PLACEMENT AGENT AGREEMENT


Dated as of:   October 14, 1997


J. Robbins Securities, LLC
1345 Avenue of the Americas
22 Floor
New York, New York 10105
Attn.:   James A. Jedrlinic
         Chief Executive Officer

Dear Sirs:

The undersigned,  Fortune Natural Resources Corporation (the "Company"),  hereby
agrees with J. Robbins  Securities,  LLC ("Robbins" or the "Placement Agent") as
follows:

1.       Placement.
         ---------

         A. The  Company,  a Delaware  corporation,  is an  independent  oil and
natural gas company  engaged  primarily in  exploration  for and  development of
domestic oil and natural gas.

         B. The Company hereby engages Robbins to act as its exclusive placement
agent in connection with the sale by the Company (the "Placement") of up to $3.5
million in aggregate  principal  amount of convertible  subordinated  notes (the
"Notes").  The Notes will (i) bear annual  interest at the rate of 12%,  payable
quarterly;  (ii) mature on December  31,  2007;  (iii) be  convertible  into the
Company's  common stock (the "Underlying  Shares");  and (iv) be subordinated to
"Senior  Indebtedness," all as described in the form of Note attached as Exhibit
B to  the  Subscription  Agreement  and  Investment  Letter  (the  "Subscription
Agreement")  which constitutes part of the "Offering  Materials"  referred to in
PARAGRAPH 3 (C) below. The anticipated use of the Placement  proceeds will be as
set  forth in the  Schedule  of Use of  Proceeds  attached  as  Exhibit K to the
Subscription Agreement.

2.       Offering.
         --------

         A. The Notes will be offered on a "$1.25  million  aggregate  principal
amount minimum or none to $3.5 million  aggregate  principal amount maximum best
efforts basis " for the "Offering  Period" as defined below. They will be issued
in  denominations  of $10,000 or integral  multiples  thereof in such  principal
amounts as shall be determined by the Company.

         B. The closing date will occur  approximately  seven business days (the
"Closing Date") following the acceptance by the Company of  subscriptions  for a
sufficient  aggregate  principal  amount of Notes offered  hereby (as determined
jointly by the Company and Robbins) but in no event less than five business days
or as soon  thereafter  as funds have  cleared the banking  system in the normal
course of business and, in any event,  will occur on or before  October 31, 1997
unless  extended by the mutual consent of the Company and the Placement Agent to
no later than  December  1, 1997 (such date is  hereinafter  referred  to as the
"Termination  Date"; the period  commencing on the date hereof and ending on the
Termination  Date is  sometimes  referred to herein as the  "Offering  Period").
There may be more than one Closing Date in the event that less than $3.5 million
aggregate  principal  amount  of Notes  has been  sold and paid for on the first
Closing Date.


                                       1
<PAGE>
         C. The Notes will be  offered  by the  Company  through  the  Placement
Agent, by means of the "Offering  Materials"  which shall include such documents
as appropriately  describe the Company's  business and prospects.  A list of the
Offering  Materials is attached hereto as EXHIBIT I. Payment for the Notes shall
be made by check or wire  transfer as more fully  described in the  Subscription
Agreement.  The Placement  will be effected  pursuant to the exemption  from the
registration  provisions of the  Securities Act of 1933 (the  "Securities  Act")
provided  by Section 4 (2)  thereof  and Rule 506 of  Regulation  D  promulgated
thereunder by the Securities and Exchange  Commission  (the  "Commission").  The
Notes will be sold only to "Accredited Investors" within the meaning of Rule 501
(a) of Regulation D ("Accredited Investors").

         D. All funds received from subscriptions  will be promptly  transmitted
pursuant to the terms of an escrow  agreement,  to a special bank escrow account
at The Chase  Manhattan Bank (the "Escrow  Agent").  In the event that less than
$1.25 million in aggregate  principal  amount of Notes are subscribed for during
the Offering Period,  all funds will be returned  promptly after the Termination
Date in full to subscribers  without deduction therefrom or interest thereon. In
the event that $1.25 million or more in aggregate  principal amount of Notes are
subscribed for during the Offering Period,  the funds therefrom,  net of (i) 10%
commissions and 3% expense allowance (the "Expense Allowance") due Robbins (less
$25,000 to be paid to  Robbins or for its  account  upon the  execution  of this
Agreement  pursuant to the terms of Section 7 below,  and (ii) bank escrow fees,
will be forwarded to the Company,  against  delivery of the Notes as soon as the
funds  received from such  subscriptions  have cleared the banking system in the
normal course of business.  In addition,  Robbins will be granted  warrants (the
"Placement  Agent's  Warrants"),  exercisable over a five year period commencing
upon the last Closing  Date,  to purchase a number of shares of the Common Stock
equal to 10% of the  aggregate  gross  proceeds of the Offering  received by the
Company  divided  by 3.6.  The  warrant  exercise  price will be $3.60 per share
adjusted in accordance with anti dilution  provisions which shall be the same as
those set forth in the Note.

         E. The  Company is  required  to obtain the  permission  of its primary
lender,  Credit  Lyonnais New York Branch (the  "Bank"),  in order to effect the
Placement. Accordingly, no funds will be released from the escrow account to the
Company  unless  the  Bank's  permission  is  obtained  or  unless  the  Company
determines to repay the Bank with the Placement proceeds.

         F. The Placement  Agent shall not be obligated to sell any of the Notes
and shall only be obligated to offer the Notes on a "best efforts" basis.

         G. The Company reserves the right to reject any subscriber, in whole or
in part,  in its  sole  discretion.  Notwithstanding  anything  to the  contrary
contained in this PARAGRAPH G, the Company's right to reject a subscriber  shall
lapse five business days after receipt by the Company of the fully completed and
duly executed  subscription  documents from the Placement  Agent with respect to
such  subscriber,  unless the Company  shall notify the  Placement  Agent of its
election to reject such subscriber prior thereto.

3.       Further Agreements of the Company.
         ---------------------------------

         The Company shall at its sole cost and expense do as follows:

                           (i) Prior to the earlier of the last  Closing Date or
                  the  Termination  Date,  as  soon  as the  Company  is  either
                  informed or becomes aware thereof,  advise the Placement Agent
                  of any material  adverse  change in the  Company's  results of
                  operations,  condition (financial or otherwise) or business or
                  of  any  development  materially  affecting  the  Company;  or
                  rendering  untrue or misleading any material  statement in the
                  Offering  Materials   occurring  at  any  time  prior  to  the
                  completion  or  termination  of the  Placement  and  upon  the
                  request  of the  Placement  Agent  shall  confirm  the same in
                  writing.

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<PAGE>

                           (ii) Cause the Notes to be  qualified  or  registered
                  for sale, or to obtain  exemptions from such  qualification or
                  registration  requirements,  on terms  consistent  with  those
                  stated in the Offering  Materials under the securities laws of
                  such  jurisdictions  as the  Placement  Agent  shall  request;
                  provided,  however,  that such states and jurisdictions do not
                  require the Company to qualify as a foreign  corporation or to
                  file a general  consent to service of process.  Qualification,
                  registration  and  exemption  charges  and fees as well as all
                  legal fees and expenses  related  thereto shall be at the sole
                  cost and expense of the Company.

                           (iii) Provide and to continue to provide to each Note
                  holder,  until  his  Note has been  repaid  and/or  converted,
                  copies of all  quarterly  and  annual  consolidated  financial
                  statements  and  reports  prepared  by or  on  behalf  of  the
                  Company,  for public  disclosure  and copies of all  documents
                  delivered to all of the Company's stockholders.

