EXHIBIT 10.8



Thoroughbred Horsemens Agreement



between Colonial Downs, L.P.,

Stansley Racing Corp. and

The Virginia Horsemens Benevolent

and Protective Association, Inc.



December 23, 2002



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TABLE OF CONTENTS



|   |  |                                                                                     |  |                                                                                                         |  |     
|-- |  | ----------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------- |  | ----
|   |  |                                                                                     |  |                                                                                                         |  | Page
|1. |  | Effective Date and Term of Agreement                                                |  | 2                                                                                                      
|   |  |                                                                                    
|2. |  | Exclusive Representation                                                            |  | 2                                                                                                      
|   |  |                                                                                    
|3. |  | Accounts                                                                            |  | 3                                                                                                      
|   |  |                                                                                     | 
|   |  | A.                                                                                  |  | Thoroughbred Partners Account                                                                          |  | 3   
|   |  | B.                                                                                  |  | Horsemens Account                                                                                      |  | 4   
|   |  | C.                                                                                  |  | Availability of Information on Accounts                                                                 |  | 5   
|   |  | D.                                                                                  |  | Distribution of Interest and Other Earnings on Accounts                                                 |  | 5   
|   |  |                                                                                    
|4. |  | Administration of Accounts                                                          |  | 5                                                                                                      
|   |  |                                                                                     | 
|   |  | A.                                                                                  |  | Amounts To Be Deposited                                                                                 |  | 5   
|   |  | B.                                                                                  |  | Transfers from the Thoroughbred Partners Account to the Horsemens Account and Colonial Downs Account |  | 5   
|   |  | C.                                                                                  |  | Signal Sales                                                                                            |  | 6   
|   |  | D.                                                                                  |  | Account Wagering                                                                                        |  | 6   
|   |  | E.                                                                                  |  | Virginia Derby                                                                                          |  | 7   
|   |  | F.                                                                                  |  | Virginia Turf Festival Stakes Races                                                                     |  | 7   
|   |  | G.                                                                                  |  | National Thoroughbred Racing Association (NTRA) Dues                                                  |  | 8   
|   |  | H.                                                                                  |  | Stakes Race Purses                                                                                      |  | 8   
|   |  | I.                                                                                  |  | Administrative Fee                                                                                      |  | 8   
|   |  | J.                                                                                  |  | Other Legalized Wagering                                                                                |  | 9   
|   |  |                                                                                    
|5. |  | Purse Mechanics                                                                     |  | 9                                                                                                      
|   |  |                                                                                     | 
|   |  | A.                                                                                  |  | Purse Schedules and Condition Books                                                                     |  | 9   
|   |  | B.                                                                                  |  | Funding of Purses                                                                                       |  | 10  
|   |  | C.                                                                                  |  | Overpayment of Purses                                                                                   |  | 11  
|   |  | D.                                                                                  |  | Underpayment of Purses                                                                                  |  | 11  
|   |  | E.                                                                                  |  | Purse Notices                                                                                           |  | 12  
|   |  | F.                                                                                  |  | Collection of Nomination, Starter and Similar Fees                                                      |  | 12  
|   |  |                                                                                    
|6. |  | Number of Days of, and Dates and Average Daily Purses for, Live Thoroughbred Racing |  | 13                                                                                                     
|   |  |                                                                                    
|7. |  | Races and Awards for Virginia-Bred, Virginia-Owned and Virginia-Sired Horses        |  | 14                                                                                                     
|   |  |                                                                                    
|8. |  | Satellite Wagering Facility Expansion                                               |  | 14                                                                                                     
|   |  |                                                                                     | 
|   |  | A.                                                                                  |  | Licensing and Opening of New Richmond SWF and New Chesapeake SWF                                        |  | 15  
|   |  | B.                                                                                  |  | Distribution of Funds from the New Richmond SWF and the New Chesapeake SWF                              |  | 18  
|   |  | C.                                                                                  |  | SWF Referenda in Central-Southside Virginia Region                                                      |  | 18  



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|    |  |                                                  |  |                                                                                    |  |   
|--- |  | ------------------------------------------------ |  | ---------------------------------------------------------------------------------- |  | --
|    |  | D.                                               |  | Northern Virginia SWF                                                              |  | 21
|    |  | E.                                               |  | Efforts in Northern Virginia                                                       |  | 21
|    |  | F.                                               |  | Funding of Virginia Turf Festival                                                  |  | 22
|    |  | G.                                               |  | Incorporation of Terms in SWF Licenses                                             |  | 23
|    |  |                                                 
|9.  |  | Stalls and Track Facilities                      |  | 23                                                                                
|    |  |                                                  | 
|    |  | A.                                               |  | Availability of Stalls and Track Facilities Before, During and After Race Meetings |  | 23
|    |  | B.                                               |  | Vendors                                                                            |  | 24
|    |  | C.                                               |  | Stall Applications                                                                 |  | 24
|    |  | D.                                               |  | Racetrack Kitchen                                                                  |  | 26
|    |  | E.                                               |  | Temporary Building                                                                 |  | 26
|    |  |                                                 
|10. |  | Racing Committee                                 |  | 27                                                                                
|    |  |                                                 
|11. |  | Representations and Warranties                   |  | 28                                                                                
|    |  |                                                  | 
|    |  | A.                                               |  | VHBPA                                                                              |  | 28
|    |  | B.                                               |  | Colonial Downs                                                                     |  | 29
|    |  |                                                 
|12. |  | VHBPA Office                                     |  | 29                                                                                
|    |  |                                                 
|13. |  | Racing Officials                                 |  | 30                                                                                
|    |  |                                                 
|14. |  | Governmental Approval                            |  | 30                                                                                
|    |  |                                                 
|15. |  | Authorization for Out-of-State Simulcasting      |  | 30                                                                                
|    |  |                                                 
|16. |  | Copies of Documents; Database                    |  | 31                                                                                
|    |  |                                                 
|17. |  | Horsemens Backstretch Improvements and Programs |  | 31                                                                                
|    |  |                                                 
|18. |  | Right to Terminate                               |  | 33                                                                                
|    |  |                                                 
|19. |  | Indemnification                                  |  | 33                                                                                
|    |  |                                                 
|20. |  | Mediation; Arbitration                           |  | 34                                                                                
|    |  |                                                  | 
|    |  | A.                                               |  | Attempt to Resolve Disputes                                                        |  | 34
|    |  | B.                                               |  | Administration                                                                     |  | 34
|    |  | C.                                               |  | Notice to Arbitrate                                                                |  | 34
|    |  | D.                                               |  | Selection of Arbitrator(s)                                                         |  | 35
|    |  | E.                                               |  | Pre-Hearing Conference                                                             |  | 35
|    |  | F.                                               |  | Discovery                                                                          |  | 35
|    |  | G.                                               |  | Additional Conference                                                              |  | 37
|    |  | H.                                               |  | Arbitration Hearing                                                                |  | 37
|    |  | I.                                               |  | Arbitration Award                                                                  |  | 38
|    |  | J.                                               |  | Default                                                                            |  | 38
|    |  | K.                                               |  | Costs                                                                              |  | 38
|    |  |                                                 
|21. |  | Contribution Adjustments                         |  | 39                                                                                
|    |  |                                                  | 
|    |  | A.                                               |  | Changes in Applicable Law                                                          |  | 39



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|    |  |                                                         |  |                                                       |  |   
|--- |  | ------------------------------------------------------- |  | ----------------------------------------------------- |  | --
|    |  | B.                                                      |  | Changes in MVRC Management Fee                        |  | 40
|    |  | C.                                                      |  | Termination of Management Fee                         |  | 41
|    |  | D.                                                      |  | Duration                                              |  | 42
|    |  |                                                        
|22. |  | Consents, Approvals, Agreements or Assurances           |  | 42                                                   
|    |  |                                                        
|23. |  | Counterparts                                            |  | 42                                                   
|    |  |                                                        
|24. |  | Notices                                                 |  | 42                                                   
|    |  |                                                        
|25. |  | Waivers                                                 |  | 44                                                   
|    |  |                                                        
|26. |  | Applicable Law; Venue                                   |  | 44                                                   
|    |  |                                                        
|27. |  | Headings                                                |  | 44                                                   
|    |  |                                                        
|28. |  | Severability                                            |  | 45                                                   
|    |  |                                                        
|29. |  | Entire Agreement; Modification                          |  | 45                                                   
|    |  |                                                        
|30. |  | Conditions Precedent to Effectiveness of this Agreement |  | 45                                                   
|    |  |                                                         | 
|    |  | A.                                                      |  | Commission Approval                                   |  | 45
|    |  | B.                                                      |  | Amendment of Management and Consulting Agreement      |  | 46
|    |  | C.                                                      |  | Agreement with the Virginia Harness Horse Association |  | 47



|          |  |                                                                                    
|--------- |  | -----------------------------------------------------------------------------------
|Exhibit A |  | Form of Trust Agreement                                                            
|          | 
|Exhibit B |  | Annual Transfers of Funds from Thoroughbred Partners Account to Horsemens Account
|          | 
|Exhibit C |  | Anticipated Development Schedule                                                   
|          | 
|Exhibit D |  | Central-Southside Virginia Region                                                  





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THOROUGHBRED HORSEMENS AGREEMENT



THIS AGREEMENT is entered into this 23rdday of December 2002, effective as of January 1, 2003, by and among COLONIAL DOWNS, L.P., a Virginia limited partnership, STANSLEY RACING CORP., a
Virginia corporation (collectively, Colonial Downs), and the VIRGINIA HORSEMENS BENEVOLENT AND PROTECTIVE ASSOCIATION, INC., a Virginia not-for-profit corporation (the VHBPA).



