QUANTUM FUEL SYSTEMS TECHNOLOGIES WORLDWIDE, INC.

9,000,000 Shares of Common Stock, par value $0.001 per share

and Warrants to Purchase 13,500,000 Shares of Common Stock

PLACEMENT AGENCY AGREEMENT

August 19, 2008

Merriman Curhan Ford & Co.

600 California Street, 9th Floor

San Francisco, California 94108

Dear Sir or Madam:

Quantum Fuel Systems Technologies Worldwide, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell 9,000,000 shares (the "Offered Shares")
of common stock, par value $0.001 per share (the "Common Stock"), and warrants
to purchase 13,500,000 shares of Common Stock (the "Offered Warrants") in the
form attached hereto as Exhibit A, to certain investors (collectively, the
"Investors"). The Offered Shares and the Offered Warrants shall be sold together
as units, each unit consisting of one Offered Share and one Offered Warrant to
purchase 1.5 shares of Common Stock (such units are referred to herein
individually as the "Offered Security" and collectively as the "Offered
Securities"). The Offered Warrants shall be immediately separable from the
Offered Securities. The Company desires to engage you as its placement agent
(the "Placement Agent") in connection with such issuance and sale. The Common
Stock issuable upon exercise of the Offered Warrants is herein referred to as
the "Warrant Shares." The Offered Securities are more fully described in the
Registration Statement and the Prospectus, each as hereinafter defined.

The Company hereby confirms as follows its agreements with the Placement Agent.

1. Agreement to Act as Placement Agent. On the basis of the representations,
warranties and agreements of the Company herein contained and subject to all the
terms and conditions of this Agreement, the Placement Agent agrees to act as the
Company's exclusive placement agent in connection with the issuance and sale, on
a best efforts basis, by the Company of the Offered Securities to the Investors.
The Placement Agent shall use commercially reasonable efforts to assist the
Company in obtaining performance by each Investor whose offer to purchase
Offered Securities has been solicited by the Placement Agent and accepted by the
Company, but the Placement Agent shall not, except as otherwise provided in this
Agreement, have any liability to the Company in the event any such purchase is
not consummated for any reason. The Company shall pay to the Placement Agent an
aggregate amount equal to 6.0% of the proceeds received by the Company from the
sale of the Offered Shares as set forth on the cover page of the Prospectus.

2. Delivery and Payment. At or prior to 10:00 a.m., New York City time, on
August 25, 2008, or at such other time on such other date as may be agreed upon
by the Company and the Placement Agent (such date is hereinafter referred to as
the "Closing Date"), each of the Investors will deposit an amount equal to the
price per share as shown on the cover page of the Prospectus multiplied by the
number of Offered Securities purchased by it with the Company. At the Closing,
the Company shall (a) deliver the Offered Shares to the Investors, which
delivery may be made through the facilities of The Depository Trust Company, and
(b) shall deliver the Offered Warrants pursuant to the instructions of each
Investor in the applicable Subscription Agreements. The closing (the "Closing")
shall take place at the office of Greenberg Traurig, 200 Park Avenue, New York,
New York 10166. All actions taken at the Closing shall be deemed to have
occurred simultaneously.

3. Representations and Warranties of the Company. The Company represents and
warrants and covenants to the Placement Agent as follows:

(a) A "shelf" registration statement on Form S-3 (File No. 333-152133) with
respect to the Common Stock and certain other securities of the Company has been
prepared by the Company in conformity with the requirements of the Securities
Act of 1933, as amended (the "Act"), and the rules and regulations (the "Rules
and Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, and has been filed with the Commission. The Company and the
transactions contemplated by this Agreement meet the requirements and comply
with the conditions for the use of Form S-3. The Registration Statement meets
the requirements of Rule 415(a)(1)(x) under the Act and complies in all
materials respects with said rule. As used in this Agreement:

(i) "Applicable Time" means 9:15 a.m. (New York City time) on the date of this
Agreement;

(ii) Effective Date" means any date as of which any part of the Registration
Statement became, or is deemed to have become, effective under the Act in
accordance with the Rules and Regulations;

(iii) "Issuer Free Writing Prospectus" means each "issuer free writing
prospectus" (as defined in Rule 433(h) of the Rules and Regulations);

(iv) "Preliminary Prospectus" means any preliminary prospectus relating to the
Offered Securities included in the Registration Statement or filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations, including any
preliminary prospectus supplement thereto relating to the Offered Securities;

(v) "Pricing Disclosure Materials" means, as of the Applicable Time, the most
recent Preliminary Prospectus, together with each Issuer Free Writing Prospectus
listed on Schedule 1 hereto, and the information set forth on Schedule 2 hereto;

(vi) "Prospectus" means the final prospectus relating to the Offered Securities
including any prospectus supplement thereto relating to the Offered Securities,
as filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations; and

(vi) "Registration Statement" means, collectively, the various parts of the
registration statement described in Section 3(a), each as amended as of the
Effective Date for such part, including any Preliminary Prospectus or the
Prospectus and all exhibits to such registration statement.

Any reference to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any documents incorporated or deemed to be incorporated by
reference therein pursuant to Form S-3 under the Act as of the date of such
Preliminary Prospectus or the Prospectus, as the case may be. Any reference
herein to the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any document filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), after the effective date of the
Registration Statement, the date of such Preliminary Prospectus or the date of
the Prospectus, as the case may be, which is incorporated therein by reference.

(b) The Registration Statement has heretofore become effective under the Act or,
with respect to any registration statement to be filed to register the offer and
sale of Offered Securities pursuant to Rule 462(b) under the Act, will be filed
with the Commission and become effective under the Act no later than 10:00 p.m.,
New York City time, on the date of determination of the public offering price
for the Offered Securities; no stop order of the Commission preventing or
suspending the use of any Prospectus, or the effectiveness of the Registration
Statement, has been issued, and no proceedings for such purpose have been
instituted or, to the Company's knowledge, are contemplated by the Commission.

(c) The Company was not at the time of the initial filing of the Registration
Statement, has not been since the date of such filing, and will not be on the
Closing Date, an "ineligible issuer" (as defined in Rule 405 under the Act). The
Company has been since the time of initial filing of the Registration Statement
and continues to be eligible to use Form S-3 for the offering of the Offered
Securities.

(d) The Registration Statement, at the time it became effective, as of the date
hereof, and at the Closing Date conformed and will conform in all material
respects to the requirements of the Act and the Rules and Regulations. Any
Preliminary Prospectus conformed, and the Prospectus will conform, when filed
with the Commission pursuant to Rule 424(b) and on the Closing Date to the
requirements of the Act and the Rules and Regulations. The documents
incorporated by reference in any Preliminary Prospectus or the Prospectus
conformed, and any documents incorporated therein on or prior to the Closing,
when filed with the Commission to the requirements of the Exchange Act or the
Act, as applicable, and the rules and regulations of the Commission thereunder.

(e) The Registration Statement did not, as of the Effective Date, contain 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 not misleading.

(f) The Prospectus will not, as of its date and on the Closing Date, contain 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; provided, however,
that the Company makes no representation or warranty with respect to any
statement contained in the Prospectus in reliance upon and in conformity with
information concerning the Placement Agent and furnished in writing by the
Placement Agent to the Company expressly for use in the Prospectus, as set forth
in Section 8(b).