                           (iv) Deliver, until all of the Notes have been repaid
                  and/or  converted,  to the  Placement  Agent,  in  the  manner
                  provided in PARAGRAPH 10 (C) of this Agreement:  (A) within 55
                  days after the end of each of the first three quarters of each
                  fiscal  year  of  the  Company  or as  soon  thereafter  as is
                  reasonably  practicable,  commencing  with the  first  quarter
                  ending after the Termination  Date, the Form 10-Q filed by the
                  Company with the Commission  for each such  quarterly  period;
                  (B) within 100 days after the close of each fiscal  year,  the
                  Form 10-K filed by the Company  with the  Commission  for such
                  fiscal  year;  and (C) a copy of all  documents,  reports  and
                  information furnished to its respective stockholders generally
                  at the  time  such  documents,  reports  and  information  are
                  furnished to such stockholders.

4.       Representations, Warranties and Covenants of the Placement Agent.
         ----------------------------------------------------------------

         The Placement Agent represents, warrants and covenants as follows:

                           (i) The Placement  Agent has the necessary  corporate
                  power  and  authority  to enter  into  this  Agreement  and to
                  consummate the transactions contemplated hereby.

                           (ii)  The  Placement  Agent  is a  limited  liability
                  company duly organized and validly  existing under the laws of
                  the State of New  York;  the  execution  and  delivery  by the
                  Placement Agent of this Agreement and the  consummation of the
                  transactions  herein  contemplated  will  not  result  in  any
                  violation of, or be in conflict  with, or constitute a default
                  under,  any  agreement or  instrument  to which the  Placement
                  Agent  is a party  or by  which  the  Placement  Agent  or its
                  properties are bound,  or any judgment,  decree,  order or, to
                  the  Placement  Agent's  knowledge,   any  statute,   rule  or
                  regulation  applicable to the Placement Agent. This Agreement,
                  when  executed and  delivered  by the  Placement  Agent,  will
                  constitute  the legal,  valid and  binding  obligation  of the
                  Placement  Agent,  enforceable  in accordance  with its terms,
                  except to the extent that (a) the enforceability hereof may be
                  limited by bankruptcy, insolvency, reorganization,  moratorium
                  or similar laws from time to time in effect and  affecting the
                  rights of creditors generally,  (b) the enforceability  hereof
                  is  subject  to  general  principles  of  equity,  or (c)  the
                  indemnification  provisions hereof may be held to be violative
                  of public policy.

                                       3
<PAGE>

                           (iii)  The  Placement  Agent  will  deliver  to  each
                  purchaser, prior to any submission by such person of a written
                  offer to purchase any Notes, a copy of the Offering Materials,
                  as it may have been most recently  amended or  supplemented by
                  the Company.

                           (iv)  Upon   receipt  of  an  executed   Subscription
                  Agreement and the payments representing subscriptions for such
                  Notes, the Placement Agent will promptly forward copies of the
                  subscription  documents  to the Company and shall  forward all
                  consideration  received  for such Notes to the Escrow Agent to
                  be held in escrow.

                           (v) The Placement Agent will not deliver the Offering
                  Materials to any person it does not  reasonably  believe to be
                  an Accredited Investor.

                           (vi) The Placement Agent will not intentionally  take
                  any  action  which it  reasonably  believes  would  cause  the
                  Placement to violate the  provisions of the  Securities Act or
                  the Securities Exchange Act of 1934 (the "Exchange Act").

                           (vii) The  Placement  Agent shall use all  reasonable
                  efforts to determine (a) whether any prospective  purchaser is
                  an Accredited Investor and (b) that any information  furnished
                  by a prospective investor is true and accurate.  The Placement
                  Agent shall have no  obligation  to insure that (1) any check,
                  note,  draft or other  means of payment  for the Notes will be
                  honored,   paid  or  enforceable  against  the  subscriber  in
                  accordance  with its terms,  or (2) subject to the performance
                  of the Placement  Agent's  obligations and the accuracy of the
                  Placement Agent's  representations  and warranties  hereunder,
                  (A)  that  the  Placement  is  exempt  from  the  registration
                  requirements  of the Securities  Act or any  applicable  state
                  "Blue  Sky"  law  or  (B)  any  prospective  purchaser  is  an
                  Accredited Investor.

                           (viii)  The  Placement  Agent  is  a  member  of  the
                  National  Association  of  Securities  Dealers,  Inc. and is a
                  broker-dealer  registered  as such under the  Exchange Act and
                  under  the  securities   laws  of  the  States  in  which  the
                  securities will be offered by the Placement  Agent,  unless an
                  exemption  for such state  registration  is  available  to the
                  Placement Agent.

5.       Representations, Warranties and Covenants of the Company.
         --------------------------------------------------------

         The Company represents, warrants and covenants as follows:

                                       4
<PAGE>

                                    (i) Each of this Agreement and  Subscription
                  Agreement have been duly and validly authorized by the Company
                  and are, or with respect to the  Subscription  Agreements will
                  be, valid and binding  agreements of the Company,  enforceable
                  in  accordance  with  their  respective  terms,  except to the
                  extent that (a) the  enforceability  hereof and thereof may be
                  limited by bankruptcy, insolvency, reorganization,  moratorium
                  or similar laws from time to time in effect and  affecting the
                  rights  of  creditors  generally  and (b)  the  enforceability
                  hereof or thereof is subject to general  principles of equity.
                  The Notes,  Underlying  Shares and Placement  Agent's Warrants
                  will be duly  authorized  and,  when  issued  and  paid for in
                  accordance with the Offering  Materials,  this Agreement,  and
                  Subscription  Agreements,  will  be  (or in  the  case  of the
                  Underlying  Shares,  issuable  upon  conversion  of the  Notes
                  and/or   exercise  of  the  Placement   Agent's   Warrants  in
                  accordance  with the terms thereof will be),  validly  issued,
                  fully paid and non assessable; the holders thereof are not and
                  will not be subject to personal  liability solely by reason of
                  being such holders; the Underlying Shares, will not be subject
                  to the  preemptive  rights of any  stockholder of the Company;
                  and  all  corporate  action  required  to  be  taken  for  the
                  authorization, issuance of the Notes and the Placement Agent's
                  Warrants and the sale of the Notes,  has been (or with respect
                  to the Underlying  Shares,  will be) duly and validly taken by
                  the  Company.   The  Notes  and  Placement   Agent's  Warrants
                  constitute  valid  and  binding  obligations  of the  Company,
                  enforceable in accordance with their respective terms, (except
                  to the  extent  that  the  enforceability  thereof  (1) may be
                  limited by bankruptcy, insolvency, reorganization,  moratorium
                  or similar laws from time to time in effect and  affecting the
                  rights of  creditors  generally  and (2) is subject to general
                  principles  of  equity)  to  issue  and  sell,  upon  exercise
                  thereof,  in accordance with their terms,  the number and type
                  of the Company's securities called for thereby.

                           (ii) As of September 30, 1997, the authorized capital
                  stock of the Company  consists of 40 million  shares of common
                  stock (the  "Common  Stock"),  $0.01 per share par  value,  of
                  which  12,199,163  shares are issued  and  outstanding,  and 2
                  million shares of preferred stock,  $1.00 per share par value,
                  none of which are outstanding.  Additionally, 7,410,224 shares
                  of Common Stock are reserved  for  issuance  upon  exercise of
                  options and warrants held by current and former  employees and
                  management  of  the  Company  and  others,  and  approximately
                  162,681  shares of Common Stock are reserved for issuance upon
                  conversion of currently outstanding debentures. All issued and
                  outstanding  shares of Common Stock have been duly  authorized
                  and  such  shares  are  validly  issued,  are  fully  paid and
                  non-assessable  and the  holders  thereof  have no  preemptive
                  rights,  no rights of rescission  with respect thereto and are
                  not  subject to personal  liability  solely by reason of being
                  such  holders.  No  shares  of  Common  Stock  were  issued in
                  violation  of the  preemptive  rights  of any  holders  of any
                  capital stock of the Company.

