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Agreement - MID STATE RACEWAY INC - 1-30-2004

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Agreement - MID STATE RACEWAY INC - 1-30-2004 Powered By Docstoc
					                                                 EXHIBIT 10.1

(Rev8-04-5)
AGREEMENT

Agreement made as of December 1, 2003, by and between Mid-State Raceway, Inc. with a mailing address at
P.O. Box 860 Vernon, New York 13476 (hereinafter referred to as "Raceway") and Harness Horse Association
of Central New York, Inc. with a mailing address at P.O. Box 586 Vernon, New York 13476 (hereinafter
referred to as the "Association").

                                                WITNESSETH:

Whereas, Raceway was licensed in 2003 and believes that it will be licensed in 2004 to conduct and engage in
the business of conducting harness race meetings at a race track owned and operated by Raceway in Vernon,
New York known as "Vernon Downs" (hereinafter "Vernon Downs"); and

Whereas, the Association consists of owners, trainers and drivers of harness horses who participate in meetings
both at Vernon Downs and elsewhere in United States and Canada; the Association was organized and exists for
the purpose of promoting the sport of harness racing; and the Association has been recognized as the exclusive
bargaining agent for all owners, trainers, and drivers engaged in harness racing at Vernon Downs; and

Whereas, the parties desire to promote harness racing at Vernon Downs by providing reasonable compensation
to the owners, trainers and drivers participating at meetings at Vernon Downs, increasing overall interest in
harness racing by encouraging top quality competitive harness racing at Vernon Downs, and providing exciting
and enjoyable harness racing for the general public, and

Whereas, the pari-mutuel retention derived from harness race meets and simulcasts and from other forms of
legally permissible wagering conducted at Vernon Downs constitutes a reasonable basis for the determination of
the financial arrangement between the parties.

NOW THEREFORE, in consideration of the premises and the covenants, terms and conditions hereincontained
and for other good and valuable consideration each to the other in hand paid, the receipt and sufficiency of which
is hereby jointly acknowledged, the parties hereto do hereby agree as follows:

1. Quality and Integrity of Racing.

(a) General. Raceway and the Association agree to use their best efforts to encourage and induce owners of
harness horses, whether or not such owners are members of the
Association, to participate in meetings conducted by Raceway at Vernon Down or elsewhere. The parties further
agree to use their best efforts to promote the interests of Vernon Downs in order to increase the attendance and
handle and thereby increase the profitability to Raceway, the amount of funds available to participating horsemen,
and the quality and excitement of the harness racing provided to the general public. The benefits set forth in this
agreement ("Agreement") shall inure to the benefit of Raceway, the Association and all owners, trainers and
drivers who participate at Vernon Downs (whether or not such owners, trainers and drivers are members of the
Association) except as herein expressly provided to the contrary.

(b) Race Program. Raceway will employ a competent Director of Racing (designated by, and upon terms and
conditions acceptable to, Raceway in its sole and absolute discretion) and the Association will support the efforts
of said Director of Racing to write conditions as appropriate for the benefit of the entire program. Raceway shall
notify an Association representative prior to reopening events or altering race conditions. Neither the Association
nor its designated representatives will interfere in any way with the normal operations of the Racing Office or
Vernon Downs.

(c) Integrity of Racing. In an effort to further the professionalism of the sport and increase the confidence of the
racetrack patron, any licensed owner, trainer, or driver who receives a suspension of 30 days or more from any
state or international racing authority shall not be permitted to race at Vernon Downs until such time as the
suspension has been served or lifted. In the event of an appeal, said driver, trainer or owner shall not be
permitted to race at Vernon Downs while the appeal is pending.

2. Purse Account and Purse Payment.

(a) Purse Account. Raceway has opened and designated Account No.946-1352632 at the Fleet Bank as the
"Purse Account": (i) into which shall be deposited Raceway's Annual Purse Payment (as defined), sums paid by
the Breeder's Fund (the "Breeder's Payments") and fees paid by the horsemen; (the "Horsemen's Payments") and
(ii) from which shall only be paid purses, Driver Minimums (as defined) and the Administrative Distribution (as
defined). Raceway will provide the Association with a weekly accounting of contributions (both in the aggregate
and by source) into and distributions from the Purse Account substantially in the form annexed hereto as Exhibit
"A"; the first of which weekly accountings shall be for the first full week during which live races are tun at Vernon
Downs during each of 2004 and 2005, respectively, and the last of which weekly accountings shall be for the
week ending immediately following November 30, 2004 and the expiration of the Term (as defined),
respectively.

(b) Raceway Annual Purse Payment. The payment to be made by Raceway into the Purse Account for payment
in each of 2004 and 2005, respectively, of purses, Driver Minimums (as defined) and Administrative Distribution
(the "Annual Purse Payment") shall be in the sum determined in accordance with the provisions of Exhibit "B"
annexed hereto and made a part hereof.
(c) Initial Determination of Purses and Purse Adjustments. Purses for races run in the first month during which live
racing shall be held at Vernon Downs during each of 2004 and 2005, respectively, shall be calculated by
Raceway (and payments to the Purse Account for such month's races made by, or on behalf of, Raceway) as if
Raceway had guaranteed purse payments for the entire year 2004 in the amount of $1,900,000 and there were
96 race days in number. Purses for races run in each of the succeeding months of 2004 and 2005, respectively,
during which races are run shall be calculated by Raceway (and payments to the Purse Account for such month's
races made by Raceway): (i) in accordance with Exhibit "B"; (ii) based upon the actual live racing, simulcast and
OTB revenues and VLT Revenues for the immediately preceding month, or, if not available, the most recent
available monthly period; and (iii) based upon the number of race days remaining in the Racing Season (as
defined) for 2004 and 2005, respectively. Using the foregoing as a guide, Raceway shall use its best efforts in
good faith to adjust purses during the course of each meet taking into account seasonal business trends so as to
minimize the fluctuation of purses during each meet and to attempt to limit any balance due to the Purse Account
at the conclusion of any meet (the "Annual Carry Over") to no more than $100,000. The purse payments will be
reviewed monthly by the President of Raceway and the President of the Association.

(d) Underpayments. To the extent that the actual amount paid into the Purse Account by Raceway during either
of 2004 or 2005, as the case may be, is less than the Annual Purse Payment, as finally determined, the full
amount of any such deficiency ("Underpayment") shall be paid by Raceway into the Purse Account . To the
extent that the Underpayment is either (i) $100,000 or less, or (ii) if more than $100,000, in an amount consented
to in writing by the Association, it shall be retained in the Purse Account and utilized for the payments from the
Purse Account in the next succeeding year, subject to the provisions of subparagraph 16(b) hereof. Subject to
the written consent of the Association pursuant to clause 2(d) (ii) hereof, to the extent that the Underpayment
exceeds the sum of $100,000 then and in that event any such excess ("Excess Underpayment") shall be
distributed to the owners of horses which participated in races run during the 2004 or 2005 Racing Season, as
the case may be, as follows: (A) The Excess Underpayment shall be divided by the total number of races run
during the subject Racing Season in order to determine the "Per Race Amount"; and (B) the Per Race Amount
shall be allocated to each race run during the Racing Season and shall be paid out to the participants therein in the
same proportions as were distributions of the original purse allocable to such race.

(e) Overpayments. To the extent that the actual amount paid into the Purse Account by Raceway during or with
respect to 2004 or 2005, as the case may be, is in excess of the Annual Purse Contribution applicable to such
calendar year, as finally determined, the full amount of any such excess shall be credited against Raceway's
Annual Purse Contribution for the next succeeding year or years, as the case may be, irrespective of the
termination or expiration of this Agreement.

(f) Purse Allocations.
(i) Not less than 90% of the money available for the payment of purses (exclusive of the Administrative
Distribution) shall be allocated and paid during the 2004 and 2005 Racing Season, respectively, exclusively for
purses for overnight races.

(ii) Up to 10% of the money available for the payment of purses (exclusive of the Administrative Distribution)
may, in the sole and absolute discretion of Raceway be allocated and paid during the 2004 and 2005 Racing
Season, respectively, exclusively for purses for non- overnight races.

(iii) The amount of any purse in excess of $7,500 payable with respect to a race shall be charged against the 10%
described in subparagraph 3(f)(ii) hereof unless (A) such race is an overnight race and prior to the running of such
race the Association waives such "charge", or (B) Raceway contributes any such excess to the Purse Account.

(iv) An "overnight race" shall be and mean a race which is listed on the weekly (or more frequently prepared)
condition sheet prepared by Raceway's Race Secretary setting forth: (A) the races for a horse for which a horse
may be entered; (B) the closing day and hour for entries in such races; (C) where no prior nomination,
declaration or commitment is required before making the entry; and (D) where no nominating, sustaining or
starting fees are required.