WHEREAS, Colonial Downs owns and operates in New Kent County, Virginia, the
facility known as the Colonial Downs racetrack (the Racetrack) and four satellite wagering facilities located in Brunswick, Chesapeake, Hampton and Richmond, Virginia (the SWFs);



WHEREAS, the VHBPA is a trade organization composed of owners, trainers,
owner-trainers, and owner-breeders of thoroughbred race horses (its Members);



WHEREAS, the VHBPA provides benevolence programs and other services for its Members and their employees and other participants in thoroughbred horse racing who are and will be engaged in live racing at the Racetrack
(such racing a Race Meeting);



WHEREAS, the parties
hereto desire to continue and enhance a close and understanding relationship among owners and trainers of thoroughbred race horses (the Horsemen), including VHBPA Members, the VHBPA, Colonial Downs, and the public;



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WHEREAS, the parties desire to expand the network of SWFs throughout the Commonwealth of Virginia beyond
the four existing SWFs and the currently statutorily authorized six SWFs to support more days of live quality thoroughbred racing at the Racetrack, including the promotion and development of a Virginia Turf Festival; and



WHEREAS, the parties agree that a goal of achieving $200,000,000 of total
thoroughbred handle (which is approximately 50 days of live thoroughbred racing at current purse levels) within five years from the effective date of this Agreement is reasonable and desire to set forth certain actions intended to lead to the
achievement of this goal to which they are committed.



NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties desiring to be legally bound agree as follows:



1. Effective Date and Term of Agreement. Upon the satisfaction or waiver of all conditions set forth in Section 30 hereof, this Agreement shall
become effective as of 12:01 a.m. on January 1, 2003, and shall remain in effect through midnight on December 31, 2004 (the Term), unless otherwise terminated as provided herein, with the exception of Subsections 4.B. and E., Section 8,
and Section 21, which shall continue in effect as stated therein.



2. Exclusive Representation. During the Term of this Agreement, the VHBPA shall be the exclusive representative of its Members with respect to the matters set forth herein. The VHBPA hereby warrants and represents that it is the
Horsemens organization representing a majority of the Horsemen racing at the Racetrack, and Colonial Downs hereby recognizes it as such.



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3. Accounts.



A. Thoroughbred Partners Account. Colonial Downs and the VHBPA currently maintain an account at the Middleburg,
Virginia branch of BB&T Bank, N.A. (the Thoroughbred Partners Account or the Account). The parties agree that the financial institution(s) at which the Thoroughbred Partners Account is maintained may be
changed at any time by agreement of the parties. Colonial Downs and the VHBPA agree that all funds maintained in the Thoroughbred Partners Account are funds that are to be maintained in trust on behalf of and for the benefit of Horsemen, less
those funds to be distributed to Colonial Downs, as provided herein, and distributed according to regulations promulgated by the Virginia Racing Commission (the Commission) from time to time or by agreement between the parties to this
Agreement. In furtherance of such purpose, the parties hereto have executed the trust agreement attached as Exhibit A and have had the Thoroughbred Partners Account designated a trust account by the financial institution at which the
Thoroughbred Partners Account is maintained. The parties shall take similar steps to have the Thoroughbred Partners Account designated as a trust account by any other financial institution(s) to which the Account is moved. In addition,
either party may elect upon written notice to the other party to have a third-party trustee, acceptable to both parties, appointed as trustee of the Account. All interest and other earnings whatsoever on the amounts



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paid or deposited into the Thoroughbred Partners Account shall accrue solely to the benefit of the Thoroughbred
Partners Account. All funds paid or deposited into the Thoroughbred Partners Account (i) shall be invested in an interest-bearing account that provides market rates of return, or government or bank securities, and (ii) shall be used for
purses and for such other purposes as the parties may agree and the Commission may approve.



B. Horsemens Account. Monies payable to Horsemen as purses under this Agreement shall be deposited from the Thoroughbred Partners Account into a separate account (the Horsemens Account)
as needed to pay purses. The amounts to be transferred from the Thoroughbred Partners Account to the Horsemens Account are set forth herein. The transfer of funds from the Thoroughbred Partners Account to the Horsemens
Account shall be made, and the appropriate portions of purse money shall be made available to the earners thereof, within seventy-two (72) hours (dark days and Sundays excluded) after the result of the race in which such money was earned has been
declared official; provided, that in the event of any dispute as to the result of a race due to a drug test or other regulatory inquiry, the purse money shall not be made available until final resolution of the dispute by the stewards, the
Commission or the courts, as the case may be. No portion of such money payable as purses to any earner thereof (other than jockey and gate fees) shall be deducted by Colonial Downs unless requested in writing by the person to whom such monies are
payable or his duly authorized representative or as required by order of the stewards or a court.



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C. Availability of Information on Accounts. The Thoroughbred Partners Account and the
Horsemens Account and the investment or deposit schedules of Colonial Downs with respect to such accounts during any Race Meeting shall be subject to examination at any reasonable time by the President of the VHBPA or his or her designee.



D. Distribution of Interest and Other Earnings on
Accounts. Interest and any other earnings on the Thoroughbred Partners Account and Horsemens Account shall be distributed fifty percent (50%) thereof to each of (a) Colonial Downs, to help defray the costs of maintaining such
accounts, including, but not limited to, the Horsemens bookkeeper and any third-party trustee fees; and (b) the VHBPA for the benefit of Horsemen in its sole and absolute discretion.



4. Administration of Accounts.



A. Amounts To Be Deposited. Colonial Downs shall deposit into the
Thoroughbred Partners Account the amounts specified in paragraph 13 of § 59.1-369 of the Code of Virginia and shall deposit into the Horsemens Account the amounts specified for purses in Subsections D(1) and G(1) of § 59.1-392
of the Code of Virginia.



B. Transfers from the Thoroughbred
Partners Account to the Horsemens Account and Colonial Downs Account. With respect to all deposits to the Thoroughbred Partners Account derived from handle at all satellite wagering facilities, the parties agree that
transfer of funds from the Thoroughbred Partners Account to the Horsemens Account shall be made as set forth in Exhibit B hereto,



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subject to the terms and conditions set forth in Section 8 hereof. The balance of all deposits to the Thoroughbred
Partners Account derived from handle at all satellite wagering facilities after giving effect to the foregoing sentence shall be transferred to an account designated by Colonial Downs.



C. Signal Sales. For 2003 and 2004, Colonial Downs shall deposit into
an account designated and exclusively controlled by the VHBPA fifty percent (50%) of all revenues it receives from the sale of its live thoroughbred race signal to entities outside Virginia less twenty-one percent (21%) of such amount to cover
Colonial Downs direct operational costs associated with that sale. Revenues from signal sales shall be based on information provided by Colonial Downs to the VHBPA using accounting practices generally accepted in the horse racing industry.



D. Account Wagering. Neither Colonial Downs nor the
VHBPA shall enter into an agreement, without the prior written consent of the other, which consent shall not be unreasonably withheld, delayed or conditioned, regarding telephone account or other electronic media wagering systems pursuant to which
Colonial Downs or the VHBPA would receive any fee from Television Games Network or any other telephone or other electronic media account wagering entities for the right to accept wagers from account holders located in Virginia on thoroughbred races
simulcast from within or outside of Virginia. The foregoing sentence shall not apply to Colonial Downs existing and future agreements for the sale of its live thoroughbred racing signals to simulcast venues to which the VHBPAs consent is
governed by Section 15 of this Agreement.



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E. Virginia Derby. Colonial Downs and the VHBPA agree that the purse for the Virginia Derby for
years 2003, 2004, 2005, and 2006 shall be not less than $500,000, which shall consist of $350,000 contributed from the Thoroughbred Partners Account and $150,000 contributed by Colonial Downs or its affiliates. Colonial Downs also agrees,
subject to the approval of the Maryland-Virginia Racing Circuit, Inc. (MVRC), a subsidiary of the Maryland Jockey Club that manages Colonial Downs Racetrack and SWFs pursuant to an Amended and Restated Management and Consulting
Agreement, effective January 15, 1999, as amended (the Management and Consulting Agreement), between Colonial Downs and MVRC, that any funds generated by sponsorship(s) or promotional fees paid to Colonial Downs with respect to the
Virginia Derby, from whatever source derived, shall be paid in their entirety to the Thoroughbred Partners Account in addition to the amounts specified in Subsection A of this Section unless the parties to this Agreement and MVRC agree
otherwise. Colonial Downs shall endeavor in good faith to secure MVRCs consent to the foregoing.



F. Virginia Turf Festival Stakes Races. Colonial Downs desires to establish a premier event for turf course racing in order to distinguish itself
as the Mid-Atlantic center for thoroughbred turf racing. To achieve this goal, Colonial Downs desires to structure a series of stakes races in conjunction with the Virginia Derby commencing in 2004 in order to establish the Virginia Turf Festival.
The Virginia Turf Festival shall initially consist of high quality races with total overnight and stake purses of up to $2,000,000, which shall include but not be



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limited to the Virginia Derby ($500,000), the All Along Breeders Cup Stakes ($200,000), a stakes race for 3-year
old fillies to be known as the Virginia Oaks ($200,000), the Zeke Ferguson Memorial ($50,000) and such other stakes races as the parties agree.



G. National Thoroughbred Racing Association (NTRA) Dues. The VHBPA may, in its discretion, designate a portion of the funds deposited
into the Thoroughbred Partners Account to be paid as the VHBPAs dues payable to the NTRA. If so designated, those dues shall be paid from funds available in the Thoroughbred Partners Account.



H. Stakes Race Purses. The percentage of the purse monies available
under Subsections A through F of this Section, excluding promotional fees and sponsorships, to be paid to Horsemen participating in stakes races held at the Racetrack shall be limited to twenty percent (20%) of the total purses paid unless the VHBPA
in its sole and absolute discretion consents to a higher percentage. Such consent shall be granted by the VHBPA as necessary to assist Colonial Downs in its attempts to achieve graded status for the Virginia Derby and to develop the Virginia Turf
Festival pursuant to Section 6 hereof.



I. Administrative
Fee.The administrative fee paid to the VHBPA for services rendered to Horsemen as the majority Horsemens group shall be as provided in Subsection S of § 59.1-392 of the Code of Virginia. The parties shall agree on advance
payments of the administrative fee between live thoroughbred Race Meetings at the Racetrack in recognition of the VHBPAs year-round service to Horsemen, obligations with respect to Horsemens interests before the Commission, and the
VHBPAs efforts to assist Colonial Downs on legislative issues.



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J. Other Legalized Wagering. Except as otherwise specifically provided herein, in the event that
wagers other than on thoroughbred horse racing, including, but not limited to, the sale of lottery tickets and/or participation in other wagering enterprises at the Racetrack and/or the SWFs, are authorized by legislative action and a portion of the
proceeds is provided by that legislation for thoroughbred racing, the parties shall be bound by the allocations in such legislation. In the event the allocation of revenues is not addressed by such legislative action, the parties shall negotiate in
good faith a written agreement governing the allocation between them of the revenues to be received for thoroughbred racing from that legislative action.