                           (iii) The Company has good and  marketable  title to,
                  or valid and  enforceable  leasehold  estates in, all items of
                  real and personal property stated in the Offering Materials to
                  be owned  or  leased  by it,  free  and  clear  of all  liens,
                  encumbrances,  claims,  security  interests and defects of any
                  material nature whatsoever,  other than those set forth in the
                  Offering  Materials  and  liens  for  taxes  not  yet  due and
                  payable. The Company has no subsidiaries.

                           (iv) There is no material  litigation or governmental
                  proceeding pending or, to the best of the Company's knowledge,
                  threatened against, or involving the properties or business of
                  the Company other than as set forth in the Offering Materials.

                           (v) The financial  statements of the Company included
                  in  the  Offering   Materials  fairly  present  the  financial
                  position and the results of  operations  of the Company at the
                  dates  and for the  periods  to  which  they  apply;  and such
                  financial  statements  have been prepared in  conformity  with
                  generally accepted accounting principles  consistently applied
                  throughout the periods involved.

                                       5
<PAGE>

                           (vi) The  Company  has  been  duly  organized  and is
                  validly  existing as a corporation  in good standing under the
                  laws of its jurisdiction of incorporation. Except as set forth
                  above or in the Offering  Materials,  the Company does not own
                  an  interest in any  corporation,  partnership,  trust,  joint
                  venture  or  other  business  entity.   The  Company  is  duly
                  qualified  or  licensed  and in  good  standing  as a  foreign
                  corporation  in each  jurisdiction  in which its  ownership or
                  leasing of any  properties or the character of its  operations
                  requires such  qualification or licensing and where failure to
                  so  qualify  would  have  a  material  adverse  effect  on the
                  Company.  The Company has all  requisite  corporate  power and
                  authority,  and all  material  and  necessary  authorizations,
                  approvals,  orders, licenses,  certificates and permits of and
                  from all governmental  regulatory  officials and bodies to own
                  or  lease  its   properties  and  conduct  its  businesses  as
                  described in the Offering Materials,  and the Company is doing
                  business in material compliance with all such  authorizations,
                  approvals, orders, licenses,  certificates and permits and all
                  federal,  state, local and foreign laws, rules and regulations
                  concerning   the   business  in  which  it  is  engaged.   Any
                  disclosures in the Offering  Materials  concerning the effects
                  of  federal,  state,  local  and  foreign  regulation  on  the
                  Company's business as currently  conducted and as contemplated
                  are correct in all material  respects and do not omit to state
                  a material  fact.  The  Company  has all  corporate  power and
                  authority to enter into this  Agreement  and the  Subscription
                  Agreements  and to carry  out the  provisions  and  conditions
                  hereof  and  thereof,   and  all   consents,   authorizations,
                  approvals  and orders  required  in  connection  herewith  and
                  therewith  have been obtained or will have been obtained prior
                  to the Closing  Date. No consent,  authorization  or order of,
                  and no filing with, any court, government agency or other body
                  is  required  by the  Company  for the  issuance of the Notes,
                  Underlying  Shares or the Placement  Agent's  Warrants  except
                  with respect to applicable federal and state securities laws.

                           (vii)  There has been no material  adverse  change in
                  the  condition  or  prospects  for  commercialization  of  the
                  Company,  financial or otherwise,  from the latest dates as of
                  which such condition or prospects, respectively, are set forth
                  in the  Offering  Materials,  and the  outstanding  debt,  the
                  property and the business of the Company,  each conform in all
                  material respects to the descriptions thereof contained in the
                  Offering Materials.

                                       6
<PAGE>

                           (viii)  The  Company  is  not  in  violation  of  any
                  provision of its incorporating  documents or By-Laws.  Neither
                  the  execution  and  delivery  of  this  Agreement,   nor  the
                  Subscription  Agreements nor the issue and sale or delivery of
                  the Notes, Underlying Shares or the Placement Agent's Warrants
                  nor the consummation of any of the  transactions  contemplated
                  herein, or in the Subscription Agreements,  nor the compliance
                  by the  Company  with  the  terms  and  provisions  hereof  or
                  thereof,  has  conflicted  with or will conflict  with, or has
                  resulted in or will result in a breach of, any of the material
                  terms and provisions of, or has constituted or will constitute
                  a default  under,  or has  resulted  in or will  result in the
                  creation or imposition of any lien, charge or encumbrance upon
                  any property or assets of the Company or pursuant to the terms
                  of any material indenture, mortgage, deed of trust, note, loan
                  or credit  agreement  or any  other  agreement  or  instrument
                  evidencing  an  obligation  for borrowed  money,  or any other
                  agreement or  instrument  to which the Company may be bound or
                  to which  any of the  property  or assets  of the  Company  is
                  subject except where such default, lien, charge or encumbrance
                  would not have a material  adverse effect on the Company;  nor
                  will such action result in any violation of the  provisions of
                  the  incorporating  documents or the By-Laws of the Company or
                  assuming  due  performance  by  the  Placement  Agent  of  its
                  obligations  hereunder,  any  statute  or any  order,  rule or
                  regulation  applicable  to the  Company of any court or of any
                  federal,   state  or  other  regulatory   authority  or  other
                  government body having jurisdiction over the Company.

                           (ix) The Notes and the Subscription  Agreements shall
                  conform in all material  respects to the descriptions  thereof
                  contained in this Agreement.

                           (x) There are no claims for services in the nature of
                  a finder's or origination  fee with respect to the sale of the
                  Notes hereunder.

                           (xi) To the Company's  knowledge,  the Company is not
                  in  violation  of  any  agreement  pursuant  to  which  it  is
                  obligated to pay  royalties or fees of any kind  whatsoever to
                  any third party with respect to technology  it has  developed,
                  uses, employs or intends to use or employ.

                           (xii)   Neither  the  Offering   Materials   nor  any
                  amendment or supplement  thereto nor any document contains any
                  untrue  statement  of a  material  fact or omits to state  any
                  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.  All statements of
                  material facts in the Offering  Materials are true and correct
                  as of the  date of the  this  Agreement  and  will be true and
                  correct on the Termination Date and on each Closing Date.

                           (xiii) All taxes which are due and  payable  from the
                  Company  have  been  paid in full and the  Company  has no tax
                  deficiency or claim  outstanding  assessed or proposed against
                  it.

                           (xiv)  Neither the  Company nor any of its  officers,
                  directors, employees or agents, nor any other person acting on
                  behalf of the Company, have, directly or indirectly,  given or
                  agreed to give any money,  gift or similar benefit (other than
                  legal price concessions to customers in the ordinary course of
                  business) to any  customer,  supplier,  employee or agent of a
                  customer  or   supplier,   or  official  or  employee  of  any
                  governmental  agency  or  instrumentality  of  any  government
                  (domestic or foreign) or any political  party or candidate for
                  office  (domestic or foreign) or other person who is or may be
                  in a position  to help or hinder the  business  of the Company
                  (or  assist  it in  connection  with any  actual  or  proposed
                  transaction)  which  subjects  the  Company  to any  damage or
                  penalty in any civil,  criminal or governmental  litigation or
                  proceeding.

