Document:

REGISTRATION RIGHTS AGREEMENT

                  REGISTRATION RIGHTS AGREEMENT,  dated as of December 16, 1999,
by and among Evercel,  Inc., a Delaware  corporation  (the  "Company"),  and the
persons listed on Schedule 1 to this Agreement (the "Purchasers").

                                    RECITALS:

                  WHEREAS,  Purchasers  are  acquiring  shares of the  Company's
Preferred  Stock and the  Warrants to purchase  shares of the  Company's  Common
Stock; and

                  WHEREAS,  the Purchasers  wish to acquire,  and the Company is
willing to grant,  certain registration rights with respect to the shares of the
Company's  Common Stock which such  Purchasers  now or may hereafter  own, which
rights are set forth herein.

                  NOW,  THEREFORE,  in  consideration of the premises and mutual
covenants  and  agreements of the parties as set forth herein and other good and
valuable  consideration,  receipt of which is hereby  acknowledged,  the parties
hereto agree as follows:

                Section 1. Definitions. As used in this Agreement, the following
terms shall have the following  respective meanings:

                  "Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.

                  "Common Stock" shall mean the Company's Common Stock, $.01 par
value per share.

                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended,  and the rules and  regulations  thereunder,  and shall  include any
successor statute.

                  "Holder"  shall  mean any  holder of  outstanding  Registrable
Securities.

                  "Initiating  Holders" shall mean,  with respect to the request
for  registration  pursuant to Section 2 hereof,  any Holder or group of Holders
who in the  aggregate  are Holders of a majority  of the shares of Common  Stock
then owned by the  Holders.  For purposes of this  definition,  shares of Common
Stock  issuable upon  conversion of the Preferred  Stock and/or upon exercise of
the Warrants shall be deemed shares of Common Stock owned by such Purchaser.

                  "Other  Stockholders"  has  the  meaning  given  such  term in
Section 2(a).

                  "Preferred   Stock"   shall  mean  the  Series  A   Cumulative
Convertible  Preferred  Stock of the  Company,  $.01 par value and the  Series B
Cumulative Convertible Preferred Stock of the Company, $.01 par value.

<PAGE>

                  "Register,"  "registered" and "registration"  shall refer to a
registration  effected  by  preparing  and filing a  registration  statement  in
compliance  with the  Securities  Act,  and the  declaration  or ordering of the
effectiveness of such registration statement.

                  "Registered  Securities"  shall  mean  Registrable  Securities
which have been  registered  under the Securities Act pursuant to a registration
statement filed with and declared effective by the Commission.

                  "Registrable  Securities"  shall mean issued  shares of Common
Stock or  shares  of Common  Stock  then  issuable  (i) upon  conversion  of the
Preferred  Stock,  (ii) upon  exercise of the Warrants and (iii) with respect to
shares  of  Common  Stock  issued by way of any  stock  split,  stock  dividend,
recapitalization,  pre-emptive  rights or  similar  event  with  respect  to the
Preferred Stock or Warrants.  For purposes of this Agreement,  a Person shall be
deemed to be a holder of Registrable Securities,  and the Registrable Securities
shall be  deemed  to be in  existence,  whenever  such  Person  has the right to
acquire directly or indirectly such  Registrable  Securities (upon conversion or
exercise,  in  connection  with a  transfer  of  securities  or  otherwise,  but
disregarding  any  restrictions or limitations upon the exercise of such right),
whether or not such  acquisition  has actually  been  effected,  and such Person
shall be entitled to exercise the rights of a holder of  Registrable  Securities
hereunder.  As to any particular  Registrable  Securities,  such securities will
cease to be  Registrable  Securities  when  they have  ceased  to be  Restricted
Securities;  provided, however, that any securities which cease to be Restricted
Securities  solely  because they have become  eligible for transfer  pursuant to
Rule 144 will not cease to be  Registrable  Securities  until they have actually
been sold in compliance with Rule 144 or become subject to Rule 144(k).

                  "Registration  Expenses"  shall mean all expenses  incurred by
the Company in compliance with Sections 2, 3, 5 and 6 hereof, including, without
limitation,  all  registration,  filing and National  Association  of Securities
Dealers  fees,  all fees and expenses of complying  with  securities or blue sky
laws,  all  word  processing,  duplicating  and  printing  expenses,  messenger,
telecommunications, mailing and delivery expenses, the fees and disbursements of
counsel for the Company and of its independent public accountants, including the
expenses of any special audits or "cold comfort" letters required by or incident
to such performance and compliance,  the fees and disbursements  incurred by the
holders of  Registrable  Securities  to be  registered  (including  the fees and
disbursements  of one law firm  retained  by such  Holders  in  accordance  with
Sections 2 or 3 hereof),  premiums  and other  costs of  policies  of  insurance
against  liabilities  arising  out of the  public  offering  of the  Registrable
Securities  being  registered  and any fees and  disbursements  of  underwriters
customarily  paid by issuers or sellers of  securities,  but  excluding  Selling
Expenses, if any, provided that, in any case where Registration Expenses are not
to be borne by the Company,  such expenses shall not include salaries of Company
personnel or general overhead expenses of the Company,  auditing fees,  premiums
or other expenses  relating to liability  insurance  required by underwriters of
the Company or other  expenses for the  preparation  of financial  statements or
other  data  normally  prepared  by the  Company in the  ordinary  course of its
business or which the Company would have incurred in any event.

                  "Restricted  Securities"  shall  mean  the  securities  of the
Company  required to bear or bearing the legend set forth in Section 6(a)(ix) of
the  Subscription  Agreement of even date  herewith by and among the Company and
the other parties named therein.
<PAGE>

                  "Rule  144"  shall  mean  Rule  144   promulgated   under  the
Securities Act, or any successor rule then in force.

                  "Securities  Act" shall mean the  Securities  Act of 1933,  as
amended,  and the rules  and  regulations  thereunder,  and  shall  include  any
successor statute.

                  "Selling  Expenses" shall mean all underwriting  discounts and
selling commissions applicable to the sale of Registrable Securities.

                  "Warrants"  shall  mean the  warrants  to  purchase  shares of
Common  Stock  issued  pursuant  to the  Subscription  Agreement  dated the date
herewith and the  warrants to purchase  shares of Common Stock issued to Burnham
Securities Inc., as placement agent.

                  Section 2.        Requested Registration.
                                    ----------------------

                  (a) Request for Registration. If, on or after six months after
the date hereof,  the Company shall receive from any Initiating  Holder entitled
to make such request a written request that the Company effect any  registration
with respect to all or part of the Registrable Securities, the Company will:

                           (1)      promptly give written notice of the proposed
         registration to all other Purchasers other than the Initiating Holders;
         and

                           (2) as soon as  practicable,  use its  diligent  best
         efforts to effect such registration (including, without limitation, the
         execution  of  an  undertaking  to  file   post-effective   amendments,
         appropriate  qualification  under  applicable  blue sky or other  state
         securities laws and appropriate  compliance with the Securities Act) as
         may be so  requested  and as would  permit or  facilitate  the sale and
         distribution of all or such portion of such  Registrable  Securities as
         are specified in such request, together with all or such portion of the
         Registrable Securities of any Holder or Holders joining in such request
         as are  specified in a written  request given within  twenty-five  (25)
         days after receipt of such written notice from the Company  pursuant to
         Sections 2 or 3 hereof;  provided,  however, that the Company shall not
         be  obligated  to effect,  or to take any  action to  effect,  any such
         registration  pursuant to this Section 2 after the Company has effected
         a total of two  registrations  pursuant to this Section 2, and all such
         registrations  have been  declared  or  ordered  effective,  maintained
         effective  for at least  nine  months  (or less if all the  Registrable
         Securities included therein are sooner sold).

Subject to the foregoing  subsection  (2), the Company shall file a registration
statement  covering the Registrable  Securities so requested to be registered as
soon as  practicable  after receipt of the request or requests of the Initiating
Holders.   For   purposes   of  a   registration   under   this   Section  2,  a
majority-in-interest  of the  Initiating  Holders  requesting  any  registration
pursuant to this Section 2 shall have the right to select the counsel for all of
the selling Holders.
<PAGE>

                  Notwithstanding  the  foregoing,  the  Company  may  delay the
filing of any registration  statement requested pursuant to this Section 2 for a
reasonable  period of time  (not to  exceed 60 days) if within  five days of the
decision  of the board of  directors  of the Company to delay such  filing,  the
Company  provides  the  Initiating  Holders  with a  certificate  signed  by the
Chairman of the Board of  Directors  of the Company  stating  that,  in the good
faith  judgment  of the board of  directors  of the  Company,  the filing of the
registration  statement  would require  disclosure of information  not otherwise
then required to be disclosed and that such disclosure  would  adversely  affect
any material business opportunity,  transaction or negotiation then contemplated
by the Company.  The Company shall give prompt notice to the Initiating  Holders
of the end of any delay period under this subsection.

                  The  registration  statement  filed pursuant to the request of
the  Initiating  Holders may,  subject to the  provisions of Section 2(b) below,
include Registrable Securities for which inclusion in the registration statement
is  requested   pursuant  to  Section  3,  securities  (other  than  Registrable
Securities)  of the  Company  which are held by  officers  or  directors  of the
Company  or which are held by  persons  who,  by virtue of  agreements  with the
Company,  are entitled to include their securities in any such registration (the
"Other Stockholders"), or securities of the Company for its own account.

                  Notwithstanding  the  foregoing,  the  Company  shall  not  be
required to effect registration under this Section 2 if counsel for the Company,
reasonably acceptable to the Holders requesting  registration,  shall deliver an
opinion  reasonably  acceptable  to the Holders  requesting  registration  that,
pursuant to Rule 144 under the  Securities  Act or  otherwise,  such Holders can
publicly  sell the  Registrable  Securities  as to which  registration  has been
requested  without  registration  under  the  Securities  Act  and  without  any
limitation  with  respect to  offerees,  manner of  offering  or the size of the
transaction.

                  (b)  Underwriting.   If  the  Initiating   Holders  intend  to
distribute the  Registrable  Securities  covered by their request by means of an
underwriting,  they shall so advise the Company as a part of their  request made
pursuant to Section 2 and the Company  shall  include  such  information  in the
written notice referred to in Section 2(a)(1) above. A  majority-in-interest  of
the Initiating  Holders included in any registration  pursuant to this Section 2
shall have the right to select the lead investment  banker and manager,  and any
co-managers, to administer the offering, subject to the Company's approval which
will not be  unreasonably  withheld.  The right of any  Holder  to  registration
pursuant to this Section 2 shall be conditioned upon such Holder's participation
in such underwriting and the inclusion of such Holder's  Registrable  Securities
in the underwriting (unless otherwise mutually agreed by a  majority-in-interest
of the Initiating Holders and such Holder with respect to such participation and
inclusion) to the extent provided herein.
<PAGE>

                  If officers or directors of the Company or Other  Stockholders
holding securities of the Company shall request inclusion in any registration to
be effected pursuant to Section 2, the Initiating Holders shall offer to include
the  securities  of such  officers,  directors  and  Other  Stockholders  in the
underwriting  and may  condition  such offer on their  acceptance of the further
applicable  provisions of this  Agreement.  The Company shall (together with all
officers,  directors  and  Other  Stockholders  proposing  to  distribute  their
securities  through such underwriting)  enter into an underwriting  agreement in
customary  form  with  the  underwriter  or   underwriters   selected  for  such
underwriting.  Notwithstanding  any other  provision  of this  Section 2, if the
managing  underwriter  advises the  Initiating  Holders that  marketing  factors
require a limitation on the number of shares to be underwritten,  the securities
of the Company (other than Registrable Securities) held by officers or directors
of the  Company  shall be  excluded  from  such  registration  to the  extent so
required  by such  limitation  (pro rata  based  upon the  number of  securities
requested to be included in such  registration  by each such  person),  and if a
further  limitation of the number of shares is required,  the  securities of the
Company (other than Registrable  Securities) held by Other Stockholders shall be
excluded  from such  registration  to the extent so required by such  limitation
(pro rata based upon the number of  securities  requested to be included in such
registration  by each such person) and if a further  limitation of the number of
shares is  required,  the  Initiating  Holders  shall so advise  all  Holders of
Registrable  Securities requesting  registration pursuant to this Section 2, and
the  number of shares of  Registrable  Securities  that may be  included  in the
registration  and  underwriting  shall be  allocated  among all such  Holders in
proportion,  as nearly as practicable,  to the respective amounts of Registrable
Securities  which they had requested to be included in such  registration at the
time of filing the  registration  statement.  No  Registrable  Securities or any
other securities  excluded from the underwriting by reason of the  underwriter's
marketing  limitation shall be included in such  registration.  If any Holder of
Registrable Securities, officer, director or Other Stockholder who has requested
inclusion in such registration as provided above disapproves of the terms of the
underwriting,  such person may elect to withdraw  therefrom by written notice to
the Company, the managing underwriter and the Initiating Holders. The securities
so  withdrawn  shall  also  be  withdrawn  from  registration.  If the  managing
underwriter  has not  limited  the  number of  Registrable  Securities  or other
securities to be  underwritten,  the Company may include its  securities for its
own account in such  registration  if the managing  underwriter so agrees and if
the number of Registrable  Securities and other securities which would otherwise
have been included in such  registration  and  underwriting  will not thereby be
limited unless the inclusion of Company securities in such registration will, in
the reasonable  judgment of the managing  underwriter,  have a material  adverse
affect on the anticipated offering price.

