AMENDED AND RESTATED
                   MANAGEMENT AND CONSULTING AGREEMENT

This Amended and Restated Management and Consulting Agreement is entered into
By and among: (1) COLONIAL DOWNS, L.P., a Virginia limited partnership ("Owner")
STANSLEY RACING CORP., a Virginia corporation that is the sole general partner
of Owner ("Operator"), and COLONIAL DOWNS HOLDINGS, INC., a Virginia corporation
("Holdings") that is the limited partner of Owner and the successor in interest
to STANSLEY MANAGEMENT CORP., a Virginia corporation that was the former sole
general partner of Owner (collectively "Colonial Downs" unless the context
indicates otherwise); and (2) MARYLAND-VIRGINIA RACING CIRCUIT, INC. (formerly
known as the OLD DOMINION JOCKEY CLUB, INC.), a Virginia corporation
("Manager").

                            R E C I T A L S:

     1.   Owner applied to the Virginia Racing Commission ("Commission") for a
license to own a horse racing facility with pari-mutuel wagering at a
345-acre site in New Kent County, Virginia (the "Racetrack").
Operator also applied to the Commission for a license to operate the
Racetrack.

     2.   The parents of Manager are Pimlico Racing Association, Inc. and
Laurel Racing Association Limited Partnership (collectively, the "Maryland
Jockey Club").

     3.   Colonial Downs and the Maryland Jockey Club entered into a letter
agreement dated January 1, 1994, as amended September 12, 1994 (the "Letter
Agreement"), which was filed with the Commission as part of Colonial Downs'
application for the licenses.

     4.   The Commission, by Decision and Order dated October 12, 1994, awarded
the licenses (the "Licenses") to own and operate a horse racing facility in
New Kent County to Owner and Operator, respectively.

     5.   The Commission in the Decision and Order made findings that the
Maryland Jockey Club had agreed to manage Colonial Downs' thoroughbred meet;
that Colonial Downs and the Maryland Jockey Club had agreed to coordinate
racing schedules to create a Virginia-Maryland thoroughbred circuit; and that
the Maryland Jockey Club and Colonial Downs had agreed to share the broadcast
signals from their respective thoroughbred meets.

     6.   Colonial Downs holds four licenses from the Commission to own and
operate four off-track betting facilities ("OTB Facilities") and intends to
apply to the Commission for additional licenses (collectively, the "OTB
Licenses," to include all such current and future licenses unless the context
clearly indicates otherwise) to develop and operate the maximum number of OTB
Facilities consistent with its business and financing.

     7.   Manager holds an operator's license from the Commission to operate
the thoroughbred meets at the Racetrack.

     8.   Operator has become the sole general partner of Owner, and Holdings
has become the successor in interest to Stansley Management Corp. and the owner
of both Owner and Operator; and


     9.   The parties (or successors to or affiliates thereof) hereto entered
into a Management and Consulting Agreement, dated as of April 22, 1996 (the
"1996 Agreement").  After conducting two thoroughbred race meets pursuant to
the 1996 Agreement, the parties desire to amend the 1996 Agreement in certain
respects and, accordingly, enter into this amended and restated agreement,which
subject to Section 9.14 below, supersedes the 1996 Agreement in its entirety.

                            A G R E E M E N T S:

NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, agree as follows:

                                  SECTION 1
                      RESPONSIBILITIES OF COLONIAL DOWNS

     1.1   Financing and Development of the Racetrack and OTB Facilities.
Owner shall have the exclusive responsibility to obtain all of the funds needed
to develop, build, equip and operate the Racetrack and all the OTB Facilities.
In addition, Owner shall develop, build and equip the Racetrack and all OTB
Facilities and in connection therewith shall acquire all movable and other
equipment necessary or desirable for the successful operation of the Racetrack
and OTB Facilities, including but not limited to all equipment reasonably
necessary for Manager to perform properly its duties and responsibilities under
this Agreement.  The funds needed to develop additional OTB Facilities are
unknown at this time.  The terms of all equity and debt financing for the
Racetrack and any or all of the OTB Facilities shall be determined solely by
Owner, but shall not restrict, without Manager's consent, Owner's authority to
pay the Management Fee and Performance Fee to Manager as required by this
Agreement.  Manager shall have no obligation to obtain or provide any such
equity or debt financing.

     1.2   Working Capital. Owner shall provide all the funds necessary for
working capital during the development and construction phase as well as during
the operating phases of the Racetrack and the OTB Facilities.  Owner shall use
its reasonable best efforts to provide, timely and in adequate amounts, the
funds necessary to pay all of the costs and expenses of the Racetrack and all
OTB Facilities.

     1.3.   Licenses and Permits.

     1.3.1   Owner and Operator.  Owner and Operator shall apply for and obtain
and shall apply for and obtain renewal of, all licenses and permits necessary to
develop and operate the Racetrack and all OTB Facilities. Such licenses include
but are not limited to the Licenses and the OTB Licenses.  If Owner or Operator
fails to apply timely for the issuance or renewal of any such license or permit
Manager shall have the right to do so, at the cost of Owner or Operator, as the
case may be, and in the name of and as attorney-in-fact for Owner or Operator,
upon at least thirty (30) days' advance notice to Colonial Downs.

     1.3.2   Manager.  Manager may apply to the Commission for an operator's
license to operate standardbred meets at the Racetrack and to operate the OTB
Facilities, but other than these operator's licenses and its operator's license
to operate the thoroughbred meets at the Racetrack, Manager agrees, subject to
Sections 5.4.1 and 5.4.2 of this Agreement, not to apply for or otherwise
obtain a license to own or operate a pari-mutuel horse racing facility or
pari-mutuel horse racing off-track betting facility in the Commonwealth of
Virginia during the Term of this Agreement.

     1.4   Maintenance of Facilities and Capital Expenditures.  Colonial Downs
shall use its best efforts to assure that the Racetrack and OTB Facilities are
maintained as first-class facilities with all repairs, maintenance and capital
expenditures made to assure that they continue to be first-class facilities.
For purposes of funding capital expenditures, the parties have agreed to the
procedures set forth in Section 6.2.4 below.

     1.5   Responsibility and Authority of Colonial Downs.  Except for the
delegation to Manager in this Agreement, Colonial Downs reserves and retains
management responsibility, control and authority over the operations of the
Racetrack and OTB Facilities, including the following functions the positions
for which shall be staffed with employees who shall be paid, managed and
supervised by Holdings, Owner or Operator as provided in Sections 2.4.1, 2.4.2
and 2.4.3 below:

     (i)   Controller, accounting, finance and treasury functions.  The
foregoing include but are not limited to all matters related to: pari-mutuel
and simulcast accounting; auditing of tellers and money rooms; money room
operations and management; purse receipts and disbursements; horsemen's
bookkeeping; and selection and supervision of independent certified public
accountants;

     (ii)   Selection of and negotiations of all arrangements with food and
beverage concessionaires consistent with the budget;

     (iii)   For 1999, (1) negotiation of all agreements with horsemen
representatives as to the number of race days and aggregate purse funds, and
subject to agreement with Manager, in which months  meets will be held, and (2)
the conduct of racing for less than four days a week (with the possible
exception of the first and last week of the meet) consistent with the budget.
After 1999, Manager shall be responsible for the foregoing, subject to Owner's
approval of any agreement providing for purses in excess of the 1999 budget for
each breed.  Additionally, Owner shall have the right to approve the purse for
the Virginia Derby; 

     (iv)   All requests and reports to the Commission and to the Securities 
and Exchange Commission;

     (v)   All Virginia legislative matters;

     (vi)   All press releases and other communications with the media relating
to Colonial Downs other than matters relating exclusively to racing at the
Racetrack and events at the OTB Facilities;

     (vii)   Retention of professional advisors (accountants, attorneys,
engineers);

     (viii)   Development of additional OTB Facilities;

     (ix)   All financial reporting to third parties, including the Securities
and Exchange Commission, and all communications with stockholders and
securities firms; and

     (x)   Maintenance and access to all bank and similar accounts.

     1.6   Execution of Contracts.  In all instances under this Agreement in
which Colonial Downs is required to approve and enter into a contract or other
agreement at the request of Manager, Colonial Downs shall act reasonably and
promptly unless otherwise specifically provided in this Agreement.

                                  SECTION 2
                           RESPONSIBILITIES OF MANAGER

     2.1   Management of Live Meets.  Colonial Downs has retained and hereby
retains Manager to manage the day-to-day operations of the Racetrack and all
live thoroughbred and standardbred racing meets to be conducted at the 
Racetrack during the Term and on the terms and subject to the conditions of
this Agreement, with such changes therein as the parties hereto may from time
to time agree, and subject to the rules, regulations and orders of the
Commission.  Manager shall have the following specific responsibility and
authority with respect to the live thoroughbred and standardbred meets
conducted at the Racetrack:

     2.1.1   Racing.  Manager shall be responsible for and have authority with
respect to all functions generally performed by the Racing Department (i) of a
major thoroughbred racetrack, including but not limited to the following with
respect to thoroughbred meets, and (ii) of a standardbred racetrack at a
similar level of quality to the Racetrack for the comparable activities that
are applicable with respect to standardbred meets:

     a.   Receiving stall applications and making stall assignments;

     b.   Determining the qualifications and acceptability of all horses;

     c.   Performing all race office and stable functions, including writing
the condition and stakes books, writing the races and conducting the draws for
the races;

     d.   Developing and producing the daily racing program and past
performance information, including, subject to the approval of Colonial Downs,
which shall not be unreasonably withheld, delayed or conditioned, negotiating
contracts or agreements with Equibase and/or the Daily Racing Form, and with
printers or other such entities necessary to produce the daily racing program;

     e.   In conjunction with the appropriate representative(s) of Colonial
Downs, establishing and maintaining the liaison between management and the
horsemen and jockeys and the organizations that represent them;

     f.   Charting and clerk of course functions;

     g.   Paddock and patrol judges;

     h.   Starter, assistant starters and gate crew; and

     i.   Negotiating photo finish, teletimer and starting gate contracts,
subject to the approval of Colonial Downs which shall not be unreasonably
withheld, delayed or conditioned.

     2.1.2   Track Maintenance.  Manager shall be responsible for and have
authority with respect to all functions generally performed by the Track
Maintenance Department of a major thoroughbred or standardbred racetrack, as
the case may be, including but not limited to the following:

     a.   All activities related to assuring that the dirt and turf courses and
all inner and outer rails are well-maintained and safe for the horses and
jockeys;

     b.   Using tractors, water trucks, harrows, floats and other vehicles and
other equipment provided by Owner to maintain the track surfaces at necessary
and proper levels of condition;

     c.   Supervising the watering systems for the turf courses and assuring
that sufficient fertilizer, seed and sod are applied as necessary;

     d.   Providing the moveable rail for the turf courses, provided that
Colonial Downs shall be responsible for any damage to such rail other than
normal wear and tear; and

     e.   Taking such action as may be necessary to shut down the racing
surfaces properly for periods of time when they are not utilized for
thoroughbred training or racing.

Unless Owner otherwise agrees, all of the direct labor required for track
maintenance, to the extent reasonably possible, shall be performed by employees
paid by Owner and managed and supervised (including hiring and dismissing) by
Manager as provided in Section 2.4.5 below.  Manager's Track Superintendent
shall coordinate with the Director of Maintenance in his performance of the
foregoing.

     2.1.3   Promotion and Marketing.  Subject to the funds made available by
Owner for marketing in the Annual Operating Budget, Manager shall establish a
plan for the promotion, marketing and advertising of the Racetrack and OTB
Facilities.  To the extent reasonably possible, all direct labor for the
administration of such promotion, marketing and advertising shall be performed
by employees paid by Owner and managed and supervised (including hiring and
dismissing) by Manager as provided in Section 2.4.5 below, to the extent such
services are not performed by third parties.  Manager shall oversee, manage and
supervise (including hiring and dismissing) the Director of Marketing for the
Racetrack and OTB Facilities and any personnel deemed necessary to assist such
Director as provided in Section 2.4.5 below.

     2.1.4   Virginia-Bred Races. In planning, scheduling, promoting and
conducting the live meets at the Racetrack, Manager shall use its best efforts
to schedule races that promote qualified Virginia-bred horses and otherwise to
promote and encourage the horse breeding industry in the Commonwealth of
Virginia.

