PLACEMENT AGENCY AGREEMENT

(b)                                  The term of the Placement Agent’s exclusive engagement will be six months; however, the Company may terminate the engagement at any time and for any reason upon 5 days written notice to the Placement Agent.  Upon termination, the Placement Agent will be entitled to collect all fees earned pursuant to the terms hereof and, to the extent provided herein, to be reimbursed for all expenses incurred through the date of termination.  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 Agreements of the Company .

Except as set forth in the Registration Statement, the Base Prospectus or the Prospectus Supplement, the Company hereby represents, warrants and covenants to the Placement Agent as of the date hereof, and as of the Closing Date of the Offering, as follows:

(a)                                   Securities Law Filings .  The Company has filed with the Securities and Exchange Commission (the “ Commission ”) the Registration Statement (as defined below), which became effective on January 16, 2009, for the registration under the Securities Act of 1933, as amended (the “ Act ”), of the Shares.  On the date of the filing of the Registration Statement and the date on which the Registration Statement became effective, the Company met the requirements for use of Form S-3 under the Act.  Such registration statement meets the requirements set forth in Rule 415(a)(1)(x) under the Act and complies in all other material respects with said Rule.  The Company will file with the Commission pursuant to Rule 424(b) under the Act and the rules and regulations thereunder 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 material 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 the 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 the Prospectus Supplement shall be deemed to refer to and include the documents incorporated by reference therein (the “ Incorporated Documents ”) pursuant to Item 12 of 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 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 the 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 and prior to the time of the Closing (as defined below), or the issue date of the Base Prospectus or the 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 the 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 the 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.

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(c)                                   Compliance with Applicable Regulations .  The Registration Statement (and any further documents to be filed with the Commission in connection with the Offering) contains or will contain, as applicable, 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 or becomes effective, complied in all material respects with the Act and the Exchange Act and the applicable rules and regulations of the Commission thereunder and did not and, as amended or supplemented, if applicable, will 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 the Prospectus Supplement, as of its respective date, complied in all material respects with the Act and the Exchange Act and the applicable rules and regulations of the Commission thereunder.  Each of the Base Prospectus and the Prospectus Supplement, as amended or supplemented, did not and will not contain as of the date thereof 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, 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, when read together with the other information in the Registration Statement, contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Base Prospectus or Prospectus Supplement prior to the Closing, 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 when read together with the other information in the Registration Statement, will not contain any untrue statement of a material fact or omit to state a material fact necessary 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 the 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 the 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)                                  No Offers.  Prior to the execution of this Agreement, the Company has not, directly or indirectly, offered or sold any Shares by means of any “prospectus” (within the meaning of the Act) or used any “prospectus” (within the meaning of the Act) in connection with the offer or sale of the Shares, in each case other than the Base Prospectus and the Prospectus Supplement (if the parties utilize the Base Prospectus and the Prospectus Supplement at or prior to the time of receipt and acceptance by the Company of an executed Subscription Agreement); the Company has not, directly or indirectly, prepared, used or referred to any free writing prospectus (as defined in Rule 405 under the Act) except in compliance with Rules 164 and 433 under the Act; assuming that such free writing prospectus is so sent or given after the Registration Statement was filed with the Commission (and after such free writing prospectus was, if required pursuant to Rule 433(d) under the Act, filed with the Commission), and the Registration Statement includes a prospectus that, other than by reason of Rule 433 or Rule 431 under the Act, satisfies the requirements of Section 10 of the Act; the parties hereto agree and understand that the content of any and all “road shows” (as defined in Rule 433 under the Act) related to the offering of the Shares contemplated hereby is solely the property of the Company.

(e)                                Reports and Documents, etc .  There are no documents required to be filed with the Commission in connection with the transaction contemplated hereby that (x) have not been filed as required pursuant to the Act or (y) will not be filed within the requisite time period.  There are no material

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contracts or other documents required to be described in the Prospectus Supplement, or to be filed as exhibits or schedules to the Registration Statement, which have not been described or filed as required.

(f)                                  Offering Materials Furnished to the Placement Agent .  The Company has delivered, or upon request 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, as applicable, filed as a part thereof, and conformed copies of the Registration Statement (without exhibits) and the Base Prospectus and the Prospectus Supplement, as amended or supplemented, in such quantities and at such places as the Placement Agent reasonably requests.

(g)                                  Distribution of Offering Material .  The Company has not distributed and will not distribute, prior to the Closing Date, any offering material in connection with the offering and sale of the Shares other than the Base Prospectus and the 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 (g).

