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      AMENDMENT
        TO INDUSTRIAL REAL ESTATE LEASE

      

      This
        Amendment shall pertain to that
        certain Industrial Real Estate Lease dated May 1, 1990 executed as between
        GERALD BASHAW(“LANDLORD”) and MODTECH HOLDINGS, INC., a Delaware
        Corporation(“TENANT”). The parties hereto hereby expressly acknowledge that good
        and valuable consideration has been mutually given and received in exchange
        for
        their consent to the amendments contained herein.

      

      This
        Amendment shall specifically
        supersede and amend all conflicting terms set forth within the above-referenced
        Lease, the terms and conditions of which are hereby incorporated by this
        reference. All other terms and conditions of said Lease shall remain in full
        force and affect, except as specifically agreed to and modified
        herein.

      

      Section
        1.04 in amended such that the
        only property hereafter being leased is as follows: that certain group of
        Parcels 8, 9, 10 and 11 on the Parcel map attached hereto as Exhibit “A”, which
        have been circled and marked collectively Parcel “2”.

      

      Section
        1.12 is hereby amended such
        that BASE RENT shall be at the rate of $700.00 per acre of property leased
        hereby.

      

      Said
        amendments are hereby agreed to as
        of the date of execution of this document, with the operative date of the
        change
        in rental property description and rental rate being the first day of January,
        2006. It is anticipated that the parties may agree in writing to a further
        extension of said effective date, but that in no event shall the extended
        operative date extend beyond February 1, 2006.

       

       

      
        	
                 

                 

                Dated:
                  11/1/05

              	
                "LANDLORD"

                 

                By: /s/ Gerald Bashaw

                      Gerald Bashaw

                 

                "TENANT"

                MODTECH HOLDINGS, INC., a

                Delaware Corporation

                 

              
	
                 

                Dated:
                  11/28/05

              	
                 

                By:
                  /s/ Dennis L. Shogren

                 

                Its:
                  CFOExecution
        Copy November 8, 2005

       

      OPERATING
        AGREEMENT

       

      OF

       

      AMERICAN
        RACING AND ENTERTAINMENT, LLC

       

      This
        Operating Agreement (the “Agreement”) of American Racing and Entertainment, LLC
        (the “Company”), dated effective as of the 24th day of August, 2005, is hereby
        executed and agreed to, for good and valuable consideration, by Nevada Gold
        NY,
        Inc., a New York corporation, (“Nevada Gold”), TrackPower, Inc., a Wyoming
        corporation (“TrackPower”), and Southern Tier Acquisition II LLC, a New York
        limited liability company ("Southern Tier").

       

      The
        parties agree as follows:

       

      ARTICLE
        I. 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 shall begin on the date its Articles of Organization are filed with
        the
        New York Secretary of State and shall continue until a Dissolution may
        occur.

      

      1.4 Foreign
        Qualification.
        After
        formation of the Company under the Act, the Company will 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; 

      

      (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;

      

      
        
          
          

        

        
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      (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. 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 Nevada Gold, TrackPower and Southern Tier. The
        initial Percentage of each Member in the Company shall be as
        follows:

      
        	 	 	 
	 	Nevada Gold 	50.00% 
	 	TrackPower 	25.00% 
	 	Southern Tier 	25.00% 

      

         

      The
        Percentage of each Member as stated in this Section 3.1 shall be adjusted
        from
        time to time pursuant to the provisions of this Agreement. 

      

      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
        Sections 7.1 and 7.2 hereof.

      

      (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;

       

      
        
          
          

        

        
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      (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 Membership
        Interests 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 or (v) 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.

      

      3.4 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.
        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
        Membership Interests.

      

      
        
          
          

        

        
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      Execution
        Copy November 8, 2005

       

      3.6 Notice
        of Meetings.
        Written
        notice of a meeting 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.
        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 Membership Interest (with the limited rights of a Transferee
        as set forth in Section 14.6). 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
        17.8).

       

      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. 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 specifically authorized by the Board in each instance.
        No
        Director shall represent himself or herself as a manager of the Company.
        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: (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 Agreement defined in Section
        4.5
        hereof).

      

      (b) "Unanimous
        Decisions" shall mean decisions to:

       

      
        
          
          

        

        
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      (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; or (C) is necessary to comply with any contractual
        or
        other Company obligations);

      

      (iii) during
        the nine (9) 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) 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;

      

      (c) "Major
        Decisions" shall mean decisions to:

      

      (i) select
        the president of the Company, the General Manager and the Racing
        Manager;

      

      (ii) approve
        the Conceptual Plans and Specifications and the Final Plans and Specifications
        or a Material Modification (but a nonmaterial amendment or modification shall
        not be a Major Decision);

      

      (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;

       

      
        
          
          

        

        
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        Execution
          Copy November 8, 2005

         

        (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);

         

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

      

      

      (viii) 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
        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, Alpert & Green as the accountants for the
        Company;

      

      (xi) approve
        a
        proposed transaction between the Company and an Affiliate of a
        Member.

      

      (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
        the either Complex (or both Complexes) or enter into any agreement to do
        so,
        except the Management Agreement 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; or (F) Debt incurred under any contract, loan document,
        lease or other agreement authorized pursuant to this Agreement.

      

      (iv) elect
        to
        have the Members make additional capital contributions to the Company pursuant
        to Section 7.2;

       

      
        
          
          

        

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

      

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

      

      (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:
        (i)
        any Member may cause the Company to take such action to the extent it, in
        good
        faith, determines that such action: (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; or (C) is necessary to comply with any contractual or other
        Company
        obligations.

      

      (g) The
        Conceptual Plans and Specifications, 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. 

      

      (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 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.

      

      
        
          
          

        

        
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      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;

       

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

      

      (iv) the
        Minimum Balance (as defined in the Management) which must remain in the Bank
        Account (as defined in the Management Agreement) as of the end of each Fiscal
        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.

      

      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 do 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. 

      

      
        
          
          

        

        
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      Execution
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      4.2 Election
        of Board of Directors.

      

      (a) Number,
        Term and Qualifications.
        The
        Board of Directors shall be comprised of four members (each, a "Director"),
        two
        designated by Nevada Gold, one designated by TrackPower and one designated
        by
        Southern Tier. Each of the Members agrees to vote or express consent with
        respect to all of their respective Membership Interests 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. The initial members of the Board
        are
        as follows:

      
        
          	 	 	 
	 	H. Thomas Winn 	Nevada Gold 
	 	Jon Arnesen 	Nevada Gold 
	 	Ed Tracy 	TrackPower 
	 	Jeffrey Gural 	Southern Tier 
	 	 	 

        

          (b) 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. 