                                       7
<PAGE>

                           (xv)  There  is no  strike  or  other  labor  dispute
                  involving  the Company  pending,  or to the  knowledge  of the
                  Company threatened, which could have a material adverse effect
                  on the assets,  condition (financial or otherwise),  operating
                  results,  or business (or  proposed  business) of the Company.
                  The Company has neither received written notice nor has actual
                  knowledge that any executive officer or key employee,  or that
                  any group of key  employees,  intends to terminate  his or her
                  employment  with the  Company,  nor does  the  Company  have a
                  current  intention to terminate  the  employment of any of the
                  foregoing.

                           (xvi)  Subject to the  performance  by the  Placement
                  Agent  of  its  obligations   hereunder  and  subject  to  the
                  representations  and  warranties  of the  subscribers  for the
                  Notes,  the  offer and sale of the  Notes  complies,  and will
                  continue to comply,  up to the later of all  Closing  Dates or
                  the  Termination  Date,  in all  material  respects  with  the
                  requirements of Regulation D and any other applicable  federal
                  and state laws,  statutes,  rules,  regulations  and executive
                  orders.

                           (xvii)  The  Company  has  no  employment  contracts,
                  deferred   compensation   agreements   or  bonus,   incentive,
                  profit-sharing,  or  pension  plans  currently  in  force  and
                  effect,  or  any  understanding  with  respect  to  any of the
                  foregoing,  except  as  otherwise  described  in the  Offering
                  Materials.

                             (xviii)   Except  as   disclosed  in  the  Offering
                  Materials,   the  Company  is  in  all  material  respects  in
                  compliance with all applicable Environmental Laws. The Company
                  has no knowledge of any past,  current or, as  anticipated  by
                  the   Company,   future   events,   conditions,    activities,
                  investigation,  studies,  plans or  proposals  that (i)  would
                  interfere with or prevent  compliance  with any  Environmental
                  Law by the  Company or (ii) could  reasonably  be  expected to
                  give rise to any common law or other  liability,  or otherwise
                  form the basis of a claim, action, suit,  proceeding,  hearing
                  or investigation, involving the Company and related in any way
                  to Hazardous  Substances or Environmental Laws. Except for the
                  prudent and safe use and management of Hazardous Substances in
                  the  ordinary  course  of  the  Company's  business,   (i)  no
                  Hazardous  Substance  is or has been  used,  treated,  stored,
                  generated,  manufactured  or  otherwise  handled  on or at any
                  Facility  and  (ii)  to  the  Company's  best  knowledge,   no
                  Hazardous Substance has otherwise come to be located in, on or
                  under any Facility.  No Hazardous Substances are stored at any
                  Facility  except  in  quantities   necessary  to  satisfy  the
                  reasonably  anticipated use or consumption by the Company.  No
                  litigation, claim, proceeding or governmental investigation is
                  pending  regarding  any  environmental  matter  for  which the
                  Company  has been  served  or  otherwise  notified  or, to the
                  knowledge of the Company  threatened  or asserted  against the
                  Company,  or its officers or directors in their  capacities as
                  such, or any Facility or the Company's business.  There are no
                  orders,   judgments   or  decrees  of  any  court  or  of  any
                  governmental agency or instrumentality under any Environmental
                  Law which specifically  apply to the Company,  any Facility or
                  any of the Company's operations.  The Company has not received
                  from a  governmental  authority or other person (i) any notice
                  that  it  is  a   potentially   responsible   person  for  any
                  Contaminated  site or (ii) any request for information about a
                  site alleged to be  Contaminated  or regarding the disposal of
                  Hazardous  Substances.  There is no  litigation  or proceeding
                  against  any  other  person  by  the  Company   regarding  any
                  environmental matter.

                                       8
<PAGE>

                           For  the   purposes  of  the   foregoing   paragraph,
                  "Environmental  Laws" means any applicable  federal,  state or
                  local  statute,  regulation,  code,  rule,  ordinance,  order,
                  judgment,  decree,  injunction or common law pertaining in any
                  way to the  protection  of human  health  or the  environment,
                  including without  limitation,  the Resource  Conservation and
                  Recovery  Act,  the  Comprehensive   Environmental   Response,
                  Compensation and Liability Act, the Toxic  Substances  Control
                  Act, the Clean Air Act, the Federal  Water  Pollution  Control
                  Act  and  any  similar  or  comparable  state  or  local  law;
                  "Hazardous Substance" means any hazardous,  toxic, radioactive
                  or infectious substance,  material or waste as defined, listed
                  or regulated under any Environmental Law; "Contaminated" means
                  the  actual  existence  on  or  under  any  real  property  of
                  Hazardous  Substances,  if the  existence  of  such  Hazardous
                  Substances    triggers   a   requirement    to   perform   any
                  investigatory,  remedial,  removal  or other  response  action
                  under  any  Environmental  Laws  or if  such  response  action
                  legally  could  be  required  by any  governmental  authority;
                  "Facility"  means  any  property  currently  owned,  leased or
                  occupied by the Company.

                             (xix) The Company is in  compliance in all material
                  respects  with  all  currently  applicable  provisions  of the
                  Employee  Retirement  Income Security Act of 1974, as amended,
                  including  the  regulations   and  published   interpretations
                  thereunder  ("ERISA");  no  "reportable  event" (as defined in
                  ERISA) has occurred  with  respect to any  "pension  plan" (as
                  defined  in  ERISA)  for  which  the  Company  would  have any
                  liability; the Company has not incurred and does not expect to
                  incur  liability  under (i) Title IV of ERISA with  respect to
                  termination of, or withdrawal from, any "pension plan" or (ii)
                  Sections 412 or 4971 of the Internal  Revenue Code of 1986, as
                  amended,    including    the    regulations    and   published
                  interpretations  thereunder  (the  "Code");  and each "pension
                  plan" for which the Company would have any  liability  that is
                  intended to be qualified  under Section  401(a) of the Code is
                  so  qualified  in  all  material   respects  and  nothing  has
                  occurred,  whether by action or by failure to act, which would
                  cause the loss of such qualification.

                           (xx)  Neither the  Company  nor anyone  acting on its
                  behalf, other than the Placement Agent, has offered any of the
                  Notes (or substantially similar securities of the Company) for
                  sale to, or solicited offers to buy any such securities of the
                  Company  from,  or otherwise  approached  or  negotiated  with
                  respect thereto with any prospective  purchaser except through
                  the Placement Agent or with the Placement Agent's consent. The
                  Company  agrees  that  neither  it nor  anyone  acting  on its
                  behalf,  other than the Placement  Agent,  has offered or will
                  offer such  securities  of the Company or any part  thereof or
                  any substantially  similar securities for issuance or sale to,
                  or solicit any offer to acquire  any of the same from,  anyone
                  so as to make the  issuance  and sale of the Notes  subject to
                  the  registration  requirements of Section 5 of the Securities
                  Act.  Except  as  otherwise   specifically  disclosed  in  the
                  Offering  Materials,  to the best of the Company's  knowledge,
                  all of the Company's outstanding  securities have been offered
                  and sold in compliance  with all applicable  federal and state
                  securities laws and any failure to so offer or sell securities
                  which is specifically in the Offering Materials has since been
                  cured as described in the Offering Materials.

