EXHIBIT 4.1

                         FAST EDDIE RACING STABLES, INC.

                          SECURITIES PURCHASE AGREEMENT

                                  March 9, 2005

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                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

1.    Agreement to Sell and Purchase...........................................1

2.    Fees and Warrant.........................................................1

3.    Closing, Delivery and Payment............................................2
      3.1     Closing..........................................................2
      3.2     Delivery.........................................................2

4.    Representations and Warranties of the Company............................3
      4.1     Organization, Good Standing and Qualification....................3
      4.2     Subsidiaries.....................................................4
      4.3     Capitalization; Voting Rights....................................4
      4.4     Authorization; Binding Obligations...............................5
      4.5     Liabilities......................................................5
      4.6     Agreements; Action...............................................5
      4.7     Obligations to Related Parties...................................6
      4.8     Changes..........................................................7
      4.9     Title to Properties and Assets; Liens, Etc.......................8
      4.10    Intellectual Property............................................8
      4.11    Compliance with Other Instruments................................9
      4.12    Litigation.......................................................9
      4.13    Tax Returns and Payments.........................................9
      4.14    Employees.......................................................10
      4.15    Registration Rights and Voting Rights...........................10
      4.16    Compliance with Laws; Permits...................................11
      4.17    Environmental and Safety Laws...................................11
      4.18    Valid Offering..................................................11
      4.19    Full Disclosure.................................................11
      4.20    Insurance.......................................................12
      4.21    SEC Reports.....................................................12
      4.22    Listing.........................................................12
      4.23    No Integrated Offering..........................................12
      4.24    Stop Transfer...................................................13
      4.25    Dilution........................................................13
      4.26    Patriot Act.................................................... 12

5.    Representations and Warranties of the Purchaser.........................13
      5.1     No Shorting.....................................................13
      5.2     Requisite Power and Authority...................................14
      5.3     Investment Representations......................................14
      5.4     Purchaser Bears Economic Risk...................................14
      5.5     Acquisition for Own Account.....................................14
      5.6     Purchaser Can Protect Its Interest..............................14
      5.7     Accredited Investor.............................................15
      5.8     Legends.........................................................15
      5.9     Limitation on Acquisition of Common Stock of the Company........14


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6.    Covenants of the Company................................................16
      6.1     Stop-Orders.....................................................16
      6.2     Listing.........................................................16
      6.3     Market Regulations..............................................16
      6.4     Reporting Requirements..........................................16
      6.5     Use of Funds....................................................16
      6.6     Access to Facilities............................................17
      6.7     Taxes...........................................................17
      6.8     Insurance.......................................................17
      6.9     Intellectual Property...........................................18
      6.10    Properties......................................................18
      6.11    Confidentiality.................................................19
      6.12    Required Approvals..............................................19
      6.13    Reissuance of Securities........................................20
      6.14    Opinion.........................................................20
      6.15    Margin Stock....................................................19
      6.16    Restricted Cash Disclosure......................................19
      6.17    Financing Right of First Refusal................................19

7.    Covenants of the Purchaser..............................................21
      7.1     Confidentiality.................................................21
      7.2     Non-Public Information..........................................21
      7.3     Other...........................................................20
      7.4     No Shorting.....................................................20
      7.5     Limitation on Acquisition of Common Stock of Company............20

8.    Covenants of the Company and Purchaser Regarding Indemnification........22
      8.1     Company Indemnification.........................................22
      8.2     Purchaser's Indemnification.....................................22

9.    Conversion of Convertible Note..........................................22
      9.1     Mechanics of Conversion.........................................22

10.   Registration Rights.....................................................24
      10.1    Registration Rights Granted.....................................24
      10.2    Offering Restrictions...........................................24

11.   Miscellaneous...........................................................24
      11.1    Governing Law...................................................24
      11.2    Survival........................................................25
      11.3    Successors......................................................25
      11.4    Entire Agreement................................................26
      11.5    Severability....................................................26
      11.6    Amendment and Waiver............................................26
      11.7    Delays or Omissions.............................................26
      11.8    Notices.........................................................26
      11.9    Attorneys' Fees.................................................27
      11.10   Titles and Subtitles............................................27
      11.11   Facsimile Signatures; Counterparts..............................27
      11.12   Broker's Fees...................................................28


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      11.13   Construction....................................................28

                                LIST OF EXHIBITS
--------------------------------------------------------------------------------
Form of Convertible Term Note...................................     Exhibit A
Form of Warrant.................................................     Exhibit B-1
Form of Option                                                       Exhibit B-2
Form of Opinion.................................................     Exhibit C
Form of Escrow Agreement........................................     Exhibit D


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                          SECURITIES PURCHASE AGREEMENT

      THIS SECURITIES  PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of March 9, 2005,  by and between  FAST EDDIE  RACING  STABLES,  INC., a
Florida  corporation  (the  "Company"),  and Laurus Master Fund,  Ltd., a Cayman
Islands company (the "Purchaser").

                                    RECITALS

      WHEREAS,  the  Company  has  authorized  the  sale to the  Purchaser  of a
Convertible Term Note in the aggregate principal amount of Three Million Dollars
($3,000,000)  (as  amended,  modified  or  supplemented  from time to time,  the
"Note"),  which Note is convertible  into shares of the Company's  common stock,
$0.01 par value per share (the "Common  Stock") at an initial  fixed  conversion
price of $ 0.83 per share of Common Stock ("Fixed Conversion Price");

      WHEREAS,  the Company  wishes to issue (x) a warrant to the  Purchaser  to
purchase  up to  1,084,338  shares of the  Company's  Common  Stock  (subject to
adjustment  as set forth  therein)  and (y) an option to  purchase up to 643,700
shares  of the  Company's  Common  Stock  (subject  to  adjustment  as set forth
therein) in connection with Purchaser's purchase of the Note;

      WHEREAS, Purchaser desires to purchase the Note, the Option (as defined in
Section 2) and the Warrant (as defined in Section 2) on the terms and conditions
set forth herein; and

      WHEREAS,  the Company  desires to issue and sell the Note,  the Option and
Warrant to Purchaser on the terms and conditions set forth herein.

                                    AGREEMENT

         NOW,  THEREFORE,  in  consideration  of the foregoing  recitals and the
mutual promises, representations, warranties and covenants hereinafter set forth
and for other good and valuable  consideration,  the receipt and  sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

      1.  Agreement to Sell and Purchase.  Pursuant to the terms and  conditions
set forth in this Agreement,  on the Closing Date (as defined in Section 3), the
Company  agrees to sell to the  Purchaser,  and the  Purchaser  hereby agrees to
purchase  from  the  Company,  a  Note  in the  aggregate  principal  amount  of
$3,000,000  convertible in accordance  with the terms thereof into shares of the
Company's  Common  Stock  in  accordance  with  the  terms  of the Note and this
Agreement.  The  Note  purchased  on the  Closing  Date  shall  be  known as the
"Offering."  A form of the Note is  annexed  hereto as  Exhibit A. The Note will
mature on the Maturity  Date (as defined in the Note).  Collectively,  the Note,
the Option and Warrant and Common  Stock  issuable in payment of the Note,  upon
conversion  of the Note and upon  exercise  of the  Warrant  and the  Option are
referred to as the "Securities."

      2. Fees, Option and Warrant. On the Closing Date:

            (a) The Company will issue and deliver to the Purchaser a Warrant to
      purchase up to  1,084,338  shares of Common Stock in  connection  with the
      Offering (as


                                      D-1
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      amended,  modified  or  supplemented  from  time to time,  the  "Warrant")
      pursuant to Section 1 hereof. The Warrant must be delivered on the Closing
      Date.  A form of  Warrant  is  annexed  hereto  as  Exhibit  B-1.  All the
      representations, covenants, warranties, undertakings, and indemnification,
      and other rights made or granted to or for the benefit of the Purchaser by
      the Company are hereby also made and granted in respect of the Warrant and
      shares of the Company's Common Stock issuable upon exercise of the Warrant
      (the "Warrant Shares").

            (b) The Company will issue and deliver to the Purchaser an Option to
      purchase  up to  643,700  shares of Common  Stock in  connection  with the
      Offering  (as amended,  modified or  supplemented  from time to time,  the
      "Option")  pursuant to Section 1 hereof.  The Option must be  delivered on
      the Closing  Date. A form of the Option is annexed  hereto as Exhibit B-2.
      All  the  representations,   covenants,   warranties,   undertakings,  and
      indemnification, and other rights made or granted to or for the benefit of
      the  Purchaser  by the Company are hereby also made and granted in respect
      of the Option and  shares of the  Company's  Common  Stock  issuable  upon
      exercise of the Option (the "Option Shares").

            (b) Subject to the terms of Section  2(d) below,  the Company  shall
      pay to Laurus Capital  Management,  LLC, the manager of the  Purchaser,  a
      closing  payment in an amount  equal to three and three  quarters  percent
      (3.75%) of the aggregate  principal  amount of the Note. The foregoing fee
      is referred to herein as the "Closing Payment."

            (c) The Company shall  reimburse  the  Purchaser for its  reasonable
      expenses  (including legal fees and expenses)  incurred in connection with
      the  preparation  and  negotiation  of  this  Agreement  and  the  Related
      Agreements (as hereinafter  defined),  and expenses incurred in connection
      with  the  Purchaser's  due  diligence  review  of  the  Company  and  its
      Subsidiaries (as defined in Section 4.2) and all related matters.  Amounts
      required  to be paid under this  Section  2(c) will be paid on the Closing
      Date and shall be $52,500 for such  expenses  referred to in this  Section
      2(c).

            (d)  The  Closing  Payment  and  the  expenses  referred  to in  the
      preceding  clause (c) (net of  deposits  previously  paid by the  Company)
      shall be paid at closing out of funds held pursuant to a Escrow  Agreement
      (as defined below) and a disbursement letter (the "Disbursement Letter").

      3. Closing, Delivery and Payment.

            3.1 Closing. Subject to the terms and conditions herein, the closing
of the transactions contemplated hereby (the "Closing"), shall take place on the
date  hereof,  at such time or place as the Company and  Purchaser  may mutually
agree (such date is hereinafter referred to as the "Closing Date").

            3.2 Delivery.  Pursuant to the Escrow  Agreement,  at the Closing on
the Closing Date, the Company will deliver to the Purchaser, among other things,
a Note in the form attached as Exhibit A  representing  the aggregate  principal
amount of $3,000,000, a Warrant in


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the form attached as Exhibit B-1 in the Purchaser's name representing  1,084,338
Warrant Shares, an Option in the form attached as Exhibit B-2 in the Purchaser's
name  representing  643,700  Option Shares and the Purchaser will deliver to the
Company, among other things, the amounts set forth in the Disbursement Letter by
certified  funds or wire transfer (it being  understood  that  $2,500,000 of the
proceeds  of the Note shall be placed in the  Restricted  Account (as defined in
the Restricted  Account Agreement  referred to below) on the Closing Date and up
to $500,000 of the proceeds of the Note will be utilized  for expenses  incurred
in connection  with the  transactions  referred to in this  Agreement,  with the
remainder of such $500,000 of proceeds to be provided to the Company for working
capital purposes).

