EXHIBIT 10.19

 

SHOPPING CENTER LEASE

 

THIS AGREEMENT OF LEASE, made this 28th day of February, 2005, by and between
Jay F. Wilks, Trustee under indenture dated December 20, 1976 by and between
Herbert Cashvan and Marvin Simon, as Settlors and Jay F. Wilks, as Trustee
(hereinafter called “Landlord”), whose mailing address is 3400 Building,
Suite 200, 397 Little Neck Road, Virginia Beach, Virginia 23452, and telephone
number is (757) 340-3535, and Colonial Downs L.P., a Virginia Limited
Partnership (hereinafter called “Tenant”), whose mailing address is:  10515
Colonial Downs Parkway, New Kent, Virginia, 23124 and telephone number is
804-966-7223.

 

W I T N E S S E T H:

 

1.                                      Demised Premises. Landlord hereby leases
and demises to Tenant and Tenant hereby takes and leases from Landlord that
certain store building (the “Demised Premises”) which is deemed to be 16,875
rentable square feet of which 10,000 s.f. shall be leased (“Leased Space”) and
the remaining 6,875 s.f. shall be reserved by Tenant for expansion (“Expansion
Space”), outlined in red on EXHIBIT A attached hereto, in Indian River Shopping
Center (the “Shopping Center”) having a street address of 4301 Indian River
Road, Chesapeake, VA. The exact s.f. will be adjusted to actual following
completion of a dimensioned floor plan that is prepared by Tenant and approval
by Landlord. The Leased Space shall also include the use, without additional
charge, of a 10 foot by 40 foot area behind the Demised Premises for the
location of satellite dishes serving the Demised Premises. The “Leased Space,”
“Expansion Space,” and the 10 foot by 40 foot satellite dish area shall be
constructed and/or improved by Tenant in accordance with the specifications to
be agreed upon prior to the end of the Feasibility Period (defined herein) at
Tenant’s expense. Tenant is taking the “Leased Space and “Expansion Space” in an
“as is” condition.

 

2.                                       Term. Except as otherwise provided in
paragraph 58 below, the term of this lease shall commence on the earlier to
occur of (i) October 1, 2005 or (ii) the date Tenant opens for business, and
shall end on September 30, 2015.

 

3.                                       Purpose. The Demised Premises shall be
used for the purpose of conducting therein to operate a satellite wagering
facility in the Demised Premises. Tenant covenants and agrees that at all times
during the term hereof Tenant will actively conduct such a business in the
Demised Premises, and keep the Demised Premises open for business not less than
eight (8) hours per day, Monday through Saturday) of the Shopping Center, which
hours shall be established by Tenant.

 

4.                                       Definition of “Term” and “Lease Year”.
Except where the context clearly requires otherwise, the word “term,” whenever
used in this lease with reference to the term hereof, shall be construed to
include any renewal term, as well as the original term. The words “Lease Year,”
as used in this lease, shall be construed to mean each twelve (12) month period
elapsing after (i) the commencement of the term, if the term begins on the first
day of a month, or (ii) the first day of the month following the commencement of
the term if the term does not begin on the first day of a month; provided,
however, that the period of the term, if any, beginning after the commencement
of the last full twelve (12) month Lease Year of this lease shall be deemed to
be a “Lease Year” even though it comprises less than twelve (12) months.

 

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5.                                       Base Rent. Landlord reserves, and
Tenant covenants to pay to Landlord, without prior demand being made therefore,
as rent for the Demised Premises, the following minimum base rent (the “Base
Rent”) payable in equal monthly installments as follows:

 

Years 1 – 5:

 

$7.00 psf

 

$5,833.34 per month

 

$70,000.00 per year

Years 6 – 10:

 

$8.00 psf

 

$6,666.67 per month

 

$80,000.00 per year

 

In addition, Tenant shall pay Landlord, as rent for the Expansion Space, from
the date of commencement of the term hereof until and including September 30,
2006, the amount of $1,719.00. Thereafter, if Tenant elects to retain the
Expansion Space, Tenant shall so advise Landlord in writing on or before
October 1, 2006, whereupon such space shall, ipso facto, be deemed part of the
Leased Space and the Base Rent shall be increased as follows:

 

10/1/06 – end of Lease year 5       $7.00 psf    $9,843.75 per month        
$118,125.00 per year

Lease year 6 to Lease year 10       $8.00 psf    $11,250.00 per month       
$135,000.00 per year

 

In the event Tenant does not elect to retain the Expansion Space as aforesaid,
the Base Rent shall remain as set forth above and Tenant shall vacate and
relinquish the Expansion Space to Landlord who shall thereupon have the right to
lease the same to another tenant.

 

Each monthly installment of rent and all other sums due Landlord by Tenant
hereunder shall be paid to Palms Associates on behalf of Landlord on the first
day of each month during the term at Suite 200, 3400 Building, 397 Little Neck
Road, Virginia Beach, Virginia 23452 or at such other place as shall be
designated in writing, from time to time, by Landlord.

 

6.                                       Additional Charges. Tenant shall pay
additional charges as follows:

 

CAM, Taxes and Insurance. Tenant shall pay its actual pro-rata share of common
area maintenance charges (“CAM”) and insurance for the Leased Space, provided,
however, that such amount shall not exceed $2.00 (CAP) per s.f. during the first
year of the Lease. After that, as a component of such CAP, CAM Charges shall not
exceed $.50 per s.f., such amount to increase at the rate of CPI, while
Insurance and Taxes shall not be subject to the CAP. The current CAM charges are
currently estimated at $1.50 per square foot. . It is understood that additional
charges apply to the “Leased Space only at inception and to the Expansion Space
if and when it becomes part of the Lease.

 

7.                                       Percentage Rent - INTENTIONALLY DELETED

 

8.                                       Gross Sales – INTENTIONALLY DELETED

 

9.                                       Statement of Gross Sales and Payment of
Percentage Rent – INTENTIONALLY DELETED

 

10.                                 Tenant’s Records - INTENTIONALLY DELETED

 

11.                                 Late Payments. Tenant covenants and agrees
to pay a Late Fee monthly, equal to the greater of One Hundred Dollars ($100.00)
or ten percent ( 10%) of all rents and all other sums due under this lease from
the time said rents or sums accrue if they are not received by Landlord within
five (5) days after due, Landlord expressly reserving all other rights and
remedies provided herein and/or by law in respect thereto. Tenant further agrees
to pay (or to reimburse Landlord promptly if Landlord elects to pay) any and all
costs and expenses incurred by Landlord in connection with the collection of
delinquent rents and/or the enforcement of any of the provisions of this lease ,
including reasonable attorneys’ fees. Tenant

 

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further covenants and agrees to pay Landlord a “bad check” or “returned check”
charge in the amount of Twenty-Five Dollars ($25.00) for each check of Tenant
dishonored by Tenant’s bank.