     2.1.5   Establishment and Maintenance of Purse Accounts.  Owner has
established separate trust accounts, known as the purse accounts, to be used in
connection with meets at the Racetrack (the "Purse Accounts"). Owner shall
deposit into the Purse Accounts all amounts required by Virginia law,
applicable rules and regulations of the Commission and agreements with the
horsemen.  Additional funds may be deposited in the Purse Accounts from time to
time as Owner, in its sole discretion, may determine.  Manager shall have the
authority to determine the purses to be paid on races held during the meets at
the Racetrack, consistent with agreements with the horsemen, and to cause Owner
to pay such amounts from the Purse Accounts; provided, however, that the size of
the purse for the Virginia Derby shall be subject to the approval of Owner.  Not
later than ninety (90) days prior to the commencement of each live race meet,
Colonial Downs shall notify Manager in writing of the total amount of purse
money to be distributed during the forthcoming race meet (exclusive of
contributions from horse owners, sponsors and persons other than Colonial Downs
for stakes races and similar events).  Manager shall then establish the purse
schedule and Colonial Downs shall pay purses during such race meet within the
total amount established by Colonial Downs.  By mutual written agreement of
Manager and Colonial Downs, appropriate adjustments may be made during the meet
to the purse schedule and total purses if warranted by factors such as the
Handle, as defined in Section 4.1.1 below, during the meet.

     2.2   Management of OTB Facilities.  Colonial Downs has retained and hereby
retains Manager to manage the day-to-day operations of its OTB Facilities during
the Term and on the terms and subject to the conditions of this Agreement, with
such changes therein as the parties hereto may from time to time agree, and
subject to the rules, regulations and orders of the Commission.

     2.3   Simulcasting and Audio-Visual.  Manager shall be responsible for and,
subject to the provisions of this Section 2.3, shall have authority with respect
to the following functions generally performed by the Simulcast and/or
Audio-Visual Departments of a major racetrack for the live meets at the
Racetrack:

     a.   Negotiating contracts on behalf of Colonial Downs for the sale of
simulcast signals of races run at the Racetrack, including both full cards and
individual races, for wagering, both on a commingled and non-commingled basis,
in any jurisdiction outside Virginia.  Colonial Downs shall have the right to
participate in, and Manager shall keep Colonial Downs fully informed of the
status of, the negotiation of any such contract. Manager shall not have the
authority to bind Colonial Downs to any such contract unless Colonial Downs, in
its sole and absolute discretion, approves such contract.

     b.   Liaison with contractors for the above-mentioned services;

     c.   Developing and providing program information;

     d.   Liaison with the pari-mutuel department of the Racetrack regarding
post times and scheduling of races; 

     e.   Liaison with the Racing Department regarding program information and
scheduling; and

     f.   Coordinating with Colonial Downs the dissemination of information to
the on- and off-track betting network in Virginia, Maryland and other
jurisdictions.

     2.4   Personnel.  In furtherance of the respective duties of Holdings,
Owner Operator and Manager under this Agreement, the personnel at the Racetrack
and OTB Facilities shall be employed, managed and supervised as follows:

     2.4.1.   Personnel Employed, Managed and Supervised by Holdings.  Holdings
shall employ at its expense, shall pay directly the wages, salaries, benefits
and other costs and expenses of employment of, and shall oversee, manage and
supervise (including hiring and dismissing) at its expense, all staff necessary
to perform all controller, accounting, finance and treasury functions set forth
in Section 1.5(i) above.

     2.4.2.   Personnel Employed, Managed and Supervised by Owner.  Owner shall
employ at its expense, shall pay directly the wages, salaries, benefits and
other costs and expenses of employment of, and shall oversee, manage and
supervise (including hiring and dismissing) at its expense, all persons
associated with those functions set forth in Section 1.5(ii) through (x) above
that it performs.

     2.4.3.   Personnel Employed, Managed and Supervised by Operator. Operator
shall employ at its expense, shall pay directly the wages, salaries, benefits
and other costs and expenses of employment of, and shall oversee, manage and
supervise (including hiring and dismissing) at its expense, all persons, if
any, associated with those functions set forth in Section 1.5(ii) through (x)
above that it performs.

     2.4.4.   Personnel Employed, Managed and Supervised by Manager.  Manager
shall employ at its expense, shall pay directly the wages, salaries, benefits,
and other costs and expenses of employment of, and shall oversee, manage and
supervise (including hiring and dismissing) at its expense, (i) the
Thoroughbred Racing Staff set forth on Schedule I to this Agreement, as the
same may from time to time be amended by the mutual consent of Colonial Downs
and Manager, and (ii) senior management personnel from the Maryland Jockey Club,
including a primary management contact, as Manager deems necessary, in its sole
discretion, to manage the personnel designated in Section 2.4.5.

     2.4.5.   Personnel Employed by Owner and Managed and Supervised by Manager.
Owner, at its expense and subject to the Annual Operating Budget agreed upon by
Colonial Downs and Manager pursuant to Section 6.2.3 below, shall employ and
pay directly the wages, salaries, benefits, and other costs and expenses of
employment of, and Manager shall oversee, manage and supervise (including
hiring and dismissing) at its expense, and shall fix the salaries, wages and
benefits, subject to the Annual Operating Budget, of the following personnel:

     (i)   A Regional Vice President, mutually agreeable to Owner and Manager,
to oversee and supervise the general operations of the Racetrack and OTB
Facilities on behalf of Manager.  Such regional vice president shall be
experienced in marketing and familiar with the operation of a racetrack and
related facilities and shall be paid a salary of up to $150,000.00;

     (ii)   Directors of Marketing, Human Resources, Maintenance, and Racing
Centers Operations (the OTB Facilities), and managers of the OTB Facilities,
and the individuals who presently fill these positions shall remain employed
through December 31, 1999;

     (iii)   Full-time and part-time personnel necessary to operate the OTB
Facilities and the Racetrack, other than staff provided by Manager and
described in Section 2.4.4 above.  Such personnel shall include but not be
limited to personnel employed to perform human resources, maintenance, parking,
admissions, programs, group sales, administration of sky suites, guest services,
press and public relations, and pari-mutuel operations functions, except those
set forth in Section 1.5 above, and personnel necessary for the operations of
(1) all activities in the backstretch, racing surfaces, and paddock areas of the
Racetrack during live meets, and (2) additional miscellaneous services to be
performed in connection with live meets, including but not limited to,
consistent with the Annual Operating Budget, a track photographer and medical
support for the infirmary;

     (iv)   Security personnel set forth in Sections 2.4.6 and 2.4.7 below; and

     (v)   The Standardbred Racing Staff set forth on Schedule II.

     2.4.6.   Racetrack Security .  Manager shall oversee and supervise
(including hiring and dismissing) the Director of Security for the Racetrack
and OTB Facilities, who, if permitted by the Commission, may be, at the
discretion of Manager, an employee of Manager but located in Maryland.  During
live meets, Manager shall employ at Owner's expense additional personnel to
ensure the security of the Racetrack (including the backstretch) and the
health, safety and welfare of patrons and participants in racing.

     2.4.7.   OTB Facility Security.  In cooperation with the Director of
Security, Director of Racing Centers, and local law enforcement agencies whose
employees provide security services while off duty, Manager shall oversee and
supervise security (including hiring and dismissing personnel) at the OTB
Facilities.

     2.4.8.   Responsibility and Liability to Third Parties for Acts and
Omissions of Employees.  Subject to the provisions of Sections 7.2, 7.3 and 7.4
below, (i) Colonial Downs shall have the sole responsibility and liability to
third parties for all acts and omissions of all persons employed pursuant to
Sections 2.4.1, 2.4.2, 2.4.3 and 2.4.5 above and shall defend and hold harmless
Manager as to any claim arising from such persons' acts or omissions, and (ii)
Manager shall have the sole responsibility and liability to third parties for
all acts and omissions of all persons employed pursuant to Section 2.4.4 above
and shall defend and hold harmless the other parties to this Agreement as to
any claim arising from such persons' acts or omissions.  Nothing in this
section is intended to change the substantive law of Virginia regarding an
employer's respondeat superior liability by enlarging the scope of the
circumstances under which a third party may hold an employee liable for the
acts or omissions of its employees.  The parties to this Agreement acknowledge
that all employees described in Sections 2.4.1, 2.4.2, 2.4.3 and 2.4.5 are
engaged in the trade, business, or occupation of Colonial Downs and are
employees of Colonial Downs for purposes of the Virginia Workers' Compensation
Act.  Colonial Downs shall purchase and maintain, at its expense, workers'
compensation insurance consistent with this acknowledgment, and the workers'
compensation insurance policy shall name Manager as an additional insured.
Colonial Downs shall defend and hold harmless Manager as to all claims
encompassed by the Virginia Workers' Compensation Act brought against Manager
or an employee of Manager by any employee described in Sections 2.4.1, 2.4.2,
2.4.3 and 2.4.5 above.

     2.4.9.   Food and Beverage Service.  Manager shall oversee and supervise
the concessionaire selected by Owner to provide the food and beverage service
at the Racetrack and OTB Facilities.

     2.5.   Totalizator Contractor.  Colonial Downs and Manager agree that it
is desirable to use the same contractor for totalizator services in both
Virginia and Maryland and to utilize one hub for all wagering in both
jurisdictions if (i) it is in the respective economic interests of each party
to do so, (ii) it is permissible under the laws of both Virginia and Maryland,
and (iii) it is not prohibited by either the Virginia or Maryland Racing
Commission. Provided, however, that Colonial Downs shall have the sole right
and authority to select the totalizator contractor to be utilized by the
Racetrack and the OTB Facilities, and to negotiate the contract to be entered
into by Colonial Downs for totalizator equipment and services, including hubbing
services, subject to Sections 3.5 and 3.6 below.  The parties acknowledge that
Owner has renewed its agreement with Autotote for 1999 through 2001.  Any
extension or material amendment to such Autotote agreement shall be subject to
the terms and provisions of this Section 2.5.

     2.6.   Virginia Horsemen's and Breeders' Associations.  During calendar
year 1999, Manager shall have the right and authority to participate in all
discussions and negotiations with all organizations representing the Virginia
thoroughbred and standardbred horsemen and breeders.  Manager shall have the
right to approve those organizations to be recognized by Colonial Downs as the
representatives of those groups and to approve all contracts and understandings
with such organizations, which approval shall not be unreasonably withheld,
delayed or conditioned.  After calendar year 1999, the negotiations and
contracts with Virginia horsemen and breeders shall be governed by the second
sentence of Section 1.5(iii) above.

     2.7   General Authority of Manager.

     2.7.1.   Protection of Assets.  In performing its duties under this
Agreement, Manager shall supervise the management, operation and maintenance of
the Racetrack and OTB Facilities in a reasonably satisfactory manner and to do
all things reasonably necessary to protect the assets, goodwill and business of
Owner at the Racetrack and OTB Facilities; provided however, that Manager shall
have no responsibility to provide funds for any purpose other than payment of
the personnel set forth in Section 2.4.4 above.

     2.7.2.   Compliance with Agreements and Laws.  Manager shall:

     a.   Refrain from any actions or failures of action that would give rise to
the suspension or cancellation of the Licenses, any alcoholic beverage control
license, or other material permit for the Racetrack or OTB Facilities;

     b.   Comply in material respects with federal, state and municipal laws,
ordinances, rules, regulations and orders relative to the operation and use, and
with respect to its obligations under Section 2.1.2 above, repair and
maintenance, of the Racetrack and OTB Facilities;

     c.   Notify Owner promptly in writing of any material violation of such
laws, ordinances, rules, regulations or orders that comes to Manager's
attention.  Owner shall remedy such violation at its expense; provided,
however, that if Manager's actions or omissions gave rise to such violation,
Manager shall cure such violation at its expense; and

     d.   Refrain from any actions or failures to act, other than those required
by federal, state, or municipal laws, ordinance, rules, regulations, or orders,
including orders of the Commission, which, based upon specific written
instructions provided by Owner, would give rise to an event of default as
defined in the lease between Owner and Holdings or any credit agreement to which
Owner is a party.  Such written instructions shall specify the actions that
Manager is to take or to refrain from taking and the specific provision of the
applicable lease or credit agreement.