      4.  Representations  and  Warranties  of the Company.  The Company  hereby
represents and warrants to the Purchaser as follows (which  representations  and
warranties  are  supplemented  by the  Company's  filings  under the  Securities
Exchange Act of 1934 made prior to the date of this Agreement (collectively, the
"Exchange Act Filings"), copies of which have been provided to the Purchaser):

            4.1  Organization,  Good  Standing  and  Qualification.  Each of the
Company and each of its  Subsidiaries  is a corporation,  partnership or limited
liability company,  as the case may be, duly organized,  validly existing and in
good standing under the laws of its  jurisdiction of  organization.  Each of the
Company and each of its  Subsidiaries  has the corporate  power and authority to
own and  operate  its  properties  and  assets,  to execute and deliver (i) this
Agreement,  (ii) the Note, the Option and the Warrant to be issued in connection
with this Agreement,  (iii) the Master  Security  Agreement dated as of the date
hereof  between  the  Company,  certain  Subsidiaries  of the  Company  and  the
Purchaser (as amended,  modified or supplemented  from time to time, the "Master
Security  Agreement"),  (iv) the Registration  Rights Agreement  relating to the
Securities dated as of the date hereof between the Company and the Purchaser (as
amended,  modified or supplemented from time to time, the  "Registration  Rights
Agreement"),  (v) the  Subsidiary  Guaranty  dated as of the date hereof made by
certain  Subsidiaries of the Company (as amended,  modified or supplemented from
time to time, the "Subsidiary Guaranty"),  (vi) the Stock Pledge Agreement dated
as of the date hereof among the Company, certain Subsidiaries of the Company and
the  Purchaser  (as amended,  modified or  supplemented  from time to time,  the
"Stock  Pledge  Agreement"),  (vii) the  Escrow  Agreement  dated as of the date
hereof  among the  Company,  the  Purchaser  and the escrow  agent  referred  to
therein,  substantially in the form of Exhibit D hereto (as amended, modified or
supplemented from time to time, the "Escrow  Agreement"),  (viii) the Restricted
Account  Agreement dated as of the date hereof among the Company,  the Purchaser
and North Fork Bank (as amended, modified or supplemented from time to time, the
"Restricted Account Agreement"), (ix) the Restricted Account Side Letter related
to the  Restricted  Account  Agreement  dated as of the date hereof  between the
Company and the Purchaser  (as amended,  modified or  supplemented  from time to
time, the "Restricted Account Side Letter") and (x) all other agreements related
to this  Agreement  and the Note and referred to herein (the  preceding  clauses
(ii) through (x), collectively, the "Related Agreements"), to issue and sell the
Note and the shares of Common Stock  issuable  upon  conversion of the Note (the
"Note  Shares"),  to issue and sell the  Option  and the  Option  Shares and the
Warrant  and the Warrant  Shares,  to issue and sell the Warrant and the Warrant
Shares,  and to carry  out the  provisions  of this  Agreement  and the  Related
Agreements  and to carry on its  business as  presently  conducted.  Each of the
Company and each of its  Subsidiaries  is duly qualified and is authorized to do
business and is in good standing as a


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foreign  corporation,  partnership or limited liability company, as the case may
be, in all  jurisdictions  in which  the  nature  of its  activities  and of its
properties (both owned and leased) makes such  qualification  necessary,  except
for  those  jurisdictions  in  which  failure  to do so has not,  or  could  not
reasonably be expected to have,  individually  or in the  aggregate,  a material
adverse effect on the business,  assets,  liabilities,  condition  (financial or
otherwise),   properties,  operations  or  prospects  of  the  Company  and  its
Subsidiaries, taken individually and as a whole (a "Material Adverse Effect").

            4.2  Subsidiaries.  Each  direct  and  indirect  Subsidiary  of  the
Company,  the  direct  owner of such  Subsidiary  and its  percentage  ownership
thereof,  is set forth on Schedule  4.2.  For the purpose of this  Agreement,  a
"Subsidiary"  of any person or entity  means (i) a  corporation  or other entity
whose shares of stock or other ownership  interests having ordinary voting power
(other than stock or other ownership  interests having such power only by reason
of the happening of a contingency)  to elect a majority of the directors of such
corporation,  or other persons or entities performing similar functions for such
person or entity, are owned, directly or indirectly, by such person or entity or
(ii) a corporation or other entity in which such person or entity owns, directly
or indirectly, more than 50% of the equity interests at such time.

            4.3 Capitalization; Voting Rights.

            (a) The  authorized  capital  stock of the  Company,  as of the date
      hereof consists of 100,000,000  shares,  all of which are shares of Common
      Stock,  par value $0.01 per share.  The  authorized  capital stock of each
      Subsidiary of the Company is set forth on Schedule 4.2.

            (b) Except as disclosed on Schedule 4.3,  other than: (i) the shares
      reserved for issuance  under the Company's  stock option  plans;  and (ii)
      shares  which may be granted  pursuant to this  Agreement  and the Related
      Agreements,  there are no outstanding options, warrants, rights (including
      conversion or  preemptive  rights and rights of first  refusal),  proxy or
      stockholder agreements,  or arrangements or agreements of any kind for the
      purchase or acquisition from the Company of any of its securities.  Except
      as disclosed on Schedule 4.3,  neither the offer,  issuance or sale of any
      of the Note, the Option or the Warrant, or the issuance of any of the Note
      Shares,  the Option Shares or Warrant Shares,  nor the consummation of any
      transaction  contemplated  hereby  will result in a change in the price or
      number of any securities of the Company  outstanding,  under anti-dilution
      or other similar provisions contained in or affecting any such securities.

            (c) All issued and outstanding shares of the Company's Common Stock:
      (i) have been duly  authorized  and validly  issued and are fully paid and
      nonassessable;  and (ii) were  issued in  compliance  with all  applicable
      state and federal laws concerning the issuance of securities.

            (d) The rights,  preferences,  privileges  and  restrictions  of the
      shares of the Common Stock are as stated in the Company's  Certificate  of
      Incorporation  (the  "Charter").  The Note Shares,  the Option  Shares and
      Warrant  Shares have been duly and validly  reserved  for  issuance.  When
      issued and paid for in compliance  with the  provisions of this  Agreement
      and the Company's Charter, the Securities will be validly issued, fully


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      paid and  nonassessable,  and will be free of any  liens or  encumbrances;
      provided,  however,  that the Securities may be subject to restrictions on
      transfer under state and/or federal securities laws as set forth herein or
      as otherwise required by such laws at the time a transfer is proposed.

            4.4 Authorization;  Binding Obligations. All corporate,  partnership
or  limited  liability  company,  as the case may be,  action on the part of the
Company and each of its  Subsidiaries  (including  the  respective  officers and
directors)  necessary for the  authorization  of this  Agreement and the Related
Agreements,   the  performance  of  all  obligations  of  the  Company  and  its
Subsidiaries  hereunder  and under the other  Related  Agreements at the Closing
and, the authorization,  sale, issuance and delivery of the Note, the Option and
Warrant has been taken or will be taken prior to the Closing. This Agreement and
the Related  Agreements,  when  executed and delivered and to the extent it is a
party thereto,  will be valid and binding obligations of each of the Company and
each of its  Subsidiaries,  enforceable  against each such person in  accordance
with their terms, except:

            (a) as limited by applicable bankruptcy, insolvency, reorganization,
      moratorium or other laws of general application  affecting  enforcement of
      creditors' rights; and

            (b) general  principles of equity that restrict the  availability of
      equitable or legal remedies.

The sale of the Note and the subsequent  conversion of the Note into Note Shares
are not and will not be  subject  to any  preemptive  rights  or rights of first
refusal that have not been properly waived or complied with. The issuance of the
Warrant and the  subsequent  exercise of the Warrant for Warrant  Shares and the
issuance of the Option and the subsequent  exercise of the Option for the Option
Shares  are not and will not be subject  to any  preemptive  rights or rights of
first refusal that have not been properly waived or complied with.

            4.5 Liabilities. Neither the Company nor any of its Subsidiaries has
any contingent liabilities,  except current liabilities incurred in the ordinary
course of business and liabilities disclosed in any Exchange Act Filings.

            4.6 Agreements; Action. Except as set forth on Schedule 4.6 or as
disclosed in any Exchange Act Filings:

            (a) there are no agreements, understandings, instruments, contracts,
      proposed  transactions,  judgments,  orders, writs or decrees to which the
      Company  or any of its  Subsidiaries  is a party  or by  which it is bound
      which may  involve:  (i)  obligations  (contingent  or  otherwise)  of, or
      payments to, the Company in excess of $50,000 (other than  obligations of,
      or  payments  to, the Company  arising  from  purchase or sale  agreements
      entered into in the ordinary course of business);  or (ii) the transfer or
      license of any patent, copyright,  trade secret or other proprietary right
      to or from the Company  (other than licenses  arising from the purchase of
      "off  the  shelf"  or  other  standard  products);   or  (iii)  provisions
      restricting the development,  manufacture or distribution of the Company's
      products or services; or (iv) indemnification by


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      the Company with respect to infringements of proprietary rights.

            (b) Since  December  31,  2004,  neither  the Company nor any of its
      Subsidiaries  has: (i) declared or paid any  dividends,  or  authorized or
      made any  distribution  upon or with respect to any class or series of its
      capital stock;  (ii) incurred any  indebtedness  for money borrowed or any
      other liabilities (other than ordinary course obligations) individually in
      excess of  $50,000  or,  in the case of  indebtedness  and/or  liabilities
      individually  less than $50,000,  in excess of $100,000 in the  aggregate;
      (iii) made any loans or advances to any person not in excess, individually
      or in the aggregate, of $100,000,  other than ordinary course advances for
      travel expenses;  or (iv) sold,  exchanged or otherwise disposed of any of
      its assets or rights, other than the sale of its inventory in the ordinary
      course of business.

            (c)  For  the  purposes  of  subsections  (a)  and  (b)  above,  all
      indebtedness,   liabilities,  agreements,   understandings,   instruments,
      contracts  and proposed  transactions  involving the same person or entity
      (including  persons or  entities  the  Company  has reason to believe  are
      affiliated  therewith)  shall be aggregated for the purpose of meeting the
      individual minimum dollar amounts of such subsections.

            4.7 Obligations to Related Parties.  Except as set forth on Schedule
      4.7, there are no obligations of the Company or any of its Subsidiaries to
      officers,  directors,  stockholders  or employees of the Company or any of
      its Subsidiaries other than:

            (a) for  payment  of  salary  for  services  rendered  and for bonus
      payments;

            (b) reimbursement for reasonable  expenses incurred on behalf of the
      Company and its Subsidiaries;

            (c) for other standard employee benefits made generally available to
      all employees  (including stock option  agreements  outstanding  under any
      stock option plan approved by the Board of Directors of the Company); and

            (d)  obligations  listed in the  Company's  financial  statements or
      disclosed in any of its Exchange Act Filings.