 

12.                                 Real Estate Taxes, Common Areas and
Insurance

 

(a)                                  Tenant acknowledges that the parcel of land
on which the Demised Premises is located is a tax parcel (“Landlord’s Parcel”)
separate from the remainder of the Shopping Center. Tenant agrees to pay to
Landlord, as additional rent contemporaneously with the payment of monthly
installments of Base Rent an amount equal to one twelfth of the annual real
estate taxes assessed against Landlord’s Parcel, from time to time, including
any special assessment, provided, however, in the event Tenant does not elect to
retain the Expansion Space, then from and after October 1, 2006, Tenant shall
only be required to pay Landlord, on a monthly basis, an amount equal to one
twelfth of 59.5% (this is meant to be pro rata; Landlord shall provide Tenant
evidence of how this was calculated) of the annual real estate taxes assessed
against the Landlord’s Parcel, from time to time, including any special
assessment.

 

(b)                                 Tenant agrees to, and shall, pay to
Landlord, before any fine, penalty, interest or cost is added thereto for the
non-payment thereof, any tax that may be levied, assessed or imposed, by way of
license or otherwise, upon the rent reserved herein and/or this lease and/or the
Demised Premises by any governmental authority acting under any present or
future law, statute, ordinance or the like.

 

(c)                                  Tenant agrees to pay to Landlord, monthly
as Additional Rent, a common area maintenance charge based upon the gross square
foot floor area of the Demised Premises as Tenant’s Proportionate Share of the
cost of maintaining the Common Areas of the Shopping Center (hereinafter called
“Common Area Charge”). The Common Area Charge relates to the total cost and
expense incurred by Landlord in operating and maintaining the Common Areas,
including, without limitation, gardening and landscaping of the Shopping Center,
landscape watering and sprinklers, parking lot pavement repairs and maintenance
and parking lot striping, sidewalk repairs and maintenance, trash and rubbish
and garbage removal in the event Landlord provides dumpsters, roof repairs and
maintenance, parking lot lighting, Shopping Center signage repair and
maintenance, snow removal, storm water management fees and fees imposed by any
governmental body having jurisdiction and all costs, charges, and expenses
incurred by Landlord in connection with any charge of any company providing
electricity service, including, without limitation to, maintenance, repair,
installation, and service costs associated therewith. The Common Area Charge
shall also include , the cost of personnel to direct parking and to police the
common facilities and other general Common Area repairs. In addition, the Common
Area Charge shall also include Tenant payments for water and sewerage charges,
if the same is not individually metered by Landlord, and the lighting of
Tenant’s signage, if the same is connected with the parking lot light meter or
is paid by Landlord. Landlord will submeter water for very high usage tenants.

 

(d)                                 Landlord shall obtain and keep in force
during the term of this lease a policy or policies of insurance, covering loss
or damage to the Shopping Center, the Common Areas and the building of which the
Demised Premises comprise a part, in an amount not less than eighty percent
(80%) of the replacement costs thereof, providing protection against all perils
included within the classifications of fire, extended coverage, vandalism
(exclusive of glass and doors), special extended perils (all risk), together
with public liability insurance with established limits of coverage deemed
appropriate by Landlord for personal injury or injuries. Tenant agrees to pay to
Landlord, as Additional Rent, Tenant’s Proportionate Share of Landlord’s
insurance premium.

 

(e)                                  Landlord shall estimate Tenant’s
Proportionate Share of real estate taxes, Common Area Charges and insurance
premiums on the basis of periods of twelve (12) months, commencing and ending on
such dates as may be designated by Landlord, one-twelfth (1/12th) of which shall
be paid monthly by Tenant as Additional Rent. Landlord may revise its estimate
of such costs at any time. Tenant, upon notice, shall adjust its monthly
installments during the remainder of the period to reflect such revised

 

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estimate. After the end of each designated twelve (12) month period, Landlord
shall furnish Tenant a statement of the actual costs for the period, and there
shall be an adjustment between Landlord and Tenant, with a payment to Landlord
or a credit to Tenant, as the case may be, to the end that Landlord shall
receive the entire amount of Tenant’s Proportionate Share for such period.
Tenant, at its own cost and expense, has the right to audit the books and
records of Landlord regarding these charges; provided, however, if the actual
charges are more than 5% less than those billed to Tenant, Landlord shall pay
for such audit.

 

13.                                 Trade Fixtures. Tenant agrees, at its own
cost and expense, to fixture the Demised Premises with new trade fixtures. All
trade fixtures installed in the Demised Premises by Tenant shall remain Tenant’s
property; provided, however, that nothing herein shall be deemed to affect
Landlord’s remedy of distraint. Tenant agrees to repair (or to reimburse
Landlord for the cost of repairing) any damage to the Demised Premises
occasioned by the installation or removal of said trade fixtures.

 

14.                                 Acceptance of Premises. Tenant hereby agrees
to accept the Demised Premises from Landlord as they are found by Tenant on the
date hereof and shall have no legal or equitable remedy based either upon a
claim that Landlord failed to deliver possession in accordance with this lease
or based on a claim that the size, location, layout, dimensions or construction
of the Demised Premises or the parking lots or other Common Areas were not
completed and/or furnished in accordance with the terms of this lease.

 

15.                                 Common Areas. Tenant, its customers,
employees and invitees shall have the right to use and enjoy free of charge, in
common with Landlord, other tenants and their customers, employees and invitees,
the parking areas, approaches, sidewalks, entrances, exits and roadways
(hereinafter collectively called the “Common Areas”) which Landlord agrees to
provide for the reasonable operation of the Shopping Center. It is expressly
understood that the Common Areas are intended primarily for the use by customers
of the stores in the Shopping Center, and Tenant accordingly agrees that its
employees will not use the Common Areas for the parking or storage of any
automobile, truck or any other vehicle owned or used by any of its employees,
except as may be approved in writing by Landlord. Tenant further agrees that
Landlord reserves the right, in its sole discretion, to designate specific
parking area(s) for the use by the employees and/or customers of Tenant and if
so designated, Tenant shall instruct its employees and/or customers, as the case
may be, to park in any such designated areas. In order to assist Landlord in the
enforcement of the provisions of this paragraph, Tenant agrees that within ten
(10) days after being requested so to do, Tenant will furnish Landlord a written
statement containing the license plate numbers of all employees, agents, and
representatives employed by Tenant in or about the Demised Premises. Tenant
shall not park, or permit to be parked, any delivery vehicles in the Common
Areas intended for the use by customers of the stores in the Shopping Center,
nor permit merchandise delivery from such Common Areas if delivery access and
loading and unloading zones are provided by Landlord. Landlord covenants that,
at all times during the term hereof, it will maintain the Common Areas in a good
condition of repair and adequately lighted and paved, and that, except as
otherwise provided in paragraph 33 below, there will be at least the minimum
number of parking spaces sufficient to satisfy governmental requirements and in
no event shall the number of parking spaces at the Shopping Center existing as
of the date of this lease be reduced by more than twenty (20) spaces during the
term or any extension thereof. Anything in this paragraph to the contrary
notwithstanding, Landlord expressly reserves the right, from time to time,
(i) to construct other buildings and/or enlarge existing buildings on or over
the Common Areas so long as the number of parking spaces is not reduced by more
than twenty (20) spaces, and (ii) increase, reduce, modify or alter the
dimensions and locations of roadways, parking lots, sidewalks and buildings
provided such changes, additions or reductions do not unreasonably interfere
with Tenant’s use of the Demised Premises or reduce the number of parking spaces
at the Shopping Center by more than twenty (20) spaces. Notwithstanding anything
to the contrary contained herein, Tenant shall have the exclusive use of the
parking (with the right to mark it for such purpose) on the side and in the back
of the Building as outlined on Exhibit A.