(g) The documents incorporated by reference in any Preliminary Prospectus or the
Prospectus did not, and any documents filed and incorporated by reference
therein on or prior to the Closing will not, when filed with the Commission,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated in such document or necessary to make the statements in
such document, in light of the circumstances under which they were made, not
misleading.

(h) The Pricing Disclosure Materials did not, as of the Applicable Time, contain
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 light of
the circumstances under which they were made, not misleading; provided, however
, that the Company makes no representation or warranty with respect to any
statement contained in the Pricing Disclosure Materials in reliance upon and in
conformity with information concerning the Placement Agent and furnished in
writing by the Placement Agent to the Company expressly for use in the Pricing
Disclosure Materials, as set forth in Section 8(b).

(i) Each Issuer Free Writing Prospectus, when considered together with the
Pricing Disclosure Materials as of the Applicable Time, did not contain 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 light of the
circumstances under which they were made, not misleading.

(j) Each Issuer Free Writing Prospectus conformed or will conform in all
material respects to the requirements of the Act and the Rules and Regulations
on the date of first use, and the Company has complied or will comply with any
filing requirements applicable to such Issuer Free Writing Prospectus pursuant
to the Rules and Regulations. Each Issuer Free Writing Prospectus, as of its
issue date and at all subsequent times through the completion of the public
offer and sale of the Offered Securities, did not, does not and will not include
any information that conflicted, conflicts or will conflict with the information
contained in the Registration Statement or the Prospectus, including any
document incorporated by reference therein that has not been superseded or
modified. The Company has retained in accordance with the Rules and Regulations
all Issuer Free Writing Prospectuses that were not required to be filed pursuant
to the Rules and Regulations.

(k) The Company is, and at the Closing Date will be, duly organized, validly
existing and in good standing under the laws of the state of Delaware. The
Company (i) has, and at the Closing Date will have, full power and authority to
conduct all the activities conducted by it, to own or lease all the assets owned
or leased by it and to conduct its business as described in the Registration
Statement and the Prospectus and (ii) is, and at the Closing Date will be, duly
licensed or qualified to do business and in good standing as a foreign
organization in all jurisdictions in which the nature of the activities
conducted by it or the character of the assets owned or leased by it makes such
licensing or qualification necessary; except, in each case, where the failure to
be so qualified or in good standing or have such power or authority would not,
individually or in the aggregate, have a material adverse effect or would not
reasonably be expected to have a material adverse effect on or affecting the
business, properties, management, financial position, stockholders' equity or
results of operations of the Company (a "Material Adverse Effect"). Complete and
correct copies of the articles or certificate of incorporation and of the bylaws
of the Company and all amendments thereto have been delivered or made available
to the Placement Agent, and no changes therein will be made subsequent to the
date hereof and prior to the Closing Date.

(l) Except as set forth in the Registration Statement, the Company does not have
any subsidiaries.

(m) The issued and outstanding shares of capital stock of the Company have been
validly issued, are fully paid and nonassessable and, other than as set forth in
the Registration Statement, are not subject to any preemptive rights, rights of
first refusal or similar rights. The Company has an authorized, issued and
outstanding capitalization as set forth in the Registration Statement and the
Prospectus as of the dates referred to therein. Except as set forth in the
Registration Statement and the Prospectus or pursuant to plans or arrangements
described therein, the Company does not have outstanding any options to
purchase, or any rights or warrants to subscribe for, or any securities or
obligations convertible into, or exchangeable for, or any contracts or
commitments to issue or sell, any shares of capital stock or other securities.

(n) The Company has full legal right, power and authority to enter into this
Agreement and the proposed purchase agreements to be executed by each Investor
and the Company, substantially in the form attached hereto as Exhibit C (the
"Subscription Agreements" and together with this Agreement, the "Transaction
Documents"), and perform the transactions contemplated hereby and thereby. The
Transaction Documents have been authorized and this Agreement has been, and the
Subscription Agreement will be, validly executed and delivered by the Company
and this Agreement is, and the Subscription Agreement will be, legal, valid and
binding agreements of the Company enforceable against the Company in accordance
with their respective terms, subject to the effect of applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally and equitable
principles of general applicability.

(o) The issuance and sale of each of the Offered Shares and the Offered Warrants
have been duly authorized by the Company, and the Offered Shares, when issued
and paid for in accordance with the Transaction Documents, will be duly and
validly issued, fully paid and nonassessable and will not be subject to
preemptive or similar rights. The Warrant Shares have been duly authorized and
reserved for issuance pursuant to the terms of the Offered Warrants, and the
Warrant Shares, when issued by the Company upon valid exercise of the Offered
Warrants and payment of the exercise price, will be duly and validly issued,
fully paid and nonassessable and will not be subject to preemptive or similar
rights. The Offered Securities, when issued, will conform in all material
respects to the description thereof set forth in or incorporated into the
Prospectus.

(p) The financial statements and the related notes included in the Registration
Statement and the Prospectus present fairly, in all material respects, the
financial condition of the Company as of the dates thereof and the results of
operations and cash flows at the dates and for the periods covered thereby in
conformity with generally accepted accounting principles ("GAAP"). No other
financial statements or schedules of the Company or any other entity are
required by the Act or the Rules and Regulations to be included in the
Registration Statement or the Prospectus.

(q) To the Company's knowledge, Ernst & Young LLP and McGladrey and Pullen, LLP
(the "Accountants"), who have reported on such financial statements and
schedules, are registered independent public accountants with respect to the
Company as required by the Act and the Rules and Regulations and by the rules of
the Public Company Accounting Oversight Board. The financial statements of the
Company and the related notes and schedules included in the Registration
Statement and the Prospectus have been prepared in conformity with the
requirements of the Act and the Rules and Regulations and present fairly the
information shown therein.

(r) The Company is, and at the Closing Date will be, in compliance with all of
the provisions of the Sarbanes Oxley Act of 2002 and the rules and regulations
promulgated therewith (the "Sarbanes Oxley Act") with which the Company is
required to comply. To the Company's knowledge, there is, and has been, no
failure on the part of any of the Company's current officers, in their
capacities as such, to comply with any applicable provisions of the Sarbanes
Oxley Act with respect to the Company. The Company maintains systems of internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company has established disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15 and 15d-15). The Company
presented in its Form 10-K for the fiscal year ended April 30, 2008 (the
"Evaluation Date") the conclusions of the certifying officers about the
effectiveness o the disclosure controls and procedures based upon their
evaluations as of the Evaluation Date. Since the Evaluation Date, there have
been no significant changes in the Company's internal controls (as such term is
defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to the
Company's knowledge, in other factors that could significantly affect the
Company's internal controls.

(s) Except as set forth in or otherwise contemplated by the Registration
Statement, since the date of the most recent financial statements of the Company
included or incorporated by reference in the Registration Statement and prior to
Closing, (i) there has not been and will not have been any change in the capital
stock of the Company (except for changes in the number of outstanding shares of
Common Stock of the Company due to the issuance of shares upon the exercise of
stock options, purchases under the Company's Employee Stock Purchase Plan) or
long-term debt of the Company or any dividend or distribution of any kind
declared, set aside for payment, paid or made by the Company on any class of
capital stock, or any material adverse change, or any development that would
reasonably be expected to result in a material adverse change in, or affecting,
the business, properties, management, financial position, stockholders' equity
or results of operations of the Company (a "Material Adverse Change") and
(ii) the Company has not sustained, and does not expect to sustain, any material
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor disturbance or
dispute or any action, order or decree of any court or arbitrator or
governmental or regulatory authority, except in each case as otherwise disclosed
in the Registration Statement and the Prospectus.

