Document:

<PAGE>

Exhibit 10.20

                                     LEASE

                                 by and between

                            PW ACQUISITIONS IV, LLC,
                      a Delaware limited liability company,

                                  as Landlord,

                                       and

                       BAY MEADOWS OPERATING COMPANY LLC,
                      a Delaware limited liability company,

                                    as Tenant
<PAGE>

                               TABLE OF CONTENTS
                                                                           Page
                                                                           ----
1.   Definitions; Term....................................................   4
--   -----------------
2.   Rent.................................................................   4
--   ----
3.   Net Lease............................................................   5
--   ---------
4.   Use..................................................................   6
--   ---
     (A)  Permitted Use...................................................   6
     ---  -------------
     (B)  Operating Covenant..............................................   6
     ---  ------------------
     (C)  Land Use Restrictions...........................................   6
     ---  ---------------------
     (D)  Cooperation.....................................................   6
     ---  -----------
5.   Taxes................................................................   6
--   -----
     (A)  Payment of Taxes................................................   6
     ---  ----------------
     (B)  Tax Contest.....................................................   7
     ---  -----------
6.   Condition of Premises................................................   8
--   ---------------------
7.   Repairs and Maintenance..............................................   9
--   -----------------------
8.   Compliance with Laws and Regulations.................................   9
--   ------------------------------------
     (A)  Compliance with Law.............................................   9
     ---  -------------------
     (B)  Environmental Matters...........................................   9
     ---  ---------------------
9.   Utilities and Services...............................................   11
--   ----------------------
10.  Landlord's Right of Access...........................................   11
---  --------------------------
11.  Indemnification......................................................   12
---  ---------------
12.  Insurance............................................................   12
---  ---------
     (A)  Improvements....................................................   12
     ---  ------------
     (B)  General Liability Insurance.....................................   13
     ---  ---------------------------
     (C)  Worker's Compensation...........................................   13
     ---  ---------------------
13.  Subordination........................................................   13
---  -------------
14.  Damage and Destruction...............................................   13
---  ----------------------
     (A)  Option to Terminate.............................................   13
     ---
     (B)  Waiver of Statutory Rights......................................   14
     ---  --------------------------
15.  Assignment...........................................................   14
---  ----------
     (A)  Prohibition on Assignment.......................................   14
     ---  -------------------------
     (B)  Permitted Subleases.............................................   14
     ---  -------------------
16.  Eminent Domain.......................................................   15
---  --------------
17.  Default..............................................................   15
---  -------
18.  Landlord's Remedies..................................................   16
---  -------------------
     (A)  Continuation....................................................   16
     ---  ------------
     (B)  Termination.....................................................   16
     ---  -----------
     (C)  Appointment of Receiver.........................................   17
     ---  -----------------------
     (D)  Landlord's Right to Cure........................................   17
     ---  ------------------------
19.  Mechanic's Liens.....................................................   17
---  ----------------
     (A)  Restriction Against Mechanic's Liens............................   17
     ---  ------------------------------------
     (B)  Contests - Surety Bond..........................................   17
     ---  ----------------------
     (C)  Right to Remove Liens...........................................   18
     ---  ---------------------
     (D)  Notice of Non-Responsibility....................................   18
     ---  ----------------------------
     (E)  Certificate of Completion.......................................   18
     ---  -------------------------

                                       i
<PAGE>

20.  Bankruptcy...........................................................  18
---  ----------
21.  Notices..............................................................  19
---  -------
22.  Quiet Enjoyment......................................................  19
---  ---------------
23.  Waiver...............................................................  20
---  ------
24.  Liability of Landlord................................................  20
---  ---------------------
     (A)  Landlord's Default..............................................  20
     ---  ------------------
     (B)  Limitation of Landlord's Liability..............................  20
     ---  ----------------------------------
25.  Landlord's Representations and Warranties............................  21
---  -----------------------------------------
26.  Tenant's Representations and Warranties..............................  21
---  ---------------------------------------
27.  Severability.........................................................  21
---  ------------
28.  Attorneys' Fees......................................................  21
---  ---------------
29.  Time of Essence......................................................  21
---  ---------------
30.  Nonmerger of Fee and Leasehold Estate................................  21
---  -------------------------------------
31.  Estoppel Certificates................................................  22
---  ---------------------
32.  Force Majeure - Unavoidable Delay....................................  22
---  ---------------------------------
33.  Surrender............................................................  22
---  ---------
34.  Lease Not a Partnership..............................................  22
---  -----------------------
35.  Holding Over.........................................................  23
---  ------------
36.  Execution in Counterparts............................................  23
---  -------------------------
37.  No Recordation.......................................................  23
---  --------------
38.  Applicable Law.......................................................  23
---  --------------
39.  Successors and Assigns...............................................  23
---  ----------------------
40.  Interpretation.......................................................  23
---  --------------
41.  Entire Agreement.....................................................  23
---  ----------------
42.  Signs................................................................  23
---  -----
43.  Good Faith and Reasonableness........................................  23
---  -----------------------------
44.  Further Assurances...................................................  24
---
45.  Access to Trailer Parcel.............................................  24
---
46.  Art..................................................................  24
---  ---

EXHIBITS:

EXHIBIT A:  Legal Description of the Premises
EXHIBIT B:  Art Work
EXHIBIT C:  Trailer Parcel

                                      ii
<PAGE>

                                     LEASE

     This Lease (this "Lease") dated as of November ____, 2000, is entered into
                       -----
by and between PW ACQUISITIONS IV, LLC, a Delaware limited liability company

("Landlord"), and BAY MEADOWS OPERATING COMPANY LLC, a Delaware limited
  --------
liability company ("Tenant").
                    ------

     In consideration of their respective agreements contained herein, Landlord
hereby leases to Tenant, and Tenant hereby leases from Landlord, that certain
parcel of real property (the "Land"), together with the horse racing facility
                              ----
and associated improvements (the "Main Track Improvements"), including without
                                  -----------------------
limitation all barn facilities thereon, located in the City of San Mateo, County
of San Mateo, California, as more particularly described on Exhibit A hereto,
                                                            ---------
and together with the art and other items (the "Art") identified on Exhibit B
                                                ---                 ---------
hereto, but not including that portion of the Land (the "Trailer Parcel")
                                                         --------------
outlined on Exhibit C attached hereto (collectively, the "Premises").  The
            ---------                                     --------
Premises includes all of the real property presently utilized to operate the Bay
Meadows Racecourse in a manner consistent with its present operations,
including, without limitation, the lands underlying the racetrack, infield,
grandstands, barns and related facilities, together with all of the parking lots
and ingress and egress rights held by Landlord and used in connection with the
present operation of the racetrack.

     Landlord and Tenant hereby agree as follows:

     1.   Definitions; Term.
          -----------------

          (a) For purposes of this Lease, the first "Lease Year" under this
                                                     ----------
Lease shall commence on the Commencement Date and terminate on December 31, 2001
(the "First Lease Year"), and the last "Lease Year" under this Lease shall
      ----------------                  ----------
commence on January 1, 2002 and terminate on the Expiration Date (the "Last
                                                                       ----
Lease Year").
----------

          (b) The term of this Lease shall commence on the date hereof (the

"Commencement Date") and shall end on the later of (i) December 31, 2002 or (ii)
------------------
the final date of any horse racing meet in progress on the Premises on December
31, 2002, but in no event later than March 31, 2003 (such date, or any prior
date on which this Lease may terminate pursuant to the terms hereof, shall be
hereinafter referred to as the "Expiration Date"), unless otherwise extended
                                ---------------
pursuant to the agreement of Landlord and Tenant, and either party may refuse to
agree to such an extension in its sole discretion.

     2.   Rent.  For each Lease Year, Tenant shall pay to Landlord at Landlord's
          ----
address for notices in Section 21 below, or to such other person or at such
                       ----------
other place as Landlord may direct by written notice from time to time, the
following rent, without demand, set-off or deduction:

     Lease Year            Annual Rent
     ---------------------------------
     First Lease Year          $1.00
     Last Lease Year           $1.00

                                       1
<PAGE>

The rent for the First Lease Year shall be due and payable on January 1, 2001.
The rent for the Last Lease Year shall be due and payable on January 1, 2002.
Any other sums, payments, charges and amounts due to Landlord from Tenant under
this Lease shall be deemed additional rent and shall be payable within ten (10)
business days following delivery to Tenant of written demand therefor.  Interest
shall accrue on any rent or additional rent owed by Tenant to Landlord,
commencing on the first date of delinquency and continuing until the full amount
(including interest) is paid to Landlord, at the Default Rate (as defined in

Section 18(b)).  Except as otherwise provided herein with respect to the timing
-------------
of payments, references in this Lease to "rent" shall include the annual rent
set forth in this Section 2 and all additional rent.
                  ---------

     3.   Net Lease.
          ---------

          (a) This Lease is intended to be, and shall be construed as, a net
Lease, whereby under all circumstances and conditions, whether now or hereafter
existing or within the contemplation of the parties, the rent set forth in

Section 2 hereof shall be a completely net return to Landlord throughout the
---------
Term, and Tenant shall pay, and shall indemnify and hold harmless Landlord from
and against, any and all expenses, costs, liabilities, obligations and charges
whatsoever that shall arise or be incurred, or shall become due, during or in
respect of the Term, or in respect of the Premises and the ownership, leasing,
operation, alteration, construction, management, maintenance, repair, use or
occupancy thereof, or any portion thereof, except as may be expressly provided
to the contrary herein.