Except as described  above or set forth on Schedule  4.7,  none of the officers,
directors  or,  to the  best  of  the  Company's  knowledge,  key  employees  or
stockholders  of the Company or any  members of their  immediate  families,  are
indebted to the Company,  individually or in the aggregate, in excess of $50,000
or have any direct or indirect  ownership  interest  in any firm or  corporation
with which the  Company is  affiliated  or with which the Company has a business
relationship,  or any firm or corporation which competes with the Company, other
than passive  investments in publicly traded companies  (representing  less than
one percent (1%) of such company) which may compete with the Company.  Except as
described  above, no officer,  director or  stockholder,  or any member of their
immediate  families,  is,  directly or  indirectly,  interested  in any material
contract  with  the  Company  and  no  agreements,  understandings  or  proposed
transactions are contemplated between the Company and any such person. Except as


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set forth on Schedule  4.7, the Company is not a guarantor or  indemnitor of any
indebtedness of any other person, firm or corporation.

            4.8 Changes.  Since  December  31, 2004,  except as disclosed in any
Exchange  Act  Filing  or in any  Schedule  to this  Agreement  or to any of the
Related Agreements, there has not been:

            (a) any  change  in the  business,  assets,  liabilities,  condition
      (financial  or  otherwise),  properties,  operations  or  prospects of the
      Company or any of its Subsidiaries, which individually or in the aggregate
      has had, or could  reasonably be expected to have,  individually or in the
      aggregate, a Material Adverse Effect;

            (b) any  resignation or termination of any officer,  key employee or
      group of employees of the Company or any of its Subsidiaries;

            (c) any material change,  except in the ordinary course of business,
      in the contingent obligations of the Company or any of its Subsidiaries by
      way of guaranty, endorsement, indemnity, warranty or otherwise;

            (d) any  damage,  destruction  or loss,  whether  or not  covered by
      insurance,  which  has  had,  or could  reasonably  be  expected  to have,
      individually or in the aggregate, a Material Adverse Effect;

            (e)  any  waiver  by the  Company  or any of its  Subsidiaries  of a
      valuable right or of a material debt owed to it;

            (f) any direct or  indirect  loans made by the Company or any of its
      Subsidiaries  to any  stockholder,  employee,  officer or  director of the
      Company  or any of its  Subsidiaries,  other  than  advances  made  in the
      ordinary course of business;

            (g) any material change in any compensation arrangement or agreement
      with any employee,  officer, director or stockholder of the Company or any
      of its Subsidiaries;

            (h) any declaration or payment of any dividend or other distribution
      of the assets of the Company or any of its Subsidiaries;

            (i) any labor organization activity related to the Company or any of
      its Subsidiaries;

            (j)  any  debt,   obligation  or  liability  incurred,   assumed  or
      guaranteed  by the Company or any of its  Subsidiaries,  except  those for
      immaterial  amounts and for current  liabilities  incurred in the ordinary
      course of business;

            (k) any sale,  assignment  or transfer of any  patents,  trademarks,
      copyrights,  trade secrets or other intangible assets owned by the Company
      or any of its Subsidiaries;

            (l) any change in any material agreement to which the Company or any
      of its  Subsidiaries  is a party or by which  either the Company or any of
      its Subsidiaries is bound


                                       7
<PAGE>

      which either individually or in the aggregate has had, or could reasonably
      be expected to have,  individually or in the aggregate, a Material Adverse
      Effect;

            (m) any other  event or  condition  of any  character  that,  either
      individually or in the aggregate, has had, or could reasonably be expected
      to have, individually or in the aggregate, a Material Adverse Effect; or

            (n) any  arrangement  or  commitment  by the  Company  or any of its
      Subsidiaries to do any of the acts described in subsection (a) through (m)
      above.

            4.9 Title to Properties and Assets;  Liens, Etc. Except as set forth
on Schedule 4.9, each of the Company and each of its  Subsidiaries  has good and
marketable  title to its properties and assets,  and good title to its leasehold
estates, in each case subject to no mortgage,  pledge, lien, lease,  encumbrance
or charge, other than:

            (a) those resulting from taxes which have not yet become delinquent;

            (b) minor liens and  encumbrances  which do not  materially  detract
      from the value of the property  subject  thereto or materially  impair the
      operations of the Company or any of its Subsidiaries; and

            (c) those  that have  otherwise  arisen  in the  ordinary  course of
      business.

All facilities,  machinery,  equipment,  fixtures, vehicles and other properties
owned,  leased or used by the Company and its Subsidiaries are in good operating
condition and repair,  ordinary wear and tear  excepted,  and are reasonably fit
and usable for the purposes  for which they are being used.  Except as set forth
on Schedule 4.9, the Company and its  Subsidiaries  are in  compliance  with all
material terms of each lease to which it is a party or is otherwise bound.

            4.10 Intellectual Property.

            (a)  Each  of the  Company  and  each  of its  Subsidiaries  owns or
      possesses  sufficient  legal  rights to all patents,  trademarks,  service
      marks, trade names, copyrights,  trade secrets, licenses,  information and
      other proprietary  rights and processes  necessary for its business as now
      conducted  and to the  Company's  knowledge,  as presently  proposed to be
      conducted (the "Intellectual Property"), without any known infringement of
      the  rights of  others.  There are no  outstanding  options,  licenses  or
      agreements of any kind relating to the foregoing  proprietary  rights, nor
      is the  Company  or any of its  Subsidiaries  bound  by or a party  to any
      options,  licenses or  agreements of any kind with respect to the patents,
      trademarks,   service  marks,  trade  names,  copyrights,  trade  secrets,
      licenses,  information and other  proprietary  rights and processes of any
      other person or entity other than such licenses or agreements arising from
      the purchase of "off the shelf" or standard products.

            (b) Neither the Company nor any of its Subsidiaries has received any
      communications  alleging that the Company or any of its  Subsidiaries  has
      violated  any of the  patents,  trademarks,  service  marks,  trade names,
      copyrights or trade secrets or other


                                       8
<PAGE>

      proprietary  rights of any other  person or entity,  nor is the Company or
      any of its Subsidiaries aware of any basis therefor.

            (c) The  Company  does not  believe  it is or will be  necessary  to
      utilize any inventions, trade secrets or proprietary information of any of
      its employees made prior to their  employment by the Company or any of its
      Subsidiaries,   except  for  inventions,   trade  secrets  or  proprietary
      information  that have been  rightfully  assigned to the Company or any of
      its Subsidiaries.

            4.11 Compliance with Other Instruments.  Neither the Company nor any
of its Subsidiaries is in violation or default of (x) any term of its Charter or
Bylaws,  or (y) of any  provision  of  any  indebtedness,  mortgage,  indenture,
contract,  agreement or  instrument to which it is party or by which it is bound
or of any judgment,  decree,  order or writ, which violation or default,  in the
case of this  clause  (y),  has had,  or could  reasonably  be expected to have,
either  individually  or in  the  aggregate,  a  Material  Adverse  Effect.  The
execution,  delivery and  performance of and compliance  with this Agreement and
the Related  Agreements to which it is a party, and the issuance and sale of the
Note by the Company and the other Securities by the Company each pursuant hereto
and thereto,  will not, with or without the passage of time or giving of notice,
result in any such  material  violation,  or be in conflict with or constitute a
default  under any such term or  provision,  or  result in the  creation  of any
mortgage,  pledge,  lien,  encumbrance  or charge upon any of the  properties or
assets of the Company or any of its Subsidiaries or the suspension,  revocation,
impairment,  forfeiture or nonrenewal of any permit,  license,  authorization or
approval  applicable  to the Company,  its business or  operations or any of its
assets or properties.

            4.12 Litigation.  Except as set forth on Schedule 4.12 hereto, there
is no action,  suit,  proceeding or  investigation  pending or, to the Company's
knowledge,  currently  threatened against the Company or any of its Subsidiaries
that  prevents the Company or any of its  Subsidiaries  from  entering into this
Agreement or the other Related Agreements, or from consummating the transactions
contemplated  hereby  or  thereby,  or which  has had,  or could  reasonably  be
expected to have,  either  individually or in the aggregate,  a Material Adverse
Effect or any change in the current  equity  ownership  of the Company or any of
its Subsidiaries, nor is the Company aware that there is any basis to assert any
of the foregoing.  Neither the Company nor any of its Subsidiaries is a party or
subject to the provisions of any order, writ, injunction,  judgment or decree of
any court or government  agency or  instrumentality.  There is no action,  suit,
proceeding or investigation by the Company or any of its Subsidiaries  currently
pending or which the Company or any of its Subsidiaries intends to initiate.

            4.13 Tax Returns and  Payments.  Each of the Company and each of its
Subsidiaries  has filed all tax  returns  (federal,  state  and  local)  due and
required  to be filed by it.  All  taxes  shown  to be due and  payable  on such
returns,  any  assessments  imposed,  and all other taxes due and payable by the
Company or any of its  Subsidiaries on or before the Closing,  have been paid or
will be paid prior to the time they  become  delinquent.  Except as set forth on
Schedule 4.13, neither the Company nor any of its Subsidiaries has been advised:

            (a) that any of its returns,  federal,  state or other, have been or
      are being audited as of the date hereof; or


                                       9
<PAGE>

                  (b) of any  deficiency in  assessment or proposed  judgment to
            its federal, state or other taxes.

The Company has no knowledge of any liability for any tax to be imposed upon its
properties  or assets as of the date of this  Agreement  that is not  adequately
provided for.

            4.14  Employees.  Except as set forth on Schedule 4.14,  neither the
Company nor any of its  Subsidiaries  has any collective  bargaining  agreements
with any of its employees.  There is no labor union organizing  activity pending
or, to the Company's knowledge, threatened with respect to the Company or any of
its Subsidiaries. Except as disclosed in the Exchange Act Filings or on Schedule
4.14,  neither the Company nor any of its Subsidiaries is a party to or bound by
any currently effective employment contract,  deferred compensation arrangement,
bonus plan,  incentive plan, profit sharing plan,  retirement agreement or other
employee compensation plan or agreement. To the Company's knowledge, no employee
of the  Company or any of its  Subsidiaries,  nor any  consultant  with whom the
Company or any of its Subsidiaries  has contracted,  is in violation of any term
of any  employment  contract,  proprietary  information  agreement  or any other
agreement  relating to the right of any such individual to be employed by, or to
contract with, the Company or any of its  Subsidiaries  because of the nature of
the business to be conducted by the Company or any of its  Subsidiaries;  and to
the Company's  knowledge  the continued  employment by the Company or any of its
Subsidiaries of its present employees,  and the performance of the Company's and
its Subsidiaries' contracts with its independent contractors, will not result in
any such  violation.  Neither the Company nor any of its  Subsidiaries  is aware
that any of its employees is obligated under any contract  (including  licenses,
covenants or  commitments of any nature) or other  agreement,  or subject to any
judgment,  decree or order of any court or  administrative  agency,  that  would
interfere with their duties to the Company or any of its  Subsidiaries.  Neither
the Company nor any of its  Subsidiaries  has received any notice  alleging that
any such  violation  has  occurred.  Except  for  employees  who have a  current
effective employment  agreement with the Company or any of its Subsidiaries,  no
employee of the Company or any of its Subsidiaries has been granted the right to
continued  employment  by the  Company  or any  of  its  Subsidiaries  or to any
material  compensation  following  termination of employment with the Company or
any of its  Subsidiaries.  Except as set forth on Schedule  4.14, the Company is
not aware  that any  officer,  key  employee  or group of  employees  intends to
terminate  his,  her  or  their  employment  with  the  Company  or  any  of its
Subsidiaries,  nor does the  Company or any of its  Subsidiaries  have a present
intention to terminate the  employment of any officer,  key employee or group of
employees.