Manager shall have no responsibility for a breach of the foregoing provisions
unless such breach arises from an action, omission, or condition that is
encompassed by the foregoing provisions and that first occurs or first exists
on or after July 1, 1999 involving (i) Manager's gross negligence, willful
misconduct, or bad faith with respect to the performance of its obligations
under Section 2.1.1, 2.1.2 or 2.3, or (ii) Manager's negligence, willful
misconduct or bad faith with respect to the performance of its other
obligations under this Agreement; provided that Manager shall have no
responsibility for a breach of the foregoing provisions arising from a
condition existing prior to July 1, 1999.  Except as specifically provided
above, this Section 2.7.2 does not modify Section 7 of this Agreement.

Emergency Expenditures.  In addition to implementing the capital
expenditures approved by Owner, Manager shall arrange, at the sole expense of
Owner and Holdings, for the maintenance, repair and minor alteration of
theRacetrack and OTB Facilities in order to keep them in a safe, sound and
attractive condition.  Notwithstanding the foregoing, without the prior
approval of Owner, Manager shall not make or incur expenditures for the
operation, maintenance, repair or alteration of the Racetrack or OTB Facilities
in excess of the then current budget limitation set forth in the then current
budgets approved by Owner pursuant to Sections 6.2.3 and 6.2.4. below, except
for unbudgeted expenditures not to exceed $25,000.00 for emergency repairs to
the Racetrack or OTB Facilities that, in Manager's judgment reasonably
exercised, are required to be made immediately for the preservation and safety
of the Racetrack or OTB Facilities, or patrons thereof, or to avoid the
suspension of any service to or of the Racetrack or OTB Facilities, or to avoid
danger to life or property at the Racetrack or OTB Facilities.  Manager shall
immediately advise Owner in writing of the need for such emergency
expenditures.  Owner shall promptly reimburse Manager for such emergency
expenditures upon presentation of receipts or invoices for such expenditures.

     2.7.4.   Manager's Activities Under Agreement.  In furtherance of its
duties under this Section 2, Manager shall have the right to arrange,
supervise, coordinate, develop and direct its activities under this Agreement.

     2.8.   Obligations of Manager. Manager accepts the engagement under this
Agreement and agrees to act with reasonable prudence and reasonable diligence
in the performance of its duties and responsibilities. Notwithstanding any
other provision of this Agreement, Manager shall be obligated to perform its
duties, responsibilities and obligations only to the extent that current funds
are made or caused to be made available by Colonial Downs to Manager.  Subject
to the terms of this Agreement, Manager shall have the right to enter into
agreements with its affiliates or with unaffiliated third parties in performing
its duties under this Agreement, provided that such agreements with affiliates
are disclosed to Colonial Downs in advance, are not less favorable to Colonial
Downs than would have been reasonably available from comparably experienced and
competent independent third parties in arm's length transactions, and are
consistent with the Annual Operating or Capital Budget approved by Owner.

                                  SECTION 3
                        COOPERATION BETWEEN COLONIAL DOWNS
                            AND THE MARYLAND JOCKEY CLUB

     3.1.   Establishment and Maintenance of Maryland-Virginia Thoroughbred
Circuit Manager shall cause the Maryland Jockey Club to take the following
action in order to provide for the establishment and maintenance of a Maryland
-Virginia circuit for thoroughbred horses:

     3.1.1.   Thoroughbred Racing Dates.  Each year, the Maryland Jockey Club
shall advise the Maryland Racing Commission that it will cease live
thoroughbred racing in Maryland for such period as the parties may agree, some
time between mid-June to mid-October, in order to provide a supply of
thoroughbred horses comparable in quality to those racing at the Maryland
Jockey Club's Maryland thoroughbred racetracks, to maximize the likelihood of
a successful thoroughbred meet at the Racetrack during such period, of up to a
maximum of 102 thoroughbred racing days.

     3.1.2.   Encouragement of Maryland Horsemen to Race in Virginia.  The
Maryland Jockey Club shall use its reasonable best efforts to encourage
thoroughbred horsemen who normally race in Maryland during the aforesaid period
to race in Virginia during Colonial Downs' thoroughbred meet.  No comparable
requirement shall be applicable with respect to standardbred racing, but
Manager shall use its reasonable best efforts to supervise solicitation of
horsemen to race their standardbred horses at the Racetrack.  The Maryland
Jockey Club may, but shall not be required to, expend any of its own funds in
this regard.

     3.1.3.   Vanning Service.  For the purpose of maintaining a Maryland
-Virginia thoroughbred racing circuit, Colonial Downs and Manager shall share
equally the expense of a vanning service to transport thoroughbred horses from
Maryland to the Racetrack to participate in thoroughbred race meets at the
Racetrack.

     3.2   Virginia Racing Dates

     3.2.1.   Virginia Thoroughbred Racing Dates.  Colonial Downs shall apply
to the Commission for thoroughbred racing in Virginia on such dates as the
parties agree and days of the week as are designated by Manager (provided
racing is scheduled for at least four days a week, with the possible exception
of the first and last weeks of a meet), are consented to by Colonial Downs,
which consent shall not be unreasonably withheld, delayed or conditioned, and
are consistent with the thoroughbred racing dates to be sought in Maryland
pursuant to Section 3.1.1 above. Colonial Downs shall not apply for any
thoroughbred racing dates that would overlap with thoroughbred racing dates in
Maryland without the prior written consent of Manager.  If the Maryland Racing
Commission refuses to permit the establishment of the Virginia-Maryland
thoroughbred racing circuit, or if the Maryland Jockey Club is otherwise unable
to continue the Virginia-Maryland thoroughbred racing circuit, each
substantially in the manner contemplated in this Agreement and as heretofore
conducted, subject to the rights of Colonial Downs under Section 8.1.5 below,
Colonial Downs shall consult with the Maryland Jockey Club as to the
thoroughbred race dates to be sought in Virginia and may, if reasonably
necessary, apply for overlapping race dates.

     3.2.2.   Virginia Standardbred Racing Dates.  For 1999, Colonial Downs
shall apply to the Commission for standardbred racing in Virginia on such dates
and days of the week as it determines in its sole discretion.  After 1999,
Colonial Downs shall apply to the Commission for standardbred racing in
Virginia on such dates and days of the week as are designated by Manager and
are consented to by Colonial Downs, which consent shall not be unreasonably
withheld, delayed or conditioned.

     3.3.   Stabling of Horses.  Colonial Downs shall, and Manager shall cause
the Maryland Jockey Club to, cooperate with each other in keeping open the
stable, dormitory and other backstretch areas of their respective racetracks
during such times of the year as may be reasonably necessary or appropriate to
help assure a sufficient quantity of horses for a Maryland-Virginia
thoroughbred racing circuit. Such cooperation shall include but not be limited
to keeping open the backstretch areas of the Racetrack for stabling and
training of thoroughbred horses during times of the year when live standardbred
racing is not being conducted there and, in the reasonable opinion of Manager,
such action is necessary for the benefit of thoroughbred racing at the
Racetrack; provided, however, in no event shall Colonial Downs be required
hereunder to keep open its backstretch areas for periods more than thirty (30)
days prior to its meets, during its meets and fourteen (14) days following its
meets.

     3.4.   Exchange of Simulcast Racing Programs. Colonial Downs shall, and
Manager shall cause Maryland Jockey Club to, exchange simulcast racing programs
on the following basis:

     3.4.1.   During the period when there is no live thoroughbred racing at
the Racetrack, Manager shall cause the Maryland Jockey Club to make its
Maryland live thoroughbred race signals available to Colonial Downs and its
network of OTB Facilities in Virginia for simulcast pari-mutuel wagering in
Virginia.

     3.4.2.   During the period when there is live thoroughbred racing at the
Racetrack, Colonial Downs shall make its Virginia live thoroughbred
race signals available to the Maryland Jockey Club and its Maryland off-track
betting and intertrack facilities for simulcast pari-mutuel wagering in
Maryland.

     3.4.3.   No charge shall be imposed by the Maryland Jockey Club or
Colonial Downs for the aforesaid exchange of simulcast signals. Each such
entity shall, however, be responsible for all costs of receiving and
distributing the simulcast signal of the other's races within its network
(including without limitation the costs of downlinks, decoders and related
equipment) and charges for long distance data and other telephone lines,
totalizator and other services and equipment.

     3.4.4.   To the extent that the percentage of Handle wagered in Virginia
on Maryland races that is payable by the Maryland Jockey Club to Maryland
horsemen and breeders is reduced below one and six-tenths percent (1.6%), one
-half of the savings from such reduction shall be shared by Manager with Owner
in the form of a reduction in the Management Fee due Manager under this
Agreement.

     3.5.   Approval of Contracts.  Colonial Downs and Manager both desire to
maximize the benefits of the two-state circuit for racing and wagering between
Virginia and Maryland. Colonial Downs and Manager both recognize that such
benefits might be maximized by Colonial Downs and Manager jointly bidding,
negotiating and awarding for the Racetrack, Laurel Park and Pimlico Race
Course, and the off-track betting facilities in Virginia and Maryland, various
contracts for services purchased from independent contractors that are common
to both Virginia and Maryland. Colonial Downs and Manager shall cooperate with
each other and jointly bid such contracts if Colonial Downs and Manager each
believes it is in their respective best interests to do so and neither party
shall be liable to the other for its decision not to agree to jointly bid such
contracts.  Any contract resulting from such joint bid shall be subject to
Colonial Downs' review and approval, which approval shall not be unreasonably
withheld, delayed or conditioned, and shall be granted promptly.  Additionally,
Owner shall have the right to approve contracts that require the annual
expenditure by Owner of more than $25,000 in any twelve month period, which
approvals shall not be unreasonably withheld, delayed or conditioned, and shall
be granted promptly. With respect to such latter contracts, Manager shall
reasonably attempt to obtain bids from at least two potential service
providers, it being recognized, however, that it may not always be reasonably
possible to obtain more than one bid.  Colonial Downs generally will approve
an agreement with the low bidder, provided that the quality of service among
the bidders is comparable.

     3.6   Right of First Refusal for Certain Live Racing and Simulcast Service
Contracts.  The parties recognize that there are various simulcast and
totalizator services related to wagering on live and simulcast races at the
Racetrack and the OTB Facilities that are not required to be provided by
Manager to Colonial Downs pursuant to this Agreement.  These services include
reconciliations, telephone lines for transmittal of data and voice
communications, satellite downlinks, uplinks and decoders, signal fees, and
other "hub" and totalizator services (collectively, "simulcast services").  If
Colonial Downs desires to contract with a third party or parties for all or any
portion of such simulcast services, it shall advise Manager and Manager shall
have the right, but not the obligation, to submit a bid to Colonial Downs
setting forth the terms and conditions under which Manager would provide such
simulcast services to Colonial Downs, either alone or in conjunction with
another party or parties (including but not limited to a totalizator
contractor).  Colonial Downs shall have the right to solicit bids from other
parties for such simulcast services. Colonial Downs shall advise Manager if it
has received a bid from a qualified third party or parties for such simulcast
services that Colonial Downs is prepared to accept and shall provide Manager a
true and complete copy of such bid. Manager shall have the right, within three
(3) business days after receipt of such copy, or such longer period as the
parties may agree, to elect to match all of the terms and provisions of such
bid and to be awarded the contract therefor either alone or in conjunction with
another party (including but not limited to a totalizator contractor).
Recognizing that different equipment manufacturers generally utilize different
equipment, Manager's aforesaid election to match another bid may include use of
equipment that is substantially equivalent, rather than identical, to equipment
that is contained in the bid being matched.  If Manager does not make such
election to match or Manager's bid does not match, in Colonial Downs'
reasonable judgment, the bid presented, Colonial Downs shall be free to award
such contract to such third party on the aforesaid terms and provisions.