(t) Since the date as of which information is given in the Registration
Statement or the Prospectus, the Company has not entered into, and will not
enter into prior to the Closing, any transaction or agreement, not in the
ordinary course of business, that is material to the Company, or incurred or
will incur prior to the Closing any liability or obligation, direct or
contingent, not in the ordinary course of business, that is material to the
Company.

(u) The Company does not own any real property. The Company has good and valid
title to all personal property described in the Registration Statement or the
Prospectus as being owned by it that are material to the business of the
Company, in each case free and clear of all liens, encumbrances and claims
except those that (i) do not materially interfere with the use made and proposed
to be made of such property by the Company or (ii) would not reasonably be
expected, individually or in the aggregate, if determined adversely to the
Company, to have a Material Adverse Effect. Any real property described in the
Registration Statement or the Prospectus as being leased by the Company that is
material to the business of the Company is held by the Company under valid,
existing and enforceable leases, except those that (A) do not materially
interfere with the use made or proposed to be made of such property by the
Company or (B) would not be reasonably expected, individually or in the
aggregate, to have a Material Adverse Effect.

(v) The Company is not, nor upon completion of the transactions contemplated
herein will it be, an "investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act").

(w) There are no legal, governmental or regulatory actions, suits or proceedings
pending, nor, to the Company's knowledge, any legal, governmental or regulatory
investigations, to which the Company is a party or to which any property of the
Company is the subject that, individually or in the aggregate, would reasonably
be expected to have a Material Adverse Effect or materially and adversely affect
the ability of the Company to perform its obligations under the Transaction
Documents (collectively, the "Actions"); to the Company's knowledge, no such
Actions are threatened by any governmental or regulatory authority or threatened
by others; and there are no current or pending legal, governmental or regulatory
investigations, actions, suits or proceedings that are required under the Act to
be described in the Prospectus that are not so described.

(x) The Company has, and at the Closing Date will have, (i) all governmental
licenses, permits, consents, orders, approvals and other authorizations
necessary to carry on its respective business as presently conducted except
where the failure to have such governmental licenses, permits, consents, orders,
approvals and other authorizations would not have a Material Adverse Effect,
(ii) complied with all laws, regulations and orders applicable to either it or
its business, including but not limited to, the laws contained in, and the rules
and regulations promulgated under, the Employee Retirement Income Security Act
of 1974, as amended, and the Currency and Foreign Transactions Reporting Act of
1970, as amended, except where the failure to so comply would not have a
Material Adverse Effect, and (iii) performed all its obligations required to be
performed, and is not, and at the Closing Date will not be, in default, under
any indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement, lease, contract or other agreement or
instrument (collectively, a "contract or other agreement") to which it is a
party or by which its property is bound or subject, except where such failure to
perform or default would not have a Material Adverse Effect, and, to the
Company's knowledge, no other party under any material contract or other
agreement to which it is a party is in default in any respect thereunder where
such default would have a Material Adverse Effect. The Company is not in
violation of any provision of its organizational or governing documents.

(y) All consents, authorizations, approvals and orders required in connection
with the Transaction Documents have been obtained, except such as may be
required under state securities or Blue Sky Laws or the by-laws and rules of the
Financial Industry Regulatory Authority ("FINRA") or the NASDAQ Global Market.

(z) Neither the execution of the Transaction Documents, nor the issuance,
offering or sale of the Offered Securities, nor the consummation of any of the
transactions contemplated herein and therein, nor the compliance by the Company
with the terms and provisions hereof and thereof will conflict with, or will
result in a breach of, any of the terms and provisions of, or has constituted or
will constitute a default under, or has resulted in or will result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to the terms of any contract or other agreement
to which the Company may be bound or to which any of the property or assets of
the Company is subject, except such conflicts, breaches or defaults as may have
been waived nor will such action result (x) in any violation of the provisions
of the organizational or governing documents of the Company or (y) in any
violation of the provisions of any statute or any order, rule or regulation
applicable to the Company or of any court or of any federal, state or other
regulatory authority or other government body having jurisdiction over the
Company, except for such violations that could not reasonably be expected to
have a Material Adverse Effect.

(aa) There is no document or contract of a character required to be described in
the Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that is not described or filed as required. All such
contracts to which the Company is a party have been authorized, executed and
delivered by the Company, constitute valid and binding agreements of the
Company, and are enforceable against the Company in accordance with the terms
thereof, subject to the effect of applicable bankruptcy, insolvency or similar
laws affecting creditors' rights generally and equitable principles of general
applicability.

(bb) The Company and, to the knowledge of the Company, its directors, officers
or controlling persons have not taken, directly or indirectly, any action
intended, or which might reasonably be expected, to cause or result, under the
Act or otherwise, in, or which has constituted, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Common Stock.

(cc) No holder of securities of the Company has rights to the registration of
any securities of the Company as a result of the filing of the Registration
Statement or the transactions contemplated by this Agreement, except for such
rights as have been waived or satisfied.

(dd) The Common Stock is currently listed on the NASDAQ Global Market. Except as
set forth in the Registration Statement, the Company has not, in the 12 months
preceding the date hereof, received notice from the NASDAQ Global Market to the
effect that the Company is not in compliance with the listing or maintenance
requirements. The Company is, and expects that in the foreseeable future that it
will continue to be, in compliance with such listing and maintenance
requirements.

(ee) The Company is not involved in any material labor dispute nor is any such
dispute known by the Company to be threatened.

(ff) The business and operations of the Company have been and are being
conducted in compliance with all applicable laws, ordinances, rules,
regulations, licenses, permits, approvals, plans, authorizations or requirements
relating to occupational safety and health, or pollution, or protection of
health or the environment (including, without limitation, those relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants or hazardous or toxic substances, materials or wastes into ambient
air, surface water, groundwater or land, or relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of chemical substances, pollutants, contaminants or hazardous or toxic
substances, materials or wastes, whether solid, gaseous or liquid in nature) of
any governmental department, commission, board, bureau, agency or
instrumentality of the United States, any state or political subdivision
thereof, or any foreign jurisdiction, and all applicable judicial or
administrative agency or regulatory decrees, awards, judgments and orders
relating thereto, except where the failure to be in such compliance will not,
individually or in the aggregate, have a Material Adverse Effect; and the
Company has not received any notice from any governmental instrumentality or any
third party alleging any material violation thereof or liability thereunder
(including, without limitation, liability for costs of investigating or
remediating sites containing hazardous substances and/or damages to natural
resources).