          (b) Except as otherwise expressly provided in this Lease, any present
or future law to the contrary notwithstanding, Tenant shall not be entitled to
(and Tenant hereby expressly waives all rights to) any abatement, deferment,
reduction, set-off, counterclaim, defense or deduction with respect to any rent
payable pursuant to Section 2 hereof, additional rent or other sum payable
                    ---------
hereunder, and except as otherwise expressly provided in this Lease, the
obligations of Tenant hereunder shall not be affected by reason of (i) any
damage to or destruction of the Premises, (ii) any taking of the Premises or any
part thereof by condemnation or otherwise, (iii) any prohibition, limitation,
restriction or prevention of Tenant's use, occupancy or enjoyment of the
Premises, or any interference with such use, occupancy or enjoyment by any
person other than Landlord or Landlord's agents or employees or any person
claiming under Landlord, (iv) any default by Landlord hereunder or under any
other agreement, or (v) any action of any governmental authority.  The parties
intend that the obligations of Tenant hereunder shall be separate and
independent covenants and agreements and shall continue unaffected unless such
obligations shall have been modified or terminated pursuant to an express
provision of this Lease.

          (c) Tenant shall remain obligated under this Lease in accordance with
its terms and shall not take any action to terminate, rescind or avoid this
Lease, notwithstanding any bankruptcy, insolvency, reorganization, liquidation,
dissolution or other proceeding affecting Landlord or any assignee of Landlord,
or any action with respect to this Lease that may be taken by any trustee,
receiver or liquidator or by any court provided that such action does not
materially adversely affect any rights or benefits granted to Tenant hereunder.
If any of the events described in the immediately preceding sentence shall
occur, Tenant waives all rights to terminate or surrender this Lease (except as
expressly permitted hereby, including, without limitation, in the event any
rights or benefits granted to Tenant hereunder are materially

                                       2
<PAGE>

adversely affected), or to any abatement or deferment of rent payable under
Section 2 hereof, additional rent or other sums payable hereunder.
---------

     4.   Use.
          ---

          (a) Permitted Use.  The Premises may only be used (i) as a horse
              -------------
racing track and for other incidental or related sporting and similar events,
including pari-mutuel wagering on thoroughbred, quarter horse and harness horse
racing, horse training and boarding, operating as a satellite facility receiving
the broadcast of horse racing from locations outside of Bay Meadows, and civic
and public relations activities such as horse shows, banquets, concerts, dances
and film and television production, (ii) for other activities ancillary to such
purposes, and (iii) for such other lawful uses with Landlord's consent, which
consent will not be unreasonably withheld, delayed or conditioned; provided,
however, that in no event shall any form of wagering other than pari-mutuel
wagering provided in (i), above, be allowed in the Premises.

          (b) Operating Covenant.  Tenant shall continuously operate the
              ------------------
Premises as a horseracing facility, consistent with the prior operation of the
Premises, through December 31, 2002.

          (c) Land Use Restrictions.  Tenant shall not apply for, request,
              ---------------------
execute or enter into any document, instrument or agreement with any
governmental authority or other third party restricting or modifying the use of
the Premises, granting easements over the Premises, seeking or obtaining zoning
changes or conditional use or similar permits, or otherwise encumbering the
Premises or any portion thereof.  This provision shall not apply to
communications with or applications made to or agreements entered into with the
California Horse Racing Board by Tenant.

          (d) Tenant's Cooperation.  Tenant shall, at Landlord's request,
              --------------------
reasonably cooperate with Landlord in connection with any application or
submission by Landlord to the City or any other governmental authority regarding
a modification of the zoning or permitted use of the Premises applicable to any
period subsequent to the term of this Lease.

     5.   Taxes.
          -----

          (a) Payment of Taxes. Tenant, in addition to the rent provided for
              ----------------
herein, shall pay prior to delinquency all Real Estate Taxes levied against the
Premises during the Lease term.  The phrase "Real Estate Taxes" means all taxes,
                                             -----------------
assessments (including, without limitation, general, special, supplemental and
escape assessments), possessory interest taxes, impositions, service payments,
license, permit, inspection or use fees, excises, transit charges, housing fund,
assessments, impositions, levies, fees or charges, general or special, ordinary
or extraordinary, unforeseen as well as foreseen, of any kind which are
assessed, levied, charged or imposed by any public, quasi-public or private
authority upon the Premises (including both the land and the improvements
constituting the Premises), the operation of the Premises, or the rent payable
hereunder, and shall include the cost of contesting by appropriate proceedings
the amount or validity of any of the foregoing (subject to Section (5)(b) below)
                                                           --------------
and also shall include any interest or penalties for late payments of any of the
foregoing.  Real Estate Taxes shall also include any increases in any taxes
assessed, levied, charged or imposed on the Premises resulting

                                       3
<PAGE>

from an increased assessed value of the Premises (or portion thereof) following
a "change of ownership" of the Premises, as that term is defined in California
Revenue and Tax Code (S) 60. If any governmental authority imposes, assesses or
levies a tax on rent or any other tax upon Landlord as a substitute in whole or
in part for a Real Estate Tax, the substitute tax shall be deemed to be a Real
Estate Tax. Except as expressly set forth herein, "Real Estate Taxes" shall
however, exclude, and Tenant shall not be obligated to pay, franchise,
corporate, net income or profit, capital levy, capital stock, transfer, estate,
gift, inheritance tax or successor tax payable by Landlord. Notwithstanding the
foregoing, Landlord shall be responsible for and shall pay directly fifty
percent (50%) of each installment of Real Estate Taxes levied against the Land
and the Main Track Improvements constituting a portion of the Premises and
Tenant shall pay (as provided above) the remaining fifty percent (50%) of each
such installment of Real Estate Taxes levied against the Land and the Main Track
Improvements constituting a portion of the Premises.

          (b) Tax Contest.  Landlord and Tenant agree to consult with each other
              -----------
and to keep each other advised concerning any controversy or contest pertaining
to the amount or validity of any Real Estate Taxes.  Notwithstanding the
foregoing, either Landlord or Tenant shall have the right to contest or review,
by legal proceedings or in such other manner as it may deem suitable (which, if
instituted by Tenant, shall be conducted by Tenant at its own expense and free
of any expense to Landlord), the amount of any valuation or rate in respect of
any Real Estate Taxes or the validity of any Real Estate Taxes enacted after the
date of this Lease and payable with respect to periods during the Lease term.
Tenant may cause to be paid under protest or Tenant may cause the payment of a
contested item to be deferred to the extent permitted by law, provided that in
the case of such a deferral of payment such contest does not subject Landlord or
the Premises to any civil or criminal liability or penalty, and that, prior to
the institution of any such proceedings, Tenant shall furnish to Landlord: (i)
an agreement by Tenant to indemnify Landlord against all losses, costs, damages
and expenses including, without limitation, reasonable attorney's fees and
disbursements incurred by reason of such contest; or (ii) a surety company bond,
cash deposit or other security satisfactory to Landlord, sufficient to cover the
amount of the contested item or items and interest and penalties covering the
period which such proceedings may be expected to take, securing payment of such
contested items, interest, penalties and all costs in connection therewith.
Notwithstanding the furnishing of any such indemnity, bond or security (other
than a cash deposit), if the Premises or any part thereof shall at any time be
in imminent danger of being sold, forfeited or otherwise lost, then Tenant shall
promptly pay such contested item or items:  provided, however, that if Tenant
shall have made a cash deposit, then Landlord shall thereupon pay the contested
item or items out of the cash deposit, and any balance of the cash deposit
remaining after the payment or cancellation thereof shall be repaid to Tenant
without interest.  The legal proceedings may review tax assessments, appeals
from orders therein and appeals from any judgments, decrees or orders, but all
such proceedings shall be commenced by Tenant as soon as practicable after the
imposition or assessment of any contested item and shall be prosecuted by Tenant
to final adjudication with dispatch.  Any refunds recovered by Tenant may be
retained by and shall be the property of Tenant except that such refunds (net of
the costs of collection) shall belong to Landlord if and to the extent they are
in respect of a period prior or subsequent to the Commencement Date.  Landlord
shall not be required to join in any proceedings referred to in this
subparagraph unless the provisions of any law or the requirements of any
governmental authority at the time in effect shall require that such proceedings
be brought by or in the name of Landlord, in which event Landlord shall join in
such proceedings or permit the same to be brought in its name, and

                                       4
<PAGE>

Landlord shall otherwise reasonably cooperate with Tenant in connection with any
such tax contest or proceeding, at no cost to Landlord. Landlord shall not be
subjected to any liability for the payment of any costs or expenses in
connection with any such proceedings, and Tenant shall indemnify and save
harmless Landlord from any such costs and expense, including reasonable
attorneys' fees and disbursements.

