ONEIDA
                ENTERTAINMENT, LLC

            
	 
	 
	 
	
              By:
                ______________________________

            
	
              Name:
                ____________________________

            
	
              Title:
                ______________________________

            


    

    


     

    
      	
              GURAL: 
                Solely for purposes of Sections 7.11, 7.12 and 7.13 of the
                Agreement

            
	 
	 
	
              ______________________________

            
	
              Jeff
                Gural

            


    

    


     

    
      
        
        

      

      
        -64-

        
          

        

      

      
        
        

      

    

    


    LIST
      OF EXHIBITS

     

    Exhibit
      3.1 Capital
      Contributions and Percentages of Members

     

    Exhibit
      “A” Definitions

     

    Exhibit
      “B” Constituent
      Interests in Members

     

    
      
        
        

      

      
        -65-

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      3.1

     

    
      	
              Member

            	
              Date
                Admitted as Member

            	
              Capital

              Contributions

              Made

            	
              Units

            	
              Initial

              Percentage

            	
              Adjusted

              Percentage

            
	 	 	
               

              Non-Cash
                (a)

            	
               

              Cash

            	
               

              Total

            	 	 	 
	
               

              Nevada
                Gold NY, Inc.

            	
               

              11-8-05

            	
               

              -0-

            	
               

              $10,000,000

            	
               

              $10,000,000

            	
               

              100,000

            	
               

              40%

            	
               

              40%

            
	
               

              Southern
                Tier Acquisitions, II, LLC

            	
               

              11-8-05

            	
               

              $5,983,384

            	
               

              $1,516,516

            	
               

              $7,499,900

            	
               

              50,000

            	
               

              20%

            	
               

              20%

            
	
               

              TrackPower,
                Inc.

            	
               

              11-8-05

            	
               

              $5,983,384

            	
               

              $1,516,516

            	
               

              $7,499,900

            	
               

              50,000

            	
               

              20%

            	
               

              20%

            
	
               

              Oneida
                Entertainment, LLC

            	
               

              2-__-06

            	
               

              -0-

            	
               

              $5,000,000

            	
               

              $5,000,000

            	
               

              50,000

            	
               

              20%

            	
               

              20%

            


    

    


    
      	
              (a)

            	
              On
                November 29, 2005, in accordance with the terms of the Contribution
                Agreement, certain Affiliates of TrackPower and Southern Tier contributed
                to the Company all of their right, title and interest in and to the
                Tioga
                Downs Contributed Assets. The Members agree that the Fair Market
                Value of
                the Tioga Downs Contributed Assets is $10,221,408, including $5,221,408
                in
                cash, and $5,000,000 in increased value. As a result of such contribution,
                TrackPower and Southern Tier have each been credited with a capital
                account equal to $5,110,704. Certain Affiliates of TrackPower and
                Southern
                Tier have also contributed to the Company all of their right, title
                and
                interest in and to the Vernon Downs Contributed Assets. The Members
                agree
                that the Fair Market Value of the Vernon Downs Contributed Assets
                is
                $1,745,360. As a result of such contribution, $872,680 shall be credited
                to each of TrackPower’s and Southern Tier’s Capital Account, resulting in
                a total Capital Account of $5,983,384 for each of TrackPower and
                Southern
                Tier as of November 29, 2005.

            


    

    


    


    
      
        
        

      

      
        -66-

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      “A”

     

    Definitions

     

    In
      addition to other terms which are defined elsewhere in this Agreement, the
      following terms, for purposes of this Agreement, shall have the meanings set
      forth in this Exhibit “A”:

     

    
      	
              Act:

               

            	
              The
                New York Limited Liability Company Law and any successor statute,
                as
                amended from time to time.

               

            
	
              Adjusted
                Capital

               

              Account:

               

            	
              The
                Capital Account maintained for each Member as provided in Section
                7.6, (a)
                increased by (i) the amount of any unpaid Capital Contributions agreed
                to
                be contributed by such Member, if any, (ii) an amount equal to such
                Member’s allocable share of Minimum Gain as computed on the last day of
                each Fiscal Year in accordance with the applicable Regulations, and
                (iii)
                the amount of Company liabilities allocable to such Member under
                Section
                752 of the Code with respect to which such Member bears the economic
                risk
                of loss to the extent such liabilities do not constitute Member
                Nonrecourse Debt, and (b) reduced by the adjustments provided for
                in
                Regulations § 1.704-1(b)(2)(ii)(d)(4)-(6).

               

            
	
              Affected
                Member:

               

            	
              A
                Member that is notified that it is an Unsuitable Person under Section
                15.2
                or Section 15.3(b).

               

            
	
              Affiliate:

               

            	
              An
                “Affiliate” of a Person means a Person directly or indirectly controlling,
                controlled by or under common control with such Person. For this
                purpose
                and for purposes of the use of the term “control” in this Agreement,
                control means the possession, direct or indirect, of the power to
                direct
                or cause the direction of the management and policies of a Person,
                whether
                through the ownership of voting securities, by contract or
                otherwise.

               

            
	
              Affiliated
                Person:

               

            	
              A
                Person whose relationship to a Member is such that a Gaming Authority
                considers such Person’s suitability as a factor in determining the
                Member’s or the Company’s suitability for receiving a Gaming
                License.

               

            
	
              Annual
                Plan:

               

            	
              The
                Annual Plan set forth in Section 4.1(h) of the Agreement.

