Document:

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                                                                    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

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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.

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                  (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.

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                           (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

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                           (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

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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

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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.

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         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

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(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

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                  (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.

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                  (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

<PAGE>

                           (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

<PAGE>

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

<PAGE>

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

<PAGE>

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

<PAGE>

                                   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

<PAGE>

         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.

<PAGE>

                                   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";

<PAGE>

"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.<PAGE>

                                                                   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

<PAGE>

                           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

<PAGE>

         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_______________________________

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