(g) Net Accrual
(i) Subject to the provisions of subparagraph 2(g)(ii) hereof, on or before the first day when live racing is
conducted in the 2004 and 2005 Racing Season, respectively, the parties hereto shall cause the Net Accrual (as
defined) to be deposited in the Purse Account for disposition pursuant to the provisions of Paragraph 2 hereof;
which Net Accrual shall be and be deemed to be a portion (and credited against the obligation of Raceway for
the payment) of the Annual Purse Payment for 2004 or 2005, as the case may be;

(ii) If live racing does not commence at Vernon Downs on or before May 1st during 2004 or 2005, as the case
may be, then and in that event, Raceway shall thereafter promptly take such actions and execute such documents
as shall be reasonably necessary to disburse the Net Accrual (together with any interest earned thereon) to the
Association; and in connection therewith the Association shall: (1) retain the Net Accrual, as trustee, for and on
behalf of the Horsemen participating in harness horse races at Vernon Downs;
(2) deposit the Net Accrual in the purse account of the entity first conducting harness horse races at Vernon
Downs subsequent to the Association's receipt of such Net Accrual; and (3) indemnify and hold harmless
Raceway from and against any and all costs, expenses, losses, liabilities, judgments, awards and demands
(including reasonable attorneys fees) arising out of or relating to the payment of the Net Accrual to the
Association and/or claims of any horsemen participating (in the past or future) in harness horse races at Vernon
Downs for or with respect to the Net Accrual and/or the actions of the Association with respect thereto; and

(iii) For purposes of this Agreement the terms: "Net Accrual" shall be and mean the payment which would be
required to be made by Raceway to the Purse Account (a) with respect to the 2004 Racing Season for the
months of December 2003 and January, February and March, 2004 and until the earlier of either the first day
when live racing is conducted at Vernon Downs or May 1st of such year, and (b) with respect to the 2005
Racing Season for the months of December 2004 and January, February and March, 2005, and until the earlier
of either the first day when live racing is conducted at Vernon Downs or May 1st of such year, as the case may
be, in each case pursuant to the Formula Amount as defined and determined in accordance with (and subject to
the limitations set forth in) the provisions of Schedule 1 of Exhibit "B";

(h) ) With respect to each month in 2004 or 2005, respectively, subsequent to April 2004 or 2005, as the case
may be, and prior to December 2004 or 2005, as the case may be, during or prior to which live racing does not
or has not commenced at Vernon Downs, as the case may be, Raceway shall pay over to the Association (in lieu
and instead of deposit in the Purse Account) the payment which would be required to be made by Raceway to
the Purse Account for such month pursuant to the Formula Amount as defined and determined in accordance
with (and subject to the limitations set forth in) the provisions of Schedule 1 of Exhibit "B"; such payment to be
made prior to the end of the next succeeding calendar month; and the amounts paid over to the Association
pursuant to this subparagraph 2(h) hereof shall be retained and disposed of in the same manner (and subject to
the same rights and obligations of the Association) as set forth in subparagraph 2(g)(ii) hereto;.

(i) The Association shall have the right during normal business hours, on reasonable notice and at the location
where the same are normally kept, to audit the books and records of Raceway
relating to the receipt of proceeds from pari-mutuel wagering, OTB Commissions, Simulcast revenues and VLT
Revenues, and to make abstracts and copies thereof.

3. Racing Calendar.

(a) Subject to the provisions of subparagraph 3(f) hereof, the live harness horse race meet (the "Racing Season")
for each of 2004 and 2005, respectively, will commence (subject to the receipt by Raceway of its 2004 and
2005 live racing licenses, as the case may be) on April 1, 2004 and 2005, as the case may be (the
"Commencement Date") and will conclude on October 31, 2004 and 2005, as the case may be ( the "Conclusion
Date"); provided however that if live racing at Vernon Downs commences later than April 3, 2004 or 2005,
respectively, then and in either such event the Conclusion Date shall be extended for that additional number of
days as shall be equal to the number of days elapsing between April 3 of such year and the date upon which live
racing commences at Vernon Downs. Raceway will guarantee 120 Race Days(as defined) during the 2004
Racing Season at the rate of at least four Race Days per week. Raceway and the Association shall agree upon
the number of Race Days for the 2005 Racing Season which Race Days shall, be not less than 120 (subject to
the availability of horses) at the rate of at least four Race Days per week unless otherwise agreed to in writing by
the parties. In the event that either party seeks an increase in number of Race
Days during the 2005 Racing Season the parties shall submit the issue of the number of Race Days during the
2005 Racing Season to negotiation pursuant to the provisions of Paragraph 14 hereof; such negotiation to be
commenced by either party by notice to the other no later that October 31, 2004. Race Days during the 2004
and 2005 Racing Seasons, respectively, will be primarily Wednesday through Saturday, with Monday races held
on Memorial Day and Labor Day (at the times specified by Raceway in its sole and absolute discretion);
provided however that any Race Days in excess of 90 Race Days during the 2004 or 2005 Racing Season will
be primarily Monday, Tuesday or Sunday (except as otherwise provided in subparagraph 3(a) hereof).

(b) Anything in this Paragraph 3 hereof to the contrary notwithstanding, Raceway shall have the right (exercisable
in its sole and absolute discretion) to cancel (and reschedule within the same week) from time to time and on one
or more occasions one or more racing days for the purpose of holding "special events" at Vernon Downs
provided that written notice of any such cancellation shall be transmitted to the Association at least 14 days prior
to the race date subject to such cancellation.

(c) Anything in this Agreement to the contrary notwithstanding, Raceway shall have no liability to the Association,
the horsemen or anyone else claiming any rights under this Agreement in the event Raceway is unable to hold, or
is required to cancel any daily race meet, or part thereof at Vernon Downs, during the term of this Agreement
because of circumstances beyond its control including, without limitation, fire, flood, war, riot, civil insurrection,
civil or military authority, inclement weather or other act of God, or, in any event, because of circumstances
resulting from work stoppages, boycotts or other labor disputes.

(d) A "Race Day" shall be and mean (i) a consecutive period of 24 hours during which, (ii) live harness horse
racing is conducted at Vernon Downs and (iii) subject to the sufficiency of applicants for participation in races, at
least 9 pari-mutuel races are scheduled and (iv) no more than 13 pari-mutuel races are scheduled. All overnight
races will be conducted at a distance of one mile unless agreed to in writing by the Association.

(e) Raceway may conduct up to five Superfecta wagering events on any Race Day, each containing 9 horses, as
shall be determined in Raceways' sole and absolute discretion; provided however that (i) during the 2004 and
2005 Racing Season, all 9 horse fields shall have a total of 3% of the regular purse added to the regular purse
and such 3% will be paid to the 6 place finisher, and
(ii) maiden trotters NW 1 PM cannot be included in a 9 horse race; provided further, however that the limitations
contained in clauses (i) and (ii) of this subparagraph 3(e) shall be of no further force and effect from and after the
date upon which either (i) the utilization of the "chute" is re-instituted or
(ii) the track or racing distance is altered to the written satisfaction of the Association. Anything is this
subparagraph 3 (e) hereof to the contrary notwithstanding Raceway may "re-open" a class to increase the
entrants in a race to 9 in number without the consent of the Association but with an increase of 3% of the regular
purse added to the regular purse.

(f) Raceway and the Association shall agree upon the Commencement Date and Conclusion Date for the 2005
Racing Season which shall in any event consist of not less than a 30 consecutive week period occurring during the
period from March 1, 2005 to November 10, 2005.
4. Administrative Distribution.

(a) Raceway shall pay the Association out of the proceeds deposited in the Purse Account, for the Association's
administrative purposes the sum of $3,000 per month (the "Base Stipend"). Payment of such monthly stipend
shall be in arrears on or before the 10th day of the next succeeding month. In addition, Raceway will at its own
cost and expense pay for the insurance described in subparagraph 8(a) hereof.

(b) (i) Subject to the conditions set forth in subparagraphs
4(b)(ii)and (iii) hereof, Raceway shall pay to the Association out of the proceeds deposited in the Purse Account,
an amount (the "Special Distribution) equal to 6 % of the Raceway's 2004 and 2005 Annual Purse Payment
(exclusive of the Breeder's Payments and the Horsemen's Payments) to be used solely and exclusively by the
Association for the benefit of the Horsemen at Vernon Downs (including, without limitation for Horsemen
Benefits, as defined) Driver Trainer Award, "Black Box Testing Expenses and for administrative expenses of the
Association. The term "Horsemen Benefits" shall be and mean medical, dental, disability and/or retirement
benefits and/or premiums on insurance providing such benefits. The Special Distribution shall be paid in monthly
installments on the 10th day of the next succeeding month. For purposes of this Agreement the term
"Administrative Distribution" shall be and mean the sum of the Base Stipend and the Special Distribution.

(ii) Should the Association, in its sole discretion, decide to provide Horsemen Benefits such Horsemen Benefits
will be paid and payable to all horsemen participating at Vernon Downs irrespective of whether they are or are
not members of the Association; and

(iii) The payment of the Special Distribution shall be subject to and condition upon the receipt by the Association
and Raceway of a written consent or approval to this Agreement and the terms and conditions hereof issued by
the New York State Racing and Wagering Board.