     3.7   Liaisons. Owner and Manager shall each appoint one liaison.  The
initial liaison for Owner shall be Jeffrey P. Jacobs.  The initial liaison for
Manager shall be Joseph A. De Francis.  The alternate liaison for Owner shall
be Ian M. Stewart.  The alternate liaison for Manager shall be John Mooney.
The liaisons or the alternate liaisons shall meet at least monthly in person or
telephonically to report on the status of operations and the matters for which
each party is responsible under this Agreement and to address any disputes or
concerns arising from the performance of each party's obligations under this
Agreement.  To the extent a question or dispute arises as to the scope of
Manager's authority that is not specifically addressed in this Agreement, the
liaisons or alternate liaisons shall attempt to resolve such question or
dispute prior to referring the matter to mediation as provided in Section 9.8
below.

     3.8   Cooperation. The parties shall cooperate to enhance the public
perception of Colonial Downs and operations of the Racetrack and OTB
Facilities, and the parties shall use their reasonable best efforts to promote
the public image of each other.

     3.9   Consent or Approval.  Wherever this Agreement requires the consent
or approval of Colonial Downs or Manager, such consent or approval shall not be
unreasonably withheld, delayed or conditioned unless otherwise specifically
provided in this Agreement.

                                   SECTION 4
                             COMPENSATION OF MANAGER

     4.1   Management Fee.  As compensation for the management and
consulting services under this Agreement, and regardless of the number of live
racing days at the Racetrack in any given year, Owner shall pay Manager an
annual fee (the "Management Fee") as follows:

     4.1.1.   Southern Virginia.  For the Racetrack and all OTB Facilities not
located in the Virginia counties of Loudoun, Fairfax, Prince William, and
Arlington and the Virginia cities of Manassas, Manassas Park, Fairfax City,
Falls Church and Alexandria, Owner shall pay Manager a Management Fee equal to
one percent (1%) of  the first $75 million of  the aggregate of the gross
amounts wagered ("Handle") in any calendar year in the Commonwealth of
Virginia, whether at the Racetrack, at the OTB Facilities or in any other form
(including but not limited to account, telephone and home wagering) on all
races run live in Virginia, or received by simulcast in Virginia, excluding
only (1) Handle generated at racetracks, offtrack betting facilities or in any
other form licensed to persons or entities other than Colonial Downs and in
which Colonial Downs or any of its affiliates has no ownership, financial or
other interest, and (2) Handle generated at any racetrack in addition to the
Racetrack licensed by the Commission to persons or entities other than Colonial
Downs (as well as at off-track betting facilities licensed to such other
racetrack licensee or licensees) in which an affiliate of Colonial Downs has
a passive, non-controlling interest so long as such interest was not designed
or intended to circumvent this Agreement. (Handle, subject to the foregoing
exclusions, is referred to herein as "Adjusted Handle.")  Additionally, Owner
shall pay Manager an annual Management Fee equal to two percent (2%) of all
Adjusted Handle in excess of $75 million per calendar year.

     4.1.2.   Northern Virginia - Outer Loop. For all OTB Facilities located
in the Virginia counties of Loudoun and Prince William and the Virginia cities
of Manassas and Manassas Park, Owners shall pay Manager an annual Management
Fee equal to two percent (2%) of all Adjusted Handle generated at such OTB
Facilities for such calendar year.

     4.1.3.   Northern Virginia - Inner Loop. For all OTB Facilities located in
the Virginia counties of Fairfax and Arlington and the Virginia cities of
Fairfax City, Falls Church and Alexandria, Owner shall pay Manager an annual
Management Fee equal to three and one-quarter percent (3 1/4%) of all Adjusted
Handle generated at such OTB Facilities for such calendar year.

     4.1.4.   Possible Reduction in Management Fee and Performance Fee. The
Management Fee payable by Owner to Manager shall be reduced by one-half in the
event that, before they are authorized and conducted in Virginia, expanded non-
pari-mutuel gaming activities are authorized and conducted in Maryland at
Laurel or Pimlico or offtrack wagering facilities controlled or managed by the
Maryland Jockey Club with contributions from such activities made to
thoroughbred purses.  Additionally, the Operating EBITDA (as defined herein)
used to calculate the Performance Fee (as defined herein) shall be calculated
as if only one-half of the actual reduction in the Management Fee had occurred.
The aforesaid reduction shall terminate and the Management Fee shall revert to
the Management Fee provided in Sections 4.1.1, 4.1.2, and 4.1.3 above at such
time as expanded non-pari-mutuel gaming activities comparable to those in
Maryland are authorized and conducted in Virginia.

     4.2.   Payment of Management Fee.  For the first six (6) months of 1999,
Owner shall pay the Management Fee monthly on or before the twenty-first (21st)
day of each month based on the Adjusted Handle report generated by the
totalizator system for the immediately preceding month.  Thereafter, Owner
shall pay the Management Fee monthly on or before the seventh (7th) day of each
month based on the Adjusted Handle report generated by the totalizator system
for the immediately preceding month.  After the audited financial statements of
Owner are completed for a fiscal year, Manager shall receive from or reimburse
Owner, or Owner shall have the right to offset against future payments to
Manager, any amount necessary for Manager to have received the correct
Management Fee for such fiscal year.

     4.3.   Performance Fee.  In addition to the Management Fee, Owner shall
pay to Manager each year a fee (the "Performance Fee") based on Colonial Downs'
consolidated earnings before interest, taxes, depreciation, and amortization
("EBITDA") for the immediately preceding year determined by Colonial Downs'
independent auditors in accordance with generally accepted accounting practices
and principles consistently applied, adjusted by (a) deducting any revenues and
expenses excluded pursuant to Section 9.12 below and (b) adding back (i)
corporate overhead expenses of Holdings that are deducted in calculating
EBITDA, (ii) the amount of any Performance Fee that is deducted in calculating
EBITDA, (iii) write-offs of accounts receivable related to activities prior to
July 1, 1999, and (iv) expenses related to operations prior to January 1, 1999
that were not accrued in a prior year (as adjusted, "Operating EBITDA"), as set
forth below.  It is the express intent of the parties that, in the calculation
of Operating EBITDA, Colonial Downs shall not directly or indirectly shift any
items of income or expense from one fiscal year to another for the purpose of
affecting adversely, even if otherwise permitted by generally accepted
accounting principles, payment of the Performance Fee.  The calculation of the
Performance Fee shall be provided to Manager in detail and shall be accompanied
by an "Agreed Upon Procedures Report" issued by Colonial Downs' independent
auditors confirming that the calculation was made in accordance with the
foregoing.

     4.3.1.   1999.  No Performance Fee shall be due for 1999 unless Operating
EBITDA exceeds $6.5 million.  Owner shall pay Manager an annual Performance Fee
equal to twenty percent (20%) of Operating EBITDA in excess of $6.5 million up
to $8.5 million and forty percent (40%) of Operating EBITDA in excess of $8.5
million.

     4.3.2.   After 1999.  Each year after 1999, no Performance Fee shall be
due for any year unless Operating EBITDA exceeds $5.5 million for such year.
Owner shall pay Manager an annual Performance Fee equal to forty percent (40%)
of Operating EBITDA in excess of $5.5 million for such year.

     4.3.3.   Calculation of and Adjustments to Operating EBITDA.  Operating
EBITDA shall be calculated each year by Colonial Downs.  Additionally, the
Operating EBITDA thresholds set forth in Sections 4.3.1 and 4.3.2 above shall
be adjusted to reflect a ten percent (10%) per annum rate of return on
additional capital investments or up to ten percent (10%) on debt incurred by
Colonial Downs' investors necessary (i) to develop and/or construct OTB
Facilities in Northern Virginia or (ii) after 1999, to make capital
improvements in excess of $500,000 per year at the Racetrack and the OTB
Facilities, which improvements have been agreed to by Manager.  The Management
Fee and Performance Fee shall have priority in payment to (i) Holdings'
corporate overhead expenses deducted in calculating EBITDA to the extent such
expenses exceed $1.7 million per year and (ii) any salaries or management or
other fees (including credit enhancement fees) paid by Colonial Downs to Owner,
Operator, or Holdings or to any of their affiliates, except for such salaries
and fees that are included in the $1.7 million of Holdings' corporate overhead
expenses set out in Schedule III of this Agreement.  The 1999 Annual Operating
Budget that will be set forth on Schedule III to this Agreement pursuant to
Section 6.2.3 below shall contain a schedule detailing the $1.7 million in
Holdings' corporate overhead expenses that are to be deducted in calculating
EBITDA.  None of such amounts shall be treated as or become other operating
expenses of Colonial Downs.  In addition, any salaries or management or other
fees that are deducted in calculating EBITDA and are paid by Owner to Operator
or Holdings or to any of their affiliates shall be included in Holdings'
corporate overhead expenses for purposes of calculating Operating EBITDA.

     4.3.4.   Payment of Performance Fee.  The Performance Fee shall be paid
no later than April 15 of the year following the year for which such fee is
determined (e.g., any such fee for 1999 is payable by April 15, 2000).

     4.3.5.   Termination of Performance Fee.  In the event that after 1999
Manager fails to achieve Operating EBITDA on a two-year running average, not
including any portion of 1999 or previous years, of the sum of (i) $900,000.00
and (ii) one-half of the savings achieved from negotiations with the Virginia
horsemen for 1999, then Manager's authority shall revert to that provided in
Sections 2.1.1, 2.1.2, and 2.3 above and no Performance Fee shall be paid,
unless such failure was due to circumstances beyond the reasonable control of
Manager. 

     4.4.   Payment of Expenses. All of the expenses of the development,
construction, operation, maintenance and repair of the Racetrack and the OTB
Facilities, including without limitation all costs and expenses of the live
meets and the OTB Facilities, whether contracted for by Colonial Downs or
Manager (in accordance with the terms of this Agreement), shall be borne and
paid for timely by Owner.  Such costs and expenses shall include all direct and
indirect costs and expenses, other than the expenses of the Thoroughbred Racing
Staff  and general overhead of the Maryland Jockey Club, incurred by Manager in
performing services under and in accordance with this Agreement.  In the event
Manager pays any such expenses on behalf of Colonial Downs, it shall
be reimbursed therefor promptly by Owner, provided that such expenses are
contained in the Annual Operating Budget or Annual Capital Budget approved by
Owner under Sections 6.2.3 and 6.2.4 below, or constitute emergency
expenditures under Section 2.7.3 above.  Expenses of the Thoroughbred Racing
Staff and general overhead of the Maryland Jockey Club shall be borne by
Manager.

     4.5.   Authorization of Additional Forms of Gaming in Virginia.  In the
event there is authorized in Virginia at any time during the Term of this
Agreement any additional form of gaming permitted at or in connection with the
Racetracks and/or any of the OTB Facilities other than pari-mutuel wagering on
live or simulcast horse racing, Colonial Downs and Manager shall negotiate in
good faith with each other as to the appropriate sharing by them of the
benefits thereof.  The foregoing shall not, however, preclude any person owning
an interest in any of the parties to this Agreement or in the respective
parents of the parties from participating in any such additional form of gaming
other than at or in connection with the Racetrack and/or any of the OTB
Facilities.

     4.6.   Management Fees through December 31, 1998.  Owner shall pay
Manager $1,450,000.00 in lieu of all past due Management Fees owed by Owner to
Manager through December 31, 1998.  Such amount shall be evidenced by a
promissory note, maturing December 31, 2005, bearing interest at the rate of
seven and three-quarters percent (73/4%) per annum, payable quarterly.
Interest only shall be payable quarterly for the first two years and principal
shall be amortized and paid together with interest in quarterly installments
over the remaining five-year term of the note.  All payments shall be made on
or before the fifth day of the month following the end of the calendar quarter.

     4.7.   Late Charge.  Any payment due from Colonial Downs under this
Agreement that is not paid in full within five (5) days after it is due shall
bear interest at the prime rate then in effect, as published in the Wall Street
Journal, plus four percent (4%) per annum.

                                     SECTION 5
                                 TERM OF AGREEMENT

     5.1.   Term.  The 1996 Agreement shall continue in effect from April 22,
1996 to the date of this Agreement.  The term of this Agreement (the "Term")
shall commence and be effective as of the date hereof and shall continue in
effect for as long as Colonial Downs (or any successors or transferees, as
provided in Sections 5.2 and 5.3 below) owns, controls or operates, directly or
indirectly, any of the Licenses and/or the OTB Licenses, unless terminated
earlier in accordance with this Agreement; provided, however, that in no event
shall the term of this Agreement continue beyond April 21, 2046; and provided
further, that Manager's authority and obligations, other than as specified in
Sections 2.1.1, 2.1.2, and 2.3 above, shall not commence until July 1, 1999.