          (c) During the Lease term, Tenant shall pay, prior to delinquency, any
and all taxes imposed by any governmental authority upon any personal property,
machinery or equipment of Tenant located on or affixed to the Premises.  This
obligation shall be subject to the indemnity provisions of Section 11.
                                                           ----------

     6.   Condition of Premises.  Except as specifically provided for herein,
          ---------------------
neither Landlord nor its agents have made any representations with respect to
the  Premises, Tenant has made such inspections of the  Premises as it desires
and accepts the  Premises "AS IS" without any representation or warranty,
express or implied, in fact or by law, by Landlord as to the condition of the
Premises.  Tenant acknowledges that it is familiar with all aspects of the
condition of the  Premises, and that, except as may be expressly set forth
herein, no representations, warranties, guarantees or assurances, whether
express or implied, have been made by Landlord, or any agent or person
representing or acting on behalf of Landlord, to Tenant with respect to the
condition of the  Premises, any easements, covenants, liens or encumbrances
affecting the  Premises, the environmental history or environmental condition of
the  Premises, the projected revenues, expenses or operating results of the
Premises, the obtainability of any licenses or permits which may be necessary or
desirable in connection with the use and operation of the  Premises, the zoning
and other legal requirements applicable to the  Premises or the compliance of
the  Premises therewith, the use or occupancy of the  Premises or any part
thereof, or any other matter whatsoever relating to the  Premises.  Except as
may be otherwise expressly provided herein, Landlord shall have no liability to
Tenant because of, or as a result of, the existence of any subsurface or soil
condition, either on the  Premises or land adjacent thereto, which might affect
Tenant's activities on the  Premises.

     Notwithstanding the foregoing, Landlord hereby represents and warrants to
Tenant as follows:

          (a) Landlord has full right and lawful authority to enter into this
Lease for the term granted herein, and has good and marketable title to the
Premises free and clear of any mortgages, liens or encumbrances which would
interfere with Tenant's quite enjoyment of the Premises for the purposes set
forth herein.

          (b) As of the commencement of the term, the Premises, and the use of
the premises for the purposes contemplated by this Lease, comply with all
covenants, conditions, restrictions, easements and similar agreements recorded
against or binding on the Premises and/or any tenant thereof.

          (c) Landlord has not generated, used, transported, treated, stored,
released or disposed of, or has suffered or permitted anyone else to generate,
use, transport, treat, store, release or dispose of any Hazardous Materials (as
defined below) at or about the Premises in

                                       5
<PAGE>

violation of any Hazardous Materials Laws (as defined below). To Landlord's
knowledge, no underground storage tank is contained in or located at the
Premises.

          (d) Landlord has not received any notice from any governmental agency
or entity that the present waste water management practices at the Facility are
in violation of any Hazardous Materials Laws

     7.   Repairs and Maintenance.  Subject to Section 14 hereof, Tenant, at its
          -----------------------              ----------
sole expense, shall maintain and repair the Premises in a manner adequate for
Tenant's use of the Premises.  Except to the extent any such change is required
as a result of the ADA Litigation, Landlord shall not be required to make any
repairs, alterations, improvements, replacements, changes or additions to the
Premises, Tenant shall not call upon Landlord for any disbursement or outlay
whatsoever in connection therewith, and Tenant hereby expressly releases and
discharges Landlord of and from any liability therefor.  Notwithstanding the
foregoing, in the event any repairs to the Premises is, in the reasonable
opinion of Tenant required to permit Tenant to operate the Premises during the
entire term of this Lease in a manner consistent with its past use, and in the
event such repair would cost in the aggregate in excess of two hundred thousand
dollars ($200,000), then Tenant shall have the option to terminate this Lease;
provided, that as a condition to the exercise of such option Tenant shall either
pay or have paid to Landlord the rent in full for the entire term of this Lease.

     8.   Compliance with Laws and Regulations.
          ------------------------------------

          (a) Compliance with Law.  Tenant, at its sole expense, shall comply
              -------------------
with (i) all statutes, laws, ordinances, orders, codes, conditions, rules and
regulations of federal, state and municipal authorities now in force or which
may hereafter be in force (collectively, "Applicable Law") pertaining to
                                          --------------
Tenant's use and occupancy of the  Premises, (ii) all rules, regulations, orders
and other requirements of the Board of Fire Underwriters of the State of
California, the Fire Insurance Rating organization of the State of California,
and any other similar body performing the same or similar functions and having
jurisdiction or authority over the  Premises (the "Insurance Requirements"), and
                                                   ----------------------
(iii) all covenants, easements and other instruments and agreements recorded in
the land records of the County and encumbering the  Premises or any portion
thereof (the "Property Restrictions").  Tenant, at its sole expense, shall
              ---------------------
obtain and comply with all licenses, permits or approvals that may be required
for the conduct of its business and operations or for the making of repairs,
alterations, improvements, additions to the  Premises.  Tenant shall not commit,
or suffer to be committed, any waste upon the  Premises or any nuisance.

          (b)  Environmental Matters.

               (i) Tenant shall, at its sole expense, at all times and in all
respects comply with all federal, state and local statutes, laws, ordinances,
orders, codes, conditions, rules and regulations (collectively "Hazardous
                                                                ---------
Materials Laws") relating to industrial hygiene, environmental protection or the
--------------
use, analysis, generation, manufacture, storage, disposal or transportation of
any oil, gasoline and related products, flammable explosives, asbestos,
radioactive materials or waste, or other hazardous, toxic, contaminated or
polluting materials, substances or wastes, including, without limitation, any
"hazardous substances," "hazardous

                                       6
<PAGE>

wastes," "hazardous materials" or "toxic substances" under any such laws,
ordinances or regulations, any toxic or hazardous substance, material or waste
listed in the United States Department of Transportation Table (49 CPR 172.101)
or by the Environmental Protection Agency as a hazardous substance (40 CPR, Part
302) and amendments thereto, or such substances, materials and wastes which are
or become regulated or listed as toxic under any applicable local, state or
federal law (collectively, "Hazardous Materials").
                            -------------------

              (ii)  Tenant shall, at its own expense procure, maintain in effect
 and comply with all conditions of any and all permits, licenses and other
governmental and regulatory approvals required for Tenant's use of the
Premises, including, without limitation, discharge of (appropriately treated)
materials or wastes into or through any sanitary sewer serving the  Premises.
Except as discharged into the sanitary sewer in strict accordance and conformity
with all applicable Hazardous Materials Laws, Tenant shall cause any and all
Hazardous Materials removed from the Premises to be removed and transported
solely by duly licensed haulers to duly licensed facilities for final disposal
of such materials and wastes if required by applicable governmental agencies
having responsibility for any such removal.  Tenant shall in all respects
handle, treat, deal with and manage any and all Hazardous Materials in, on,
under or about the Premises in strict conformity with all applicable Hazardous
Materials Laws and prudent industry practices regarding management of such
Hazardous Materials.  Upon expiration or earlier termination of the term of this
Lease, Tenant shall cause all Hazardous Materials discharged during the term of
this Lease upon the  Premises (other than by Landlord or Landlord's agents or
employees) in excess of levels permitted by governmental authorities to be
removed from the  Premises and transported for use, storage or disposal in
accordance and compliance with all applicable Hazardous Materials Laws.  Tenant
shall not take any remedial action in response to the presence of any Hazardous
Materials in or about the  Premises, nor enter into any settlement agreement,
consent decree or other compromise in respect to any claims relating to any
Hazardous Materials in any way connected with the  Premises, without first
notifying Landlord of Tenant's intention to do so, obtaining Landlord's prior
written consent (which consent shall not be unreasonably withheld, delayed or
conditioned), and affording Landlord ample opportunity to appear, intervene or
otherwise appropriately assert and protect Landlord's interest with respect
thereto.

              (iii) Tenant shall immediately notify Landlord in writing of:  (A)
any enforcement, cleanup, removal or other governmental or regulatory action
instituted, completed or threatened pursuant to any Hazardous Materials Laws;
(B) any claim made or threatened by any person against Tenant or the  Premises
relating to damage, contribution, cost recovery compensation, loss or injury
resulting from or claimed to result from any Hazardous Materials; and (C) any
reports made to any environmental agency arising out of or in connection with
any Hazardous Materials in or removed from the  Premises, including any
complaints, notices, warnings or asserted violations in connection therewith.
Tenant shall also supply to Landlord as promptly as possible, and in any event
within five (5) business days after Tenant first receives or sends the same,
copies of all claims, reports, complaints, notices, warnings or asserted
violations relating in any way to the  Premises or Tenant's use thereof.  Upon
request of Landlord, Tenant shall promptly deliver to Landlord copies of
hazardous waste manifests reflecting the legal and proper disposal of all
Hazardous Materials removed from the  Premises.

                                       7
<PAGE>

          (iv) Landlord shall, at Landlord's sole expense and with counsel
reasonably acceptable to Tenant, indemnify, defend and hold harmless Tenant and
Tenant's members and each of their shareholders, directors, officers, employees,
partners, affiliates and agents (the "Tenant Indemnified Parties") with respect
                                      --------------------------
to any and all claims, liabilities, penalties, forfeitures, losses or expenses
(including attorneys' fees) or death of or injury to any person or damage to any
property whatsoever incurred by Tenant Indemnified Parties, arising out of or
resulting from the use, analysis, storage, transportation, disposal, release,
threatened release, discharge or generation of any Hazardous Materials in or
about the Premises or the violation of any Hazardous Materials Law prior to the
Commencement Date of this Lease.  Landlord's obligations hereunder shall survive
the expiration or earlier termination of the term of the Lease.  For purposes of
the indemnity provisions hereof, any acts or omissions of Landlord, or by
employees, agents, assignees, contractors or subcontractors of Landlord or
others acting for or on behalf of Landlord (whether or not they are negligent,
intentional, willful or unlawful) shall be strictly attributable to Landlord.