(h)                                  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.

(i)                                      Authorization of the Shares .  The Shares have been duly authorized for issuance and sale, and the Shares, when issued and delivered by the Company to the Investors against payment therefor pursuant to this Agreement and the terms of the Subscription Agreements, will be validly issued, fully paid and nonassessable.

(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, or any development that could reasonably be expected to result in a material adverse change or effect, in the condition, financial or otherwise, or in the business, operations or prospects of the Company and the Subsidiaries (as defined 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.

(k)                                   No Default.  Neither the Company nor the Subsidiaries is in breach or violation of or in default under (nor has any event occurred which, with notice, lapse of time or both, would result in any breach or violation of, constitute a default under or give the holder of any indebtedness (or a person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a part of such indebtedness under) (A) its charter or bylaws or other organizational or charter documents, or (B) any indenture, mortgage, deed of trust, bank loan or credit agreement or other evidence of indebtedness, or any license, lease, contract or other agreement or instrument to which it is a party or by which it or any of its properties may be bound or affected, or (C) any federal, state, local or foreign law, regulation or rule, or (D) any rule or regulation of any self-regulatory organization or other non-governmental regulatory authority (including, without limitation, the rules and regulations of NASDAQ), or (E) any

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decree, judgment or order applicable to it or any of its properties, except, with respect to clauses (B), (C), (D) or (E), for such breaches, violations, defaults and events as would not, individually or in the aggregate, have a Material Adverse Effect;

(l)                                      No Conflict.  The execution, delivery and performance of this Agreement by the Company, the issuance and sale of the Shares and the consummation of the transactions contemplated hereby will not conflict with, result in any breach or violation of or constitute a default under (nor constitute any event which, with notice, lapse of time or both, would result in any breach or violation of, constitute a default under or give the holder of any indebtedness (or a person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a part of such indebtedness under) (or result in the creation or imposition of a lien, charge or encumbrance on any property or assets of the Company or the Subsidiaries pursuant to) (A) the charter or bylaws or other organizational or charter documents of the Company or the Subsidiaries (B) any indenture, mortgage, deed of trust, bank loan or credit agreement or other evidence of indebtedness, or any license, lease, contract or other agreement or instrument to which the Company or the Subsidiaries is a party or by which any of them or any of their respective properties may be bound or affected, or (C) any federal, state, local or foreign law, regulation or rule, or (D) any rule or regulation of any self-regulatory organization or other non-governmental regulatory authority (including, without limitation, the rules and regulations of NASDAQ), or (E) any decree, judgment or order applicable to the Company or the Subsidiaries or any of their respective properties, except, with respect to clause (B), (C), (D) or (E) for such conflicts, breaches, violations, defaults and events as would not, individually or in the aggregate, have a Material Adverse Effect.

(m)                                Independent Accountants .  Baker Tilly Virchow Krause, LLP, which has expressed its opinion with respect to the Company’s audited financial statements (which term as used in this Agreement includes the related notes and schedules thereto) for the fiscal year ended August 31, 2008 and supporting schedules filed with the Commission as a part of the Registration Statement and incorporated by reference in the Prospectus Supplement, is an independent registered public accounting firm as required by the Act and the Exchange Act.

(n)                                  Preparation of the Financial Statements .  The financial statements filed with the Commission as a part of the Registration Statement or included or incorporated by reference in the Base Prospectus or Prospectus Supplement present fairly in all material respects the financial position of the Company and its consolidated subsidiaries as of and at the dates thereof and the results of their operations and cash flows for the periods specified therein, subject in the case of anaudited statements to normal, immaterial, year-end audit adjustments.  The supporting exhibits and schedules included in the Registration Statement, if any, present fairly in all material respects the information required to be stated therein subject to the normal year-end adjustments which are not expected to be material in amount.  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, except as may be otherwise stated in the related notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP comply in all material respects with the Act, the Exchange Act and the applicable rules and regulations of the Commission thereunder.  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 or the Prospectus Supplement.

(o)                                  Incorporation and Good Standing .  Each of the Company and each of the Company’s majority-owned subsidiaries that is considered a “significant subsidiary” within the meaning of Rule 1-02(w) of Regulation S-X  (collectively, the “ Subsidiaries ”) has been duly organized and is validly existing and, as applicable, is in good standing under the laws of the jurisdiction of incorporation or organization

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(as applicable) with requisite 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 or other entity and, as applicable, is in good standing under the laws of each jurisdiction in which the nature of the business conducted or property owned by it requires such qualification or license, except where the failure to be so qualified or in good standing would not have a Material Adverse Effect.