                  Section 3.        Piggyback Registration.
                                    ----------------------

                  (a) If the Company  shall  determine  to  register  any of its
securities  either for its own  account or the  account of a security  holder or
holders exercising their respective demand  registration  rights,  including any
rights granted  pursuant to Section 2 hereof,  other than a registration  on any
form which does not permit secondary sales or does not include substantially the
same information as would be required to be included in a registration statement
covering the sale of Registrable Securities, the Company will:

                           (i)  promptly  give to  each  Holder  written  notice
                  thereof  (which shall include a list of the  jurisdictions  in
                  which  the  Company   intends  to  attempt  to  qualify   such
                  securities  under  the  applicable  blue  sky or  other  state
                  securities laws); and

                           (ii)  include in such  registration  (and any related
                  qualification under blue sky laws or other compliance), and in
                  any  underwriting   involved  therein,   all  the  Registrable
                  Securities  specified in a written request or requests made by
                  any Holder within  twenty-five  (25) days after receipt of the
                  written notice from the Company described in clause (i) above,
                  except  as set  forth in  Section  3(b)  below.  Such  written
                  request may  specify  all or a part of a Holder's  Registrable
                  Securities.
<PAGE>

For  purposes of any  registration  pursuant to this  Section 3 the Holders of a
majority-in-interest of the Registrable Securities to be registered shall choose
the counsel for all of the selling Holders.

                  (b)  Underwriting.  If the  registration  of which the Company
gives notice is for a registered public offering involving an underwriting,  the
Company  shall so advise  the  Holders  as a part of the  written  notice  given
pursuant  to  Section  3(a)(i).   All  Holders  proposing  to  distribute  their
securities  through such  underwriting  shall (together with the Company and the
Other  Stockholders  distributing  their securities  through such  underwriting)
enter into an underwriting  agreement  mutually  agreeable to the underwriter or
underwriters  selected  by  the  Company  and  each  selling  Holder,  it  being
understood  that the Company shall have no liability to any selling Holder which
cannot  reach  agreeable  terms  with the  underwriter(s)  and the  sole  remedy
available  to any  selling  Holder  which  does not agree  with the terms of the
underwriting   agreement   is  to  not   participate   in   such   underwriting.
Notwithstanding  any  other  provision  of  this  Section  3,  if  the  managing
underwriter  advises the Company that marketing  factors require a limitation on
the number of shares to be underwritten, the Company shall so advise all holders
of securities  requesting  registration,  and the number of shares of securities
that are entitled to be included in the registration  and underwriting  shall be
allocated in the following  manner:  the  securities of the Company  (other than
Registrable  Securities)  held by officers and directors of the Company shall be
excluded from such  registration and underwriting to the extent required by such
limitation  (pro rata  based  upon the  number  of  securities  requested  to be
included in such registration by each such person), and, if a further limitation
on the number of shares is required,  the  securities of the Company (other than
Registrable  Securities) held by Other  Stockholders shall be excluded from such
registration  to the extent required by such limitation (pro rata based upon the
number of securities  requested to be included in such registration by each such
person),  and if a further  limitation on the number of shares is required,  the
number of shares that may be included in the registration and underwriting shall
be allocated  among all such Holders  requesting  inclusion in the  registration
pursuant  to this  Section 3 in  proportion,  as nearly as  practicable,  to the
respective  amounts of  Registrable  Securities  which they had  requested to be
included in such registration at the time of filing the registration  statement.
If any  Holder of  Registrable  Securities  or any  officer or  director  of the
Company or Other Stockholder  disapproves of the terms of any such underwriting,
he may elect to  withdraw  therefrom  by written  notice to the  Company and the
managing underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.  Any
registration  solely  pursuant to this  Section 3 shall not  constitute a demand
registration under Section 2(a)(2) hereof.

                  Section 4. Expenses of Registration. All Registration Expenses
incurred  in  connection  with any  registration,  qualification  or  compliance
pursuant  to this  Agreement  shall  be borne by the  Company,  and all  Selling
Expenses  shall be borne by the Holders of the securities so registered pro rata
on the basis of the number of their  shares so  registered;  provided,  however,
that the Company shall not be required to pay any Registration Expenses if, as a
result of the withdrawal of a request for registration by a majority-in-interest
of the Initiating  Holders (other than as a result of a material  adverse change
in the  Company's  business,  financial  condition or  operating  results or the
market for the Company's  stock or as a result of an event which  materially and
adversely  affects the Holders'  ability to sell their shares in compliance with
the  Federal  securities  laws),  the  registration  statement  does not  become
effective,  in which case the Initiating  Holders (other than Holders requesting
inclusion  in such  registration  pursuant to Section 3) and Other  Stockholders
requesting  registration  shall bear such Registration  Expenses pro rata on the
basis of the number of their shares so included in the registration request, and
provided, further, that such registration shall not be counted as a registration
pursuant  to Section  2(a)(2).  Notwithstanding  the  proviso  in the  preceding
sentence,  the Initiating Holders may elect to have such withdrawn  registration
count as a registration  pursuant to Section 2(a)(2), in which event the Company
shall bear all Registration Expenses relating to such withdrawn registration.
<PAGE>

                  Section 5.  Registration  on Form S-3.  After the  Company has
qualified  and for so long as the Company  continues to be qualified for the use
of Form S-3 or any successor  form,  in addition to the rights  contained in the
foregoing  provisions of this Agreement,  the Holders of Registrable  Securities
shall have the right to request  registrations  on Form S-3 (such requests shall
be in writing and shall state the number of shares of Registrable  Securities to
be disposed of and the intended  methods of  disposition  of such shares by such
Holder or Holders);  provided,  however, that the Company shall not be obligated
to file more than one Form S-3 in any six-month  period.  Any such  registration
shall not be counted as a registration pursuant to Section 2(a)(2).

                  Notwithstanding  the  foregoing,  the  Company  shall  not  be
required to effect registration under this Section 5 if counsel for the Company,
reasonably acceptable to the Holders requesting  registration,  shall deliver an
opinion  reasonably  acceptable  to the Holders  requesting  registration  that,
pursuant to Rule 144 under the  Securities  Act or  otherwise,  such Holders can
publicly  sell the  Registrable  Securities  as to which  registration  has been
requested  without  registration  under  the  Securities  Act  and  without  any
limitation  with  respect to  offerees,  manner of  offering  or the size of the
transaction.

                  Section  6.  Registration  Procedures.  In the  case  of  each
registration  effected by the Company  pursuant to this  Agreement,  the Company
will  keep  each  Holder  advised  in  writing  as to  the  initiation  of  each
registration  and  as  to  the  completion  thereof.  Whenever  the  holders  of
Registrable  Securities  have  requested  that  any  Registrable  Securities  be
registered pursuant to this Agreement,  the Company will use its best efforts to
effect  the  registration  and  the  sale  of  such  Registrable  Securities  in
accordance with the intended method of disposition thereof, and pursuant thereto
the Company will at its expense and as expeditiously as possible:

                  (a)  Prepare  and file  with  the  Commission  a  registration
statement with respect to such  Registrable  Securities and use its best efforts
to cause such registration  statement to become effective;  provided that before
filing a  registration  statement or  prospectus  or any amendment or supplement
thereto,  including documents incorporated by reference after the initial filing
of any registration  statement,  the Company shall furnish to the Holders of the
Registrable   Securities   covered  by  such  registration   statement  and  the
underwriters,  if any, copies of all such documents  proposed to be filed, which
documents will be subject to the review of such Holders and underwriters;
<PAGE>

                  (b) Prepare and file with the Commission  such  amendments and
post-effective  amendments  to a  registration  statement as may be necessary to
keep such  registration  effective  for a period of nine (9) months or until the
Holder or Holders have completed the distribution  described in the registration
statement relating thereto, whichever first occurs; provided,  however, that the
Company,  in good faith,  may delay the filing of any amendment or supplement to
the  Registration  Statement for a reasonable  period of time, not to exceed 120
days, in order to permit the Company (A) to effect  disclosure or disposition or
consummation of any transaction requiring  confidential treatment which is being
actively  pursued  at such  time  and  which  would  require  disclosure  in the
Registration  Statement or (B) to negotiate,  effect or complete any transaction
which the Company reasonably believes might be jeopardized, delayed or made more
costly to the Company by disclosure in the Registration Statement;  and provided
further, however, that (i) such 9 month period shall be extended for a period of
time equal to the  period  the  Holder  refrains  from  selling  any  securities
included in such  registration  in accordance  with the provisions of Section 12
hereof;  (ii) such 9 month period shall be extended by the number of days during
the  period  from and  including  the date of the giving of notice  pursuant  to
Section 6(e) hereof to and  including  the date when each Holder of  Registrable
Securities covered by such registration statement shall have received the copies
of the supplemented or amended  prospectus  contemplated by Section 6(e) hereof;
and (iii) in the case of any registration of Registrable  Securities on Form S-3
which are intended to be offered on a continuous or delayed basis,  such 9 month
period shall be  extended,  if  necessary,  to keep the  registration  statement
effective  until all such  Registrable  Securities are sold,  provided that Rule
415, or any successor  rule under the Securities  Act,  permits an offering on a
continuous or delayed basis,  and provided  further that applicable  rules under
the Securities Act governing the obligation to file a  post-effective  amendment
permit,  in lieu of filing a  post-effective  amendment  which (y)  includes any
prospectus  required by Section  10(a)(3) of the  Securities Act or (z) reflects
facts or events representing a material or fundamental change in the information
set forth in the registration  statement,  the incorporation by reference in the
registration statement of periodic reports filed pursuant to Section 13 or 15(d)
of the Exchange Act that contain the information  required to be included in (y)
and (z) above;

                  (c) Cause the related  prospectus  to be  supplemented  by any
required prospectus supplement, and, as so supplemented, to be filed pursuant to
Rule 424 under  the  Securities  Act;  and  comply  with the  provisions  of the
Securities Act with respect to the disposition of all securities covered by such
registration  statement  during  such  period in  accordance  with the  intended
methods of  disposition  by the sellers  thereof set forth in such  registration
statement or supplement to such prospectus;

                  (d) Furnish such number of  prospectuses  and other  documents
incident thereto,  including any amendment of or supplement to the prospectus as
a Holder from time to time may reasonably request;

                  (e) Notify each  seller of  Registered  Securities  covered by
such  registration  statement at any time when a prospectus  relating thereto is
required to be delivered  under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration  statement, as
then in effect,  includes  an 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, and at the request of any such seller, prepare and furnish
to such seller a reasonable  number of copies of a supplement to or an amendment
of such  prospectus as may be necessary so that, as thereafter  delivered to the
purchasers of such shares, such prospectus shall not include an untrue statement
of a  material  fact or omit 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;

                  (f) Cause all such Registered  Securities to be listed on each
securities  exchange on which similar  securities issued by the Company are then
listed or, if not then listed,  cause such Registered  Securities to be included
on  whatever  exchange  or  national  automated  quotation  system  the Board of
Directors determines is appropriate;
<PAGE>

                  (g) Provide a transfer  agent and registrar for all Registered
Securities and a CUSIP number for all such Registered  Securities,  in each case
not later than the effective date of such registration;

                  (h) Make  available for  inspection  during  regular  business
hours by any seller of Registrable Securities,  any underwriter participating in
any  disposition  pursuant to such  registration  statement,  and any  attorney,
accountant  or  other  agent   retained  by  any  such  seller  or   underwriter
(collectively,  the  "Inspectors"),  all financial and other records,  pertinent
corporate  documents and properties of the Company  (collectively the "Records")
as shall be reasonably  necessary to enable them to exercise their due diligence
responsibility,  and cause the  Company's  officers,  directors,  employees  and
independent  accountants to supply all information  reasonably requested by such
seller, underwriter, attorney or accountant in connection with such registration
statement.   Records  which  the  Company  determines,  in  good  faith,  to  be
confidential and which it notifies the Inspectors are confidential  shall not be
disclosed by the Inspectors unless (A) the disclosure of such Records is, in the
opinion of counsel for the selling  Holders,  reasonably  necessary  to avoid or
correct any  misstatement  or omission in the  registration  statement,  (B) the
release of such Records is ordered  pursuant to a subpoena or other order from a
court of  competent  jurisdiction,  or (C) the  disclosure  of such  Records  is
required by any governmental  regulatory body with  jurisdiction over any seller
of Registrable  Securities.  Such seller,  upon learning that disclosure of such
Records is sought in a court of competent jurisdiction, shall notify the Company
and allow the  Company,  at its  expense,  to  undertake  appropriate  action to
prevent disclosure of the Records deemed confidential;

                  (i) Cooperate  with the sellers of Registered  Securities  and
the managing  underwriter(s),  if any, to facilitate the timely  preparation and
delivery of  certificates  representing  the  Registered  Securities to be sold,
without any restrictive  legends,  in such  denominations and registered in such
names as the  managing  underwriter(s)  may request at least two  business  days
prior to any sale thereof to the underwriters, if applicable;