     5.2.   Sale, Merger, Lease, or Other Transfer.  In the event of any sale
of all or substantially all of the assets of Owner, Operator, or Holdings
(or of any successor or successors), or any merger or other business
combination of Owner,  Operator, or Holdings (or of any successor or
successors) with any other entity, or any lease, license, or other agreement
with respect to the Racetrack for use of the Racetrack as a horse racetrack
this Agreement shall continue in full force and effect.  Owner, Operator, and
Holdings (or any successor or successors) shall, as a condition of such
transaction, require the buyer or other acquirer, transferee, or lessee to be
bound by this Agreement as fully as if named herein.

     5.3.   Sale or Transfer of Licenses. In the event of any sale or other
transfer of any of the Licenses or the OTB Licenses, this Agreement shall also
continue in full force and effect. Colonial Downs (or any successor or
successors) shall, as a condition of such transaction, require the buyer or
other transferee to be bound by this Agreement as fully as if named herein.

     5.4.   Loss of Licenses.

     5.4.1.   Abandonment of Licenses.  Notwithstanding anything to the
contrary contained in this Agreement, Colonial Downs may suspend live racing at
the Racetrack indefinitely in order to ensure the long term viability of horse
racing in Virginia at the Racetrack.  However, if Colonial Downs both (i)
notifies Manager in writing of its intent to abandon any of the Licenses or all
of the OTB Licenses and (ii) thereafter does not seek the award of racing
days from the Virginia Racing Commission for the year following such notice,
then Colonial Downs shall, if Manager so requests, assign and transfer such
license or licenses to Manager without recourse. Colonial Downs and Manager
shall execute and deliver to each other all documents as may be reasonably
necessary to assign and transfer such licenses, but no other Colonial Downs
assets, rights, or obligations.  Such assignment or transfer shall be subject
to such approval of the Commission as may be necessary.  Upon such transfer,
this Agreement shall automatically terminate and be of no further force or
effect and neither Colonial Downs nor Manager shall have any further rights
or obligations hereunder, except for any obligations incurred prior to such
termination.

     5.4.2.   Revocation of Licenses. In the event the award of any of the
Licenses or OTB Licenses is revoked or otherwise nullified by the Commission or
a court of competent jurisdiction, Manager shall have the right to apply for
any such license in its own name and in its own behalf without any obligation
or liability to Colonial Downs hereunder.  Provided, however, that in the event
Manager makes such application as aforesaid, Colonial Downs shall not oppose
such application or support another application.  If Manager's application is
granted, this Agreement shall automatically terminate and be of no further
force and effect and neither Colonial Downs nor Manager shall have any further
rights or obligations hereunder, except for any obligation incurred prior to
such termination.

     5.5.   Option to Buy-Out Term. Not withstanding any other provision of
this Agreement, Colonial Downs shall have the right, at any time after
April 21, 2024 to buy out Manager's entire interest under this Agreement for
the then remaining term. Colonial Downs shall give Manager written notice of
the exercise of such right and the closing of the purchase and sale shall take
place at the principal office of Manager not later than sixty (60) days after
the giving of notice. The purchase price shall be an amount equal to the
product of seventeen (17) times the average gross amount paid and/or payable to
Manager as its Management Fee and Performance Fee during the three (3) full
calendar years immediately preceding the date of closing. At the closing, (i)
the purchase price shall be paid in full by Colonial Downs to Manager in
immediately available funds, without offset; (ii) the parties shall execute and
deliver general mutual releases excluding therefrom only any specifically
alleged claims theretofore properly asserted and submitted under this
Agreement; and (iii) the parties shall execute and deliver such additional
documents and instruments as may be reasonably necessary to effectuate the
purchase by Colonial Downs and sale by Manager.

     5.6.   Right of First Refusal upon Change in Control of Colonial Downs.

     5.6.1.   Transfer of Equity Interest.  Owner, Operator, Holdings, CD
Entertainment, Ltd., ("Entertainment") and all their affiliates and successors
(all of the foregoing individually and collectively, "Offeror") shall not close
a Control  Transaction except as permitted by this Section 5.6.  Holdings shall
cause Entertainment and all affiliates of Offeror to be bound by this Section
5.6.

     5.6.2.   Right of First Refusal.  Subject to this Section 5.6.2,
Offeror may enter into a written contract, including a letter of intent, to
consummate a Control Transaction (a "Written Control Transaction Agreement")
at any time, provided that such Written Control Transaction Agreement expressly
includes a provision that it is subject and subordinate to this Section 5.6.2
for a period equal to 30 days (the "Applicable Period").

     a.   Subject to Section 5.6.4 below, all Control Transactions shall be
subject to Manager's right of first refusal.

     b.   Upon execution of any Written Control Transaction Agreement, the
parties desiring to consummate such Control Transaction shall first submit
to Manager a complete copy of the Written Control Transaction Agreement,
together with reasonably satisfactory evidence of the would-be purchaser's
financial ability to close.  For the Applicable Period, Manager shall have the
first right of refusal to contract to acquire all, but not less than all, of
the Equity Interest specified in the Written Control Transaction Agreement at
the same price and terms set forth in the Written Control Transaction
Agreement; provided, however, that Manager shall not be required to close prior
to the later of the date provided for under the Written Control Transaction
Agreement or the expiration of 120 days after Manager's exercise of the right
of first refusal.

     c.   If Manager exercises the right of first refusal within the
Applicable Period, Manager shall notify Offeror in writing and shall post a
deposit equal to the lesser of the deposit provided for under the Written
Control Transaction Agreement or 10% of the purchase price specified in the
Written Control Transaction Agreement.  If Manager exercises this right,
Manager shall purchase and the selling party shall sell the Equity Interest
upon the terms specified in the Written Control Transaction Agreement.  If
the proposed Control Transaction is not a sale for cash consideration, then,
for purposes of the right of first refusal, the purchase price shall be the
fair market value of the consideration as determined by an independent
reputable appraiser.

     d.   If within the Applicable Period, Manager (i) fails to act, (ii)
elects not to exercise its right, or (iii) exercises its right of first
refusal, but is unable to close within the time period specified in subsection
(b) above, Offeror may close upon the Control Transaction for the sale of the
Equity Interest on terms no more materially favorable than those provided in
the Written Control Transaction Agreement within 180 days after expiration of
the Applicable Period.  In the event Manager is unable to close, all but
$500,000.00 of the deposit referred to in subsection (c) above shall be
refunded promptly and Manager shall have no other liability to Offeror for
failure to close.

     5.6.3.   Definitions.  As used in this Section 5.6:

     "Affiliate" means any person, entity or organization directly or
indirectly controlling, controlled by or under common control with one of the
parties hereto or an affiliate of such party.

     "Control Transaction" means a single transaction or series of related
transactions resulting, or which if consummated would result, in (i)
Entertainment and its successors and affiliates owning less than twenty
percent (20%) of the outstanding Class A capital stock of Holdings or less
than fifty percent (50%) of the outstanding Class B capital stock, (ii) the
transfer of the general partnership interest or more than fifty percent (50%)
of the limited partnership interests of Owner, or (iii) the transfer of more
than fifty percent (50%) of the outstanding capital stock or voting control
of Operator.

     "Equity Interest" means any equity ownership interest in Owner, Operator,
Holdings, or Entertainment, including any option, warrant, or other right with
respect to such interest.

     5.6.4.   No Rights.  Notwithstanding the provisions of Section 5.6.2
above, Manager shall have no rights of first refusal with respect to (i) a
hostile tender offer for the outstanding capital stock of Holdings, (ii) the
issuance of additional shares of Holdings through an underwritten public
offering or otherwise, for the purposes of raising additional equity to expand
the operations of Holdings, that results in the dilution of Entertainment's and
its successors' and affiliates' percentage ownership of Holdings to below
twenty percent (20%) of the outstanding Class A capital stock or below fifty
percent (50%) of the outstanding Class B capital stock, or (iii) a transaction
between Entertainment and/or its successors or affiliates and an entity in which
(a) Jeffrey P. Jacobs and/or members of his family control at least twenty
percent (20%) of the votes of the issued and outstanding stock, or (b) Jeffrey
P. Jacobs controls and is the Chairman, Chief Executive Officer or President of
a publicly traded company; provided that, it is the intention of the parties
that this provision allows Entertainment and its successors and affiliates to
enter into business combinations with entities controlled by Jeffrey P. Jacobs
and/or members of his family and not to facilitate the transfer of an Equity
Interest to a third party.

                                  SECTION 6
                      BOOKS, RECORDS, ACCOUNTING, AND REPORTS

     6.1.   Records and Accounting.  Colonial Downs shall keep or cause to be
kept appropriate books and records with respect to the business of Owner and
Holdings, including both the Racetrack and the OTB Facilities, which shall at
all times be kept at the principal office of Owner in Virginia.  Such books
shall be maintained for financial reporting purposes on the accrual basis, in
accordance with generally accepted accounting principles and applicable law,
including but not limited to the rules and regulations of the Commission.
Manager shall provide Colonial Downs, on a timely basis, with such information
as it has and Colonial Downs needs to maintain such books and records with
respect to the Racetrack and OTB Facilities.

     6.2.   Reports and Budgets.

     6.2.1.   Annual Statements.  As soon as reasonably practicable after the
end of each fiscal year, but not later than (90) days after the end of the
fiscal year, Colonial Downs shall deliver to Manager reports containing audited
financial statements for Colonial Downs on a consolidated basis for such fiscal
year, presented on the accrual basis, including a balance sheet and statements
of income and cash flows, and shall disclose in detail (i) the overhead and
other expenses of Holdings that were deducted in determining that income and
(ii) the calculation of EBITDA and Operating EBITDA. The financial statements
shall be audited by a recognized national or regional firm of certified public
accountants selected by Colonial Downs.

     6.2.2.   Monthly and Quarterly Statements.  Colonial Downs shall deliver
to Manager unaudited statements prepared in a similar format to the annual
statements of Colonial Downs on a consolidated basis, as follows: (1) monthly
statements within twenty (20) days after the end of each month, or such shorter
period in which such statements are provided to lenders; and (2) quarterly
statements within forty-five (45) days after the end of each fiscal quarter,
or such shorter period in which such statements are provided to lenders.  Such
reports shall include detailed information regarding Handle at the Racetrack
and OTB Facilities separately for each location and a comparison of results of
operations with the budget for that period.

     6.2.3.   Annual Operating Budget.  Manager and Colonial Downs shall agree
upon an Annual Operating Budget for calendar year 1999, which also is Colonial
Downs' fiscal year, on or before February 28, 1999.  In the event that Manager
and Colonial Downs are unable to agree on such Annual Operating Budget, (i) the
parties shall submit their dispute to the Honorable John H. Shenefield for
mediation, and (ii) in the event such mediation does not produce agreement on
an Annual Operating Budget for 1999, then either party may terminate this
Agreement until such time as the parties agree upon an Annual Operating Budget
for 1999 and the 1996 Agreement shall be in full force and effect upon such
termination.  Once Colonial Downs and Manager have agreed to the Annual
Operating Budget for 1999, such budget shall be attached hereto as Schedule 
III. For each year after 1999, Owner shall notify Manager not later than ninety
(90) days prior to the commencement of each fiscal year of the amount of the
funds Owner will make available such fiscal year for the promotion, marketing
and advertising of the Racetrack and the OTB Facilities.  Such amount shall
be reasonably adequate to promote and market live racing at the Racetrack and
simulcast racing at the Racetrack and the OTB Facilities, consistent with
normal industry standards.  Thereafter, Manager shall provide Colonial Downs
not later than sixty (60) days before commencement of each fiscal year a
budget in reasonable detail as to all income and expenses for the operation
of the Racetrack and OTB Facilities (the "Annual Operating Budget ").  Colonial
Downs shall within thirty (30) days thereafter approve or disapprove such
proposed Annual Operating Budget.  If Colonial Downs shall disapprove the
proposed Annual Operating Budget, it shall advise Manager of its concerns.
Colonial Downs and Manager shall cooperate with each other and resolve in
good faith any disagreements in the proposed Annual Operating Budget prepared
by Manager; provided, however, that if a budget for a fiscal year has not
been agreed upon by December 15th of the prior year, the Annual Operating
Budget  then in effect shall remain in effect for the following fiscal year.

