PLACEMENT AGENCY AGREEMENT

Nothing in this Agreement shall be construed to limit the ability of the Placement Agent or its affiliates to pursue, investigate, analyze, invest in, or engage in investment banking, financial advisory or any other business relationship with entities or persons other than the Company.

Section 2.       Representations, Warranties and Covenants of the Company .

The Company hereby represents, warrants and covenants to the Placement Agent as of the date hereof, and as of each Closing Date, as follows:

(a)           Securities Law Filings .  The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (Registration file No. 333-128334), which became effective on October 11, 2005, for the registration under the Securities Act of 1933, as amended (the “Act”) of the Shares.  On the date of the filing of such registration statement, the Company met the requirements for use of Form S-3 under the Act.  Such registration statement complies in all material respects with the requirements of the Act.  The Company will file with the Commission pursuant to Rule 424(b) under the Act a supplement to the form of prospectus included in such registration statement relating to a placement of the Shares and the plan of distribution thereof and the Company has advised the Placement Agent of all further information (financial and other) with respect to the Company to be set forth therein.  Such registration statement, including the exhibits thereto, as amended at the date of this Agreement, is hereinafter called the “Registration Statement”; such prospectus in the form in which it appears in the Registration Statement is hereinafter called the “Base Prospectus”; and each supplemented form of prospectus, in the form in which it will be filed with the Commission pursuant to Rule 424(b) is hereinafter called a “Prospectus Supplement.”  Any reference herein to the Registration Statement, the Base Prospectus or a Prospectus Supplement shall be deemed to refer to and include the documents, if any, which may be incorporated by reference therein (the “Incorporated Documents”) pursuant to Form S-3 which were filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on or before the date of this Agreement, or the issue date of the Base Prospectus or any Prospectus Supplement, as the case may be; and any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, the Base Prospectus or a Prospectus Supplement shall be deemed to refer to and include the filing of any document under the Exchange Act after the date of this Agreement, or the issue date of the Base Prospectus or any Prospectus Supplement, as the case may be, deemed to be incorporated therein by reference.  All references in this Agreement to financial statements and schedules and other information which is “contained,” “included” or “stated” in the Registration Statement or any Prospectus Supplement (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is or is deemed to be incorporated by reference in the Registration Statement or such Prospectus Supplement, as the case may be.

(b)           No Stop Order .  No stop order suspending the effectiveness of the Registration Statement or the use of the Base Prospectus or the Prospectus Supplement has been issued, and no proceeding for any such purpose is pending or has been initiated or, to the Company’s knowledge, is threatened by the Commission.

(c)           Compliance with Applicable Regulations .  The Registration Statement contains all exhibits and schedules as required by the Act.  Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material respects with the requirements of the Act and the applicable rules and regulations of the Commission thereunder and did not contain any 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.  Each of the Base Prospectus and each Prospectus Supplement, as of its respective date, complied (or in the case of any Prospectus Supplement will comply) in all material respects with the Act and the applicable rules and regulations of the

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Commission thereunder.  Each of the Base Prospectus and the Prospectus Supplement, as amended or supplemented, did not contain as of the effective date thereof, and will not as of each Closing Date contain, any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  The Incorporated Documents, if any, when they were filed with the Commission, conformed in all material respects to the requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder, and none of such documents, when they were filed with the Commission, contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein not misleading; and any further documents so filed and incorporated by reference in the Base Prospectus or Prospectus Supplement, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder, as applicable, and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  Notwithstanding the foregoing, the Company makes no representations or warranties as to the information contained in or omitted from any Prospectus Supplement or any amendment thereof or supplement thereto in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of the Placement Agent specifically for use in the Registration Statement or such Prospectus Supplement.  No post-effective amendment to the Registration Statement reflecting any facts or events arising after the effective date thereof which represent, individually or in the aggregate, a fundamental change in the information set forth therein is required to be filed with the Commission.