               

            
	
              Approved
                Substitute Manager:

            	
              Barry
                M. Gosin, Vice Chairman and Chief Executive Officer of Newmark &
                Company Real Estate, Inc., or James D. Kuhn, President of Newmark
&
                Company Real Estate, Inc.

               

            


    

     

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

     

    
      	
              Articles:

               

            	
              The
                Articles of Organization of the Company as filed under the Act, as
                amended
                from time to time.

               

            
	
              Board:

               

            	
              The
                Board of Directors established pursuant to Section 4.2 of this
                Agreement.

               

            
	
              Budgets:

               

            	
              The
                Cost Budgets that are approved or otherwise operative under this
                Agreement
                or the Operating Budgets that are approved or otherwise operative
                under
                this Agreement.

               

            
	
              Business:

               

            	
              The
                business of the Company set forth in the last paragraph in Section
                2.1 of
                this Agreement.

               

            
	
              Cap:

               

            	
              The
                sum of (a) the principal amount of $60,000,000 minus
                the amount of any repayments and commitment reductions under any
                of the
                First Lien Facilities to the extent such repayments and reductions
                cannot
                be reborrowed or increased (specifically excluding, however, any
                such
                repayments and commitment reductions occurring in connection with
                any
                refinancing, replacement, restatement or substitution of any of the
                First
                Lien Facilities), plus (b) accrued interest, fees and expenses,
                costs
                of collection and foreclosure of any lien granted to the First Lien
                Lenders, and advances made for the costs of maintaining or protecting
                the
                collateral securing the indebtedness
                under any of the First Lien Facilities.

               

            
	
              Capital
                Account:

               

            	
              The
                capital account maintained for each Member under Section 7.6 of this
                Agreement.

               

            
	
              Capital
                Contribution:

               

            	
              The
                aggregate of the dollar amounts of any cash contributed to the capital
                of
                the Company and the Fair Market Value of any property contributed
                to the
                capital of the Company, or, if the context in which such term is
                used so
                indicates, the dollar amounts of cash and the Fair Market Value of
                any
                property agreed to be contributed, by such Member to the capital
                of the
                Company.

               

            
	
              Capital
                Transaction:

               

            	
              Any
                sale, exchange, condemnation (including any eminent domain or similar
                transaction), casualty, financing, refinancing or other disposition
                with
                respect to any real or personal property owned by the Company which
                is not
                in the ordinary course of business.

               

            


    

     

     

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

     

    
      	
              Cause:

               

            	
              Cause
                as to the removal of any Director under Section 4.2(d) shall be defined
                as
                any breach of the terms of this Agreement, breach of any term of
                employment including violation of policies and procedures of the
                Company,
                fraud, or willful misconduct, by the Director who is being
                removed.

               

            
	
              Code:

               

            	
              The
                Internal Revenue Code of 1986, as amended from time to time (including
                corresponding provisions of subsequent revenue laws).

               

            
	
              Company:

               

            	
              American
                Racing and Entertainment, LLC, as formed under the Articles and as
                operating under this Agreement.

               

            
	
              Company
                Nonrecourse

               

              Liabilities:

               

            	
              Nonrecourse
                liabilities (or portions thereof) of the Company for which no Member
                (or a
                related person within the meaning of Treasury Regulation section
                1.752-4)
                bears the economic risk of loss.

               

            
	
              Company
                Securities:

               

            	
              Units
                or any other equity, ownership or profits interests of the Company,
                or any
                warrants, options, convertible securities or other rights to acquire
                Units
                or any such other equity, ownership or profits interests of the
                Company.

               

            
	
              Conceptual
                Plans and Specifications:

               

            	
              The
                Conceptual Plans and Specifications for a Gaming Complex (or any
                portion
                thereof), approved by the Board.

               

            
	
              Consumer
                Price Index:

               

            	
              The
                Consumer Price Index for All Urban Consumers most recently published
                by
                the Bureau of Labor Statistics of the United States Department of
                Labor,
                U.S. City Average, all items, (1997-98=100), or any successor or
                replacement index thereto. If the Consumer Price Index shall, after
                the
                date hereof, be converted to a different standard reference base
                or shall
                otherwise be revised, any determination hereunder which uses the
                Consumer
                Price Index shall be made with the use of such conversion factor,
                formula
                or table for converting the Consumer Price Index as may be published
                by
                the Bureau of Labor Statistics, or, if said Bureau shall not publish
                the
                same, then with the use of such conversion factor, formula or table
                as may
                be published by Prentice Hall, Inc., or, failing such publication,
                by any
                other nationally recognized publisher of similar statistical information.
                If the Consumer Price Index shall cease to be published, then for
                the
                purpose of this Agreement there shall be substituted for the Consumer
                Price Index such other similar index as the Company accountants shall
                determine which measures changes in the relative purchasing power
                of
                United States currency over the term of this Agreement.

               

            


    

     

     

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

     

    
      	
              Contributing
                Members:

            	
              Means
                (i) in the case of Section 7.2(c) hereof with respect to any Delinquent
                Contribution, each Other Member that contributes any portion of such
                Delinquent Contribution, (ii) in the case of Section 7.11(d) hereof
                with
                respect to any Unfunded RCG Reimbursement Amount, each Other Member
                that
                makes a loan to the Company in respect of any portion of such Unfunded
                RCG
                Reimbursement Amount and (iii) in the case of Section 7.12(d) hereof
                with
                respect to any Unfunded VSM Reimbursement Amount, each Other Member
                that
                makes a loan to the Company in respect of any portion of such Unfunded
                VSM
                Reimbursement Amount.