                                       9
<PAGE>

6.       Indemnification.
         ---------------

         A.  The  Company  hereby  agrees  that it will  indemnify  and hold the
Placement   Agent  and  each  officer,   director,   shareholder,   employee  or
representative of the Placement Agent and each person controlling, controlled by
or under common control of the Placement  Agent within the meaning of Section 15
of the  Securities  Act or  Section  20 of the  Exchange  Act or the  rules  and
regulations  promulgated  under the  Securities  Act and the  Exchange  Act (the
"Rules and  Regulations")  harmless  from and against  any and all loss,  claim,
damage,  liability,  cost or expense whatsoever (including,  but not limited to,
any and all reasonable legal fees and other expenses and disbursements  incurred
in connection with  investigating,  preparing to defend or defending any action,
suit or  proceeding,  including  any  inquiry  or  investigation,  commenced  or
threatened,  or any claim whatsoever or in appearing or preparing for appearance
as  a  witness  in  any  action,  suit  or  proceeding  including  any  inquiry,
investigation  or  pretrial  proceeding  such as a  deposition)  to  which  such
indemnified  person  of  the  Placement  Agent  may  become  subject  under  the
Securities  Act,  the  Exchange  Act,  the Rules and  Regulations,  or any other
federal or state statutory law or regulation at common law or otherwise, arising
out of or based upon (i) any untrue  statement or alleged untrue  statement of a
material fact contained in (a) this  Agreement,  (b) the Offering  Materials (c)
the Subscription  Agreement, or (d) any application or other document or written
communication  executed  by  the  Company  or  based  upon  written  information
furnished by the Company in any jurisdiction in order to qualify the Notes under
the  securities  laws  thereof  or  filed  with  the  Commission,  or any  state
securities  commission  or agency;  (ii) the omission or alleged  omission  from
documents  described  in clauses (a),  (b), (c) or (d) above of a material  fact
required to be stated  therein or necessary to make the  statements  therein not
misleading,  or (iii) the breach of any  representation  or warranty made by the
Company in this  Agreement.  The Company  further  agrees that upon demand by an
indemnified  person at any time or from time to time, it will promptly reimburse
such indemnified person for any loss, claim, damage,  liability, cost or expense
actually and reasonably paid by the  indemnified  person as to which the Company
has  indemnified  such person  pursuant  hereto.  Notwithstanding  the foregoing
provisions  of this  Paragraph  6 A, any such  payment or  reimbursement  by the
Company of fees, expenses or disbursements  incurred by an indemnified person in
any  proceeding in which a final  judgment by a court of competent  jurisdiction
(after all appeals or the expiration of time to appeal) is entered  against such
indemnified person as a direct result of such person's willful  misfeasance will
be promptly repaid to the Company,  if previously paid. Anything to the contrary
not  withstanding,  the indemnity set forth in this PARAGRAPH A shall not extend
to liability based upon  information  provided in writing by the Placement Agent
specifically for use in the documents referred to herein.

         B. The Placement  Agent hereby  agrees that it will  indemnify and hold
the Company and each officer, director, shareholder,  employee or representative
of the  Company  and each  person  controlling,  controlled  by or under  common
control of the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, or the Rules and  Regulations  harmless from and
against any and all loss, claim, damage,  liability,  cost or expense whatsoever
(including,  but not  limited  to, any and all  reasonable  legal fees and other
expenses and disbursements incurred in connection with investigating,  preparing
to defend or defending  any action,  suit or  proceeding  including any inquiry,
investigation  or  pretrial  proceeding  such as a  deposition)  to  which  such
indemnified  person of the Company may become subject under the Securities  Act,
the Exchange Act, the Rules and  Regulations or other federal or state statutory
law or  regulation  at common law or  otherwise,  based upon the  conduct of the
Placement  Agent or its  employees  in its  acting  as  Placement  Agent for the
Offering.  Notwithstanding  the foregoing  provisions of this Paragraph 6 B, any
such  payment or  reimbursement  by the  Placement  Agent of fees,  expenses  or
disbursements  incurred by an  indemnified  person in any  proceeding in which a
final  judgment by a court of competent  jurisdiction  (after all appeals or the
expiration of time to appeal) is entered  against such  indemnified  person as a
direct result of such person's  willful  misfeasance  will be promptly repaid to
the Placement Agent, if previously paid.

                                       10
<PAGE>

         C.  Promptly  after  receipt  by  an  indemnified  party  under  either
Paragraph A or B hereof,  as the case may be, of the notice of  commencement  of
any action  covered by  Paragraph A or B hereof,  such  indemnified  party shall
within five (5) business days notify the indemnifying  party of the commencement
thereof;  the omission by one  indemnified  party to so notify the  indemnifying
party shall not relieve the  indemnifying  party of its  obligation to indemnify
any other indemnified party that has given such notice and shall not relieve the
indemnifying  party of any  liability  outside of this  indemnification.  In the
event that any action is brought against the indemnified party, the indemnifying
party will be entitled to participate  therein and, to the extent it may desire,
to assume and control the  defense  thereof  with  counsel  chosen by it.  After
notice from the indemnified  party, the indemnifying party will not be liable to
such indemnified  party under such  subparagraph for any legal or other expenses
subsequently  incurred by such indemnified  party in connection with the defense
thereof, but the indemnified party may, at its own expense,  participate in such
defense by counsel chosen by it, without,  however,  impairing the  indemnifying
party's  control  of the  defense.  Notwithstanding  anything  to  the  contrary
contained  herein,  the indemnified party shall have the right to choose its own
counsel  and  control  the  defense  of any  action,  all at the  expense of the
indemnifying  party,  if: (i) the  employment  of such  counsel  shall have been
authorized in writing by the  indemnifying  party in connection with the defense
of such action at the expense of the indemnifying  party,  (ii) the indemnifying
party  shall  not  have  employed  counsel   reasonably   satisfactory  to  such
indemnified  party  to have  charge  of the  defense  of such  action  within  a
reasonable  time  after  notice of  commencement  of the  action  or (iii)  such
indemnified  party or parties shall have reasonably  concluded that there may be
defenses available to it or them which are different from or additional to those
available  to one  or  all  of the  indemnifying  parties  (in  which  case  the
indemnifying  parties  shall not have the right to direct  the  defense  of such
action on behalf of the  indemnified  party or parties),  in any of which events
such  fees  and  expenses  of one  additional  counsel  shall  be  borne  by the
indemnifying  party.  No  settlement  of any  action or  proceeding  against  an
indemnified party shall be made without the consent of the indemnifying party.

         D.  In  order  to  provide  for  just  and  equitable  contribution  in
circumstances in which the  indemnification  provided for in Paragraph A of this
Section 6 is due in  accordance  with its terms but is for any reason  held by a
court to be  unavailable  from the Company to the Placement  Agent on grounds of
policy or otherwise, the Company and the Placement Agent shall contribute to the
aggregate  losses,  claims,  damages and liabilities  (including  legal or other
expenses  reasonably incurred in connection with the investigation or defense of
same) to which  the  Company  and the  Placement  Agent may be  subject  in such
proportion  so  that  the  Placement  Agent  is  responsible  for  that  portion
represented  by the  percentage  that the aggregate of its placement  commission
under this Agreement bears to the aggregate offering price for all Notes sold in
the  Offering  and the Company is  responsible  for the  balance,  except as the
Company may  otherwise  agree to  reallocate  a portion of such  liability  with
respect to such balance with any other person; provided, however, that no person
guilty of  fraudulent  misrepresentation  within the meaning of Section 11(f) of
the Securities Act shall be entitled to contribution from any person who was not
guilty of such fraudulent  misrepresentation.  For purposes of this Paragraph D,
any person controlling, controlled by or under common control with the Placement
Agent, or any partner, director, officer, employee,  representative or any agent
of any  thereof,  shall have the same rights to  contribution  as the  Placement
Agent and each person  controlling,  controlled by or under common  control with
the Company within the meaning of Section 15 of the Securities Act or Section 20
of the  Exchange  Act,  each  officer of the  Company  and each  director of the
Company  shall have the same rights to  contribution  as the Company.  Any party
entitled to contribution will,  promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a claim
for  contribution  may be made  against the other party under this  Paragraph D,
notify such party from whom  contribution may be sought,  but the omission to so
notify  such party shall not  relieve  the party from whom  contribution  may be
sought from any obligation  they may have hereunder or otherwise.  The indemnity
and contribution  agreements  contained in this Section 6 shall remain operative
and in full  force and  effect  regardless  of any  investigation  made by or on
behalf of any indemnified person or any termination of this Agreement.