(d)           Reports and Documents, etc .  There are no documents required to be filed with the Commission in connection with the transaction contemplated hereby that (i) have not been filed as required pursuant to the Act or (ii) will not be filed within the requisite time period.  There are no contracts or other documents required to be described in any Prospectus Supplement, or to be filed as exhibits or schedules to the Registration Statement, which have not been or will not be described or filed as required.

(e)           Offering Materials Furnished to the Placement Agent .  The Company has delivered, or will as promptly as practicable deliver, to the Placement Agent complete conformed copies of the Registration Statement and of each consent and certificate of experts filed as a part thereof, and conformed copies of the Registration Statement (without exhibits) and the Base Prospectus and each Prospectus Supplement, as amended or supplemented, in such quantities and at such places as the Placement Agent reasonably requests.

(f)            Distribution of Offering Material .  The Company has not distributed and will not distribute, prior to each Closing Date, any offering material in connection with the offering and sale of the Shares other than the Base Prospectus and a Prospectus Supplement or the Registration Statement and copies of the documents incorporated by reference therein.  For the avoidance of doubt, any other material prepared and distributed solely by the Placement Agent is not deemed to be distributed by the Company for purposes of this paragraph (f).

(g)           The Placement Agency Agreement .  This Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company, enforceable against the Company in accordance with its terms, except as rights to indemnification and contribution hereunder may be limited by applicable law and except as the enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles.

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(h)           Authorization of the Shares .  The Shares have been duly authorized for issuance and sale.  The Shares, when issued and delivered by the Company to the Investors against payment therefor pursuant to this Agreement or any subscription agreement between the Company and such Investors, will be validly issued, fully paid and nonassessable.

(i)            No Applicable Registration or Other Similar Rights .  There are no persons with registration, preemptive or other similar rights to acquire any securities being offered in the Offering contemplated by this Agreement or to have any securities (whether equity, debt or any combination thereof) registered or qualified for sale under the Registration Statement or a Prospectus Supplement or included in the Offering contemplated by this Agreement, except, in each case, for such rights as have been duly waived or satisfied.

(j)            No Material Adverse Change .  Subsequent to the respective dates as of which information is given in the Base Prospectus and in any Prospectus Supplement:  (i) there has been no material adverse change or effect in the assets, properties, financial condition, or in the results of operations of the Company and the Subsidiaries (as defined in Section 2(m) below) taken as a whole (any such change or effect, where the context so requires, is called a “Material Adverse Change” or a “Material Adverse Effect”); (ii) the Company and the Subsidiaries have not incurred any material liability or obligation, indirect, direct or contingent, not in the ordinary course of business nor entered into any material transaction or agreement not in the ordinary course of business; and (iii) there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of capital stock or repurchase or redemption by the Company of any class of capital stock except as disclosed in the Incorporated Documents.

(k)           Independent Accountants .  To the Company’s knowledge, KPMG LLP, which have expressed their opinion with respect to the financial statements (which term as used in this Agreement includes the related notes and schedules thereto) and supporting schedules filed with the Commission as a part of the Registration Statement and incorporated by reference in the Base Prospectus or any Prospectus Supplement, are independent registered public accountants as required by the Act and the Exchange Act.

(l)            Preparation of the Financial Statements .  The financial statements (including all notes and schedules thereto) filed with the Commission as a part of the Registration Statement or included or incorporated by reference in the Base Prospectus or a Prospectus Supplement present fairly the financial position of the Company and its consolidated subsidiaries as of and at the dates indicated and the results of their operations and cash flows for the periods specified therein.  Such financial statements and supporting schedules, if any, have been prepared in conformity with generally accepted accounting principles as applied in the United States (“GAAP”), as applicable, applied on a consistent basis throughout the periods involved (provided that non-year-end financial statements are subject to normal recurring year-end audit adjustments and do not contain all footnotes required by GAAP).  No other financial statements or supporting schedules or exhibits are required by the Act or the rules and regulations of the Commission thereunder to be included in the Registration Statement, the Base Prospectus or the Prospectus Supplement.