                  (j) Obtain from its accountants  "cold-comfort" letters, dated
the effective date of the registration  statement and the date of the closing of
the sale of the  Registered  Securities,  and  addressed  to the Company and the
selling Holders,  in form and substance as are customarily  issued in connection
with underwritten public offerings and otherwise reasonably  satisfactory to the
Company  and a  majority-in-interest  of  (i)  the  Initiating  Holders  if  the
registration  is pursuant to Section 2 or (ii) the selling  Holders in all other
cases;

                  (k) Obtain  from its  counsel  an  opinion,  addressed  to the
selling Holders,  with respect to the offering in form and substance  reasonably
satisfactory  to a  majority-in-interest  of (i) the  Initiating  Holders if the
registration  is pursuant to Section 2 or (ii) the selling  Holders in all other
cases;

                  (l)  Otherwise  use  its  best  efforts  to  comply  with  all
applicable  rules and regulations of the  Commission,  and make available to its
security  holders,  as soon as  reasonably  practicable,  an earnings  statement
covering  the  period of at least  twelve  months,  but not more  than  eighteen
months,  beginning  with  the  first  month  after  the  effective  date  of the
Registration Statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act;
<PAGE>

                  (m) In connection with any underwritten offering pursuant to a
registration  statement  filed  pursuant to Section 2 hereof,  the Company  will
enter into any underwriting  agreement  reasonably necessary to effect the offer
and  sale  of  Common  Stock,  provided  such  underwriting  agreement  contains
customary  underwriting,  indemnification  and  contribution  provisions,  which
indemnification  and contribution  provisions shall be in all material  respects
similar to the provisions of Section 7 hereof; provided, however, that no Holder
will be liable for indemnification or contribution in excess of the net proceeds
such Holder received in the offering;

                  (n)  Use  its  best   efforts  to  register  or  qualify  such
Registrable  Securities  under  such other  securities  or blue sky laws of such
jurisdictions  as any seller  reasonably  requests and do any and all other acts
and things which may be reasonably  necessary or advisable to enable such seller
to  consummate  the  disposition  in  such   jurisdictions  of  the  Registrable
Securities  owned by such seller (provided that the Company will not be required
to (i) qualify  generally to do business in any jurisdiction  where it would not
otherwise be required to qualify but for this subparagraph,  (ii) subject itself
to  taxation in any such  jurisdiction  or (iii)  consent to general  service of
process in any such jurisdiction);

                  (o) Use its best efforts to cause such Registrable  Securities
covered by such registration statement to be registered with or approved by such
other  governmental  agencies or  authorities  as may be necessary to enable the
sellers  thereof to consummate the disposition of such  Registrable  Securities;
and

                  (p) Take all such other actions as the  underwriters,  if any,
and a majority-in-interest  of (i) the Initiating Holders if the registration is
pursuant to Section 2 or (ii) the selling Holders in all other cases  reasonably
request in order to expedite or facilitate the  disposition of such  Registrable
Securities   (including,   without  limitation,   effecting  a  stock  split  or
combination of shares).
<PAGE>

                  Section 7.  Indemnification; Contribution.

                  (a) To the extent permitted by law, the Company will indemnify
each Holder,  each of its officers,  directors,  members and partners,  and each
person   controlling   such  Holder,   with   respect  to  which   registration,
qualification or compliance has been effected  pursuant to this Agreement,  each
director and  controlling  person of the Company and each officer of the Company
who signed the registration  statement,  and each underwriter,  if any, and each
person who controls any  underwriter,  against all claims,  losses,  damages and
liabilities  (or actions,  proceedings or settlements,  if such  settlements are
effected with the written consent of the Company,  in respect  thereof)  arising
out of or based on any untrue  statement  (or  alleged  untrue  statement)  of a
material fact contained in any prospectus,  offering  circular or other document
(including  any  related  registration  statement,  notification  or  the  like)
incident to any such registration,  qualification or compliance, or any omission
(or alleged  omission) to state  therein a material  fact  required to be stated
therein or  necessary  to make the  statements  therein not  misleading,  or any
violation by the Company of the  Securities  Act or the Exchange Act or any rule
or  regulation  thereunder  applicable  to the Company and relating to action or
inaction  required  of the  Company in  connection  with any such  registration,
qualification  or compliance,  and will reimburse each such Holder,  each of its
officers,  directors,  members and partners,  and each person  controlling  such
Holder,  each  such  director,   controlling  person  and  officer,   each  such
underwriter and each person who controls any such underwriter, for any legal and
any other expenses  reasonably  incurred in connection  with  investigating  and
defending  or  settling  any such  claim,  loss,  damage,  liability,  action or
proceeding;  provided,  however, that the Company will not be liable in any such
case to the extent  that any such  claim,  loss,  damage,  liability  or expense
arises  out of or is based on any  untrue  statement  or  omission  made in such
registration  statement,  prospectus,  offering  circular  or other  document in
reliance  upon and in  conformity  with  written  information  furnished  to the
Company by such  Holder or  underwriter  and stated to be  specifically  for use
therein.

                  (b) To the extent  permitted  by law,  each  Holder  will,  if
Registrable  Securities held by such Holder are included in the securities as to
which  such  registration,   qualification  or  compliance  is  being  effected,
indemnify the Company, each of its directors,  officers and controlling persons,
and each  underwriter,  if any, of the  Company's  securities  covered by such a
registration statement, each person who controls the Company or such underwriter
within the meaning of the  Securities  Act or the  Exchange Act or the rules and
regulations thereunder,  each other such Holder and Other Stockholder (if and to
the extent such Other  Stockholder  has agreed to  indemnify  the Holders as set
forth in this clause (b)) including Registrable  Securities and other securities
in the securities as to which such registration,  qualification or compliance is
being effected, and each of their officers, directors, members and partners, and
each person  controlling such Holder or Other  Stockholder,  against all claims,
losses,  damages and  liabilities  (or actions,  proceedings  or  settlements in
respect  thereof)  arising out of or based on any untrue  statement  (or alleged
untrue  statement)  of a  material  fact  contained  in  any  such  registration
statement,  prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements  therein not misleading,  and will reimburse
the Company and such Holders, Other Stockholders,  directors, officers, members,
partners,  persons,  underwriters  or control persons for any legal or any other
expenses  reasonably  incurred in connection with investigating and defending or
settling any such claim, loss, damage, liability,  action or proceeding, in each
case to the extent,  but only to the  extent,  that such  untrue  statement  (or
alleged  untrue  statement)  or omission  (or alleged  omission) is made in such
registration  statement,  prospectus,  offering  circular  or other  document in
reliance  upon and in  conformity  with  written  information  furnished  to the
Company by such Holder and stated to be specifically for use therein;  provided,
however,  that the obligations of each such Holder hereunder shall be limited to
an amount  equal to the net proceeds to each such Holder of  securities  sold as
contemplated herein.

<PAGE>

                  (c) Each party entitled to indemnification  under this Section
7 (the  "Indemnified  Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the  Indemnifying  Party to assume  the  defense of any such claim or any
litigation  resulting  therefrom,  provided  that  counsel for the  Indemnifying
Party,  who shall conduct the defense of such claim or any litigation  resulting
therefrom,  shall be approved by the Indemnified Party (whose approval shall not
unreasonably  be withheld),  and the  Indemnified  Party may participate in such
defense at such party's  expense,  and provided  further that the failure of any
Indemnified  Party to give  notice as  provided  herein  shall not  relieve  the
Indemnifying Party of its obligations under this Agreement,  unless such failure
to notify  materially  adversely  affects the  Indemnifying  Party's  ability to
defend such action.  No Indemnifying  Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement  which does not include as an
unconditional  term  thereof  the giving by the  claimant or  plaintiff  to such
Indemnified  Party of a release  from all  liability in respect of such claim or
litigation.  Each  Indemnified  Party shall furnish such  information  regarding
itself or the claim in question as an Indemnifying  Party may reasonably request
in writing and as shall be reasonably required in connection with the defense of
such claim and litigation resulting therefrom.

                  (d) If the  indemnification  provided  for in this  Section  7
shall  for  any  reason  be  unenforceable  by an  Indemnified  Party,  although
otherwise  available in accordance with its terms, then each Indemnifying  Party
shall, in lieu of indemnifying such Indemnified Party,  contribute to the amount
paid or payable by such  Indemnified  Party as a result of the  losses,  claims,
damages,  liabilities or expenses with respect to which such  Indemnified  Party
has claimed indemnification, in such proportion as is appropriate to reflect the
relative  fault of the  Indemnified  Party on the one hand and the  Indemnifying
Party on the other in connection with the statements or omissions which resulted
in such losses, claims,  damages,  liabilities or expenses, as well as any other
relevant equitable considerations.  The relative fault, in the case of an untrue
statement,  alleged untrue  statement,  omission or alleged  omission,  shall be
determined by, among other things,  whether such statement,  alleged  statement,
omission or alleged omission relates to information supplied by the Indemnifying
Party or the Indemnified  Party, and such parties'  relative intent,  knowledge,
access to  information  and  opportunity  to correct or prevent such  statement,
alleged  statement,  omission or alleged  omission.  The Company and each Holder
agree that it would not be just and equitable if  contribution  pursuant  hereto
were  to be  determined  by pro  rata  allocation  or by  any  other  method  of
allocation which does not take into account such equitable  considerations.  The
amount  paid or  payable  by an  Indemnified  Party as a result  of the  losses,
claims,  damages,  liabilities or expenses referred to herein shall be deemed to
include any legal or other  expenses  reasonably  incurred  by such  Indemnified
Party in connection with  investigating or defending against any action or claim
which is the subject hereof. In no case, however,  shall a Holder be responsible
for a portion of the  contribution  obligation  in excess of the net proceeds to
such Holder of  securities  sold as  contemplated  herein.  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 is not
guilty of such fraudulent misrepresentation.
<PAGE>

                  (e)  Anything  to the  contrary  contained  in this  Section 7
notwithstanding,   no  Holder  shall  be  liable  for  any   indemnification  or
contribution  in  excess  of the net  proceeds  received  by it from any sale of
Registrable Securities which has been registered hereunder.

                  Section 8.    Obligations of Holder.

                  (a) Each  Holder of  Registrable  Securities  included  in any
registration shall furnish to the Company such information regarding such Holder
and the  distribution  proposed by such  Holder as the  Company  may  reasonably
request in writing and as shall be reasonably  required in  connection  with any
registration, qualification or compliance referred to in this Agreement.

                  (b)  Each  Holder  of the  Registrable  Securities  agrees  by
acquisition of such Registrable  Securities that upon receipt of any notice from
the Company  pursuant to Section 6(e),  such Holder will  forthwith  discontinue
such Holder's disposition of Registered  Securities pursuant to the registration
statement relating to such Registered  Securities until such Holder's receipt of
the copies of the  supplemented  or amended  prospectus  contemplated by Section
6(e) and,  if so directed by the  Company,  will  deliver to the Company (at the
Company's  expense) all copies,  other than permanent file copies,  then in such
Holder's possession of the prospectus relating to such Registered  Securities at
the time of receipt of such notice.

                  Section  9.   Limitations   on   Registration   of  Issues  of
Securities.  Any right given by the Company to any holder or prospective  holder
of the Company's  securities in connection  with the  registration of securities
shall be  conditioned  such that it shall be  consistent  with the rights of the
Holders provided in this Agreement.

                  Section  10.  Rule  144  Reporting.  With  a  view  to  making
available to the Holders the benefits of certain  rules and  regulations  of the
Commission  which may permit a Holder to sell  securities  of the Company to the
public without registration, the Company agrees to:

                           (a)      Make and keep public information  available,
as those terms are understood and defined in Rule 144 under the Securities Act;

                           (b) Use its best efforts to file with the  Commission
in a timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act at any time  following  registration  of
any of its securities under the Securities Act or Exchange Act; and

                           (c)  So  long  as  a  Holder  owns  any   Registrable
Securities, furnish to such Holder forthwith upon request a written statement by
the Company as to its compliance  with the reporting  requirements  of Rule 144,
and of the Securities Act and the Exchange Act, a copy of the most recent annual
or quarterly  report of the  Company,  and such other  reports and  documents so
filed as a Holder  may  reasonably  request  in  availing  itself of any rule or
regulation  of the  Commission  allowing  a Holder  to sell any such  securities
without registration.
<PAGE>

                  Section 11. Transfer or Assignment of Registration Rights. The
rights to cause the Company to register the securities granted to the Purchasers
by the Company under  Sections 2, 3 and 5 may be  transferred  or assigned by an
Purchaser to a  transferee  or assignee of any of such  Purchaser's  Registrable
Securities;  provided, however, that the Company is given written notice by such
Purchaser  at the time of or within a  reasonable  time after said  transfer  or
assignment,  stating the name and  address of said  transferee  or assignee  and
identifying  the securities with respect to which such  registration  rights are
being  transferred or assigned;  and provided,  further,  that the transferee or
assignee of such rights assumes the  obligations  of such  Purchaser  under this
Agreement.

                  Section  12.  "Market  Stand-off"  Agreement.  (a) Each Holder
agrees, if requested by the Company and an underwriter of Common Stock (or other
securities) of the Company,  not to sell or otherwise transfer or dispose of any
Common Stock (or other securities) of the Company held by such Holder during the
period required by such  underwriter (up to a maximum of 180 days) following the
effective  date of a  registration  statement  of the  Company  filed  under the
Securities Act without the prior consent of such underwriter, provided, however,
that all Holders,  Other  Stockholders and officers and directors of the Company
enter into similar agreements on substantially similar terms.