      

      

      (c) 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 termination of such Director without further action by the Members.
        

      

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

      

      (e) 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.

       

      
        
          
          

        

        
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      (f) 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 of Directors 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 of Directors cast in favor of that
        Unanimous Decision.

       

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

      

      (h)
         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 4.6, 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. 

      

      
        
          
          

        

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

      

      (a) The
        Members and the Directors shall devote such time to the Company 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
        limit, 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 in 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 Member
        or the other Member's 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 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.

      

      (d) Notwithstanding
        the foregoing provisions of this Section 4.4, during the first forty eight
        (48)
        months of this Agreement 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, unless and until the Company, by
        unanimous vote of the Members has elected not to pursue such New York Harness
        Racing/VLT Opportunity and has approved the pursuit of such New
        York
        Harness Racing/VLT Opportunity
        by any
        of the Members (or their Affiliates) for their own account; provided, that
        a
        vote of the Members shall be held within fifteen (15) days after receipt
        by the
        Members of all information related to such New York Harness Racing/VLT
        Opportunity from the Member presenting the New York Harness Racing/VLT
        Opportunity to the Company. It is understood and acknowledged that any election
        by the Members to pursue such opportunity must include the obligation by
        the
        Members to contribute, on a prorata basis, all equity required for the pursuit
        of the opportunity.

      

      
        
          
          

        

        
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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 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 the Board. The Company (or a subsidiary of the
        Company) has entered into a management agreement (the "Management Agreement")
        with Nevada Gold to manage 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. The terms
        of such
        management are set forth in the management agreement entered into on the
        date of
        execution of this Agreement between the Company (or a subsidiary of the Company)
        and Nevada Gold. 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, 

      

      (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 Nevada Gold, as manager, 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. 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. 

      

      
        
          
          

        

        
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      Execution
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      4.6 Payments
        to Directors.
        Each
        Director shall be reimbursed for reasonable out-of-pocket expenses for attending
        Board meetings and attending to other Company Business. Except as specified
        in
        this Agreement, no Director is entitled to remuneration for services rendered
        or
        goods provided to the Company in his or her capacity as a Director.

      

      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 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. 

      

      (ii) If
        the
        Members cannot agree on a single Arbitrator within twenty (20) days after
        an
        election to submit a Major Decision to arbitration, then Nevada Gold, on
        the one
        hand, and TrackPower and Southern Tier, on the other hand, shall each appoint
        one Arbitrator within ten (10) days following such twenty (20) day period.
        The
        two appointed Arbitrators shall within ten (10) days of such referral appoint
        a
        third Arbitrator, and if such Arbitrators are not able to agree on such third
        Arbitrator within such time, then, on five (5) days' Notice in writing to
        the
        other Arbitrator, either Arbitrator shall apply to the branch of the American
        Arbitration Association in New York, New York to designate and appoint such
        third Arbitrator. The three Arbitrators shall meet with the Board within
        twenty
        (20) days after the appointment of the third Arbitrator 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. 

      

      
        
          
          

        

        
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      Execution
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      (iii) If
        either
        Nevada Gold, on the one hand, or TrackPower and Southern Tier, on the other
        hand, fails timely to appoint an Arbitrator pursuant to Section 4.7(b) (ii),
        then the single Arbitrator designated by the other shall act as the sole
        Arbitrator and shall be deemed to be the unanimously approved Arbitrator
        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.

      

      ARTICLE
        5: PROJECT FINANCING FOR THE GAMING COMPLEXES

      

      5.1 Senior
        Note Financing.
        The
        Members acknowledge that the Company will arrange certain senior note financing
        for the development of the Vernon Downs Complex and the Tioga Downs Complex,
        from a lender (the “Lender”) in the aggregate amount of approximately $70.0
        million (the “Senior Note Financing”). In connection with the Senior Note
        Financing, Nevada Gold agrees to provide an approximately $5.0 million guarantee
        to the Lender and, if collateral is required by the Lender with respect to
        such
        guarantee, then Nevada Gold agrees to provide cash or a letter of credit
        to the
        Lender to the extent required to collateralize such guarantee on the terms
        set
        forth below. The Company will endeavor to obtain Senior Note Financing on
        a
        non-recourse basis, with payments of interest only at an interest rate of
        approximately nine percent (9%) per annum and a term of approximately five
        to
        seven years, or such other terms as the Board shall approve. If Nevada Gold
        provides collateral in the form of cash or if cash is drawn from a guaranty
        or a
        letter of credit provided as collateral, such amounts shall be treated as
        loans
        by Nevada Gold to the Company and evidenced by subordinated notes (the
“Subordinated Notes”) bearing interest at the rate of one percent (1%) per annum
        above the interest rate of the Senior Note Financing and maturing thirty
        (30)
        days following the maturity date of the Senior Note Financing. The Subordinated
        Notes will be unsecured obligations of the Company. The Company shall pay
        all
        reasonable bank fees incurred by Nevada Gold for any required letter of
        credit.

      

      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 Initial DIP Financing in the net
        amount of $1,414,000 contributed by TrackPower and Southern Tier shall be
        returned to them as and when repaid in accordance with, and subject to the
        limitations of, Section 7.1(f). Additionally, the Senior Note Financing will
        decrease from approximately $70 million to approximately $25 million and
        Nevada
        Gold’s guarantee will decrease from $5.0 million to $2.5 million.

      

      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. 

      

      
        
          
          

        

        
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      (b) 
        The Fair
        Market Value of any property other than a Membership Interest 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 Membership Interest in the Company shall
        be
        determined in accordance with this Section 6.1(c). Membership Interests 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
        Ownership 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 Membership
        Interests 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 Membership Interests shall
        be (i) the Percentage represented by such Member’s Membership Interests,
        multiplied by the Fair Market Value of all of the Membership Interests,
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 Membership Interest,
        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
        in Section 7.1 hereof. In addition, the Members may mutually agree on the
        Fair
        Market Value of any property, including a Membership Interest 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 fails to appoint an Appraiser to which it or he is otherwise entitled,
        the other appointed appraiser shall proceed to determine the Fair Market
        Value
        of the Membership Interests 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 Membership
        Interests 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

      

      7.1 Initial
        Capital Contributions.  

      

      (a) In
        accordance with the terms of the Contribution Agreement, certain Affiliates
        of
        TrackPower and Southern Tier have 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. For purposes of determining
        the pro-rata capital contributions required of each Member from and after
        the
        date hereof, the $5,000,000 in increased value will not be taken into account
        in
        determining TrackPower's and Southern Tier's capital contributions. 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.