            4.15 Registration  Rights and Voting Rights.  Except as set forth on
Schedule  4.15 or on Schedule 7(b) to the  Registration  Rights  Agreement,  and
except as disclosed in Exchange Act Filings,  neither the Company nor any of its
Subsidiaries is presently under any obligation,  and neither the Company nor any
of its Subsidiaries has granted any rights,  to register any of the Company's or
its Subsidiaries' presently outstanding securities or any of its securities that
may  hereafter  be issued.  Except as set forth on  Schedule  4.15 and except as
disclosed in Exchange Act Filings, to the Company's knowledge, no stockholder of
the Company or any of its  Subsidiaries  has  entered  into any  agreement  with
respect  to  the  voting  of  equity  securities  of the  Company  or any of its
Subsidiaries.


                                       10
<PAGE>

            4.16 Compliance with Laws;  Permits.  Neither the Company nor any of
its Subsidiaries is in violation of any applicable  statute,  rule,  regulation,
order  or   restriction   of  any   domestic  or  foreign   government   or  any
instrumentality  or agency  thereof in respect of the conduct of its business or
the ownership of its properties  which has had, or could  reasonably be expected
to have, either individually or in the aggregate,  a Material Adverse Effect. No
governmental  orders,  permissions,  consents,  approvals or authorizations  are
required to be obtained and no  registrations or declarations are required to be
filed in connection  with the  execution  and delivery of this  Agreement or any
other Related  Agreement and the issuance of any of the Securities,  except such
as has been duly and validly  obtained or filed,  or with respect to any filings
that must be made after the Closing,  as will be filed in a timely manner.  Each
of the  Company  and its  Subsidiaries  has all  material  franchises,  permits,
licenses and any similar authority  necessary for the conduct of its business as
now being  conducted by it, the lack of which could,  either  individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

            4.17  Environmental and Safety Laws.  Neither the Company nor any of
its  Subsidiaries is in violation of any applicable  statute,  law or regulation
relating to the environment or occupational  health and safety,  which violation
has had, or could reasonably be expected to have, a Material Adverse Effect, and
to its knowledge,  no material  expenditures are or will be required in order to
comply with any such existing statute, law or regulation. Except as set forth on
Schedule  4.17, no Hazardous  Materials (as defined below) are used or have been
used,  stored,  or disposed of by the Company or any of its  Subsidiaries or, to
the Company's  actual  knowledge,  by any other person or entity on any property
owned,  leased or used by the  Company or any of its  Subsidiaries,  in any such
case in violation of applicable law. For the purposes of the preceding sentence,
"Hazardous Materials" shall mean:

            (a) materials  which are listed or otherwise  defined as "hazardous"
      or "toxic" under any applicable local, state,  federal and/or foreign laws
      and regulations  that govern the existence  and/or remedy of contamination
      on property,  the protection of the environment  from  contamination,  the
      control of  hazardous  wastes,  or other  activities  involving  hazardous
      substances, including building materials; or

            (b) any petroleum products or nuclear materials.

            4.18 Valid  Offering.  Assuming the accuracy of the  representations
and warranties of the Purchaser contained in this Agreement, the offer, sale and
issuance of the Securities will be exempt from the registration  requirements of
the Securities  Act of 1933, as amended (the  "Securities  Act"),  and will have
been registered or qualified (or are exempt from registration and qualification)
under the registration,  permit or qualification  requirements of all applicable
state securities laws.

            4.19  Full  Disclosure.   Each  of  the  Company  and  each  of  its
Subsidiaries  has provided the Purchaser with all  information  requested by the
Purchaser in connection  with its decision to purchase the Note,  the Option and
Warrant,  including all information the Company and its Subsidiaries  believe is
reasonably necessary to make such investment  decision.  Neither this Agreement,
the Related  Agreements,  the exhibits and schedules  hereto and thereto nor any
other document  delivered by the Company or any of its Subsidiaries to Purchaser
or its attorneys


                                       11
<PAGE>

or  agents  in  connection  herewith  or  therewith  or  with  the  transactions
contemplated hereby or thereby,  contain any untrue statement of a material fact
nor omit to state a  material  fact  necessary  in order to make the  statements
contained  herein or therein,  in light of the  circumstances  in which they are
made, not misleading.  Any financial projections and other estimates provided to
the  Purchaser  by the  Company  or any of its  Subsidiaries  were  based on the
Company's and its Subsidiaries' experience in the industry and on assumptions of
fact  and  opinion  as to  future  events  which  the  Company  or  any  of  its
Subsidiaries,  at the date of the  issuance of such  projections  or  estimates,
believed to be reasonable, it being acknowledged that such projections and other
estimates do not in any way constitute a guarantee of future performance.

            4.20 Insurance. Each of the Company and each of its Subsidiaries has
general commercial, product liability, fire and casualty insurance policies with
coverages  which the Company  believes are  customary  for  companies  similarly
situated to the Company and its Subsidiaries in the same or similar business.

            4.21 SEC Reports.  Except as set forth on Schedule 4.21, the Company
has filed all proxy statements, reports and other documents required to be filed
by it under the Securities  Exchange Act 1934, as amended (the "Exchange  Act").
The Company has furnished the Purchaser with copies of: (i) its Annual Report on
Form 10-KSB for its fiscal year ended  December 31, 2004; and (ii) its Quarterly
Report on Form 10-QSB for its fiscal  quarter ended  September 30, 2004, and the
Form  8-K  filings  which  it has  made  during  the  fiscal  year  2005 to date
(collectively,  the "SEC  Reports").  Except as set forth on Schedule 4.21, each
SEC Report was, at the time of its filing,  in substantial  compliance  with the
requirements  of its  respective  form  and  none  of the SEC  Reports,  nor the
financial  statements (and the notes thereto) included in the SEC Reports, as of
their respective filing dates, contained any untrue statement of a material fact
or omitted to state a material fact  required to be stated  therein or necessary
to make the statements  therein,  in light of the circumstances under which they
were made, not misleading. The Company also reaffirms the representation made by
it in Section 6(a) of the Registration Rights Agreement.

            4.22 Listing.  The  Company's  Common Stock is listed for trading on
the National  Association of Securities  Dealers Over the Counter Bulletin Board
("NASD  OTCBB") and  satisfies all  requirements  for the  continuation  of such
trading.  The Company has not received any notice that its Common Stock will not
be  eligible  to be traded on the NASD OTCBB or that its  Common  Stock does not
meet all requirements for such trading.

            4.23 No  Integrated  Offering.  Neither the Company,  nor any of its
Subsidiaries  or affiliates,  nor any person acting on its or their behalf,  has
directly or indirectly made any offers or sales of any security or solicited any
offers to buy any security under  circumstances that would cause the offering of
the Securities pursuant to this Agreement or any of the Related Agreements to be
integrated  with prior  offerings by the Company for purposes of the  Securities
Act which would prevent the Company from selling the Securities pursuant to Rule
506 under the  Securities  Act, or any applicable  exchange-related  stockholder
approval  provisions,  nor  will  the  Company  or  any  of  its  affiliates  or
Subsidiaries  take any  action or steps  that would  cause the  offering  of the
Securities to be integrated with other offerings.


                                       12
<PAGE>

            4.24 Stop Transfer.  The Securities are restricted  securities as of
the date of this Agreement. Neither the Company nor any of its Subsidiaries will
issue any stop transfer  order or other order  impeding the sale and delivery of
any of the  Securities at such time as the  Securities are registered for public
sale or an exemption from registration is available, except as required by state
and federal securities laws.

            4.25  Dilution.  The  Company  specifically  acknowledges  that  its
obligation  to issue the shares of Common Stock upon  conversion of the Note and
the  exercise  of the  Warrant  and the Option is binding  upon the  Company and
enforceable  regardless  of the dilution such issuance may have on the ownership
interests of other shareholders of the Company.

            4.26  Patriot  Act.  The  Company  certifies  that,  to the  best of
Company's  knowledge,  neither the Company nor any of its  Subsidiaries has been
designated,  and is not  owned or  controlled,  by a  "suspected  terrorist"  as
defined in  Executive  Order 13224.  The Company  hereby  acknowledges  that the
Purchaser seeks to comply with all applicable laws concerning  money  laundering
and related  activities.  In furtherance  of those  efforts,  the Company hereby
represents,  warrants and agrees that: (i) none of the cash or property that the
Company or any of its Subsidiaries  will pay or will contribute to the Purchaser
has been or shall be derived  from,  or related to, any activity  that is deemed
criminal  under United  States law; and (ii) no  contribution  or payment by the
Company or any of its Subsidiaries to the Purchaser, to the extent that they are
within the Company's and/or its Subsidiaries'  control shall cause the Purchaser
to be in  violation of the United  States Bank  Secrecy  Act, the United  States
International  Money  Laundering  Control  Act  of  1986  or the  United  States
International  Money Laundering  Abatement and  Anti-Terrorist  Financing Act of
2001.  The  Company  shall  promptly  notify  the  Purchaser  if  any  of  these
representations  ceases to be true and accurate  regarding the Company or any of
its  Subsidiaries.  The Company  agrees to provide the Purchaser any  additional
information  regarding the Company or any of its Subsidiaries that the Purchaser
deems  necessary or convenient to ensure  compliance  with all  applicable  laws
concerning money laundering and similar activities.  The Company understands and
agrees  that  if at  any  time  it is  discovered  that  any  of  the  foregoing
representations  are  incorrect,  or if otherwise  required by applicable law or
regulation related to money laundering or similar activities,  the Purchaser may
undertake  appropriate  actions  to ensure  compliance  with  applicable  law or
regulation,  including but not limited to segregation  and/or  redemption of the
Purchaser's  investment in the Company. The Company further understands that the
Purchaser  may  release  confidential  information  about  the  Company  and its
Subsidiaries  and, if applicable,  any underlying  beneficial  owners, to proper
authorities if the Purchaser,  in its sole discretion,  determines that it is in
the best interests of the Purchaser in light of relevant  rules and  regulations
under the laws set forth in subsection (ii) above.