(m)          Incorporation and Good Standing .  Each of the Company and its subsidiaries set forth in Exhibit B hereto (the “Subsidiaries”) has been duly organized and is validly existing and, as applicable, is a corporation in good standing under the laws of its jurisdiction of incorporation with full corporate power and authority to own its properties and other assets and conduct its business as described in the Prospectus Supplement, and is duly qualified or licensed to do business as a foreign corporation and, as applicable, is in good standing under the laws of each jurisdiction which requires such qualification or license, except where the failure to be so qualified or in good standing would not have a Material Adverse Effect.

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(n)           Capitalization and Other Capital Stock Matters .  The authorized, issued and outstanding capital stock of the Company is as set forth in the Registration Statement and in each Prospectus Supplement (other than for issuances after the dates thereof, if any, pursuant to employee benefit plans described in any Prospectus Supplement or upon exercise of outstanding options or warrants described in any Prospectus Supplement).  The Shares conform in all material respects to the description thereof contained in the Registration Statement as supplemented by the Prospectus Supplement.  The outstanding capital stock of the Company, and the outstanding options, warrants, or convertible securities of the Company, are as described in the Registration Statement as supplemented by the Prospectus Supplement, as of the date such information is presented therein.  As of the effective date of the Registration Statement, except as described in the Incorporated Documents, there were 14,475,047 shares of common stock outstanding.  Since the effective date of the Registration Statement, the Company has not issued any securities other than Common Stock of the Company pursuant to the exercise of previously outstanding options in connection with the Company’s option plans (the “Plans”) and options granted pursuant to the Plans in the ordinary course of business consistent with past practice, in each case as disclosed in the Registration Statement as supplemented by Prospectus Supplement.  All the issued and outstanding shares of the capital stock of the Company and the Subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable and have been issued in compliance, in all material respects, with federal and state securities laws, as applicable.  Except as set forth in the Registration Statement as supplemented by the Prospectus Supplement, all of the outstanding shares of capital stock of the Subsidiaries are owned, directly or indirectly, by the Company.  To the knowledge of the Company, since January 1, 2001, none of the outstanding shares of capital stock of the Company or any Subsidiary were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities.  There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company or any Subsidiary other than those described in the Registration Statement as supplemented by the Prospectus Supplement.  The descriptions of the Company’s stock option plans, bonus and other compensation arrangements, and the options, warrants or other rights granted thereunder, set forth in the Registration Statement as supplemented by the Prospectus Supplement accurately and fairly present in all material respects the information required to be described with respect to such plans, arrangements, options and rights.  Except as set forth in the Registration Statement as supplemented by the Prospectus Supplement, the Company does not have any subsidiaries or own directly or indirectly any of the capital stock or other equity or long-term debt securities or have any equity interest in any other person.

(o)           Stock Exchange Listing .  The Common Stock (including the Shares) is registered under the Exchange Act and is, or as of each Closing Date will be, listed on the Nasdaq National Market (the “NNM”).  The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or delisting or suspending from trading the Common Stock on the NNM, nor has the Company received any written notice from the Commission or the NNM that the Commission or the NNM is contemplating terminating or suspending such registration or listing.

(p)           No Consents, Approvals or Authorizations Required .  No consent, approval, authorization, filing with or order of any court or governmental agency or regulatory body or vote of the Company’s shareholders is required in connection with the performance by the Company of its obligations under this Agreement or the offering or sale of the Shares hereunder, except such as have been obtained or made or are contemplated by Section 2(a) or Section 5 to be obtained or made and any necessary qualification under the securities or blue sky laws of the various jurisdictions in which the Shares are being offered, under the terms of this Agreement, under the rules and regulations of the National Association of Securities Dealers, Inc. (the “NASD”), or under the rules and regulations of the NNM.