 

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16.                                 Utility Deregulation.

 

(a)                                  Landlord Control
Selection.                                         Landlord has advised Tenant
that presently Virginia Power (“Electric Service Provider”) is the utility
company selected by Landlord to provide electricity service for the Demised
Premises. Notwithstanding the foregoing, if permitted by Law, Landlord shall
have the right that any time and from time to time during the Term to either
contract for service from a different company or companies providing electricity
service (each such company shall hereinafter be referred to as an “Alternate
Service Provider”) or continue to contract for service from the Electric Service
Provider. In such an event, there shall be no interruption in the electric
service to the Demised Premises as a result of or during such change in
provider.

 

(b)                                 Tenant shall Give Landlord Access. Tenant
shall cooperate with Landlord, the Electric Service Provider, and any Alternate
Service Provider at all times and, as reasonable necessary, shall allow
Landlord, Electric Service Provider, and any Alternate Service Provider
reasonable access to all electric lines, feeders, risers, wiring, and any other
machinery within the Demised Premises.

 

(c)                                  Landlord Not Responsible for Interruption
of Service. Except if caused by Landlord’s negligence or willful misconduct,
Landlord shall in no way be liable or responsible for any loss, damage, or
expense that Tenant may sustain or incur by reason of any change, failure,
interference, disruption, or defect in the supply or character of the electric
energy furnished to the Premises, or if the quantity or character of the
electric energy supplied by the Electric Service Provider or any Alternate
Service Provider is no longer available or suitable for Tenant’s requirements,
and no such change, failure, defect, unavailability, or unsuitability shall
constitute an actual or constructive eviction, in whole or in part, or entitle
Tenant to any abatement or diminution of rent, or relieve Tenant from any of its
obligations under the Lease.

 

17.                                 Landlord’s Repairs and Right of Entry.
Landlord shall be responsible for cleaning and maintaining the Common Areas in a
manner similar to other Shopping Centers in the area of the same quality and
size. In addition, Landlord shall be responsible for maintenance and repair of
the structure of the building, including the roof, walls, and foundations.
Landlord covenants that it will, with reasonable dispatch after being notified
in writing by Tenant of the need therefore, make such repairs to the Common
Areas and outside utility lines and to the exterior of the Demised Premises
(including the gutters, downspouts and outside walls and parking, sidewalks and
grass surfaces on the Property, but excepting all glass and doors), as may be
necessary to keep the same in a good condition and repair; provided, however,
that if the need for such repair is occasioned by the casualty resulting from
negligence or willful act of Tenant, or any of its agents, employees, or
contractors, such repairs shall be made by Landlord, but the cost of such
repairs shall be charged to and be promptly paid for by Tenant subject to Tenant
being given credit for any money Landlord actually receives in respect to such
damage from its insurance. Anything in the foregoing to the contrary
notwithstanding, Landlord shall have no liability whatsoever for damage or
injury to person or property occasioned by its failure to make any such repair
(e.g., injury damage to property resulting from leaks caused by a defect in the
roof, outside walls, gutters and/or downspouts) unless, within a reasonable time
after being notified in writing by Tenant of the need therefore, Landlord shall
have failed to make such repair and such failure shall not have been due to any
cause beyond Landlord’s control, including, without limitation, strikes and/or
inability to obtain materials and/or equipment at reasonable prices. Landlord,
its agents, employees and contractors, shall have the right after giving Tenant
24 hours notice except in the case of an emergency, from time to time, to enter
and use insofar as may be necessary the Demised Premises for the purpose of
making any of the aforesaid repairs. Tenant shall not be entitled to any
reduction in rent or to any claim for damages by reason of any inconvenience,
annoyance, and/or injury to business arising out of any repairs made by Landlord
pursuant to this paragraph. Tenant will permit Landlord or its representatives
(i) to enter the Demised Premises during the last six months of the term for the
purpose of exhibiting the Demised Premises to prospective tenants.

 

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18.                                 Tenant’s Repairs. Tenant covenants that it
will, at all times during the term hereof and at its own cost and expense, keep
the Demised Premises (including, without limitation,  the interior and rooftop
heating and air conditioning system, the floors, the finish and related work to
be added by Tenant to the exterior walls, toilets, sprinkler system, signage,
interior pipes, plumbing, wires and conduits, and electric lines, windows,
doors, glass, fixtures and equipment) in a good condition of repair and in good
working order (making such repairs and replacements as may be necessary), unless
the need therefore is occasioned by fire or other casualty covered by Landlord’s
fire and extended coverage insurance policy (exclusive of any damage to glass or
doors), in which event such repair and replacement shall be an expense of
Landlord to the extent of such coverage. Tenant agrees to be responsible and
liable for any freezing in pipes and/or within plumbing fixtures within and
serving the Demised Premises and shall pay for the repair of any damage caused
thereby. In this regard, Tenant shall keep the Demised Premises at a sufficient
temperature to prevent such freezing. Tenant understands and agrees that Tenant
(not Landlord) shall be responsible for any condensation in or around the duct
work used by heating and/or air conditioning.

 

19.                                 Tenant’s Care of Sidewalks, etc. Tenant
covenants and agrees that it will, at all times during the term hereof, keep the
Demised Premises and the sidewalk immediately adjoining the Demised Premises
clean and free from obstruction, rubbish, dirt, snow and ice. Tenant shall place
all trash, rubbish and garbage in a proper closed receptacle at the rear
entrance of the Demised Premises and shall pay all costs incident to the removal
thereof.