      

      (b) In
        accordance with the terms of the Contribution Agreement, an Affiliate of
        Nevada
        Gold has contributed to the Company all of its right, title and interest
        in and
        to the TDR Loan ($1,001,550 in principal outstanding). In addition, an Affiliate
        of Nevada Gold made the Scott/Vestin Settlement Payment ($526,550) on behalf
        of
        the Company. As a result of the contribution of the TDR Loan and the
        Scott/Vestin Settlement Payment, Nevada Gold has been credited with a Capital
        Account equal to $1,528,100 and the TDR Loan shall be converted from debt
        to
        equity.

      

      
        
          
          

        

        
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      (c) The
        equity financing necessary to complete the development of the Tioga Downs
        Complex will be approximately $10,000,000. The equity financing necessary
        to
        complete the development of the Vernon Downs Complex will be approximately
        $10,000,000. These amounts ($20,000,000) are inclusive of the capital
        contributions made pursuant to Section 7.1(a) (with the exception of the
        $5,000,000 in increased value) and Section 7.1(b), which total $8,494,868.
        If
        the Company is not successful in acquiring the Vernon Downs Complex, then
        the
        Members shall not be required to contribute any remaining amount of the
        $10,000,000 equity financing for the Vernon Downs Complex.

      

      (d) Nevada
        Gold agrees to make the next $5,438,668 in capital contributions to the Company,
        as and when required for items set forth in the Cost Budget for the Tioga
        Downs
        Complex and the Cost Budget for the Vernon Downs Complex, in order to equalize
        the capital contributions of the Members in accordance with their Percentages
        as
        follows:

      
        	 	 	 	 
	 	
                (i) 

              	Nevada Gold: 	$6,966,768 
	 	
                (ii) 

              	TrackPower: 	$3,483,384 
	 	
                (iii) 

              	Southern Tier: 	$3,483,384 
	 	 	 	 

      

      (e) Once
        Nevada Gold has made the contributions described in Section 7.1(d), each
        Member
        agrees to contribute to the capital of the Company, as follows:

      

      (i)
        Nevada Gold will contribute $3,033,232, as and when required for items set
        forth
        in the Cost Budgets for the Tioga Downs Complex and the Vernon Downs Complex,
        on
        a pari passu basis with TrackPower and Southern Tier. 

      

      (ii)
        TrackPower will contribute $1,516,616, as and when required by the Company
        for
        items set forth in the Cost Budgets for the Tioga Downs Complex and the Vernon
        Downs Complex, on a pari passu basis with Southern Tier and Nevada
        Gold.

      

      (iii)
        Southern Tier will contribute $1,516,616, as and when required by the Company
        for items set forth in the Cost Budgets for the Tioga Downs Complex and the
        Vernon Downs Complex, on a pari passu basis with TrackPower and Nevada
        Gold.

      

      (f) If
        the
        Company is not successful in acquiring the Vernon Downs Complex, then the
        Company shall return to TrackPower and Southern Tier the interest in the
        Initial
        DIP Financing (in the net amount of $1,414,000) that each of them contributed,
        and their Capital Contributions and Capital Accounts shall be adjusted
        accordingly; provided, that no distribution (or portion thereof) will be
        made to
        the extent such distribution (or portion thereof) would cause the Capital
        Contributions (as adjusted for such distribution and not including the increased
        value for the Tioga Downs Complex described in Section 7.1(a)) of either
        TrackPower and Southern Tier to be less than 25% of the aggregate Capital
        Contributions (as adjusted for such distribution and not including the increased
        value for the Tioga Downs Complex described in Section 7.1(a)) made by all
        Members at the time of such distribution. 

       

      
        
          
          

        

        
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      Execution
        Copy November 8, 2005

       

      (g) Aggregate
        Capital Contributions made by the Members pursuant to this Section 7.1 shall
        not
        exceed (i) $10 million in the aggregate for the Tioga Downs Complex or (ii)
        $10
        million in the aggregate for the Vernon Downs Complex, except as provided
        in
        Section 7.2.

      

      (h) The
        Company shall have three wholly owned subsidiaries, Tioga Downs Racetrack,
        LLC,
        Vernon Downs Acquisition, LLC and Tioga Management Co., Inc. The capital
        contributions described in Section 7.1(a) represent existing equity in Tioga
        Downs Racetrack, LLC and Vernon Downs Acquisition, LLC. Unless otherwise
        agreed
        by the Board, the capital contributions described in Section 7.1 (b) through
        (f)
        shall be loaned or contributed as equity to either Tioga Downs Racetrack,
        LLC or
        Vernon Downs Acquisition, LLC, as appropriate. 

      

      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 after all initial Capital Contributions of the Members as set forth
        in
        Section 7.1 above have been made, 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, but only on the terms and conditions
        set forth in Section 7.2(b).

      

      (b) If
        the
        Lender has not required a guaranty of $5,000,000 ($2,500,000 in the event
        the
        Vernon Downs Complex is not acquired), or if the Lender has required such
        guaranty but permits all or a portion of it to be used to fund Cost Budget
        overruns for the Tioga Downs Complex and/or the Vernon Downs Complex, then
        Nevada Gold shall provide financing to the Company, up to the amount of
        $5,000,000 (or $2,500,000 in the event the Vernon Downs Complex is not acquired)
        to fund Cost Budget overruns for the Tioga Downs Complex and/or the Vernon
        Downs
        Complex. Any and all such advances shall be treated as unsecured loans by
        Nevada
        Gold to the Company and evidenced by subordinated notes bearing interest
        at the
        rate of one percent (1%) per annum above the interest rate of the Senior
        Note
        Financing and maturing thirty (30) days following the maturity date of the
        Senior Note Financing. 