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(q)           Non-Contravention of Existing Instruments and Agreements .  Neither the issue and sale of the Shares nor the performance by the Company of its obligations under this Agreement nor the fulfillment of the terms hereof will conflict with, result in a breach or violation of, or the loss of any benefit under, or give rise to a right of acceleration or any other right, or the imposition of any lien, charge or encumbrance upon any property or assets of the Company or any Subsidiary pursuant to:  (i) the charter or by-laws of the Company or any Subsidiary; (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which the Company or any Subsidiary is a party or is bound or to which any of its property is subject and which conflict, breach, violation, loss of benefit, acceleration, imposition of lien, charge or encumbrance is reasonably likely to have a Material Adverse Effect; or (iii) any statute, law, rule, regulation, judgment, order or decree applicable to the Company or any Subsidiary, as the case may be, of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or such Subsidiary, as the case may be, or any of its property, the result of which is reasonably likely to have a Material Adverse Effect.

(r)            No Defaults or Violations .  None of the Company or any Subsidiary is in violation or default of:  (i) any provision of its charter or by-laws; (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which it is a party or by which it is bound or to which any of its property is subject; or (iii) any foreign, federal, state or local statute, law or rule applicable to the Company or any Subsidiary, as the case may be, or any regulation, judgment, order or decree of any court, governmental body, or agency having jurisdiction over the Company or such Subsidiary, as the case may be, or any of its property, as applicable, except in case of clause (ii) and (iii) any such violation or default which would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Change not specifically disclosed in the Registration Statement as supplemented by the Prospectus Supplement.

(s)           No Actions, Suits or Proceedings .  No action, suit or proceeding by or before any foreign, federal, state or local court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary, as the case may be, or any of its property is pending or, to the best knowledge of the Company, threatened that if adversely determined:  (i) could reasonably be expected to have a Material Adverse Effect on the performance of this Agreement or the consummation of any of the transactions contemplated hereby; or (ii) except as disclosed in the Registration Statement as supplemented by the Prospectus Supplement, could reasonably be expected to result in a Material Adverse Effect.

(t)            All Necessary Permits, Etc .  To the best of the Company’s knowledge, each of the Company and its Subsidiaries possesses such valid and current certificates, authorizations and permits issued by the appropriate foreign, federal, state or local regulatory agencies or bodies necessary to conduct its business as currently conducted, except to the extent that the failure to obtain such certificates, authorizations or permits would not have a Material Adverse Effect, and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of, or non-compliance with, any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, could reasonably be expected to result in a Material Adverse Change.

(u)           Title to Properties .  Neither the Company nor any Subsidiary owns any real property.  Each of the Company and its Subsidiaries has good and marketable title to all personal property and assets reflected as owned by it in the financial statements referred to in 2(l) above (or elsewhere in the Registration Statement as supplemented by the Prospectus Supplement) and which are material to the business of the Company or such Subsidiary, in each case free and clear of any security interests, mortgages, liens, encumbrances, claims and other defects, except such as would not reasonably be

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expected to result in a Material Adverse Effect.  The real property, improvements, equipment and personal property held under lease by each of the Company and its Subsidiaries are held under valid and enforceable leases, with such exceptions as are not material, and do not materially interfere with the use made or proposed to be made of such real property, improvements, equipment or personal property.  The Company and its Subsidiaries own or have valid rights to use the  intellectual property assets used in their business, necessary to conduct the business described in the Registration Statement as supplemented by the Prospectus Supplement, and no material right is expected to expire, terminate or be disposed of in the foreseeable future, except as disclosed therein.  Except as described in the Registration Statement as supplemented by the Prospectus Supplement, the Company has not received any written notice of, and neither the Company nor any Subsidiary has knowledge of, any infringement of or conflict with the rights of others, except where the loss of any such right would not be reasonably likely to have a Material Adverse Effect.