5. Purse Mechanics.



A. Purse Schedules and Condition Books. Colonial Downs shall use its reasonable judgment to estimate attendance, pari-mutuel handle and breakage
for thoroughbred racing. Using that information and after consultation with a designated representative of the VHBPA, Colonial Downs shall establish a tentative average daily overnight purse schedule and a tentative stakes purse schedule for each
Race Meeting in accordance with the terms of this Agreement. Colonial Downs shall exercise reasonable care to avoid significant underpayments or overpayments of purses at all Race Meetings. Colonial Downs shall send to the VHBPA its first condition
book and proposed purse schedules for each Race Meeting before they are sent to the printer.



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B. Funding of Purses.



(1) Colonial Downs shall pre-fund to the Thoroughbred Partners Account up to $2,000,000 in 2003 to pay the purse
amounts for the days of live thoroughbred racing in 2003, as determined in Section 6 below, if there is a temporary shortfall in that Account. The amount of such pre-funding shall bear interest at the prime rate (as announced from time to time in
the Eastern edition of the Wall Street Journal) plus 0.25%. Pursuant to Section 6 hereof, for each year after 2003 the parties shall meet to seek agreement on the amount of funds Colonial Downs will pre-fund to the Thoroughbred Partners
Account to fund the anticipated temporary shortfall, if any, for race days agreed upon by the parties for that year. If there is such an agreement between the parties, Colonial Downs shall pre-fund to the Thoroughbred Partners Account, with
interest at the prime rate (as announced from time to time in the Eastern edition of the Wall Street Journal) plus 0.25%, such amounts as the parties agree are necessary to pay the purse amounts for the days of live thoroughbred racing in
each such year as determined pursuant to Section 6. In the absence of an agreement of the parties, after good faith efforts to reach an agreement, Colonial Downs shall not be obligated to provide any such funds. Any funds provided pursuant to this
Subsection, and interest accruing thereon prior to October 15 of any year, shall be repaid to Colonial Downs from funds accruing to the Thoroughbred Partners Account for the remainder of the



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calendar year in which such funds are provided on a first dollar in first dollar out basis and, if there is
any pre-funded sum that has not yet been repaid by the end of that calendar year, from funds accruing to the Thoroughbred Partners Account commencing on January 1 of the following calendar year on a first dollar in first dollar out
basis. Any interest on any funds provided pursuant to this Subsection by Colonial Downs that accrues on or after October 15 shall be borne by Colonial Downs.



(2) The VHBPA and Colonial Downs agree to use all reasonable efforts, including recommendations to the Virginia Racing Commission for race days and
purses and the use of portions of increased revenue resulting from the opening of additional SWFs in 2003 and thereafter, to reduce and eliminate temporary shortfalls as described above.



C. Overpayment of Purses. Colonial Downs and the VHBPA shall cooperate to the fullest extent possible to avoid
overpayment of purses to Horsemen as of the end of any year during the Term of this Agreement. If Colonial Downs makes an overpayment in excess of the amount computed under Section 4 hereof, the overpayment shall be repaid to Colonial Downs from
funds accruing to the Thoroughbred Partners Account commencing on January 1 of the following calendar year on a first dollar in first dollar out basis.



D. Underpayment of Purses. During any Race Meeting, Colonial Downs shall increase purses as reasonable and
appropriate based upon deposits to the Horsemens Account pursuant to Subsections D(1) and G(1) of § 59.1-392 of the



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Code of Virginia to minimize the possibility of underpayment of purses to Horsemen. Colonial Downs shall use its
reasonable best efforts to help assure that there are no underpayments of purses at any Race Meeting based upon deposits to the Horsemens Account pursuant to Subsections D(1) and G(1) of § 59.1-392 of the Code of Virginia.



E. Purse Notices. The pari-mutuel handle, pari-mutuel handle
commission, and purse distribution figures, as well as the percentage figures that represent the relationship between purses and the total of pari-mutuel income and breakage shall be posted on the bulletin board in the Racing Secretarys office
each day of a Race Meeting.



F. Collection of Nomination,
Starter and Similar Fees. Colonial Downs shall use its commercially reasonable efforts to collect promptly all nomination, starter and similar fees that are, or prior to 2002 were, incurred by participants. If such fees attributable to the 2002,
2003, and 2004 Race Meetings remain unpaid six months after the conclusion of the relevant Race Meeting, then Colonial Downs shall be entitled to assign the accounts receivable for such fees to the VHBPA for collection and to be reimbursed from the
Thoroughbred Partners Account for the aggregate amount of such fees; provided, however, that fees arising from nominations or entries which the parties agree, acting reasonably and in good faith, were accepted by the Racing Secretary for
promotional or marketing purposes shall not be included in the amounts for which reimbursement is sought and shall not be assigned to the VHBPA. Anything contained in this Subsection F to the



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contrary notwithstanding, Colonial Downs shall not be entitled to reimbursement for any fee for which Colonial Downs has
not met the following requirements: (i) Colonial Downs shall have invoiced the debtor at least three times between the close of the Race Meeting during which the debt was incurred and the end of the calendar year in which that Race Meeting was
conducted, and (ii) Colonial Downs shall have furnished written notice to the VHBPA of the debtors name and the amount owed by that debtor within ninety (90) days of the close of the Race Meeting at which the debt was incurred.



6. Number of Days of, and Dates and Average Daily Purses for, Live
Thoroughbred Racing. Not less than thirty (30) days prior to the deadline for submission to the Commission, Colonial Downs and the VHBPA shall make reasonable efforts to agree upon the number of days of, and the dates and average daily purses
for, live thoroughbred racing at the Racetrack for the following calendar year, and shall then present such agreed upon schedule and average daily purses to the Commission for approval. Such schedule shall take into account the average daily purses
for the Virginia Turf Festival and the amount that shall be applied to reduce the need for Colonial Downs funding pursuant to Subsection 5.B. hereof. If the parties are unable to agree upon a particular number of days of, dates for and/or
average daily purses for live thoroughbred racing for any such calendar year, Colonial Downs shall submit to the Commission its requested number of days of, dates for and/or average daily purses for live thoroughbred racing for that calendar year,
and the VHBPA shall also convey to the Commission



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its requested number of days of, dates for and/or average daily purses for live thoroughbred racing for that calendar
year. For 2003, Colonial Downs applied for thirty (30) days of thoroughbred racing with average daily purses of at least $200,000 per day, and the Commission orally approved such application at its meeting on November 20, 2002. Such 30 days of
thoroughbred racing shall be conducted from June 13 to July 22, 2003, at the Racetrack, unless the parties otherwise agree and the Commission approves those other agreed upon dates. The parties intend that if Colonial Downs is successful in opening
the New Richmond SWF and the New Chesapeake SWF (as defined in Section 8 hereof) in 2003, that at least 32 days of thoroughbred racing shall be conducted in 2004.



7. Races and Awards for Virginia-Bred, Virginia-Owned and Virginia-Sired Horses. Colonial Downs shall include in its
condition book opportunities to race for Virginia-bred, Virginia-owned and Virginia-sired thoroughbred horses, including those that typically race for lower purses as well as those that typically race for higher purses. To the extent reasonably
possible, in filling races, Colonial Downs shall give preference to Virginia-bred and Virginia-sired horses that are stabled at the Racetrack or elsewhere in Virginia. Awards from the Virginia Breeders Fund for Virginia-bred, Virginia-owned and
Virginia-sired horses shall continue to be distributed according to guidelines approved by the Commission.



8. Satellite Wagering Facility Expansion. Colonial Downs and the VHBPA agree that a greater dollar volume in annual handle is necessary to increase
the number of days of quality thoroughbred racing in Virginia, and that



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increased handle will most likely occur by opening additional SWFs beyond the four existing SWFs, and beyond the current
statutorily authorized six SWFs. The parties further agree that a goal of achieving $200,000,000 of total thoroughbred handle (which is approximately 50 days of live thoroughbred racing at current purse levels) within five years from the effective
date of this Agreement is reasonable and desire to set forth certain actions intended to lead to the achievement of this goal to which they are committed. Accordingly, the parties agree:



A. Licensing and Opening of New Richmond SWF and New Chesapeake SWF. Colonial Downs shall pursue simultaneously the
opening of a new SWF in Chesapeake and a new SWF in Richmond as set forth herein, either one of which may open before the other.



(1) Colonial Downs shall open in 2003 an additional SWF in the Richmond area (the New Richmond SWF), subject to Force Majeure Events (as
defined herein). Upon approval of this Agreement by the Commission, Colonial Downs shall seek to secure a site and address any concerns relating to compliance with all municipal laws and regulations (including zoning compliance). Upon securing a
site and satisfying all applicable municipal laws and regulations, Colonial Downs shall apply expeditiously to the Commission for owners and operators licenses for the New Richmond SWF. Upon issuance of the licenses, Colonial Downs shall
immediately commence build out or construction of the New Richmond SWF and prosecute completion using all commercially reasonable means. It is anticipated that the New Richmond SWF will open no later than four to six



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months after the Commission issues Colonial Downs licenses to own and operate the New Richmond SWF. An anticipated
development schedule is set forth in Exhibit C hereto.



(2)
Colonial Downs shall also relocate in 2003 the existing Chesapeake SWF to a location closer to Virginia Beach (the New Chesapeake SWF), subject to Force Majeure Events. Upon approval of this Agreement by the Commission, Colonial Downs
shall seek to secure a site and address any concerns relating to compliance with all municipal laws and regulations (including zoning compliance). Upon securing a site and satisfying all applicable municipal laws and regulations, Colonial Downs
shall apply expeditiously to the Commission for owners and operators licenses for the New Chesapeake SWF. Upon issuance of the licenses, Colonial Downs shall immediately commence build out or construction of the New Chesapeake SWF and
prosecute completion using all commercially reasonable means. It is anticipated that the New Chesapeake SWF will open no later than four to six months after the Commission issues Colonial Downs licenses to own and operate the New Chesapeake SWF. An
anticipated development schedule is set forth in Exhibit C hereto.