      5.  Representations and Warranties of the Purchaser.  The Purchaser hereby
represents  and  warrants to the Company as follows  (such  representations  and
warranties do not lessen or obviate the  representations  and  warranties of the
Company set forth in this Agreement):

            5.1  No  Shorting.  The  Purchaser  or any  of  its  affiliates  and
investment partners has not, will not and will not cause any person or entity to
directly  engage in "short sales" of the  Company's  Common Stock as long as the
Note shall be outstanding.


                                       13
<PAGE>

            5.2 Requisite  Power and Authority.  The Purchaser has all necessary
power and  authority  under all  applicable  provisions  of law to  execute  and
deliver  this  Agreement  and the  Related  Agreements  and to carry  out  their
provisions.  All corporate  action on  Purchaser's  part required for the lawful
execution and delivery of this Agreement and the Related Agreements have been or
will be  effectively  taken  prior to the  Closing.  Upon  their  execution  and
delivery,  this Agreement and the Related  Agreements  will be valid and binding
obligations of Purchaser, enforceable in accordance with their terms, except:

            (a) as limited by applicable bankruptcy, insolvency, reorganization,
      moratorium or other laws of general application  affecting  enforcement of
      creditors' rights; and

            (b) as limited by general  principles  of equity that  restrict  the
      availability of equitable and legal remedies.

            5.3  Investment  Representations.  Purchaser  understands  that  the
Securities are being offered and sold pursuant to an exemption from registration
contained in the Securities Act based in part upon  Purchaser's  representations
contained in the Agreement, including, without limitation, that the Purchaser is
an "accredited investor" within the meaning of Regulation D under the Securities
Act of 1933, as amended (the "Securities  Act"). The Purchaser  confirms that it
has  received  or has had  full  access  to all  the  information  it  considers
necessary or appropriate to make an informed investment decision with respect to
the Note,  the Option and the Warrant to be purchased by it under this Agreement
and the Note Shares,  the Option  Shares and the Warrant  Shares  acquired by it
upon the  conversion of the Note and the exercise of the Option and the Warrant,
respectively.  The Purchaser  further confirms that it has had an opportunity to
ask questions and receive  answers from the Company  regarding the Company's and
its Subsidiaries'  business,  management and financial affairs and the terms and
conditions of the Offering, the Note, the Option, the Warrant and the Securities
and to obtain  additional  information (to the extent the Company possessed such
information  or  could  acquire  it  without  unreasonable  effort  or  expense)
necessary to verify any  information  furnished to the Purchaser or to which the
Purchaser had access.

            5.4 Purchaser  Bears Economic  Risk.  The Purchaser has  substantial
experience in  evaluating  and investing in private  placement  transactions  of
securities  in  companies  similar  to the  Company  so  that it is  capable  of
evaluating  the merits and risks of its  investment  in the  Company and has the
capacity to protect its own interests. The Purchaser must bear the economic risk
of this  investment  until the Securities are sold pursuant to: (i) an effective
registration  statement  under the  Securities  Act; or (ii) an  exemption  from
registration is available with respect to such sale.

            5.5  Acquisition  for Own Account.  The  Purchaser is acquiring  the
Note,  the Option and Warrant  and the Note  Shares,  the Option  Shares and the
Warrant Shares for the Purchaser's own account for investment only, and not as a
nominee or agent and not with a view  towards or for resale in  connection  with
their distribution.

            5.6 Purchaser Can Protect Its Interest. The Purchaser represents
that by reason of its, or of its management's, business and financial
experience, the Purchaser has the


                                       14
<PAGE>

capacity to evaluate  the merits and risks of its  investment  in the Note,  the
Warrant,  the Option and the  Securities  and to protect  its own  interests  in
connection with the transactions  contemplated in this Agreement and the Related
Agreements.  Further,  Purchaser is aware of no publication of any advertisement
in connection with the transactions contemplated in the Agreement or the Related
Agreements.

            5.7  Accredited  Investor.   Purchaser  represents  that  it  is  an
accredited investor within the meaning of Regulation D under the Securities Act.

            5.8 Legends.

            (a) The Note shall bear substantially the following legend:

            "THIS NOTE AND THE COMMON STOCK  ISSUABLE  UPON  CONVERSION  OF THIS
            NOTE HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS
            AMENDED,  OR ANY APPLICABLE STATE SECURITIES LAWS. THIS NOTE AND THE
            COMMON STOCK ISSUABLE UPON  CONVERSION OF THIS NOTE MAY NOT BE SOLD,
            OFFERED  FOR SALE,  PLEDGED  OR  HYPOTHECATED  IN THE  ABSENCE OF AN
            EFFECTIVE  REGISTRATION  STATEMENT  AS TO THIS  NOTE OR SUCH  SHARES
            UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF
            COUNSEL REASONABLY  SATISFACTORY TO FAST EDDIE RACING STABLES,  INC.
            THAT SUCH REGISTRATION IS NOT REQUIRED."

            (b) The Note  Shares and the Warrant  Shares,  if not issued by DWAC
      system (as  hereinafter  defined),  shall bear a legend  which shall be in
      substantially  the  following  form  until such  shares are  covered by an
      effective registration statement filed with the SEC:

            "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
            UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED,  OR ANY  APPLICABLE
            STATE  SECURITIES  LAWS.  THESE SHARES MAY NOT BE SOLD,  OFFERED FOR
            SALE,  PLEDGED  OR  HYPOTHECATED  IN  THE  ABSENCE  OF AN  EFFECTIVE
            REGISTRATION  STATEMENT  UNDER SUCH  SECURITIES  ACT AND  APPLICABLE
            STATE LAWS OR AN OPINION OF COUNSEL REASONABLY  SATISFACTORY TO FAST
            EDDIE RACING STABLES, INC. THAT SUCH REGISTRATION IS NOT REQUIRED."

            (c) The Warrant shall bear substantially the following legend:

            "THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS
            WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
            AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THIS WARRANT
            AND


                                       15
<PAGE>

            THE COMMON SHARES  ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE
            SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
            EFFECTIVE   REGISTRATION   STATEMENT  AS  TO  THIS  WARRANT  OR  THE
            UNDERLYING  SHARES OF COMMON  STOCK  UNDER  SAID ACT AND  APPLICABLE
            STATE   SECURITIES   LAWS  OR  AN  OPINION  OF  COUNSEL   REASONABLY
            SATISFACTORY   TO  FAST  EDDIE  RACING   STABLES,   INC.  THAT  SUCH
            REGISTRATION IS NOT REQUIRED."

      6.  Covenants of the Company.  The Company  covenants  and agrees with the
Purchaser as follows:

            6.1  Stop-Orders.  The Company will advise the  Purchaser,  promptly
after it receives  notice of issuance by the Securities and Exchange  Commission
(the "SEC"), any state securities  commission or any other regulatory  authority
of any stop order or of any order  preventing or suspending  any offering of any
securities  of the Company,  or of the  suspension of the  qualification  of the
Common  Stock of the Company for  offering or sale in any  jurisdiction,  or the
initiation of any proceeding for any such purpose.

            6.2 Listing.  The Company shall  promptly  secure the listing of the
shares  of  Common  Stock  issuable  upon  conversion  of the  Note and upon the
exercise of the Warrant on the NASD OTCBB (the  "Principal  Market")  upon which
shares of Common Stock are listed  (subject to official  notice of issuance) and
shall maintain such listing so long as any other shares of Common Stock shall be
so listed.  The Company  will  maintain  the listing of its Common  Stock on the
Principal  Market,  and will comply in all material  respects with the Company's
reporting,  filing  and  other  obligations  under  the  bylaws  or rules of the
National  Association  of Securities  Dealers  ("NASD") and such  exchanges,  as
applicable.

            6.3 Market  Regulations.  The Company shall notify the SEC, NASD and
applicable  state  authorities,  in accordance with their  requirements,  of the
transactions  contemplated by this Agreement, and shall take all other necessary
action and  proceedings as may be required and permitted by applicable law, rule
and  regulation,  for the legal  and valid  issuance  of the  Securities  to the
Purchaser and promptly provide copies thereof to the Purchaser.

            6.4  Reporting  Requirements.  The Company will timely file with the
SEC all reports  required to be filed  pursuant to the  Exchange Act and refrain
from  terminating  its status as an issuer  required by the Exchange Act to file
reports  thereunder  even  if  the  Exchange  Act or the  rules  or  regulations
thereunder would permit such termination.

            6.5 Use of Funds.  The Company  agrees that it will use the proceeds
of the sale of the Note, the Option and the Warrant for acquisitions approved by
the Purchaser  and/or general working capital purposes only (it being understood
that  $2,500,000 of the proceeds of the Note will be deposited in the Restricted
Account on the Closing Date and shall be subject to the terms and  conditions of
the Restricted Account Agreement and the Restricted Account Side Letter).


                                       16
<PAGE>

            6.6  Access  to  Facilities.  Each of the  Company  and  each of its
Subsidiaries will permit any representatives designated by the Purchaser (or any
successor of the Purchaser),  upon reasonable  notice and during normal business
hours,  at such person's  expense and  accompanied  by a  representative  of the
Company, to:

            (a) visit and inspect any of the properties of the Company or any of
      its Subsidiaries;

            (b) examine the corporate  and  financial  records of the Company or
      any of its  Subsidiaries  (unless  such  examination  is not  permitted by
      federal,  state or local law or by  contract)  and make copies  thereof or
      extracts therefrom; and

            (c) discuss the affairs, finances and accounts of the Company or any
      of  its  Subsidiaries   with  the  directors,   officers  and  independent
      accountants of the Company or any of its  Subsidiaries (so long as, in the
      case of such independent  accountants,  a representative of the Company is
      present at any such discussion).

Notwithstanding  the foregoing,  neither the Company nor any of its Subsidiaries
will provide any material,  non-public  information to the Purchaser  unless the
Purchaser  signs a  confidentiality  agreement in form and substance  reasonably
satisfactory  to the Company  and the  Purchaser  and  otherwise  complies  with
Regulation FD, under the federal securities laws.

            6.7 Taxes.  Each of the  Company and each of its  Subsidiaries  will
promptly pay and  discharge,  or cause to be paid and  discharged,  when due and
payable,  all  lawful  taxes,  assessments  and  governmental  charges or levies
imposed  upon the income,  profits,  property or business of the Company and its
Subsidiaries;  provided, however, that any such tax, assessment,  charge or levy
need not be paid if the validity  thereof  shall  currently be contested in good
faith by appropriate proceedings and if the Company and/or such Subsidiary shall
have set  aside  on its  books  adequate  reserves  with  respect  thereto,  and
provided,  further,  that the  Company  and its  Subsidiaries  will pay all such
taxes,  assessments,  charges  or  levies  forthwith  upon the  commencement  of
proceedings to foreclose any lien which may have attached as security therefor.