               

            
	
              Contribution
                Agreement:

               

            	
              The
                Contribution Agreement dated November 8, 2005, between the Company,
                Nevada
                Gold, TrackPower, Inc. and Southern Tier Acquisition, LLC, relating
                to the
                contribution of certain assets to the Company as of November 29,
                2005.

               

            
	
              Cost
                Budget:

               

            	
              The
                Cost Budget for all development and construction costs for each Gaming
                Complex (or any part thereof), approved by the Board.

               

            
	
              Cost
                Budget Overruns:

               

            	
              Cost
                Budget Overruns shall mean cost overruns in the Cost Budgets of the
                Vernon
                Downs Complex and/or the Tioga Downs Complex after all transfers
                of costs
                to and from contingency line items. Cost Budget Overruns shall be
                limited
                to budget overruns in the initial construction, renovation and development
                of the Tioga Downs Complex and the Vernon Downs Complex that occur
                prior
                to the Opening Date of the Management Agreement for each complex
                (as such
                term is defined in the respective Management Agreements).

               

            
	
              Debt:

               

            	
              (a)
                all liabilities and obligations, contingent or otherwise, of the
                Company:
                (i) in respect to borrowed money (whether or not the recourse of
                the
                lender is to the whole or the assets of the Company or only to a
                portion
                thereof); (ii) evidenced by bonds, notes, debentures or similar
                instruments; (iii) representing the balance deferred and unpaid of
                the
                purchase price of any property or services, if and to the extent
                any of
                the foregoing described in clauses (i), (ii) and (iii) would appear
                as a
                liability on the balance sheet of the Company; (iv) evidenced by
                bankers’
                acceptances or similar instruments issued or accepted by banks; (v)
                for
                the payment of money relating to a capitalized lease obligation;
                or (vi)
                evidenced by a letter of credit or reimbursement obligation of such
                person
                with respect to any letter of credit; (b) all liabilities of others
                of the
                kind described in the preceding clause (a) that the Company has guaranteed
                or that is otherwise its legal liability; and (c) all obligations
                secured
                by a lien to which the property or assets (including, without limitation,
                leasehold interests and any other tangible or intangible property
                rights)
                of the Company are subject, whether or not the obligations secured
                thereby
                shall have been assumed by or shall otherwise be the Company’s legal
                liability, provided, that the amount of such obligations shall be
                limited
                to the lesser of the fair market value of the assets or property
                to which
                such lien attaches and the amount of the obligation so
                secured.

               

            


    

     

     

    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

    

     

    
      	
              Debt
                Financing:

               

            	
              Any
                of the following: (a) any debt financing by the Company with any
                third
                party, (b) the issuance of any bonds, notes, debentures or similar
                debt
                securities (whether or not convertible into Units or any other equity,
                ownership or profits interests of the Company, or offered as a unit
                with
                any Units or other equity, ownership or profits interests) to a third
                party, and (c) any transfer, assignment or other disposition (including
                by
                assumption) by any holder of Debt to any other Person to which the
                Company
                provides its consent or approval, including, without limitation,
                any of
                the foregoing with or involving any Member or any Affiliate of any
                Member;
                provided, that the financing contemplated by the Initial First Lien
                Facility shall not constitute a Debt Financing.

               

            
	
              Director:

               

            	
              Any
                Person named in the Articles and any Person elected as a Director
                of the
                Company as provided in this Agreement, but does not include any Person
                who
                has ceased to be a Director of the Company.

               

            
	
              Dissolution:

               

            	
              The
                dissolution of the Company as provided in Section 12.1.

               

            


    

     

     

    
      
        
        

      

      
        A-5

        
          

        

      

      
        
        

      

    

     

    
      	
              Distribution:

               

            	
              A
                distribution of money or other property made by the Company with
                respect
                to a Unit.

               

            
	
              Early
                Termination Event:

               

            	
              As
                applied to any holder of Debt or claim against the Company that has
                agreed
                not to take an Enforcement Action for a period of time, the occurrence
                of
                any of the following: (a) acceleration of any other Debt or claim
                against
                the Company in excess of (either individually or in the aggregate)
                $150,000; (b) the holder of any other Debt or claim against the Company
                in
                excess of (either individually or in the aggregate) $150,000 initiates
                any
                judicial proceeding or action to collect any portion of such other
                Debt or
                claim, or exercises any right of set-off or counterclaim against
                the
                Company or commences any foreclosure action against any of the assets
                of
                the Company; and (c) any voluntary or involuntary insolvency, bankruptcy,
                receivership, custodianship, liquidation, dissolution, reorganization,
                assignment for the benefit of creditors, appointment of a custodian,
                receiver, trustee or other officer with similar powers or any other
                proceeding for the liquidation, dissolution or other winding up of
                the
                Company.

               

            
	
              EBIDTA:

               

            	
              Earnings
                of the Company before interest, depreciation, taxes and
                amortization.

               

            
	
              Electing
                Member:

            	
              Means
                (i) in the case of Section 7.9, each Member that elects to purchase
                Company Securities pursuant to such Section; (ii) in the case of
                Section
                14.4(a), each Offeree Member that elects to purchase Offered Units
                pursuant to such Section; and (iii) in the case of Section 15.4(d),
                each
                Member that elects to purchase an Affected Member’s Units pursuant to such
                Section.