      

      (c) If
        financing from Nevada Gold is not required under Section 7.2(b), and the
        Board
        elects to require additional Capital Contributions by the Members, the Board
        shall give written notice of such Cost Budget overruns or operating deficits
        to
        all of the Members, which 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, and the projected
        sources and amounts of future cash flow and which notice shall also specify
        a
        contribution date ("Contribution Date") ( which shall not be less than thirty
        (30) days following the effective date of such notice) upon which each Member
        shall have the obligation to contribute to the capital of the Company, in
        cash,
        such Member's Percentage (as of the Contribution Date) of such operating
        deficits ("Cash Deficit Contribution"). If any Member (the "Non-Contributing
        Member") fails to contribute all or any portion of the Cash Deficit Contribution
        or any other amount required to be made by such Member pursuant to Section
        7.1
        ("Delinquent Contribution"), and provided that one or more of the other Members
        (collectively, the "Contributing Members") have contributed (in the proportion
        of their ownership Percentages unless otherwise agreed) to the capital of
        the
        Company all of the Cash Deficit Contribution or any other amount required
        to be
        made by the Non-Contributing Member pursuant to Section 7.1 within thirty
        (30)
        days following the Contribution Date, then in such event there shall be a
        dilution penalty of 150% of every dollar not contributed by the Non-Contributing
        Member. 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 Cash Deficit Contribution
        or other amount required by Section 7.1 of such Non-Contributing Member,
        such
        election to be exercised within five (5) days following the Contribution
        Date.
        The dilution penalty shall be determined as follows: the Percentage of the
        Contributing Members will be increased by an amount which is arrived at by
        multiplying 150% times a fraction, the numerator of which is the amount
        contributed by the Contributing Members on behalf of the
        Non-Contributing  Member, and the denominator of which
        is the
        aggregate Capital Contributions of all of the Members after the making of
        the
        additional Capital Contribution by the Contributing Members. The
        Percentage of the Non-Contributing Member will be decreased
        by the
        same amount. For example, if (i) $1,000,000 in Cash Deficit Contributions
        are
        required, (ii) Nevada Gold contributes 100% of such amount, and (iii) the
        aggregate Capital Contributions of all of the Members after the making of
        the
        $1,000,000 Cash Deficit Contribution is $19,000,000, then Nevada Gold's
        Percentage shall be increased by 3.95%, calculated as follows:

      

      
        
          
          

        

        
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      Execution
        Copy November 8, 2005

       

      150%
        X
        $500,000/$19,000,000 = 3.95%

      

      Trackpower's
        Percentage shall be decreased by 1.975% and Southern Tier's Percentage shall
        be
        decreased by 1.975%.

      

      For
        purposes of this Section, the aggregate amount of Capital Contributions made
        by
        the Members shall not include the amount of $5,000,000 associated with the
        Tioga
        Downs Contributed Amount (representing the incremental increase in value),
        which
        was credited one-half to TrackPower and one-half to Southern Tier. 

      

      (d) If,
        as a
        result of the dilution penalty, a Member’s (the "Diluted Member") ownership
        Percentage falls to or below 50% of its initial Percentage set forth in Section
        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 Membership Interests of the Diluted Member
        at a
        purchase price equal to 85% of the Fair Market Value of the remaining Membership
        Interests of the Diluted Member. 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
        Membership Interests being purchased shall be determined. Upon giving of
        the
        Purchase Notice, the Fair Market Value of the Membership Interests shall
        be
        determined pursuant to Article 6. 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").

      

      (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 of Directors shall
        be
        increased to five members and such Member shall have the right to elect three
        directors to the Board, and each of the other two Members shall have the
        right
        to elect one director (or if there is only one other Member, the Member holding
        a 60% or greater Percentage shall have the right to elect three directors
        to the
        Board and the other Member shall have the right to elect two
        directors).

      

      
        
          
          

        

        
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      Execution
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      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.
        Any
        advances by a Member to the Company shall constitute a loan from the Member
        to
        the Company (“Member Loan”), and shall 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.

      

      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 Membership Interest 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 Membership Interest will carry over to the Transferee, unless
        otherwise provided by the express terms of this Agreement.

      

      
        
          
          

        

        
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      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.

       

      ARTICLE
        8: ALLOCATION
        OF PROFITS AND LOSSES

      

      8.1 Profits
        and Losses.
        

      

      (a) Allocation
        of Losses other than from Capital Transactions.

       

      All
        Losses, other than Losses arising from Capital Transactions, shall be allocated
        to the Members in proportion to their respective Percentages.

      

      (b) Allocation
        of Profits other than from Capital Transactions.

       

      All
        Profits, other than Profits from Capital Transactions, 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) in proportion to such Losses until the cumulative Profits
        allocated pursuant to this Section 8.1(b) to such Members are equal to the
        total
        of such Losses allocated to such Members for all prior periods; and

       

      (ii) second,
        to the Members in proportion to their respective Percentages.

      

      (c) Allocation
        of Losses from Capital Transactions.

       

      All
        Losses arising from Capital Transactions shall be allocated among the Members
        in
        accordance with their respective Percentages.

      

      (d) Allocation
        of Profits from Capital Transactions

       

      All
        Profits 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(c) in proportion to such Losses until the cumulative Profits
        allocated pursuant to this Section 8.1(d) to such Members are equal to the
        total
        of such Losses allocated to such Members for all prior periods; and

      

      (ii) second,
        to the Members in accordance with their respective Percentages.

      

      (e) Special
        Allocation of Profits and Losses from Initial DIP
        Financing.

       

      If
        Section 7.1(f) applies such that the interest and fees in the Initial DIP
        Financing is returned to TrackPower and Southern Tier, then all Profits and
        Losses with respect to the Initial DIP Financing shall be allocated to
        TrackPower and Southern Tier pro rata.

      

      
        
          
          

        

        
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      Execution
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      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 Treasury 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 Treasury 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 Treasury 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.

       

      (e) In
        accordance with Section 704(c) of the Internal Revenue Code and the Treasury
        regulations thereunder, 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.

       

      
        
          
          

        

        
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      Execution
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      (f) Except
        as
        otherwise provided in Section 8.2, if a Membership Interest is transferred
        during any Fiscal Year (whether by Transfer or liquidation of a Membership
        Interest, 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).

      

      (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, other than
        distributions of Net Sales Cash, to the Members in proportion to their
        respective Percentages.

      

      (d) Fourth,
        the Company will make distributions of Net Sales Cash to the Members in
        accordance with their respective Percentages. 