            6.8 Insurance.  Each of the Company and its  Subsidiaries  will keep
its assets which are of an insurable  character insured by financially sound and
reputable  insurers  against loss or damage by fire,  explosion  and other risks
customarily  insured against by companies in similar business similarly situated
as the Company and its  Subsidiaries;  and the Company and its Subsidiaries will
maintain, with financially sound and reputable insurers, insurance against other
hazards and risks and liability to persons and property to the extent and in the
manner  which the Company  reasonably  believes is  customary  for  companies in
similar business  similarly  situated as the Company and its Subsidiaries and to
the extent available on commercially  reasonable terms. The Company, and each of
its Subsidiaries  will jointly and severally bear the full risk of loss from any
loss  of any  nature  whatsoever  with  respect  to the  assets  pledged  to the
Purchaser  as  security  for its  obligations  hereunder  and under the  Related
Agreements.  At the  Company's and each of its  Subsidiaries'  joint and several
cost  and  expense  in  amounts  and  with  carriers  reasonably  acceptable  to
Purchaser,  the  Company  and each of its  Subsidiaries  shall  (i) keep all its
insurable  properties and properties in which it has an interest insured against
the hazards of fire,


                                       17
<PAGE>

flood,  sprinkler leakage,  those hazards covered by extended coverage insurance
and such other  hazards,  and for such  amounts,  as is customary in the case of
companies  engaged in  businesses  similar to the  Company's  or the  respective
Subsidiary's including business interruption insurance;  (ii) maintain a bond in
such  amounts as is customary  in the case of  companies  engaged in  businesses
similar  to  the  Company's  or the  respective  Subsidiary's  insuring  against
larceny,  embezzlement or other criminal  misappropriation of insured's officers
and  employees  who may either  singly or jointly  with  others at any time have
access to the assets or funds of the Company or any of its  Subsidiaries  either
directly or through governmental  authority to draw upon such funds or to direct
generally the  disposition  of such assets;  (iii)  maintain  public and product
liability insurance against claims for personal injury, death or property damage
suffered by others;  (iv)  maintain all such  worker's  compensation  or similar
insurance  as may be  required  under the laws of any state or  jurisdiction  in
which the Company or the respective  Subsidiary is engaged in business;  and (v)
furnish  Purchaser  with  (x)  copies  of  all  policies  and  evidence  of  the
maintenance  of such  policies at least  thirty (30) days before any  expiration
date, (y) excepting the Company's workers' compensation policy,  endorsements to
such policies  naming  Purchaser as  "co-insured"  or  "additional  insured" and
appropriate  loss payable  endorsements  in form and substance  satisfactory  to
Purchaser, naming Purchaser as loss payee, and (z) evidence that as to Purchaser
the  insurance  coverage  shall not be  impaired  or  invalidated  by any act or
neglect of the Company or any Subsidiary and the insurer will provide  Purchaser
with at least  thirty (30) days notice  prior to  cancellation.  The Company and
each Subsidiary  shall instruct the insurance  carriers that in the event of any
loss  thereunder,  the carriers  shall make payment for such loss to the Company
and/or the Subsidiary and Purchaser jointly. In the event that as of the date of
receipt of each loss  recovery  upon any such  insurance,  the Purchaser has not
declared  an event of  default  with  respect  to this  Agreement  or any of the
Related  Agreements,  then the Company and/or such Subsidiary shall be permitted
to direct the application of such loss recovery  proceeds  toward  investment in
property,  plant and  equipment  that  would  comprise  "Collateral"  secured by
Purchaser's  security  interest  pursuant to its  security  agreement,  with any
surplus funds to be applied toward payment of the  obligations of the Company to
Purchaser. In the event that Purchaser has properly declared an event of default
with respect to this  Agreement or any of the Related  Agreements and such event
of default is continuing,  then all loss  recoveries  received by Purchaser upon
any such insurance  thereafter may be applied to the  obligations of the Company
hereunder and under the Related  Agreements,  in such order as the Purchaser may
determine.  Any surplus  (following  satisfaction of all Company  obligations to
Purchaser)  shall be paid by  Purchaser  to the  Company  or  applied  as may be
otherwise  required by law. Any deficiency  thereon shall be paid by the Company
or the Subsidiary, as applicable, to Purchaser, on demand.

            6.9  Intellectual  Property.  Each of the  Company  and  each of its
Subsidiaries  shall maintain in full force and effect its existence,  rights and
franchises and all licenses and other rights to use Intellectual  Property owned
or possessed by it and  reasonably  deemed to be necessary to the conduct of its
business.

            6.10  Properties.  Each of the Company and each of its  Subsidiaries
will keep its properties in good repair, working order and condition, reasonable
wear and tear  excepted,  and from  time to time  make all  needful  and  proper
repairs, renewals, replacements, additions and improvements thereto; and each of
the  Company  and each of its  Subsidiaries  will at all times  comply with each
provision of all leases to which it is a party or under which it occupies


                                       18
<PAGE>

property if the breach of such provision  could,  either  individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

            6.11 Confidentiality.  The Company agrees that it will not disclose,
and will not  include in any  public  announcement,  the name of the  Purchaser,
unless  expressly agreed to by the Purchaser or unless and until such disclosure
is required by law or applicable regulation, and then only to the extent of such
requirement. Notwithstanding the foregoing, the Company may disclose Purchaser's
identity and the terms of this Agreement to its current and prospective debt and
equity financing sources.

            6.12 Required Approvals. For so long as twenty-five percent (25%) of
the principal amount of the Note is outstanding,  the Company, without the prior
written  consent of the  Purchaser,  shall not,  and shall not permit any of its
Subsidiaries to:

            (a) (i) directly or indirectly  declare or pay any dividends,  other
      than   dividends   paid  to  the  Company  or  any  of  its   wholly-owned
      Subsidiaries,   (ii)  issue  any  preferred   stock  that  is  manditorily
      redeemable  prior to the one year anniversary of Maturity Date (as defined
      in the Note) or (iii)  redeem any of its  preferred  stock or other equity
      interests;

            (b)  liquidate,  dissolve  or effect a material  reorganization  (it
      being understood that in no event shall the Company dissolve, liquidate or
      merge with any other person or entity (unless the Company is the surviving
      entity);

            (c) become  subject to  (including,  without  limitation,  by way of
      amendment to or modification  of) any agreement or instrument which by its
      terms would (under any circumstances) restrict the Company's or any of its
      Subsidiaries  right to  perform  the  provisions  of this  Agreement,  any
      Related Agreement or any of the agreements contemplated hereby or thereby;

            (d)  materially  alter or change  the scope of the  business  of the
      Company and its  Subsidiaries  taken as a whole (it being  acknowledged by
      the  Purchaser  that the  Company and its  Subsidiaries  intend to use the
      proceeds of the Note to effect acquisitions approved by the Purchaser,  as
      noted in Section 6.5 hereof);

            (e) (i) create,  incur,  assume or suffer to exist any  indebtedness
      (exclusive  of trade debt and debt  incurred  to finance  the  purchase of
      equipment  (not in excess of five percent (5%) of the fair market value of
      the Company's and its  Subsidiaries'  assets) whether secured or unsecured
      other  than  (x)  the  Company's   indebtedness  to  the  Purchaser,   (y)
      indebtedness set forth on Schedule 6.12(e) attached hereto and made a part
      hereof  and any  refinancings  or  replacements  thereof  on terms no less
      favorable to the  Purchaser  than the  indebtedness  being  refinanced  or
      replaced,  and (z) any debt  incurred in  connection  with the purchase of
      assets  in  the  ordinary  course  of  business,  or any  refinancings  or
      replacements  thereof on terms no less favorable to the Purchaser than the
      indebtedness  being refinanced or replaced;  (ii) cancel any debt owing to
      it in excess of $50,000 in the aggregate during any 12 month period; (iii)
      assume,  guarantee,  endorse or otherwise  become directly or contingently
      liable in connection with any obligations of any other Person,  except the
      endorsement of negotiable instruments by the Company for


                                       19
<PAGE>

      deposit or collection or similar  transactions  in the ordinary  course of
      business  or  guarantees  of  indebtedness   otherwise   permitted  to  be
      outstanding pursuant to this clause (e); and

            (f) create or acquire any  Subsidiary  after the date hereof  unless
      (i) such  Subsidiary is a wholly-owned  Subsidiary of the Company and (ii)
      such Subsidiary becomes party to the Master Security Agreement,  the Stock
      Pledge  Agreement  and the  Subsidiary  Guaranty  (either by  executing  a
      counterpart  thereof  or an  assumption  or joinder  agreement  in respect
      thereof)  and, to the extent  required by the  Purchaser,  satisfies  each
      condition  of  this  Agreement  and  the  Related  Agreements  as if  such
      Subsidiary were a Subsidiary on the Closing Date.

            6.13  Reissuance  of  Securities.  The  Company  agrees  to  reissue
certificates  representing  the  Securities  without  the  legends  set forth in
Section 5.8 above at such time as:

            (a) the holder  thereof is permitted  to dispose of such  Securities
      pursuant to Rule 144(k) under the Securities Act; or

            (b) upon resale subject to an effective registration statement after
      such Securities are registered under the Securities Act.

The Company  agrees to  cooperate  with the  Purchaser  in  connection  with all
resales  pursuant  to Rule 144(d) and Rule  144(k) and  provide  legal  opinions
necessary  to allow such resales  provided  the Company and its counsel  receive
reasonably  requested  representations from the selling Purchaser and broker, if
any.

            6.14 Opinion.  On the Closing Date,  the Company will deliver to the
Purchaser an opinion  acceptable  to the Purchaser  from the Company's  external
legal counsel.  The Company will provide,  at the Company's expense,  such other
legal opinions in the future as are deemed reasonably necessary by the Purchaser
(and  acceptable to the Purchaser) in connection with the conversion of the Note
and exercise of the Option and the Warrant.

            6.15 Margin  Stock.  The Company will not permit any of the proceeds
of the Note,  the Option or the  Warrant to be used  directly or  indirectly  to
"purchase"  or  "carry"  "margin  stock" or to repay  indebtedness  incurred  to
"purchase" or "carry"  "margin stock" within the respective  meanings of each of
the quoted  terms under  Regulation  U of the Board of  Governors of the Federal
Reserve System as now and from time to time hereafter in effect.

            6.16  Restricted  Cash  Disclosure.  The  Company  agrees  that,  in
connection  with  its  filing  of its 8-K  Report  with the SEC  concerning  the
transactions  contemplated  by this Agreement and the Related  Agreements  (such
report, the "Laurus  Transaction 8-K") in a timely manner after the date hereof,
it will  disclose in such Laurus  Transaction  8-K the amount of the proceeds of
the Note  issued to the  Purchaser  that has been  placed in a  restricted  cash
account and is subject to the terms and  conditions  of this  Agreement  and the
Related  Agreements.  Furthermore,  the Company agrees to disclose in all public
filings required by the Commission (where  appropriate)  following the filing of
the Laurus  Transaction 8-K, the existence of the restricted cash referred to in
the immediately preceding sentence, together with the amount thereof.