(gg) Except as disclosed in the Registration Statement, (i) the Company owns or
has obtained valid and enforceable licenses or options for the inventions,
patent applications, patents, trademarks (both registered and unregistered),
trade names, copyrights and trade secrets necessary for the conduct of its
business as currently conducted (collectively, the "Company Intellectual
Property"); and (ii) (a) there are no third parties that have any ownership
rights to any Company Intellectual Property described in the Registration
Statement or the Prospectus that would preclude the Company from conducting its
business as currently conducted and have a Material Adverse Effect, except for
the ownership rights of the owners of the Company Intellectual Property licensed
or optioned by the Company; (b) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others challenging
the rights of the Company in or to any Company Intellectual Property, other than
claims which would not reasonably be expected to have a Material Adverse Effect;
(c) there is no pending or, to the Company's knowledge, threatened action, suit,
proceeding or claim by others challenging the validity or scope of any Company
Intellectual Property, other than actions, suits, proceedings and claims which
would not reasonably be expected to have a Material Adverse Effect; and
(d) there is no pending or, to the Company's knowledge, threatened action, suit,
proceeding or claim by others that the Company infringes or otherwise violates
any patent, trademark, copyright, trade secret or other proprietary right of
others, other than actions, suits, proceedings and claims which would not
reasonably be expected to have a Material Adverse Effect; provided, however,
that with respect to reexamination proceedings filed with the United States
Patent and Trademark Office (the "USPTO"), opposition proceedings in comparable
foreign authorities, or unpublished or provisional applications filed with the
USPTO or comparable foreign authorities, the representations and warranties set
forth in clauses (b), (c) or (d) above, are qualified as to the Company's
knowledge.

(hh) The Company has filed all necessary federal, state and foreign income and
franchise tax returns, after taking into account all applicable extensions
obtained, except where the failure to file would not reasonably be expected to
have a Material Adverse Effect, and has paid or accrued all taxes shown as due
thereon, and the Company has no knowledge of any tax deficiency which has been
or might be asserted or threatened against it which could have a Material
Adverse Effect.

(ii) The Company maintains insurance of the types and in the amounts that the
Company reasonably believes are appropriate for its business, including, but not
limited to, insurance covering real and personal property owned or leased by the
Company against theft, damage, destruction, or acts of vandalism, all of which
insurance, to the knowledge of the Company, is in full force and effect.

(jj) Neither the Company, nor, to the knowledge of the Company, any director,
officer, agent or employee of the Company, has directly or indirectly, (i) made
any unlawful contribution to any candidate for public office, or failed to
disclose fully any contribution in violation of law, (ii) made any payment to
any United States federal or state governmental officer or official, or other
person charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States or any jurisdiction
thereof, (iii) violated or is in violation of any provisions of the U.S. Foreign
Corrupt Practices Act of 1977 or (iv) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.

(kk) The Company has not distributed and, prior to the later to occur of the
Closing Date and completion of the distribution of the Offered Securities, will
not distribute any offering material in connection with the offering and sale of
the Offered Securities other than the Registration Statement, any Preliminary
Prospectus, the Prospectus and any Issuer Free Writing Prospectus to which the
Placement Agent have consented.

(ll) No relationship, direct or indirect, exists between or among the Company,
on the one hand, and the directors, officers, stockholders, customers or
suppliers of the Company, on the other, which is required by the Act to be
disclosed in the Registration Statement and the Prospectus and is not so
disclosed.

(mm) The Company has not sold or issued any securities that would be integrated
with the offering of the Offered Securities contemplated by this Agreement
pursuant to the Act, the Rules and Regulations or the interpretations thereof by
the Commission.

(nn) The Company is not a party to any contract, agreement or understanding with
any person (other than this Agreement) that would give rise to a valid claim
against the Company or the Placement Agent (or the Placement Agent's co-agent or
sub-agent, if any) for a brokerage commission, finder's fee or like payment in
connection with the offering and sale of the Offered Securities.

(oo) To enable the Placement Agent to rely on Rule 2710(b)(7)(C)(i) of FINRA,
the Company represents that it has non-affiliated, public common equity float of
at least $150 million or non-affiliated, public common equity float of $100
million and annual trading volume of at least 3,000,000 shares and (b) has been
subject to the Exchange Act reporting requirements for a period of at least 36
months.

4. Agreements of the Company. The Company covenants and agrees with the
Placement Agent as follows:

(a) The Registration Statement has become effective, and if Rule 430A is used or
the filing of the Prospectus is otherwise required under Rule 424(b), the
Company will file the Prospectus (properly completed if Rule 430A has been
used), subject to the prior approval of the Placement Agent (which approval
shall not be unreasonably withheld or delayed), pursuant to Rule 424(b) within
the prescribed time period and will provide a copy of such filing to the
Placement Agent promptly following such filing.

(b) The Company will not, during such period as the Prospectus would be required
by law to be delivered in connection with sales of the Offered Securities by an
underwriter or dealer in connection with the offering contemplated by this
Agreement, file any amendment or supplement to the Registration Statement or the
Prospectus unless a copy thereof shall first have been submitted to the
Placement Agent within a reasonable period of time prior to the filing thereof
and the Company has in good faith considered any reasonable objections or
comments of the Placement Agent.

(c) The Company will notify the Placement Agent promptly, and will, if
requested, confirm such notification in writing, (1) when any post-effective
amendment to the Registration Statement becomes effective, but only during the
period mentioned in Section 4(b); (2) of any request by the Commission for any
amendments to the Registration Statement or any amendment or supplements to the
Prospectus or any Issuer Free Writing Prospectus or for additional information,
but only during the period mentioned in Section 4(b); (3) of the issuance by the
Commission of any stop order preventing or suspending the effectiveness of the
Registration Statement, or the initiation of any proceedings for that purpose or
the threat thereof, but only during the period mentioned in Section 4(b); (4) of
becoming aware of the occurrence of any event during the period mentioned in
Section 4(b) that in the reasonable judgment of the Company makes any statement
made in the Registration Statement or the Prospectus untrue in any material
respect or that requires the making of any changes in the Registration Statement
or the Prospectus in order to make the statements therein, in light of the
circumstances in which they are made, not misleading; and (5) of receipt by the
Company of any notification with respect to any suspension of the qualification
of the Offered Securities for offer and sale in any jurisdiction. If at any time
the Commission shall issue any order suspending the effectiveness of the
Registration Statement in connection with the offering contemplated hereby, the
Company will make every reasonable effort to obtain the withdrawal of any such
order at the earliest possible moment. If the Company has omitted any
information from the Registration Statement, pursuant to Rule 430A, it will use
its best efforts to comply with the provisions of and make all requisite filings
with the Commission pursuant to said Rule 430A and to notify the Placement Agent
promptly of all such filings.

(d) If, at any time when a Prospectus relating to the Offered Securities is
required to be delivered under the Act, the Company becomes aware of the
occurrence of any event as a result of which the Prospectus, as then amended or
supplemented, would, in the reasonable judgment of counsel to the Company or
counsel to the Placement Agent, include any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or the Registration Statement, as then amended or supplemented,
would, in the reasonable judgment of counsel to the Company or counsel to the
Placement Agent, include any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein not misleading,
or if for any other reason it is necessary, in the reasonable judgment of
counsel to the Company or counsel to the Placement Agent, at any time to amend
or supplement the Prospectus or the Registration Statement to comply with the
Act or the Rules and Regulations, the Company will promptly notify the Placement
Agent and, subject to Section 4(b) hereof, will promptly prepare and file with
the Commission, at the Company's expense, an amendment to the Registration
Statement or an amendment or supplement to the Prospectus that corrects such
statement or omission or effects such compliance and will deliver to the
Placement Agent, without charge, such number of copies thereof as the Placement
Agent may reasonably request. The Company consents to the use of the Prospectus
or any amendment or supplement thereto by the Placement Agent.

(e) The Company will furnish to the Placement Agent and its counsel, without
charge (i) one conformed copy of the Registration Statement as originally filed
with the Commission and each amendment thereto, including financial statements
and schedules, and all exhibits thereto, (ii) so long as a prospectus relating
to the Offered Securities is required to be delivered under the Act, as many
copies of each Issuer Free Writing Prospectus, Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto as the Placement Agent may
reasonably request.