          (v)  Tenant shall, at Tenant's sole expense and with counsel
reasonably acceptable to Landlord, indemnify, defend and hold harmless Landlord
and Landlord's shareholders, directors, officers, employees, partners,
affiliates, agents, successors and assigns with respect to any and all claims,
liabilities, penalties, forfeitures, losses or expenses (including attorneys'
fees) or death of or injury to any person or damage to any property whatsoever,
arising out of or resulting from the use, analysis, storage, transportation,
disposal, release, threatened release, discharge or generation of any Hazardous
Materials in or about the Premises or the violation of any Hazardous Materials
Law during the term of this Lease except to the extent caused by Landlord or its
agents or employees. Tenant's obligations hereunder shall include, without
limitation, and whether foreseeable or unforeseeable, all costs of any required
or necessary repair, cleanup or detoxification or decontamination of the
Premises resulting from the facts or circumstances described in the first
sentence of this subparagraph (v), and the preparation and implementation of any
closure, remedial action or other required plans in connection therewith, and
shall survive the expiration or earlier termination of the term of the Lease.
For purposes of the release and indemnity provisions hereof, any acts or
omissions of Tenant, or by employees, agents, assignees, contractors or
subcontractors of Tenant or others acting for or on behalf of Tenant (whether or
not they are negligent, intentional, willful or unlawful) shall be strictly
attributable to Tenant.

     9.   Utilities and Services.  Tenant shall supply and pay all charges for
          ----------------------
water, gas, heat, light, telephone, power and all other utilities and services
used by Tenant on or supplied to the  Premises during the Lease term.

     10.  Landlord's Right of Access.  Subject to Landlord taking reasonable
          --------------------------
steps to minimize interference with Tenant's use of the  Premises, Landlord and
its representatives may enter the  Premises at any reasonable time for the
purpose of inspecting the  Premises, showing same to prospective tenants (only
during the last nine (9) months of the Lease term) or purchasers, posting and
keeping notices as provided by Section 3094 of the Civil Code of California or
by any other law or which Landlord deems necessary for the protection of
Landlord and the  Premises, or to exercise its rights under this Lease.  Except
for Landlord's or Landlord's representatives' gross negligence or intentional
misconduct, Landlord's right of access shall not be deemed to impose upon
Landlord any obligation, responsibility or liability for the care,

                                       8
<PAGE>

maintenance, supervision or repair of the Premises nor a waiver of any default
on the part of Tenant. Landlord shall not be liable to Tenant for any loss of
occupation or quiet enjoyment of the Premises occasioned thereby, nor shall
Landlord's entry constitute an actual or constructive eviction of Tenant.

     11.  Indemnification.  (a) Tenant shall defend (upon notice from Landlord
          ---------------
and with counsel reasonably acceptable to Landlord), indemnify and hold
Landlord's affiliates, and the partners, shareholders, directors, managers,
employees, agents, attorneys, successors and assigns of any of the foregoing,
free and harmless against and from any and all claims, demands, liens,
liabilities, damages, suits, fines, penalties and expenses, including reasonable
attorneys' fees and costs of defense (collectively, "Claims") relating to the
                                                     ------
Premises arising from any cause whatsoever, except those Claims that arise due
to the gross negligence or willful misconduct of Landlord or those Claims or
matters for which Landlord is expressly indemnifying Tenant hereunder.  Except
to the extent Landlord is expressly indemnifying Tenant hereunder, Tenant, as a
material part of the consideration to Landlord, hereby assumes all risk of
damage to property or injury to persons in, upon or about the Premises from any
cause except the gross negligence or willful acts or omissions of Landlord or
its agents, employees or contractors.  Landlord shall not be liable for
interference with light, air or other similar benefit nor shall Landlord be
liable for any defect in the Premises.  Tenant's indemnification set forth in
this Section 11(a), and any other indemnification obligations of either party
     -------------
pursuant to this Lease, shall survive the expiration or other termination of
this Lease.

     (b)  Landlord shall, at Landlord's sole expense and with counsel reasonably
acceptable to Tenant, indemnify, defend and hold harmless the Tenant Indemnified
Parties from and against any and all claims, losses, costs, damage, expenses,
liabilities, liens, actions, causes of action (whether in tort or contract, law
or equity, or otherwise), charges, assessments, fines and penalties of any kind
(including consultant and expert expenses, court costs and attorney fees
actually incurred) arising from or relating to that certain complaint,
Marquejanet A. Brown, et al v. Bay Meadows Operating Company, LLC, et.al., filed
---------------------------    ------------------------------------------
in the United States District Court for the Northern District of California, as
Case No. C 00 0908 MJJ, or the facts and circumstances giving rise thereto (the
"ADA Litigation"). . Landlord's indemnification set forth in this Section
 --------------                                                     -------
11(b), and any other indemnification obligations of either party pursuant to
-----
this Lease, shall survive the expiration or other termination of this Lease.

     12.  Insurance.
          ---------

          (a) Improvements.  Throughout the Lease term, at Tenant's sole
              ------------
expense, Tenant shall maintain in effect property insurance in an amount equal
to the full insurable replacement cost with coverage at least as broad as ISO
form CP1030 Special Form Causes of Loss ("all risks"), covering the Main Track
Improvements against loss or damage by fire and such other risks as are now or
hereafter included in such coverage.  Such property insurance shall contain an
agreed valuations provision in lieu of any co-insurance clause.  Landlord shall,
at Tenant's expense, cooperate fully with Tenant to obtain the largest possible
recovery, and all policies of fire and extended coverage insurance required by
this Section 12(a) shall provide that the proceeds shall be paid to Landlord and
     -------------
shall be utilized and applied as hereinafter set forth.  Such insurance shall
contain an express waiver of any right of subrogation against Landlord.
Landlord shall have the right (but not the obligation) and at its expense, to
carry such additional

                                       9
<PAGE>

insurance as it deems necessary to protect its interest in the Premises against
the risks enumerated above or such other risks as it deems appropriate.

          (b) General Liability Insurance.  Throughout the Lease term, at
              ---------------------------
Tenant's sole expense, Tenant shall maintain:

              (i)  Commercial General Liability insurance, written on an
occurrence (not claims-made) basis, covering the Premises, and all operations of
or under the control of Tenant in connection therewith, with coverage at least
as broad as ISO form CGOOO1 1298 Commercial General Liability. Such insurance
shall provide coverage for bodily injury, including without limitation personal
injury, sickness, disease or death, and damage to or destruction of property
(including loss of use resulting therefrom), with minimum combined single limits
of not less than $10,000,000 (not including defense costs), and a deductible of
not more than $25,000. Such policies shall contain endorsements (a) including
employees and naming Landlord as an additional insured, (b) deleting any liquor
liability exclusion, (c) specifically insuring Tenant's indemnity obligations
under Section 11 and elsewhere in this Lease, and (d) covering products and
      ----------
completed operations, elevator liability, and garage keeper's liability; and

              (ii) automobile liability insurance (bodily injury and property
damage), including coverage for all owned (if any), hired and non-owned vehicles
and equipment with a minimum combined single limit of at least One Million
Dollars ($1,000,000).

          (c) Worker's Compensation.  Throughout the Lease term, at Tenant's
              ---------------------
sole expense, Tenant shall maintain statutory worker's compensation insurance in
form and amount as required by Applicable Law, as defined in Section 8(a).
                                                             ------------

          (d) All insurance required by express provisions of this Lease shall
be carried only with responsible insurance companies licensed to do business in
the State of California and approved by Landlord.  Tenant shall promptly furnish
Landlord with Accord 27, Evidence of Property Insurance and shall name Landlord
as additional insured on all policies, which shall provide 30 days notice of
cancellation.

          (e) Tenant may effect for its own account any insurance not required
under this Lease.  Tenant may provide by blanket insurance, covering the
Premises and any other location or locations, any insurance required or
permitted under this Lease, so long as the coverage of such blanket insurance is
equivalent to that provided by separate policies.

     13.  Subordination.  Landlord will not be required to subordinate its fee
          -------------
interest in the  Premises to any encumbrances of any kind, including, without
limitation, leases, mortgages or deeds of trust that may be executed covering
the Premises, or any renewals, modifications, consolidations, replacements or
extensions thereof.

     14.  Damage and Destruction.
          ----------------------

          (a) Option to Terminate.  If the Main Track Improvements, or any
              -------------------
portion thereof, are damaged or destroyed to any material extent, then Tenant
shall have the right to terminate this Lease effective upon the date of such
damage or destruction by giving Landlord

                                      10
<PAGE>

notice within thirty (30) days of the date of such damage or destruction;
provided that it shall be a condition to the termination of this Lease by Tenant
that Landlord shall receive either from Tenant or from the proceeds of insurance
delivered to Landlord on account of such damage or destruction an amount equal
to full rent required to be paid for the full term of this Lease through and
including the Expiration Date. If Tenant exercises the foregoing right of
termination, Tenant shall deliver to Landlord the proceeds of insurance paid or
payable in connection with such damage or destruction. Notwithstanding the
foregoing, in the event Tenant so terminates this Lease and Landlord receives
either from Tenant or from insurance proceeds payable on account of such damage
or destruction an amount equal to the full rent required to be paid for the full
term of this Lease, then the balance of any such insurance proceeds shall be
distributed to Landlord and Tenant as follows: First, Tenant shall be entitled
to receive from any remaining insurance proceeds (but only from such insurance
proceeds) an amount equal to the prorata portion of the rent paid to Landlord
for the period from the date of termination to the end of the term of this Lease
through and including the Expiration Date; Second, Landlord shall be entitled to
receive an amount of the full cost to fully demolish and clear the Land of the
Facility and all other Main Track Improvements. Third, any remaining insurance
proceeds shall be disbursed by Landlord, fifty percent (50%) to Landlord and
fifty percent (50%) to Tenant.