               

            
	
              Enforcement
                Action:

            	
              As
                applied to the holder of any Debt or any holder of any claims against
                the
                Company (a) to take from or for the account of the Company, by set-off
                or
                in any other manner, the whole or any part of any moneys owing by
                the
                Company with respect to such Debt or claim, (b) to sue for payment
                of, or
                to initiate or participate with others in any suit, action or proceeding
                against the Company to (i) enforce payment of or to collect the whole
                or
                any part of such Debt or claim or (ii) commence judicial enforcement
                of
                any of the rights and remedies under the applicable documents or
                agreement
                relating to such Debt or claim or applicable law with respect to
                such Debt
                or claim, (c) to accelerate such Debt or claim, or (d) take any action
                under the provisions of any state or federal law, including, without
                limitation, the Uniform Commercial Code, or under any contract or
                agreement, to enforce, foreclose upon, take possession of or sell
                any
                property or assets of the Company.

               

            


    

     

     

    
      
        
        

      

      
        A-6

        
          

        

      

      
        
        

      

    

     

    
      	
              Fair
                Market Value:

            	
              Fair
                Market Value as defined in Section 6.1.

               

            
	
              Final
                Plans and

               

              Specifications:

               

            	
              The
                final plans and specifications for a Gaming Complex (or any portion
                thereof), approved by the Board.

               

            
	
              Fiscal
                Year:

               

            	
              The
                fiscal and taxable year of the Company as determined under this Agreement,
                including both 12-month and short taxable years.

               

            
	
              Fully
                Elected Members:

            	
              Means
                (i) in the case of Section 14.4(a), each Electing Member that elects
                to
                purchase its full allocable share of Offered Units pursuant such
                Section;
                and (ii) in the case of Section 15.4(d), each Electing Member that
                elects
                to purchase its full allocable share of the Affected Member’s Units
                pursuant such Section.

               

            
	
              Gaming
                Authority:

               

            	
              Any
                national, state, tribal, local and other governmental, regulatory
                and
                administrative authority, agency, board, commission or official
                responsible for or involved in the regulation of gaming activities
                of the
                Company or its Members in any jurisdiction.

               

            
	
              Gaming
                Complex:

               

            	
              For
                each of the Vernon Downs Complex and the Tioga Downs Complex, the
                Project
                Site, and any building structures and improvements construed on or
                affixed
                to the Project Site; and all roads, utilities, dredging, grading,
                landscaping, and other off-site improvements constructed or developed
                by
                the Company on or in support of the Project Site.

               

            
	
              Gaming
                Facilities:

               

            	
              Any
                and all buildings within a Gaming Complex including but not limited
                to
                hotel, parking, gaming, restaurant and entertainment facilities and
                all
                surface parking lots serving such buildings.

               

            
	
              Gaming
                Laws:

               

            	
              The
                laws pursuant to which any Gaming Authority possesses regulatory,
                licensing or permit authority over gaming within any
                jurisdiction.

               

            


    

     

     

    
      
        
        

      

      
        A-7

        
          

        

      

      
        
        

      

    

     

    
      	
              Gaming
                License:

               

            	
              Any
                license, permit, authorization, consent or favorable determination
                from or
                issued by a Gaming Authority pursuant to any Gaming Laws.

               

            
	
              General
                Manager:

            	
              The
                General Manager for the Gaming Complexes.

               

            
	
              Indemnified
                Person:

            	
              As
                to any Member indemnified under Article 10, such Member, the Member’s
                designated Board representative and any Affiliate of such Member
                (other
                than the Indemnifying Member), and any agents, attorneys, officers,
                members, directors, stockholders or employees of such Member or such
                Affiliate.

               

            
	
              Indemnifying
                Member:

               

            	
              The
                Member that owes any amount or duty to any Indemnified Person pursuant
                to
                Article 10.

               

            
	
              Initial
                First Lien Facility:

            	
              The
                initial senior debt financing not to exceed $60 million described
                in the
                first sentence of Section 5.1, and any amendments or modifications
                thereof, but not including any Debt Financing that refinances, refunds
                or
                otherwise replaces such initial senior debt financing other than
                any debt
                financing entered into with the CIBC Group that refinances, refunds
                or
                otherwise replaces such initial senior debt financing.

               

            
	
              Interest
                Rate:

               

            	
              The
                prime interest rate of J.P. Morgan Chase & Co. (or any successor
                bank), plus 2%.

               

            
	
              Licensed
                Member:

               

            	
              Any
                Member to which a Gaming License has been granted, or to whose Affiliate
                a
                Gaming License has been granted.

               

            
	
              Liquidation:

               

            	
              The
                process of terminating the Company and winding up its business under
                Article 13 after its Dissolution.

               

            
	
              Losses:

               

            	
              The
                net losses, deductions and credits of the Company determined in accordance
                with generally accepted accounting principles and as reported separately
                or in the aggregate, as appropriate, on the tax returns of the Company
                filed for federal income tax purposes.

               

            
	
              Major
                Decisions

               

            	
              As
                defined in Section 4.1(c).

               

            
	
              Management
                Agreements:

               

            	
              The
                collective reference to the Tioga Downs Management Agreement and
                the
                Vernon Downs Management Agreement.