(c) Raceway shall have the right during normal business hours, on reasonable notice and at the location where the
same are normally kept, to audit the books and records of the Association relating to the receipt and disposition
of the Special Distribution and provision of Horsemen Benefits to the horsemen participating in harness horse
racing at Vernon Downs, and to make abstracts and copies thereof.

(d) The Association shall pay to recipients thereof out of the proceeds of the Administrative Distribution,
Driver/Trainer awards in the aggregate amount of $10,000. An award recipient must be a member of the
Association by July 1, 2004 or 2005, as the case may be; and all award recipients shall be chosen by the
Association in its sole discretion.

(e) Raceway shall pay to the recipients thereof out of the proceeds deposited in the Purse Account (in
accordance with the rules and regulations of the New York State Racing and Wagering Board) Driver Minimum
payments as follows. Each participating and finishing driver in each race
(other than baby races, sire stakes and/or special events such a amateur and/or media races) shall be paid a
minimum of $10.00 for participating and finishing such race.

5. Term. The term of this Agreement shall commence as of December 1, 2003 and, subject to the provisions of
subparagraph 16 (a) hereof, expire on November 30, 2005 or, if later, the Conclusion Date. The parties shall
meet and negotiate a new contract no later than sixty (60) days prior to the expiration of this Agreement;
provided however that if prior to the expiration of this Agreement the parties hereto have not executed an
agreement effective for the period commencing on the day following the expiration of this Agreement, then and in
that event this Agreement (a) shall be automatically extended for ninety
(90) days and (b) thereafter can be extended for additional ninety (90) day increments by mutual written
agreement of the parties. Any new agreement will be effective retroactive to the day following the expiration of
this Agreement.

6. Office Space. Raceway acknowledges that it has rented office space (the "Association Offices") to the
Association in the new building adjacent to the current administration building for a rental of $400 per month for a
period of ten years commencing December 1, 1999, and terminating on November 30, 2009; and that the entire
ten year rental has been prepaid. The Association may install and maintain in the Association Offices, at its
expense, a telephone, provided that the use thereof will be in compliance with the regulations of the New York
State Racing and Wagering Board. The Association does hereby expressly agree to indemnify and hold harmless
Raceway from any liability, claim, demand or judgment of any kind or nature (including without limitation,
violations of the Racing Law and/or the rules and regulations adopted by the New York State Racing and
Wagering Board, fire, casualty, personal injury or wrongful death) arising from or relating to: (a) the use of the
Association Offices and (b) the actions of the Association, its officers and/or directors taken and/or authorized to
be taken on the premises of Vernon Downs.

7. Backstretch.

(a) Subject to the provisions of subparagraph 7(b) hereof during the Term, the winter stall rent (for period of the
Term outside of the 2004 Racing Season) shall remain at $70.00 per month per stall; and Raceway shall maintain
such facilities in substantially the condition existing during the 2002/2003 winter season; and

(b) Raceway and the Association shall negotiate for the winter stall rent (for the period of the Term outside of the
2005 Racing Season) to reflect increases in direct operating costs relative thereto; and failing such agreement the
rate shall remain at the rate applicable to the 2004 Racing Season.

8. Insurance.

(a) Raceway will, at its own cost and expense, procure and keep in effect during the Term of this Agreement
accidental death and dismemberment, hospitalization and disability insurance for drivers, trainers, assistant
trainers, and grooms. Medical coverage shall be $20,000, per person and not per incident, accidental death and
dismemberment shall be $10,000, disability shall be $250 per week with a maximum of 104 weeks; and
(b) The Association will, at its own cost and expense, provide equipment insurance for sulkies and jog carts for
all Association members pursuant to the Association Rules and Regulations pertaining thereto at the time; and
Raceway shall have no obligation for the payment for the damage or destruction of any sulkies and/or jog carts.

9. Statutory Compliance. During the Term: (a) Raceway shall use its best efforts to ensure full compliance by
Raceway and its officers, directors, shareholders and employees; and (b) the Association will use its best efforts
to ensure full compliance by the Association, horsemen, trainers, drivers and owners, in both cases, with the
Racing Law and the rules and regulations of the New York State Racing and Wagering Board.

10. Non-Discrimination. Neither Raceway nor the Association shall discriminate against any person on the basis
of race, religion, creed, age, sex, or national origin. In addition, Raceway shall not discriminate against any
members of the Association by reasons of their membership therein nor shall the Association discriminate against
employees of Raceway by reason of their employment. Payment of purses shall be made without regard to
whether a person entitled thereto is a member or a non-member of the Association.

11. Business Disruption. During the Term of this Agreement:

(a) Neither the Association nor its members, officers or directors shall engage in any strike, slowdown, work
stoppage, refusal to race, or engage in any other activities that might restrict or limit in any manner Raceway's
operations at Vernon Downs; and

(b) Raceway shall not cause or permit any lockout of the members of the Association; during the term of this
Agreement; and

(c) Neither party shall engage in any subterfuge of any kind for the purpose or effect of defeating or abating the
terms hereof.

12. Roster. Raceway shall provide to the Association a copy of the stable personnel form consisting of a list of
owners, trainers and drivers at Vernon Downs together with a schedule of the names (and if available the
addresses) of the recipients of purse payments during 2004 and 2005, respectively; which listing shall include the
name and local address where available upon the written request of the Association made no more than four
times during the Term. The Association shall not disclose such names or addresses to any third party without the
prior written consent of Raceway. The Association shall provide Raceway with a current list of the Association's
member; which listing shall include the name and local address where available, upon the written request of
Raceway made no more than four times during the Term. Raceway shall not disclose such names or addresses to
any third party without the prior written consent of the Association.

13. Management Rights and Obligations.
(a) Nothing in this Agreement shall restrict or limit in any manner the absolute discretion of Raceway, its officers,
or its Board of Directors in the operation of Vernon Downs except as herein expressly provided to the contrary.

(b) Subject to the full and timely performance by the Association, its officers, directors and members of their
respective duties and obligations herein contained, Raceway shall:

(i) maintain the track racing and training surface in accordance with industry standards for each type of track,
respectively;

(ii) use its best efforts in good faith to prepare for and clean up after each "special event" (such as concerts) so as
to minimize, to the extent reasonably possible, the impact thereof on the ability of the horsemen to utilize the back
stretch and/or training facilities at Vernon Downs;

(iii) advise the Association of any pending negotiations with respect to distribution of revenue from off-track
sources resulting from the transmission of racing information;

(iv) on a monthly basis meet with representatives of the Association for the purpose of (A) exchanging views with
respect to the facilities and operations of Vernon Downs and (B) reviewing written notifications by the
Association of any claimed hazardous, dangerous or substandard conditions and proposed improvements;
provided however, that the decisions by Raceway with respect to all such matters shall be final;

(v) use its best efforts in good faith to notify all stall applicants of stall space allocations at least two weeks prior
to the commencement of each Racing Season. The assignment of stalls shall be within the sole and absolute
discretion of Raceway; provided however that Raceway shall not deny stall space solely by reason of
membership in, or activity on behalf of, the Association or a duly constituted horsemen's committee;

(vi) not, by means of agreement or otherwise, seek to establish or impose upon the horsemen a monopoly and
other anti-competitive requirements concerning horseshoers, feedmen, tack suppliers or any other suppliers or
servicemen customarily used by horsemen;

(vii) not impose any charge for stall space or manure removal or impose any charges for tack rooms, electricity,
water and/or track maintenance during the Term except as otherwise specifically provided for herein; and shall
provide suitable stall space to qualified applicants during the Racing Season;

(viii) maintain groom's quarters or other suitable grooming accommodations pursuant to Raceway's rules and
regulations, for grooms listed in the horsemen's stable registrations at a rental fee, per groom, of $50.00 per
month together with a deposit of $50.00 (in both cases, payable in advance). Heat and electricity for such
groom's quarters will be provided without additional charge; and
(ix) permit qualifying races to continue to be scheduled as has been the practice in the past.

(c) Raceway shall accept approval by the Association to be manifest by approval by the Board of Directors of
the Association; provided however that the Association shall indemnify and hold harmless Raceway from and
against any and all costs, expenses, losses, liabilities, judgments, awards and demands (including reasonable
attorneys fees) arising out of or relating to claims by Association members and/or stockholders arising out of or
relating to any such consent or approval and/or the acceptance thereof and/or reliance thereon by Raceway.