(3) Force Majeure Events shall mean: (a) acts of God (including flood, landslide, earthquake, hurricane, or tornado); (b) delay caused by acts or neglect of the Commission or the Commonwealth in issuing required permits or other
administrative approvals regarding Colonial Downs proposed SWF; (c) acts of war or terrorism; (d) strikes or labor disputes affecting the proposed SWF; (e) any



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legal action initiated by third parties that challenge any permit, approval, license, or similar governmental action that
is necessary for the renovation, construction, or operation of an SWF or any such action initiated by Colonial Downs to overturn a ruling denying any permit, approval, license, or similar necessary governmental action; (f) materially adverse weather
conditions at the site not reasonably anticipated; (g) fire or other unavoidable casualties at the site; (h) Colonial Downs inability to obtain materials or the unavailability of specified materials where there are no reasonable substitutes
available or no alternative methods or means available of obtaining such materials on a timely basis; (i) construction delays caused by subsurface or otherwise concealed physical conditions at the site differing materially from those indicated in
the plans and specifications, or from those originally encountered, which were not ascertainable by Colonial Downs prior to the grant of the licenses; and (j) delays caused solely by the failure of any governmental agency, department, or
organization to timely issue building permits or other construction-related permits that could not be secured prior to the date of the licenses or to timely perform inspections that cannot be completed prior to construction on matters necessary for
the proper execution and completion of the work necessary to build or complete the SWF, provided that Colonial Downs has taken all actions reasonably available to it, including the filing and aggressive prosecution of legal action, to compel such
agencies, departments, or organizations to issue such permits and to timely perform such inspections.



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(4) The deadlines specified in this Subsection A shall be suspended for each day that a delay specified
in this Subsection A occurs and continues, provided that Colonial Downs exercises all reasonable diligence during such time to overcome the delay.



B. Distribution of Funds from the New Richmond SWF and the New Chesapeake SWF. Upon fulfillment of Colonial Downs commitments in Subsection A
above, Colonial Downs and the VHBPA agree to distribute funds from the Thoroughbred Partners Account in such a fashion as set forth in Exhibit B hereto. The effective contribution rates for the New Richmond SWF and the New Chesapeake SWF set
forth in Exhibit B hereto shall continue for the term of Colonial Downs licenses for such facilities.



C. SWF Referenda in Central-Southside Virginia Region. Colonial Downs shall conduct not less than three statutory SWF referenda during the period
from January 1, 2003 to December 31, 2004, two referenda during the period from January 1, 2005 to December 31, 2006, and one referendum during the period from January 1, 2007 to December 31, 2007 in the Central-Southside Virginia region as set
forth in Exhibit D hereto (the Central-Southside Virginia Region); provided however, upon total thoroughbred handle (as calculated as provided in this Subsection C) equaling or exceeding $200,000,000, Colonial Downs obligations to
conduct additional referenda in the Central-Southside Virginia Region shall automatically terminate.



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(1) Upon fulfillment of Colonial Downs commitments in Subsection A of this Section, Colonial Downs
and the VHBPA agree to distribute funds from the Thoroughbred Partners Account in such a fashion so that Colonial Downs effective rate of contribution into the Horsemens Account shall be as set forth in Exhibit B hereto at each new
SWF for which Colonial Downs applies for licenses in the Central-Southside Virginia Region, not including any relocation or relicensing within that region of an SWF formerly licensed outside that region. The effective rate of contributions into the
Horsemens Account as set forth in Exhibit B hereto shall be available for any SWF in the Central-Southside Virginia Region for which a license application has been made within the ten-year period commencing on the effective date of this
Agreement or, if later, the date on which all conditions set forth in Section 30 are satisfied or waived.



(2) Each year after December 1, 2004, the parties shall determine if Colonial Downs has conducted the minimum number of referenda required by this
Agreement. In the event that Colonial Downs fails to conduct the minimum number of referenda in the time periods specified above, the contribution rate for thoroughbred handle to the payment of purses set forth in Exhibit B hereto shall be suspended
for all SWFs operating in the Central-Southside Virginia Region and for the New Richmond SWF and the New Chesapeake SWF, and the purse contribution rate shall be that rate specified in Exhibit B hereto for All Other SWFs until such time
as Colonial Downs conducts the minimum number of referenda specified in this Subsection C regardless of the time periods specified



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above (e.g., conducting an additional referendum in 2005 after conducting only two referenda during the period from
January 1, 2003 to December 31, 2004). Upon Colonial Downs conducting such minimum number of referenda, the purse contribution rates shall be reinstated to the rates set forth in Exhibit B hereto for SWFs located in the Central-Southside Virginia
Region, the New Richmond SWF, and the new Chesapeake SWF. No adjustment (either higher or lower) to the purse contribution rate shall be retroactive.



(3) Upon winning a referendum, Colonial Downs shall use its commercially reasonable efforts to apply expeditiously for licenses to own and operate an SWF
in the locality in which the referendum was won; provided, however, if more than one referendum is won in adjacent localities or in localities in which two SWFs would compete with each other, Colonial Downs shall be obligated to apply for licenses
in only one such locality. Upon the grant of the licenses, Colonial Downs shall use its commercially reasonable efforts to open the licensed facility expeditiously.



(4) Colonial Downs obligation to conduct the referenda for the 2003-2004, 2005-2006, and 2007 time periods specified
in this Subsection C shall be temporarily suspended, but not terminated, for each year in which there are no statutorily authorized SWFs available for initial licensing.



(5) For purposes of determining whether total thoroughbred handle equates to $200,000,000 for a particular calendar year,
the following calculation shall be made: (i) total live thoroughbred handle; plus (ii) total SWF



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thoroughbred handle from all SWFs operating for at least 12 months; and plus (iii) for each SWF open less than 12 months,
the product of (a) the last three (3) months thoroughbred handle and (b) four (4).



D. Northern Virginia SWF. Upon fulfillment of Colonial Downs commitments in Subsection A above, Colonial Downs and the VHBPA agree to distribute funds from the Thoroughbred Partners Account in such
a fashion as set forth in Exhibit B hereto for an SWF opened by Colonial Downs in Northern Virginia during the five-year period commencing on the effective date of this Agreement. For the purposes of this Agreement, Northern Virginia is defined as
the counties of Loudoun, Prince William, Fairfax and Arlington and the cities of Manassas, Manassas Park, Fairfax City, Falls Church, and Alexandria.



E. Efforts in Northern Virginia. Because the parties agree on the importance to Virginia racing of a Northern Virginia SWF, they further agree to
undertake the following, in consultation with the MVRC and its parent, the Maryland Jockey Club:



(1) Political advance work with local government officials and business leaders in Northern Virginia;



(2) Interest polling in Northern Virginia;



(3) Periodic meetings between the principals of Colonial Downs and MVRC and
their respective staffs, including an initial meeting no later than January 31, 2003, to discuss and consider the feasibility of referenda and SWF construction in Northern Virginia; and



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(4) Not later than January 1, 2004, presenting to the Board of Directors of the VHBPA a report by the
principals of Colonial Downs and MVRC setting forth the feasibility and cost of referenda and SWF construction in Northern Virginia, including handle estimates for all SWF sites considered by Colonial Downs and MVRC. Such report shall give due
consideration to providing meaningful information to the VHBPA without jeopardizing the chances for success by premature disclosure of strategic non-public information.



F. Funding of Virginia Turf Festival. The amount of purse funds devoted to the Virginia Turf Festival shall increase
by an amount equal to between thirty-three percent (33%) and fifty percent (50%) of additional purse money provided by the New Richmond SWF, the New Chesapeake SWF from thoroughbred handle in excess of $22,375,000, new SWFs in the Central-Southside
Virginia Region, and new SWFs in Northern Virginia. The allocation of days for the Virginia Turf Festival and purses per day shall be based on the goal of maintaining an average purse per day for the Virginia Turf Festival within the top five
percent (5%) of purses per day at thoroughbred racetracks nationally. Colonial Downs may supplement the purses for the Virginia Turf Festival from its own funds, in its sole discretion, to achieve this purse per day result. Upon the Virginia Turf
Festival growing to ten (10) days under the foregoing criteria, following discussions pursuant to Section 6 hereof, Colonial Downs may separate the Virginia Turf Festival from the summer thoroughbred meet, in which event the Virginia Derby may cease
to be included in the Virginia Turf Festival, in Colonial Downs discretion, and remain a part of the summer meet. Funding for the Virginia Turf Festival shall remain at the levels set forth herein, however, in such event.



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G. Incorporation of Terms in SWF Licenses. Colonial Downs and the VHBPA agree that in order for
any and all owners and operators licenses for the additional SWFs referenced herein (including but not limited to the New Richmond SWF, the New Chesapeake SWF, SWFs in the Central-Southside Virginia Region and SWFs in Northern Virginia)
to be effective for purposes of this Agreement, such licenses shall contain or incorporate the provisions of this Agreement relating to adjustments to contributions from the Thoroughbred Partners Account to the Horsemens Account and
Section 21 hereof. The parties agree to use their best efforts to have the SWF licenses issued by the Commission contain or incorporate such provisions.



9. Stalls and Track Facilities.



A. Availability of Stalls and Track Facilities Before, During and After Race Meetings. Colonial Downs shall make available at least one thousand
(1,000) stalls to Horsemen during each Race Meeting. Access to the racing strip, barns, track kitchen facilities, dormitories, and related backside facilities at the Racetrack (collectively, the Backside Facilities) necessary for
training purposes shall be made available by Colonial Downs without charge (i) prior to each live Race Meeting, to Horsemen who have horses training for that live Race Meeting, and (ii) following each live Race Meeting, to Horsemen who have raced at
the Racetrack during that Race Meeting. The Backside Facilities shall be made available by



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Colonial Downs prior to and following each Race Meeting for an aggregate total of 20 days, the exact number of days
before and number of days after each Race Meeting to be agreed upon each year by Colonial Downs and the VHBPA. Notwithstanding the foregoing, such periods may be shortened if the Backside Facilities are then needed for a live standardbred race
meeting, and Colonial Downs shall provide advance notice to the Horsemen in any such event. During the aforesaid periods, Colonial Downs shall, at its own expense, make water and electricity available to each barn in use and keep the racing surfaces
properly harrowed and watered.