          (b) Waiver of Statutory Rights.  Tenant waives the provisions of Civil
              --------------------------
Code Section 1932(2) and Civil Code Section 1933(4) with respect to any
destruction of the  Premises.

     15.  Assignment.
          ----------

          (a) Prohibition on Assignment.  Tenant shall not, directly or
              -------------------------
indirectly, sell, convey, assign, transfer, pledge, or encumber its interest in
this Lease or in the Premises, or sublease all or any part of the Premises,
except as provided in Section 15(b) below, or allow any other person or entity
                      -------------
(except Tenant's authorized representatives) to occupy or use all or any part of
the  Premises, without first obtaining Landlord's written consent, which consent
may be withheld in Landlord's sole discretion.  Any assignment, encumbrance or
sublease, without Landlord's prior written consent (except as permitted under

Section 15(b)), shall be void and, at Landlord's election shall constitute a
-------------
default hereunder.  No consent to any assignment, encumbrance or sublease shall
constitute a further waiver of the provisions of this Section 15(a).  No
                                                      -------------
interest of Tenant in this Lease shall be assignable by operation of law.  As
used herein, the term "assignment" shall include, without limitation, the direct
or indirect sale, transfer, conveyance or disposition of (i) more than 50% (in
the aggregate) of the beneficial economic interests in Tenant, whether in a
single transaction or in a series of transactions, or (ii) any right or interest
in Tenant which provides the holder of such right or interest with the power or
authority to direct the operations and management of Tenant.

          (b) Permitted Subleases.  The provisions of this Section 15 shall not
              -------------------                          ----------
prohibit Tenant from, and Landlord's consent shall not be required for, entering
into a sublease to any entity controlled by, controlling or under common control
with Tenant (including, without limitation, Pacific Racing Association, for the
running of all or any part of Golden Gate Fields meet at the Premises).  The
provisions of this Section 15 also shall not prohibit Tenant from, and
                   ----------
Landlord's consent shall not be required for, subleases, sub-subleases,
concessions, or licenses to vendors or operators necessary or desirable in
connection with the operation of the Main Track Improvements as a horseracing
facility in the normal course of business.  Each sublease, sub-

                                      11
<PAGE>

sublease, concession or license that is entered into by Tenant shall provide
that it is subject to the provisions of this Lease and the term of any such
sublease, sub-sublease, concession or license shall not exceed the Lease term.
Tenant shall provide Landlord with prior written notice of any such sublease,
sub-sublease, concession or license that is entered into by Tenant, and shall
promptly provide Landlord with copies of any such agreements and any notices
delivered by any party under such agreements.

     16.  Eminent Domain.  If the whole of the  Premises, or so much thereof as
          --------------
to render the balance unusable by Tenant for the purposes set forth in Section
                                                                       -------
4, shall be taken under power of eminent domain, or sold, transferred or
conveyed in lieu thereof, then this Lease shall automatically terminate as of
the date of such condemnation, or as of the date possession is taken by the
condemning authority, whichever is later.  No award for any partial or entire
taking shall be apportioned, and Tenant hereby assigns to Landlord any award
which may be made in such taking or condemnation, together with any and all
rights of Tenant now or hereafter arising thereto; provided, however, that
Tenant shall have the right to make a separate claim for, and recover from the
condemnor and Landlord shall not have any interest in any award made to Tenant
for, the interruption of, or damage to, Tenant's business, including, without
limitation, Tenant's relocation costs, provided that such award to Tenant does
not reduce Landlord's award made in connection with such taking.
Notwithstanding the foregoing, in the event this Lease terminates as a result of
any eminent domain action and as a result thereof Landlord does not receive an
amount which when added to rent previously paid to Landlord under this Lease
equals at least six million dollars ($6,000,000), then tenant shall pay to
Landlord the difference between such amount and six million dollars ($6,000,000)
upon the date of termination of this Lease, which obligation shall survive the
termination of this Lease.  In the event of a partial taking, or a sale,
transfer or conveyance in lieu thereof, which does not result in a termination
of this Lease, the rent shall not be reduced.  Each party waives the provisions
of Code of Civil Procedures Section 1265.130 allowing either party to petition
the Superior Court to terminate this Lease in the event of a partial taking of
the Premises that does not prevent Tenant from continuing its business
activities at the  Premises.

     17.  Default.  The occurrence of any of the following shall constitute a
          -------
default, by Tenant under this Lease:

          (a) failure to pay rent (including additional rent) when due, if the
failure continues for ten (10) business days after written notice of same has
been given to Tenant;

          (b) failure to perform any other provision of this Lease, if the
failure to perform is not cured within thirty (30) days after written notice has
been given to Tenant; provided, however, that, if the nature of Tenant's
obligation is such that more than thirty (30) days are required for its
performance, then Tenant shall not be deemed to be in default if it shall
commence performance within such thirty (30)-day period and thereafter
diligently prosecute the same to completion.

              Failure to pay any sums that Tenant is obligated to pay under this
Lease (whether to Landlord or to any other person or entity) shall not, in any
event, constitute a default not reasonably capable of being cured within thirty
(30) days.  Notices given under this Section 17 shall specify the alleged
                                     ----------
default and the applicable Lease provisions, and shall demand that

                                      12
<PAGE>

Tenant perform the provisions of this Lease or pay the rent that is in arrears,
as the case may be, within the applicable period of time, or quit the Premises.
No such notice shall be deemed a forfeiture or a termination of this Lease
unless Landlord so elects in the notice.

     18.  Landlord's Remedies.  Landlord shall have the following remedies if
          -------------------
Tenant commits a default, which remedies are not exclusive but are cumulative
and in addition to any remedies now or later allowed by law:

          (a) Continuation.  Landlord may continue this Lease in full force and
              ------------
effect, and the Lease will continue in effect as long as Landlord does not
terminate Tenant's right of possession, and Landlord shall have the right to
collect rent when due.  During the period Tenant is in default, Landlord can
enter the Premises and relet them, or any part of them, to third parties for
Tenant's account.  Tenant shall be liable immediately to Landlord for all costs
Landlord incurs in reletting the Premises, including, without limitation,
brokers' commissions, expenses of preparing the Premises for reletting, and like
costs.  Reletting can be for a period shorter or longer than the remaining Lease
term.  Tenant shall pay to Landlord the rent due under this Lease on the dates
the rent is due, less the rent Landlord receives from any reletting.  No act by
Landlord allowed by this Section 18 shall terminate this Lease unless Landlord
                         ----------
elects to terminate this Lease.  To the fullest extent permitted by Applicable
Law, the revenues from any reletting shall be applied:

              (i)   first, to pay to Landlord the costs and expense of such
reletting, including, without limitation, costs and expenses of retaking or
repossessing the Premises, removing persons and property therefrom, and securing
new tenants;
              (ii)  second, to the payment of rent, additional rent and other
sums due and unpaid hereunder, and

              (iii) the residue, if any, shall be held by Landlord and applied
to payment of other or future obligations of Tenant to Landlord under this Lease
as the same become due and payable.

          (B) Termination.  Landlord may terminate Tenant's right to possession
              -----------
of the Premises at any time.  No act by Landlord other than giving written
notice to Tenant shall terminate this Lease.  Acts of maintenance, efforts to
relet the Premises or the appointment of a receiver on Landlord's initiative to
protect Landlord's interest under this Lease shall not constitute a termination
of Tenant's right of possession.  On termination, Landlord has the right to
recover from Tenant:

              (i)   the worth, at the time of the award, of the unpaid rent
that had been earned at the time of termination of this Lease;

              (ii)  the worth, at the time of the award, of the amount by which
the unpaid rent that would have been earned after the date of termination of
this Lease until the time of award exceeds the amount of the loss of rent that
Tenant proves could have been reasonably avoided;

                                      13
<PAGE>

               (iii) the worth, at the time of the award, of the amount by which
the unpaid rent for the balance of the term after the time of award exceeds the
amount of the loss of rent that Tenant proves could have been reasonably
avoided; and

               (iv)  any other amount, and court costs, necessary to compensate
Landlord for all detriment proximately caused by Tenant's default.

     "The worth, at time of award," as used in subparagraphs (i) and (ii) above,
shall be computed by allowing interest at the prime rate as quoted by the Wall
Street Journal at the time of the award, plus two percent (2%) (the "Default
                                                                     -------
Rate").  "The worth, at the time of award," as referred to in subparagraph
----
(iii), shall be computed by discounting the amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of the award, plus one percent
(1%).