14. Arbitration. Any dispute, claim or controversy between Raceway and the Association over the rights or
obligations of the parties under the terms of this Agreement (including, without limitation, disputes as to the
computation of the Annual Purse Computation), which remains unresolved after diligent and good faith efforts by
each party, shall be submitted to binding arbitration in accordance with the rules and regulations of the American
Arbitration Association then obtaining. Such arbitration shall be held in the City of Utica, State of New York
before a panel of three arbitrators, one of which shall be designated by Raceway, one of which shall be
designated by the Association and one of which shall be designated by the other two arbitrators. The decision of
a majority of the arbitrators shall be binding; and the award of the arbitrators shall be enforceable in any court of
competent jurisdiction; provided however, that any determination of the New York Racing and Wagering Board
as to the meaning or intent of any relevant statutory or regulatory matters shall be final and binding on the parties
hereto and the arbitrators unless such determination is successfully challenged in a court of law.

15. Severability. In the event that any provision of this Agreement is declared invalid or ineffective by the New
York State Racing and Wagering Board or a court of competent jurisdiction, the remaining provisions hereof
shall remain in full force and effect; provided however, that if any provision relating to the contributions into
and/or payments out of the Purse Account are deemed invalid or ineffective, either party hereto shall have the
right to immediately reopen this Agreement for the purpose of renegotiating the terms and conditions of any such
invalid or ineffective provisions.

16. Termination.

(a) Anything in this Agreement to the contrary notwithstanding, Raceway shall have the right to terminate this
Agreement and the Term in the event that (a) it is not issued valid live racing and simulcast licenses for 2004 or
2005 by the New York State Racing and Wagering Board and/or
(b) if at any time during 2004 or 2005 Raceway's live racing and/or simulcast licenses are suspended, canceled,
revoked, rescinded, or terminated or made subject to conditions that are unacceptable to Raceway by the New
York State Racing and Wagering Board and Raceway ceases to run harness horse races at Vernon Downs at
which pari-mutuel wagering is permitted and occurs and all other operations relating to such harness horse races.
Raceway shall exercise such termination by written notice to the Association.

(b) If this Agreement is terminated by Raceway prior to November 30, 2004 or 2005, respectively, pursuant to
the provisions of subparagraph 16(a) hereof, then and in that event: (i) Raceway shall pay any Underpayment
(computed to the date of such termination) plus any Net Accrual
to the Associations within 30 days of any such termination; (ii) the Association shall retain the Underpayment, as
trustee, for and on behalf of the Horsemen participating in harness horse races at Vernon Downs subsequent to
the date of such termination; (iii) the Association shall deposit the Underpayment in the purse account of the entity
first conducting harness horse races at Vernon Downs subsequent to such termination; and (iv) the Association
shall indemnify and hold harmless Raceway from and against any and all costs, expenses, losses, liabilities,
judgments, awards and demands (including reasonable attorneys fees) arising out of or relating to the payment of
the Underpayment to the Association and/or claims of any horsemen participating (in the past or future) in harness
horse races at Vernon Downs for or with respect to the Underpayment and/or the actions of the Association with
respect thereto.

17. Black Box Testing Expenses. Raceway and the Association shall, prior to the commencement of the 2004
and 2005 Racing Season agree upon a procedure for the "black box" random testing of contestants in harness
horse racing at Vernon Downs. The costs and expenses of such testing ("Black Box Testing Expenses") shall be
borne equally by Raceway and the Association; provided however, that without the prior written consent of the
Association, its share of such Testing Expenses shall not exceed $12,650 for either such Racing Season;
provided further however that Raceway shall have no obligation to commence or continue such testing in the
absence of the continued contribution to the Testing Expenses by the Association as herein provided.

18. Association Consents. Simultaneously with the execution hereof the Association shall execute and deliver to
Raceway the three letters set forth as Exhibit "C" annexed hereto; and during the Term the Association shall
promptly execute and deliver such other and further consents, authorizations or permissions necessary to permit
Raceway to limit its Race Days to 120 for the 2004 Racing Season and the number agreed to by the parties (or
pursuant to negotiation as herein provide) for the 2005v Racing Season and/or continue unlimited and
unrestricted simulcast operations.

19. Integration. This Agreement constitutes the sole and entire agreement between the parties with respect to the
subject matter herein contained and supercedes any and all prior oral or written agreements, all of which are
hereby rendered null and void and of no further force or effect. This Agreement shall be governed and construed
in accordance with the laws of the State of New York; can only be amended by a writing executed by both of
the parties

                           REMAINDER OF PAGE INTENTIONALLY BLANK
hereto; and shall inure to the benefit of and be binding upon the parties hereto and their respective successor,
transferees, heirs, assigns and beneficiaries.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year first above
written.

                                                MID-STATE RACEWAY, INC.:          HARNESS           HORSE
                                                        ASSOCIATION OF CENTRAL NEW YORK:

          __________________________________              __________________________________
                                                              Hoolae Paoa
                                                                   Richard Papa
                                            State of New York     )
                                                                      ) ss




County of Oneida )

On the day of December in the year 2003, before me personally came HOOLAE PAOA, to me known, who,
being by me duly sworn, did depose and say that he is the president of MID-STATE RACEWAY, INC, the
corporation described in and which executed the above instrument, and that he signed his name thereto by
authority of the board of directors of said corporation.

                                                         _______________________________
                                                              Notary Public

          State of New York      )
                                     ) ss
          County of Oneida       )

                    On the        day of December in the year 2003, before me personally came




RICHARD PAPA, to me known, who, being by me duly sworn, did depose and say that he is the president of
HARNESS HORSE ASSOCIATION OF CENTRAL NEW YORK, the corporation described in and which
executed the above instrument, and that he signed his name thereto by authority of the board of directors of said
corporation.


                                                  Notary Public
                                               EXHIBIT "B"

                                  RACEWAY 2003 PURSE PAYMENT

1. THE RACEWAY ANNUAL PURSE PAYMENT FOR THE 2004 AND 2005 RACING SEASON,
RESPECTIVELY, SHALL BE IN AN AMOUNT EQUAL TO THE SUM OF THE FOLLOWING:

(a) the Formula Amount (as determined in accordance with the provisions of Schedule 1 annexed hereto and
made a part hereof; plus

(b) Net Horsemen VLT Revenues (as defined).

2. For purposes of this Agreement the terms:

2. "VLT REVENUES" SHALL BE AND MEAN THE REVENUES DERIVED FROM THE
INSTALLATION AND OPERATION OF VIDEO LOTTERY MACHINES ("VLT'S") AT VERNON
DOWNS;

3. "STATUTORY SHARE" SHALL BE AND MEAN THAT PORTION, IF ANY, OF THE VLT
REVENUES REQUIRED TO BE PAID BY STATUTE TO THE ASSOCIATION AND/OR THE
HORSEMEN;

4. "CONDITIONAL OBLIGATION" SHALL BE AND MEAN THE OBLIGATION OF THE
ASSOCIATION TO PAY TO RACEWAY THE AGGREGATE AMOUNT OF $250,000; WHICH
CONDITIONAL OBLIGATION SHALL (EXCEPT AS HEREIN EXPRESSLY PROVIDED TO THE
CONTRARY) BE PAID (WITHOUT INTEREST) SOLELY AND EXCLUSIVELY OUT OF THE
STATUTORY SHARE FOR 2003 AND ALL SUBSEQUENT YEARS WHEN EVER AND HOWEVER
PAID;

5. "NET HORSEMEN VLT REVENUES" SHALL BE AND MEAN: (I) FOR THE 2004 RACING
SEASON, THE EXCESS, IF ANY OF THE STATUTORY SHARE FOR THE PERIOD DECEMBER 1,
2003 THROUGH NOVEMBER 30, 2004 OVER THE CONDITIONAL OBLIGATION. (II) FOR THE
2005 RACING SEASON, THE EXCESS, IF ANY OF THE STATUTORY SHARE FOR THE PERIOD
DECEMBER 1, 2004 THROUGH NOVEMBER 30, 2005 OVER THE UNPAID PORTION OF THE
CONDITIONAL OBLIGATION.

6. ANYTHING IN THIS AGREEMENT TO THE CONTRARY NOTWITHSTANDING, THE
ASSOCIATION (INDIVIDUALLY AND ON BEHALF OF THE HORSEMEN) SHALL PAY TO
RACEWAY AND/OR PERMIT RACEWAY TO RETAIN IN SATISFACTION OF THE CONDITIONAL
OBLIGATION 100% OF THE PROCEEDS OF THE STATUTORY SHARE (WHETHER EARNED OR
ACCRUED DURING OR AFTER THE
EXPIRATION AND/OR TERMINATION OF THIS AGREEMENT AND/OR FOR THE YEARS 2003
AND THEREAFTER AND/OR WHEN SO EVER PAID) UNTIL SUCH TIME AS RACEWAY SHALL
HAVE RECEIVED FROM SUCH STATUTORY SHARE THE AGGREGATE AMOUNT OF $250,000.
THE ASSOCIATION AND RACEWAY HAVE NEGOTIATED THE WITHIN REPAYMENT
CONSISTENT WITH THE PROVISIONS OF SECTION 1612 IN EFFECT AS OF THE DATE OF THE
EXECUTION OF THIS AGREEMENT; WITH THE INTENTION THAT SUCH REPAYMENT AND THE
AGREEMENT WITH RESPECT THERETO SHALL SURVIVE ANY SUBSEQUENT MODIFICATION,
ALTERATION OR AMENDMENT OF
SECTION 1612 OR ANY OTHER PROVISION OF LAW. ANYTHING IN THIS AGREEMENT TO THE
CONTRARY NOTWITHSTANDING, IF THE ASSOCIATION AND/OR THE HORSEMEN ARE
PROHIBITED FROM SATISFYING THE CONDITIONAL OBLIGATION OUT OF ITS OR THEIR
STATUTORY SHARE, THEN AND IN THAT EVENT THE PAYMENT BY RACEWAY TO THE PURSE
ACCOUNT FROM OTHER SOURCES (FOR 2004 AND/OR THEREAFTER) SHALL BE REDUCED BY
AN AMOUNT EQUAL TO THE LESSER OF (a) 100% OF THE STATUTORY SHARE OR (b) THE
CONDITIONAL OBLIGATION.