                  (b)  In  the  event  of an  underwritten  public  offering  of
Registrable  Securities  pursuant to Section 2 hereof,  the Company  agrees,  if
requested  by the  underwriter(s)  of such  offering,  not to sell in the public
market any Common Stock (or other  securities  convertible  into or exchangeable
for Common Stock) of the Company during the period required by such  underwriter
following  the effective  date of the  registration  statement  relating to such
offering  filed  under the  Securities  Act  without  the prior  consent of such
underwriter, provided, however, that such period shall not exceed 90 days or, if
reasonably  requested  by  such  underwriter,  such  longer  period  as is  then
customary.

                  (c) Such  agreement  shall be in writing in a form  reasonably
satisfactory  to the  Company  and such  underwriter.  The  Company  may  impose
stop-transfer instructions with respect to the shares (or securities) subject to
the foregoing restriction until the end of said period.

                  Section 13. Adjustments Affecting Registrable Securities.  The
Company will not take any action, or permit any change to occur, with respect to
the  Registrable  Securities  which  would  adversely  affect the ability of the
Holders of Registrable  Securities to include such  Registrable  Securities in a
registration  undertaken  pursuant to this  Agreement  or which would  adversely
affect  the   marketability   of  such   Registrable   Securities  in  any  such
registration.

                  Section 14.       Governing  Law.  This  Agreement  shall  be
governed  in all  respects  by  the  laws  of the  State  of New  York,  without
application of the conflicts of laws principles thereof.

                  Section 15.       Successors  and Assigns.  This     Agreement
shall be binding  upon,  and inure to the benefit of, the  successors,  assigns,
heirs, executors and administrators of the parties hereto.
<PAGE>

                  Section  16.  Entire  Agreement;   Amendment.  This  Agreement
constitutes the full and entire  understanding and agreement between the parties
with regard to the  subjects  hereof and  supersedes  any prior  understandings,
agreements or representations by or between the parties,  written or oral, which
conflicts  with,  or may have related to, the subject  matter hereof in any way.
Neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated, except by a written instrument signed by the Company and the Holders
of  not  less  than  a  majority-in-interest   of  the  Registrable  Securities.
Notwithstanding  the foregoing,  (a) this Agreement may not be amended to reduce
the  number of  demand  registrations  and  "piggy-back"  registrations  granted
pursuant to Sections  2, 3 and 5, except by a written  instrument  signed by the
Company  and a  majority-in-interest  of the  Purchasers  and (b) no  amendment,
modification,  supplement  or waiver of, or  departure  from,  Section 7 or this
sentence of this  Section 17 shall be effective  without the written  consent of
all Purchasers then holding Registrable Securities.

                  Section  17.  Attorney's  Fees.  In any  action or  proceeding
brought to enforce  any  provision  of this  Agreement,  or where any  provision
hereof or thereof is validly  asserted as a defense,  the successful party shall
be  entitled  to recover  reasonable  attorney's  fees in  addition to any other
available remedy.

                  Section 18. Notices,  etc. All notices or other communications
hereunder  shall be in  writing  and shall be deemed to have been duly  given if
delivered personally or sent by telex, telefax or telegraphic communication,  by
recognized overnight courier marked for overnight delivery,  or by registered or
certified mail, postage prepaid,  addressed as follows:  (a) if to an Purchaser,
as indicated  on Schedule 1 attached  hereto,  or at such other  address as such
Purchaser shall have furnished to the Company in writing, or (b) if to any other
holder of any shares of Common  Stock at such  address as such holder shall have
furnished  the Company in writing,  or,  until any such holder so  furnishes  an
address to the  Company,  then to and at the address of the last holder  thereof
who has so furnished an address to the Company,  or (c) if to the Company, 2 Lee
Mac Avenue, Danbury, CT 06810, Attention:  President, or such other addresses as
shall  be  furnished  by like  notice  by  such  party.  All  such  notices  and
communications  shall,  when telexed  (provided the correct  answerback has been
received) or  telefaxed  (immediately  thereafter  confirmed  by  telephone)  or
telegraphed,  be effective when telexed, telefaxed or delivered to the telegraph
company,  respectively,  or if sent by nationally  recognized  overnight courier
service, be effective one Business Day after the same has been delivered to such
courier service marked for overnight delivery,  or, if mailed, be effective when
received.

                  Section 19. Severability. Whenever possible, each provision of
this  Agreement  shall be  interpreted  in such manner so as to be effective and
valid under applicable law, but if any provision of this Agreement is held to be
invalid,  illegal or  unenforceable  in any respect under any  applicable law or
rule in any jurisdiction, such invalidity,  illegality or unenforceability shall
not affect any other provision of this Agreement.  If any provision contained in
this Agreement is determined to be invalid, illegal or unenforceable as written,
a court of competent  jurisdiction  shall,  at any party's  request,  reform the
terms of this Agreement to the extent necessary to cause such otherwise  invalid
provisions to be enforceable under applicable law.

                  Section 20. No Inconsistent  Agreements.  The Company will not
on or after the date of this Agreement  enter into any agreement,  and as of the
date of this Agreement the Company is not a party to any agreement, with respect
to its securities  which is inconsistent  with the rights granted to the holders
of  Registrable  Securities in this  Agreement or otherwise  conflicts  with the
provisions hereof or impairs the rights granted  hereunder.  The Company has not
previously  entered into any agreement with respect to its  securities  granting
any  registration  rights to any Person which has not been terminate on or prior
to the date hereof.

                  Section 21.       Titles and Subtitles.  The  titles  of  the
sections,  paragraphs and subparagraphs of this Agreement are for convenience of
reference only and are not to be considered in construing this Agreement.

                  Section 22.       Counterparts. This Agreement may be executed
in any number of  counterparts,  each of which shall be an original,  but all of
which together shall constitute one instrument.

                                    [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

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

                                            EVERCEL, INC.

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

                                            PURCHASER

                                            ----------------------------------
                                                  Name:

<PAGE>

                                   Schedule I

     ANB Associates
     Delaware Charter Guarantee & TR CO
        C/F James W. Armour Jr. IRA
     Andrew Blum
     Josette A. Bordiga
     Willow Creek Offshore Fund
     Willow Creek Capital Partners, LP
     David M. & Andrea Brewer
     Burnham Asset Management Corporation
     Vivian Cavalieri
     John W. Fisher IRA Rollover #2
        Delaware Charter GTY & TR CO TTEE
     Paul H. Fitzgerald
     Forum Capital Offshore Fund Ltd.
     Forum Capital 2, Ltd.
     Richard Freedman
     Margo Fuld
     Bruce Galloway
     Delaware Charter Guarantee & TR CO
        C/F Bruce Galloway IRA Rollover
     Gelfenbein Family LP
     Michael E. Gellert
     James D. Gerson
     Barbara Gerson c/f Fred Gerson
     Barbara Gerson c/f Simon Gerson
     Goren Brothers LTD.
     John Gutfreund
     Haff Partners LP
     Graham Humes
     Van Eck Emerging Market Opportunity Portfolio
     Jacombs Trading
     Ruth Joffe
     Stanley & Eileen Kaplan
     Carl Kempner
     Robert L. Kanode IRA Rollover
        Delaware Charter GTY & TR TTEE
     LAMBDA IV, LLC
     Aaron M. Lamport
     Sarah W. Laurence
     Ellen V. Langner
     Jay B. Langner
     Lewis Family Limited Partnership

<PAGE>

     Daniel Lewis IRA
        Delaware Charter GTY & TR TTEE
     Michael Lewis
     Richard Lewisohn III IRA R/O #2
        Delaware Charter GTY & TR TTEE
     Joan R. Linclau
     Laurence W. Lytton
     Albert G. Lowenthal
     Fahnestock & Co., Inc.
     Lisa Ann Pruzan
     Daryl E. Lowenthal
     Robert S. Lowenthal
     Mangin Family Limited Partnership
     Dimitri A. Manthos
     Clinton O. Mayer, III
     Robert Mittleman
     Mogen Investment
     Jeff & Audrey Nagelberg
     NTS Financial Services
     Jerry W. O'Connell
     Ann Oliver
     Martin Oppenheimer
     Sheila Pakula
     Leonard & Gillis Plaine
     Richard Pollak
     Jacqueline Rosenthal
     John P. Rosenthal
     John P. Rosenthal
     Sidney Singer
     Sontek Industries Inc.
     Ralph J. Sorrentino
     Peter Strauss
     Richard M.H. Thompson
     Jack & Jane Weiselberg
     Andrew & Allyson Wiener
     Howard L. & Freya D. WienerEVERCEL, INC.

                            Shares of Preferred Stock
                       and Common Stock Purchase Warrants

                             SALES AGENCY AGREEMENT

December 16, 1999

Burnham Securities Inc.
1325 Avenue of the Americas, 17th Floor
New York, New York 10019

Ladies and Gentlemen:

         Evercel,  Inc., a Delaware  corporation  (the  "Company"),  proposes to
offer for sale in a private  offering (the  "Offering")  pursuant to Rule 506 of
Regulation D ("Regulation  D") under the Securities Act of 1933, as amended (the
"Act"), up to (i) 264,000 shares (each a "Primary Share") of Series A Cumulative
Convertible  Preferred Stock, par value $0.01 per share (the "Series A Preferred
Stock") and (ii) up to 132,000  shares  (each an  "Overcall  Share" and together
with  a  Primary  Share,  a  "Share")  of  the  Company's  Series  B  Cumulative
Convertible  Preferred Stock, par value $0.01 per share (the "Series B Preferred
Stock" and,  together with the Series A Preferred Stock, the "Preferred  Stock")
pursuant  to Section  2(b)  hereof,  together  with  warrants  (the  "Warrants,"
together with the Preferred Stock are hereinafter  sometimes  referred to as the
"Securities") to purchase shares of the Company's  common stock,  $.01 par value
per share (the "Common  Stock").  The Preferred Stock is convertible into shares
of Common Stock (the  "Conversion  Shares.") The Offering will be made solely to
"accredited  investors"  as defined  in  Regulation  D. This is to  confirm  our
agreement   concerning  your  acting  as  our  exclusive  placement  agent  (the
"Placement Agent") in connection with the Offering.

         1.       Appointment of Placement Agent.
                  ------------------------------
<PAGE>

                  On the basis of the representations  and warranties  contained
herein,  and subject to the terms and conditions  set forth herein,  the Company
hereby appoints you as its Placement Agent and grants to you the exclusive right
to offer, as its agent, the Securities  pursuant to the terms of this Agreement.
On the  basis  of such  representations  and  warranties,  and  subject  to such
conditions,  you  hereby  accept  such  appointment  and  agree to use your best
efforts to secure subscriptions to purchase up to 264,000 Shares pursuant to the
terms of this  Agreement.  The agency  created  hereby is not  terminable by the
Company  except upon  termination  of the Offering  contemplated  hereby or upon
expiration  of the Offering  Period (as defined  below) in  accordance  with the
terms of this Agreement.

         2.       Terms of the Offering.
                  ---------------------

                  (a)  The  Primary   Shares   shall  be  offered  for  sale  to
prospective  investors  in this  Offering  (the  "Prospective  Investors")  at a
purchase  price  of  $25.00  per  share  (the  "Offering  Price").  The  minimum
investment by a  Prospective  Investor  shall be $12,5000  (500 Shares),  unless
otherwise agreed to by the Company and the Placement Agent. Officers,  directors
and  employees  of the  Company,  and the  Placement  Agent  and  its  officers,
directors and employees may purchase  Shares on the same terms and conditions as
other  investors.  All  references  herein  to  subscriptions  from  Prospective
Investors shall be deemed to include such Shares.

                  (b)  In  addition,  upon  the  basis  of  the  warranties  and
representations and other terms and conditions herein set forth, at the purchase
price per share set forth in paragraph (a) of this Section 2, the Company has an
option to sell the Overcall  Shares to the  Prospective  Investors who purchased
securities  at the  Closing or at any  Additional  Closing.  The  option  hereby
granted will expire on August 31, 2000 and may be exercised once, in whole or in
part, upon notice by the Company to the Placement Agent setting forth the number
of Overcall Shares as to which the Company is then calling and the time and date
of payment and delivery for such Overcall Shares.

                  (c) The  Offering  with  respect to the Primary  Shares  shall
commence on the date hereof (the  "Commencement  Date") and shall expire at 5:00
P.M., New York time, on December 20, 1999, unless extended from time to time for
up to an  aggregate  of 90 days  by  mutual  agreement  of the  Company  and the
Placement Agent. Such period, as the same may be so extended,  shall hereinafter
be referred to as the "Offering Period."