 

20.                                 Tenant’s Failure to Repair and Remove
Debris, etc Tenant agrees that if it fails to perform any obligation placed upon
it by either paragraph 17 or paragraph 18 of this lease, Landlord, in addition
to other remedies provided by law and/or this lease, after giving Tenant five
(5) days written notice may correct (or have corrected) the default at the cost
and expense of Tenant.

 

21.                                 Miscellaneous Covenants of Tenant. Tenant
covenants that: it will comply with all Federal, State and/or municipal laws,
ordinances and regulations relating to its business conducted in the Demised
Premises; it will promptly pay for all electricity, gas, water and other
utilities consumed on, and all sewage disposal charges assessed against, the
Demised Premises and all required meter deposits and connection fees relating to
such utilities; it will promptly pay for lighting the portion of the marquee in
front of the Demised Premises if used for Tenant’s signage; it will not use the
name of the Shopping Center for any purpose other than as the address of its
business to be conducted in the Demised Premises; it will not use, or permit to
be used, the Demised Premises for any illegal or purpose; it will conduct its
business in such manner as will be in keeping with the character and reputation
of the Shopping Center; it will comply with the Rules and Regulations pertaining
to the Shopping Center attached hereto, as the same may be amended from time to
time by Landlord; ; ; it will not use the sidewalks of the Shopping Center for
business purposes; it will not without the prior written consent of Landlord:
(i) make any alteration to any structural portion of the Demised Premises,
(ii) use or permit to be used any advertising medium or device such as a
phonograph, radio or public address system which can be heard outside of the
Demised Premises, and (iii) hold a fire, bankruptcy, going-out-of-business or
auction sale; and it will permit Landlord or its representatives to enter the
Demised Premises during the last twelve (12) months of the term for the purpose
of exhibiting the Demised Premises to prospective tenants, and to place a “For
Rent” sign in a front show window during such period of time.

 

22.                                 Insects and Rodents. Tenant covenants that
it will, at its own expense, take such steps as shall be necessary to keep the
Demised Premises free of termites, roaches, rodents, insects and other pests and
that it will save Landlord harmless from any damage caused thereby, unless such
termites, etc. are coming from another space in the Shopping Center.

 

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23.                                 Damage by Vandals. If the doors,  window
frames, or glass Demised Premises are damaged by persons breaking, or attempting
to break, into the Demised Premises, or by vandals, Tenant covenants to repair
immediately at its own expense any and all such damage; provided, however, that
any such damage to the roof and or exterior walls of the Demised Premises shall
be repaired by the Landlord.

 

24.                                 Fire Hazard. Tenant covenants that, without
the prior written consent of Landlord, it will not do anything which will
increase the rate of fire insurance on the building of which the Demised
Premises constitute a part, and that if such consent is given, Tenant will pay
Landlord the amount of the increase in the cost of such insurance, as and when
the premiums become due.

 

25.                                 Care of Roof. Tenant agrees that it will not
(directly or by sufferance) place any debris on the roof of the building of
which the Demised Premises constitute a part, or cut, drive nails into or
otherwise mutilate the roof, that it will keep the roof free of all debris and
that it will keep the gutters and downspouts free of Tenant’s or its Agents’
trash; provided, however, Tenant may place and install heating and air
conditioning equipment on the roof if necessary Tenant understands that roof is
under warranty and that Tenant will not do any action which would violate this
warranty.

 

26.                                 Condition on Termination. Tenant covenants
that it will, upon the expiration or earlier termination of this lease,
(a) deliver up to Landlord, peaceably and quietly, the Demised Premises in good
condition as improved by Tenant, ordinary wear and tear and damage by casualty
within the coverage of a standard fire insurance policy with extended coverage
excepted, and (b) remove its trade fixtures and/or signs from the Demised
Premises (unless it is then in default hereunder, in which event it will not be
permitted to effect such removal) and to repair promptly any damage caused by
such removal. Tenant further covenants that, in the event it does not retain the
Expansion Space as part of the Demised Premises, then on or before October 1,
2006, Tenant will (c) deliver up to the Landlord, peaceably and quietly, the
Expansion Space as improved by Tenant in the good condition , ordinary wear and
tear and damage by casualty within the coverage of a standard fire insurance
policy with extended coverage excepted, (d) remove its trade fixtures and/or
signs from the Expansion Space and to repair promptly any damage caused by such
removal and (e) make available for use by the Expansion Space the HVAC system
and electrical and plumbing facilities to be installed by Tenant as specified in
Exhibit “B” attached hereto.

 

27.                                 Improvements to Become Landlord’s. Tenant
agrees that all additions and other improvements installed in the Demised
Premises by it, including, without limitation, all electric wiring, electric
fixtures, air conditioning systems, screens, screen doors, awnings, awning
frames and floor coverings (including carpeting but excepting rugs) shall
immediately become the property of Landlord, and shall not be removed by Tenant
at the expiration or earlier termination of this lease, unless requested to do
so by Landlord, in which event Tenant agrees to do so and to repair promptly any
damage caused by any such removal.

 

28.                                 Tenant’s Liability Insurance. Tenant agrees
that it will hold Landlord and any agent of Landlord harmless from any and all
injury or damage to person or property in, on or about the Demised Premises and
the portion of sidewalk immediately adjoining the Demised Premises, including,
without limitation, all costs, expenses, claims or suits arising in connection
therewith; provided, however, that this clause shall not apply to injury or
damage caused by Landlord’s own negligence or willful act or Landlord’s failure
to make any repair (which Landlord has herein agreed to make) within a
reasonable time after Tenant’s written notice of the need therefore. Tenant
will, at all times during the term hereof, at its own cost and expense, carry
with a company or companies, satisfactory to Landlord, public liability
insurance on the Demised Premises and adjoining Common Areas, with limits of not
less than Two Million Dollars ($2,000,000.00) (provided that Tenant’s coverage
shall be no greater than at its other satellite wagering facilities) for injury
or death to one person and One Million Dollars ($1,000,000.00) for injury or
death to more than one person in any one accident and property damage of One
Hundred Thousand Dollars ($100,000.00), which insurance shall be written or
endorsed so as to protect Landlord, any agent of

 

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Landlord and Tenant, as their respective interests may appear. Said policy or
policies shall contain a provision insuring Tenant against all liability which
Tenant might have under this hold harmless provision, except Landlord’s
negligence or willful act Tenant covenants that certificates of all such
insurance policies shall be delivered to Landlord promptly upon request . If
Tenant fails to provide such insurance within five (5) days after receiving
written notice from Landlord, Landlord may, but shall not be required to, obtain
such insurance and collect the cost thereof as a part of the rent herein
reserved.