7. RACEWAY AND THE ASSOCIATION ACKNOWLEDGE THAT ANY BREEDER'S PAYMENTS
AND/OR HORSEMEN'S PAYMENTS PAID INTO THE PURSE ACCOUNT FOR PURSES BY THE
BREEDERS AND/OR HORSEMEN, AS THE CASE MAY BE, SHALL BE IN ADDITION TO THE
RACEWAY ANNUAL PURSE PAYMENT.
                                                   Schedule 1

                                       Computation of Formula Amount

1. For purposes of this Agreement the term "Formula Amount" shall be and mean the sum computed as follows
for the period commencing December 1, 2003 and ending November 30, 2004 and for the period December 1,
2004 and ending November 30, 2005, respectively:

50% of Net Track Commissions (as defined); PLUS

1.75% Statutory Purse Allocation (as defined) computed on Net Handle (as defined During Meet (as defined);
PLUS

50% of OTB Commissions (as defined); PLUS

50% of Retained During Meet Simulcast Commissions (as defined); PLUS

6% of Net Handle (as defined) of Thoroughbred Signal-Out of Meet (as defined);
PLUS

6% of Net Handle (as defined) of Harness IN State and Out of State Signal-Out of Meet (as defined); PLUS

1% of those OTB Commissions derived from Out-of State Harness Racing specifically provided to be paid to
the purses pursuant to Section 1016.

2. For purposes of this Agreement the term:

"Takeout and Breakage" shall be and mean the amount of betting monies withheld from patrons at Vernon
Downs (exclusive of "minus pools") During Meet (as defined);

"Net Track Commissions" shall be and mean the sum determined by reducing Takeout and Breakage by the sum
of: (i) State Tax (on handle and breakage); (ii) Harness Breeders Fund Assessment; (iii) Track Capital
Construction Contribution; and
(iv) Statutory Purse Allocation of 1.75% on track live handle;

"Net Handle" shall be and mean the excess of gross handle over the sum of scratches and refunds; and "gross
handle" shall be and mean the amount of monies bet by patrons at Vernon Downs (exclusive of "minus pools");

"During Meet" shall be and mean the period of time commencing on the day of the first live harness horse race at
Vernon Downs during 2004 and 2005, respectively, and terminating on the day of the last live harness horse race
at Vernon Downs during 2004 and 2005, respectively;

"Out of Meet" shall be and mean the portion of 2004 and 2005, respectively, not falling within the definition of
"During Meet";
"Thoroughbred" shall be and mean all breeds of horses other than Standardbreds, commonly referred to as
Harness Horses;

"OTB Commissions" shall be and mean commissions paid by OTB to Raceway less 1% of those OTB
Commissions derived from Out-of State Harness Racing specifically provided to be paid to the purses pursuant
to Section 1016;

"Simulcast Commissions" shall be and mean commissions (other than OTB Commissions) received by Raceway
(including its parent, subsidiary or related companies) with respect to the transmission of both inbound and
outbound signals generated by wagering done on or off site, either in person, by telephone or any other means
permitted by law; including any and all moneys (including the Simulcast Proceeds as herein defined) due to the
Purse Account from those sources pursuant to this agreement;

"Retained During Meet Simulcast Commissions" shall be and mean the excess of Gross During Meet Simulcast
Commissions (as defined) over Transmission Commissions (as defined);

"Gross During Meet Simulcast Commissions" shall be and mean the Simulcast Commissions received by
Raceway with respect to the transmission of both inbound and outbound signals During Meet less, in both cases,
pari-mutuel taxes;

"Transmission Commissions" shall be and mean any fees paid by Raceway to other tracks in connection with the
receipt of simulcast signals during 2004 and 2005, respectively; and

"VLT Revenues" shall be and mean the revenues received and retained by Raceway (prior to allocation to the
Horsemen and/or the Breeders) derived from the operation of video lottery terminals at Vernon Downs during
the period December 1, 2003 through November 30, 2004 and December 1 2004 through November 30,
2005, respectively.
                                                EXHIBIT 10.21

FINANCING AGREEMENT, dated September , 2003 between V.I.P. Structures, Inc. ("VIP") and Mid-State
Raceway, Inc. ("Raceway").

                                                WITNESSETH:

Whereas, on August , 2003, VIP and Raceway entered into a Part 2 Design/Build Agreement ("Main
Agreement", which includes the Part I Design/Build Agreement and the definitions of which Main Agreement are
hereby incorporated herein by reference) pursuant to which Raceway engaged VIP to design and build the
Project for the Contract Sum prior to the expiration of the Contract Time; and

Whereas, subsequent to the execution of the Main Agreement VIP and Raceway have executed four Change
Orders designated numbers 1 through 4 pursuant to which the Contract Sum has been reduced to $3,507,554
(the "Current Contract Sum") as set forth on the Continuation Sheet annexed hereto as Exhibit "A"; and

Whereas, Raceway has requested and VIP has agreed (subject to the terms and conditions of this agreement
("Agreement") to assist Raceway in financing the payment of the Contract Sum by deferring the payment of an
$800,000.00 portion of the Current Contract Sum (the "Deferred Portion") until November 4, 2004 (subject to
prepayment as herein provided).

NOW THEREFORE, in consideration of the premises and the covenants, terms and conditions herein contained,
the parties hereto do hereby agree as follows:

1. Subject to the terms and conditions of this Agreement the obligation of Raceway to make payment of, and
right of VIP to receive payment of, the Deferred Portion pursuant to the provisions of the Main Agreement are
hereby amended as follows:

(a) With respect to each Application for Payment submitted by VIP pursuant to the Main Agreement, Raceway
shall only be required to pay 77% of the portion thereof not subject to written objections (the "Current Portion");
and 23% thereof shall be and form a part of the Deferred Portion to be paid when and as hereinbelow provided;

(b) The Deferred Portion shall bear interest on the unpaid principal balance thereof computed at the rate of 16%
per annum; which interest shall be due and payable on November 31, 2004 (the "Maturity Date");

(C)) The Deferred Portion shall be payable on the Maturity Date; provided however that Raceway shall prepay
the Deferred Portion (including any accrued interest thereon) from the following sources when, as and if received
by Raceway:

(i) The sum of $250,000 payable by the Harness Horse Association of Central New York, Inc. ("HHA")
pursuant to the terms and
conditions of that certain agreement between Raceway and the HHA dated as of December 1, 2002;

(ii) Subject to the rights of Vestin Mortgage, Inc. ("Vestin"), 20% of the net proceeds of revenues from the
operation of video lottery terminals ("VLTs") at Vernon Downs Race Track received and retained by Raceway
(net of the portions of such revenues payable to the State of New York, the HHA and the breeders); and

(iii) Subject to the rights of Vestin , the net proceeds of additional borrowings by Raceway (exclusive of any
proceeds of leases, sales and leasebacks and installment purchases) not utilized to reduce the debt of Raceway to
Vestin;

(d) In the event that any Current Portion shall not be paid within 30 days following the submission by VIP to
Raceway of the applicable Application for Payment VIP shall have the right, on ten days prior written notice to
Raceway (during which period cure shall be permitted) to) demand, in writing, payment in full of the then
outstanding Deferred Portion;

(e) VIP shall not, until no earlier than 30 days following the failure by Raceway to pay the Current Portion of an
Application for Payment, file and/or permit to be filed, a mechanic's and/or materialmen's lien on or with respect
to the Project and/or the real and/or personal property of Raceway.