                  (d)  Each   Prospective   Investor  who  desires  to  purchase
Securities  shall be  required to deliver to the  Placement  Agent one copy of a
subscription  agreement,  including  the  investor  questionnaire  and the other
written  materials  required by the subscription  instructions  attached to such
subscription agreement (collectively,  a "Subscription Agreement"),  and payment
in the  amount  necessary  to  purchase  the number of Shares  such  Prospective
Investor desires to purchase.  The Placement Agent shall not have any obligation
to  independently  verify  the  accuracy  or  completeness  of  any  information
contained in any  Subscription  Agreement or the  authenticity,  sufficiency  or
validity  of any check or other form of  payment  delivered  by any  Prospective
Investor in payment for the Securities.
<PAGE>

                  (e) The Company has  established  a Special  Account  entitled
"Evercel,  Inc. - Escrow Account" (the "Special  Account").  The Placement Agent
shall deliver each check received from a Prospective Investor for deposit in the
Special  Account  and  shall  deliver  the  executed  copy  of the  Subscription
Agreement  received from such Prospective  Investor to the Company.  The Company
shall notify the Placement  Agent promptly of the acceptance or rejection of any
subscription.  The  Company  shall have the right,  in its sole  discretion,  to
reject any subscription;  provided, however, that in the event the Company shall
reject a subscription by a Prospective Investor meeting the investor suitability
requirements  specified  in the  Subscription  Agreement  and who has  delivered
payment and completed and executed a Subscription  Agreement and whose ownership
interest  in the  Company  will not be  detrimental  to the  Company's  business
interest in the reasonable judgment of the Company (a "Qualified Subscription"),
the Company shall pay you a fee and issue you warrants in respect  thereof in an
amount  equal to the  sales  commissions  and  Placement  Agent's  Warrants  (as
hereinafter defined) you would have otherwise received pursuant to Sections 4(a)
and 4(b) from the sale of such Shares to such Prospective Investor.

                  (f) If  Subscriptions to purchase a minimum of 200,000 Primary
Shares are not received from  Prospective  Investors  prior to the expiration of
the  Offering  Period and  accepted by the Company,  unless  otherwise  mutually
agreed by the Placement  Agent and the Company,  the Offering shall be canceled,
all funds  received by the Company shall be refunded in full,  without  interest
and this Agreement and the agency created hereby shall be terminated without any
further obligation on the part of either party, except as provided in Sections 7
and 10 hereof.

                  (g) You may  engage  other  persons  that are  members  of the
National  Association  of  Securities  Dealers,   Inc.  ("NASD")  or  registered
representatives  of such members to assist you in the Offering (each such person
being  hereinafter  referred to as a "Selected  Dealer")  and you may allow such
persons  such part of the  compensation  and payment of expenses  payable to you
hereunder  as you shall  determine.  Each  Selected  Dealer shall be required to
agree  in  writing  to  comply  with  the   provisions   of,  and  to  make  the
representations,  warranties and covenants  contained in, Sections 5(b) and 6(b)
by executing the form of Selected  Dealer  Agreement  attached hereto as Exhibit
III. On or prior to the Closing (as defined  below),  the Placement  Agent shall
deliver a copy of each executed  Selected  Dealer  Agreement to the Company.  By
executing  this  Agreement,  the Company hereby agrees to make, and is deemed to
make, the  representations and warranties to, and covenants and agreements with,
each  Selected  Dealer  (including  an agreement to  indemnify  under  Section 9
hereof) who has executed the Selected  Dealer  Agreement as is contained in this
Agreement.

<PAGE>

         3.       Closing.
                  -------

                  (a) Subject to the  conditions  set forth in Section 8 hereof,
if Qualified  Subscriptions to purchase a minimum of 200,000 Primary Shares have
been  received and cleared prior to the  expiration  of the Offering  Period and
accepted by the Company,  the closing under this Agreement (the "Closing") shall
be held at the offices of Fulbright & Jaworski  L.L.P.,  666 Fifth  Avenue,  New
York,  New  York,  at 10:00  A.M.,  New York  time,  on the third  business  day
following  the date upon which the  Placement  Agent  receives  notice  from the
Company that  subscriptions  to purchase a minimum  200,000  Primary Shares have
been so accepted or at such other  place,  time,  and/or date as the Company and
the  Placement  Agent shall agree upon (the "Closing  Time").  The Company shall
provide  the  notice   required  by  the  preceding   sentence  as  promptly  as
practicable.  The date upon which the initial Closing is held shall  hereinafter
be referred to as the "Initial Closing Date."

                  (b)  Subject to the  conditions  set forth in Section 8 hereof
and with the consent of both the Company and the Placement Agent, if, subsequent
to the Initial Closing Date and prior to the expiration of the Offering  Period,
additional   subscriptions   to  purchase   Primary  Shares  are  received  from
Prospective  Investors,  which subscriptions are accepted by the Company, one or
more additional  closings under this Agreement  (each, an "Additional  Closing")
shall be held at the offices of Fulbright & Jaworski  L.L.P.,  666 Fifth Avenue,
New York,  New York,  at 10:00 A.M.,  New York time,  on the fifth  business day
following  the date upon which the  Placement  Agent  receives  notice  from the
Company that additional  subscriptions  have been so accepted,  or at such other
place, time or date as the Company and the Placement Agent shall agree upon. The
Company shall notify the Placement Agent as promptly as practicable  whether any
additional subscriptions so received have been accepted. The date upon which any
Additional  Closing is held shall  hereinafter  be referred to as an "Additional
Closing Date."

                  (c) If the Company  elects to exercise its option  pursuant to
Section 2(b) hereof, the closing (the "Overcall  Closing") of all or part of the
Overcall Shares shall be held at the offices of Fulbright & Jaworski L.L.P., 666
Fifth Avenue, New York, New York, at 10:00 A.M., New York time, on the fifteenth
business day following the date upon which the Placement  Agent receives  notice
from the Company of such exercise,  or at such other place,  time or date as the
Company  and the  Placement  Agent  shall  agree  upon.  The date upon which the
Overcall  Closing is held shall  hereinafter  be  referred  to as the  "Overcall
Closing  Date." The latest  Closing Date is sometimes  referred to herein as the
"Final Closing Date."

                  (d) At the Closing, Additional Closing or Overcall Closing, as
the case may be, the  Company  shall pay to the  Placement  Agent from the funds
deposited in the Special Account in payment for  Securities,  the amount payable
to  the   Placement   Agent   pursuant  to  Section  4(a)  of  this   Agreement.
Notwithstanding  the  foregoing,  if any portion of the  proceeds  raised in the
Offering  are not paid to the  Company  at the  Closing,  Additional  Closing or
Overcall  Closing,  as the case may be, then the  placement fee relating to such
deferred  proceeds  shall  only be  paid by the  Company  upon  receipt  of such
deferred proceeds.  Promptly after the Initial Closing Date,  Additional Closing
Date or Overcall  Closing Date, as the case may be, the Company shall deliver to
the purchasers of Securities  certificates  representing the Shares and Warrants
to which  they are  entitled,  in the forms  attached  hereto  as  Exhibit I and
Exhibit II, respectively.

         4.       Compensation.
                  ------------
<PAGE>

                  (a) You shall be entitled,  as compensation  for your services
as  Placement  Agent  under  this  Agreement,  to an  amount  equal to 7% of the
aggregate gross proceeds  received by the Company from the sale of Securities to
Prospective  Investors,  payable by the  Company on the  Initial  Closing  Date,
Additional  Closing  Date or  Overcall  Closing  Date,  as the case may be, with
respect to the  Securities  sold on such date to investors;  provided,  however,
that any  subscription  meeting the requirements set forth in Section 2(d) shall
be deemed  to have  been  accepted  for  purposes  of  determining  whether  the
Placement Agent is entitled to its  compensation  pursuant to this Section 4(a).
In addition,  the Company shall pay the Placement Agent an amount equal to 4% of
the  aggregate  gross  proceeds to the Company  upon the  exercise of any of the
Warrants.

                  (b) As additional  compensation for your services as Placement
Agent under this  Agreement,  you and/or your designees shall become entitled to
receive,  on each of the Initial Closing Date, and each Additional  Closing Date
and Overcall Closing Date, if any, warrants (collectively,  the "Placement Agent
Warrants") to purchase shares of the Company's  Common Stock, in an amount equal
to 7% of the number of shares of Common Stock  issuable  upon the  conversion of
the Shares  sold by the  Company in the  Offering  on such  Closing  Date.  Each
Placement Agent Warrant will entitle the holder thereof, until the date which is
five (5) years  after the  Initial  Closing  Date,  Additional  Closing  Date or
Overcall Closing Date, as the case may be, to purchase one share of Common Stock
(such shares of Common Stock  issuable upon the exercise of the Placement  Agent
Warrants are hereinafter  referred to as the "Placement  Agent Warrant  Shares")
and shall contain the same terms and  conditions  as the  Warrants.  The Company
shall be obligated,  under certain  circumstances  set forth in the Registration
Rights  Agreement  made by the Company for the benefit of the  purchasers of the
Securities and the Placement Agent and its designees (the  "Registration  Rights
Agreement"),  to file a registration  statement under the Act to permit the sale
in the public  trading  market of the  Placement  Agent  Warrant  Shares and the
shares of Common Stock  issuable  upon  exercise of the Warrants  (the  "Warrant
Shares") by the holders  thereof.  The Placement Agent Warrants and the Warrants
shall be substantially in the form attached hereto as Exhibit II.

         5.       Representations and Warranties.
                  ------------------------------

                  (a)      Representations  and  Warranties of the Company.
The Company  represents  and warrants to, and agrees with,
the Placement Agent that:

                           (i)      Organization,   Etc.   The   Company is  a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has full  corporate  power and authority to conduct
its  business  as it is now being  conducted  and to own,  operate  or lease the
properties  and assets it currently  owns,  operates or holds under  lease.  The
Company is duly  qualified or licensed to do business and is in good standing as
a foreign  corporation in each jurisdiction  where the character of its business
or the nature of its properties makes such qualification or licensing necessary,
except where the failure to so qualify or be licensed  would not have a material
adverse effect
<PAGE>

                           (ii)     Capitalization.  The SEC Reports (as defined
below)  set  forth the  capitalization  of the  Company.  There are no shares of
Common Stock held as treasury shares.  The  designations,  powers,  preferences,
rights,  qualifications,  limitations and  restrictions in respect of each class
and series of  authorized  capital  stock of the Company are as set forth in the
Company's  Certificate  of  Incorporation,  and all such  designations,  powers,
preferences,  rights,  qualifications,  limitations and  restrictions are valid,
binding  and  enforceable  and in  accordance  with  all  applicable  laws.  All
outstanding shares of capital stock of the Company have been duly authorized and
validly  issued and are fully paid and  non-assessable.  All of the  outstanding
securities of the Company were issued in compliance with all applicable  Federal
and state securities  laws. None of such outstanding  securities has been issued
in  violation  of any  preemptive  rights,  rights of first  refusal  or similar
rights.  Except  as set  forth  in the SEC  Reports,  there  are no  outstanding
options,   warrants,   convertible  securities,   calls,  rights,   commitments,
preemptive  rights  or  agreements  or  instruments  or  understandings  of  any
character  to which the  Company  is a party or by which the  Company  is bound,
obligating  the  Company  to  issue,  deliver  or sell,  or cause to be  issued,
delivered or sold,  contingently or otherwise,  additional shares of its capital
stock or any securities or obligations convertible into or exchangeable for such
shares or to grant, extend or enter into any such option,  warrant,  convertible
security, call, right, commitment,  preemptive right or agreement.  There are no
outstanding obligations, contingent or other, of the Company to purchase, redeem
or otherwise acquire any shares of its capital stock.  There are no voting trust
agreements or other contracts, agreements,  arrangements,  commitments, plans or
understandings  restricting or otherwise  relating to voting,  dividend or other
rights with respect to the capital stock of the Company.

                           (iii)    No   Prior  Sales.   The   Company  has not,
directly or indirectly, solicited any offer to buy or offered to sell any shares
of Series A Preferred  Stock or any other  securities of the Company  during the
six-month  period ending on the date hereof except for the  securities as may be
described in the SEC Reports,  and has no present intention to solicit any offer
to buy or to offer to sell any Series A Preferred Stock or any other  securities
of the Company other than pursuant to this  Agreement or as described in the SEC
Reports.