               

            


    

     

     

    
      
        
        

      

      
        A-8

        
          

        

      

      
        
        

      

    

     

    
      	
              Management
                Company:

               

            	
              Nevada
                Gold NY, Inc.

               

            
	
              Material
                Modification:

               

            	
              A
                modification or addition to or deletion from the Final Plans and
                Specifications for a Gaming Complex, including without limitation,
                the
                sign layouts as well as the use of proprietary marks.

               

            
	
              Member(s):

               

            	
              Each
                of the Persons executing this Agreement as a Member, or who is
                subsequently admitted as a substitute or an additional Member as
                provided
                in this Agreement, but not including any Person who has ceased to
                be a
                Member in the Company.

               

            
	
              Member
                Financing Commitment:

            	
              Any
                Member Loan that is in the form of a guarantee, financing commitment
                or
                other similar type of credit support that requires the Member that
                has
                provided such Member Loan to, from time to time, (a) make loans or
                other
                credit extensions, advance funds or make available other financing
                arrangements to the Company or to the Company’s designee, (b) purchase or
                assume obligations of the Company or the Company’s designee, or (c)
                provide indemnification or reimbursement to the Company or the Company’s
                designee. The Nevada Gold Guarantee shall constitute a Member Financing
                Commitment.

               

            
	
              Member
                Nonrecourse

               

              Debt:

               

            	
              Any
                nonrecourse debt of the Company (or portions thereof) for which any
                Member
                (or a related person within the meaning of Treasury Regulation section
                1.752-4) bears the economic risk of loss.

               

            
	
              Member
                Nonrecourse

               

              Deductions:

               

            	
              The
                amount of deductions, losses and expenses equal to the net increase
                during
                the year in Minimum Gain attributable to a Member Nonrecourse Debt,
                reduced (but not below zero) by proceeds of such Member Nonrecourse
                Debt
                distributed during the year to the Members who bear the economic
                risk of
                loss for such debt, as determined in accordance with applicable
                Regulations.

               

            
	
              Membership
                Interest:

               

            	
              All
                or any part of a Member’s equity, ownership, profit or other right, title
                and interest in the Company in such Member’s capacity as a Member,
                including all of such Member’s rights under this Agreement.

               

            
	
              Mercer
                Group:

               

            	
              The
                collective reference to all or any of Raceway Ventures, LLC, Steven
                F.
                Cohen, Frank A. Leo, Patrick Danan, Leonard Mercer and International
                Housing Development Group, Corp.

               

            


    

     

     

    
      
        
        

      

      
        A-9

        
          

        

      

      
        
        

      

    

     

    
      	
              Minimum
                Gain:

               

            	
              With
                respect to Company Nonrecourse Liabilities, the amount of gain that
                would
                be realized by the Company if it disposed of (in a taxable transaction)
                all properties that are subject to Company Nonrecourse Liabilities
                in full
                satisfaction of such liabilities, computed in accordance with applicable
                Regulations. With respect to each Member Nonrecourse Debt, the amount
                of
                gain that would be realized by the Company if it disposed of (in
                a taxable
                transaction) the property that is subject to such Member Nonrecourse
                Debt
                in full satisfaction of such debt, computed in accordance with applicable
                Regulations.

               

            
	
              Net
                Sales Cash:

               

            	
              Cash
                receipts of the Company from a Capital Transaction, less payment
                of fees
                or expenses related to the Capital Transaction.

               

            
	
              Nevada
                Gold:

               

            	
              Nevada
                Gold NY, Inc., a New York corporation, owned 100% by Nevada Gold
&
                Casinos, Inc.

               

            
	
              New
                York Regulatory

               

              Authority

               

            	
              A
                Gaming Authority whose approval is necessary in order for the Company
                to
                obtain or maintain Gaming Licenses with respect to the Gaming
                Complexes.

               

            
	
              Non-Arbitrable
                Decisions :

               

            	
              As
                defined in Section 4.1(d).

               

            
	
              Non-Compliant
                Member :

               

            	
              As
                defined in Sections 15.2 or 15.3(b) hereof, as applicable.

               

            
	
              Notice:

               

            	
              Written
                notice (including any communication or delivery), actually given
                pursuant
                to Section 17.8.

               

            
	
              Oneida:

               

            	
              Oneida
                Entertainment, LLC and each Person to which it Transfers Units pursuant
                to
                Section 14.3(g).

               

            
	
              Operating
                Budget:

               

            	
              The
                Operating Budget defined in Section 4.1.

               

            
	
              Other
                Members:

               

            	
              Means
                (i) in the case of Section 7.2(c) hereof with respect to any Cash
                Deficit
                Contribution, each Member (other than a Non-Contributing Member)
                that has
                contributed its entire portion of such Cash Deficit Contribution,
                (ii) in
                the case of Section 7.11(d) hereof with respect to any RCG Payment
                Amount,
                each Member (other than an Unfunded RCG Reimbursing Member) that
                has made
                (or deemed to have made) a loan to the Company in respect of such
                Member’s
                RCG Reimbursement Amount and (iii) in the case of Section 7.12(d)
                hereof
                with respect to any VSM Payment Amount, each VSM Guarantee Reimbursing
                Member (other than an Unfunded VSM Reimbursing Member) that has made
                (or
                deemed to have made) a loan to the Company in respect of such VSM
                Guarantee Reimbursing Member’s VSM Reimbursement Amount.