(f) The Company will comply with all the undertakings contained in the
Registration Statement.

(g) Prior to the sale of the Offered Securities to the Investors, the Company
will cooperate with the Placement Agent and its counsel in connection with the
registration or qualification of the Offered Securities for offer and sale under
the state securities or Blue Sky laws of such jurisdictions as the Placement
Agent may reasonably request; provided, that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action which would subject it to general service of
process in any jurisdiction where it is not now so subject.

(h) The Company will not make any offer relating to the Offered Securities that
would constitute an Issuer Free Writing Prospectus without the prior written
consent of the Placement Agent.

(i) The Company will retain in accordance with the Rules and Regulations all
Issuer Free Writing Prospectuses not required to be filed pursuant to the Rules
and Regulations.

(j) The Company will apply the net proceeds from the offering and sale of the
Offered Securities in the manner set forth in the Prospectus under the caption
"Use of Proceeds."

(k) The Company will use its best efforts to ensure that the Offered Shares are
listed or quoted on the NASDAQ Global Market at the time of the Closing.

(l) The Company will not at any time, directly or indirectly, take any action
intended, or which might reasonably be expected, to cause or result in, or which
will constitute, stabilization of the price of the Offered Shares to facilitate
the sale or resale of any of the Offered Shares.

5. Agreements of the Placement Agent. The Placement Agent agrees that it shall
not include any "issuer information" (as defined in Rule 433 under the Act) in
any "free writing prospectus" (as defined in Rule 405) used or referred to by
the Placement Agent without the prior consent of the Company (any such issuer
information with respect to whose use the Company has given its consent,
"Permitted Issuer Information"). The Placement Agent also agrees to provide to
each Investor, prior to the Closing, a copy of the Prospectus and any amendments
or supplements thereto.

6. Expenses. Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay all costs and
expenses incident to the performance of the obligations of the Company under
this Agreement, including but not limited to, costs and expenses of or relating
to (1) the preparation, printing and filing of the Registration Statement
(including each pre- and post-effective amendment thereto) and exhibits thereto,
any Issuer Free Writing Prospectus, each Preliminary Prospectus, the Prospectus
and any amendments or supplements thereto, including all fees, disbursements and
other charges of counsel and accountants to the Company, (2) the preparation and
delivery of certificates representing the Offered Securities, (3) furnishing
(including costs of shipping and mailing) such copies of the Registration
Statement (including all pre- and post-effective amendments thereto), the
Prospectus and any Preliminary Prospectus or Issuer Free Writing Prospectus, and
all amendments and supplements thereto, as may be requested for use in
connection with the direct placement of the Offered Securities, (4) the listing
of the Common Stock on the NASDAQ Global Market, (5) any filings required to be
made by the Placement Agent with FINRA and the fees, disbursements and other
charges of counsel for the Placement Agent in connection therewith (provided
that such fees, disbursements and other charges of counsel shall be subject to
the limit in the last sentence of this Section 6), (6) the registration or
qualification of the Offered Securities for offer and sale under the securities
or Blue Sky laws of such jurisdictions designated pursuant to Section 4(g),
including the reasonable fees, disbursements and other charges of counsel to the
Placement Agent in connection therewith (provided that such fees, disbursements
and other charges of counsel shall be subject to the limit in the last sentence
of this Section 6) and the preparation and printing of preliminary, supplemental
and final Blue Sky memoranda, (7) fees, disbursements and other charges of
counsel to the Company and (8) fees and disbursements of Ernst & Young LLP
incurred in delivering the letter described in Section 7(f) of this Agreement.
The Company shall reimburse the Placement Agent for all reasonable travel, legal
and other out-of-pocket expenses in an aggregate amount not to exceed $25,000.

7. Conditions of the Obligations of the Placement Agent. The obligations of the
Placement Agent hereunder are subject to the following conditions:

(a)(i) No stop order suspending the effectiveness of the Registration Statement
shall have been issued, and no proceedings for that purpose shall be pending or
threatened by any securities or other governmental authority (including, without
limitation, the Commission), (ii) no order suspending the effectiveness of the
Registration Statement or the qualification or registration of the Offered
Securities under the securities or Blue Sky laws of any jurisdiction shall be in
effect and no proceeding for such purpose shall be pending before, or threatened
by any securities or other governmental authority (including, without
limitation, the Commission), (iii) any request for additional information on the
part of the staff of any securities or other governmental authority (including,
without limitation, the Commission) shall have been complied with to the
satisfaction of the staff of the Commission or such authorities and (iv) after
the date hereof and prior to the Closing no amendment or supplement to the
Registration Statement, any Issuer Free Writing Prospectus or the Prospectus
shall have been filed unless a copy thereof was first submitted to the Placement
Agent and the Placement Agent did not object thereto in good faith.

(b) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there shall not have been a
Material Adverse Change, whether or not arising from transactions in the
ordinary course of business, in each case other than as set forth in or
contemplated by the Registration Statement and the Prospectus and (ii) the
Company shall not have sustained any material loss or interference with its
business or properties from fire, explosion, flood or other casualty, whether or
not covered by insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree, that is not set forth in the
Registration Statement and the Prospectus, if in the reasonable judgment of the
Placement Agent any such development makes it impracticable or inadvisable to
consummate the sale and delivery of the Offered Securities to Investors as
contemplated hereby.

(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no litigation
or other proceeding instituted against the Company or any of its officers or
directors in their capacities as such, before or by any Federal, state or local
court, commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, which litigation or proceeding, in the reasonable
judgment of the Placement Agent, would have a Material Adverse Effect.

(d) Each of the representations and warranties of the Company contained herein
shall be true and correct in all material respects at the Closing Date, as if
made on such date, and all covenants and agreements herein contained to be
performed on the part of the Company and all conditions herein contained to be
fulfilled or complied with by the Company at or prior to the Closing Date shall
have been duly performed, fulfilled or complied with in all material respects.

(e) At the Closing, the Placement Agent shall have received an opinion, dated
the Closing Date, of Kerr, Russell and Weber PLC, counsel to the Company, in
form and substance reasonably satisfactory to the Placement Agent.

(f) No later than at the Closing, Ernst & Young LLP shall have furnished to the
Placement Agent a letter, dated no later than the Closing Date (the "Comfort
Letter"), addressed to the Placement Agent and in form and substance
satisfactory to the Placement Agent, (i) confirming that they are independent
public accountants with respect to the Company within the meaning of the Act and
the Rules and Regulations and (ii) stating, as of the date hereof (or, with
respect to matters involving changes or developments since the respective dates
as of which specified financial information is given in the Pricing Disclosure
Materials and the Prospectus, as of a date not more than five days prior to the
date hereof), the conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by accountants'
"comfort letters" in connection with registered public offerings.

(g) At the Closing, the Company shall furnish to the Placement Agent a
certificate, dated the date of its delivery, signed by each of the Chief
Executive Officer and the Chief Financial Officer of the Company, in form and
substance reasonably satisfactory to the Placement Agent to the effect that each
signer has carefully examined the Registration Statement, the Prospectus and the
Pricing Disclosure Materials, and that to each of such person's knowledge:

1. (A) As of the date of such certificate, (x) the Registration Statement does
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading and (y) neither the Prospectus nor the Pricing Disclosure
Materials contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading and (B) no event has occurred as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein not untrue or misleading in any material respect.