     6.2.4.   Annual Capital Budget.  Each year, as set forth below, Owner
shall determine the amount of capital expenditures to be made by Owner at the
Racetrack and/or the OTB Facilities, which amount shall not be less than
$500,000.00 for any year, and the allocation of such amount shall be determined
as set forth below (the "Annual Capital Budget").  Manager and Colonial Downs
shall agree upon an Annual Capital Budget for 1999 on or before February 28,
1999. In the event that Manager and Colonial Downs are unable to agree on such
Annual Capital Budget, the parties shall submit their dispute to the Honorable
John H. Shenefield for mediation.  Once the parties have agreed upon the Annual
Capital Budget for 1999, that budget shall be attached hereto as Schedule IV.
Hereafter, Colonial Downs shall advise Manager in writing on or before November
15th of each year of the amount of capital expenditures to be made at the
Racetrack and/or OTB Facilities for the following year.  On or before December
15th of each year, Manager may recommend which capital improvements should be
made to the Racetrack and/or the OTB Facilities within the capital expenditures
budget provided by Colonial Downs. Colonial Downs shall be under no obligation
to make all or any of the capital improvements recommended by Manager unless
(1) Colonial Downs determines, in its sole and absolute discretion, that such
capital improvements are necessary or desirable; or (2) such improvements are
necessary for the health or safety of persons or animals.  In the event that
Colonial Downs and Manager are unable to agree on capital improvements to be
made for a given year within the Annual Capital Budget, Colonial Downs and
Manager shall jointly request that the Chair of the Commission determine
privately which capital improvements should be made that year to the Racetrack
and/or OTB Facilities.

     6.2.5.   Other Information. Colonial Downs may release information
concerning the operations of the Racetrack and the OTB Facilities to the
Commission and to any financial institution or other person that has loaned
or may loan funds to Owner. Colonial Downs may also release such information
to any other person for reasons reasonably related to the business and
operations of the Racetrack and the OTB Facilities, as determined by Colonial
Downs, in its sole discretion, or as required by law or regulation of the
Commission or by any other regulatory body.  The Maryland Jockey Club may
release such information concerning the Racetrack, the OTB Facilities, and the
race meets to the Maryland Racing Commission, the Maryland horsemen's and
breeders' associations and its owners and lenders, and, with Owner's prior
consent which shall not be unreasonably withheld, delayed or conditioned,
to any other person for any reasonable purpose.

     6.3.   Right of Inspection and Review.  During the Term of this Agreement
and in the course of performing its obligations hereunder, Manager, its
representatives, accountants, attorneys and agents shall have the absolute
right to enter upon any part of the Racetrack and the OTB Facilities at all
reasonable times for any reasonable purpose and with reasonable notice,
including but not limited to examining or inspecting Colonial Downs' books
and records relating to the Racetrack or the OTB Facilities.

     6.4.   Accounts.  All monies collected or received by Manager with respect
to the Racetrack and OTB Facilities shall promptly be deposited into one or more
separate bank accounts specified by Owner in the name of Owner, which accounts
shall be used solely for funds of the Racetrack and the OTB Facilities, and
such monies shall not be commingled with Manager's other funds.  Owner shall
be responsible for issuing checks drawn on its accounts in response, timely and
reasonably promptly, to purchase orders or invoices submitted by Manager
consistent with the Annual Operating Budget and/or Annual Capital Budget.

                                   SECTION 7
                  GENERAL COVENANTS OF COLONIAL DOWNS AND MANAGER

     7.1   Insurance.  Owner shall at all times maintain in full force and
effect, at its sole cost and expense, all insurance customarily maintained by
first-class horse racetracks, including but not limited to liability, property,
automobile and other vehicle, crime, and workers' compensation insurance, with
limits, coverages, deductibles, policies and carriers reasonably acceptable to
Owner and Manager. Owner shall provide Manager annually with certificates of
insurance and copies of all such insurance policies evidencing the required
coverages and providing for Manager to be sent all notices of cancellation.
The following provisions shall be applicable to such insurance:

     7.1.1.   Liability Insurance.  Manager shall be an additional named
insured on all liability insurance carried by or on behalf of Owner and such
insurance shall contain cross-liability and severability of interests
provisions.  Such policy or policies shall include a waiver of the insurer's
rights, if any, of subrogation against Manager.

     7.1.2.   Property Insurance.  Manager shall be an additional named insured
on all property insurance carried in relation to physical loss of or damage to
property of Owner, or of Manager, as Manager's interests may appear, including
but not limited to fire and extended coverage insurance, all-risk insurance and
loss of use insurance. Such insurance shall include the property of Manager, if
any, used in connection with performance of its duties hereunder (provided that
Manager gives timely notice to the carrier of its acquisition of such property
and the full value thereof) and shall include a waiver of the insurer's right
of subrogation against any named insured.

     7.2.   Exculpation.

     7.2.1.   Manager shall perform its duties under this Agreement with
ordinary prudence and in a manner consistent with normal business practices
in the horse racetrack business.  Manager shall have no liability whatsoever
to Owner, Operator or Holdings, or any limited partner, stockholder or other
owner of any such entity, for any loss caused by any act of Manager or by the
failure of Manager to do any act, notwithstanding the fact that the loss arises
out of the negligence or a mistake in judgment of Manager, provided that
Manager, acting in good faith, reasonably believed that the action or lack of
action giving rise to the loss was in the best interests of Owner, Operator or
Holdings, as the case may be. Such exculpation from liability shall not,
however, apply to any loss which arises out of or involves the gross
negligence, willful misconduct or bad faith of Manager, or results from willful
violation by Manager of a material provision of this Agreement. As used in
Sections 7.1, 7.2 and 7.3 herein, "Manager" shall include that entity and its
affiliates, including but not limited to Laurel Racing Association Limited
Partnership and The Maryland Jockey Club of Baltimore City, Inc., and its and
their respective stockholders, partners, officers, directors and employees.

     7.2.2.   Notwithstanding any other provision of this Agreement, Colonial
Downs shall be solely responsible for, and Manager shall have no responsibility
for, Colonial Downs entering into any agreement not recommended by or opposed
by Manager, and Manager shall not be considered to be in breach of this
Agreement or otherwise prejudiced by failing to provide or perform any
management or consulting service which Colonial Downs has not asked Manager
to provide or perform or as to which Colonial Downs has disregarded Manager's
advice.

     7.3   Indemnity of Manager.

     7.3.1.   Owner shall indemnify and save Manager completely harmless in
respect of, and at Manager's request shall defend Manager and its stockholders,
partners, directors, officers, agents and employees, against any action, cause
of action, suit, debt, liability, cost, expense, penalty, claim or demand
whatsoever, including reasonable fees and expenses of counsel, brought by any
person at law or in equity, arising in connection with the performance or
failure of performance by Manager of any and all of its duties or obligations
under this Agreement. The foregoing shall not be applicable if it is proven
that Manager's gross negligence, willful misconduct, bad faith, or willful
violation of a material provision of this Agreement resulted in the liability
unless Manager's conduct was covered by Section 7.2.2 above.

     7.3.2.   Colonial Downs shall indemnify and hold harmless Manager and
its affiliates from and against any liability to any person under the
securities laws of the United States and any state for any act or omission
performed within the scope of Manager's obligations under this Agreement,
absent Manager's gross negligence, fraud or willful misconduct.  Such indemnity
and hold harmless shall be made to the fullest extent allowed by applicable law
and without any requirement for contribution by Manager or any of its
affiliates and shall include but not be limited to reasonable attorney's fees
and expenses incurred by Manager and/or its affiliates.

     7.3.3.   This indemnity shall continue notwithstanding the termination
of this Agreement with respect to any act or occurrence preceding such
termination. In no event shall this indemnity apply to any action, cause of
action, suit, debt, liability, cost, expense, penalty, claim or demand which is
insured for the full amount of such claim or which is caused by (1) the gross
negligence, willful misconduct or bad faith of Manager or (2) any action taken
by Manager in willful violation of a material provision of this Agreement.

     7.3.4.   No person who shall be engaged as an independent contractor by
Manager shall be considered an employee or agent for the purposes of Section
7.3.

     7.4   Indemnity of Colonial Downs.

     7.4.1.   Manager shall indemnify and save Colonial Downs completely
harmless in respect of, and at Colonial Downs' request shall defend Colonial
Downs and its respective general partner, limited partners, stockholders,
directors, agents and employees against any action, cause of action, suit,
debt, liability, cost, expense, penalty, claim or demand whatsoever, including
reasonable fees and expenses of counsel, brought by any person at law or in
equity, arising as a result of any action or decision by Manager taken or made
or purportedly taken or made in violation of this Agreement, and if and only
to the extent proven to have been caused by the gross negligence, willful
misconduct or bad faith of Manager or willful violation by Manager of a
material provision of this Agreement. The foregoing is subject to Section
7.4.2 below and Section 7.2.2 above.

     7.4.2.   This indemnity shall continue notwithstanding the termination
of this Agreement with respect to any act or occurrence preceding such
termination. In no event shall the indemnity provided under section 7.4.1.
apply to any action, cause of action, suit, debt, liability, cost, expense,
penalty, claim or demand which is insured for the full amount of such claim or
which is caused by (1) the gross negligence, willful misconduct or bad faith
of Colonial Downs or (2) any action taken by Colonial Downs in willful
violation of a material provision of this Agreement.

     7.5.   No Other Agreements.  This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and, subject to Section 9.14 below, supersedes all prior oral and written
discussions and understandings.  Acceptance of, or acquiescence in, a course
of performance rendered under this Agreement shall not be relevant or
admissible to determine the meaning of this Agreement even though the accepting
or acquiescing party has knowledge of the nature of the performance and an
opportunity to make objection. No representations, understandings or agreements
have been made or relied upon in making of this Agreement other than those
specifically set forth herein.

     7.6.   Independent Activities.  Notwithstanding the existence of
this Agreement, Colonial Downs and Manager, and each of their respective
affiliates (including but not limited to Raceway Park, Laurel Park and Pimlico
Race Course and their respective stockholders, partners, directors, officers
and employees) may engage in whatever activities each such party may choose
without having or incurring any obligation to offer any interest in any such
activities to the other party unless they relate to racing or off-track
wagering in Virginia.  Other than the operator's license it currently holds
to operate the thoroughbred meets at the Racetrack or any license for which it
may apply pursuant to Section 1.3.2 above, Manager, subject to the provisions
of Sections 5.4.1 and 5.4.2 above, shall not apply for or otherwise obtain a
license(s) to own or operate a pari-mutuel horse racing facility or pari-mutuel
horse racing off-track wagering facility in the Commonwealth of Virginia as
long as this Agreement is in effect.  This Agreement shall be applicable to
all license(s) to own or operate a pari-mutuel horse racing facility or pari-
mutuel horse racing off-track wagering facility in Virginia sought by Colonial
Downs, its subsidiaries or its affiliates controlling, controlled by or under
common control with Colonial Downs as long as this Agreement is in effect.
Colonial Downs shall not apply for or otherwise obtain a license(s) to own
or operate a pari-mutuel horse racing facility or pari-mutuel horse racing
off-track wagering facility in the State of Maryland as long as this Agreement
is in effect.  Except as set forth above, neither this Agreement nor any
activity undertaken pursuant hereto shall prevent Colonial Downs and Manager,
or their respective affiliates, from engaging in such activities, or require
participation in such activities by the other party.  As a material part of
the consideration hereof, each party hereto hereby waives, relinquishes and
enounces any such right of or claim to participation in any such activities.

                                  SECTION 8
                                 TERMINATION

     8.1.   Termination by Owner.  Notwithstanding any other provision of
this Agreement, Owner shall have the right but not the obligation to terminate
this Agreement on the occurrence of any of the following events:

     8.1.1.   The filing against Manager of a petition in bankruptcy or other
similar proceeding under law for relief of debtors, or the involuntary
appointment of  a receiver, custodian, liquidator or trustee in bankruptcy
of the property of Manager, and such petition or appointment is not vacated
or discharged within one hundred twenty (120) calendar days after the filing
or making thereof.