                           (iv)     Authorization. The Company has all requisite
corporate  power and authority to enter into this  Agreement,  the  Subscription
Agreement and the Registration Rights Agreement (collectively,  the "Transaction
Documents"),  to  carry  out  its  obligations  under  each  of the  Transaction
Documents and to consummate the  transactions  contemplated  hereby and thereby.
The  execution  and  delivery  of  this  Agreement,   the  consummation  of  the
transactions  contemplated  hereby,  the  performance  by  the  Company  of  its
obligations  hereunder and  thereunder  (other than its  obligations to register
shares of Common Stock under the  Securities  Act  pursuant to the  Registration
Rights  Agreement)  and  the  authorization,   designation,  reservation,  sale,
issuance and delivery of the Shares, the Conversion  Shares,  the Warrants,  the
Placement  Agent  Warrants,  the Warrant Shares and the Placement  Agent Warrant
Shares have been duly authorized by all necessary  corporate  action on the part
of the  Company.  This  Agreement  has been,  and each of the  other  agreements
contemplated hereby, when executed and delivered by the Company, will have been,
duly executed and delivered by the Company and constitute  the legal,  valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms  (except  as the  enforceability  thereof  may be  limited by any
applicable  bankruptcy,  insolvency or other laws  affecting  creditors'  rights
generally  or by general  principles  of  equity,  regardless  of  whether  such
enforceability  is considered in equity or at law).  The Shares,  the Conversion
Shares, the Warrants,  the Placement Agent Warrants,  the Warrant Shares and the
Placement  Agent Warrant  Shares have been duly  authorized  and, when issued in
accordance with this Agreement, the Shares, the Warrants and the Placement Agent
Warrants will be validly issued, fully paid and nonassessable,  with no personal
liability attaching to the ownership thereof. The Conversion Shares, the Warrant
Shares and the  Placement  Agent  Warrant  Shares  have been duly  reserved  for
issuance.  Neither the issuance, sale nor delivery of the Shares, the Conversion
Shares,  the Warrants,  the Placement Agent Warrants,  the Warrant Shares or the
Placement   Agent  Warrant  Shares  is  subject  to  any  preemptive   right  of
stockholders  of the Company or to any right of first  refusal or other right in
favor of any person which has not been waived in writing.
<PAGE>

                           (v)      No Violation.  The execution and delivery of
this  Agreement and each other  Transaction  Document by the Company do not, and
the  consummation  by the Company of the  transactions  contemplated  hereby and
thereby and compliance  with the terms hereof and thereof will not, (a) conflict
with, or result in any violation of or default or loss of any benefit under, any
provision of the Company's Certificate of Incorporation or By-laws; (b) conflict
with, or result in any violation of or default or loss of any benefit under, any
permit, concession,  grant, franchise, law, rule or regulation, or any judgment,
decree or order of any court or other governmental  agency or instrumentality to
which the Company is a party or to which any of its  property  is  subject;  (c)
conflict  with,  or result in a breach or violation of or default or loss of any
benefit  under,  or  accelerate  the  performance  required by, the terms of any
agreement,  contract,  indenture or other  instrument  to which the Company is a
party or to which any of its  property is subject,  or  constitute  a default or
loss of any right thereunder or an event which, with the lapse of time or notice
or both,  might  result in a  default  or loss of any  right  thereunder  or the
creation of any Security  Interest  upon any of the assets or  properties of the
Company; or (d) result in any suspension,  revocation, impairment, forfeiture or
nonrenewal of any license.

                           (vi)     Financial  Statements and Other Information.
(a) The Company has  previously  furnished to the Placement  Agent the Company's
Quarterly  Reports on Form 10-QSB for the quarters ended January 31, 1999, April
30, 1999 and July 31, 1999,  which contain the audited and  unaudited  financial
statements of the Company (the "Financial Statements").  These statements fairly
present  the  financial  condition  of the  Company as of the  respective  dates
thereof and the results of the  operations  of the Company for such  periods and
have been prepared in accordance with generally accepted  accounting  principles
consistently  applied,  except that any such unaudited statements may omit notes
and may be subject to year-end adjustment.

<PAGE>

                  (b) Since July 31,  1999,  (i) the business of the Company has
been  conducted  in the  ordinary  course of business and (ii) there has been no
material  adverse  change.  As  of  the  date  hereof,  there  are  no  material
liabilities  of the Company  which  would be  required  to be provided  for in a
balance  sheet of the Company as of July 31, 1999  prepared in  accordance  with
generally  accepted  accounting  principles  consistently  applied,  other  than
liabilities provided for in the financial statements referred to in subparagraph
(a) above and liabilities incurred after July 31, 1999 in the ordinary course of
business.

                  (c)  There  are  no  material   liabilities,   contingent   or
otherwise,  of the  Company  that  have  not  been  disclosed  in the  financial
statements  referred to in subparagraph (a) above or otherwise  disclosed in the
Company's public filings with the Securities and Exchange Commission.

                           (vii)    SEC Reports. The Company has filed all proxy
statements,  reports  and other  documents  required to be filed by it under the
Securities  Exchange Act. The Company has  furnished  the  Placement  Agent with
copies of its (i)  Quarterly  Reports  on Form  10-QSB  for the  quarters  ended
January  31,  1999,  April 30,  1999 and July 31,  1999,  (ii) Form 8-K filed on
October 13, 1999 and (iii) press releases dated August 10, August 12,  September
9 and November 1, 1999 (collectively, the "SEC Reports"). Each SEC Report was 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 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.

                           (viii)   Litigation.  There  is    no  action,  suit,
investigation,  arbitration  or proceeding  pending or, to the best knowledge of
the  Company,  threatened  against  or  affecting  the  Company,  or  any of its
properties or rights  (including  without  limitation no charge of patent and/or
trademark  infringement),  by or before any governmental entity, or any basis in
fact therefor  known to the Company,  against or involving the Company or any of
its  officers,  directors  or  employees  (in their  capacity as such),  assets,
business or products, whether at law or in equity. The Company is not subject to
any outstanding  injunction,  judgment,  order,  decree,  ruling or charge which
could reasonably be expected to have a material adverse effect.

                           (ix)     Compliance  with  Laws.   The    Company has
complied in all material  respects with all applicable  laws  (including  rules,
regulations, codes, plans, injunctions,  judgments, orders, decrees, rulings and
charges  thereunder)  of any  governmental  entity  relating to or affecting the
operation,  conduct or ownership  of its  property or  business,  and no action,
suit, proceeding,  hearing,  investigation,  charge, complaint, claim, demand or
notice has been filed or  commenced  or, to the best  knowledge  of the Company,
threatened  against it alleging  any  failure so to comply.  Neither the Company
nor, to the best  knowledge  of the  Company,  any of its  directors,  officers,
consultants  or  employees  (in their  capacity  as such),  is in default in any
material respect with respect to any order, writ,  injunction or decree known to
or served upon the Company of any governmental entity.

                        (x)      Environmental  Compliance.  The Company has not
generated, used, transported,  treated, stored, released or disposed of, and has
not suffered or permitted anyone else to generate, use, transport, treat, store,
release or dispose of any hazardous  substance in violation of any environmental
laws; (ii) there has not been any generation,  use,  transportation,  treatment,
storage,  release or  disposal of any  hazardous  substance  resulting  from the
conduct of the Company or the use of any property or facility by the Company or,
to the best of the  Company's  knowledge,  any nearby or adjacent  properties or
facilities,  which has  created or could  reasonably  be  expected to create any
material  liability on the part of the Company under the  environmental  laws or
that  would  require  reporting  to  or  notification  by  the  Company  to  any
governmental  entity; and (iii) any hazardous substance handled or dealt with in
any way in connection with the business of the Company, whether before or during
the ownership of the Company, has been and is being handled or dealt with in all
respects in compliance  with the  environmental  laws in effect at the time such
activities were being conducted, except where such violation, liability, failure
to report or failure to comply would not have a material adverse effect.
<PAGE>

                           (xi)     Registration   Rights.  Except  as  provided
for in the Registration  Rights Agreement or the SEC Reports,  upon consummation
of the transactions  contemplated hereby the Company is not under any obligation
to register under the Securities Act any of its currently outstanding securities
or any of its securities which may hereafter be issued.

                           (xii) Private Offering.   No   form   of    general
solicitation   or  general   advertising   was  used  by  the   Company  or  its
representatives in connection with the offer or sale of the Securities. Based in
part  on the  representations  of  the  Placement  Agent  contained  herein,  no
registration of the Securities  pursuant to the provisions of the Securities Act
or any state  securities or "blue sky" laws will be required by the offer,  sale
or  issuance of the  Securities  pursuant to this  Agreement.  The  transactions
contemplated hereunder,  including the issuance and sale of the Securities,  are
exempt from  registration  under the  provisions of the  Securities  Act and any
state "blue sky" laws.

                  (b)     Representations and Warranties of the Placement Agent.
 The Placement Agent hereby  represents and warrants to, and  agrees  with,  the
 Company as follows:

                           (i)      This Agreement  have  been duly  authorized,
executed and delivered by the Placement Agent, are the legal,  valid and binding
obligations of the Placement Agent and are enforceable as to the Placement Agent
in accordance  with their  respective  terms (subject to applicable  bankruptcy,
insolvency  and other laws  affecting the  enforceability  of creditors'  rights
generally and to general equitable principles).

                           (ii)     The  Placement  Agent will not offer or sell
the Securities to any investor which the Placement Agent did not have reasonable
grounds to believe and did not believe, was an "accredited investor."

                           (iii)    The  Placement  Agent  will   not  offer  or
sell the  Securities  by means of any form of  general  solicitation  or general
advertising, including, without limitation, the following:

                                    (1)     any  advertisement,  article, notice
or other  communication  published in any  newspaper, magazine or similar medium
or broadcast over television or radio; and
<PAGE>

                                    (2)     any seminar   or    meeting    whose
attendees have been invited by any general solicitation  or general advertising.

                           (iv)     The  Placement  Agent is a  member   in good
standing  of the NASD or is a  registered  representative  thereof,  is licensed
under the Exchange Act, and, if required, under the laws of all jurisdictions in
which it will offer the Securities.

                           (v)      Neither the Placement Agent nor any partner,
officer or director of the Placement Agent:

                                    (1)     Is    currently    subject   to  any
administrative  order or judgment in any state  which  prohibits  the use of any
exemption  from  registration  in  connection  with  the  purchase  or  sale  of
securities;

                                    (2)     Is  subject  to any  order, judgment
or  decree  of any  court or  regulatory  authority  of  competent  jurisdiction
temporarily  or  preliminarily  restraining  or enjoining,  or is subject to any
order,  judgment or decree of any court or  regulatory  authority  of  competent
jurisdiction,  entered  within the last five years  permanently  restraining  or
enjoining,  such person from engaging in or  continuing  any conduct or practice
(including  making use of any exemption) in connection with the purchase or sale
of any security or  commodity  or involving  the making of any false filing with
any state  relating to any security or offering or arising out of the conduct of
the business of an underwriter,  broker, dealer, municipal securities dealer, or
investment  adviser;  or which  restrains or enjoins such person from activities
subject to federal  or state  statutes  designed  to protect  consumers  against
unlawful or deceptive  practices involving  insurance,  commodities or commodity
futures,  real estate,  franchise,  business  opportunities,  consumer goods, or
other goods and services;

                                    (3)    Has been convicted of, or has pleaded
nolo  contendere  to, within the past ten years,  any felony or  misdemeanor  in
connection with the purchase or sale of any security or commodity, involving the
making of a false filing  relating to any  security or offering;  arising out of
the  conduct  of the  business  of an  underwriter,  broker,  dealer,  municipal
securities  dealer,  or  investment   adviser;   or  involving  fraud,   deceit,
racketeering, or intentional wrongdoing, including, without limitation, forgery,
embezzlement,  obtaining money under false pretenses,  larceny, or conspiracy to
defraud;

                                    (4)     Is currently  subject  to  any state
administrative  enforcement order or judgment entered by that state's securities
administrator  within  the  past  five  years  or  is  subject  to  any  state's
administrative  enforcement  order or  judgment,  entered  within  the past five
years, in which fraud or deceit,  including,  without limitation,  making untrue
statements of material  facts and omitting to state material  facts,  was found;
or, if such an order or judgment was entered,  the person  subject to such order
or judgment is licensed or registered to conduct securities-related  business in
the state in which the administrative order or judgment was entered against such
person;
<PAGE>

                                    (5)     Is    suspended   or  expelled  from
membership  in, or  suspended  or barred  from  association  with a member of an
exchange  registered as a national  securities exchange pursuant to Section 6 of
the Exchange Act, an association registered as a national securities association
under  Section 15A of the  Exchange  Act, or a Canadian  securities  exchange or
association  for any act or omission to act  constituting  conduct  inconsistent
with just and equitable principles of trade;

                                    (6)     Is  subject to a    United    States
Postal  Service false  representation  order entered under section 3005 of title
39,  United  States  Code,  within  the past  five  years;  or is  subject  to a
restraining order or preliminary  injunction entered under section 3007 of title
39, United States Code, with respect to conduct alleged to have violated section
3005 of title 39, United States Code; or

                                    (7)     Has been  the  underwriter  or named
as the underwriter of any securities  covered by any  registration  statement or
offering circular which is the subject of any pending  proceeding or examination
under the Act or is the  subject  of any  refusal  order or stop  order  entered
thereunder or under any state's laws within the past five years.

         6.       Covenants.

                  (a)      Covenants of the Company.  The Company covenants   to
the Placement Agent that it will:

                           (i)      Notify you immediately,  and confirm    such
notice  promptly in writing,  (A) when any event shall have occurred  during the
period  commencing on the date hereof and ending on the later of the  expiration
of the Offering  Period and the Final Closing Date, as a result of which the SEC
Reports would  include any untrue  statement of a material fact or omit to state
any material fact necessary to make the statements  therein not misleading,  all
in light of the circumstances  under which they were made and (B) of the receipt
of any notification with respect to the modification,  rescission, withdrawal or
suspension  of an  exemption  from  the  registration  or  qualification  of the
Securities in any  jurisdiction.  The Company will use  commercially  reasonable
efforts to prevent the issuance of any such modification, rescission, withdrawal
or  suspension  and,  if  any  such  modification,   rescission,  withdrawal  or
suspension  is  issued  and you so  request,  will use  commercially  reasonable
efforts to obtain the lifting thereof as promptly as possible.

                           (ii)     Not,   directly   or    indirectly,  solicit
any offer to buy from,  or offer to sell to any  person  any  Securities  except
through the Placement Agent.