B. Vendors. Except as
expressly provided elsewhere in this Agreement, Colonial Downs shall not impose upon Horsemen any exclusive arrangement concerning farriers, feedmen, tack supplies, or any other suppliers or providers of services customarily used by owners and
trainers; provided, however, that if Colonial Downs permits the use of bedding material other than straw, it may require the use of an exclusive supplier in order to facilitate removal of such used material. Notwithstanding the foregoing, Colonial
Downs reserves the right to impose reasonable non-discriminatory requirements for security, safety and environmental reasons. Colonial Downs shall use its reasonable best efforts to keep unlicensed persons in the above categories off its premises.



C. Stall Applications. Not less than seventy-five (75)
days prior to each Race Meeting, Colonial Downs shall publish and distribute stall applications to horsemen. Colonial Downs shall use its commercially reasonable efforts to ensure



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that: (i) the stall application contains notice of the cut-off date for the submission of stall applications; (ii) the
stall application contains in bold face type any rules of entry preference for Virginia-bred, Virginia-sired, Virginia-owned, or Virginia-stabled horses; (iii) the stall application provides on the front cover that no dogs will be allowed in the
stable area, that no children will be allowed to stay in the backstretch dormitories, and that the other rules applicable to the backside anticipated by Colonial Downs to be enforced at each Race Meeting will be posted at the Track and will be
mailed upon request to trainers and others; and (iv) each completed application contains the name, permanent address, telephone number, and electronic mail (e-mail) address of the owner and trainer of each horse expected to be stabled on the grounds
of the Racetrack during that Race Meeting. Colonial Downs shall, in the exercise of its sole business judgment, determine the terms for and approve or disapprove applications for stalls, but to the extent reasonably possible, preference shall be
given to stall applications for Virginia-bred horses, Virginia-owned horses, and Virginia-sired horses. Colonial Downs may consider, among other things, the following criteria in allocating stalls to Horsemen for use during Race Meetings:



(1) The overall quality of the horses listed on the stall
application;



(2) The quality of the racetrack(s) where the
horses listed on the stall applications have previously raced;



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(3) The number of starts a trainer listed on the application has made at past Colonial Downs Race
Meetings, where applicable;



(4) The financial and
professional integrity of the trainer listed on the stall application;



(5) The total number of stalls requested by a trainer in relation to the number of available stalls; and



(6) The best interests of Colonial Downs and thoroughbred racing.



Each Horsemen accepting a stall at the Racetrack shall be required to use his or her best efforts to run his or her horses at the Racetrack
during the Race Meeting consistent with the horses physical condition and fitness, and race conditions.



D. Racetrack Kitchen. Colonial Downs shall provide a Racetrack kitchen for use by Horsemen and others, with the terms, conditions and provisions
thereof to be mutually agreed upon on an annual basis by the VHBPA and Colonial Downs. Joint approval of Colonial Downs and the VHBPA shall be required concerning, but not limited to, management of the facility, cleanliness of the facility,
palatability and cost of food, adequacy of hours of operation, and adequacy of premises insurance coverage.



E. Temporary Building. Colonial Downs shall continue to provide a suitable location on the backstretch for the temporary placement of a temporary
building, currently anticipated to be a double-wide office trailer, to be used during the 2003 and 2004 Race Meetings for a classroom facility, an office for the chaplaincy



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program, a counseling office, a chapel, recreation, and a secure storage facility for VHBPA supplies. Colonial Downs
shall continue to furnish electrical service and telephone hook-up for the office trailer. The VHBPA shall save and hold harmless and shall indemnify Colonial Downs against any expenses, costs, claims, or demands, including attorneys fees,
arising out of the installation, use, or removal of the temporary building, electrical service, and telephone hook-up.



10. Racing Committee. Colonial Downs and the VHBPA have organized and shall maintain a joint committee to be known as the Racing
Committee. The VHBPA and Colonial Downs shall each continue to appoint not more than four (4) representatives to the Racing Committee. The Racing Committee (i) shall meet at the request of either Colonial Downs or the VHBPA on at least five
(5) days notice to the other party, and (ii) may consider such matters as the stable area, barns, tack rooms, dormitories, promotion, publicity, track conditions (bad weather closing), racing-related programs, reserved seats and passes for Horsemen,
number of races, purse schedules, track kitchen, other matters related to attendance, pari-mutuel handle or the quality of racing, and health benefit programs, death benefits, drug and alcohol abuse programs, and any other program that will aid and
assist the racing industry in Virginia in hiring, retaining and caring for its personnel at the highest level.



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11. Representations and Warranties.



A. VHBPA. In addition to the representations and warranties contained elsewhere in this Agreement, the VHBPA
warrants, represents to and covenants with Colonial Downs that during the Term of this Agreement:



(l) This Agreement has been approved by the Board of Directors of the VHBPA;



(2) This Agreement is valid and enforceable against the VHBPA according to its terms;



(3) Except as provided in Section 15 below, the VHBPA and its officials
shall not acquiesce or actively participate in any attempt to delay, interrupt, or bring about the temporary or permanent cessation or suspension of racing or other activities at the Racetrack, including simulcasting, or activities at the SWFs at
any time during the Term of this Agreement;



(4) Each VHBPA
official shall utilize commercially reasonable powers of persuasion and shall take all reasonable action within his or her power, including all commercially reasonable legal means at his or her disposal, to ensure that all VHBPA Members, their
employees, other related personnel, and other backside personnel comply with the terms of this Agreement;



(5) This Agreement shall be made available for review and copying by Members of the VHBPA and all other licensed owners, trainers, employees and backside
personnel at the VHBPA office; and



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(6) The VHBPA shall use its reasonable best efforts to ensure that the backside area of the Racetrack is
maintained in a safe, clean, and orderly condition when in use.



B. Colonial Downs. In addition to the representations and warranties contained elsewhere in this Agreement, Colonial Downs warrants, represents to and covenants with the VHBPA that during the Term of this Agreement:



(1) This Agreement has been approved by its General Partner;



(2) This Agreement is valid and enforceable against Colonial Downs according
to its terms;



(3) Colonial Downs shall use its reasonable
best efforts to ensure that the backside area of the Racetrack is maintained in a safe, clean and orderly condition when in use; and



(4) Colonial Downs shall use its reasonable best efforts to assist the VHBPA in developing health and welfare programs for backstretch personnel;
provided that, this Section imposes no obligation on either party to fund any such program.



12. VHBPA Office. Colonial Downs shall provide the VHBPA, without charge, a suitable private office located on the grounds of the Racetrack. Colonial Downs shall furnish said office with appropriate office
furniture and telephone lines. The VHBPA shall pay the applicable charges for the installation and use of such telephone lines.



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13. Racing Officials. Colonial Downs shall send to the President of the VHBPA a written list of
the persons whom Colonial Downs has requested the Commission to approve as racing officials for each Race Meeting at the same time it submits that list to the Commission in accordance with the Commissions regulations.



14. Governmental Approval. Nothing contained in this Agreement shall
be construed as requiring either party to perform any term when such performance is contrary to law or requires prior governmental approval; provided, however, both parties shall use their best efforts to obtain governmental approval if such is
required.



15. Authorization for Out-of-State
Simulcasting. During the Term of this Agreement, the VHBPA as the authorized representative of the Horsemen for interstate simulcasting purposes, hereby consents and authorizes Colonial Downs to negotiate and contract with simulcast and
receiving facilities, including off-track wagering facilities outside the Commonwealth of Virginia, for (i) the conduct of off-track wagering at the Racetrack and the SWFs, and (ii) off-track wagering on live thoroughbred races emanating from the
Racetrack, pursuant to the Interstate Horse Racing Act of 1978, P.L. 95-515 (the Interstate Horse Racing Act). This Agreement constitutes the contract required by Section 3004(a) of the Interstate Horse Racing Act. Colonial Downs shall
consider the best interests of live racing when simulcasting. To the extent required by law, out-of-state simulcasting for all of Colonial Downs races at the Racetrack shall be subject to the consent of the



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VHBPA, which consent shall not be unreasonably withheld, delayed or conditioned. In the event consent is withheld, the
VHBPA shall set forth its reasons for withholding its consent within a reasonable time after notice from Colonial Downs in advance of the intended simulcast.



16. Copies of Documents; Database. Colonial Downs shall send a copy of its stall application form, stakes purse program, and condition book for
each Race Meeting to the VHBPA on or before the first day they are distributed to Horsemen. Additionally, Colonial Downs shall provide the VHBPA copies of all filings, if any, it makes with the U. S. Securities and Exchange Commission promptly after
such filings are made. Colonial Downs shall share and coordinate all information and data on Horsemen racing at the track with the VHBPA. The parties shall work jointly to develop and maintain an effective database of Horsemen racing in Virginia.
Not later than thirty (30) days following the close of each Race Meeting, Colonial Downs shall provide the VHBPA a list of all owners and trainers who participated in that Race Meeting, including addresses, telephone numbers, and e-mail addresses to
the extent collected by Colonial Downs pursuant to Subsection 9.C. and otherwise.



17. Horsemens Backstretch Improvements and Programs. Colonial Downs and the VHBPA agree to expend for the benefit of Horsemen certain funds during calendar years 2003 and 2004 for the improvement of
backstretch working and living conditions and for educational, recreational, and counseling programs. Colonial Downs shall annually provide $50,000 (subject to adjustment as provided



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in Subsection 21.B. hereof) to be used solely for capital improvements and to be provided no later than June
1stof each year. The VHBPA shall provide at least $70,000 from its share of the signal sale (see Subsection 4.C.).
In addition, the VHBPA and Colonial Downs shall use their best efforts to ensure that at least $150,000 is provided annually from the legitimate breakage deposited into the Racing Benevolence Fund pursuant to § 59.1-392(T)(2) of the Code of
Virginia for the foregoing improvements and programs. Regarding the latter Fund, the VHBPA and Colonial Downs agree to use their best efforts to obtain any necessary authorization to use part of the legitimate breakage for such improvements and
programs. All of the above funds shall be deposited into the Backstretch Improvement Escrow Account, which shall be established at a financial institution mutually acceptable to both Colonial Downs and the VHBPA, and shall be expended as mutually
agreed by Colonial Downs and the VHBPA and subject to Commission approval pursuant to Section 30 hereof. To the extent funds are available, the improvements and programs shall include the following: (1) training and educational programs such as the
Groom Elite Program, which is a formal program developed in cooperation with Texas A & M University to train grooms in equine science concepts and practices; (2) chaplaincy and counseling, including health and drug abuse programs; (3)
participation in the national Kids To The Cup program to encourage young people to learn about the horse industry by participation in backstretch activities; (4) after-work recreational programs for backstretch personnel, such as picnics, evening
television and videos, etc.; (5) expansion and



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improvement of the bathing facilities to better serve the health needs of backstretch personnel; and (6) implementation
of a plan to eliminate from all barns the water runoff problem that in the past has resulted in standing water, which plan shall include appropriate landscaping and pesticide spraying and installation of gutters. At the conclusion of each Race
Meeting, Colonial Downs shall within sixty (60) days provide the VHBPA with an accounting of all expenditures made from the Backstretch Improvement Escrow Account.