 

29.                                 Possession. In the event Landlord tenders to
Tenant possession of the Demised Premises prior to the commencement of the term
hereof, Tenant agrees to diligently prosecute, perform and complete any
construction, fixturing or other activity that it may conduct in a manner which
will not interfere with the construction, development or operation of the
Shopping Center. Tenant shall, prior to accepting such possession of the Demised
Premises, deposit with Landlord policies or certificates of insurance evidencing
compliance with paragraph 28 hereof.

 

30.                                 Mechanic’s Liens. Tenant shall not permit
any mechanic’s, materialman’s or similar lien to be filed against any portion of
the Demised Premises for any labor performed or material furnished in connection
with any work performed or caused to be performed by Tenant.

 

31.                                 Security Deposit. INTENTIONALLY DELETED

 

32.                                 Damage by Fire or Other Casualty. In the
event the Demised Premises, or any part thereof, shall be damaged by fire or
other casualty during the term, Landlord agrees that it will restore the Demised
Premises, with reasonable dispatch, to substantially the same condition they
were in prior to such damage, and if the Demised Premises are rendered wholly or
partially untenantable as a result of such damage, the Base Rent and all
Additional Rent payable hereunder shall be equitably abated (according to the
loss of use) during the period intervening between the date of such damage and
the date the Demised Premises are restored. Anything in the foregoing to the
contrary notwithstanding, if such damage occurs during the last two (2) years of
the term, and if such damage exceeds fifty percent (50%) of the then insurable
value of the Demised Premises, either Landlord or Tenant may terminate this
lease as of the date of such damage, by giving to the other written notice of
its intention so to do within thirty (30) days after the date such damage
occurs; provided, however, that if this lease gives Tenant an option to extend
the term (other than automatic renewal as set forth in paragraph 2) and Tenant
extends the term of this lease for at least two (2) years by exercising such
option within thirty (30) days after the time such fire or other casualty
occurs, neither Landlord nor Tenant shall have the right to terminate this
lease. If this lease is so terminated, the rental payable hereunder shall be
abated as of the date of such damage, and Tenant shall remove all of its
property from the Demised Premises within thirty (30) days after the notice of
termination is given.

 

33.                                 Condemnation. In the event any portion of
the Demised Premises, or 20 % of either the total parking or the reserved
parking, shall be taken by the exercise of the power of eminent domain (or sold
to the holder of such power, pursuant to a threatened taking), this lease may,
at the option of Tenant, be terminated by written notice given to Landlord
within sixty (60) days after the date such taking or sale occurs. If this lease
is not so terminated, Landlord covenants that it will, at its own expense,
promptly after the lapse of said sixty (60) days, repair such damage and do such
work as may be required to repair and rebuild the Demised Premises, with the
view to restoring the Demised Premises as nearly as practicable to the condition
they were in immediately prior to such taking or sale; provided, however, that
whether or not this lease is so terminated, the Base Rent payable hereunder
shall be equitably abated (according to the loss of use) from the date of such
taking or sale. Tenant shall have no right in or to the proceeds of any award
made in any such condemnation (or proceeds derived from any sale in lieu
thereof), except with respect to any award based on Tenant’s improvements to the
Demised Premises, provided such retention does not result in a reduction of the
amount paid to the Landlord, in which event Tenant shall not be entitled to the
amount of the reduction.

 

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34.                                 No Representations by Landlord or Agents.
Tenant agrees that neither Landlord nor any agent of Landlord has made any
representation, express or implied, with respect to Federal, State or municipal
laws or ordinances applicable to the Demised Premises or the property of which
the Demised Premises constitute a part (including, without limitation, laws or
ordinances relating to zoning or fire walls), and Tenant shall not have the
right to terminate this lease, nor shall it be entitled to any abatement of rent
payable hereunder or any claim for damages, in the event the Demised Premises
cannot be used by Tenant, in whole or in part, for the purpose for which Tenant
intends to use the same, except as otherwise provided herein.

 

35.                                 Assignment, Subletting, Mortgaging, Etc.
Tenant shall not, without the prior written consent of Landlord, which consent
will not be unreasonably withheld, conditioned or delayed, assign this Lease, or
sublet all or any part of the Demised Premises. Notwithstanding Landlord’s
consent, no assignment or subletting shall release Tenant from liability for the
payment of rent or other sums due, or the performance of any other obligations,
hereunder. In the event Tenant is a corporation, partnership, or other legal
entity, the sale, transfer or encumbrance of 50% or more of the corporate stock
or partnership or other ownership interest shall be deemed an assignment or
encumbrance as the case may be, in violation of the provisions of this
paragraph.

 

36.                                 Occupancy. INTENTIONALLY DELETED

 

37.                                 Subordination. This lease is subject and
subordinate to all ground or underlying leases (if any) and to all mortgages or
deeds of trust which may now or hereafter affect such leases, the Demised
Premises, or the land on which the Demised Premises are situated, and to all
renewals, modifications and extensions thereof; provided, however that Landlord
shall obtain from any ground lessor or lender to which this provision applies
the right of Tenant to non-disturbance so long as Tenant is not in default under
the Lease in a form reasonably satisfactory to Tenant and its lenders.

 

38.                                 Waiver of Subrogation. All fire insurance,
extended coverage, and policies relating to other casualties carried by any
party to this lease covering the Demised Premises and/or the contents thereof,
shall expressly waive any right on the part of the insurer against any other
party to this lease, which right, to the extent not prohibited or violative of
any such policy, is hereby expressly waived. Landlord and Tenant each agree that
policies will include such waiver clause or endorsement so long as the same
shall be obtainable without extra cost, or if extra cost shall be charged
therefore, so long as the party or parties in whose favor such waiver clause or
endorsement runs pays such extra cost. If extra cost shall be chargeable
therefore, each party shall advise the other of the amount of the extra cost,
and the other party, at its election, may pay the same, but shall not be
obligated so to do (C.D. needs to confirm that this is acceptable to its
insurance carrier).