               

            


    

     

     

    
      
        
        

      

      
        A-10

        
          

        

      

      
        
        

      

    

     

    
      	
              Percentage:

               

            	
              As
                of any date of determination for any Member, a percentage expressed
                as a
                fraction, (a) the numerator of which is the number of Units held
                by such
                Member as of such date on a fully diluted basis and (b) the denominator
                of
                which is the number of Units held by all Members as of such date
                on a
                fully diluted basis. For purposes of this definition, the phrase
“on a
                fully diluted basis”, as applied to determining the number of Units held
                by a Member on any particular date or the number of Units held by
                all
                Members in the aggregate on any particular date, means the total
                number of
                Units held by such Member or all Members (as applicable) as of such
                date
                assuming full conversion or exercise of all outstanding options,
                warrants,
                convertible securities or other rights to acquire Units, whether
                or not
                then convertible or exercisable. The Percentage of each Member is
                set
                forth on Exhibit 3.1 attached hereto.

               

            
	
              Permitted
                Amount:

            	
              In
                the case of any Cost Budget Overruns, an amount equal to: (a) in
                the case
                the First Lien Lenders have not required Nevada Gold to provide the
                Nevada
                Gold Guarantee, $5,000,000; (b) in the case the First Lien Lenders
                have
                required Nevada Gold to provide the Nevada Gold Guarantee up to the
                amount
                of $5,000,000 and do not permit Nevada Gold to use any part of the
                Nevada
                Gold Guarantee to fund Cost Budget Overruns, $0; (c) in the case
                the First
                Lien Lenders have required Nevada Gold to provide the Nevada Gold
                Guarantee for an amount less than $5,000,000 and do not permit Nevada
                Gold
                to use any part of the Nevada Gold Guarantee to fund Cost Budget
                Overruns,
                an amount equal to the difference between $5,000,000 and the amount
                of the
                Nevada Gold Guarantee; (d) in the case the First Lien Lenders have
                required Nevada Gold to provide the Nevada Gold Guarantee up to the
                amount
                of $5,000,000 and do permit Nevada Gold to use a portion of the Nevada
                Gold Guarantee to fund Cost Budget Overruns, an amount equal to such
                portion; (e) in the case the First Lien Lenders have required Nevada
                Gold
                to provide the Nevada Gold Guarantee for an amount less than $5,000,000
                and do permit Nevada Gold to use a portion of the Nevada Gold Guarantee
                to
                fund Cost Budget Overruns, an amount equal to the sum of (i) such
                portion
                plus (ii) the difference between $5,000,000 and the amount of the
                Nevada
                Gold Guarantee; and (f) in the event that Nevada Gold has not been
                released from all guaranty, reimbursement and indemnity obligations
                with
                respect to the RCG/VSM Loans, $0. All references in this definition
                to
                $5,000,000 shall be changed to $2,500,000 if the Company does not
                acquire
                the Vernon Downs Complex. In the event that the First Lien Lenders
                have
                required Nevada Gold to provide the Nevada Gold Guarantee and subsequently
                release Nevada Gold from its obligations under the Nevada Gold Guarantee
                prior to the occurrence of the Opening Date under each of the Management
                Agreements, the Permitted Amount shall automatically be increased
                by the
                amount of the obligations so released.

               

            


    

     

     

    
      
        
        

      

      
        A-11

        
          

        

      

      
        
        

      

    

     

    
      	
              Permitted
                Transferee:

               

            	
              A
                Person described in Section 14.3 to whom a Unit may be transferred
                without
                compliance with a right of first refusal.

               

            
	
              Person:

               

            	
              An
                individual, corporation, trust, partnership, limited liability company,
                limited liability association, unincorporated organization, association
                or
                other entity.

               

            
	
              Plainfield
                Funds:

               

            	
              Plainfield
                Asset Management, LLC and any funds or investment vehicles controlled
                or
                managed by Plainfield Asset Management, LLC or one of its
                Affiliates.

               

            
	
              Price
                Per Unit:

               

            	
              The
                purchase price for one (1) Unit established by the Board pursuant
                to
                Section 4.1(d)(iv) in connection with any required purchase of Units
                authorized by the Board pursuant to Section 7.2(a) and Section 7.2(c)
                or
                any other issuance or sale of Units authorized by the Board or required
                to
                be made by the Company in accordance with this Agreement (including
                pursuant to Section 7.11 and 7.12).

               

            
	
              Proceeding:

               

            	
              Any
                threatened, pending, or completed action, suit or proceeding, whether
                civil, criminal, administrative or investigative and whether formal
                or
                informal.

               

            
	
              Profits:

               

            	
              The
                net income and gains of the Company determined in accordance with
                generally accepted accounting principles and as reported separately
                or in
                the aggregate, as appropriate, on the tax returns of the Company
                filed for
                federal income tax purposes.

               

            


    

     

     

    
      
        
        

      

      
        A-12

        
          

        

      

      
        
        

      

    

     

    
      	
              Project
                Site(s):

               

            	
              The
                sites on which the Tioga Downs Complex and the Vernon Downs Complex
                are
                located.

               

            
	
              Racing
                Manager:

               

            	
              The
                manager for the Racing Operations.

               

            
	
              Racing
                Operations:

               

            	
              As
                defined in Section 4.5 hereof.

               

            
	
              Regulations:

               

            	
              The
                Regulations (including temporary regulations) promulgated under the
                Code,
                as amended from time to time (including corresponding provisions
                of
                succeeding regulations).