18. Right to Terminate. Either party may terminate this Agreement upon the other partys failure to
substantially perform as required under this Agreement and such failure continues for thirty (30) days following the date written notice of default detailing the perceived failure to perform is sent to and received by the allegedly defaulting party
in accordance with Section 24 below. Such termination shall not constitute an election of remedy, nor shall it constitute a waiver of a partys other remedies at law or in equity. Additionally, Colonial Downs may terminate this Agreement upon
written notice to the VHBPA if the Racetrack and all the SWFs are closed for ninety (90) continuous days.



19. Indemnification. The VHBPA shall indemnify and save harmless Colonial Downs, its agents, representatives, employees, officers, directors and
stockholders, their respective successors and assigns, and all persons acting by, through, under, or in concert with any of them, from and against any and all demands, liabilities, loss, costs, damages, or expenses of whatever nature or kind,
including fees of attorneys and all other expenses, arising out of or in any way related to or occasioned by Colonial Downs performance under Subsection 4.I. hereof (Administrative Fee).



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20. Mediation; Arbitration.



A. Attempt to Resolve Disputes. 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.



B. Administration. The arbitration shall be administered by the American Arbitration Association (AAA), or its successor, pursuant to
the expedited procedures (irrespective of the amount in controversy) of the AAAs then-prevailing Commercial Arbitration Rules (the Rules), subject to the limitations and modifications set forth herein. The laws of the Commonwealth
of Virginia will govern all matters arising the arbitration without giving effect to the choice of law principles thereunder. The arbitration will be held in Virginia unless the parties otherwise agree.



C. Notice to Arbitrate. Notice of a demand for arbitration pursuant to
this procedure (the Notice to Arbitrate) shall be made in writing and delivered to all other affected parties as provided in Section 24 hereof. The Notice to Arbitrate shall be accompanied by a short and plain statement of the
partys



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claim(s), the grounds for same and the relief sought. Within ten (10) days of receipt of the Notice to Arbitrate, the
other party shall set forth in writing and deliver to all other affected parties as provided in Section 24 hereof, an answer setting forth its response to the claim for relief, as well as any affirmative defenses and counterclaims.



D. Selection of Arbitrator(s). The arbitration shall be before one
neutral arbitrator (the Arbitrator) to be selected in accordance with the Rules (as modified herein). In the event the parties cannot agree upon an Arbitrator within ten (10) business days from receipt of the Notice to Arbitrate, each
party shall select one Arbitrator. The Arbitrators so selected shall select a third arbitrator at the Pre-Hearing Conference (as defined herein), who shall be the chairperson of the three member panel.



E. Pre-Hearing Conference. The Arbitrator(s), within ten (10) days of
his, her or their appointment, shall conduct a pre-hearing conference (the Pre-Hearing Conference). The parties shall be prepared to discuss discovery matters, schedule the Additional Conference and Arbitration Hearing (as defined
herein), decide procedural matters and address all other questions that may be presented.



F. Discovery. The parties shall have the right to conduct and enforce pre-hearing discovery in accordance with the Federal Rules of Civil Procedure then in effect for the Eastern District of Virginia (Richmond
Division), including any Local Rules (collectively, the Court Rules), subject to the following:



(1) The parties shall make the voluntary disclosures described in the Court Rules (except those applicable to expert witnesses) within fifteen (15) days
after the appointment of the Arbitrator(s). The identity and report of each expert witness, as well as all other disclosures described in the Court Rules, shall be disclosed to the other parties no later than thirty (30) days after the appointment
of the Arbitrator(s).



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(2) Each party may serve a request for production of tangible and documentary evidence. Responses to a
request for production shall be due fifteen (15) days after receipt.



(3) Each party may serve no more than one set of interrogatories limited to no more than thirty (30) questions, including subparts. Answers to interrogatories shall be due fifteen (15) days after receipt.



(4) Each party may depose up to, but no more than, three (3) witnesses;
provided, however, that each party is limited to no more than a total of eighteen (18) hours of deposition time in the aggregate.



(5) All discovery must be completed within forty-five (45) days after appointment of the Arbitrator(s) (the Discovery Deadline).



(6) The Arbitrator(s), for good cause shown, upon motion and three (3)
days notice to all parties, may extend any of the discovery deadlines set forth herein for a period not to exceed fourteen (14) days.



The Arbitrator(s) shall have the right and authority to decide any and all discovery disputes. The Arbitrator(s) shall be empowered to issue subpoenas and any and all
process and orders permitted under the Rules to compel cooperation in discovery and otherwise enforce the discovery rights and obligations of the parties.



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G. Additional Conference. Within ten (10) days after the Discovery Deadline, the Arbitrator(s)
shall hold an additional conference (the Additional Conference) to set dates for the exchange of witness and exhibit lists, deposition testimony designations, testimony summaries and arbitration briefs; determine the length of the
Arbitration Hearing; and address any and all other questions that may be presented.



H. Arbitration Hearing. The arbitration hearing (the Arbitration Hearing) shall commence within twenty (20) days after the date of the Additional Conference, unless otherwise agreed by the parties.
For good cause shown, the Arbitrator(s) may grant no more than one (1) continuance per party of a duration not to exceed ten (10) days each; provided, however, no party shall be entitled to any other continuances. Unless otherwise agreed by the
parties or ordered by the Arbitrator(s) for good cause shown, the Arbitration Hearing shall continue from day-to-day for such period of time (not to exceed five (5) days) as may be set by the Arbitrator(s). Each party shall have equal time for
presentation and rebuttal, unless otherwise agreed by the parties. The parties may present evidence, at their option, in the form of testimony (live and/or by deposition), documents and other tangible evidence, or testimony summaries, or any
combination thereof. The Arbitrator(s), upon timely request by a party or if otherwise required by law, shall require witnesses to testify under oath administered by any duly qualified person.



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Any party, at its own cost and three (3) days notice to all other parties, may arrange for a stenographic record of
the proceedings. Such record shall be made available for inspection and copying by all other parties and the Arbitrator(s).



I. Arbitration Award. Notwithstanding the foregoing, it is the parties intent that the arbitration shall be completed and resolved within one
hundred and twenty (120) days of the commencement of such proceeding. The Arbitrator(s) shall issue and deliver to each party a written and signed award (the Arbitration Award) within thirty (30) days of the closing of the record. The
Arbitration Award shall contain the factual and legal bases for such award. The Arbitration Award, in addition to the relief granted therein, may award attorneys fees and costs to the prevailing party as the Arbitrator(s) may determine in
light of all of the circumstances. The Arbitration Award shall be final and binding upon the parties in accordance with its terms and Section 8.01-577 et seq. of the Code of Virginia.



J. Default. If a party fails to proceed with arbitration or defaults in his obligation to arbitrate, such default
shall not prevent the other party from proceeding with such arbitration and the party who fails to proceed with such arbitration shall be bound by the arbitration.



K. Costs. The costs of the arbitration incurred by the parties for hearing reporting fees, rental of a hearing room
and all AAA fees, costs and services charges and of the arbitrator shall be paid by Colonial Downs, except that hearing postponement or cancellation fees or charges by the AAA or the arbitrator(s) shall



38



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be borne exclusively by the canceling or postponing party. Conversely, with respect to all other matters, unless the
arbitrator(s) otherwise so determines and provides in the arbitration award, 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.



21.
Contribution Adjustments.



A. Changes in Applicable
Law. The parties have negotiated the relevant transfers from the Thoroughbred Partners Account to the Horsemens Account (the Purse Amounts) from expected handle at the New Richmond SWF, the New Chesapeake SWF, and future
SWFs located in the Central-Southside Virginia Region and Northern Virginia based upon those statutes, regulations, administrative proceedings, common law and other accepted sources of rules and regulations applicable to the parties that are in
effect as of the date hereof (collectively, Applicable Law). Under Applicable Law, certain allocations of rights and entitlements have been made to Colonial Downs (such as uncashed tickets) and the VHBPA (such as a portion of breakage),
and the parties do not intend to alter such existing rights and entitlements by this Agreement generally or by application of this Section 21, in particular, to future events. Nonetheless, in the event there is a change in Applicable Law or a ruling
or action of the Commission that alters contributions to the Thoroughbred Partners Account or transfers to the Horsemens Account, or otherwise inures to the benefit or detriment of the VHBPA or its successors in the form of purses,
operating funds or awards, then the parties agree



39



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that the Purse Amounts shall be adjusted to restore the parties to the economic terms set forth in this Agreement. By way
of example and not limitation, if Applicable Law is changed to provide that a percentage of breakage or uncashed tickets is applied to increase purses for thoroughbred racing, then the Purse Amounts shall be adjusted downward such that in any fiscal
year the amount contributed to purses pursuant to the terms hereof shall be reduced by an amount equal to the contribution to purses from breakage. By way of further example, if the percentage of handle paid to the Commonwealth of Virginia as a
pari-mutuel tax increases, there shall be no change in the Purse Amounts under this Agreement unless such increased pari-mutuel tax is used to supplement purses or is used for the exclusive activities of the representative horsemen group or groups
for Horsemen racing at Colonial Downs.



