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Colonial Downs Holdings Announces Debt Refinancing

The refinanced former PNC debt and the Company's existing debt of $8.2 million due to affiliates of Mr. Jacobs will be consolidated into one loan which will have a term of five years at an interest rate of LIBOR plus 3%, the current interest rate payable on the PNC loan.

The $23.2 million loan will have principal payments of $1 million due on each of June 30, 2001, 2002, 2003 and 2004 with the remainder due on June 30, 2005.

In addition, the Company has agreed to make an additional annual principal payment contingent upon the Company's annual cash flow. The New Kent racetrack property and the racing centers located in Richmond, Hampton and Brunswick, Virginia will be pledged as collateral for the loan.

The loan is convertible, at the lenders' option and subject to share availability, into shares of the Company's Class A common stock at 125% of the average closing price of the Company's common stock for the period June 23, 2000 through June 29, 2000. The Company will make efforts to authorize additional shares for such conversion rights.

Ian M. Stewart, President and CFO of Colonial Downs stated, ``The refinancing of the PNC debt resolves the Company's immediate liquidity problem. In addition, as part of the refinancing, the credit enhancement fee the Company has been charged by an affiliate of Mr. Jacobs for guaranteeing the PNC debt has been eliminated.

With the PNC debt removed as an issue, Colonial Downs can now concentrate on exploring all of the strategic options available to it, with a focus on those outside of pari-mutuel wagering, to increase the value of the Company.''

Colonial Downs Holdings, Inc. is a Virginia corporation organized in November 1996 to pursue opportunities for pari-mutuel horse race wagering in Virginia. The Company through its subsidiaries holds the only unlimited licenses to own and operate a pari-mutuel horseracing course and satellite wagering facilities/racing centers in Virginia. Colonial Downs Holdings, Inc. became a publicly held company in March 1997 and trades on the NASDAQ Small Cap System under the symbol CDWN.

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