 

39.                                 Default and Remedies. In the event Tenant
shall default in the payment of any installment of rent herein reserved, or in
the event Tenant shall default in the performance of any of the terms,
covenants, conditions or provisions herein contained binding upon Tenant and
such default shall not be remedied within five (5) days in the case of a
monetary default, and thirty (30) days in the case of a non-monetary default
during which time Tenant is diligently pursuing the cure if it cannot be cured
within thirty (30) days, after written notice thereof shall have been given by
Landlord to Tenant, or in the event Tenant shall be adjudicated a bankrupt or
shall become insolvent or shall make a general assignment for the benefit of its
creditors, or in the event a receiver shall be appointed for Tenant or a
substantial part of its property and such receiver is not removed within ninety
(90) days after appointment, Landlord shall have the right (in addition to all
other rights and remedies provided by law), to reenter and take possession of
the Demised Premises, peaceably or by force, to terminate this lease and to
remove any property therein, without liability for damage to, and without
obligation to store, such property. In the event of such termination, Landlord
may (but shall be under no obligation to) relet the Demised Premises, or any
part thereof, from time to time, in the name of Landlord or Tenant, without
further notice, for such term or terms, on such conditions, and

 

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for such uses and purposes, as Landlord, in its sole and absolute discretion,
may determine, and may collect and receive all rents derived therefrom and apply
the same, after deduction of all appropriate expenses (including, without
limitation, attorneys fees and other costs of collection) to the payment of the
rent payable hereunder, Tenant remaining liable for any deficiency. Landlord
shall not be responsible or liable for any failure to so relet the Demised
Premises or any part thereof, or of any failure to collect any rent connected
therewith. The failure of Tenant to keep the business open for a certain minimum
hours as required under Paragraph 3 shall not constitute a default.

 

40. Tenant shall have the right to self-help hereunder in the event that
Landlord does not cure an event which can be cured within ten (10) days after
written notice from Tenant, or does not begin and diligently pursue completion
within ten (10) days following notice of matters which will require more than
ten (10) days to cure. In the event Tenant exercise its right of self-help,
Tenant shall have the right to offset the costs of such self-help against rent

 

41.                                 Estoppel Certificate. Within ten (10) days
after written request of Landlord, Tenant shall certify by a duly executed and
acknowledged written instrument to any mortgagee or purchaser, or proposed
purchaser, or any other person, firm or corporation specified by Landlord, as to
the validity and force and effect of this lease, as to the existence of any
default on the part of any party thereunder, as to the existence of any offsets,
counterclaims, or defenses thereto on the part of Tenant, and as to any other
matters as may be reasonably requested by Landlord, all without charge and as
frequently as Landlord deems necessary. Tenant’s failure or refusal to deliver
such statement within such time shall be conclusive upon Tenant (i) that this
lease is in full force and effect, without modification except as may be
represented by Landlord, (ii) that there are no uncured defaults in Landlord’s
performance or obligations hereunder, and (iii) that not more than one month’s
installment of Base Rent has been paid in advance of the due date.

 

42.                                 Notices. Any notice herein provided for to
be given to Landlord shall be deemed to be given if and when deposited in United
States registered or certified mail, postage prepaid, addressed to Landlord at
Suite 200, 3400 Building, 397 Little Neck Road, Virginia Beach, VA 23452, and
any notice herein provided for to be given to Tenant shall be deemed to be given
if and when deposited in United States registered or certified mail, postage
pre-paid, addressed to Tenant, Attention: President, at 10515 Colonial Downs
Parkway, New Kent, Virginia, 23124, with a copy to James Weinberg, Esq.,
Hirschler-Fleischer, Federal Reserve Bank Building, 701 East Byrd, Richmond,
Virginia, 23219

 

43.                                 Quiet Enjoyment. Subject to the terms,
covenants and conditions set forth in this lease, Landlord covenants that Tenant
shall have and enjoy quiet and peaceable possession of the Demised Premises
during the term hereof.

 

44.                                 Short Form Lease. The parties hereto agree
that a short form of lease, of even date herewith, describing the Demised
Premises, setting forth the term and referring to this lease, shall, at the
request of either party, be promptly executed and recorded (at the cost of the
requesting party).

 

45.                                 Entire Agreement. This lease contains the
entire agreement between the parties hereto, and cannot be altered or modified
in any way except in writing signed by the parties hereto.

 

46.                                 No Waivers. Any failure of either party
hereto to insist upon strict observance of any covenant, provision or condition
of this lease in any one or more instances shall not constitute or be deemed a
waiver, at that time or thereafter, of such or any other covenant, provision or
condition of this lease.

 

47.                                 Pronouns. Every pronoun used in this lease
shall be construed to be of such number and gender as the context shall require.

 

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48.                                 Marginal Headings. The headings appearing on
the margin of this lease are intended only for convenience of reference, and are
not to be considered in construing this instrument.

 

49.                                 Successors and Assigns. This lease and all
the terms, covenants, conditions and provisions herein contained, shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective heirs, personal representatives, successors and (if and when assigned
in accordance with the provisions hereof) assigns. The undersigned hereby
guarantees prompt and faithful performance of all obligations of tenant
hereunder, including the payment of all rents and other amounts due hereunder.

 

50.                                 Exculpation. Anything herein to the contrary
notwithstanding, in the event of the default by Landlord in the performance of
any of its obligations hereunder, Tenant expressly covenants and agrees to look
solely to Landlord’s equity in the Shopping Center for the payment of all
amounts due Tenant as a result of any such default by Landlord, and Tenant shall
not seek any personal money judgment against Landlord or any of its trustees or
beneficiaries or any of their respective heirs, personal representatives,
successors or assigns.

 

51.                                 Signage. The erection, display and design of
all signage is subject to approval by Landlord. Tenant shall submit to Landlord
a plan and description and specifications of any signage desired to be installed
by Tenant. All signage must conform to the sign criteria set forth on EXHIBIT C
attached hereto. Tenant shall keep all signs installed (with the consent of
Landlord) on the exterior of the Building of which the Demised Premises
constitute a part, freshly painted, in good repair and operating condition at
all times. In addition, Tenant shall be entitled to the space formerly occupied
by the Village Thrift store on the existing pole sign located near Indian River
Road.

 

52.                                 Maintenance. On or before occupancy, Tenant
shall furnish evidence to Landlord that Tenant has contracted for, and is having
performed, preventive maintenance on all HVAC equipment in the Demised Premises,
on at least a quarterly basis. In the event Tenant shall not have contracted for
and/or provided evidence that such HVAC preventive maintenance is being and will
be provided in a manner satisfactory to Landlord, Landlord shall have the right
to so contract for said preventive maintenance to the HVAC equipment and charge
100% of the cost to do so as Additional Rent hereunder. Landlord shall have the
right to have any unscheduled remedial HVAC preventive maintenance performed
deemed necessary to keep said equipment in operating condition and Tenant agrees
to pay 100% of the charges arising therefrom as Additional Rent hereunder.

 

53.                                 Waiver of Homestead Exemption. Tenant waives
the benefit of the homestead exemption as to this lease.