          (c) Appointment of Receiver.  Landlord may have a receiver appointed
              -----------------------
to collect rent and conduct Tenant's business.  Neither the filing of a petition
for the appointment of a receiver nor the appointment itself shall constitute an
election by Landlord to terminate this Lease.

          (d) Landlord's Right to Cure.  Landlord, at any time after Tenant
              ------------------------
commits a default (which default continues for a period of thirty (30) days
following the delivery of written notice by Landlord to Tenant), may cure the
default at Tenant's cost; provided, however, that so long as Tenant has
commenced to cure a non-monetary default within such thirty (30)-day period and
is using diligent efforts to complete the cure of such default and so long as
such default is actually cured within ninety (90) days, Landlord shall not have
the right to cure such default.  If Landlord at any time, by reason of Tenant's
default, pays any sum or does any act that requires the payment of any sum, then
the sum paid by Landlord shall be due within ten (10) days after demand therefor
from Tenant to Landlord as additional rent at the time the sum is paid, and if
paid at a later date shall bear interest at the Default Rate from the date the
sum is paid by Landlord until Landlord is fully reimbursed by Tenant.

     Nothing in this Section 18 shall be deemed to affect Landlord's right to
                     ----------
indemnification for liability or liabilities arising prior to the termination of
this Lease, including personal injuries and property damage under the
indemnification provisions of Section 11 or elsewhere in this Lease.
                              ----------

     19.  Mechanic's Liens.
          ----------------

          (a) Restriction Against Mechanic's Liens.  Tenant shall not permit or
              ------------------------------------
suffer to be placed against the Premises, or any part thereof, any mechanic's,
materialman's, contractor's or subcontractor's liens, arising from any work to
be performed on the Premises by, at the request or on behalf, of Tenant, or its
employees or agents.  Tenant shall pay, or cause to be paid, all of such liens,
claims or demands before any action is brought to enforce the same against the
Premises.

          (b) Contests - Surety Bond.  Tenant, at its sole expense, may contest
              ----------------------
any lien for which Tenant is responsible pursuant to Section 19(a), but shall
                                                     -------------
pay any adverse judgment that may be rendered thereon before the enforcement
thereof against the  Premises.  As a

                                      14
<PAGE>

condition to such contest, the contesting party may be required by the other
party to procure and record a bond freeing the Premises from the effect of such
lien or action thereon.

          (c) Right to Remove Liens.  If Tenant fails to discharge such lien or
              ---------------------
furnish a bond against the foreclosure thereof as provided by Applicable Law,
then Landlord may, but is not obligated to, discharge the same or take such
other action as Landlord deems necessary to prevent a judgment of foreclosure of
said lien from being executed against the Premises.  All costs and expenses,
including reasonable attorneys' fees, incurred by Landlord shall be repaid by
Tenant upon demand, with interest from the date of Landlord's payment, at the
Default Rate.

          (d) Notice of Non-Responsibility.  Nothing in this Lease shall be
              ----------------------------
deemed or construed in any way as constituting the consent or request of
Landlord, express or implied, by inference or otherwise, to any contractor,
subcontractor, laborer or materialman, to perform any labor or furnish any
materials for any specific improvement, alteration or repair of or to the
Premises.  Landlord shall have the right at all reasonable times to post and
keep posted on the  Premises such notices of non-responsibility as Landlord may
deem necessary for the protection of Landlord and the Premises from mechanic's
and materialman's liens.

          (e) Certificate of Completion.  On completion of any substantial work
              -------------------------
of improvement during the Lease term, Tenant shall timely record or cause to be
recorded, a notice of completion.

     20.  Bankruptcy.  Tenant agrees that (a) if Tenant shall commence a
          ----------
voluntary case under Title 11 of the United States Code entitled "Bankruptcy" as
now or hereafter in effect, or any successor thereto (the "Bankruptcy Code");
                                                           ---------------
(b) if an involuntary case is commenced against Tenant and the petition is not
controverted within one hundred and twenty (120) days, or is not dismissed
within ninety (90) days, after commencement of the case; (c) if a custodian (as
defined in the Bankruptcy Code) is appointed for, or takes charge of, all or any
substantial part of the property of Tenant; (d) if Tenant commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Tenant or there is
commenced against Tenant any such proceeding which remains undismissed for a
period of ninety (90) days; (e) if Tenant is adjudicated insolvent or bankrupt;
(f) if any order or relief or other order approving any such case or proceeding
is entered; (g) if Tenant suffers any appointment of any custodian or the like
for Tenant or any substantial part of Tenant's property to continue undischarged
or unstayed for a period of ninety (90) days; (h) if Tenant makes a general
assignment for the benefit of creditors; (i) if Tenant shall be unable to pay
its debts generally as they become due; (j) if Tenant shall by any act or
failure to act indicate its consent to, approval of or acquiescence in any of
the foregoing; or (k) if any action is taken by Tenant for the purpose of
effecting any of the foregoing, then this Lease and any interest of Tenant in
and to the Premises shall not become an asset in any of such proceedings.  In
any such event, and in addition to any and all rights or remedies of Landlord
hereunder or provided by law, the Lease term shall automatically end, whereupon
Landlord may reenter the Premises and take possession thereof and remove all
persons therefrom, and Tenant shall have no further claim thereon or hereunder.

                                      15
<PAGE>

     21.  Notices.  Any notices relating to this Lease shall be given in writing
          -------
and shall be deemed sufficiently given and served for all purposes when
delivered, if (a) by receipt confirmed facsimile transmission, (b) in person,
(c) by generally recognized overnight courier service, or (d) Certified United
States Mail, addressed as follows:

     If to Tenant:

     Bay Meadows Operating Company LLC
     c/o Magna Entertainment Corp.
     337 Magna Drive
     Aurora, Ontario L46 7K1
     CANADA
     Attn:  James Nicol
     Facsimile:  (905) 726-7177

     And a copy to:

     Magna Entertainment Corp.
     610 Newport Center Drive, Suite 1700
     Newport Beach, California  92660
     Attn:  Scott Daruty
     Facsimile: (949) 823-6994

     If to Landlord:

     PW Acquisitions IV, LLC
     1285 Avenue of the Americas, 38th Floor
     New York, New York  10019
     Attn:  John Tashjian
     Facsimile:  (212) 713-7949

     with a copy to:

     Gibson, Dunn & Crutcher LLP
     One Montgomery Street
     Telesis Tower
     San Francisco, California  94104-4505
     Attn:  Fred L. Pillon, Esq.
     Facsimile:  (415) 986-5309

     Either party may change its address by giving written notice to the other
in the manner provided above.

     22.  Quiet Enjoyment.  So long as Tenant pays the rent and performs and
          ---------------
observes all of the terms and conditions thereof, Tenant shall, at all times
during the Lease term, peaceably and quietly enjoy the Premises without any
disturbance or interference from Landlord or from any other person claiming
through Landlord.

                                      16
<PAGE>

     23.  Waiver.  No right or remedy hereunder shall be exclusive of any other
          ------
right or remedy, but shall be cumulative and in addition to any other right or
remedy hereunder or now or hereafter existing.  Failure by any party to insist
upon the strict performance of any provision hereof or to exercise any option,
right, power or remedy contained herein shall not constitute a waiver or
relinquishment thereof by such party for the future.  One or more waivers of any
covenant or condition by either party shall not be construed as a waiver of a
subsequent breach of the same or any other covenant or condition by such party,
and the consent or approval by Landlord to or of any act by Tenant requiring
Landlord's consent or approval shall not be construed to waive or render
unnecessary Landlord's consent or approval to or of any subsequent similar act
by Tenant.  Receipt by Landlord of any rent, additional rent or other sums
payable hereunder with knowledge of the breach of any provision hereof shall not
constitute a waiver of such breach, and no waiver by either party of any
provision hereof shall be deemed to have been made unless made in writing signed
by the party to be bound by such waiver.  Either party shall be entitled to
injunctive relief in case of the violation or attempted or threatened violation,
of any of the provisions hereof, or to a decree compelling performance of any of
the provisions hereof, or to any other remedy allowed to either party at law or
in equity.  No payment by Tenant or receipt by Landlord of a lesser amount than
the rents herein stipulated shall be deemed to be other than on account of the
earliest stipulated rents, nor shall any endorsement or statement on any check
or any letter accompanying any check or payment be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such rent or pursue any other remedy
in this Lease.

     24.  Liability of Landlord.
          ---------------------

          (a) Landlord's Default.  Landlord shall not be deemed to be in default
              ------------------
in the performance of any obligation required to be performed by it hereunder
unless and until it has failed to perform such obligation within thirty (30)
days after written notice by Tenant to Landlord specifying how Landlord has
failed to perform such obligations; provided, however, that, if the nature of
Landlord's obligation is such that more than thirty (30) days are required for
its performance, then Landlord shall not be deemed to be in default if it shall
commence performance within such thirty (30) day period and thereafter
diligently prosecute the same to completion.