                                       20
<PAGE>

            6.17  Financing  Limitations.  The  Company  will not,  and will not
permit its  Subsidiaries to, agree,  directly or indirectly,  to any restriction
with any person or entity  which limits the ability of the Company or any of its
Subsidiaries to incur any additional indebtedness from the Purchaser and/or sell
or issue any equity  interests of the Company or any of its  Subsidiaries to the
Purchaser.

            6.18  Additional  Investment.  The Company agrees that the Purchaser
shall have the right (at its sole option),  on or prior to the date which is 270
days  following the Closing Date, to issue an additional  note to the Company in
an  aggregate  principal  amount  of up to  $7,000,000  on the  same  terms  and
conditions  (including,  without  limitation,  the same interest rate, the Fixed
Conversion Price (as defined in the Note) then in effect,  proportionate warrant
coverage (at the same exercise prices), a proportionate  amortization  schedule,
etc.) set forth in, and pursuant to substantially similar documentation as, this
Agreement and the Related Agreements.

      7. Covenants of the Purchaser. The Purchaser covenants and agrees with the
Company as follows:

            7.1 Confidentiality. The Purchaser agrees that it will not disclose,
and will not include in any public announcement, the name of the Company, unless
expressly  agreed to by the  Company  or unless  and until  such  disclosure  is
required by law or  applicable  regulation,  and then only to the extent of such
requirement.

            7.2 Non-Public  Information.  The Purchaser agrees not to effect any
sales in the  shares  of the  Company's  Common  Stock  while in  possession  of
material,  non-public  information  regarding  the  Company if such sales  would
violate applicable securities law.

            7.3  Other.  The  Purchaser  agrees  that it  will  not,  while  any
principal amount of the Note remains outstanding, become a customer with respect
to the products offered by the Company or any of its Subsidiaries.

            7.4 No Shorting. Neither the Purchaser nor any of its affiliates and
investment partners will, or will cause any person or entity to, directly engage
in "short  sales" of the  Company's  Common  Stock as long as the Note  shall be
outstanding.

            7.5  Limitation  on  Acquisition  of  Common  Stock of the  Company.
Notwithstanding  anything  to the  contrary  contained  herein,  in any  Related
Agreement or any document,  instrument  or agreement  entered into in connection
with any other transactions between the Purchaser and the Company, the Purchaser
may not acquire stock in the Company (including, without limitation, pursuant to
a contract to purchase,  by exercising an option or warrant,  by converting  any
other  security or  instrument,  by acquiring or  exercising  any other right to
acquire,  shares of stock or other security  convertible into shares of stock in
the Company, or otherwise, and such contracts,  options, warrants, conversion or
other rights shall not be enforceable or  exercisable)  to the extent such stock
acquisition  would cause any interest  (including any original  issue  discount)
payable by the Company to Laurus not to qualify as "portfolio  interest"  within
the meaning of Section  881(c)(2) of the Code, by reason of Section 881(c)(3) of
the Code, taking into account the constructive ownership rules under


                                       21
<PAGE>

Section 871(h)(3)(C) of the Code (the "Stock Acquisition Limitation"). The Stock
Acquisition  Limitation  shall  automatically  become null and void  without any
notice to the  Company  upon the  earlier to occur of either  (a) the  Company's
delivery to Laurus of a Notice of Redemption (as defined in the Note) or (b) the
existence  of an Event of  Default  (as  defined in the Note) at a time when the
average  closing price of the  Company's  common stock as reported by Bloomberg,
L.P. on the Principal Market for the immediately  preceding five trading days is
greater than or equal to 150% of the Fixed  Conversion  Price (as defined in the
Note).

      8. Covenants of the Company and Purchaser Regarding Indemnification.

            8.1 Company Indemnification.  The Company agrees to indemnify,  hold
harmless,  reimburse and defend the Purchaser, each of the Purchaser's officers,
directors,  agents,  affiliates,  control persons,  and principal  shareholders,
against  any  claim,  cost,  expense,  liability,  obligation,  loss  or  damage
(including reasonable legal fees) of any nature, incurred by or imposed upon the
Purchaser   which   results,   arises  out  of  or  is  based   upon:   (i)  any
misrepresentation  by the  Company or any of its  Subsidiaries  or breach of any
warranty by the Company or any of its Subsidiaries in this Agreement,  any other
Related Agreement or in any exhibits or schedules attached hereto or thereto; or
(ii) any breach or default in performance by Company or any of its  Subsidiaries
of  any  covenant  or  undertaking  to be  performed  by  Company  or any of its
Subsidiaries hereunder, under any other Related Agreement or any other agreement
entered  into  by the  Company  and/or  any of its  Subsidiaries  and  Purchaser
relating hereto or thereto.

            8.2 Purchaser's Indemnification. Purchaser agrees to indemnify, hold
harmless,  reimburse and defend the Company and each of the Company's  officers,
directors,  agents, affiliates,  control persons and principal shareholders,  at
all times  against any claim,  cost,  expense,  liability,  obligation,  loss or
damage (including  reasonable legal fees) of any nature,  incurred by or imposed
upon  the  Company  which  results,  arises  out of or is  based  upon:  (i) any
misrepresentation  by  Purchaser  or breach of any warranty by Purchaser in this
Agreement  or in any  exhibits  or  schedules  attached  hereto  or any  Related
Agreement;  or (ii) any breach or default in  performance  by  Purchaser  of any
covenant or  undertaking  to be performed by Purchaser  hereunder,  or any other
agreement entered into by the Company and Purchaser relating hereto.

      9. Conversion of Convertible Note.

            9.1 Mechanics of Conversion.

            (a)  Provided  the   Purchaser  has  notified  the  Company  of  the
      Purchaser's  intention  to sell the Note  Shares  and the Note  Shares are
      included in an effective  registration  statement or are otherwise  exempt
      from  registration  when sold: (i) upon the conversion of the Note or part
      thereof,  the  Company  shall,  at its own  cost  and  expense,  take  all
      necessary  action  (including  the  issuance  of  an  opinion  of  counsel
      reasonably  acceptable  to  the  Purchaser  following  a  request  by  the
      Purchaser) to assure that the Company's  transfer agent shall issue shares
      of the  Company's  Common  Stock  in the  name  of the  Purchaser  (or its
      nominee)  or  such  other  persons  as  designated  by  the  Purchaser  in
      accordance  with Section  9.1(b)  hereof and in such  denominations  to be
      specified  representing  the  number  of Note  Shares  issuable  upon such
      conversion; and (ii) the


                                       22
<PAGE>

      Company warrants that no instructions  other than these  instructions have
      been or will be given to the transfer agent of the Company's  Common Stock
      and that after the  Effectiveness  Date (as  defined  in the  Registration
      Rights  Agreement)  the Note  Shares  issued  will be freely  transferable
      subject to the prospectus delivery  requirements of the Securities Act and
      the  provisions  of  this  Agreement,   and  will  not  contain  a  legend
      restricting the resale or transferability of the Note Shares.

            (b) Purchaser will give notice of its decision to exercise its right
      to convert the Note or part thereof by telecopying or otherwise delivering
      an executed and  completed  notice of the number of shares to be converted
      to the Company (the "Notice of  Conversion").  The  Purchaser  will not be
      required to surrender  the Note until the  Purchaser  receives a credit to
      the account of the  Purchaser's  prime broker  through the DWAC system (as
      defined  below),  representing  the Note Shares or until the Note has been
      fully  satisfied.  Each date on which a Notice of Conversion is telecopied
      or delivered to the Company in accordance with the provisions hereof shall
      be deemed a  "Conversion  Date."  Pursuant  to the terms of the  Notice of
      Conversion,  the Company will issue  instructions  to the  transfer  agent
      accompanied  by an opinion of counsel  within two (2) business  days after
      receipt by the  Company of the Notice of  Conversion  and shall  cause the
      transfer agent to transmit the  certificates  representing  the Conversion
      Shares to the Holder by  crediting  the account of the  Purchaser's  prime
      broker  with the  Depository  Trust  Company  ("DTC")  through its Deposit
      Withdrawal Agent Commission ("DWAC") system within three (3) business days
      after  receipt by the Company of the Notice of Conversion  (the  "Delivery
      Date").

            (c) The Company understands that a delay in the delivery of the Note
      Shares  in the form  required  pursuant  to  Section 9 hereof  beyond  the
      Delivery Date could result in economic loss to the Purchaser. In the event
      that the Company  fails to direct its  transfer  agent to deliver the Note
      Shares to the  Purchaser  via the DWAC  system  within  the time frame set
      forth in Section 9.1(b) above and the Note Shares are not delivered to the
      Purchaser by the Delivery Date, as  compensation to the Purchaser for such
      loss,  the Company  agrees to pay late  payments to the Purchaser for late
      issuance  of the Note  Shares in the form  required  pursuant to Section 9
      hereof upon  conversion of the Note in the amount equal to the Purchaser's
      actual damages from such delayed delivery.  Notwithstanding the foregoing,
      the Company will not owe the  Purchaser  any late payments if the delay in
      the delivery of the Note Shares  beyond the Delivery Date is solely out of
      the control of the Company and the Company is actively  trying to cure the
      cause of the delay. The Company shall pay any payments incurred under this
      Section in  immediately  available  funds upon  demand and, in the case of
      actual damages,  accompanied by reasonable  documentation of the amount of
      such damages. Such documentation shall show the number of shares of Common
      Stock the Purchaser is forced to purchase (in an open market  transaction)
      which the Purchaser anticipated receiving upon such conversion,  and shall
      be calculated as the amount by which (A) the  Purchaser's  total  purchase
      price (including customary brokerage  commissions,  if any) for the shares
      of Common Stock so purchased  exceeds (B) the aggregate  principal  and/or
      interest  amount of the Note,  for which  such  Conversion  Notice was not
      timely honored.


                                       23
<PAGE>

Nothing  contained herein or in any document  referred to herein or delivered in
connection  herewith  shall be deemed to  establish  or require the payment of a
rate of  interest  or other  charges  in  excess  of the  maximum  permitted  by
applicable law. In the event that the rate of interest or dividends  required to
be paid or other charges  hereunder  exceed the maximum amount permitted by such
law, any payments in excess of such maximum  shall be credited  against  amounts
owed by the Company to a Purchaser and thus refunded to the Company.

      10. Registration Rights.

            10.1  Registration   Rights  Granted.   The  Company  hereby  grants
registration rights to the Purchaser pursuant to a Registration Rights Agreement
dated as of even date herewith between the Company and the Purchaser.