                                       11
<PAGE>

7.       Payment of Expenses.
         -------------------

         Whether or not the  Placement is  successfully  completed,  the Company
hereby  agrees to bear all of the  Company's  expenses  in  connection  with the
Offering, including, but not limited to the following: filing fees, printing and
duplicating costs, advertisements,  postage and mailing expenses with respect to
the  transmission  of offering  material,  its marketing and road show expenses,
registrar and transfer  agent fees,  bank escrow fees and expenses,  its counsel
and accounting  fees,  issue and transfer  taxes, if any, and "Blue Sky" counsel
fees and  expenses.  It is agreed that the  Company's  counsel shall perform the
required Blue Sky legal services. In this connection,  Blue Sky applications for
registration  of the Notes or exemption  therefrom  shall be made in such states
and  jurisdictions  as shall be  reasonably  requested  by the  Placement  Agent
provided  that such  states and  jurisdictions  do not  require  the  Company to
qualify  as a foreign  corporation  or to file a general  consent  to service of
process.  The Company shall also pay reasonable  expenses for travel and lodging
incurred  by the  Placement  Agent  in  performing  its  duties  hereunder  (the
"Placement Agent Offering Expenses"), the amount of such expenses to be deducted
from the Expense  Allowance.  $12,000 of the $25,000 Expense  Allowance  advance
referred  to in  PARAGRAPH  2 D above,  shall be  retained by the Company to pay
Placement  Agent Offering  Expenses.  The balance shall be paid to the Placement
Agent upon the  execution  of this  Agreement.  In no event will the  Company be
required to pay more than  $25,000 in expenses to the Agent if the  Placement is
not consummated.

8.       Conditions of the Placement Agent's Obligations.
         -----------------------------------------------

         The  obligations of the Placement  Agent  hereunder shall be subject to
the  continuing  accuracy of the  representations  and warranties of the Company
herein as of the date  hereof  and as of the  Closing  Date and each  subsequent
Closing  Date, if any, as if they had been made on and as of the Closing Date or
each subsequent  Closing Date, as the case may be; the accuracy on and as of the
Closing  Date or  subsequent  Closing  Date,  if any, of the  statements  of the
officers  of the  Company  made  pursuant  to the  provisions  hereof;  and  the
performance  by the  Company on and as of the Closing  Date and each  subsequent
Closing  Date, if any, of its  covenants  and  obligations  hereunder and to the
following further conditions:

                  (a) On the Closing Date, the Placement Agent shall receive the
         opinion of Reish & Luftman,  counsel to the Company,  dated the Closing
         Date and addressed to the Placement Agent and to each purchaser in form
         and  substance  satisfactory  to counsel for the  Placement  Agent,  in
         substantially the form set forth below, with such changes as are agreed
         upon by Reish &  Luftman,  the  Placement  Agent  and  Counsel  for the
         Placement Agent:

                           (i)  The  Company  has  been  duly  organized  and is
                  validly  existing as a corporation  in good standing under the
                  laws of its  jurisdiction and is duly qualified to do business
                  and is in good  standing  in all  jurisdictions  in which  the
                  failure to so qualify would have a material  adverse effect on
                  the  business of the Company;  the Company has full  corporate
                  power  and  authority  and,  to the  best  of  such  counsel's
                  knowledge,  has  all  necessary   authorizations,   approvals,
                  licenses,   certificates   and   permits   of  and   from  all
                  governmental  regulatory  officials and bodies to own or lease
                  its  properties  and conduct its  business as described in the
                  Offering  Materials  and is in  compliance  with  (A) all such
                  authorizations,  approvals, orders, licenses, certificates and
                  permits and (B) all federal,  state and local laws,  rules and
                  regulations applicable to the business in which it is engaged.
                  Subject to state  securities  law  requirements,  no  consent,
                  authorization  or order of,  and no filing  with,  any  United
                  States Court,  government  agency or other body is required by
                  the Company for the issuance of the Notes,  Underlying  Shares
                  or the Placement  Agent's  Warrants.  Assuming the accuracy of
                  the  representations  and warranties made by each purchaser in
                  such  purchaser's   Subscription  Agreement  and  the  factual
                  matters  contained in the  representations  and  warranties in
                  this Placement Agreement,  no consent,  authorization or order
                  of, and no filing with any court,  government  agency or other
                  body  (other than as may be  required  under state  securities
                  laws) is  required  by the  Company  for the  issuance  of the
                  Notes, Underlying Shares and the Placement Agent's Warrants.

                                       12
<PAGE>

                           (ii) This Agreement,  the Subscription Agreement, the
                  Notes,  the  Underlying   Shares  and  the  Placement  Agent's
                  Warrants have been duly and validly  authorized,  executed and
                  delivered  by the Company  and are valid and  legally  binding
                  agreements  or  obligations  of the  Company,  enforceable  in
                  accordance  with their  terms,  except to the extent  that the
                  enforceability  hereof  or  thereof  may  be  limited  by  (A)
                  bankruptcy, insolvency, reorganization,  moratorium or similar
                  laws from time to time in effect and  affecting  the rights of
                  creditors generally, (B) limitations upon the power of a court
                  to grant specific  performance or any other equitable  remedy,
                  and (C) a finding by a court of  competent  jurisdiction  that
                  the  indemnification  provisions  herein are in  violation  of
                  public policy.

                           (iii) The Underlying Shares and the shares underlying
                  the Placement  Agent's  Warrants have been duly authorized and
                  will be, upon the  conversion of the Notes and/or  exercise of
                  the Placement Agent's Warrants and payment  therefor,  validly
                  issued,  fully paid and non-assessable and the holders thereof
                  will not be subject to personal  liability solely by reason of
                  being  such  holders;  none of the  Underlying  Shares  or the
                  shares  underlying the Placement  Agent's Warrants to the best
                  of such  counsel's  knowledge,  are subject to the  preemptive
                  rights of any  stockholder  of the Company,  and all corporate
                  action required to be taken for the  authorization,  issue and
                  sale of such securities has been duly and validly taken.

                           (iv) As of September 30, 1997, the authorized capital
                  stock of the Company  consists of 40 million  shares of common
                  stock (the  "Common  Stock"),  $0.01 per share par  value,  of
                  which  12,199,163  shares are issued  and  outstanding,  and 2
                  million shares of preferred stock,  $1.00 per share par value,
                  none of which are  outstanding.  All  issued  and  outstanding
                  shares of Common  Stock  have  been duly  authorized  and such
                  shares are validly issued,  are fully paid and  non-assessable
                  and the holders thereof have no preemptive  rights,  no rights
                  of  rescission  with  respect  thereto  and are not subject to
                  personal liability solely by reason of being such holders.  No
                  shares  of  Common  Stock  were  issued  in  violation  of the
                  preemptive  rights of any holders of any capital  stock of the
                  Company. To the best of such counsel's knowledge, there are no
                  liens,  charges,  encumbrances,  pledges,  security interests,
                  defects, or material equitable rights of any kind to which any
                  outstanding shares of Common Stock are subject.  Except as set
                  forth in the Offering Materials,  there are (A) no outstanding
                  warrants,  options or rights to subscribe  for or purchase any
                  capital  stock  or other  securities  of the  Company,  (B) no
                  voting  trusts  or voting  agreements  among,  or  irrevocable
                  proxies  executed by,  principal  stockholders of the Company,
                  (C) no existing  rights of stockholders to require the Company
                  to register any  securities  of the Company or to  participate
                  with the  Company in any  registration  by the  Company of its
                  securities,  and (D) no agreements between the Company and any
                  of its stockholders  providing for the purchase or sale of the
                  Company's capital stock.