2. Each of the representations and warranties of the Company contained in this
Agreement were, when originally made, and are, at the time such certificate is
delivered, true and correct in all material respects.

3. Each of the covenants required herein to be performed by the Company on or
prior to the date of such certificate has been duly, timely and fully performed
and each condition herein required to be complied with by the Company on or
prior to the delivery of such certificate has been duly, timely and fully
complied with.

4. Subsequent to the date of the most recent financial statements in the
Prospectus, there has been no Material Adverse Change.

5. No order suspending the effectiveness of the Registration Statement or the
qualification or registration of the Offered Securities under the securities or
Blue Sky laws of any jurisdiction are in effect and no proceeding for such
purpose is pending before, or threatened, to the Company's knowledge or in
writing by, any securities or other governmental authority (including, without
limitation, the Commission).

6. The Company has complied with any request for additional information from the
staff of any securities or other governmental authority (including, without
limitation, the Commission) to the satisfaction of the staff of the Commission
or such authorities.

(h) At the Closing, the Company shall furnish to the Placement Agent a
certificate, dated the date of its delivery, signed by the Secretary of the
Company, in form and substance reasonably satisfactory to the Placement Agent.

8. Indemnification.

(a) The Company shall indemnify and hold harmless the Placement Agent, its
directors, officers, employees and agents and each person, if any, who controls
the Placement Agent within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, liabilities,
expenses and damages, joint or several, (including any and all investigative,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim asserted), to
which it, or any of them, may become subject under the Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, liabilities, expenses or damages arise out of or are based on
(ii) any untrue statement or alleged untrue statement of any material fact
contained in (A) any Preliminary Prospectus, the Registration Statement or the
Prospectus or any amendment or supplement thereto, (B) any Issuer Free Writing
Prospectus or any amendment or supplement thereto or (C) any Permitted Issuer
Information used or referred to in any "free writing prospectus" (as defined in
Rule 405) used or referred to by the Placement Agent and (D) any application or
other document, or any amendment or supplement thereto, executed by the Company
based upon written information furnished by or on behalf of the Company filed in
any jurisdiction in order to qualify the Offered Securities under the securities
or Blue Sky laws thereof or filed with the Commission or any securities
association or securities exchange (each, an "Application"), or (iii) the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement, the Prospectus or any Issuer Free Writing Prospectus, or
any amendment or supplement thereto, or in any Permitted Issuer Information or
any Application a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading; provided, however, that the Company will not be liable to
the extent that such loss, claim, liability, expense or damage arises from the
sale of the Offered Securities in the public offering to any person and is based
solely on an untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to the
Placement Agent furnished in writing to the Company by the Placement Agent
expressly for inclusion in the Registration Statement, any Preliminary
Prospectus, the Prospectus, any Issuer Free Writing Prospectus or in any
amendment or supplement thereto or in any Permitted Issuer Information or any
Application (as set forth in Section 8(b) below); provided, further, that such
indemnity with respect to any Preliminary Prospectus, Issuer Free Writing
Prospectus or any Permitted Issuer Information shall not inure to the benefit of
the Placement Agent (or any person controlling any of the Placement Agent) from
whom the person asserting any such loss, claim, damage, liability or action
purchased Offered Securities that are the subject thereof to the extent that any
such loss, claim, damage or liability results from the fact that the Placement
Agent failed to send or give a copy of the Preliminary Prospectus, Prospectus
(as amended or supplemented) or Issuer Free Writing Prospectus to such person at
or prior to the confirmation of the sale of such Offered Securities to such
person in any case where such delivery is required by the Act unless such
failure to deliver the Prospectus (as amended or supplemented) was the result of
noncompliance by the Company with Section 4(d). This indemnity agreement will be
in addition to any liability which the Company may otherwise have.

(b) The Placement Agent will indemnify and hold harmless the Company, each
person, if any, who controls the Company within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, each director of the Company and each
officer of the Company who signs the Registration Statement to the same extent
as the foregoing indemnity from the Company to the Placement Agent, but only
insofar as losses, claims, liabilities, expenses or damages arise out of or are
based on any untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to the
Placement Agent furnished in writing to the Company by the Placement Agent
expressly for use in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any Issuer Free Writing Prospectus. This indemnity agreement will
be in addition to any liability that the Placement Agent might otherwise have.
The Company acknowledges that, for all purposes under this Agreement, the name
of the Placement Agent and the paragraph relating to placement agent's fees and
reimbursement of expenses appearing under the caption "Plan of Distribution" in
the Prospectus constitute the only information relating to the Placement Agent
furnished in writing to the Company by the Placement Agent expressly for
inclusion in the Registration Statement, any Preliminary Prospectus or the
Prospectus.

(c) Any party that proposes to assert the right to be indemnified under this
Section 8 will, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 8, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 8 unless, and only to the extent that,
such omission prejudiced the indemnifying party. If any such action is brought
against any indemnified party and it notifies the indemnifying party of its
commencement, the indemnifying party will be entitled to participate in and, to
the extent that it elects by delivering written notice to the indemnified party
promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel reasonably satisfactory to the
indemnified party, and after notice from the indemnifying party to the
indemnified party of its election to assume the defense, the indemnifying party
will not be liable to the indemnified party for any legal or other expenses
except as provided below and except for the reasonable costs of investigation
subsequently incurred by the indemnified party in connection with the defense.
The indemnified party will have the right to employ its own counsel in any such
action, but the fees, disbursements and other charges of such counsel will be at
the expense of such indemnified party unless (1) the indemnifying party has
agreed in writing to pay such fees, expenses and other charges, (2) the
indemnified party has reasonably concluded (based on advice of counsel) that a
conflict exists (based on advice of counsel to the indemnified party) between
the indemnified party and the indemnifying party that would prevent the counsel
selected by the indemnifying party from representing the indemnified party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (3) the indemnifying party
has not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one separate
firm admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other charges
will be reimbursed by the indemnifying party promptly as they are incurred. The
indemnifying party will not, without the prior written consent of the
indemnified party (which consent will not be unreasonably withheld), settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification has been
sought hereunder, unless such settlement, compromise or consent includes an
unconditional release of the indemnified party from all liability arising out of
such claim, action, suit or proceeding. An indemnifying party will not be liable
for any settlement of any action or claim effected without its written consent
(which consent will not be unreasonably withheld).