(v)           Tax Law Compliance .  Each of the Company and its Subsidiaries has filed all necessary foreign, federal, state and local income and franchise Tax returns, except to the extent that the failure to file such Tax returns would not have a Material Adverse Effect, and have paid all Taxes required to be paid by any of them and, if due and payable, any related or similar assessment, fine or penalty levied against any of them.  Adequate charges, accruals and reserves have been made in the applicable financial statements referred to in Section 2(l) above in respect of all federal, state and foreign income and franchise taxes for all periods as to which the Tax liability of the Company or any Subsidiary has not been finally determined.  Neither the Company nor any Subsidiary is aware of any Tax deficiency that has been or might reasonably be asserted or threatened against it that could reasonably be expected to result in a Material Adverse Change.  For purposes of this Agreement, the terms “Tax” and “Taxes” mean all federal, state, local and foreign taxes, and any other assessments of a similar nature (whether imposed directly or through withholding), including, without limitation, any interest, additions to tax, or penalties applicable thereto.  All such Tax returns are true, complete and correct in all material respects.

(w)          No Transfer Taxes or Other Fees .  There are no transfer Taxes or other similar fees or charges under United States law or the laws of any state or any political subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement or the issuance and sale by the Company of the Shares.

(x)            Accounting Controls .  Each of the Company and its Subsidiaries (i) makes and keeps accurate books and records, and (ii) maintains a system of accounting controls sufficient to provide reasonable assurances that:  (A) transactions are executed in accordance with management’s general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP, the Act and the Exchange Act and the rules and regulations of the Commission thereunder, and to maintain accountability for assets; (C) access to assets is permitted only in accordance with management’s general or specific authorization; and (D) recorded assets are compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(y)           Company not an “Investment Company.”   Neither the Company nor any Subsidiary is, or immediately after receipt of payment for the Shares will be, an “investment company” or an entity “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended.  Each of the Company and its Subsidiaries will conduct its business in a manner so that it will not become subject to the Investment Company Act.

(z)            Insurance .  Each of the Company and its Subsidiaries is insured by recognized, financially sound and reputable institutions with policies in such amounts and with such deductibles and covering such risks as are prudent and customary in the business in which it is engaged, including directors and officers liability.  Neither the Company nor any Subsidiary has any reason to believe that it

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will not be able: (i) to renew its existing insurance coverage as and when such policies expire; or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted.  Neither the Company nor any Subsidiary has been denied any insurance coverage which it has sought or for which it has applied, such as would have a Material Adverse Effect.

(aa)         Labor Matters .  No material labor disturbance by the employees of the Company or any Subsidiary exists or, to the knowledge of the Company or any Subsidiary, is threatened or imminent, and neither the Company nor any Subsidiary is aware of any existing, threatened or imminent labor disturbance by the employees of any of its principal suppliers, manufacturers, contractors or customers that could reasonably be expected to result in a Material Adverse Effect.

(bb)         No Price Stabilization or Manipulation .  The Company has not taken and will not take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Shares.

(cc)         Related Party Transactions .  There are no business relationships or related-party transactions involving the Company or any Subsidiary required by the Act to be described in the Registration Statement as supplemented by the Prospectus Supplement, which have not been described, or incorporated by reference, therein as required.

(dd)         Exchange Act Reports Filed .  The Company has timely filed all reports required of it to be filed pursuant to the Exchange Act and has filed all such reports in the manner prescribed thereby.

(ee)         Exhibits .  Each agreement described in or filed as an exhibit to the Registration Statement, the Base Prospectus and/or any Prospectus Supplement, including all documents incorporated by reference therein, is in full force and effect and is valid and enforceable by the Company or a Subsidiary, as the case may be, in accordance with its terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally.  Neither the Company nor any Subsidiary, as the case may be, nor, to the knowledge of the Company or any such Subsidiary, any other party, is in default in the observance or performance of any term or obligation to be performed by it under any such agreement, and no event has occurred that with notice or lapse of time or both would constitute such a default, in any such case where such default or event would have a Material Adverse Effect.

(ff)           Blue Sky; NASD Matters.   With respect to the compensation to be paid to the Placement Agent under this Agreement, the Company has made the initial filings required by Rule 2710 of the NASD with resp