B. Changes in MVRC
Management Fee. The parties have also negotiated the relevant transfers from the Thoroughbred Partners Account to the Horsemens Account from expected handle at the New Richmond SWF, the New Chesapeake SWF, and future SWFs located in
the Central-Southside Virginia Region and Northern Virginia based upon an amendment to the Management and Consulting Agreement reducing MVRCs management fee to 1.5% of handle wagered at New Richmond, New



40



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Chesapeake, and SWFs located in the Central-Southside Virginia Region. If that management fee is further reduced pursuant
to Section 4.1.4 of the Management and Consulting Agreement, then one-half of the amount of that reduction attributable to handle at New Richmond, New Chesapeake, and SWFs located in the Central-Southside Virginia Region (collectively, the New
Handle) shall be contributed by Colonial Downs to the Thoroughbred Partners Account (such that the effective rate of contribution attributable to the New Handle is increased by .375%) and such amount shall be added to the annual transfer of
funds from the Thoroughbred Partners Account to the Horsemens Account regarding New Richmond, New Chesapeake, and all SWFs located in Central-Southside, as set forth in Exhibit B hereto. Such payments shall commence upon the effective
date of the management fee reduction and shall terminate upon the termination of such reduction in the management fee pursuant to Section 4.1.4 of the Management and Consulting Agreement. Similarly, if the management fee in the Management and
Consulting Agreement currently applicable to handle at SWFs, other than those identified above, is reduced at any time, then Colonial Downs shall annually provide $100,000 for capital improvements (rather than $50,000) to the Racetracks
backstretch pursuant to Section 17 hereof effective in the first full calendar year after the reduction in the management fee goes into effect. Such obligation shall be reduced to $50,000 per year if the management fee reduction is terminated
pursuant to Section 4.1.4 of the Management and Consulting Agreement.



C. Termination of Management Fee. If the above-referenced management fees are reduced to zero or otherwise eliminated completely then the annual transfer of funds from the Thoroughbred Partners Account to the Horsemens
Account for all SWFs, wherever located within Virginia, shall be subject



41



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to good faith negotiations between the parties, or their successors or assigns, as to the appropriate sharing between
them of the benefits of that reduction or elimination.



D.
Duration. The terms and provisions of this Section 21 shall remain in full force and effect for as long as the licenses for the New Richmond SWF, the New Chesapeake SWF, or the SWFs located in the Central-Southside Virginia Region remain in
effect.



22. Consents, Approvals, Agreements or
Assurances. Wherever this Agreement requires the consent, approval, agreement, or assurance of Colonial Downs and/or the VHBPA, (1) a request for such consent, approval, agreement, or assurance from one party shall be responded to by the other
party in a timely and businesslike manner, and (ii) such consent, approval, agreement, or assurance shall not be unreasonably withheld, delayed or conditioned unless otherwise specifically provided in this Agreement.



23. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.



24. Notices. All notices, requests, demands or other communications as may be required by this Agreement shall be in writing, shall be signed by an
authorized representative of the party providing the communication, shall be sent to each of the persons listed below, may be sent by certified mail, return receipt requested, or by telephone facsimile, and shall be deemed to have been given or



42



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made when received by personal delivery or otherwise. A courtesy hard copy of any communication that is sent by telephone
facsimile also shall be sent by certified mail, return receipt requested. The current addresses of persons to whom communications are to be sent are as follows:



|                |  |                                                                                                                                             
|--------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------
|Colonial Downs: |  | Mr. Jeffrey P. Jacobs Colonial Downs, L.P. 10515 Colonial Downs Parkway New Kent, VA 23124                                                  
|                | 
|                |  | Mr. Ian M. Stewart President Colonial Downs, L.P. 10515 Colonial Downs Parkway New Kent, VA 23124                                           
|                | 
|Copy to:        |  | James L. Weinberg, Esq. Hirschler Fleischer
The Federal Reserve Bank Building P. O. Box 500 701 E. Byrd Street, 15thfloor Richmond, VA 23219
|                | 
|                |  | Mr. John E. Mooney President Maryland-Virginia Racing Circuit, Inc. 10515 Colonial Downs
Parkway New Kent, VA 23124                         
|                | 
|                |  | H. Lane Kneedler, Esq. Reed Smith LLP 901 East Byrd Street, Suite 1700 Richmond, VA 23219-4069                                              
|                | 
|VHBPA:          |  | Ms. Althea D. Richards President Virginia Horsemens Benevolent and Protective Association,
Inc. P. O. Box 273 Millwood, VA 22646           



43



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|         |  |                                                                                                                      
|-------- |  | ---------------------------------------------------------------------------------------------------------------------
|Copy to: |  | Peter C. Burnett, Esq. Burnett & Williams,
P.C. 105 Loudoun Street, S.E. Leesburg, VA
20175                          
|         | 
|         |  | Frank Petramalo, Jr., Esq. Gordon & Barnett Two Lafayette Centre 1133 21st Street, NW, Suite 450 Washington, DC 20036



25. Waivers. No
waiver by a party to this Agreement of any breach of this Agreement or any of its terms shall be effective unless, and only to the extent, such waiver is in writing signed by the party providing or making such waiver and delivered to the other party
as provided in Section 24 above. No waiver of any breach shall be deemed to be a waiver of any other or any subsequent breach.



26. Applicable Law; Venue. This Agreement is being executed and delivered in the Commonwealth of Virginia and shall be construed and enforced in
accordance with the law of Virginia without regard to its conflict of laws rules and provisions. In all court proceedings brought in connection with this Agreement, the parties hereto irrevocably consent to exclusive personal jurisdiction by, and
venue in, the Circuit Court for the City of Richmond, Virginia, or the United States District Court for the Eastern District of Virginia, Richmond Division.



27. Headings. Any headings preceding the text of the several sections, subsections, paragraphs and subparagraphs hereof are inserted solely for
convenience of reference and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction, or effect.



44



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28. Severability. If any provision of this Agreement is declared invalid by any tribunal, or
becomes invalid or inoperative by operation of law, the remaining provisions of this Agreement shall not be affected thereby and shall remain in full force and effect.



29. Entire Agreement; Modification. This Agreement contains the entire Agreement between the parties and supersedes
all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter of this Agreement. This Agreement shall be binding upon and inure to the benefit of each party hereto, its legal representatives
and successors, including, but not limited to, any successor group to the VHBPA that is the recognized majority thoroughbred horsemens group. No modification, variation or amendment of this Agreement or of any attachment or exhibit to this
Agreement shall be effective unless such modification, variation or amendment is in writing and has been signed by the parties to this Agreement. This Agreement may be assigned by Colonial Downs in its sole discretion, subject to applicable law.



30. Conditions Precedent to Effectiveness of this
Agreement. This Agreement shall become effective only upon the satisfaction, or waiver by the parties, of the following conditions precedent:



A. Commission Approval. The parties acknowledge that this Agreement and the expenditures from the Racing Benevolence Fund detailed in Section 17
above are subject to the approval of the Commission. If this Agreement in its entirety and such expenditures are not approved by the Commission, this Agreement shall be null and void.



45



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B. Amendment of Management and Consulting Agreement. The Management and Consulting Agreement shall
have been amended such that Section 4.1.1 of the Management and Consulting Agreement substantively provides as follows and such amendment shall have been approved by the Commission:



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 as set forth herein based upon 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. Adjusted Handle shall be comprised of Adjusted Handle from (i) amounts wagered at the Racetrack, the four OTB Facilities currently licensed to Colonial Downs in
Richmond, Chesapeake, Hampton and Brunswick, Virginia, and certain future OTB Facilities proposed by Colonial Downs in a Thoroughbred Horsemens Agreement with the Virginia Horsemens Benevolent and Protective Association, dated December
23, 2002, and effective as of January 1, 2003, such future OTB Facilities being referred to in that Thoroughbred Horsemens Agreement as the New Richmond SWF, the New Chesapeake SWF, and the proposed Central-Southside Virginia Region SWFs (such
aggregate Adjusted Handle referred to herein as the Horsemens Agreement Adjusted Handle), plus (ii) amounts



46



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wagered at any OTB Facilities licensed to Colonial Downs (other than OTB Facilities licensed to Colonial
Downs that are 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) that are not listed in subdivision (i) of this sentence
or wagered in any other form (including but not limited to account, telephone and home wagering) (such aggregate Adjusted Handle referred to herein as Additional Adjusted Handle), and plus (iii) amounts wagered at OTB Facilities 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 an annual Management Fee equal to (i) one percent (1%)
of the first $75 million per calendar year of Horsemens Agreement Adjusted Handle; plus (ii) two percent (2%) of the next $50 million per calendar year of Horsemens Agreement Adjusted Handle; plus (iii) one and one-half percent
(11⁄2%) of all Horsemens Agreement Adjusted Handle in excess of $125 million per calendar year; and plus (iv) two percent (2%) per calendar year of all Additional Adjusted Handle.



C. Agreement with the Virginia Harness Horse Association. Colonial
Downs shall have entered into an agreement acceptable to it with the Virginia Harness Horse Association including, but not limited to, terms substantially similar to those set forth in Section 8 hereof.



Upon satisfaction or waiver of the foregoing conditions, this Agreement shall
be effective as of January 1, 2003, regardless of the date of the satisfaction or waiver of such conditions.



47



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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first stated above.



|                                                                |  |                                                                      |  |                       |  |                           |  |                          
|--------------------------------------------------------------- |  | -------------------------------------------------------------------- |  | --------------------- |  | ------------------------- |  | -------------------------
|VIRGINIA HORSEMENS BENEVOLENT AND
PROTECTIVE ASSOCIATION, INC. |  | COLONIAL DOWNS, L.P.  By: Stansley Racing Corp., its General Partner
|                                                                |  |                                                                      |  |                      
|By:                                                             |  |                                                                      |  |                       |  | By:                       |  |                          
|                                                                |  | Althea D. Richards, President                                        |  |                       |  |                           |  | Ian M. Stewart, President
|                                                                |  |                                                                     
|                                                                |  |                                                                      |  | STANSLEY RACING CORP.
|                                                                |  |                                                                      | 
|                                                                |  |                                                                      |  | By:                   |  |                          
|                                                                |  |                                                                      |  |                       |  | Ian M. Stewart, President



48



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EXHIBIT A

FORM OF

TRUST AGREEMENT



THIS TRUST AGREEMENT is entered into this  day of
, 200, by and between COLONIAL DOWNS, L.P., a Virginia limited partnership (the
Trustee), and the VIRGINIA HORSEMENS BENEVOLENT AND PROTECTIVE ASSOCIATION, INC., a not-for-profit corporation (the VHBPA), on behalf of the thoroughbred horsemen engaging in thoroughbred racing at Colonial
Downs racetrack (the Track) (collectively, the Beneficiaries).