(p)                                  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 Base Prospectus and the Prospectus Supplement.  As of September 15, 2009, there were 3,759,180 shares of Common Stock outstanding.  Since September 15, 2009, the Company has not issued any securities other than (i) Common Stock of the Company pursuant to the exercise of previously outstanding options in connection with the Company’s employee stock purchase, stock option and stock incentive plans (the “ Plans ”), outstanding warrants and other outstanding obligations, and (ii) options granted pursuant to the Plans in the ordinary course of business consistent with past practice, in each case as disclosed in the Base Prospectus and each 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 Base Prospectus and each Prospectus Supplement, all of the outstanding shares of capital stock of the Subsidiaries are owned, directly or indirectly, by the Company.  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 Base Prospectus and each Prospectus Supplement.  The description of the Company’s stock option, stock bonus and other stock plans or arrangements, and the options, warrants or other rights granted thereunder, set forth in the Base Prospectus and the Prospectus Supplement accurately and fairly presents the information required by the Act to be shown with respect to such plans, arrangements, options and rights.  Except as set forth in the Base Prospectus or in any 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.

(q)                                  Stock Exchange Listing .  The Common Stock is registered under the Exchange Act and is listed on the NASDAQ Global Market (“ NASDAQ ”), and 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 suspending from trading the Common Stock from NASDAQ, nor has the Company received any information suggesting that the Commission or the Financial Industry Regulatory Authority (“ FINRA ”) is contemplating terminating or suspending such registration or quotation.

(r)                                     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.

(s)                                   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

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stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Shares.

(t)                                     FINRA Matters.  The Company has filed and cleared with FINRA the Base Prospectus included within the Registration Statement.

(u)                                  NASDAQ Notifications.  Since August 31, 2008, the Company has not received any notice from NASDAQ regarding the delisting of the Common Stock from NASDAQ.

(v)                                  No FINRA Affiliations.  To the Company’s knowledge, there are no affiliations or associations between (i) any member of FINRA and (ii) the Company or any of the Company’s officers, directors or 5% or greater security holders or any beneficial owner of the Company’s unregistered equity securities that were acquired at any time on or after the 180th day immediately preceding the date the Registration Statement was initially filed with the Commission, except as disclosed in the Registration Statement, the Base Prospectus and the Prospectus Supplement.

(w)                                No Unlawful Influence.  The Company has not offered, or caused any Placement Agent to offer, Shares to any person with the intent to influence unlawfully (A) a customer or supplier of the Company or the Subsidiaries to alter the customer’s or supplier’s level or type of business with the Company or the Subsidiaries or (B) a trade journalist or publication to write or publish favorable information about the Company or the Subsidiaries or any of their respective products or services.

(x)                                    Blue Sky.   The Shares have been or will be qualified for sale under the securities laws of such jurisdictions (United States and foreign) as the Placement Agent and the Investors determine, or are or will be exempt from the qualification and broker-dealer requirements of such jurisdictions.

(y)                                  Officer’s Certificate.  Any certificate signed by an officer of the Company and delivered to the Placement Agent in connection herewith or in connection with the Offering shall be deemed to be a representation and warranty by the Company to the Placement Agent as to the matters set forth therein.

(z)                                    Intellectual Property.  Except as described in the Registration Statement, the Base Prospectus and the Prospectus Supplement, the Company and the Subsidiaries own, or have obtained valid and enforceable licenses for, or other rights to use, the inventions, patent applications, patents, trademarks (both registered and unregistered), trade names, service names, copyrights, trade secrets and other proprietary information described in the Registration Statement, the Base Prospectus, the Prospectus Supplement as being owned or licensed by them or which are necessary for the conduct of their respective businesses as currently conducted or as proposed (in the Registration Statement, the Base Prospectus or the Prospectus Supplement) to be conducted (including the commercialization of products or services described in the Registration Statement, the Base Prospectus or the Prospectus Supplement), except where the failure to own, license or have such rights would not, individually or in the aggregate, have a Material Adverse Effect (collectively, “ Intellectual Property ”).  Except as described in the Registration Statement, the Base Prospectus and the Prospectus Supplement, (i) there are no third parties who have or, to the Company’s knowledge, will be able to establish rights to any Intellectual Property, except for, and to the extent of, the ownership rights of the owners of the Intellectual Property which the Registration Statement, the Base Prospectus and the Prospectus Supplement disclose is licensed to the Company; (ii) to the Company’s knowledge, there is no infringement by third parties of any Intellectual Property; (iii) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the Company’s rights in or to any Intellectual Property; (iv) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the validity, enforceability or scope of any Intellectual Property; (v) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company or the Subsidiaries