      

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

      

      
        
          
          

        

        
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      Execution
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      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
        Subordinated Notes and any loans under Section 7.2(b)) have been fully repaid,
        and 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. 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, 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.

      

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

      

      9.4 Withholding.
        If
        required by the Code or by state or local law, the Company will withhold
        any
        required amount from Distributions to a Member for payment to the appropriate
        taxing authority. Any amount so withheld from a Member will be treated as
        a
        Distribution by the Company to such Person. 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.

      

      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.

      

      
        
          
          

        

        
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      Execution
        Copy November 8, 2005

       

      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 the
        Management Agreement. 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;

      

      (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
        each such agreement constitutes the legal, valid and binding obligation of
        each
        such Member enforceable in accordance with its respective 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 Membership
        Interests:

      

      (i)
         it
        acknowledges that the Membership Interests 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
        investment of this type;

       

      
        
          
          

        

        
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      (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 and 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;

      

      (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 Membership
        Interests;

      

      (ix) it
        understands that there will be no public market for its Membership 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 Membership Interests 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;

      

      
        
          
          

        

        
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      (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;

      

      (v) it
        knows
        of no actions or lawsuits, pending, planned or threatened, by or against
        it, the
        Company, or its Affiliates, which could create an obligation or liability
        for
        the Company or any of the other Members other than those described in
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 or other
        organizational documents, as the case may be, of any such entity;
        or

       

      (iii) require
        any consent, or 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.

       

      (e)
        (i) TrackPower
        shall and does hereby indemnify, defend and hold harmless the Company and
        the
        Indemnified Persons of Nevada Gold and Southern Tier, and each of them
        separately, from and against all loss, cost, or damage whatsoever (including
        reasonable attorneys fees) resulting from any act, claim or omission of or
        by
        TrackPower or any Affiliates of TrackPower's prior to the date
        hereof.

       

      (ii) Southern
        Tier shall and does hereby indemnify, defend and hold harmless the Company
        and
        the Indemnified Persons of Nevada Gold and TrackPower, and each of them
        separately, from and against all loss, cost, or damage whatsoever (including
        reasonable attorneys fees) resulting from any act, claim or omission of or
        by
        Southern Tier or any Affiliates of Southern Tier prior to the date
        hereof.

       

      
        
          
          

        

        
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      (iii) Nevada
        Gold shall and does hereby indemnify, defend and hold harmless the Company
        and
        the Indemnified Persons of TrackPower and Southern Tier, and each of them
        separately, from and against all loss, cost, or damage whatsoever (including
        reasonable attorneys fees) resulting from any act, claim or omission of or
        by
        Nevada Gold or any Affiliates of Nevada Gold's prior to the date
        hereof.

       

      (iv) Each
        Member shall and does hereby indemnify, defend and hold harmless the Company
        and
        each other Member from and against any loss, cost, or damage whatsoever
        (including reasonable attorneys fees) resulting from any breach by any of
        them
        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.

      

      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 Members,
        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 final decision of a court of competent jurisdiction, to constitute either
        fraud, bad faith, breach of this Agreement, gross negligence, or criminal
        conduct.

      

      (b) 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.

      

      (c) 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.

       

      
        
          
          

        

        
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      (d)
         (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 under this Agreement, an
        Indemnified Person shall notify the Indemnifying Member in writing of such
        claim
        and advise the Indemnifying Member whether the Indemnified Person intends
        to
        contest such claim.

       

      (B) The
        Indemnified Person shall permit the Indemnifying Member to contest and defend
        against such claim, at the Indemnifying Member's expense, if the Indemnifying
        Member 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 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
        Persona and such Indemnifying Member and another Indemnified Person whose
        defense has been assumed by the Indemnifying Member. Notwithstanding a
        determination by the Indemnifying Member to contest such claim, the Indemnified
        Persons 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 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). If the Indemnifying Member 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 advising
        the
        Indemnifying Member of such claim, or if the Indemnifying Member, 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 shall not consent to the terms of any compromise or
        settlement of any third-party claim defended by the Indemnifying Member in
        accordance herewith (other than terms related solely to the payment of money
        damages and only after the Indemnifying Member has furnished the Indemnified
        Person with such evidence as the Indemnified Person may reasonably request
        of
        the Indemnifying Member's 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.

       

      (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 written notice
        given
        by the Indemnified Person to the Indemnifying Member. Such Indemnifying Member
        shall have a period of thirty (30) days within which to respond thereto.
        If such
        Indemnifying Member does not respond within such thirty (30) day period,
        such
        Indemnifying Member 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 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.

       

      
        
          
          

        

        
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      (ii) Mitigation

      

      Each
        Indemnifying Member and 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
        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 Indemnified Person receives an insurance or other indemnification
        payment which, together with any indemnification payment made by the Company,
        exceeds the amount of such liability, then such Member or Indemnified Person
        will immediately repay such excess to the Company.

      
 

      ARTICLE
        11: ACCOUNTING AND REPORTING

      

      11.1 Fiscal
        Year.
        For
        income tax and accounting purposes, the Fiscal Year of the Company shall
        end on
        the last Sunday in April 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.

      

      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.

      

      
        
          
          

        

        
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      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 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; or

      

      (c)
         By
        unanimous written agreement of the Members. 

      

      (d) The
        election of the remaining Members to dissolve as permitted by Section 15.4(g)
        of
        this Agreement.

      

      (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 of such Member’s Membership
        Interests not approved by the Members;

      

      (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 Person’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;

      

      
        
          
          

        

        
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      (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
        Membership Interests;

      

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

      

      (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 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 Directors) will cease to have voting rights
        hereunder, and such Member will, without further act, become a Transferee
        of its
        Membership Interest (with only the limited rights of a 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 17.8).

      

      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, 

      

      (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).

       

      
        
          
          

        

        
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      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 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;

       

      (b) Second,
        to the setting up of any reserves which the Board reasonably deem 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;

      

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

      

      
        
          
          

        

        
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      Execution
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      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 of
        Organization) 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.