W I T N E S S E T H:



WHEREAS, pursuant to prior agreements that have expired and an Agreement, dated as of November , 2002 (the Horsemens Agreement), relating to live thoroughbred racing at Colonial Downs,
among other matters, the Trustee has and will make deposits into an account currently maintained at BB&T Bank, N.A., Middleburg branch (the Thoroughbred Partners Account) a portion of which will be used to fund purses and
related payments to the Beneficiaries participating in racing at the Track during the 2003 thoroughbred racing season and other years governed by the Horsemens Agreement;



NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:



1. The Account. The Trustee shall maintain the Thoroughbred Partners Account at a financial institution mutually acceptable to the parties
and that is insured by an agency of the United States government.



2. Deposits. The Trustee shall deposit all funds required by the Horsemens Agreement into the Thoroughbred Partners Account. The funds so deposited into the Thoroughbred Partners Account, exclusive of interest
earned thereon and amounts payable to Colonial Downs therefrom, are hereinafter referred to as the Trust Account Funds. Except as provided in Section 5.B. of the Horsemens Agreement, no other funds shall be deposited into the
Thoroughbred Partners Account, and the Trustee shall not commingle any other funds with the Trust Account Funds.



3. Withdrawals. The VHBPA, on behalf of the Beneficiaries, grants the Trustee the authority to withdraw funds from the Thoroughbred Partners
Account to make payments required to be made pursuant to the terms and provisions of the Horsemens Agreement, including, without limitation, to provide for the payment of purses and related awards to the Beneficiaries.



A-1



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4. Title to Funds in the Account. The Trustee shall hold only legal title to the Trust Account
Funds and shall not have any equitable or beneficial interest in such Funds. Accordingly, the Trust Account Funds are excluded from the Trustees estate for purposes of 11 U.S.C. § 541(d), as amended.



5. Interest. The Trustee understands and accepts that interest, if
any, earned on the Funds will be reported under its employer identification number, that such reporting is done as a matter of convenience for the administration of the Thoroughbred Partners Account and that the receipt of such interest does
not affect the beneficial and equitable title that the parties have to such interest and is not in derogation of the rights and entitlements of the parties as set forth herein and in the Horsemens Agreement.



6. Trustees Duties. The duties of the Trustee under this
Agreement shall be limited to the safekeeping and disbursement of the Trust Account Funds and documents under the terms and conditions of this Agreement. The Trustee shall be entitled to rely on and may assume the genuineness and authenticity of any
signatures purported to be made by the parties hereto, their lawful representatives, and successors or assigns. Upon election of either party hereto, an independent third party may be appointed trustee of the Thoroughbred Partners Account and
the Trustee hereunder may be relieved of its duties as trustee but shall be bound by the other provisions of this Agreement.



7. Limitation on Liability. The Trustee shall not be liable for any claims, damages, liabilities, losses, costs, or expenses arising from the
Trustees acts or omissions with respect to the Trust Account Funds or its performance hereunder, unless such actions or omissions result from the Trustees negligence or willful misconduct.



8. Reimbursement of Expenses. The Trustee shall be reimbursed in the
form of one-half of the interest accruing on the Trust Account Funds for all costs and expenses reasonably incurred by it in connection with the administration of the Account, including payment of any trustee fees to a third-party trustee.



9. Termination. This Agreement shall terminate on the
date on which all payments under the Horsemens Agreement have been made and the Horsemens Agreement is no longer in effect.



10. Notices. All notices, approvals, and other communications authorized or required to be given between the parties hereto shall be validly given
or made if in writing and sent in accordance with the terms and conditions of the Horsemens Agreement.



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11. Governing Law. This Agreement shall be governed, construed, and enforced in accordance with
the laws of the Commonwealth of Virginia, without regard to any conflicts of law, rules or provisions thereof.



12. Miscellaneous. Any action, suit, or proceeding in respect of or arising out of this Agreement may be prosecuted as to any party hereto in
Richmond, Virginia. Each party hereto consents to the exercise of jurisdiction over its person by any court situated in Richmond, Virginia and having jurisdiction over the subject matter of any such action, suit, or proceeding. The invalidity or
unenforceability of any provision of this Agreement in any particular respect shall not affect the validity and enforceability of any other provision of this Agreement or of the same provision in any other respect. This Agreement and the
Horsemens Agreement set forth the entire understanding of the parties to this Agreement with respect to the operation of the trust for the Thoroughbred Partners Account and may not be amended except by a written instrument executed by
all parties hereto. Other than the Horsemens Agreement, any previous agreements or understandings among the parties hereto regarding the subject matter hereof are merged into and superseded by this Agreement. All of the covenants,
stipulations, terms, and conditions of this Agreement shall extend to and be binding upon the respective successors and assigns of the parties hereto, but this Agreement shall not be assigned by the Trustee without the prior written consent of the
Beneficiaries.



This Agreement or any amendment hereto may be
executed in two or more counterparts, each of which shall constitute an original, and all of which together shall constitute one and the same Agreement.



|                                                                |  |                                                                        
|--------------------------------------------------------------- |  | -----------------------------------------------------------------------
|VIRGINIA HORSEMENS BENEVOLENT AND
PROTECTIVE ASSOCIATION, INC. |  | COLONIAL DOWNS, L.P.  By:    Stansley Racing Corp., its General Partner



|    |  |                               |  |  |  |  |  |  |  |  |  |     |  |                          
|--- |  | ----------------------------- |  |  |  |  |  |  |  |  |  | --- |  | -------------------------
|By: |  |                               |  |  |  |  |  |  |  |  |  | By: |  |                          
|    |  | Althea D. Richards, President |  |  |  |  |  |  |  |  |  |     |  | Ian M. Stewart, President
|    |  |                               |  |  |  |  |  |  |  |  |  |     |  |                          
|    |  |                               |  |  |  |  |  |  |  |  |  |     |  |                          





A-3



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EXHIBIT B



Annual Transfers of Funds from Thoroughbred

Partners Account to Horsemens Account



|                                                                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|All SWFs located in the Central-Southside Virginia Region                |  | 4.5% of all thoroughbred handle in a calendar year at each such facility for ten years from the opening date of each such facility.  After ten years from opening date, for each calendar year:  5% of the first $75,000,000 of thoroughbred handle at each such facility; plus 6% of
thoroughbred handle in excess of $75,000,000 up to $150,000,000 at each such facility; and plus 7% of thoroughbred handle in excess of $150,000,000 at each such facility.                                                                                                              
|                                                                         | 
|The New Chesapeake SWF                                                   |  | 4.5% of all thoroughbred handle in a calendar year in excess of $22,375,000 at such facility.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|The New Richmond SWF                                                     |  | 4% of the first $15,000,000 of thoroughbred handle in a calendar year at such facility; plus 5% of thoroughbred handle in excess of $15,000,000 up to $20,000,000 in a calendar year at such facility;  plus 6% of thoroughbred handle in excess of $20,000,000 up to $25,000,000 in a calendar year
at such facility; and  plus 7% of thoroughbred handle in excess of $25,000,000
in a calendar year at such facility.                                                                                                                                                      
|                                                                         | 
|Northern Virginia SWF                                                    |  | 0% of all thoroughbred handle wagered at each such facility for the first 12 months of operation and thereafter as provided for All Other SWFs described below.                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                         | 
|All Other SWFs and handle at the New Chesapeake SWF of up to $22,375,000 |  | 5% of the first $75,000,000 of aggregate thoroughbred handle from such facilities; plus 6% of aggregate thoroughbred handle in excess of $75,000,000 up to $150,000,000 from such
facilities; plus 7% of thoroughbred handle in excess of $150,000,000 from such facilities less the amounts the VHBPA is authorized to deduct from the Thoroughbred Partners Account pursuant to the Agreement (including but not
limited to NTRA dues, an administrative fee, and repayment of advances (including interest) made by Colonial Downs to the Thoroughbred Partners Account).





B-1



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EXHIBIT C



Anticipated Development Schedule



|   |  |                                                                                           |  |                                              
|-- |  | ----------------------------------------------------------------------------------------- |  | ---------------------------------------------
|   |  | Action Item                                                                               |  | Time Period                                  
|1. |  | Identify and bring under contract potential SWF site.                                     |  | 4 to 6 weeks from approval of Agreement.     
|   |  |                                                                                          
|2. |  | Meeting with local government officials and neighbors; confirmation of zoning compliance. |  | 3 to 6 weeks from having site under contract.
|   |  |                                                                                          
|3. |  | Application to the Virginia Racing Commission.                                            |  | 1 to 2 weeks from satisfaction of Item 2.    
|   |  |                                                                                          
|4. |  | Action by the Virginia Racing Commission on application after filing.                     |  | 6 to 12 weeks.                               
|   |  |                                                                                          
|5. |  | Application for permits to commence construction or renovation after grant of licenses.   |  | Within 1 week after grant of licenses.       
|   |  |                                                                                          
|6. |  | Construction or renovation period.                                                        |  | 3 to 6 months.                               
|   |  |                                                                                          
|7. |  | Total time from identifying a site to opening.                                            |  | 7 to 13 months.                              





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EXHIBIT D



Central-Southside Virginia Region



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                             
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Counties                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | Cities                                                                                                                                                                                                                                                                      
|1.   Albemarle 2.   Allegheny 3.   Amherst 4.   Augusta 5.   Bath 6.   Bedford County 7.   Bland 8.   Botetourt 9.   Buchanan 10. Campbell 11. Carroll 12. Craig 13. Dickenson 14. Floyd 15. Franklin County 16. Giles 17. Grayson 18. Greene 19. Halifax 20. Henry 21. Highland 22. Lee 23. Montgomery 24. Nelson 25. Patrick 26. Pittsylvania 27. Pulaski 28. Roanoke County 29. Rockbridge 30. Russell 31. Scott 32. Smyth 33. Tazewell 34. Washington 35. Wise 36. Wythe |  | 1.   Bedford City 2.
  Bristol 3.   Buena Vista 4.
  Charlottesville 5.   Covington 6.
  Danville 7.   Franklin City 8.
  Galax 9.   Lexington 10.
Lynchburg 11. Martinsville 12. Norton 13. Radford 14. Roanoke City 15. Salem 16. South Boston 17. Staunton 18. Waynesboro





D-1