     8.1.2.   Manager, without the knowledge of Owner, violates any material
provision of any material federal, state or local law or regulation relating to
the development,  construction or operation of the Racetrack and/or the OTB
Facilities and fails to cure (or diligently pursue the cure of) the violation
within thirty (30) days following receipt of notice from the governmental
agency of such violation.

     8.1.3.   The licenses of Owner and/or Operator from the Commission to own
and operate the Racetrack are permanently revoked, permanently withdrawn or
otherwise no longer available to Owner or Operator for any reason.

     8.1.4.   The license or other required approval of Manager or any of its
affiliates from the Commission to manage the meets and/or the OTB Facilities,
as provided in this Agreement, is permanently revoked, withdrawn or otherwise
no longer permanently available for any reason and such revocation, withdrawal
or other unavailability is upheld on appeal, or any applicable appeal time
has expired without an appeal having been filed by Manager.

     8.1.5.   Either the Commission or the Maryland Racing Commission refuses
to authorize Colonial Downs and/or the Maryland Jockey Club to participate in
the Virginia-Maryland thoroughbred racing circuit and/or requires Colonial
Downs and/or the Maryland Jockey Club to conduct a thoroughbred meet on dates
that substantially overlap with the thoroughbred meets of the other.
Notwithstanding the foregoing, the parties recognize that there may be periods
when either or both aforesaid racing commissions require Colonial Downs and/or
the Maryland Jockey Club to conduct overlapping thoroughbred meets on a
temporary basis which shall not constitute a basis for termination, it being
the parties' intent that termination under this section be allowed only in the
event that the ability of the parties to operate the Virginia-Maryland
thoroughbred racing circuit is frustrated for other than a temporary period.

     8.2.   Termination by Manager. Notwithstanding any other provision of
this Agreement, Manager shall have the right but not the obligation to
terminate this Agreement on the occurrence of any of the following events:

     8.2.1.   The filing against Owner, Operator, and/or Holdings of a petition
in bankruptcy or other similar proceeding under law for relief of debtors, or
the involuntary appointment of a receiver, custodian, liquidator or trustee in
bankruptcy of the property of Owner, Operator, and/or Holdings, and such
petition or appointment is not vacated or discharged within one hundred twenty
(120) calendar days after the filing or making thereof.

     8.2.2.   Colonial Downs, without the knowledge of Manager, violates any
material provision of any material federal, state or local law or regulation
relating to the development, construction or operation of the Racetrack and/or
any of the OTB Facilities and fails to cure (or diligently pursue the cure of)
the violation within thirty (30) days following receipt of notice from the
governmental agency of such violation.

     8.2.3.The Commission revokes, withdraws or suspends either of the
Licenses and such action is upheld on final appeal or the time in which to file
an appeal has expired without an appeal having been filed.

     8.3.   Effect of Termination.  Upon termination of this Agreement,
Colonial Downs shall:

     8.3.1.   Assume any contracts that may have been entered into by Manager
in its own name relating to the development or operation of the Racetrack or
the OTB Facilities if such contracts have been entered into in the ordinary
and customary course of business and in accordance with the provisions of this
Agreement and, to the extent required under this Agreement, indemnify Manager
against any liability by reason of anything done or required to be done under
any such contract by Manager after the effective date of such termination.

     8.3.2.   Pay for and indemnify Manager against the cost of all services,
materials and supplies, if any, that may have been ordered by Manager in the
ordinary and normal course of business and either (1) with the knowledge and
consent of Colonial Downs or (2) in accordance with a budget approved or
established by Colonial Downs.  Upon such termination, Manager shall execute
and deliver to Colonial Downs such documents of transfer and assignment as may
be required to vest in owner all of Manager's rights under any and all
contracts required to be assumed by Colonial Downs under this Section 8.3.

     8.3.3.   Pay Manager any unpaid portion of the Management Fee and
Performance Fee.

                                  SECTION 9
                           MISCELLANEOUS PROVISIONS

     9.1.   Notices. Any notices by either party to the other shall be in
writing and shall be delivered personally or deposited in the U. S. mail by
certified mail or sent via Federal Express or other overnight courier, return
receipt requested, prepaid and addressed as follows and sent as well by
facsimile transmission to the telefax number as follows:

                  To Colonial Downs:  Colonial Downs L.P
                                      P. O. Box 173
                                      New Kent, Virginia 23124
                                      Facsimile: 804-966-2086
                                      Telephone: 804-966-7223

                  With a copy to:     James L. Weinberg, Esq.
                                      Hirschler, Fleischer, Weinberg,
                                      Cox & Allen
                                      The Federal Reserve Bank Building
                                      701 East Byrd Street
                                      Richmond, Virginia 23219
                                      Facsimile: 804-644-0957
                                      Telephone: 804-771-9527

                                      To Manager:  The Maryland Jockey Club
                                      ATTN: Joseph A. De Francis
                                      Route 198 and Racetrack Road
                                      P. O. Box 130
                                      Laurel, MD  20725
                                      Facsimile: 410-792-4877
                                      Telephone:  301-725-4003

                                      With copies to:  Martin Jacobs, Esq.
                                      The Maryland Jockey Club
                                      Route 198 and Racetrack Road
                                      P. O. Box 130
                                      Laurel, MD  20725
                                      Facsimile: 410-792-4877
                                      Telephone: 301-725-1555

                                      William G. Thomas, Esq.
                                      Hazel & Thomas, P.C.
                                      P. O. Box 820
                                      Alexandria, VA  22313
                                      Facsimile: 703-836-8099
                                      Telephone: 703-836-8400

Any party may at any time change the address for notices to it by delivering or
mailing, as aforesaid, a notice to the other party stating the change and
setting forth the changed address. The effective date of any notice shall be
the date it is personally delivered or three (3) days after it is deposited
in the U.S. Mail in accordance with the provisions of this Section.

     9.2.   No Partnership or Joint Venture.  Nothing contained in this
Agreement shall constitute or be construed to be or create a partnership or
joint venture between Colonial Downs and Manager and, except as specifically
set forth herein or otherwise agreed in writing, neither shall have the power
or authority to bind or obligate the other.

     9.3.   Modification and Changes. This Agreement may not be changed or
modified except by another agreement in writing signed by the parties hereto.

     9.4.   Headings. The Section numbers and headings contained herein are
for convenience of reference only and are not intended to define, limit or
describe the scope or intent of any provision of this Agreement.

     9.5.   Binding Agreement; Assignment.  This Agreement shall be binding
upon and inure to the benefit of each party hereto, and its respective
successors and assigns.  This Agreement may not be assigned by any party
without the prior written consent of the other parties hereto, which consent
shall not be unreasonably withheld, delayed or conditioned.

     9.6.   Governing Law. This Agreement shall be deemed to have been made and
shall be construed and interpreted in accordance with the laws of the
Commonwealth of Virginia.  Jurisdiction and venue over any dispute arising
hereunder shall be deemed to be exclusively in Richmond, Virginia.

     9.7.   Attorneys' Fees.  Except as otherwise provided herein, in the event
of any dispute arising out of or concerning the terms hereof, the prevailing
party in such dispute shall be entitled to recover its reasonable attorneys'
fees and other costs incurred in enforcing its rights hereunder.

     9.8.   Mediation; Arbitration.  In the event of any disputes or
differences arising out of this Agreement, which the parties have been unable
to resolve after reasonable efforts to do so, either party may refer the
dispute or difference to a mediator mutually acceptable to the parties.  In the
event such mediation is unsuccessful, or the parties are unable to agree on a
mediator, either party may refer the dispute or difference for final settlement
to arbitration in accordance with the following procedures:

     9.8.1.   By the Commission.  The party so desiring to refer the matter
shall request the Commission to arbitrate the dispute or difference by a panel
comprised of either one (1) or three (3) of its members, as its Chairman shall
designate, in accordance with such rules as the Chairman of the Commission
determines, including, but not limited to, the Commercial Arbitration Rules of
the American Arbitration Association (the "AAA") in effect on the date of this
Agreement.

     9.8.2.   By Another Arbitrator.  If the Commission declines to arbitrate
the dispute or difference, the arbitration shall be conducted by a single
arbitrator designated by the Chairman of the Commission; and if the Chairman
declines to designate an arbitrator, the arbitration shall be conducted by
a single arbitrator selected by Colonial Downs and Manager in accordance
with the aforesaid rules of the AAA.

    9.8.3.   General.  The arbitration shall take place in Richmond, Virginia,
unless the parties otherwise mutually agree, and shall be governed by the
substantive contract law of the Commonwealth of Virginia and the arbitration
rules as determined pursuant to Section 9.8.1.  The arbitration award shall be
final, binding and conclusive on the parties, and not subject to any appeal.
No party nor the arbitrator may disclose the existence or results of any
arbitration hereunder except as may be necessary in litigation to enforce the
award or as may be required by the Commission.  Judgment upon the award
rendered may be entered in any court having jurisdiction, or application may be
made to such court for judicial recognition of the award or any order of
enforcement thereof, as the case may be.  This Section 9.8 shall not be
construed to limit the right of either party to apply to a court of competent
jurisdiction for other equitable relief to preserve the status quo or prevent
irreparable harm. Unless the arbitrator otherwise so determines and provides in
the arbitration award, (1) costs of the arbitration incurred jointly by the
parties (including hearing reporting fees, rental of a hearing room and all AAA
fees, costs and services charges) and of the arbitrator shall be shared equally
by the parties, except that hearing postponement or cancellation fees charges
by AAA or the arbitrator shall be borne exclusively by the canceling or
postponing party; and (2) each party shall bear its own costs and expenses
incurred by that party in connection with arbitration, including without
limitation each party's own travel expenses, hearing witness expenses and
attorney's fees.

     9.9.   Force Majeure.  If at any time during the term hereof it becomes
necessary in Colonial Downs' reasonable opinion to cease operation of the
Racetrack or any portion thereof in order to protect the Racetrack and/or the
health, safety, and welfare of the guests, invitees, and/or employees of the
Racetrack for a period of time or permanently for reasons of force majeure such
as, but not limited to, acts of war, insurrection, civil strife and commotion,
serious labor unrest, inclement weather, or acts of God, then in such event
Colonial Downs may close and cease operation of all or part of the Racetrack,
reopening and commencing operation when Colonial Downs reasonably deems that
such may be done without jeopardy to the Racetrack, its guests, invitees, and
employees.  Either Colonial Downs or Manager may terminate this Agreement upon
thirty (30) days' written notice if the conditions that caused the interruption
of business at the Racetrack have not ceased or improved sufficiently after the
end of one hundred eighty (180) days to permit the operation of the Racetrack
in accordance with the provisions of this Agreement. Provided, however, that
this Agreement shall continue in full force and effect as to OTB facilities,
if any, which continue to be licensed to Colonial Downs and continue to be
operated.  If within the next following period of one hundred eighty (180)
days Owner reopens the Racetrack, Manager may by written notice to Owner
reactivate this Agreement, whereupon it shall be in full force and effect as
if not terminated.

     9.10.   Limitation of Liability.  Anything contained herein to the
contrary notwithstanding, neither Colonial Downs nor any of its respective
general partner, limited partners, stockholders, directors, officers, employees
or agents shall be liable to Manager or to any of its affiliates or their
respective general partner, limited partners, stockholders, directors,
officers, employees and agents for (1) the failure of Colonial Downs to obtain
or retain licenses for the Racetrack and for all or a portion of the permitted
OTB Facilities or (2) the failure, for any reason, of Colonial Downs to raise
the capital necessary to construct, or to construct, additional OTB facilities.

     9.11.   Action of Operator and Holdings.  Wherever in this Agreement and
obligation is imposed on Owner, and it is within the power of Operator or
Holdings to cause such obligation to be performed, then Holdings and/or
Operator shall take such action.