       

      ARTICLE
        14: TRANSFER RESTRICTIONS

      

      14.1 General
        Restriction.
        No
        Member may Transfer all or any part of its Membership Interests in any manner
        whatsoever (and no constituent owner of a Member shall be permitted to transfer
        its interests in such Member) except (a) to a Permitted Transferee as set
        forth
        in Section 14.3 or (b) after full compliance with the right of first refusal
        set
        forth in Section 14.4, and in either case only if the requirements of Section
        14.5 have also been satisfied. Any other Transfer of all or any part of its
        Membership Interests is null and void, and of no effect. Any Member who makes
        a
        Transfer of all of such Member’s Membership Interests 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 Membership Interests
        will continue as a Member (with respect to the interest 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
        Membership Interest will be governed by the other provisions of this
        Agreement.

      

      
        
          
          

        

        
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      14.2 No
        Member Rights.
        No
        Member has the right or power to confer upon any Transferee (other than a
        Permitted Transferee) the attributes of a Member in the Company. The Transferee
        of all or any part of a Membership Interest 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.

      

      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 Membership Interest 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, 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.

       

      (g) A
        pledge
        or encumbrance of a Membership Interest 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.

      

      Each
        of
        the foregoing transferees shall be a “Permitted Transferee” and shall become a
        Member of the Company in accordance with Section 602 of the Act.

      

      
        
          
          

        

        
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      14.4 Right
        of First Refusal.
        Prior
        to any proposed Transfer of all or any part of Membership Interests of a
        Member,
        other than to a Permitted Transferee pursuant to Section 14.3, the Transferor
        must obtain a Third Party Offer. For purposes of this Section 14.4, a Transfer
        of the Membership Interests 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). 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 Membership Interests stated in such Third Party Offer does
        not
        accurately reflect Fair Market Value (reduced by the amount of associated
        liabilities of such Membership Interests). 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 Member (such Members called the “Other Members”),
        together with a written offer to sell the Membership Interests (which is
        the
        subject of the Third Party Offer) to the Other Member on the same price and
        terms as the Third Party Offer as provided herein. The Other Members shall
        have
        the right, to purchase, in whole but not in part, the Membership Interests
        of
        the Transferor in accordance with the terms of the Third Party Offer by giving
        notice to the Transferor within 30 days after notice of such offer. The Other
        Members shall each have the right to purchase a proportionate part of the
        Transferor's Membership Interest, equal to a percentage determined by dividing
        its Percentage by the total Percentages of the Other Members; provided that
        if
        only Member elects to purchase then that Member shall have the right to purchase
        100% of the Transferor's Membership Interest. 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 Other Members which is not later
        than 60 days after the date of the notice of acceptance by the Other Members.
        At
        the closing, the Other 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 Other Members the Membership Interests to be sold,
        free
        and clear of all liens, claims and encumbrances. If all of the Other Members
        reject the right of first refusal or if the acceptance of the right of first
        refusal is not closed in accordance with this Section 14.4, the Transferor
        will
        be free for a period of 60 days after the last day for such acceptance to
        sell
        all, but not less than all, of such Membership Interests so offered, 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 14.5. If such Membership
        Interests 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
        Membership Interests pursuant to such Third Party Offer (without making another
        offer to the Other Members pursuant to this Section 14.4) will terminate
        and the
        provisions of this Article will continue to apply to any proposed future
        Transfer.

      

      14.5 General
        Conditions on Transfers.
        No
        Transfer of a Membership Interest 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 Membership
        Interests 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 Membership Interests 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;

      

      
        
          
          

        

        
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      (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
        Membership Interests to the Transferee, together with the Certificates
        representing such Membership Interests, 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;

      

      (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 Membership Interest; 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 Membership
        Interest 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.

      

      
        
          
          

        

        
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      Execution
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      14.6 Rights
        of Transferees.
        A
        Permitted Transferee shall become a Member of the Company in accordance with
        Section 602 of the Act. Any Transferee of a Membership Interest 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. 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 of all or any part of a Membership
        Interest who is not admitted as a substitute Member in accordance with this
        Agreement 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 (and if a Member has transferred
        its
        entire Membership Interest to a Transferee who is not a substitute Member,
        then
        (x) if the transferring Member is Nevada Gold, the Board shall be decreased
        by
        the number of directors such transferring Member had the right to appoint
        or (y)
        if the transferring Member is either Southern Tier or TrackPower, then the
        Board
        shall be increased to 5 members, Nevada Gold shall have the right to appoint
        3
        directors and the other Member shall have the right to appoint 2 directors),
        (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 of all or any
        part of an Membership Interest who is not admitted as a substitute Member
        in
        accordance with this Agreement is to receive the allocations and Distributions
        to which the Transferor was entitled (to the extent of the Membership Interest
        transferred) and to receive required tax reporting information. However,
        each
        Transferee of all or any part of a Membership Interest (including both immediate
        and remote Transferees) will be subject to all of the obligations, restrictions
        and other terms contained in the Agreement as if such Transferee were a Member.
        To the extent of any Membership Interest 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.

      

      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 Membership Interest 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
        Membership Interest 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. An event described in Section 14.3(d), (e) or (f) shall
        not
        be deemed to be a transfer of a Membership Interest by Nevada Gold, TrackPower
        or Southern Tier, respectively. The Members shall have a continuing obligation
        to update the list on Exhibit
        “B”.
        

       

      
        
          
          

        

        
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      ARTICLE 15:
        PRIVILEGED LICENSE PROTECTION

       

      15.1.
        No
        Unsuitability Knowledge.
        Each Member represents to the other 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 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.

       

      15.3.
        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.

      

      
        
          
          

        

        
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      (b)
        During the period commencing with the Trigger Date and ending with the transfer
        or sale of the Affected Member’s Membership Interest 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 the Membership Interests and the amount of such distributions
        or
        interest shall be held in escrow by the Company, (ii) the holder of
        such
        Membership Interests 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 Membership Interests except in exchange for such Membership Interests
        as
        provided in this Section 15.4. Upon any sale or transfer of the Affected
        Member’s Membership Interest in accordance herewith, all voting rights shall be
        reinstated with respect to the Membership Interest and all amounts held in
        escrow shall be applied to pay to the Affected Member the purchase price
        of the
        Membership Interest.

       

      (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
        Membership Interest 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.