          (b) Limitation of Landlord's Liability.  In the event of any transfer
              ----------------------------------
or transfers of Landlord's interest in the Premises, other than a transfer for
security purposes only, Landlord shall automatically be relieved of any and all
obligations and liabilities on the part of Landlord accruing from and after the
date of such transfer, so long as such transferee expressly assumes all of the
obligations and liabilities of Landlord under this Lease, including those
accruing prior to and those accruing from and after the date of transfer;
provided, however, that, any funds in the hands of Landlord at the time of such
transfer in which Tenant has an interest shall be turned over to the transferee
and any amount then due and payable to Tenant by Landlord under any provisions
of this Lease shall be paid to Tenant.  The parties intend that the covenants
and obligations contained in this Lease on the part of Landlord shall, subject
to the preceding sentence, be binding on Landlord, its successors and assigns,
only during and in respect to their respective successive periods of ownership.
Tenant shall look solely to Landlord's estate and interest in the Premises (or
the proceeds thereof) for the satisfaction of any remedy of Tenant or for the
collection of a judgment (or other judicial process) requiring the payment of
money by

                                      17
<PAGE>

Landlord in the event of any default by Landlord hereunder.  No other
property or assets of Landlord shall be subject to levy, execution or other
enforcement procedure for the satisfaction of Tenant's remedies under or with
respect to this Lease.

     25.  Landlord's Representations and Warranties.  Landlord hereby represents
          -----------------------------------------
and warrants that:

          (a) Landlord is a duly organized limited liability company under the
laws of the State of Delaware and has the full right and authority to enter into
this Lease and perform its obligations under this Lease;

          (b) the person or persons signatory to this Lease and any document
executed pursuant hereto on behalf of Landlord have full power and authority to
bind Landlord; and

          (c) the execution and delivery of this Lease and the performance of
Landlord's obligations hereunder do not and shall not result in the violation of
Landlord's organizational documents or any material contract or agreement to
which Landlord is a party.

     26.  Tenant's Representations and Warranties.  Tenant hereby represents and
          ---------------------------------------
warrants to Landlord that:

          (a) Tenant is a duly organized limited liability company and in good
standing under the laws of the State of Delaware, is qualified and in good
standing under the laws of the State of California, and has the full right and
authority to enter into this Lease and perform its obligations under this Lease;

          (b) the person or persons signatory to this Lease and any document
executed pursuant hereto on behalf of Tenant have full power and authority to
bind Tenant; and

          (c) the execution and delivery of this Lease and the performance of
Tenant's obligations hereunder do not and shall not result in the violation of
Tenant's organizational documents or any material contract or agreement to which
Tenant is a party.

     27.  Severability.  Any provision of this Lease which a court of competent
          ------------
jurisdiction shall determine to be invalid, void or illegal shall in no way
affect, impair or invalidate any other provision hereof and all such other
provisions shall remain in full force and effect.

     28.  Attorneys' Fees.  In the event of any litigation between Tenant and
          ---------------
Landlord to enforce any provision of this Lease, the prevailing party in such
litigation shall be entitled to recover its reasonable attorneys' fees incurred
therein.

     29.  Time of Essence.  Time is of the essence with respect to the
          ---------------
performance of every portion of this Lease.

     30.  Nonmerger of Fee and Leasehold Estate.  If both Landlord's and
          -------------------------------------
Tenant's estates in the Premises become vested in the same owner, this Lease
shall nevertheless not be destroyed by application of the doctrine of merger
except at the express election of the owner and the consent of the holder of all
mortgages or deeds of trust existing under provisions of this Lease.

                                      18
<PAGE>

     31.  Estoppel Certificates.  At any time and from time to time, within ten
          ---------------------
(10) days after notice of request by either party (the "Requesting Party"), the
                                                        ----------------
other party shall execute, acknowledge and deliver to the Requesting Party, or
to such other recipient as the notice shall direct, a statement certifying that
(a) this Lease is unmodified and in full force and effect, or, if there have
been modifications, that it is in full force and effect as modified, (b) the
dates to which the rent and other charges have been paid in advance, (c) that
there are no defaults and no events or conditions that, with the giving of
notice or the passage of time, or both, could become defaults, existing under
this Lease, or, if there are defaults or potential defaults, setting forth the
nature thereof, and (d) any other matters reasonably requested by the Requesting
Party.  The statement shall be such that it can be relied on by any auditor,
creditor, lender, commercial broker or investment banker of the Requesting Party
and by any prospective purchaser of the Premises.  Either party's failure to
execute, acknowledge and deliver on request the certificate described above
within the specified time shall constitute an approval and acknowledgment by
such party to all persons entitled to rely on the statements contained therein;
and shall constitute a waiver, with respect to all persons entitled to rely on
the statement, of any defaults that may exist before the date of the notice.

     32.  Force Majeure - Unavoidable Delay.  Notwithstanding anything to the
          ---------------------------------
contrary in this Lease, if either Landlord or Tenant shall be delayed or
prevented from the performance of any act required by this Lease by reason of a
Force Majeure Event (as defined below), then performance of such act shall be
excused for the period of the delay caused by such event, and the period for the
performance of any such act shall be extended for a period equivalent to the
period of such delay; provided, however, that no allowance for delay shall be
made under this Section 32 unless a written notice, specifying the cause of such
                ----------
delay, is delivered by the delayed party to the other party within ten (10)
business days of the initial occurrence causing the delay (or, if the delayed
party is not aware of, and could not reasonably be expected to be aware of, such
initial occurrence, then such written notice shall be sent within ten (10)
business days of the date that the delayed party should reasonably have been
aware of such initial occurrence).  Nothing in this Section 32, however, shall
                                                    ----------
excuse Tenant from the prompt payment of any rent or other charge required of
Tenant.  As used herein, the term "Force Majeure Event" means a natural
                                   -------------------
disaster, fire, earthquake, flood, explosion, action of the elements, war, riot,
mob violence, inability to procure or a general shortage of labor, equipment,
facilities, energy, materials or supplies in the open market, strikes or
lockouts, but shall in no event include (a) any cause or event within the
reasonable control of the applicable party, or (b) lack of, or inability to
procure, funds.

     33.  Surrender.  On the Expiration Date or the earlier termination of this
          ---------
Lease, Tenant shall surrender to Landlord the possession of the Premises,
including the Main Track Improvements and FF&E, all of which are and shall
remain the property of Landlord.  All property that Tenant is not required to
surrender but which Tenant abandons shall, at Landlord's election, become
Landlord's property if not removed by Tenant beginning not later than thirty
(30) days after the Expiration Date or the earlier termination of this Lease.

     34.  Lease Not a Partnership.  Nothing contained in this Lease shall be
          -----------------------
deemed or construed as creating a partnership or joint venture between Landlord
and Tenant or between Landlord and any other party, or cause Landlord to be
responsible in any way for the debts or obligations of Tenant or any other
party.

                                      19
<PAGE>

     35.  Holding Over.  This Lease shall terminate without further notice on
          ------------
the Expiration Date.  Any holding over by Tenant after expiration shall be
deemed a tenancy at sufferance, terminable by either party upon one day's
notice, provided that the monthly rent shall be equal to one-twelfth (1/12th) of
two hundred percent (200%) of the rent in effect just prior to the Expiration
Date.

     36.  Execution in Counterparts.  This Lease, or a short form of this Lease,
          -------------------------
or both, may be executed in two or more counterparts, each of which shall be an
original, but all of which shall constitute one and the same instrument.

     37.  No Recordation.  Neither this Lease nor a short form thereof shall be
          --------------
recorded.

     38.  Applicable Law.  This Lease shall be governed by and construed in
          --------------
accordance with the laws of the State of California.

     39.  Successors and Assigns.  All of the covenants, conditions and
          ----------------------
provisions of this Lease shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, personal representatives,
successors and assigns, subject at all times, however, to all agreements and
restrictions herein contained with respect to assignment, subleasing and
hypothecation.

     40.  Interpretation.  The table of contents of the Lease and the captions
          --------------
of the various articles, sections and paragraphs of this Lease are for
convenience and ease of reference only and do not define, limit, augment or
describe the scope or intent of this Lease or of any part or parts of this
Lease.  The neuter gender includes the feminine and masculine, the masculine
includes the feminine and neuter, and the feminine includes the masculine and
neuter, and each includes corporations, partnerships or other legal entities
when the context so requires.  The singular number includes the plural whenever
the context so requires.

     41.  Entire Agreement.  This Lease contains the entire agreement between
          ----------------
the parties.  No promise, representation, warranty or covenant not included in
this Lease has been or is relied on by either party.  No provisions of this
Lease may be amended or supplemented except by an agreement in writing signed by
the parties hereto or their successors in interest.

     42.  Signs.  Subject to Tenant's complying with applicable laws, rules and
          -----
regulations of the City and obtaining Landlord's prior written consent (not to
be unreasonably withheld or delayed), Tenant shall have the right to place,
construct or maintain on the Premises, signs, names, insignia, advertising
placards, trademarks, descriptive material or other similar items relating to
Tenant's permitted use of the Premises pursuant to this Lease.  Tenant also
shall have the right to maintain the existing sign (and any replacement thereof
provided such replacement conforms with the requirements of this Section 42)
                                                                 ----------
located on the portion of Landlord's property adjacent to U.S. Highway 101 shown
on Exhibit B hereto, and in the event Landlord sells such property to another
   ---------
party, Landlord shall maintain an easement for such sign throughout the term
hereof.