            10.2 Offering  Restrictions.  Except as previously  disclosed in the
SEC Reports or in the Exchange Act Filings, or stock or stock options granted to
employees or directors of the Company (these exceptions  hereinafter referred to
as the "Excepted  Issuances"),  neither the Company nor any of its  Subsidiaries
will  issue any  securities  with a  continuously  variable/floating  conversion
feature  which  are or could be (by  conversion  or  registration)  free-trading
securities (i.e. common stock subject to a registration  statement) prior to the
full  repayment or conversion of the Note  (together with all accrued and unpaid
interest and fees related thereto) (the "Exclusion Period").

      11. Miscellaneous.

            11.1 Governing Law, Jurisdiction and Waiver of Jury Trial.

            (a) THIS AGREEMENT AND THE RELATED  AGREEMENTS  SHALL BE GOVERNED BY
      AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
      YORK  APPLICABLE TO CONTRACTS  MADE AND  PERFORMED IN SUCH STATE,  WITHOUT
      REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

            (b) THE COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL
      COURTS  LOCATED  IN THE  COUNTY OF NEW YORK,  STATE OF NEW YORK SHALL HAVE
      EXCLUSIVE  JURISDICTION  TO HEAR AND  DETERMINE  ANY  CLAIMS  OR  DISPUTES
      BETWEEN THE  COMPANY,  ON THE ONE HAND,  AND THE  PURCHASER,  ON THE OTHER
      HAND,  PERTAINING TO THIS AGREEMENT OR ANY OF THE RELATED AGREEMENTS OR TO
      ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OF THE OTHER
      RELATED  AGREEMENTS;   PROVIDED,   THAT  THE  PURCHASER  AND  THE  COMPANY
      ACKNOWLEDGE  THAT ANY APPEALS  FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
      COURT LOCATED  OUTSIDE OF THE COUNTY OF NEW YORK,  STATE OF NEW YORK;  AND
      FURTHER  PROVIDED,  THAT  NOTHING  IN THIS  AGREEMENT  SHALL BE  DEEMED OR
      OPERATE TO PRECLUDE THE PURCHASER FROM BRINGING SUIT OR TAKING OTHER LEGAL
      ACTION IN ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON
      THE COLLATERAL (AS DEFINED IN THE


                                       24
<PAGE>

      MASTER  SECURITY  AGREEMENT) OR ANY OTHER SECURITY FOR THE OBLIGATIONS (AS
      DEFINED IN THE MASTER  SECURITY  AGREEMENT),  OR TO ENFORCE A JUDGMENT  OR
      OTHER COURT ORDER IN FAVOR OF THE PURCHASER. THE COMPANY EXPRESSLY SUBMITS
      AND  CONSENTS  IN  ADVANCE  TO SUCH  JURISDICTION  IN ANY  ACTION  OR SUIT
      COMMENCED IN ANY SUCH COURT,  AND THE COMPANY  HEREBY WAIVES ANY OBJECTION
      WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE
      OR FORUM NON CONVENIENS. THE COMPANY HEREBY WAIVES PERSONAL SERVICE OF THE
      SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
      AGREES THAT SERVICE OF SUCH  SUMMONS,  COMPLAINT  AND OTHER PROCESS MAY BE
      MADE BY  REGISTERED  OR  CERTIFIED  MAIL  ADDRESSED  TO THE COMPANY AT THE
      ADDRESS SET FORTH IN SECTION 11.9 AND THAT SERVICE SO MADE SHALL BE DEEMED
      COMPLETED  UPON THE EARLIER OF THE  COMPANY'S  ACTUAL  RECEIPT  THEREOF OR
      THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.

            (c) THE PARTIES  DESIRE  THAT THEIR  DISPUTES BE RESOLVED BY A JUDGE
      APPLYING SUCH APPLICABLE LAWS. THEREFORE,  TO ACHIEVE THE BEST COMBINATION
      OF THE BENEFITS OF THE  JUDICIAL  SYSTEM AND OF  ARBITRATION,  THE PARTIES
      HERETO  WAIVE  ALL  RIGHTS  TO  TRIAL  BY JURY  IN ANY  ACTION,  SUIT,  OR
      PROCEEDING  BROUGHT TO RESOLVE ANY DISPUTE,  WHETHER  ARISING IN CONTRACT,
      TORT, OR OTHERWISE  BETWEEN THE PURCHASER  AND/OR THE COMPANY  ARISING OUT
      OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THE RELATIONSHIP  ESTABLISHED
      BETWEEN  THEM  IN  CONNECTION  WITH  THIS  AGREEMENT,  ANY  OTHER  RELATED
      AGREEMENT OR THE TRANSACTIONS RELATED HERETO OR THERETO.

            11.2  Survival.  The  representations,   warranties,  covenants  and
agreements made herein shall survive any investigation made by the Purchaser and
the  closing of the  transactions  contemplated  hereby to the  extent  provided
therein.  All statements as to factual  matters  contained in any certificate or
other  instrument  delivered by or on behalf of the Company  pursuant  hereto in
connection  with the  transactions  contemplated  hereby  shall be  deemed to be
representations and warranties by the Company hereunder solely as of the date of
such certificate or instrument.

            11.3 Successors.  Except as otherwise expressly provided herein, the
provisions  hereof  shall  inure to the  benefit  of, and be binding  upon,  the
successors,  heirs, executors and administrators of the parties hereto and shall
inure to the benefit of and be  enforceable by each person who shall be a holder
of the  Securities  from time to time,  other than the  holders of Common  Stock
which  has been  sold by the  Purchaser  pursuant  to Rule  144 or an  effective
registration  statement.  Purchaser  may not assign its  rights  hereunder  to a
competitor  of the Company or any  Subsidiary of the Company or to any person or
entity affiliated with such a competitor.


                                       25
<PAGE>

            11.4 Entire Agreement.  This Agreement, the Related Agreements,  the
exhibits  and  schedules  hereto and thereto and the other  documents  delivered
pursuant  hereto  constitute  the full and entire  understanding  and  agreement
between the parties  with  regard to the  subjects  hereof and no party shall be
liable or bound to any other in any manner by any  representations,  warranties,
covenants and agreements except as specifically set forth herein and therein.

            11.5  Severability.  In case any provision of the Agreement shall be
invalid, illegal or unenforceable,  the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

            11.6 Amendment and Waiver.

            (a) This  Agreement may be amended or modified only upon the written
      consent of the Company and the Purchaser.

            (b) The  obligations  of the Company and the rights of the Purchaser
      under this  Agreement  may be waived only with the written  consent of the
      Purchaser.

            (c) The  obligations  of the Purchaser and the rights of the Company
      under this  Agreement  may be waived only with the written  consent of the
      Company.

            11.7 Delays or Omissions.  It is agreed that no delay or omission to
exercise  any right,  power or remedy  accruing  to any party,  upon any breach,
default or  noncompliance  by another party under this  Agreement or the Related
Agreements,  shall  impair  any such  right,  power or  remedy,  nor shall it be
construed to be a waiver of any such breach,  default or  noncompliance,  or any
acquiescence  therein, or of or in any similar breach,  default or noncompliance
thereafter occurring.  All remedies,  either under this Agreement or the Related
Agreements,  by law or otherwise  afforded to any party, shall be cumulative and
not alternative.

            11.8 Notices.  All notices required or permitted  hereunder shall be
in writing and shall be deemed effectively given:

            (a) upon personal delivery to the party to be notified;

            (b) when sent by confirmed  facsimile if sent during normal business
      hours of the recipient, if not, then on the next business day;

            (c) three (3) business  days after having been sent by registered or
      certified mail, return receipt requested, postage prepaid; or

            (d) one (1) day after deposit with a nationally recognized overnight
      courier,  specifying  next day  delivery,  with  written  verification  of
      receipt.

All communications shall be sent as follows:


                                       26
<PAGE>

         If to the Company, to:       Fast Eddie Racing Stables, Inc.

                                      Attention: Chief Financial Officer
                                      Facsimile: 212 922 2081

                                      with a copy to:
                                      Cohen Tauber Spievack & Wagner LLP
                                      420 Lexington Avenue
                                      Suite 2400
                                      New York, New York 10170
                                      Attention: Adam Stein, Esq.
                                      Facsimile: 212-586-5095


         If to the Purchaser, to:     Laurus Master Fund, Ltd.
                                      c/o M&C Corporate Services Limited
                                      P.O. Box 309 GT
                                      Ugland House, George Town
                                      South Church Street
                                      Grand Cayman, Cayman Islands
                                      Facsimile: 345-949-8080

                                      with a copy to:

                                      John E. Tucker, Esq.
                                      825 Third Avenue 14th Floor
                                      New York, NY 10022
                                      Facsimile: 212-541-4434

or at such  other  address as the  Company or the  Purchaser  may  designate  by
written notice to the other parties hereto given in accordance herewith.

            11.9  Attorneys'  Fees.  In the  event  that any suit or  action  is
instituted to enforce any provision in this Agreement,  the prevailing  party in
such dispute shall be entitled to recover from the losing party all fees,  costs
and  expenses  of  enforcing  any right of such  prevailing  party under or with
respect to this Agreement,  including,  without limitation, such reasonable fees
and  expenses  of  attorneys  and  accountants,  which  shall  include,  without
limitation, all fees, costs and expenses of appeals.

            11.10  Titles  and  Subtitles.   The  titles  of  the  sections  and
subsections of this Agreement are for  convenience of reference only and are not
to be considered in construing this Agreement.

            11.11  Facsimile  Signatures;  Counterparts.  This  Agreement may be
executed by  facsimile  signatures  and in any number of  counterparts,  each of
which shall be an  original,  but all of which  together  shall  constitute  one
instrument.


                                       27
<PAGE>

            11.12 Broker's  Fees.  Except as set forth on Schedule 11.12 hereof,
each party hereto  represents  and warrants  that no agent,  broker,  investment
banker,  person or firm acting on behalf of or under the authority of such party
hereto is or will be  entitled  to any  broker's  or  finder's  fee or any other
commission   directly  or  indirectly  in  connection   with  the   transactions
contemplated  herein.  Each party hereto  further agrees to indemnify each other
party for any  claims,  losses or  expenses  incurred  by such other  party as a
result of the representation in this Section 11.12 being untrue.

            11.13  Construction.  Each party acknowledges that its legal counsel
participated  in the  preparation of this  Agreement and the Related  Agreements
and, therefore, stipulates that the rule of construction that ambiguities are to
be  resolved   against  the   drafting   party  shall  not  be  applied  in  the
interpretation of this Agreement to favor any party against the other.

             [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK


                                       28
<PAGE>

      IN WITNESS  WHEREOF,  the parties  hereto  have  executed  the  SECURITIES
PURCHASE AGREEMENT as of the date set forth in the first paragraph hereof.

COMPANY:                                  PURCHASER:

FAST EDDIE RACING STABLES, INC.           LAURUS MASTER FUND, LTD.


By:                                       By:
       -------------------------------          --------------------------------
Name:                                     Name:
       -------------------------------          --------------------------------
Title:                                    Title:
       -------------------------------          --------------------------------


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