       

      (d)
        If the Affected Member has not 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
        Membership Interest pursuant to Section 14.5), has entered into a
        binding
        agreement to purchase the Membership Interest for cash, or if the cash purchase
        is not consummated within the period provided in Section 14.4), any one or
        more
        of the remaining Members may purchase the Membership Interest by giving written
        notice of such Member’s or Members’ purchase intent to the Company and the
        Affected Member. The price of this purchase shall be an amount equal to the
        sum
        of (a) the outstanding principal balance of and accrued and unpaid
        interest
        on the Affected Member’s loans to the Company, plus (b) the Fair Market
        Value of the Affected Member’s Membership Interest as of the Trigger Date. Such
        purchase price shall be payable, without interest on the Fair Market Value
        of
        the Affected Member’s Membership Interest, by the Company applying the
        distributions from the Company that would have otherwise gone to the Affected
        Member to pay the Affected Member until the purchase price has been paid
        in
        full, provided that any remaining balance shall be repaid at the end of five
        (5)
        years following the Trigger Date.

       

      (e)
        In the event that the Affected Member does not give proper notice that it
        has
        entered into a binding agreement to sell its Membership Interest pursuant
        to
        Section 15.4(c), or if, in the case of a sale, the cash purchase is not
        consummated within the period provided in Section 14.4, and if no Member
        chooses
        to purchase the Membership Interest as provided for in Section 15.4(e), the
        majority in interest of the remaining Members may choose to continue the
        business of the Company. In such event, the Company shall repay any loans
        owed
        to the Unsuitable Person and shall repurchase the Unsuitable Person’s Membership
        Interest for its Fair Market Value plus any escrowed amounts under Section
        15.4(b). The Company shall repay the Unsuitable Person’s loans when the Company
        receives revenues that the Company would have been required to use to repay
        loans made by the Unsuitable Person, had the Unsuitable Person remained a
        Member. The Fair Market Value of the Unsuitable Person’s Membership Interest
        (without interest) shall be payable when the Company receives cash payments
        that
        the Company would have been required to distribute to all Members under Article
        9 had the Unsuitable Person remained a Member; provided that any remaining
        balance shall be repaid at the end of five (5) years following the Trigger
        Date.

       

      
        
          
          

        

        
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      (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 Agreement.

      

      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.

      

      
        
          
          

        

        
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      (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
        17.11.
        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, Nevada
        Gold, TrackPower, Southern Tier, 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. 

      

      (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.

       

      ARTICLE 17:
        GENERAL PROVISIONS

      

      17.1 Covenants.

      

      (a) Securities
        Law Requirements.
        The
        Members acknowledge that Nevada Gold's Parent 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. The
        Members shall take appropriate precautions to inform its employees and agents
        of
        such fact and to prevent such persons from making such disclosure.

      

      (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 Complexes, or any Member or any Affiliates
        of
        such Person including the regulatory authorities in the states of New York,
        Colorado, California, Oklahoma, New Mexico or any other jurisdiction.
        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 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, Colorado, California, New Mexico, Oklahoma, Texas and
        New
        York, or with respect to any federal, state or other security law requirement
        -
        this shall be a continuing obligation during the term of the
        Agreement.

      

      
        
          
          

        

        
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      (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

      

      (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
        Membership Interest at the time of such amendment. Notwithstanding any other
        provision of this Agreement, with respect to any Transferee not admitted
        as a
        substitute Member, 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 a Member's rights
        under
        such Articles or Sections, nor will such Person be required to make any Capital
        Contribution, without such Person’s written consent. Non-material amendments
        relating to this Agreement or that are necessary for compliance with applicable
        law may be made by the Board.

      

      17.3 Intentionally
        Deleted.

      

      17.4 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.

      

      
        
          
          

        

        
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      17.5 Intentionally
        Deleted.

      

      17.6 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.

      

      17.7 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.

      

      17.8 Equitable
        Relief.
        If any
        Person proposes to Transfer all or any part of such Person’s Membership Interest
        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.

      

      17.9 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.

      

      17.10 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):

       

      
        
          
          

        

        
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      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:

      

      Nevada
        Gold & Casinos, Inc.

      3040
        Post
        Oak Blvd., Suite 675

      Houston,
        Texas 77056

      Attention:
        General Counsel

      Fax
        no.:
        (713) 621-6919

      E-mail
        address: cporter@nevadagold.com

      

      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

      

      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

       

      
        
          
          

        

        
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      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: jamestowne@TowneLaw.com

      

      17.11 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.

      

      17.12 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.

      

      17.13 Survivability
        of the August 24, 2005 Agreement.
        This
        Agreement hereby amends, restates and supersedes any and all of the provisions
        of the 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.

      

      17.14 Entire
        Agreement.
        This
        Agreement the Exhibits attached hereto, the Contribution Agreement and the
        Management Agreement 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.

      

      17.15 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 admitted as a substitute Member
        in
        accordance with this Agreement.

      

      17.16 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.

      

      
        
          
          

        

        
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      17.17 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.

      

      17.18 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.

      

      17.19 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.

      

      17.20 Counterparts.
        This
        Agreement may be executed in any number of counterparts, 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.

      

      

      

      [BALANCE
        OF PAGE INTENTIONALLY LEFT BLANK]

      

      SIGNATURE
        PAGE FOLLOWS

       

      
        
          
          

        

        
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      IN
        WITNESS
        WHEREOF, the Members have executed this Operating Agreement of American Racing
        and Entertainment, LLC as of the 8th day of November, 2005 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 

        

      

       

      
        
          
          

        

        
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      Execution
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      LIST
        OF EXHIBITS

       

      Exhibit
        "A" Definitions

      

      Exhibit
        "B" Constituent
        Interests in Members

       

      
        
          
          

        

        
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      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 of
                    the Regulations, (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 such Fiscal Year in accordance with the applicable
                    Regulations, and (iii) the amount of Company liabilities allocable
                    to such
                    Member under Section 752 of the Internal Revenue 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.

                
	 	 
	
                  Agreement:

                	
                  This
                    Agreement, as amended from time to time.

                
	 	 
	
                  Annual
                    Plan:

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

                

        

         

        
          
            
            

          

          
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                    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.

                  
	 	 
	
                    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 Section 2.1 of the
                      Agreement. 

                  
	 	
                     

                  
	
                    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.

                  
	 	 
	
                    Cause:

                  	
                    Cause
                      as to the termination of any Director under Section 4.2 (c)
                      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
                      terminated.

                  
	 	 
	
                    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.

                  

          

           

          
            
              
              

            

            
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          Execution
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                      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 sue 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.