2. Subject to the terms and conditions of this Paragraph 2, Raceway does hereby give and grant unto VIP a
"right of last refusal" with respect to all construction, architectural and/or engineering services to be secured by
Raceway from third parties with respect to construction to be commenced (other than the Project) at Vernon
Downs Race Track during the period commencing on the date hereof and terminating on December 31, 2008.
The foregoing "right of last refusal" shall be and mean and obligate Raceway, prior to executing an agreement with
a third party supplier of construction, architectural and/or engineering services, to offer to VIP the right to execute
and perform any such agreement in lieu and instead of such other third party upon the identical terms and
conditions set forth in such agreement. VIP shall have the right within the ten day period following receipt of a
copy of any such proposed third party agreement (or memorandum setting forth the relevant services and
financial terms) to exercise such "right of last refusal" by a writing ("VIP Notice")received by Raceway prior to
the expiration of such ten day period. The VIP Notice shall, in order to represent an effective exercise of such
"right of last refusal", include the unconditional written agreement of VIP to perform the services described, for
the consideration therein stated and otherwise in accordance with the such third party agreement and/or
memorandum.

3. This Agreement sets forth the entire agreement between the parties hereto with respect to the subject matter
herein contained; shall be governed and construed in accordance with
the laws of the State of New York; cannot be altered ,amended, modified, terminated or rescinded except by a
writing executed by both of the parties hereto; and shall inure to the benefit of and be binding upon the parties
hereto and their respective successors, transferees and assign.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above
written.

                                             V.I.P. Structures, Inc.

                                   By_______________________________

                                           Mid-State Raceway, Inc.

                                   By_______________________________
                                                 EXHIBIT 10.22

                                    INDEMNIFICATION AGREEMENT

INDEMNIFICATION AGREEMENT, dated as of October 22, 2003 between All Capital, LLC, a Nevada
limited liability company ("Capital") and Mid-State Raceway, Inc., a New York corporation ("Raceway").

                                                 WITNESSETH

Whereas, in order to induce V.I.P. Structures, Inc. ("VIP") to execute a certain Financing Agreement between
VIP and Raceway ("Financing Agreement") pursuant to which VIP has agreed to extend $800,000 in credit to
Raceway ("Credit"), Raceway has agreed to cause Capital to execute and deliver an instrument of guaranty
("Guaranty") to VIP pursuant to which Capital will agree to guaranty the repayment by Raceway of $500,000 of
the Credit; and

Whereas, Capital is prepared to execute and deliver the Guaranty subject to and conditioned upon the agreement
by Raceway to indemnify and hold harmless Capital from any loss or liability arising out of or relating to the
execution, delivery and/or performance by Capital of the Guaranty, and in connection therewith the execution and
delivery by Raceway to Capital of this Indemnification Agreement.

NOW THEREFORE, in consideration of the premises, the terms, covenants and conditions herein contained and
the sum of One ($1.00) Dollar and other good and valuable consideration each to the other in hand paid, the
parties hereto do hereby agree as follows:

1. In order to induce Capital to guaranty the repayment by Raceway to VIP of $500,000 of the Credit and to
execute and deliver the Guaranty, Raceway does hereby agree to indemnify and hold harmless Capital from and
against any and all costs, expenses, losses, liabilities, claims and judgements of every kind, nature and description
(including, without limitation, attorneys fees) which may be incurred by Capital arising out of or relating to the
execution, delivery and/or performance by Capital of the Guaranty and/or the failure and/or refusal of Raceway
to repay, in whole or in part, the Credit.

2. In consideration for and in reliance upon the execution and delivery of the within Indemnification Agreement
Capital shall guaranty, to the extent of $500,000 the repayment of the Credit and in connection therewith execute
and deliver the Guaranty.

3. In order to induce Capital to execute and deliver this Indemnification Agreement and the Guaranty Raceway
does hereby represent, warrant, covenant and agree (which representations, warranties, covenants and
agreements shall survive the execution and delivery of this Indemnification Agreement) that:(a) Raceway has the
corporate power and authority to execute and deliver this agreement; (b) the execution and delivery of this
agreement does not violate the constitutional documents of Raceway or any agreement to which it is a party or by
which it is bound or any law; (c)) the execution, delivery and performance of this agreement has been authorized
by the taking of all required corporate
action; and (d) upon the execution and delivery of this agreement by an officer of Raceway this agreement shall
be duly and properly authorized, executed and delivered by and on behalf of Raceway and valid and binding
upon Raceway and fully enforceable in accordance with its terms.

4. This agreement sets forth the entire agreement between the parties hereto with respect to the subject matter
herein contained; shall be governed and construed in accordance with the laws of the State of Nevada; cannot be
altered, amended, modified, terminated or rescinded except by a writing executed by both of the parties hereto;
and shall inure to the benefit of and be binding upon the parties hereto and their respective successors, transferees
and assigns.

IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement as of the day and
year first above written.

                                            Mid-State Raceway, Inc.

                                      By___________________________
                                           Hoolae Paoa, President

                                                 All Capital, LLC

                                      By___________________________
                                                 EXHIBIT 10.23

(Rev)

                                                  GUARANTEE

GUARANTEE, dated this day of September, 2003 by All Capital LLC, a Nevada limited liability company
("Guarantor") in favor of VIP Structures, Inc., a New York corporation ("VIP").

                                                  WITNESSETH

WHEREAS, Guarantor is the owner of 4.9% of the issued and outstanding capital stock of Mid-State Raceway,
Inc. ("Raceway") and the holder of warrants to purchase 1,700,000 shares of the capital stock of Raceway; and

WHEREAS, Raceway has entered into a Financing Agreement (the "Financing Agreement", the definitions of
which are herein incorporated herein by reference) with VIP pursuant to which VIP has agreed to defer payment
of a portion of the Current Contract Sum otherwise payable by Raceway pursuant to the Main Agreement; and

WHEREAS, as a condition to executing the Financing Agreement VIP has requested that the Guarantor execute
and deliver the within Guarantee.

NOW THEREFORE, in consideration of the premises, the mutual agreements herein contained the parties hereto
agree as follows:

1. Guaranty of Payment and Performance.

(a) Subject to and in accordance with the provisions of subparagraphs 1 (b) (C)) and (d) hereof, the Guarantor
does hereby absolutely, unconditionally and irrevocably guarantee to VIP the full and punctual payment and
performance of the Obligation (as defined). For purposes of this Guarantee the term "Obligation" shall be and
mean an amount equal to 63% of the Deferred Portion (but in no event more than $500,000) as and when the
same shall become due and payable, in accordance with the terms of the Financing Agreement.

(b) If any of the Obligation shall not be paid in full as the same shall become due and payable, either at stated
maturity or otherwise, in accordance with the terms of the Financing Agreement, then and in that event:

(i) VIP shall take and perform such reasonable efforts (collectively "Collection Efforts") as shall be reasonably
necessary to cause Raceway to make payment of the Obligation then due and payable; and

(ii) VIP shall, following the completion of the Collection Efforts transmit to the Guarantor written notice ("VIP
Notice") setting forth: (A) the continued existence of the Raceway's default in payment of the Obligation, (B) the
amount of the Obligation which is at such time the subject of Raceway's
payment default ("Current Default"), (C) the amount of the costs incurred by VIP in performing the Collection
Efforts (the "Collection Costs"), (D) the sum of the Collection Costs and the Current Default; and

(iii) Guarantor shall have the right during the seven day period following transmittal by VIP of the VIP Notice to
cure Raceway's payment default by making payment to VIP of the full amount of the sum of the Current Default
and the Collection Costs prior to the expiration of such seven day period.

(c)) Subject to the provisions of subparagraph 1 (b) and
(c)) hereof, if the Guarantor shall fail or refuse to pay the full amount of the sum of Current Default and the
Collection Costs (as set forth in the VIP Notice), then and in such event the Guarantor shall, upon demand,
immediately pay to VIP any such Obligation without presentment, diligence, protest or other notice of any kind,
all of which are hereby expressly waived. In addition to the foregoing, the Guarantor agrees to pay any and all
reasonable expenses (including without limitation, reasonable attorney's fees and expenses) which may be paid or
incurred by VIP in connection with the enforcement by VIP of the obligations of the Guarantor with respect to
the Obligation. All payments under this Guarantee shall be made in the place, currency and manner specified for
the Obligation as provided in the Main Agreement.

(d) Anything in this Guarantee to the contrary notwithstanding the duty and obligation of the Guarantor to pay the
Obligation is and shall be expressly conditioned upon and subject to the satisfaction of each of the following
conditions precedent:

(i) provided all Current Portions have been paid in full, the Project shall be completed and a final certificate of
occupancy shall have been issued;

(ii) provided the Current Portions have been paid in full, the portion of the Current Contract Sum which shall have
been deferred by VIP and become the Deferred Portion shall be no less than $800,000.00;

(iii) all non conforming and/or rejected work and/or materials shall
have been cured, repaired or replaced as provided in the Main Agreement; and

(iv) VIP shall be, and at all prior times shall have been, in full and complete compliance with the provisions of
subparagraph 1(e) of the Financing Agreement.