               

            
	
              Reserves:

               

            	
              With
                respect to any fiscal period, cash set aside by the Company for working
                capital and to pay taxes, insurance, debt service, repairs, capital
                replacements, capital improvements, contingent liabilities or other
                costs
                and expenses incident to the ownership or operation of the Company’s
                properties, as estimated in good faith by the Board.

               

            
	
              Scott
                Increased Payments:

               

            	
              Any
                increased payments in excess of $550,000 (but not exceeding $1,800,000)
                owing to All Vernon Acquisition, LLC on account of the purchase by
                Vernon
                Downs Acquisition, LLC of the equity interests of Shawn Scott, Victoria
                Scott, All Capital, LLC, All Vernon Acquisition, LLC and their affiliates
                in Mid-State Raceway, Inc., resulting from revenues from the VLT
                operations at the Vernon Downs Complex achieving certain
                thresholds.

               

            
	
              Senior
                Credit Facilities:

               

            	
              The
                collective reference to the First Lien Facilities and the Second
                Lien
                Facility, as the same may be amended, modified, renewed, replaced,
                restated, substituted or refinanced, in whole or in part, from time
                to
                time.

               

            
	
              Senior
                Credit Facility Lenders:

               

            	
              The
                holders of Debt or other obligations under the Senior Credit
                Facilities.

               

            
	
              Southern
                Tier:

               

            	
              Southern
                Tier Acquisition II LLC, a New York limited liability company owned
                36.364% by Jeff Gural.

               

            
	
              Subordinated
                Note:

               

            	
              A
                promissory note evidencing a Member Loan that is subordinated to
                the
                Senior Credit Facilities and which contains subordination terms that
                are
                acceptable to the Senior Credit Facility Lenders which shall include,
                without limitation, provisions with respect to the following matters:
                (i)
                debt subordination; (ii) lien subordination, if applicable, on a
                basis
                junior in priority in all respects to the security interests of the
                Senior
                Credit Facility Lenders in the assets at issue; (iii) collateral
                agent
                selection solely by the Senior Credit Facility Lenders; (iv) exclusive
                and
                permanent control by the collateral agent at the direction of the
                Senior
                Credit Facility Lenders over all enforcement actions relating to
                collateral; (v) exclusive right of the Senior Credit Facility Lenders
                to
                implement or consent to the use of cash collateral under the Bankruptcy
                Code, and to the provision of such financing to the Company by a
                third
                party in any amount; and (vi) agreement by the holder of the Subordinated
                Note not to oppose or object to any actions by or at the direction
                of the
                Senior Credit Facility Lenders or the collateral agent with respect
                to any
                collateral, including any sale or disposition of any collateral in
                any
                insolvency proceeding under the Bankruptcy Code.

               

            


    

     

     

    
      
        
        

      

      
        A-13

        
          

        

      

      
        
        

      

    

     

    
      	
              Third
                Party:

               

            	
              With
                respect to any Member, a Person other than an Affiliate.

               

            
	
              Third
                Party Offer:

               

            	
              A
                bona fide, non-collusive, binding, arm’s-length written offer from a Third
                Party stated in terms of U.S. dollars.

               

            
	
              Tioga
                Downs Complex:

               

            	
              Tioga
                Downs Racetrack, a harness track located in Nichols, New York, located
                on
                approximately 145 acres of real estate, and all improvements located
                thereon.

               

            
	
              Tioga
                Downs Contributed

               

              Assets:

               

            	
              100%
                of the ownership interests in Tioga Downs Racetrack, LLC.

               

            
	
              Tioga
                Downs Management Agreement:

               

            	
              The
                Tioga Downs Management Agreement, dated effective November 8, 2005,
                by and
                between Tioga Downs Racetrack, LLC and Nevada Gold.

               

            
	
              TrackPower:

               

            	
              TrackPower,
                Inc., a Wyoming corporation.

               

            
	
              Transfer:

               

            	
              A
                sale, exchange, assignment or other disposition of a Unit, whether
                voluntary or by operation of law.

               

            
	
              Transferee:

               

            	
              A
                Person to whom a Unit is transferred.

               

            
	
              Transferor:

               

            	
              A
                Person who transfers a Unit.

               

            


    

     

     

    
      
        
        

      

      
        A-14

        
          

        

      

      
        
        

      

    

     

    
      	
              Trigger
                Date:

               

            	
              The
                later of the date of receipt by the Company and receipt by all other
                Members of a notice from a Licensed Member under Sections 15.2 or
                15.3
                that it intends to exercise the rights set forth in Section
                15.4.

               

            
	
              Unanimous
                Decisions

            	
              As
                defined in Section 4.1(b).

               

            
	
              Unfunded
                Member Loan:

            	
              At
                any time of determination, any Member Financing Commitment under
                which or
                pursuant to which the Member making, providing or issuing such Member
                Financing Commitment has not actually made any loans, advances, purchases,
                assumptions, payments or reimbursements that have not been reimbursed
                to
                such Member.

               

            
	
              Unreturned
                Capital

               

              Contributions:

               

            	
              The
                total amount of Capital Contributions made to the Company by a Member
                less
                the total Distributions received by that Member. In no event will
                the
                total Unreturned Capital Contribution of a Member be less than
                zero.