     9.12.   Separate Activities of Colonial Downs.  All revenues generated
and expenses incurred, directly or indirectly, by Colonial Downs (i) from the
ownership, operation or use of the Racetrack, the current facilities at the
Racetrack, or the current or future OTB Facilities, whether or not related
to horse racing at the Racetrack, or (ii) in any other manner from the use
by Colonial Downs of the Licenses or the OTB Licenses, shall be accounted for
as revenues and expenses of Colonial Downs and shall be included in the
calculation of Operating EBITDA pursuant to Section 4.3 above.  All revenues
generated and expenses incurred, directly or indirectly, by Colonial Downs
from the ownership, operation, or use of facilities (i) located at the
Racetrack or OTB Facilities in the future and requiring capital expenditures
by Colonial Downs but not related to or adversely affecting the operations of
the Racetrack or OTB Facilities or (ii) located somewhere other than at the
Racetrack or OTB Facilities shall not be accounted for as revenues and expenses
of Colonial Downs for purposes of calculating Operating EBITDA pursuant to
Section 4.3 above.

     9.13.   Restructuring of Owner.  If there is any restructuring of Colonial
Downs after the date of this Agreement, the effect of which could be to divert
revenues generated by the Racetrack or the OTB Facilities, or the Licenses or
the OTB Licenses, which revenue is includable in the calculation of Operating
EBITDA as provided in Section 9.12 above, to Operator, Holdings or any other
person or entity, Operator, Holdings and such other person or entity shall be
jointly and severally responsible with Owner for the obligations of Owner to
Manager under this Agreement and such other person or entity shall become a
party to this Agreement to reflect the aforesaid responsibility.

     9.14.   Bankruptcy of Colonial Downs.  Colonial Downs has indicated both
publicly and to Manager on numerous occasions during 1998 that it is
considering filing for bankruptcy protection under Chapter 11 of the U.S.
Bankruptcy Code.  Nonetheless, Colonial Downs also has stated to and assured
Manager that it intends in good faith to perform its duties and
responsibilities fully under this Agreement, and that it does not intend to
reject this Agreement in any such bankruptcy proceeding.  As more fully set
out in an Addendum to this Agreement, dated the same date as this Agreement,
however, in the event that Colonial Downs files for protection under the U. S.
Bankruptcy Code on or before January 1, 2001, at the election of Manager in its
sole and absolute discretion, this amended and restated Management Agreement
shall be of no further force or effect and the 1996 Agreement shall control as
if not amended or restated.  Until such time, this Agreement shall control as
to all matters between the parties that are subject to this Agreement or the
1996 Agreement.

     9.15.   Interpretation.  Colonial Downs and Manager acknowledge and agree
that this Agreement has been jointly prepared by the parties hereto and, in the
event of any dispute among or between the parties, this Agreement or any
provision hereof shall not be construed against any of the parties as the party
drafting this Agreement or that provision.

     9.16.   Submission to Commission.  This Agreement shall not be effective
until (i) a fully executed copy of this Agreement has been submitted to the
Virginia Racing Commission and (ii) forty-five (45) days have passed since
the date of that submission without the Virginia Racing Commission disapproving
or formally voicing, in the form of a resolution, any objection to this
Agreement.




                         [Balance of page intentionally blank.]


     IN WITNESS WHEREOF, each of the parties through its respective duly
authorized representatives has executed and delivered this Agreement as of
January 15, 1999.

                          COLONIAL DOWNS, L.P.

                          By:  Stansley Racing Corp., its general partner


                          By: /s/  Jeffrey P. Jacobs
                              ----------------------
                              Jeffrey P. Jacobs, CEO

                          STANSLEY RACING CORP.


                          By: /s/  Jeffrey P. Jacobs
                              ----------------------
                              Jeffrey P. Jacobs, CEO
CEO

                          COLONIAL DOWNS HOLDINGS, INC.


                          By: /s/  Jeffrey P. Jacobs
                              ----------------------
                              Jeffrey P. Jacobs, CEO


                          MARYLAND-VIRGINIA RACING CIRCUIT, INC.


                          By: /s/  Joseph A. DeFrancis
                              ------------------------
                              Joseph A. De Francis, President




                                ADDENDUM TO
                  AMENDED AND RESTATED MANAGEMENT AGREEMENT


     WHEREAS, the parties to this Addendum to Amended and
Restated Management Agreement, Colonial Downs, L.P., Stansley Racing
Corp., and Colonial Downs Holdings, Inc. (collectively, "Colonial Downs")
and Maryland-Virginia Racing Circuit, Inc. ("Manager") were the parties
to, or are successors to the parties to, a Management and Consulting
Agreement dated April 22, 1996 (the "1996 Agreement"); and

     WHEREAS, the parties to this Addendum are parties to an
Amended and Restated Management Agreement, dated January 15,
1999, into which this Addendum is incorporated; and

     WHEREAS, the parties to this Addendum intend that the defined
terms in the Amended and Restated Management Agreement be
incorporated in and apply in full to this Addendum; and

     WHEREAS, by a letter dated January 8, 1998, Colonial Downs
submitted a written Demand for Arbitration to the Virginia Racing
Commission (the "Commission") for arbitration of certain differences
between the parties hereto regarding the 1996 Agreement; and

     WHEREAS, the foregoing letter stated, in part, that "on multiple
occasions over the last year and a half . . .," efforts were made to
negotiate the differences between the parties regarding the 1996
Agreement; and

     WHEREAS, the Demand for Arbitration itself stated that the issues
in dispute included, without limitation, impossibility of performance,
rescission, modification and/or reformation of the 1996 Agreement; and

     WHEREAS, Colonial Downs' request for relief in the foregoing
arbitration included, among other things, a reduction in the annual
management fee payable to Manager, a retroactive adjustment to that fee
to February 17, 1996, a resolution of an alleged dispute over the amount
owed to Manager by Colonial Downs, or alternatively rescission of the
agreement, a refund of sums paid by Colonial Downs to Manager, and a
mandate that the parties enter into a new management agreement, plus
attorneys' fees and "any other relief" that was deemed appropriate
based upon the evidence presented; and

     WHEREAS, Manager filed a response to the arbitration claim
denying Colonial Downs' entitlement to any relief and counterclaimed for
$1,480,568 in past due management fees plus interest, $174,947 in
reimbursable out-of-pocket expenses, and certain other damages, which
counterclaim was contested by Colonial Downs; and

     WHEREAS, with the consent of Colonial Downs and Manager, the
Honorable John H. Shenefield, a Washington, D.C. attorney who was the
former Chairman of the Commission, was appointed as the arbitrator of
the arbitration dispute; and

     WHEREAS, the parties thereafter again entered into negotiations
and discussions and voluntarily consented to mediation in an effort to
resolve their differences regarding the 1996 Agreement; and

     WHEREAS, Colonial Downs through its authorized
representatives has stated on numerous occasions during the past year
that one or more of the entities comprising it was considering seeking,
and later that it would seek, bankruptcy protection under Chapter 11 of
the United States Bankruptcy Code; and

     WHEREAS, Manager states that it never would agree to negotiate
an Amended and Restated Management Agreement only to have that
Amended and Restated Management Agreement rejected under 11
U.S.C.  365 in a bankruptcy proceeding; and

     WHEREAS, Colonial Downs has represented that it does not now
intend to file for bankruptcy under circumstances as they exist as of the
date hereof; and

     WHEREAS, Colonial Downs has represented that it expects, after
the execution of the Amended and Restated Management Agreement, to
generate revenues sufficient to pay its obligations under that Amended
and Restated Management Agreement; and

     WHEREAS, Manager states that it would not make the significant
concessions provided for in the Amended and Restated Management
Agreement only to thereafter have one or more of the entities comprising
Colonial Downs breach and/or reject the Amended and Restated
Management Agreement in bankruptcy; and

     WHEREAS, the parties hereto wish to suspend the 1996
Agreement until January 1, 2001, but not now terminate the 1996
Agreement; and

     WHEREAS, in order to induce Manager to enter into the
suspension of the 1996 Agreement and be bound by the Amended and
Restated Management Agreement, the parties hereto wish to ensure thatby
entering into the Amended and Restated Management Agreement,
Manager will not lose or reduce its rights under the 1996 Agreement if
the Amended and Restated Management Agreement is rejected in
bankruptcy; and

     WHEREAS, the parties agree that the filing of bankruptcy and the
rejection, breach or avoidance of the Amended and Restated
Management Agreement should and will, at the election of Manager in its
sole and absolute discretion, vitiate the Amended and Restated
Management Agreement as provided below; and

     WHEREAS, the parties want to provide for the suspension and
reinstatement of the 1996 Agreement and the potential voiding of the
Amended and Restated Management Agreement as provided below
should bankruptcy be filed by one or more of the entities comprising
Colonial Downs and rejection of the Amended and Restated Management
Agreement result; NOW THEREFORE, the parties hereto enter into this
Addendum to Amended and Restated Management Agreement as
follows:

     1.   The foregoing recitals are hereby incorporated in the body
of this Addendum.

     2.   This Addendum to Amended and Restated Management
Agreement is contingent upon and shall be valid if and only if:

     A.   One or more of the entities comprising Colonial
Downs does not file for bankruptcy relief prior to January 1, 2001; or

     B.   If a bankruptcy is filed, such bankruptcy results in
one or more of the entities comprising Colonial Downs successfully
moving to accept the Amended and Restated Management Agreement
under 11 U.S.C.  365.

     3.   If one or more of the entities comprising Colonial Downs
does not file for bankruptcy prior to January 1, 2001, the foregoing
contingency shall be removed and the suspension of the 1996
Agreement shall terminate and the 1996 Agreement shall be of no further
force or effect.

     4.   If one or more of the entities comprising Colonial Downs
does file for bankruptcy prior to January 1, 2001, and (i) the filing
entity(ies) of Colonial Downs do not move within 60 days of such filing to
accept, or following such motion do not diligently pursue acceptance
of, the Amended and Restated Management Agreement under 11 U.S.C.
365; or (ii) such motion to accept is not approved by the United States
Bankruptcy Court; or (iii) the filing entity(ies) of Colonial Downs attempt to
promote or confirm a plan that purports to reject or modify the Amended
and Restated Agreement, then in any of the above events, the Amended
and Restated Agreement shall, at the election of Manager in its sole and
absolute discretion after the occurrence of the events specified in
paragraphs 4(i), (ii) or (iii) above, be null and void ab initio and the 1996
Agreement between the parties shall cease to be suspended and shall
become the controlling agreement between the parties.

     5.   During the time frame set forth in paragraphs 2, 3 and 4
above and under the conditions set forth therein, the 1996 Agreement
shall be deemed suspended until January 1, 2001, and the parties shall
be governed by, and shall perform their respective duties and
responsibilities as provided in, the Amended and Restated Management
Agreement.  Should the contingencies set forth in paragraphs 2, 3 and/or
4 above not occur or be met, and Manager in its sole and absolute
discretion so elects, then, in that event, all sums paid by Colonial Downs
to Manager during the term of the suspension of the 1996 Agreement
shall be applied to sums owed under the 1996 Agreement, said 1996
Agreement shall be considered to have been in full force and effect
continuously as if the Amended and Restated Management Agreement
was never made and entered into, and the Amended and Restated
Management Agreement shall be deemed null and void ab initio and of no
legal effect.  The 1996 Agreement shall cease to be suspended and shall
be deemed terminated and of no force or effect as of the date hereof (i)
if no Colonial Downs entity files for bankruptcy relief prior to January 1,
2001, or (ii) if one or more entities comprising Colonial Downs files for
bankruptcy prior to January 1, 2001, and the Amended and Restated
Management Agreement is successfully accepted and assumed
pursuant to 11 U.S.C.  365.

     IN WITNESS WHEREOF, each of the parties through its respective
duly authorized representatives has executed and delivered this
Addendum to Amended and Restated Management Agreement effective
as of January 15, 1999.


                                     COLONIAL DOWNS, L.P.

                                     By:  Stansley Racing Corp.,
                                          its general partner

                                     By:  /s/  Jeffrey P. Jacobs
                                          ----------------------
                                          Jeffrey P. Jacobs, CEO


                                     STANSLEY RACING CORP.


                                     By: /s/  Jeffrey P. Jacobs
                                         ----------------------
                                         Jeffrey P. Jacobs, CEO


                                     COLONIAL DOWNS HOLDINGS, INC.



                                     By: /s/  Jeffrey P. Jacobs
                                         ----------------------
                                         Jeffrey P. Jacobs, CEO


                                     MARYLAND-VIRGINIA RACING CIRCUIT, INC.



                                     By:  /s/  Joseph A. DeFrancis
                                          -------------------------
                                          Joseph A. DeFrancis, President