(e) Without limiting the generality of the provisions of subparagraphs 1(a) and (c)) hereof but expressly subject to
the provisions of subparagraphs 1(b) and (d)hereof:

(i) The liability of the Guarantor under this Guarantee is primary, absolute, direct and immediate, and not
conditional or contingent upon pursuit by VIP of any remedies it may have against Raceway or any other person
or entity, whether pursuant to the terms hereof or at law, in equity or by statute;

(ii) The Guarantor hereby waives any right it otherwise might have to require VIP to make any demand upon
and/or proceed against Raceway or any other person or entity before seeking enforcement of this Guarantee, or
to pursue any legal, equitable or statutory remedy otherwise available to VIP in any particular manner or order;

(iii) The Guarantor hereby expressly authorizes VIP, in its sole and absolute discretion, without notice to or
further assent of the Guarantor and without in any way discharging, terminating, releasing, affecting or impairing
the obligations and liabilities of the Guarantor hereunder, from time to time or at any one or more times to: (A)
amend, modify, renew, extend, accelerate or otherwise change the time or manner of payment for or
performance of, or otherwise change, modify or amend any of the other terms and conditions of the Obligation,
(B) release, discharge or compromise or settle with Raceway, (C) waive compliance with or any default under,
forbear from, delay or only partially enforce, or grant any other indulgences with respect to the Obligation, (D)
assign, transfer, pledge, hypothecate, grant a security interest in or otherwise transfer its interest in this Guarantee,
and (E) otherwise deal in all respects with Raceway with respect to the Construction Agreement as if this
Guarantee was not in effect;

(iv) The Guarantor: (A) agrees that the validity and enforceability of its obligations hereunder shall be unaffected
by the genuineness, validity, regularity or enforceability of the Main Agreement or by any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, (B) expressly
waives any defense arising by reason of laches, the statute of limitations or any incapacity, lack of authority, or
other defense of Raceway (including, without limitation, the bankruptcy, reorganization, liquidation, dissolution,
release or discharge of Raceway or any arrangement, compromise, settlement or other action with respect to
Raceway's creditors or by reason of the cessation from any cause whatsoever
(other than payment or performance in full of the liability of Raceway), and (C) hereby releases VIP from any
requirement of looking into such matters.
2. Guarantor's Obligations Not Affected. This Guarantee is an absolute, unconditional, irrevocable, present and
continuing guarantee of payment and performance and not merely of collection or collectibility, and, except as
expressly provided herein to the contrary, is in no way conditioned or contingent upon any attempt to collect from
Raceway or any other person any of the Obligation or upon any other condition or contingency. The obligations
of the Guarantor under this Guarantee shall remain in full force and effect without regard to, and shall not be
impaired or affected by:

(i) any change in the existence, structure or ownership of Raceway, or any insolvency, bankruptcy,
reorganization, arrangement, adjustment, composition, liquidation, receivership or similar proceeding affecting
Raceway;

(ii) the existence of any claim or other rights that the Guarantor may have at any time against Raceway, whether in
connection herewith or in any unrelated transactions; provided however that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory counterclaim;

(iii) any exercise or non-exercise by VIP or any other person of any right, power, privilege or remedy pursuant to
or in respect of this Guarantee, or any waiver of any such right, power, privilege or remedy; or

(iv) any merger or consolidation of Raceway with or into any other person, or any sale, lease or transfer of any or
all of the assets of Raceway to any other person or the dissolution, termination, winding up or other
discontinuation of Raceway.

3. Waiver. Except as herein expressly provided to the contrary, Guarantor unconditionally waives (i) all notices
which may be required by statute, rule of law or otherwise, notice of acceptance of this Guarantee as well as (a)
presentment, demand for payment and/or performance and protest of non-payment and/or non-performance, (b)
notice of presentment, demand and protest, (c) notice of any default hereunder and/or under the Note, and of all
indulgences, (d) demand for observance of performance of, or enforcement of, any terms or provisions of this
Guarantee, and (e) all other notices and demands otherwise required by law or statute which Guarantor may
lawfully waive. Further, to the extent permitted by law, Guarantor waives the rights to (f) trial by jury, (g) implead
Raceway or assert a counterclaim against Raceway, (h) to consolidate any such action with any proceeding
involving Raceway, and (ii) any requirement of diligence on the part of VIP.

4. Termination. This Guarantee and the obligations of the Guarantor hereunder shall terminate and be of no
further force and effect on the date when the Obligation shall be have been indefeasibly paid in full.

5. No Waivers. No failure or delay by VIP in exercising any right, power or privilege hereunder shall operate as
a waiver thereof nor shall any single or partial exercise thereof preclude any other or furgher exercise thereof or
the exercise of any other right, power or privilege. The rights and remedies provided herein shall be cumulative
and not exclusive of any rights or remedies provided by law.
6. Notices. Any and all notices, requests or instructions desired or required to be given to VIP or to Guarantor
shall be in writing and shall either be hand delivered or mailed to the recipient first class, postage prepaid,
certified, return receipt requested at the following respective addresses:

                                         To:      Guarantor                  1055 East Tropicana
                                                  Avenue
                                                  Suite 700
                                                  Las Vegas, NV 89119

          To:                                     VIP                        The address set forth in
                                                  the
                                                  Main Agreement




or at such other address as any party hereto shall designate in a writing complying with the provisions of this
Paragraph.

7. Savings Clause. If any provision of this Guarantee is held to be invalid or unenforceable by any court or
tribunal of competent jurisdiction, the remainder hereof shall not be affected thereby, and such provisions shall be
carried out as nearly as possible according to its original terms and intent to eliminate such invalidity or
unenforceability.

8. General. This agreement sets forth the entire agreement between the parties hereto with respect to the subject
matter hereincontained; shall be governed and construed in accordance with the laws of the State of New York;
cannot be altered, amended, modified or terminated except by a writing executed by both of the parties hereto or
as herein expressly otherwise provided; and shall inure to the benefit of and be binding upon the parties hereto
and their respective successors, transferees, heirs, assigns and beneficiaries.

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be executed and delivered as
of the day and year first above written.

                                                 All Capital LLC

                                  By________________________________
                                                 EXHIBIT 16.1

                                                  FORM 8-K/A

Pursuant to Section 13 or 15(D) of the Securities Exchange Act of 1934

                   Date of Report (Date of earliest event reported) December 15, 2003

                                        MID-STATE RACEWAY, INC.


                                            (Exact name of registrant)

            NEW YORK STATE                              000-01607                           15-0555258
            --------------                              ---------                           ----------
            (STATE OF INCORPORATION)                    (COMMISSION FILE)                   (IRS EIN)

                       P.O. BOX 860, RUTH STREET, VERNON, NEW YORK                    13476
                       -------------------------------------------                    -----
                       (ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)                        (ZIP)

            Registrant's telephone number (315) 829-2201

                                                   --------------




Item 4

On December 15, 2003, Mid-State Raceway, Inc. (Registrant) received notice that Urbach Kahn & Werlin
LLP, Certified Public Accountants (UK&W), the firm of independent accountants previously engaged as the
principal accountants to audit Registrant's financial statements, resigned. The resignation was unilateral and was
communicated in a letter to the Registrant dated December 11. UK&W's resignation letter is attached as Exhibit
(marked "A"). The letter was supplemented by a letter dated December 19, 2003. A copy of the supplemental
letter is attached as Exhibit (marked "B"). The resignation was not requested or prompted by the Registrant.

UK&W's reports on Registrant's financial statements for the past two (2) years contained no adverse opinion or
disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles.
No 10k reports have been filed as of this date by registrant for such years.

During Registrant's two (2) most recent fiscal years and the subsequent interim period up to the date of the
resignation, there were no disagreements with UK&W of the character described in paragraph (a)(1)(iv) of
Regulation S-K, Item 304, and there were no reportable events of the character described in paragraph
(a)(1)(v) of Regulation S-K, Item 304.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned hereunto duly authorized.

                                            Mid-State Raceway, Inc.
                                                  (Registrant)

          Date December 19, 2003                                            /s/ Hoolae Paoa
                                                                            ------------------------
                                                                            Hoolae Paoa, President
                                                    Exhibit A

[LOGO]
URBACH KAHN & WERLIN LLP
CERTIFIED PUBLIC ACCOUNTANTS

                                               December 11, 2003

VIA FACSIMILE (702) 434-1644 AND U.S. MAIL
Jerry Mottern, Audit Committee Chairman
Mid-State Raceway, Inc.
P.O. Box 860 Vernon, NY 13476-0860

Dear Jerry:

As you are aware, Mid-State Raceway, Inc. ("Mid-State") is delinquent in filing several quarterly Form 10-Q's
and annual Form 10-K's with the Securities and Exchange Commission ("SEC"). On several occasions, we have
communicated our concerns over the delinquent status to the Audit Committee, the Board of Directors, the
management of Mid-State, and outside legal counsel.