               

            
	
              Unsuitable
                Person:

            	
              (i) any
                Person who, if the Person is an Affiliate of the Company or any Member,
                will cause the Company, any Member or any Affiliate of any Member
                (A) not
                to obtain any Gaming License, or (B) to have a Gaming License revoked
                or
                not renewed, or (ii) a Member who is properly determined by a second
                Member to be an Unsuitable Person in accordance with Sections 15.2
                or
                15.3(b) for reasons that remain unremedied.

               

            
	
              VDA:

            	
              Vernon
                Downs Acquisition, LLC, a Delaware limited liability company owned
                by the
                Company, subject to the rights of shareholders of Mid-State Raceway,
                Inc.
                to acquire an aggregate of 10% of VDA.

               

            
	
              Vernon
                Downs Complex:

               

            	
              Vernon
                Downs Raceway, a harness track located in Vernon, New York, located
                on
                approximately 600 acres of real estate, and all improvements located
                thereon, including a 47,700 square foot grandstand, clubhouse, 34,000
                square foot VLT facility, a 175-room hotel, surface parking and other
                amenities.

               

            
	
              Vernon
                Downs Contributed Assets:

               

            	
              100%
                of the ownership interests in VDA.

               

            
	
              Vernon
                Downs Management Agreement:

               

            	
              The
                Vernon Downs Management Agreement, dated effective November 8, 2005,
                by
                and between Vernon Downs Acquisition, LLC and Nevada Gold.

               

            
	
              Vestin/Scott/Mercer
                Group

               

            	
              The
                collective reference to all or any of Vestin Mortgage, Inc., All
                Capital,
                LLC and the Mercer Group.

               

            
	
              Withdrawal:

               

            	
              The
                occurrence of an event with respect to a Member which terminates
                membership in the Company, as provided in Section 12.2.

               

            


    

     

     

    
      
        
        

      

      
        A-15

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      “B”

     

    Constituent
      Interests in Members

     

    Directors,
      Officers and Owners of Southern Tier:

     

    
      	 	 
	
              Manager:

            	
              Jeffrey
                Gural

            
	 	 
	
              Owners:

            	
              Jeffrey
                R. Gural

            	
              36.364%

            
	 	
              Aaron
                Gural

            	
              18.182%

            
	 	
              Barry
                Gosin

            	
              9.091%

            
	 	
              Peter
                Kleinhans

            	
              9.091%

            
	 	
              Ted
                Gewertz

            	
              7.273%

            
	 	
              Buzzy
                Geguld

            	
              5.455%

            
	 	
              Gerry
                Ritterman

            	
              5.455%

            
	 	
              James
                Kuhn

            	
              4.545%

            
	 	
              Howard
                Kaye

            	
              2.727%

            
	 	
              Marc
                Holiday

            	
              1.817%

            
	 	
              TOTAL

            	
              100%

            
	 	 	 


    

    Directors,
      Officers and Owners (5% or more) of TrackPower, Inc.

     

    
      	
              Directors:

            	
              John
                G. Simmonds, Chairman

              Kenneth
                J. Adelberg

              Edward
                M. Tracy

              James
                Ahearn

            
	 	 
	
              Officers:

            	
              Edward
                M. Tracy, CEO and President

              Gary
                Hokkanen, CFO and Treasurer

              Carrie
                Weiler, Secretary

            
	 	 
	
              Shareholders
                (5% or more):

            	
              Paul
                Marsiglio

              Asolare
                II, LLC

            
	 	 


    

    Directors,
      Officers and Owners (5% or more) of Nevada Gold & Casinos,
      Inc.

     

    
      	
              Directors:

            	
              H.
                Thomas Winn

              Paul
                Burkett

              Wayne
                White

              Francis
                Ricci

              William
                Jayroe

              Joe
                Juliano

              John
                Gallaway

            
	 	 
	
              Officers:

            	
              H.
                Thomas Winn, CEO

              John
                Arnesen, President & COO

              Alan
                J. Greenstein, CFO

              Don
                Brennan, Vice President - Development

            
	 	 
	
              Shareholders
                (5% or more):

            	
              Clay
                County Holdings, Inc.

            
	 	 


    

    Directors,
      Officers and Owners of Oneida

     

    
      	
              Directors:

            	
              Max
                Holmes 

            
	 	
              Joseph
                C. Bencivenga 

            
	 	 
	
              Officers:

            	
              Max
                Holmes - President

              Joseph
                C. Bencivenga - Treasurer

              Thomas
                X. Fritsch - Secretary

            
	 	 
	
              Owners:

            	
              Oneida
                Entertainment Holdings, Inc.1 

            
	 	
              Oneida
                Capital, LLC2 

            


    

    


    
      
        

      

      
        
          	
                	1	
                  Oneida
                    Entertainment Holdings, Inc. will control Oneida Entertainment,
                    LLC.
                    Oneida Entertainment Holdings, Inc. has one shareholder: Plainfield
                    Special Situations Master Fund Limited, a Cayman Islands corporation
                    (the
                    “Master Fund”). The Master Fund is what is commonly referred to as a hedge
                    fund. The Master Fund is managed by Plainfield Asset Management
                    LLC
                    (“PAM”), a Delaware limited liability company and an investment adviser
                    duly registered with the SEC under the Investment Advisers Act
                    of 1940.
                    The sole managing member of PAM is Achim Maximilian Holmes. 

                


        

      

      
        
          	
                	
                  2

                	
                  Oneida
                    Capital, LLC has one member: Eric M. Spector. 

                


        

      

    

     

     

    
      
        
        

      

      B-1