                          (iii)    Not solicit any  offer  to  buy or  offer to
sell  the  Securities  by any  form  of  general  solicitation  or  advertising,
including,  without  limitation,  any  advertisement,  article,  notice or other
communication  published  in  any  newspaper,  magazine  or  similar  medium  or
broadcast  over  television or radio or any seminar or meeting  whose  attendees
have been invited by any general solicitation or advertising.
<PAGE>

                           (iv)     Use  commercially   reasonable    efforts to
qualify or register the Securities for offering and sale under,  or establish an
exemption from such qualification or registration under, the securities or "blue
sky" laws of such jurisdictions as you may reasonably request.  The Company will
not  consummate any sale of Securities in any  jurisdiction  or in any manner in
which such sale may not be lawfully made.

                           (v)      At all times  during  the period  commencing
on the date  hereof and ending on the later of the  expiration  of the  Offering
Period and the Final Closing Date,  provide to each Prospective  Investor or his
or her purchaser representative, if any, on request, such reasonable information
(in addition to that contained in the SEC Reports) concerning the Offering,  the
Company and any other  relevant  matters as it possesses or can acquire  without
unreasonable effort or expense and extend to each Prospective Investor or his or
her purchaser  representative,  if any, the opportunity to ask questions of, and
receive  answers from,  the Company  concerning  the terms and conditions of the
Offering  and the  business of the  Company  and to obtain any other  additional
information,  to the  extent it  possesses  the same or can  acquire  it without
unreasonable  effort or  expense,  as such  Prospective  Investor  or  purchaser
representative  may  consider   reasonably   necessary  in  making  an  informed
investment  decision  or in order to  verify  the  accuracy  of the  information
furnished to such Prospective Investor or purchaser representative,  as the case
may be, subject to receipt of a  confidentiality  agreement if the Company deems
it  appropriate;  provided,  however,  that the  Company  shall not  accept  any
subscription to purchase Securities from a Prospective Investor who has not been
provided with all information  requested by such Prospective Investor or who has
not received  answers to all questions asked by such Prospective  Investor.  Any
additional written information provided to a Prospective Investor by the Company
will not  contain  any untrue  statement  of a material  fact or omit to state a
material fact necessary to make the statements therein not misleading. Copies of
any such written information will promptly be given to the Placement Agent.

                           (vi)     Before   accepting   any    subscription  to
purchase Securities from, or making any sale to, any Prospective Investor,  have
reasonable  grounds  to  believe  and does  believe  that  (A) such  Prospective
Investor  is  an   "accredited   investor"  and  meets  all  other   suitability
requirements  for  investing  in the  Securities  set forth in the  Subscription
Agreement,  and (B) all  representations  made and furnished by such Prospective
Investor  in the  Subscription  Agreement  and  related  documents  are true and
correct in all material respects.

                           (vii)    Notify  you  promptly   of the acceptance or
rejection of any subscription.

                           (viii)   File five copies  of  a  Notice  of Sales of
Securities  on  Form  D  with  the  Securities  and  Exchange   Commission  (the
"Commission")  within the time  required by such Rule and file a final notice on
Form D with the  Commission  within the time required by such Rule.  The Company
shall file  promptly  such  amendments to such Notices on Form D as shall become
necessary and shall also comply with any filing requirement  imposed by the laws
of any state or  jurisdiction  in which  offers and sales are made.  The Company
shall  furnish you and your  counsel  with copies of all such  filings  promptly
after any such filing is made.
<PAGE>

                           (ix)     Place  the  following   legend    on     all
certificates representing the Shares sold pursuant to this Offering, as well as,
to the extent applicable,  the Conversion Shares,  Warrants, the Placement Agent
Warrants, the Warrant Shares and the Placement Agent Warrant Shares:

                                    "The securities  represented hereby have not
                           been registered  under the Securities Act of 1933, as
                           amended, or any state securities laws and neither the
                           securities  nor any interest  therein may be offered,
                           sold,  transferred,  pledged or otherwise disposed of
                           except   pursuant   to  an   effective   registration
                           statement under such act or such laws or an exemption
                           from  registration  under  said  act and  such  laws,
                           which,  in the  opinion  of counsel  for the  holder,
                           which counsel and opinion are reasonably satisfactory
                           to counsel for the company, is available";

                           (x)      Not,  directly or indirectly,  engage in any
act or activity  which may jeopardize the status of the Offering and sale of the
Securities as exempt transactions under the Act or under the securities or "blue
sky"  laws of any  jurisdiction  in which  the  Offering  may be  made.  Without
limiting the generality of the foregoing, and notwithstanding anything contained
herein to the contrary,  the Company shall not, during the six months  following
completion of the Offering,  (A) directly or indirectly,  engage in any offering
of securities  which would result in integration with the Offering in the manner
prescribed  by Rule  502(a)  of  Regulation  D and  applicable  releases  of the
Commission  and thereby  jeopardize  the status of the  Offering and sale of the
Securities  as  exempt  transactions  under  Regulation  D or (B)  engage in any
offering of securities,  without the opinion of counsel reasonably  satisfactory
to the Placement  Agent,  to the effect that such  offering  would not result in
integration  with this Offering,  or if integration  would so result,  that such
integration  would  not  jeopardize  the  status of this  Offering  as an exempt
transaction  under  Regulation D. The Company  agrees to indemnify the Placement
Agent and/or any controlling person, director,  officer, employee,  affiliate or
agent of the Placement Agent and hold them harmless against any losses,  claims,
damages,  expenses or liabilities to which the Placement Agent and/or such other
indemnified parties may become subject, which are related to or arise out of the
breach of the covenant contained in this Section 6(a)(x).

                           (xi)     Apply,  in all  material  respects,  the net
proceeds  from the sale of the  Securities  for the purposes of  automating  the
Danbury,  CT  manufacturing  facility,  working  capital and  general  corporate
purposes.

<PAGE>

                           (xii)    Not, during  the  period   commencing on the
date hereof and ending on the later of the expiration of the Offering Period and
the Final Closing Date,  unless  otherwise  legally  obligated,  issue any press
release or other  communication or hold any press conference with respect to the
Company, its financial condition, results of operations,  business,  properties,
assets or  liabilities,  or the Offering,  without your prior  written  consent,
which consent shall not be unreasonably withheld.

                           (xiii)   Comply  in all respects with its obligations
under the Transaction Documents.

                  (b)      Covenants of the Placement Agent. The Placement Agent
hereby covenants and agrees as follows:

                           (i)      The  Placement  Agent  will  not accept  the
subscription of any person unless immediately before accepting such subscription
the Placement Agent has reasonable  grounds to believe and does believe that (A)
such person is an  "accredited  investor" and (B) all  representations  made and
information  furnished by such person in the Subscription  Agreement and related
documents are true and correct in all material  respects.  The  Placement  Agent
agrees to notify the Company  promptly if the Placement Agent shall, at any time
during the period after  delivery of the  documents  furnished by such person to
the Company in connection  with a subscription  for  Securities and  immediately
before the sale of Securities to such person, no longer reasonably  believes one
or more of the foregoing matters with respect to such person.

                           (ii)     The  Placement Agent will solicit purchasers
of  Securities  in the United  States  only in the  jurisdictions  in which such
solicitation  may,  upon  the  advice  of  counsel,  be  made  under  applicable
securities or "blue sky" laws and in which the  Placement  Agent is qualified so
to act.

                           (iii)    The Placement Agent will render its services
in  connection  with  the  Offering  in  accordance  with  Regulation  D and all
applicable state and federal manner of sale and anti-fraud securities laws.

         7        Payment of Expenses.

                  (a)  Whether  or not  the  transactions  contemplated  by this
Agreement are consummated or this Agreement is terminated,  the Company will pay
all fees, charges and expenses incident to the performance by the Company of its
obligations  hereunder,  including,  without limitation,  all fees, charges, and
expenses in connection with (i) the preparation, printing, reproduction, filing,
distribution and mailing of the Subscription  Agreement,  Transaction  Documents
and all other documents relating to the offering, purchase, sale and delivery of
the Securities,  and any supplements or amendments  thereto,  including the fees
and expenses of counsel to the Company, and the cost of all copies thereof, (ii)
the issuance,  sale, transfer and delivery of the Shares, the Conversion Shares,
the Warrants, the Placement Agent Warrants, the Warrant Shares and the Placement
Agent Warrant Shares, including any transfer or other taxes payable thereon (not
including income related taxes of the recipient of such securities) and the fees
of any Transfer Agent or Registrar,  (iii) the  registration or qualification of
the  Securities or the securing of an exemption  therefrom  under state or "blue
sky" or securities laws, including,  without limitation,  filing fees payable in
the  jurisdictions  in which such  registration  or  qualification  or exemption
therefrom is sought and the costs of  preparing  preliminary,  supplemental  and
final "Blue Sky Surveys"  relating to the offer and sale of the Securities;  and
(iv) the filing fees, if any, payable to the Commission; (v) travel and roadshow
expenses,  all of  which  shall  be paid at each  Closing  of the  Offering,  as
applicable.

                  (b)  Whether  or not  the  transactions  contemplated  by this
Agreement are consummated or this Agreement is terminated, the Company will from
time to time promptly upon request  therefor  reimburse the Placement  Agent for
the cost of printing  and mailing the  offering  materials,  travel and roadshow
expenses and all other out-of-pocket expenses incurred by the Placement Agent in
connection with this Offering  (including,  without limitation and disbursements
as set forth below). Such expenses in excess of $25,000 shall be billed monthly,
as incurred.

                  (c) The Company  shall pay to or as directed by the  Placement
Agent on the Initial  Closing Date (and, to the extent of any  additional  legal
fees and expenses, on each Additional Closing Date or the Overcall Closing Date)
the  fees  and  disbursements  of  counsel  to the  Placement  Agent of up to an
aggregate of $25,000.

         8 Conditions of Placement Agent's  Obligations.  The obligations of the
Placement  Agent  pursuant to this  Agreement  (other than pursuant to Section 1
hereof) and the right of the Company to obtain on the Initial  Closing Date and,
if applicable,  each Additional  Closing Date and the Overcall Closing Date, the
funds  representing  Securities  purchased at such Closing,  as the case may be,
shall be subject to the performance by the Company of its obligations hereunder,
and to the satisfaction of the following additional conditions:

                  (a) On or prior to the Initial  Closing Date,  each Additional
Closing Date and the Overcall  Closing  Date,  as the case may be, the Placement
Agent shall have been furnished such information,  documents and certificates as
it may  reasonably  require for the purpose of enabling it to review the matters
referred  to  in  this  Section  8  and  in  order  to  evidence  the  accuracy,
completeness  or  satisfaction  of  any  of  the  representations,   warranties,
covenants,  agreements or conditions  herein  contained,  or as it may otherwise
reasonably request.

                  (b)  The   representations   and  warranties  of  the  Company
contained in this Agreement that are qualified with respect to materiality shall
be true and  correct in all  material  respects,  and such  representations  and
warranties  that are not so qualified  shall be true and correct in all respects
on each  Closing  Date,  as the case may be,  with the same effect as if made on
such Closing Date, and all covenants and agreements  contained in this Agreement
to be performed on the part of the Company and all conditions  contained in this
Agreement  to be  fulfilled  or complied  with by the Company at or prior to the
Initial Closing Date,  Additional  Closing Date or Overcall Closing Date, as the
case may be, shall have been duly performed,  fulfilled or complied with and the
Placement Agent shall have received a certificate to such effect, dated the such
Closing  Date,  as the case may be, from the chief  executive  officer and chief
financial officer of the Company.

                  (c) At the Initial  Closing  Date,  the Company  shall  accept
subscriptions  representing no less than 200,000 Primary Shares. At the Closing,
Additional  Closing  and  Overcall  Closing,  if any,  the  Company  shall  have
satisfied its obligations under Sections 4(a) and 7.
<PAGE>

                  (d) At the Closing and each  Additional  Closing and  Overcall
Closing,  if any, the Placement Agent shall have received the favorable opinions
of Robinson & Cole,  LLP,  counsel for the Company,  dated the date of delivery,
addressed to the Placement  Agent,  in form  satisfactory to the Placement Agent
and its counsel.

                  (e) On the Initial  Closing Date and each  Additional  Closing
Date and Overcall  Closing Date,  if any, all  corporate  and other  proceedings
taken or to be taken by the Company in connection  with the  issuance,  sale and
delivery of the  Securities  and the  transactions  contemplated  hereby and all
documents  incident  thereto shall be  satisfactory in form and substance to you
and your counsel.

                  (f) On the Initial  Closing Date and each  Additional  Closing
Date and Overcall Closing Date, if any, the Registration  Rights Agreement shall
have been duly  executed  and  delivered by the Company,  by the  purchasers  of
Securities,  and by the other  parties  thereto  and shall be in full  force and
effect.