As you will recall at the October 16, 2003 meeting of the Audit Committee of the Board of Directors, Urbach
Kahan & Werlin stated that the Audit Committee must take the responsibility of ensuring that Mid-State develop
a reasonable plan to cure the delinquency and must adhere to the plan. We committed to the Audit Committee
that we would provide the necessary resources to ensure that the filings, once completed, would be reviewed by
us in an effective and efficient manner. Further, we put the Audit Committee on notice that we would resign as
independent certified public accountants if Mid-State did not establish and adhere to a formal and reasonable
plan for curing delinquent status.

Shortly after our October 16th meeting, management committed to having the delinquent filings ready for our
review by Thanksgiving. To date, Mid-State has not met this commitment and furthermore, has dismissed James
Wise, its Chief Financial Officer and Treasurer. As a consequence of Mid-State's failure to establish and adhere
to a plan for curing its delinquency with the SEC, we herby resign as the Company's independent auditors
effective immediately.

Pursuant to SEC rules, you are required to notify the Commission of our decision to resign within five days of this
notification.

Very truly yours,

                                     URBACH KAHN & WERLIN LLP

                                          /s/ Paul L. Goetz
                                          -------------------------
                                          Paul L. Goetz, CPA
                                          Partner




                                        PLG:lsy
                                        Copy:      Hoolae Paoa
                                                   Bruce Poushter, Esq.




                                                  EXHIBIT B

[LOGO]
URBACH KAHN & WERLIN LLP
CERTIFIED PUBLIC ACCOUNTANTS

                                               December 19, 2003
VIA FACSIMILE (702) 434-1644 AND U.S. MAIL
Jerry Mottern, Audit Committee Chairman
Mid-State Raceway, Inc.
P.O. Box 860 Vernon, NY 13476-0860

Dear Mr. Mottern:

By letter dated December 11, 2003, Urbach Kahn & Werlin LLP resigned as the Company's independent
auditor. The Company has asked us to clarify our position with respect to this use of our audit reports previously
issued in connection with the Company's financial statements as of and for the years ended December 31, 2000,
2001 and 2002.

Professional standards require that auditors perform certain subsequent review procedures when audit reports
are to be reissued. The inclusion of our audit reports in the delinquent 10-K filings the Company plans to submit
to the Securities and Exchange Commission is considered a "reissuance" of our audit reports and, as such, will
require the completion of subsequent event review procedures. Such procedures will include, but not be limited
to:

- Inquiries of officers and executives having responsibility for financial and accounting matters concerning events
subsequent to the date of our auditor's reports that would have a material effect on the previously audited
financial statements.

- Reading of minutes of the Board of Directors and committees thereof.

- Inquires of the Company's legal counsel, and

- Obtaining representations from management concerning its responsibilities for the financial information and other
matters.

Upon completion of these procedures, and any other procedures that we deem necessary in the circumstances,
we will advise you if we are in a position to consent to the use of our independent auditor's reports in the
delinquent 10-K filings.

In addition, we will perform interim review procedures on unaudited financial statements expected to be included
in delinquent 10-Q filings for periods through December 31, 2002. Such interim review procedures will also be
conducted in accordance with professional standards.

As you can appreciate, in order to accomplish the foregoing, we will need the full cooperation of management
throughout these review processes.

Jerry Mottern
Mid-State Raceway, Inc.
Page Two
December 19, 2003

We will schedule our subsequent review procedures at a mutually convenient time. We will need, of course, to
agree on a fee arrangement for these services, including payment of all outstanding invoices prior to the
commencement any work.

Very truly yours,

                                      URBACH KAHN & WERLIN LLP

                                        /s/ Paul L. Goetz
                                        -----------------------------
                                        Paul L. Goetz, CPA
                                        Partner
PLG:lsy
Copy:     Hoolae Paoa (by facsimile)
          Bruce Poushter (by facsimile)
                                                                                December 29, 2003




Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549

Commissioners:

We have read the statements made by Mid-State Raceway, Inc. (copy attached), which we understand have
been filed with the Commission, pursuant to Item 4 of Form 8-K, as part of Mid-State's Form 8-K report dated
December 18, 2003.

We agree with the statements concerning our firm in such Form 8-K.

Very truly yours,

                                   URBACH KAHN & WERLIN LLP

                                            /s/ Paul L. Goetz
                                            -----------------
                                            Paul L. Goetz, CPA
                                            Partner




Enclosure
                                                 EXHIBIT 16.2

[URBACH KAHN & WERLIN LLP LOGO]

                                     URBACH KAHN & WERLIN LLP
                                   CERTIFIED PUBLIC ACCOUNTANTS

                                               December 30, 2003

                             VIA FACSIMILE (315) 829-6060 AND U.S. MAIL
                                  Jerry Mottern, Audit Committee Chairman

Mid-State Raceway, Inc.
P.O. Box 860
Vernon, NY 13476-0860

Dear Jerry:

This letter outlines our proposed arrangement to perform subsequent event review procedures on the audited
financial statements of Mid-State Raceway, Inc. as of and for the periods ending December 31, 2000, 2001, and
2002 so such financial statements may be included in delinquent 1O-K filings for the same periods. As instructed
by the Company, we will not perform any procedures with regard to the delinquent Company prepared 10-Q's
for interim periods.

We will perform subsequent review procedures in accordance with professional standards on the financial
statements as of and for the periods ending December 31, 2000, 2001, and 2002. Our procedures will include
inquiries of management, updating of attorney's letters received in connection with the audits, reviews of interim
financial information, and other procedures we deem necessary in the circumstances. We will also read and
review the 10-K's.

We estimate that the above procedures will require approximately 40-60 hours to complete. Our fees for these
services will range from $8,000-$10,000. We will require a retainer of $4,000 to begin work. A final bill will be
due on completion of our work.

If this letter defines the arrangement as you understand them, please sign and date the enclosed copy and return it
to us.

Very truly yours,

                                     URBACH KAHN & WERLIN LLP

                                               /s/ Paul L. Goetz
                                               Paul L. Goetz, CPA
                                               Partner




PLG:lsy
Vernon eng.

                                         AGREED AND ACCEPTED:

                    /s/ jerry Mottern                                     12/30/2003
                    ---------------------------------------               ------------------
                    Jerry Mottern, Audit Committee Chairman               Date




66 State Street, Ste. 200, Albany, New York 12207 2595 (518) 449 3171 FAX (518)
449.7833 An Independent Member of Urbach Hacker Young International
Exhibit 21.1 - Subsidiaries of the Company

The listing below includes the subsidiaries of Mid-Sate Raceway, Inc. All subsidiaries are owned 100% by Mid-
State Raceway, Inc.

1. Vernon Productions, Inc. (New York)

2. Vernon Hospitality, Inc. (New York)

3. Mid-State Development Corporation (New York)
                                                   EXHIBIT 31.1

I, Hoolae Paoa, certify that:

1. I have reviewed this annual report on Form 10-K of Mid-State Raceway, Inc. and Subsidiary;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report,
fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days
prior to the filing date of this annual report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's board of directors (or persons performing the
equivalent functions):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the
registrant's ability to record, process, summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in
the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this annual report whether there were significant
changes in internal controls or in other factors that could significantly affect internal controls subsequent to the
date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and
material weaknesses.

                                              Date: January 10, 2004
                                              /s/ Hoolae Paoa
                                                   EXHIBIT 31.2

Hoolae Paoa
President and Chief Executive Officer

Certification of Principal Financial and Accounting Officer

I, Rose Frawert, certify that:

1. I have reviewed this annual report on Form 10-K of Mid-State Raceway, Inc. and Subsidiary;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report,
fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days
prior to the filing date of this annual report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's board of directors (or persons performing the
equivalent functions):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the
registrant's ability to record, process, summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in
the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this annual report whether there were significant
changes in internal controls or in other factors that could significantly affect internal controls subsequent to the
date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and
material weaknesses.

                                 Date: January 10, 2004
                                 /s/ Rose Frawert
                                 Rose Frawert
                                 Principal Financial and Accounting Officer
                                                   EXHIBIT 32.1

Certification Pursuant to 18 U.S.C. Section 1350 As Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002

I, Hoolae Paoa, President and Chief Executive Officer of Mid-State Raceway, Inc. and Subsidiary (the
"Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1)the Annual Report on Form 10-K of the Company for the year ended December 31, 2002 (the "Report") fully
complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended
(15 U.S.C. 78m or 78o(d)); and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.

                                    Date: January 10, 2004

                                    /s/ Hoolae Paoa
                                    Hoolae Paoa
                                    President and Chief Executive Officer
                                                   EXHIBIT 32.2

Certification Pursuant to 18 U.S.C. Section 1350 As Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002

I, Rose Frawert, Principal Financial and Accounting Officer of Mid-State Raceway, Inc. and Subsidiary (the
"Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1)the Annual Report on Form 10-K of the Company for the year ended December 31, 2002 (the "Report") fully
complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended
(15 U.S.C. 78m or 78o(d)); and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.

                                 Date: January 10, 2004
                                 /s/ Rose Frawert
                                 Rose Frawert
                                 Principal Financial and Accounting Officer

				
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