 

54.                                 Waste and Nuisance. Tenant agrees not to
suffer, permit or commit any waste, nor to allow, suffer or permit any odors,
vapors, steam, water, vibrations, noise, loud music or other undesirable effects
to emanate from the Demised Premises into other portions of the building of
which the Demised Premises comprise a part or into the Common Areas, or
otherwise to allow, suffer or permit the Demised Premises or any use thereof to
constitute a nuisance or unreasonably to interfere with the safety, comfort or
enjoyment of the Shopping Center by Landlord or any other occupants of the
Shopping Center or their customers, invitees or any others lawfully in or upon
the Shopping Center. Upon written notice by Landlord to Tenant that any of the
aforesaid is occurring, Tenant agrees forthwith to cease and discontinue the
same and within five ( (5) days thereafter to make such changes in the Demised
Premises and/or install or remove such apparatus or equipment therein or
therefrom as may be required by Tenant for the purpose of obviating any such
condition; and if any such condition is not so remedied, then Landlord may, at
its option, either: (i) enter upon the Demised Premises and cure such condition
in any manner Landlord shall deem necessary and add the cost and expense
incurred by Landlord therefore, together with all damages, including attorney’s
fees, sustained by Landlord, to the next installment of the Base Rent due and
Tenant agrees to pay such amount, as Additional Rent hereunder, or (ii) treat
such failure on the part of Tenant to remedy such

 

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condition as an “Event of Default” within the meaning of Paragraph 39 of this
lease. Tenant hereby further agrees to indemnify and save Landlord harmless of
and from all fines, claims, demands, actions, proceedings, judgments and damages
(including attorneys’ fees) of any kind or nature by anyone whomsoever arising
or growing out of any breach or non-performance by Tenant of the covenants
contained in this paragraph.

 

55.                                 Holding Over. Any holding over by Tenant
after the expiration of the term with the written consent of Landlord shall be
construed to create a tenancy from month to month at the same Base Rent reserved
during the last lease year of the term, prorated on a monthly basis, and which
tenancy shall otherwise be subject to the terms and conditions set forth in this
lease. Any holding over by Tenant after the expiration of the term without the
written consent of Landlord shall also be construed to create a tenancy from
month to month, subject to the terms and conditions set forth in this lease,
except that the Base Rent shall be 150% the Base Rent reserved during the last
lease year of the term, prorated on a monthly basis. Tenant agrees to indemnify
and save Landlord harmless from and against any and all costs, losses, damages,
liabilities and/or expenses incurred by Landlord as a result of a delay by
Tenant in surrendering possession of the Demised Premises at the expiration or
earlier termination of the term, including, without limitation, any claims made
by any succeeding tenant due to such delay in surrendering possession.

 

56.                                 Merchants Association. Tenant is hereby
invited to join, and maintain during the term hereof, membership in any
merchants association organized for the Shopping Center and to pay all dues and
assessments charged by such association.

 

57.                                 Protection of Exclusive. Tenant shall not
sell any merchandise in the Demised Premises which would be in violation of any
exclusive use provision in any of the other leases in the Shopping Center,
provided , that this provision shall not prevent Tenant from selling merchandise
which it sells at any of its other satellite wagering facilities in Virginia.

 

58.                                 Brokerage.                                
In accordance with the regulations of the Virginia Real Estate Board, Tenant is
hereby informed that The Katsias Company represents the Landlord in this
transaction and will be paid a commission as per a separate agreement Pursuant
to Virginia Real Estate Board regulation Section 6.3, The Katsias Company, makes
the following disclosures:

 

1.                                       In the above transaction, The Katsias
Company represents:

 

o                                    A.                                   the
Tenant exclusively;

 

ý                                    B.                                     the
Landlord exclusively;

 

o                                    C.                                     the
Tenant and Landlord jointly and such dual agency is expressly consented to by
the parties by their execution hereof.

 

2.                                       In the above transaction, The Katsias
Company shall receive compensation from:

 

o                                    A.                                   the
Tenant exclusively;

 

ý                                    B.                                     the
Landlord exclusively;

 

o                                    C.                                     the
Tenant and Landlord jointly and such dual agency is expressly consented to by
the parties by their execution hereof. The Landlord and Tenant acknowledge,
agree with, and consent to the representation and compensation disclosed above.

 

59.                                 Option. Providing that the Tenant is not in
default upon the expiration of the term set forth in Section 2 of the lease,
Tenant shall have the right at its election, 180 days prior to ending of the
term of the Lease which is about to expire, to extend this lease for three
(3) additional five (5) year terms (‘Option”), commencing upon the expiration of
the original term on the same terms and conditions as herein set forth, except
that the rent payable shall increase as follows:

 

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If Expansion Space Retained by Tenant:

 

Option 1: Years 11-15 $9.00 psf

 

$12,656.25 per month

 

$151,875.00 per year

Option 2: Years 16-20 $10.00 psf

 

$14,062.50 per month

 

$168,750.00 per year

Option 3: Years 21-25 $12.00 psf

 

$18,675.00 per month

 

$224,100.00 per year

 

If Expansion Space Not Retained by Tenant:

 

Option 1: Years 11-15 $9.00 psf

 

$7,500.00 per month

 

$90,000.00 per year

Option 2: Years 16-20 $10.00 psf

 

$8,333.34 per month

 

$100,000.00 per year

Option 3: Years 21-25 $12.00 psf

 

$10,000.00 per month

 

$120,000.00 per year

 

60.                                 Broker’s Commission. The parties acknowledge
that Tenant has been represented by Thalhimer Cushman and Wakefield representing
Tenant and The Katsias Company representing the Landlord and both will be paid
by the Landlord as per a separate agreement. Otherwise neither has been
represented by a real estate broker and each agrees to indemnify the other
against any claims for brokerage commissions by third party brokers and/or
agents made though such party.

 

61.                                 Contingency. The Lease shall be subject to
(A) a sixty day due diligence period for Tenant after signing the Lease during
which Tenant may terminate the Lease in its sole discretion with no further
liability; and (B) Review and approval of the Virginia Racing Commission, which
must be obtained no later than April 30, 2005. Upon payment by Tenant of a
non-refundable fee of $5,583 per month, such deadline my be extended monthly
until July 31, 2005. If such approvals are not or cannot be obtained within such
time frame, Tenant or Landlord may terminate the Lease with no further
liability, unless Tenant agrees to be bound by the terms of the lease absent
such approval. Landlord shall turn the Demised Premises over to Tenant fifteen
(15) days after the Virginia Racing Commission approves the application for a
license. In such an event, Fixed Rent shall commence no later than October 1,
2005.

 

LANDLORD:  Jay F. Wilks, Trustee under indenture dated December 20, 1976 by and
between Herbert Cashman and Marvin Simon, as Settlers and Jay F. Wilks, as
Trustee

 

 

 

By:

/s/ Jay I. Wilks

 

 

Jay F. Wilks, Trustee

 

TENANT:

Colonial Downs L.P., a Virginia Limited Partnership

 

 

 

 

By:

Stansley Racing, its General Partner

 

 

 

 

 

 

 

By:

/s/ Ian M. Stewart

 

 

 

Ian M. Stewart

 

Its:

President

 

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RULES AND REGULATIONS

 

1.                                       All trash must be kept in a fully
enclosed container, or if requested by Landlord, in a Dumpster or similar
container furnished and serviced at Tenant’s expense.