(d) In order to provide for just and equitable contribution in circumstances in
which the indemnification provided for in the foregoing paragraphs of this
Section 8 is applicable in accordance with its terms but for any reason is held
to be unavailable from the Company or the Placement Agent, the Company and the
Placement Agent will contribute to the total losses, claims, liabilities,
expenses and damages (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted, but after deducting any
contribution received by the Company from persons other than the Placement Agent
such as persons who control the Company within the meaning of the Act or the
Exchange Act, officers of the Company who signed the Registration Statement and
directors of the Company, who also may be liable for contribution) to which the
Company and the Placement Agent may be subject in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on the one
hand and the Placement Agent on the other. The relative benefits received by the
Company on the one hand and the Placement Agent on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering (before
deducting Company expenses) received by the Company as set forth in the table on
the cover page of the Prospectus bear to the fee received by the Placement Agent
hereunder. If, but only if, the allocation provided by the foregoing sentence is
not permitted by applicable law, the allocation of contribution shall be made in
such proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence but also the relative fault of the
Company, on the one hand, and the Placement Agent on the other, with respect to
the statements or omissions which resulted in such loss, claim, liability,
expense or damage, or action in respect thereof, as well as any other relevant
equitable considerations with respect to such offering. Such relative fault
shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Placement Agent, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Placement Agent agrees that it would not be just and equitable if
contributions pursuant to this Section 8(d) were to be determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, liability, expense or
damage, or action in respect thereof, referred to above in this Section 8(d)
shall be deemed to include, for purpose of this Section 8(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), the Placement Agent shall not be required to
contribute any amount in excess of the fee received by it, and no person found
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) will be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 8(d), any person
who controls a party to this Agreement within the meaning of the Act or the
Exchange Act will have the same rights to contribution as that party, and each
officer of the Company who signed the Registration Statement will have the same
rights to contribution as the Company, subject in each case to the provisions
hereof. Any party entitled to contribution, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim for
contribution may be made under this Section 8(d), will notify any such party or
parties from whom contribution may be sought, but the omission so to notify will
not relieve the party or parties from whom contribution may be sought from any
other obligation it or they may have under this Section 8(d). No party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).

9. Termination.

(a) The obligations of the Placement Agent under this Agreement may be
terminated at any time prior to the Closing Date, by notice to the Company from
the Placement Agent, without liability on the part of the Placement Agent to the
Company if, prior to delivery and payment for the Offered Securities, in the
sole judgment of the Placement Agent (i) trading in the Common Stock of the
Company shall have been suspended by the Commission or by the NASDAQ Global
Market, (ii) trading in securities generally on the NASDAQ Global Market shall
have been suspended or limited or minimum or maximum prices shall have been
generally established on any of such exchange or additional material
governmental restrictions, not in force on the date of this Agreement, shall
have been imposed upon trading in securities generally by any of such exchange
or by order of the Commission or any court or other governmental authority,
(iii) a general banking moratorium shall have been declared by Federal or New
York State authorities or (iv) any material adverse change in the financial or
securities markets in the United States or any outbreak or material escalation
of hostilities or declaration by the United States of a national emergency or
war or other calamity or crisis shall have occurred, the effect of any of which
is such as to make it, in the sole judgment of the Placement Agent,
impracticable or inadvisable to market the Offered Securities on the terms and
in the manner contemplated by the Prospectus.

(b) If this Agreement shall be terminated pursuant to any of the provisions
hereof, or if the sale of the Offered Securities provided for herein is not
consummated because any condition to the obligations of the Placement Agent set
forth herein is not satisfied or because of any refusal, inability or failure on
the part of the Company to perform any agreement herein or comply with any
provision hereof, the Company will, subject to demand by the Placement Agent,
reimburse the Placement Agent for all reasonable out-of-pocket expenses incurred
in connection herewith in an aggregate amount not to exceed $25,000.

10. No Fiduciary Duty. The Company acknowledges and agrees that in connection
with this offering, sale of the Offered Securities or any other services the
Placement Agent may be deemed to be providing hereunder, notwithstanding any
preexisting relationship, advisory or otherwise, between the parties or any oral
representations or assurances previously or subsequently made by the Placement
Agent: (i) no fiduciary or agency relationship between the Company and any other
person, on the one hand, and the Placement Agent, on the other, exists; (ii) the
Placement Agent is not acting as advisors, experts or otherwise, to the Company,
including, without limitation, with respect to the determination of the offering
price of the Offered Securities, and such relationship between the Company, on
the one hand, and the Placement Agent, on the other, is entirely and solely
commercial, based on arms-length negotiations; (iii) any duties and obligations
that the Placement Agent may have to the Company with respect to the offering
contemplated by this Agreement shall be limited to those duties and obligations
specifically stated herein; and (iv) the Placement Agent and its respective
affiliates may have interests that differ from those of the Company. The Company
hereby waives any claims that the Company may have against the Placement Agent
with respect to any breach of fiduciary duty in connection with this offering.

11. Notices. Notice given pursuant to any of the provisions of this Agreement
shall be in writing and, unless otherwise specified, shall be mailed or
delivered (a) if to the Company, at the office of the Company, 17872 Cartwright
road, Irvine, California 92614, Attention: Alan P. Niedzwiecki, with copies to
Kerr, Russell and Weber, PLC, 500 Woodward Avenue, Suite 2500, Detroit, Michigan
48226, Attention: Patrick J. Haddad, Esq., or (b) if to the Placement Agent, at
the office of Merriman Curhan Ford & Co., 600 California Street, 9th Floor, San
Francisco, California 94108, Attention: Alex Bernstein, with copies to Greenberg
Traurig, 2375 East Camelback Road, Phoenix, Arizona 85016, Attention: Robert S.
Kant, Esq. Any such notice shall be effective only upon receipt. Any notice
under Section 8 may be made by facsimile or telephone, but if so made shall be
subsequently confirmed in writing.

12. Survival. The respective representations, warranties, agreements, covenants,
indemnities and other statements of the Company and the Placement Agent set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, any of its officers or
directors, the Placement Agent or any controlling person referred to in
Section 8 hereof and (ii) delivery of and payment for the Offered Securities.
The respective agreements, covenants, indemnities and other statements set forth
in Sections 6 and 8 hereof shall remain in full force and effect, regardless of
any termination or cancellation of this Agreement.

13. Successors. This Agreement shall inure to the benefit of and shall be
binding upon the Placement Agent, the Company and their respective successors
and legal representatives, and nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any other person any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained, this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person except that (i) the
indemnification and contribution contained in Sections 8(a) and (d) of this
Agreement shall also be for the benefit of the directors, officers, employees
and agents of the Placement Agent and any person or persons who control any of
the Placement Agent within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, (ii) the indemnification and contribution contained in
Sections 8(b) and (d) of this Agreement shall also be for the benefit of the
directors of the Company, the officers of the Company who have signed the
Registration Statement and any person or persons who control the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act. No
Investor shall be deemed a successor because of such purchase, and (iii) as set
forth in the Subscription Agreement, the Investors may rely on the
representations, warranties, and covenants of the Company contained herein.

14. Applicable Law. The validity and interpretations of this Agreement, and the
terms and conditions set forth herein, shall be governed by and construed in
accordance with the laws of the state of New York, without giving effect to any
provisions relating to conflicts of laws.

15. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

16. Entire Agreement. This Agreement constitutes the entire understanding
between the parties hereto as to the matters covered hereby and supersedes all
prior understandings, written or oral, relating to such subject matter.

Please confirm that the foregoing correctly sets forth the agreement between the
Company and the Placement Agent.

Very truly yours,

QUANTUM FUEL SYSTEMS TECHNOLOGIES WORLDWIDE, INC.

By:

Name: Kenneth R. Lombardo

Title: Vice President-Legal and General Counsel

Confirmed as of the date first above mentioned:

MERRIMAN CURHAN FORD & CO.

By:

Name: Alex Bernstein

Title: Managing Director

 

 

SCHEDULE 1

ISSUER FREE WRITING PROSPECTUSES

None.

SCHEDULE 2

TERM SHEET INFORMATION

Issuer:

 

Quantum Fuel Systems Technologies Worldwide, Inc., a Delaware corporation (the
"Company").