                                       13
<PAGE>

                           (v) To the best of such counsel's knowledge, there is
                  no litigation or governmental proceeding pending or threatened
                  against,  or  involving  the  properties  or business  of, the
                  Company which might  materially and adversely affect the value
                  or the  operation  of the  properties  or the  business of the
                  Company except as referred to in the Offering Materials.

                           (vi) Each Note and Placement  Agent's Warrant conform
                  in all material respects to the description  thereof contained
                  in this Agreement.

                           (vii)  To  the  best  of  such  counsel's  knowledge,
                  neither the execution and delivery of this Agreement,  nor the
                  Subscription  Agreement,  nor the issue and sale of the Notes,
                  Underlying Shares or the Placement  Agent's Warrants,  nor the
                  consummation of any of the transactions contemplated herein or
                  therein,  nor the compliance by the Company with the terms and
                  provisions  hereof or  thereof,  has  conflicted  with or will
                  conflict  with,  or has resulted in or will result in a breach
                  of, any of the terms and provisions of, or has  constituted or
                  will  constitute a default  under,  or has resulted in or will
                  result in the creation or  imposition  of any lien,  charge or
                  encumbrance  upon  any  property  or  assets  of  the  Company
                  pursuant  to the  terms of any  indenture,  mortgage,  deed of
                  trust,  note, loan or credit  agreement or any other agreement
                  or instrument  evidencing an obligation for borrowed money, or
                  any other  agreement or  instrument  to which the Company is a
                  party or by which the  Company may be bound or to which any of
                  the  property or assets of the  Company is  subject;  nor will
                  such action result in any  violation of the  provisions of the
                  incorporation  documents  or the  By-Laws of the  Company  or,
                  assuming  due  performance  by  the  Placement  Agent  of  its
                  obligations  hereunder,  any  statute  or any  order,  rule or
                  regulation  applicable  to the  Company of any court or of any
                  federal,   state  or  other  regulatory   authority  or  other
                  government body having jurisdiction over the Company,  subject
                  to state securities laws exceptions.

                           (ix) The  Subscription  Agreement and the  Investment
                  Letter (the  Subscription  Agreement and the Investment Letter
                  are referred to collectively as the "Subscription  Agreement")
                  comply  as  to  form  in  all  material   respects   with  the
                  requirements  of  Regulation D promulgated  by the  Commission
                  pursuant  to  the   Securities   Act  and   assuming   without
                  independent investigation (A) the accuracy and completeness of
                  all information  provided in the Subscription  Agreement,  (B)
                  the  correctness of the investors'  responses set forth in the
                  Subscription  Agreement,  and  (C) the  executed  Subscription
                  Agreement  constitute all of the  Subscription  Agreement,  no
                  registration   under  the   Securities   Act  is  required  in
                  connection  with  the  sale  and  issuance  of  the  Notes;  a
                  statement   that  such   counsel  has  reviewed  the  Offering
                  Materials and nothing has come to such counsel's  attention to
                  lead them to believe that either the Offering Materials or any
                  amendment or supplement  thereto contain any untrue  statement
                  of a material  fact or omits to state a material fact required
                  to be  stated  therein  or  necessary  to make the  statements
                  therein,  in the light of the  circumstances  under which they
                  were  made,   not   misleading   (except  for  the   financial
                  statements,  notes thereto and other statistical and financial
                  information  included therein or omitted therefrom as to which
                  such counsel need express no opinion).

                                       14
<PAGE>

                  At each  subsequent  Closing Date after the Closing  Date,  if
         any, the Placement Agent shall have received the favorable  opinions of
         Reish & Luftman,  counsel to the Company, dated such subsequent Closing
         Date,  addressed  to the  Placement  Agent  and in form  and  substance
         satisfactory to counsel for the Placement Agent.

                  (b) On or prior to the Closing Date, counsel for the Placement
         Agent  shall  have been  furnished  such  documents,  certificates  and
         opinions  as they may  reasonably  require  for the purpose of enabling
         them to review or pass upon the matters referred to in SUBPARAGRAPH (A)
         of this SECTION, or in order to evidence the accuracy,  completeness or
         satisfaction  of any of the  representation,  warranties  or conditions
         herein contained.

                  (c) On and prior to the  Closing  Date,  (i) there  shall have
         been no material adverse change nor development involving a prospective
         change  in the  condition  or  prospects  or the  business  activities,
         financial or otherwise,  of the Company,  or taken as a whole, from the
         latest  dates as of which such  condition  is set forth in the Offering
         Materials;  (ii)  there  shall  have  been no  transaction,  not in the
         ordinary  course of  business,  entered  into by the  Company  from the
         latest date as of which the financial  condition of the Company, is set
         forth in the Offering Materials which is material to the Company, which
         has not been  disclosed to the  Placement  Agent in writing;  (iii) the
         Company shall not be in default  under any provision of any  instrument
         relating to any  outstanding  indebtedness;  (iv) since the date of the
         Offering Materials, the Company shall not have issued any securities or
         declared or paid any dividend or made any  distribution  of its capital
         stock of any class, except for the issuance of Common Stock pursuant to
         the exercise of currently  existing warrants or options,  and there has
         not been  any  material  change  in the  debt  (long or short  term) or
         liabilities or  obligations  of the Company  (contingent or otherwise);
         (v) no  material  amount of the assets of the  Company  shall have been
         pledged or mortgaged,  except in the ordinary  course of business or as
         indicated  or  contemplated  in the  Offering  Materials;  and  (vi) no
         action,  suit or  proceeding,  at law or in  equity,  shall  have  been
         pending or  threatened  against  the  Company or  affecting  any of its
         properties  or  businesses  before or by any court or  federal or state
         commission, board or other administrative agency wherein an unfavorable
         ruling  would  materially  adversely  affect the  business,  prospects,
         financial  condition or income of the  Company,  except as set forth in
         the Offering Materials.

                  (d) At each  Closing  Date,  the  Placement  Agent  shall have
         received a certificate of the Company signed by its President and Chief
         Executive  Officer  and by  its  Vice  President  and  Chief  Financial
         Officer,  dated as of such Closing Date, in the form attached hereto as
         EXHIBIT II.

                  (e) The Company,  having  obtained all necessary  consents and
         approvals,  shall  have  authorized  a  sufficient  number of shares of
         Common Stock necessary to cover the maximum number of Underlying Shares
         that may be issued  pursuant to the Offering or  otherwise  required by
         this Agreement.

                                       15
<PAGE>

9.       Termination.
         -----------

         This Agreement  shall terminate if the Closing Date does not take place
on or before the  Termination  Date or as soon  thereafter as the funds received
from such  subscriptions have cleared the banking system in the normal course of
business.  Upon such  termination,  all subscription  documents and payments for
Notes,  without  interest,  or  deduction  shall be returned  to the  respective
subscribers,  the  Placement  Agent  shall  have no  further  obligation  to the
Company,  and the Company  shall  terminate  the  Placement.  In such case,  the
Company will have no obligation  to pay the Placement  Agent for fees covered in
this  Agreement,  except as otherwise  set forth  elsewhere  in this  Agreement.
Either the  Placement  Agent or the Company may  terminate  the Placement in its
sole discretion  prior to any closing  hereunder.  In the event that the Company
determines to terminate the Placement from and after the date hereto through the
end of the  Offering  Period for any reason  other  than the  Placement  Agent's
breach of the terms of this  Agreement,  and the  Placement  Agent is willing to
proceed,  the  Company  shall  remain  liable for all fees and  expenses  of the
Placement Agent's counsel.