 

2.                                       Tenant shall keep lights on in show
windows, under marquee and under canopy from dusk until 9:00 p.m. Tenant shall
also keep lighted signs on from dusk until 11:00 p.m.

 

3.                                       Tenant agrees to handle all deliveries
and refuse through the rear entrance (if one) of the Demised Premises.

 

4.                                       No sign shall be permanently affixed to
the plate glass of the store front window without prior written consent of
Landlord.

 

5.                                       Except during Shopping Center
promotions, without the prior written approval of the Landlord, no sign shall be
placed in, or visible through, any show window advising the public of a fire,
bankruptcy, going-out-of-business or auction sale.

 

6.                                       Tenant shall keep store lobbies and
windows clean at all times and wash them weekly.

 

7.                                       Tenant shall keep store floors free of
trash, chewing gum and other debris, and shall scrub and wax all vinyl or
linoleum flooring at least weekly.

 

8.                                       No merchandise, vending machines, or
telephones shall be located on the sidewalks or other Common Areas without the
prior written approval of Landlord.

 

9.                                       Tenant shall not change the locks on
the front or rear doors of the premises without providing Landlord with a copy
of the new key.

 

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EXHIBIT B

 

TENANT IMPROVEMENTS / UTILITIES

 

* Prior to the end of the Feasibility Period , Tenant will deliver to Landlord
specific plans addressing the separation of “Expansion Space,” “Leased Space,”
and the 10 foot by 40 foot satellite dish space, including utilities, HVAC, and
all build-out, which plans are subject to Landlord’s approval, which approval
shall not be unreasonably withheld, conditioned, or delayed.

 

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EXHIBIT C

 

SIGN CRITERIA FOR INDIAN RIVER SHOPPING CENTER & SHOPPES

 

The following specifications shall be controlling for all signs. In such event
that this Exhibit C is in dispute with City sign ordinances, the local
jurisdictional codes shall prevail.

 

Prior to sign purchase and sign installation, the Tenant shall submit to
Landlord three copies of drawings or renderings of its proposed sign. Each of
these copies shall be reviewed and approved in writing by Landlord prior to
Tenant purchasing or installing said sign. Two (2) copies of the approved
drawings shall be returned to Tenant and/or its sign contractor. Landlord
assumes no liability for purchases or sign installation that is in place prior
to Landlord’s written approval.

 

The installation of a sign and the cost incurred shall be the responsibility of
the Tenant. Sign construction is to be completed in compliance with the
following instructions, limitations, and criteria (C.D. needs to confirm this
criteria):

 

1.                                       Tenant shall be required to identify
the Demised Premises by a sign that shall consist of channel letters on raceway
or individual channel letters and shall be internally illuminated. If a raceway
is used, its color shall match the surface upon which it is mounted.

2.                                       Sign drawings shall clearly show sign
colors, graphics and frame color as well as construction and attachment details.

3.                                       The wording of signs shall be limited
to Tenant’s trade name only. Logos will be permitted.

4.                                       All signs shall have concealed
attachment devices, clips, wiring, transformers, lamps, tubes and ballast.

5.                                       The height of the sign letters shall
not be less than 12 inches, nor exceed 30 inches. The sign letter shall be no
greater than 6 inches in depth.

6.                                       The length of same sign shall be no
greater than 80% of the linear distance of the storefront upon which the sign
will be mounted.

7.                                       No part of same sign shall hang above
or below Tenant’s sign area.

8.                                       Tenant is also responsible for
restoring to its original condition the area upon which the sign is erected at
the end of its tenancy.

9.                                       The following types of signs are
prohibited:

 

a.                                       Any sign which violates the local City
sign codes.

b.                                      Paper signs, decals and/or stickers
utilized as signs.

c.                                       Signs of a temporary character or
purpose.

d.                                      Flashing signs, moving messages signs,
externally lighted, digital reader signs and changeable letter signs.

e.                                       Signs extended at right angles to the
storefront.

 

Tenant acknowledges that it is Landlord’s intention to develop and maintain a
first-class appearance for the Shopping Center. The Shopping Center Sign
Criteria is an extension of such intention and Tenant will put forth its best
efforts to uphold and maintain the standards of the Shopping Center.

 

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GUARANTY OF LEASE

 

THE UNDERSIGNED, for a valuable consideration, the receipt whereof is hereby
acknowledged, and in further consideration of the execution and delivery of that
certain lease, dated                          , 2005, by and between Jay F.
Wilks, Trustee under indenture dated December 20, 1976 by and between Herbert
Cashman and Marvin Simon, as Settlors and Jay F. Wilks, as Trustee as Landlord,
and Colonial Downs L.P., a Virginia Limited Partnership, as Tenant, for premises
having an address of 4301 Indian River Road, Chesapeake, VA at the request of
the undersigned, which request is hereby made, hereby jointly and severally
unconditionally guarantee the prompt, full and faithful payment by Tenant of all
rent and performance by Tenant of all other terms, conditions, agreements,
covenants and obligations on Tenant’s part to be performed as provided in said
lease; and the undersigned hereby covenants and agrees that, in the event of
Tenant’s default or defaults, the undersigned will, upon ten (10) days’ prior
written notice from Landlord of Tenant’s default, at one time or from time to
time, as the circumstances may require, perform and fulfill any and all
agreements, covenants and obligations of Tenant in said lease contained, cure
such defaults at their own cost and expense and pay to Landlord all damages
which Landlord may sustain or have sustained by virtue thereof.

 

THE UNDERSIGNED hereby waives exhausting of recourse against Tenant; waives the
benefit of homestead exemption; and consents to any modification of this lease
and to any assignment of this lease and to any sublease of the demised premises,
in whole or in part, that Tenant or its assignees or sublessees may make, and
agrees that its liability hereunder shall not be affected or released thereby.

 

This guaranty shall be construed in accordance with, and governed by, the laws
of the Commonwealth of Virginia.

 

IN WITNESS WHEREOF, Jacobs Entertainment, Inc. is named Guarantor this      day
of March, 2005.

 

 

 

 

 

By:

 

 

STATE OF

 

 

 

CITY/COUNTY OF                                                   , to wit:

 

 

The foregoing instrument was acknowledged before me this         day of 
                        , 20             by
                                                      

 

 

 

 

 

Notary Public

 

My commission expires:

 

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