PROMISSORY NOTE
$475,000 September 30, 1999
New Kent, Virginia
FOR VALUE RECEIVED, the undersigned, Colonial Downs, L.P., a Virginia
limited partnership ("Maker"), promises to pay, without offset, to the order
of CD Entertainment Ltd. (d/b/a in Virginia as CD Entertainment Ltd., LLC), an
Ohio limited liability company, its successors, assigns, or other holder
("Noteholder"), at 0000 Xxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, or such place as
Noteholder may designate in writing, the principal sum of FOUR HUNDRED
SEVENTY-FIVE THOUSAND DOLLARS ($475,000), together with interest on the
indebtedness evidenced by this promissory note ("Note") as hereinafter
provided.
1. Payment.
(a) The outstanding principal indebtedness as evidenced by the
Note shall accrue interest from the date hereof until paid in full at a rate
per annum equal to the Noteholders' cost of funds, as adjusted from time to
time, plus one-half percent. Noteholder shall provide written evidence
reasonably satisfactory to the Maker of the Noteholders' cost of funds. Any
amount not paid within five (5) days of when due under this Note shall bear
interest until paid in full at a rate per annum equal to the prime rate as
listed in THE WALL STREET JOURNAL plus four percent (4%).
(b) Interest shall be due and payable on or before the fifth (5th) day
of the month following the end of each calendar quarter, beginning on January
5, 2000, for the quarter ending December 31, 1999. The principal balance of
the Note and any accrued but unpaid interest shall be due and payable in full
on or before September 30, 2001. Payments hereunder (including any
prepayments) shall be applied first to costs and expenses of collection, then
to accrued interest hereunder and then to the reduction of principal.
2. Prepayment; Events of Default.
(a) Maker shall have the right to prepay the outstanding balance, in
whole or in part, without premium or penalty.
(b) Any of the following shall constitute an "Event of Default"
hereunder: (i) failure to pay any amount due under this Note which is not
cured in full within ten (10) days after its due date, (ii) any failure or
breach of any of the other covenants, agreements or conditions of this Note,
which is not cured within ten (10) days of written notice of such failure or
breach to Maker, (iii) Maker's admission in writing that it is unable to pay
its debts as they become due, (iv) any assignment by Maker for the benefit of
its creditors, (v) Maker's filing a voluntary petition in bankruptcy or under
any other insolvency laws, or (vi) Maker's having filed against it an
involuntary petition in bankruptcy or under any other insolvency laws not
dismissed within ninety (90) days after filing. Upon the occurrence of an
Event of Default, the entire outstanding principal balance hereof and all
interest accrued thereon shall become due and payable immediately at the
election of Noteholder, without notice.
3. Miscellaneous.
(a) No delay or omission by the Noteholder in exercising any right
or power hereunder shall impair such right or power or be a waiver of any
default or an acquiescence therein. Any single or partial exercise of any
such right or power shall not preclude any other or further exercise thereof
or the exercise of any other right or power. No waiver shall be valid unless
in writing, signed by the Noteholder, and then only to the extent specifically
set forth in such writing. All remedies hereunder or by law afforded shall be
cumulative and shall be available to the Noteholder until the indebtedness
evidenced hereby shall be paid in full.
(b) Presentation, demand, protest, notices of dishonor and of
protest, the benefits of the homestead exemption and all defenses and pleas on
the ground of any extension or extensions of the time for payment or the due
dates of this Note, in whole or in part, before or after maturity, with or
without notice, are waived by Maker and are jointly and severally waived by
any and all endorsers, sureties, guarantors and assumers hereof.
(c) The Maker shall be liable for any and all costs and expenses of
collection of the interest and principal and any other amounts required to be
paid hereunder, including, without limitation, reasonable attorneys' fees and
costs, arising by virtue of an Event of Default.
(d) This Note shall be governed by and construed under the laws
of the Commonwealth of Virginia, without regard to its conflict of laws
provisions.
Maker: COLONIAL DOWNS, L.P., a Virginia limited partnership
By: Stansley Racing Corp., General Partner [SEAL]
By: /s/ Xxx X. Xxxxxxx
-------------------------
Xxx X. Xxxxxxx, President