     

Securities Offered:

 

Up to an aggregate of (i) 9,000,000 shares (the "Shares") of the Company's
common stock, $0.001 par value per share, and (ii) warrants to purchase up to
13,500,000 shares of common stock (the "Warrants") (the "Offering"). The Shares
and Warrants will be sold together as units, with each unit consisting of one
share of common stock and one Warrant to purchase 1.5 shares of common stock.
The Warrants are not attached to the shares of common stock being offered as
part of the units. There will be no minimum offering amount.

     

Warrants:

 

The exercise price of the Warrants shall be $4.00 per share of common stock. The
Warrants are exercisable at any time prior to August 25, 2015. The Warrants
shall have the terms and conditions substantially as set forth in the Form of
Warrant. A summary of the Warrants is attached as Exhibit A.

     

Purchase Price:

 

$2.12 per unit.

     

Use of Proceeds to Company:

 

The Company intends to use the net proceeds received from the sale of the
securities for general corporate purposes, repaying debt, funding contractual
commitments, expansion of the Company's solar business, funding capital
expenditures, and providing working capital.

     

Purchase and Closing Date:

 

The Company and each investor participating in the Offering (each an "Investor")
shall execute a Subscription Agreement. It is expected that the closing of the
Offering shall occur on or about August 25, 2008.

     

Risk Factors:

 

An investment in the Securities involves a high degree of risk. See the
disclosure relating to the risks affecting the Company set forth or incorporated
by reference in the base prospectus included in the registration statement
relating to this Offering and the documents filed by the Company with the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended.

     

Nasdaq Global Market Symbol:

 

QTWW

     

Confidential Information:

 

The recipient of this Term Sheet and the materials attached hereto agrees with
the Company and Merriman Curhan Ford & Co. to maintain in confidence this
disclosed information, together with any other non-public information regarding
the Company obtained from the Company and Merriman Curhan Ford & Co. or their
agents during the course of the proposed Offering, and to comply with the
recipient's obligations under U.S. and state securities laws.

     

Placement Agent:

 

The Company has engaged Merriman Curhan Ford & Co. to act as placement agent in
connection with the Offering. The placement agent will receive a fee of 6.0% of
the proceeds of the Offering and expense reimbursement of no more than $25,000.

                 

EXHIBIT A TO SCHEDULE 2 OF PLACEMENT AGENCY AGREEMENT

DESCRIPTION OF WARRANTS

Each purchaser of units will receive, for each unit purchased, one share of our
common stock and one warrant representing the right to purchase 1.5 shares of
common stock at an exercise price of $4.00 per share of common stock. The
warrants will be exercisable at any time prior to August 21, 2015. The exercise
price is subject to appropriate adjustment in the event of stock dividends,
stock splits, reorganizations or similar events affecting our common stock and
the exercise price and number of warrants held by a purchaser (or such
purchaser's direct or indirect transferee) are subject to appropriate adjustment
in the event of cash dividends or other distributions to holders of shares of
our common stock. The exercise price is also subject to standard weighted
average anti-dilution protections which means that under certain circumstances
the exercise price of the warrants would be adjusted downward if at any time the
warrants are outstanding we issue (or are deemed to issue) securities at a price
less than the then applicable exercise price for the warrants. The standard
weighted average anti-dilution provisions do not apply to any issuance (or
deemed issuance) of: (i) securities issued to employees, officers or directors
of, or consultants to, us pursuant to any stock option agreement, stock option
plan or equity incentive plan, including any shares of common stock issuable
upon the exercise of options or warrants issued pursuant to such agreement or
plan, (ii) securities issued upon conversion of outstanding convertible debt
(including in payment of the Make Whole Amount), (iii) securities issued in
payment of our obligations under the term notes issued under our credit facility
and outstanding as of the date of the purchase agreement, (iv ) securities
issued upon the exercise of any warrants outstanding as of the date of the
purchase agreement, (iv) securities issued as payment-in-kind for professional
services rendered to us; (v) securities upon the exercise or exchange of or
conversion of any securities issued pursuant to the purchase agreement or in
connection with the transaction contemplated thereby; (vi) securities issued
pursuant to acquisitions or strategic transactions; (vii) securities issued in
connection with any stock split, stock dividend or recapitalization of our
company; and (viii) securities issued in connection with any registered,
underwritten primary public offering with gross proceeds greater than $25
million.  

There is no established public trading market for the warrants, and we do not
expect a market to develop. We do not intend to apply for listing the warrants
on any securities exchange or for quotation on The NASDAQ Global Market. Without
an active market, the liquidity of the warrants will be limited. In addition, in
the event our common stock price does not exceed the per share exercise price of
the warrants during the period when the warrants are exercisable, the warrants
will not have any value.

Holders of the warrants may exercise their warrants to purchase shares of our
common stock for cash on or before the termination date by delivering an
exercise notice, appropriately completed and duly signed, and payment of the
exercise price for the number of shares for which the warrant is being
exercised. Warrants may be exercised in whole or in part, and any portion of a
warrant not exercised prior to the termination date shall be and become void and
of no value.

Upon the holder's exercise of a warrant, we will issue the shares of common
stock issuable upon exercise of the warrant within three trading days of our
receipt of notice of exercise and payment of the aggregate exercise price,
subject to surrender of the warrant.

The shares of common stock issuable on exercise of the warrants will be, when
issued in accordance with the warrants, duly and validly authorized, issued and
fully paid and non-assessable. We will authorize and reserve at least that
number of shares of common stock equal to the number of shares of common stock
issuable upon exercise of all outstanding warrants.

If, at any time the warrant is outstanding, we consummate any fundamental
transaction, as described in the warrants and generally including any
consolidation or merger into another corporation, the consummation of a
transaction whereby another entity acquires more than 50% of our outstanding
common stock, or sell all or substantially all of our assets, or other
transaction in which our common stock is converted into or exchanged for other
securities or other consideration, the holder of any warrants will thereafter
receive upon exercise of the warrants, the securities or other consideration to
which a holder of the number of shares of common stock then deliverable upon the
exercise or conversion of such warrants would have been entitled upon such
consolidation or merger or other transaction.

The exercisability of the warrants may be limited in certain circumstances if,
upon exercise, the holder (together with the holder's affiliates and any other
persons or entities acting together with the holder as a group) would hold more
than 9.99% of our total common stock issued and outstanding. The holder of the
warrant has the ability, upon providing us not less than 61 days' prior written
notice, to increase or decrease the foregoing percentage, provided that the
percentage cannot at any time exceed 9.99%. The absence of an effective
registration statement relating to the common stock issuable upon exercise of
the warrants shall not provide the holder with the right to net-settle the
warrant in cash. Similarly, the absence of an effective registration statement
or applicable exemption from registration does not alleviate our obligation to
deliver common stock issuable upon exercise of the warrant. If we fail to timely
deliver the certificates or deliver certificates with a restrictive legend in a
net-settle situation, we are subject to a penalty of 1% per month until we
satisfy our delivery requirements up to a maximum of 10% of the exercise price
paid for shares for which we failed to effect proper delivery.

The holder of a warrant will not possess any rights as a shareholder under that
warrant until the holder exercises the warrant. The warrants may be transferred
independent of the common stock with which they were issued, subject to
applicable laws.

EXHIBIT A TO PLACEMENT AGENCY AGREEMENT

FORM OF WARRANT

EXHIBIT B TO PLACEMENT AGENCY AGREEMENT

FORM OF SUBSCRIPTION AGREEMENT