10.      Miscellaneous.
         -------------

         A. All covenants, warranties and representations herein contained shall
survive the Closing Date and any subsequent closings,  or any investigation made
by the party  relying  upon  such  warranty  and/or  representation  subject  to
applicable statues of limitations.

         B. This Agreement may be executed in any number of  counterparts,  each
of which shall be deemed to be an original,  but all which shall be deemed to be
one and the same instrument

         C. All notices and  communications  required or  permitted  to be given
hereunder shall be given in writing,  effective upon receipt, and sent by United
States  certified or  registered  mail,  return  receipt  requested  and postage
prepaid,  personally  delivered  with  receipt  acknowledged,  or  by  overnight
courier, charges prepaid with receipt acknowledged addressed as follows:

                  To the Placement Agent:
                  ----------------------

                  J. Robbins Securities, LLC
                  1345 Avenue of the Americas
                  22 Floor
                  New York, New York 10105
                  Attn.:   James A. Jedrlinic
                           Chief Executive Officer

                  with a copy to:

                  Kenneth W. Leman, Esq.
                  1345 Avenue of the Americas
                  22 Floor
                  New York, New York 10105

                  To the Company:
                  --------------

                  Fortune Natural Resources Corporation
                  515 West Greens Road
                  Suite 720
                  Houston, Texas 77067
                  Attention:  Tyrone J. Fairbanks
                                   President and
                                Chief Executive Officer

                                       16
<PAGE>

                  with a copy to:

                  Bruce Ashton, Esq.
                  Reish & Luftman
                  11755 Wilshire Boulevard
                  10th Floor
                  Los Angeles, California

or to such other address of which written notice is given to the other party.

         D. This  Agreement  shall be governed by, and  construed in  accordance
with the laws of the State of New York  without  giving  effect to  conflicts of
laws.

         E. This Agreement contains the entire understanding between the parties
hereto and may not be modified or amended except by a writing duly signed by the
party against whom enforcement of the modification or amendment is sought.

         F. If any  provision of this  Agreement  shall be held to be invalid or
unenforceable,  such invalidity or  unenforceability  shall not affect any other
provision of this Agreement.

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

                           J. ROBBINS SECURITIES, LLC


                           By:  /s/ James A. Jedrlinic, Chief Executive Officer
                                ------------------------------------------------
                                James A. Jedrlinic, Chief Executive Officer

FORTUNE NATURAL
RESOURCES CORPORATION


By:  /s/ Tyrone J. Fairbanks, President
     ------------------------------------
     Tyrone J. Fairbanks, President
     and Chief Executive Officer


                                       17
<PAGE>


                                  [LETTERHEAD]


October 27, 1997

To the Recipients of the Information
Documents relating to the Offering of
Notes of Fortune Natural Resources Corporation

Re:      Amendment #1 to the Terms of the Offering

Dear Recipient:

The Company and the Placement  Agent have mutually agreed to modify the Offering
as follows:

1. The expiration  date of the Offering  period during which  subscriptions  for
Notes may be received has been extended to November 7, 1997.

2. The second  alternative  conversion  price for the Note will be 5% instead of
10%  above  the  average  daily  Closing  Price of the  Common  Stock for the 60
calendar day period immediately preceding May 1, 1999.

3. The demand registration rights referred to in the Subscription Agreement will
also include the Notes and will  commence 30 days after the final Closing of the
Offering instead of January 1, 1999.

4. The Notes  will be issued in the lower of  denominations  equal to $50,000 or
integral  multiples thereof instead of $10,000 integral multiples thereof or the
lowest principal amount of the Notes purchased in the Offering.

5. The Company's  primary lender,  Credit Lyonnais New York Branch (the "Bank"),
has requested additional  conditions in the Note relating to subordination which
could materially impact the ability of the Note holders to enforce their rights.
Among other restriction, these conditions prohibit Note holders from instituting
legal  proceedings  for payment of  defaulted  interest  for a period of 90 days
after the occurrence of the default.

Except as expressly  provided  herein all terms and  conditions  of the Offering
remain unchanged.

As of the date  hereof the  Company  has  received  executed  subscriptions  and
cleared  funds for the purchase of $1.25  million in principal  amount of Notes.
The Company  intends to effect the initial closing of the Offering on Wednesday,
October 29, 1997. In light of the changes in the Offering  described herein, any
person who has executed and delivered a Subscription  Agreement may withdraw his
subscription by notifying the undersigned on or before 5:00 PM, Eastern Standard
Time,  October 28, 1997 by mail  addressed to J. Robbins  Securities  LLC,  1345
Avenue of the  Americas,  22nd Floor,  New York,  New York 10105 or by facsimile
transmission to telephone number (212) 767-7902.

Very truly yours,

J. ROBBINS SECURITIES LLC

James A. Jedrlinic, Chief Executive Officer
cc:  Fortune Natural Resources Corporation


<PAGE>






Dated as of:   October 28, 1997


J. Robbins Securities, LLC
1345 Avenue of the Americas
22 Floor
New York, New York 10105
Attn.:   James A. Jedrlinic
         Chief Executive Officer

Dear Sirs:

The Placement  Agreement  between Fortune Natural  Resources  Corporation and J.
Robbins  Securities,  LLC dated as of  October  14,  1997 is hereby  amended  to
increase  the amount of the Offering  from $3.5  million in aggregate  principal
amount of Notes to $4.5 million in aggregate principal amount of Notes.

         IN WITNESS WHEREOF,  the parties hereto have executed this Amendment to
the Agreement as of the date first written above.

                           J. ROBBINS SECURITIES, LLC


                           By: /s/ James A. Jedrlinic
                               -------------------------------------------
                               James A. Jedrlinic, Chief Executive Officer



FORTUNE NATURAL
RESOURCES CORPORATION


By:  /s/ Tyrone J. Fairbanks
     ------------------------------
     Tyrone J. Fairbanks, President
     and Chief Executive Officer


<PAGE>


               [FORTUNE NATURAL RESOURCES CORPORATION LETTERHEAD]



November 7, 1997




James A. Jedrlinic                           VIA FACSIMILE  (212) 767-7902
Chief Executive Officer
J. Robbins Securities, L.L.C.
1345 Avenue of the Americas
New York, NY 10105

Dear Mr. Jedrlinic:

         The Placement  Agent Agreement  governing the private  placement of 12%
subordinated  notes by Fortune Natural Resources  Corporation  provides that the
offering  shall expire on October 31, 1997 unless  extended by the  parties.  We
have previously agreed to extend the offering period through November 7.

         Fortune hereby  proposes that the offering  period be further  extended
through November 19, 1997 on the terms set forth in our letter dated November 3.
If this  proposal is  acceptable,  please so indicate by signing and dating this
letter where indicated and returning it to the undersigned.

Very truly yours,



/s/ J. Michael Urban
-----------------------
J. Michael Urban
Vice President and Chief Financial Officer




ACCEPTED AND AGREED TO this 7th day of November, 1997.


J. ROBBINS SECURITIES, L.L.C.


By:  /s/ James A. Jedrlinic
     ------------------------------
     James A. Jedrlinic
     Chief Executive Officer


<PAGE>