                  (g) There  shall not have  occurred,  at any time prior to the
Initial Closing or, if applicable, an Additional Closing or Overcall Closing, as
the case may be, (i) any  domestic or  international  event,  act or  occurrence
which has materially disrupted,  or in your opinion will in the immediate future
materially disrupt,  the securities markets;  (ii) a general suspension of, or a
general limitation on prices for, trading in securities on a national securities
exchange or stock market, or in the over-the-counter  market; (iii) any outbreak
of major  hostilities  or other  national or  international  calamity;  (iv) any
banking moratorium declared by a state or federal authority;  (v) any moratorium
declared  in  foreign  exchange  trading by major  international  banks or other
persons;  (vi) any material  interruption  in the mail service or other means of
communication within the United States; (vii) any material adverse change in the
business,  properties,  assets,  results of operations or financial condition of
the  Company;  or (viii) any  material  change in the market for  securities  in
general  or in  political,  financial  or  economic  conditions  which,  in your
reasonable business judgment, makes it inadvisable to proceed with the offering,
sale and delivery of the Securities.

                  (h) On the Initial  Closing Date and each  Additional  Closing
Date and Overcall  Closing Date, if any, the Placement Agent shall have received
certificates,  each dated the such Closing  Date,  as the case may be, signed by
the chief executive officer and the chief financial  officer of the Company,  in
form and substance  satisfactory to the Placement Agent, to the effect that each
signer  (solely in his capacity as an officer of, and on behalf of, the Company)
of such certificate has carefully examined the SEC Reports and since the date of
the  latest  SEC  Report,  no event  has  occurred  as a  result  of which it is
necessary to amend or supplement  such documents in order to make the statements
therein,  in the light of the  circumstances  under  which they were  made,  not
misleading in any material respect.

                  (i) On the Initial  Closing Date and each  Additional  Closing
Date and Overcall  Closing Date, if any, the Placement Agent shall have received
a  certificate,  dated  such  Closing  Date,  as the case may be,  signed by the
Secretary of the Company,  in form and substance  satisfactory  to the Placement
Agent,  certifying as to (i) the incumbency and the signatures of those officers
of the Company  executing the  Transaction  Documents and  certificates or other
documents  to be  executed  pursuant to the terms of such  agreements,  (ii) the
certificate  of  incorporation   and  by-laws  of  the  Company  and  (iii)  the
resolutions  of the  Board  of  Directors  of the  Company  (or  duly  appointed
committee  thereof)  authorizing  the execution and delivery of the  Transaction
Documents and the transactions contemplated hereby and thereby.
<PAGE>

                  Any certificate or other document signed by any officer of the
Company and delivered to you or to your counsel shall be deemed a representation
and warranty by the Company hereunder as to the statements made therein.  If any
condition  to your  obligations  hereunder  has not been  fulfilled  as and when
required to be so  fulfilled,  you may  terminate  this  Agreement or, if you so
elect,  in writing waive any such  conditions  which have not been  fulfilled or
extend the time for their fulfillment.  In the event that you elect to terminate
this Agreement,  you shall notify the Company of such election in writing.  Upon
such  termination,  neither party shall have any further liability or obligation
to the other except as provided in Section 10 hereof.

         9        Indemnification and Contribution.

                  (a) The Company agrees to indemnify the Placement Agent and/or
any controlling person, director,  officer, employee,  affiliate or agent of the
Placement  Agent and hold them  harmless  against any losses,  claims,  damages,
expenses  or  liabilities  to  which  the  Placement  Agent  and/or  such  other
indemnified parties may become subject, which are related to or arise out of (i)
actions taken or omitted to be taken (including any untrue written statements of
a material fact made or alleged to have been made or any  statements of material
fact  omitted or alleged to have been  omitted in  connection  with any  written
statement by the Company) by the Company, its affiliates,  directors,  employees
or agent,  or (ii) actions taken or omitted to be taken by the  Placement  Agent
and/or any controlling person, director,  officer, employee,  affiliate or agent
of the Placement Agent with the Company's  written consent or in conformity with
its written instructions except to the extent that such losses, claims, damages,
expenses  (including  reasonable  fees and  expenses of  counsel),  liabilities,
actions,  proceedings,  investigations  (formal and  informal) or inquiries  are
caused by gross  negligence or willful  misconduct or bad faith of the Placement
Agent and/or any controlling person, director,  officer, employee,  affiliate or
agent of the Placement  Agent;  and in case any action shall be brought  against
the Placement Agent and/or any other party indemnified hereunder with respect to
which  indemnity is available  against the Company,  the  Placement  Agent shall
promptly  notify the Company in writing and the Company shall assume the defense
thereof,  including the employment of counsel selected by the Company reasonably
satisfactory  to the Placement  Agent and payment of all fees and expenses.  The
Placement Agent and/or any party  indemnified  hereunder shall have the right to
retain separate  counsel,  but the fees and expenses of such counsel shall be at
the expense of the Placement Agent or such other indemnified  party, as the case
may be, unless (i) the expenses of such counsel have been  expressly  assumed in
writing by the Company, (ii) the Company has failed to assume the defense or the
employ  of  counsel  satisfactory  to the  Placement  Agent,  or (iii) the named
parties to any such action  (including any impleaded  parties)  include both (a)
the Placement Agent or any such other  indemnified  party and (b) the Company or
any controlling person, director,  officer, employee,  affiliate or agent of the
Company, and the Placement Agent or such other indemnified party shall have been
advised by legal counsel that there may be one or more legal defenses  available
to it which are different  from or additional to those  available to the Company
or the  Company's  agents (in which case the Company shall not have the right to
assume the defense of such action on behalf of the  Placement  Agent and/or such
other indemnified party); it being understood that if the Placement Agent elects
not to have the Company  defend any claim  pursuant to this  clause  (iii),  the
Placement  Agent shall give the Company  the  opportunity  to be defended by the
legal  counsel  selected  by the  Placement  Agent;  and,  it being  understood,
further,  that the Company shall not, in connection  with any one such action or
separate,  substantially  similar  or related  actions in the same  jurisdiction
arising out of the same general allegations or circumstances,  be liable for the
reasonable fees and expenses of more than one separate firm of attorneys for the
Placement  Agent and all such  other  indemnified  parties,  which firm shall be
designated in writing by the Placement  Agent.  For actions  brought against the
Placement  Agent or such  other  indemnified  party for which  the  Company  has
assumed  the  defense,  the Company  agrees that it will not,  without the prior
consent of the Placement Agent,  settle or compromise or consent to the entry of
any judgment in any pending or threatened claim,  action or proceeding  relating
to the matters  contemplated  by the Placement  Agent's  engagement  unless such
settlement,  compromise  or consent  includes  an  unconditional  release of the
Placement Agent and such indemnified  parties from all liability arising or that
may arise out of such claim.  In addition,  the Company agrees to reimburse such
indemnified person for all expenses  (including fees and expenses of counsel) as
they are incurred by such  indemnified  person (upon receipt by the Company from
such indemnified person of an undertaking by such indemnified person promptly to
repay to the Company and such reimbursement upon a final judicial  determination
that such indemnified person is not entitled to indemnification  pursuant to the
preceding  paragraphs) in connection with investigating,  preparing or defending
any such action or claim,  whether or not in connection with litigation in which
any  indemnified  person  is a named  party.  The  Company  will  reimburse  the
Placement Agent for all  out-of-pocket  expenses incurred by the Placement Agent
by reason of any of its personnel  being involved in any such action against the
Placement Agent, the Company or the Company's directors.

                  (b) The Placement  Agent agrees to indemnify and hold harmless
the  Company  and/or  any  controlling  person,  director,   officer,  employee,
affiliate or agent of the Company to the same extent as the  indemnity  from the
Company to the Placement Agent set forth in paragraph (a) hereof,  but only with
respect to statements or omissions made in reliance upon and in conformity  with
written  information  furnished to the Company by the Placement  Agent expressly
for  use  in  the   Subscription   Agreement;   provided,   however,   that  any
indemnification  or  contribution  by the Placement  Agent  hereunder  shall not
exceed the amount of  compensation  received by the Placement  Agent pursuant to
Section 4 hereof.  If any action shall be brought against the Company and/or any
other party  indemnified  hereunder with respect to which indemnity is available
against the Placement  Agent pursuant to this paragraph (b), the Placement Agent
shall have the rights and duties  given to the Company by  paragraph  (a) above,
and the  Company  and/or any other  indemnified  party shall have the rights and
duties given to the Placement Agent by paragraph (a) above.

<PAGE>

                  (c) The  Company  and the  Placement  Agent  agree that if any
indemnification or reimbursement  sought pursuant to the preceding  paragraph is
finally judicially  determined to be unavailable  (except by reason of the gross
negligence   or  willful   misconduct   or  bad  faith  of  the  party   seeking
indemnification  or its controlling  persons,  directors,  officers,  employees,
affiliates  or agents,  as the case may be),  then the Company and the Placement
Agent shall  contribute to the  liabilities  for which such  indemnification  or
reimbursement  is held  unavailable  in such  proportion  as is  appropriate  to
reflect  (a) the  relative  benefits  to the  Company  on the one hand,  and the
Placement  Agent on the other hand, in connection  with the transaction to which
such  indemnification  or reimbursement  relates,  (b) the relative fault of the
parties, and (c) other equitable considerations  (provided,  however, that in no
event  shall the amount to be  contributed  by the  Placement  Agent  exceed the
amount of the fees actually received by the Placement Agent hereunder).

                  (d) The reimbursement,  indemnity and contribution obligations
of the Company and the Placement Agent under the preceding  paragraphs  shall be
in lieu of any right that the Placement Agent or the Company and/or any of their
respective controlling persons, directors,  officers,  employees,  affiliates or
agents may otherwise have, and shall be binding upon and inure to the benefit of
any successors, assigns, heirs, and personal representatives of the Company, the
Placement Agent or such other persons.

         10   Representations   and   Agreements   to  Survive   Delivery.   All
representations,   warranties,   covenants  and  agreements  contained  in  this
Agreement  shall be  deemed to be  representations,  warranties,  covenants  and
agreements  at the Initial  Closing  Date and, if  applicable,  each  Additional
Closing Date and Overcall  Closing Date, and such  representations,  warranties,
covenants and agreements,  including the indemnity and  contribution  agreements
contained  in  Section 9, shall  remain  operative  and in full force and effect
regardless of any  investigation  made by or on behalf of the Placement Agent or
any  indemnified  person,  or by or on behalf of the  Company  or any  person or
entity which is entitled to be  indemnified  under  Section 9, and shall survive
termination  of  this  Agreement  or the  issuance,  sale  and  delivery  of the
Securities.   In  addition,   notwithstanding  any  election  hereunder  or  any
termination  of this  Agreement,  and whether or not the terms of this Agreement
are  otherwise  carried  out, the  provisions  of Sections 7, 9, 10 and 12 shall
survive  termination  of this  Agreement and shall not be affected in any way by
such election or termination or failure to carry out the terms of this Agreement
or any part thereof.

         11       Notices.  All   communications    hereunder,  except as may be
otherwise  specifically provided herein, shall be in writing and, if sent to the
Placement  Agent,  shall be mailed,  or faxed and  confirmed  by letter,  to its
address set forth above,  with a copy to Merrill M. Kraines,  Esq.,  Fulbright &
Jaworski L.L.P.,  666 Fifth Avenue,  New York, New York 10103, or if sent to the
Company,  shall be mailed, or faxed and confirmed by letter, to Evercel, Inc., 2
Lee Mac Avenue, Danbury, CT 06810, Attention:  President, with a copy to Richard
A.  Krantz,  Esq.,  Robinson  & Cole,  LLP,  695  East  Main  Street,  Stamford,
Connecticut  06904. All notices hereunder shall be effective upon receipt by the
party to which it is addressed.
<PAGE>

         12       Assignment.  This Agreement shall not be assigned by any party
hereto without the prior written consent of the other parties hereto.

         13       Parties.  This Agreement shall inure solely to the benefit of,
and shall be binding upon,  the Placement  Agent and the Company and the persons
and  entities  referred to in Section 9 who are entitled to  indemnification  or
contribution, and their respective successors, legal representatives and assigns
(which shall not include any purchaser,  as such, of  Securities),  and no other
person shall have or be construed to have any legal or equitable  right,  remedy
or claim under or in respect of or by virtue of this  Agreement or any provision
herein contained.

         14  Construction.  This Agreement shall be construed in accordance with
the laws of the State of New York,  without  giving effect to its  principles of
conflict of laws.

         15 Entire  Agreement.  This  Agreement and the letter  agreement  dated
October 20, 1999 between the Company and the  Placement  Agent (the  "Engagement
Letter")  constitute and contain the entire agreement between the parties hereto
and  supersede any and all prior  agreements,  arrangements  and  understandings
between such parties  relating to the subject matter  hereof.  To the extent any
provision  of  this  Agreement  directly  conflicts  with  a  provision  of  the
Engagement Letter, the provisions of this Agreement shall control.

         16 Counterparts.  This Agreement may be executed in counterparts,  each
of which shall  constitute  an original and all of which,  when taken  together,
shall constitute one agreement.

<PAGE>

         If the foregoing  correctly  sets forth the  understanding  between us,
please so indicate in the space provided below for that purpose,  whereupon this
letter shall constitute a binding agreement between us.

                                  Very truly yours,

                                  EVERCEL, INC.

                                  By:__________________________________
                                     Name:
                                     Title:

Accepted as of the date first above written.
New York, New York

BURNHAM SECURITIES INC.

By:____________________________________
Name:
Title:

<PAGE>

                                    EXHIBITS

I.     -   Form of Certificate of Designations

II.    -   Form of Warrant

III.   -   Form of Selected Dealer Agreement

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