     43.  Good Faith and Reasonableness.  Any time the consent of Landlord or
          -----------------------------
Tenant is required under this Lease, such consent shall not be unreasonably
withheld or delayed except to the extent the Lease expressly provides otherwise.
If either party withholds consent or approval,

                                      20
<PAGE>

such party shall, upon request, deliver to the other party a written statement
specifying in detail the reason or reasons why such consent or approval was
refused unless the Lease specifically provides that such consent or approval may
be withheld in such party's sole or absolute discretion.

     44.  Further Assurances.  Landlord and Tenant each agree that at the
          ------------------
request of the other party, it will execute and deliver to the other party such
further instruments, documents, conveyances or assurances and take such other
action as may be necessary or otherwise reasonably requested by such ether party
to carry out the provisions of this Lease.

     45.  Access to Trailer Parcel.  Landlord has reserved from this Lease the
          ------------------------
Trailer Parcel, as described on Exhibit C.  Tenant acknowledges that Landlord
may cause the Trailer Parcel to be isolated and secured from the remainder of
the Premises through the use of fencing or other means that does not interfere
with the use of the remainder of the Premises by Tenant.  In addition, Tenant
hereby grants to Landlord and its employees, agents and contractors, an
irrevocable license for and during the term of the Lease for access to the
Trailer Parcel at all times, including ingress and egress from the south
entrance and main entrance to the Premises, as well as the right at all times to
park in connection with the use of the Trailer Parcel at no cost or expense on
portions of the Premises adjacent to the Trailer Parcel.

     46.  Art.  Tenant shall keep and maintain the Art in good condition and
          ---
repair for and during the term of the Lease.  Upon the commencement of this
Lease, Tenant and Landlord shall inventory the Art identified on Exhibit B and
note the condition of such items.  Upon expiration or sooner termination of this
Lease, Tenant shall (i) inventory all of the Art and compare such inventory to
the inventory taken by Landlord and Tenant upon the commencement of the term
hereof, (ii) notify Landlord in writing of any material discrepancies in such
inventory or the condition of the items of the Art, and (iii) repair, replace or
reimburse Landlord for the reasonable value of any of the Art lost, stolen or
damaged during the term hereof such that all of the Art shall be in
substantially and materially the condition upon which it was delivered upon the
commencement of the term of this Lease.  All of the Art shall be left in place
by Tenant upon the expiration or sooner termination of this Lease.

                                      21
<PAGE>

     IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease as of
the date first written above.

                              LANDLORD:

                              PW Acquisitions IV, LLC,
                              a Delaware limited liability company

                              By: PW Realty Partners, LLC, its managing
                                  member

                                  By: PW Acquisitions Corp., its
                                      managing member

                                      By: _______________________
                                           John C. Tashjian
                                      Its: Vice President

                              TENANT:

                              Bay Meadows Operating Company LLC,
                              a Delaware limited liability company

                              By: ___________________________

                                  Name: _________________________
                                  Title: ________________________

                                      S-1<PAGE>

EXHIBIT 10.21
                              AMENDMENT NO. 1 TO

                          TERM LOAN CREDIT AGREEMENT

     THIS AMENDMENT NO. 1 dated as of January 24, 2000 (this "Amendment") is
                                                              ---------
entered into between The Santa Anita Companies, Inc., a Delaware corporation
(the "Borrower"), and Wells Fargo Bank, National Association (the "Bank"), and
      --------                                                     ----
amends the Term Loan Credit Agreement dated as of November 15, 1999 (as amended
hereby and as the same may be further amended, supplemented or otherwise
modified from time to time, the "Credit Agreement") between the Borrower and the
                                 ----------------
Bank.  Terms defined in the Credit Agreement and not otherwise defined herein
are used herein as therein defined.

     WHEREAS, the Borrower has requested that the Bank agree to amend certain
provisions of the Credit Agreement and the Bank is willing to make such
amendments on the terms and subject to the conditions set forth herein;

     NOW, THEREFORE, in consideration of the mutual agreements herein contained
and other good and valuable consideration, the sufficiency and receipt of which
are hereby acknowledged, the parties hereto agree as follows:

     Section 1.  Amendment to Section 1.1 of the Credit Agreement.  The
definition of the term "Commitment Termination Date" set forth in Section 1.1 of
the Credit Agreement is hereby amended and restated to read in its entirety as
follows:

     "'Commitment Termination Date' means February 29, 2000.".

     Section 2.  Fees.  In consideration of the agreement of the Bank to extend
the Commitment Termination Date pursuant to Section 1 of this Amendment, the
Borrower hereby agrees to pay to the Bank on the Effective Date an amendment fee
(an "Amendment Fee") equal to $50,000.  The Amendment Fee shall be payable in
     -------------
immediately available funds and, once paid, shall not be refundable, provided
that in the event the Funding Date occurs prior to February 15, 2000, the Bank
shall refund $25,000 of the Amendment Fee to the Borrower.

     Section 3.  Representations and Warranties.  To induce the Bank to enter
into this Amendment, the Borrower represents and warrants to the Bank that (a)
as of the date hereof no Event of Default or Default has occurred and is
continuing and (b) except for representations and warranties which expressly
speak as of a different, specific date, all of the representations and
warranties of the Borrower contained in the Credit Agreement and each other Loan
Document to which the Borrower is a party continue to be true and correct in all
material respects as of the date of execution hereof as though made on such
date.

     Section 4.  Consent of as Guarantors.  The Los Angeles Turf Club,
Incorporated, a California corporation ("LATC"), hereby acknowledges and
                                         ----
consents to this Amendment, and affirms and acknowledges that the guaranty made
by LATC in favor of the Bank with respect to
<PAGE>

the obligations of the Borrower under the Credit Agreement remains in full force
and effect and LATC remains obligated thereunder without defense, offset or
counterclaim of any kind whatsoever, as if such guaranty were executed and
delivered to the Bank on the date hereof.

     Section 5.  Conditions to Effectiveness.  This Amendment shall become
effective as of the date hereof on the date when the following conditions
precedent have been satisfied (such date, the "Effective Date"):
                                               --------------

     (a) The Bank shall have received all an executed counterpart of this
Agreement from each of the Borrower and LATC;

     (b) No Event of Default or Default shall have occurred and be continuing on
the Effective Date;

     (c) The Amendment Fee shall have been paid by the Borrower to the Bank; and

     (d) The reasonable costs and expenses of the Bank in connection with the
preparation, negotiation and execution of this Amendment and the other Loan
Documents delivered pursuant hereto shall have been paid.

     Section 6.  Reference to and Effect on Loan Documents.

     (a) Upon the effectiveness of this Amendment, on and after the date hereof,
each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof" or words of like import, and each reference in the other Loan Documents
to the Credit Agreement, shall mean and be a reference to the Credit Agreement
as amended hereby;

     (b) Except as expressly set forth herein, this Amendment shall not by
implication or otherwise limit, impair, constitute a waiver of, or otherwise
affect the rights and remedies of the Bank or the Borrower under the Credit
Agreement or any other Loan Document, and shall not alter, modify, amend or in
any way affect any of the terms, conditions, obligations, covenants or
agreements contained in the Credit Agreement or any other Loan Document, all of
which are ratified and affirmed in all respects and shall continue in full force
and effect.

     (c) Nothing herein shall be deemed to entitle the Borrower to a waiver,
amendment, modification or other change of any of the terms, conditions,
obligations, covenants or agreements contained in the Credit Agreement or any
other Loan Document in similar or difference circumstances.

     (d) This Amendment shall be a Loan Document for all purposes.

     Section 7.  Benefits of Amendment.  The terms and provisions of this
Amendment shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns to the extent contemplated by the
Credit Agreement.

     Section 8.  Interpretation.  The Article and Section headings used in this
Amendment are for convenience of reference only and shall not affect the
construction hereof.

                                       2
<PAGE>

     Section 9.   Execution in Counterparts.  This Amendment may be executed in
any number of counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Amendment.  Faxed
signatures of this Amendment shall be binding for all purposes.

     Section 10.  Severability.  If any provision of this Amendment shall be
held to be invalid, illegal or unenforceable under applicable law in any
jurisdiction, such provision shall be ineffective only to the extent of such
invalidity, illegality or unenforceability, which shall not affect any other
provisions hereof or the validity, legality and enforceability of such provision
in any other jurisdiction.

     Section 11.  Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN CALIFORNIA.

     Section 12.  Expenses.  The Borrower agrees to pay the reasonable out-of-
pocket expenses of the Bank, including but not limited to the reasonable fees,
charges and disbursements, including but not limited to the fees, charges and
disbursements of Gibson, Dunn & Crutcher LLP, special counsel for the Bank,
incurred in connection with the preparation, negotiation, execution and delivery
of the Credit Agreement and this Amendment and any subsequent waiver, amendment
or modification of the Credit Agreement or any other Loan Document and the
security arrangements in connection herewith or therewith.

                                       3
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered as of the date first set forth above.

                         Borrower:
                         --------

                         THE SANTA ANITA COMPANIES, INC.

                         By:______________________________
                            Name:
                            Title:

                         By:______________________________
                            Name:
                            Title:

                         Bank:
                         ----

                         WELLS FARGO BANK, NATIONAL ASSOCIATION,

                         By:______________________________
                            Name:
                            Title:

                         LATC:
                         ----

                         LOS ANGELES TURF CLUB, INCORPORATED,
                          as a guarantor

                         By:______________________________
                            Name:
                            Title:

                                       4

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