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infringes or otherwise violates, or would, upon the commercialization of any product or service described in the Registration Statement, the Base Prospectus, or the Prospectus Supplement, infringe or violate, any patent, trademark, trade name, service name, copyright, trade secret or other proprietary rights of others; (vi) the Company and the Subsidiaries have complied with the terms of each agreement pursuant to which Intellectual Property has been licensed to the Company or the Subsidiaries (except where the failure to so comply would not, individually or in the aggregate, have a Material Adverse Effect), and all such agreements are in full force and effect; (vii) to the Company’s knowledge, there is no patent or patent application that contains claims that interfere with the issued or pending claims of any of the Intellectual Property or that challenges the validity, enforceability or scope of any of the Intellectual Property; (viii) to the Company’s knowledge, there is no prior art that may render any patent application within the Intellectual Property unpatentable that has not been disclosed to the U.S. Patent and Trademark Office; and (ix) the manufacture, use or sale of the product candidates described in the Registration Statement, the Base Prospectus, or the Prospectus Supplement as under development by the Company or the Subsidiaries falls or would fall within the scope of one or more claims of one or more patents or patent applications owned by, or exclusively licensed to, the Company or the Subsidiaries, except with respect to each of the clauses (i) through (ix) above, for such events as would not, individually or in the aggregate, have a Material Adverse Effect.

(aa)                             Title.  The Company and the Subsidiaries have good and marketable title to all property (real and personal) described in the Registration Statement, the Base Prospectus and the Prospectus Supplement as being owned by any of them, free and clear of all liens, claims, security interests or other encumbrances, except to the extent such liens, claims, security interests or other encumbrances are disclosed in the Registration Statement, the Base Prospectus and the Prospectus Supplement; all the property described in the Registration Statement, the Base Prospectus or the Prospectus Supplement as being held under lease by the Company or the Subsidiaries is held thereby under valid, subsisting and enforceable leases.

(bb)                           Environmental.  The Company and the Subsidiaries and their respective properties, assets and operations are in compliance with, and the Company and the Subsidiaries hold all permits, authorizations and approvals required under, Environmental Laws (as defined below), except to the extent that failure to so comply or to hold such permits, authorizations or approvals would not, individually or in the aggregate, have a Material Adverse Effect; there are no past, present or, to the Company’s knowledge, reasonably anticipated future events, conditions, circumstances, activities, practices, actions, omissions or plans that could reasonably be expected to give rise to any material costs or liabilities to the Company or the Subsidiaries under, or to interfere with or prevent compliance by the Company or the Subsidiaries with, Environmental Laws; except as would not, individually or in the aggregate, have a Material Adverse Effect, neither the Company nor the Subsidiaries (i) is the subject of any investigation, (ii) has received any notice or claim, (iii) is a party to or affected by any pending or, to the Company’s knowledge, threatened action, suit or proceeding, (iv) is bound by any judgment, decree or order or (v) has entered into any agreement, in each case relating to any alleged violation of any Environmental Law or any actual or alleged release or threatened release or cleanup at any location of any Hazardous Materials (as defined below) (as used herein, “ Environmental Law ” means any federal, state, local or foreign law, statute, ordinance, rule, regulation, order, decree, judgment, injunction, permit, license, authorization or other binding requirement, or common law, relating to health, safety or the protection, cleanup or restoration of the environment or natural resources, including those relating to the distribution, processing, generation, treatment, storage, disposal, transportation, other handling or release or threatened release of Hazardous Materials, and “ Hazardous Materials ” means any material (including, without limitation, pollutants, contaminants, hazardous or toxic substances or wastes) that is regulated by or may give rise to liability under any Environmental Law).

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(cc)                             Review of Environmental Laws.  The Company and the Subsidiaries periodically review the effect of the Environmental Laws on their respective businesses, operations and properties, in the course of which they identify and evaluate associated costs and liabilities (including, without limitation, any capital or operating expenditures required for cleanup, closure of properties or compliance with the Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties).

(dd)                           Labor Practice.  Neither the Company nor the Subsidiaries is engaged in any unfair labor practice; except for matters which would not, individually or in the aggregate, have a Material Adverse Effect.  Except for matters which would not, individually or in the aggregate, have a Material Adverse Effect, (i) there is no (A) unfair labor practice complaint pending or, to the Company&rsqu