                    
	 	 
	
                      Contribution
                        Agreement:

                    	
                      The
                        Contribution Agreement dated the same date as the execution
                        date of this
                        Agreement, between the Company, Nevada Gold, TrackPower,
                        Inc. and Southern
                        Tier Acquisition, LLC, relating to the contribution of certain
                        assets to
                        the Company.

                    
	 	 
	
                      Cost
                        Budget:

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

                    
	 	 
	
                      Debt:

                    	
                      (a)
                        all liabilities and obligations, contingent or otherwise:
                        (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.

                    

            

             

            
              
                
                

              

              
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            Execution
              Copy November 8, 2005

             

            
              
                	
                        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.

                      
	 	 
	
                        Distribution:

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

                      
	 	 
	
                        EBIDTA:

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

                      
	 	 
	
                        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.

                      
	 	 
	
                        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.

                      

              

               

              
                
                  
                  

                

                
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              Execution
                Copy November 8, 2005

               

              
                
                  	
                          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.

                        
	 	 
	
                          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
                            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 woes any amount or duty to any Indemnified
                            Person pursuant to
                            Article 10.

                        
	 	 
	
                          Initial
                            DIP Financing:

                        	
                          The
                            debtor-in-possession financing in the net amount of $1,414,000
                            provided to
                            Mid-State Raceway, Inc. by VDA. Such amount is net of
                            (a) loans advanced
                            by Nevada Gold for the purpose of funding any portion
                            of such
                            debtor-in-possession financing, which loans have been
                            converted to equity
                            pursuant to Section 7.1, and (b) any loans advanced by
                            the Company to
                            Mid-State Raceway, Inc. from and after the execution
                            date of this
                            Agreement.

                        
	 	 
	
                          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.

                        

                

                 

                
                  
                    
                    

                  

                  
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                Execution
                  Copy November 8, 2005

                 

                
                  
                    	
                            Major
                              Decisions

                          	
                            As
                              defined in Section 4.1(c).

                          
	 	 
	
                            Management
                              Company

                          	
                            Nevada
                              Gold NY, Inc.

                          
	 	 
	
                            Material
                              Modification:

                          	
                            A
                              modification of addition to or deletion from the Conceptual
                              Plans and
                              Specifications or 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
                              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:

                          	
                            The
                              Membership Interests established under Section 3.1
                              of this Agreement;
                              with
                              respect to each Person owning a Membership Interest
                              in the Company, all of
                              the Membership Interests of such Person in the Company
                              expressed as a
                              Percentage.

                          
	 	 
	
                            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.

                          

                  

                   

                  
                    
                      
                      

                    

                    
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                  Execution
                    Copy November 8, 2005

                   

                  
                    
                      	
                              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 17.10.

                            
	 	 
	
                              Operating
                                Budget:

                            	
                              The
                                Operating Budget defined in Section 4.1.

                            
	 	 
	
                              Percentages:

                            	
                              The
                                percentage ownership of a Member in the Company,
                                as initially set forth in
                                Section 3.1; subject, however, to appropriate adjustment
                                in the event of
                                any dilution pursuant to Section 7.2, in the event
                                of any transfer
                                pursuant to Articles 14 or 15, or as may be otherwise
                                provided in this
                                Agreement. 

                            
	 	 
	
                              Permitted
                                Transferee:

                            	
                              A
                                person described in Section 14.3 to whom a Membership
                                Interest 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.

                            
	 	 
	
                              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 appropri-ate, on the tax returns
                                of the Company filed
                                for federal income tax purposes.

                            
	 	 
	
                              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).

                            

                    

                     

                    
                      
                        
                        

                      

                      
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                    Execution
                      Copy November 8, 2005

                     

                    
                      
                        	
                                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/Vestin
                                  Settlement

                                Payment:

                              	
                                The
                                  amount of $526,550 paid by Nevada Gold to Vestin
                                  Mortgage, Inc., Shawn
                                  Scott, Victoria Scott, All Capital, LLC, and All
                                  Vernon Acquisition, LLC
                                  on September 12, 2005. 

                              
	 	 
	
                                Southern
                                  Tier:

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

                              
	 	 
	
                                TDR
                                  Loan:

                              	
                                The
                                  loan in the original principal amount of $1,125,000
                                  made by Nevada Gold to
                                  Tioga Downs Racetrack, LLC, of which there is an
                                  outstanding principal
                                  balance of $1,001,550 on the execution date of
                                  this
                                  Agreement.

                              
	 	 
	
                                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 and Tioga Downs
                                  Management Co., Inc. 

                              
	 	 
	
                                TrackPower:

                              	
                                TrackPower,
                                  Inc., a Wyoming corporation.

                              
	 	 
	
                                Transfer:

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

                              
	 	 
	
                                Transferee:

                              	
                                A
                                  Person to whom a Membership Interest is transferred
                                  in compliance with
                                  this Agreement.

                              
	 	 
	
                                Transferor:

                              	
                                A
                                  Person who transfers a Membership Interest in compliance
                                  with this
                                  Agreement.

                              

                      

                       

                      
                        
                          
                          

                        

                        
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                        Execution
                          Copy November 8, 2005

                      

                       

                      
                        	
                                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).

                              
	 	 
	
                                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
                                  note renewed, or (ii) a Member who is properly
                                  determined by a second
                                  Member to be an Unsuitable Person in accordance
                                  with Sections15.2 or
                                  15.3(b) for reasons that remain unremedied.

                              
	 	 
	
                                VDA:

                              	
                                Vernon
                                  Downs Acquisition, LLC, a Delaware limited liability
                                  company owned 50% by
                                  Southern Tier and 50% by TrackPower, Inc.

                              
	 	 
	
                                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.

                              
	 	 
	
                                Withdrawal:

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

                              

                      

                    

                  

                

              

            

          

        

      

       

      
        
          
          

        

        
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      Execution
        Copy November 8, 2005

      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

              	 
	 	 	 	 
	 	
                Officers:

              	
                H.
                  Thomas Winn, CEO

              	 
	 	 	
                Jon
                  Arnesen, President & COO

              	 
	 	 	
                Cathryn
                  L. Porter, General Counsel and Secretary

              	 
	 	 	
                Don
                  Brennan, Vice President - Development

              	 
	 	 	 	 
	 	
                Shareholders
                  (5% or more):

              	
                Clay
                  County Holdings, Inc.

              	 

      

       

    

    
      
        
        

      

      Page 60
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