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Exhibit 1.1

1,000,000 Shares

KMG Chemicals, Inc.

Common Stock

PLACEMENT AGENCY AGREEMENT

April 20, 2010

Canaccord Adams Inc.
99 High Street
Boston, Massachusetts 02110

Ladies and Gentlemen:

     David L. Hatcher (the “ Selling Stockholder ”) proposes, subject to the terms and conditions stated in this Placement Agency Agreement (this “ Agreement ”) and the subscription agreements in the form of Exhibit A attached hereto (the “ Subscription Agreements ”) entered into with the investors identified therein (each, an “ Investor ” and collectively, the “ Investors ”), to sell up to an aggregate of 1,000,000 shares (the “ Shares ”) owned by the Selling Stockholder of the common stock, par value $0.01 per share (the “ Common Stock ”), of KMG Chemicals, Inc., a Texas corporation (the “ Company ”). Each of the Company and the Selling Stockholder hereby confirms its agreements with Canaccord Adams Inc. (“ Canaccord ”) as set forth below. The Shares are more fully described in the Statutory Prospectus (as defined below).

     1.  Agreement to Act as Placement Agent; Delivery and Payment . On the basis of the representations, warranties and agreements of the Company and the Selling Stockholder herein contained, and subject to the terms and conditions set forth in this Agreement:

          (a) The Selling Stockholder hereby engages Canaccord, as the exclusive agent of the Selling Stockholder, to, on a commercially reasonable efforts basis, solicit offers to purchase Shares from the Selling Stockholder on the terms and subject to the conditions set forth in the Subscription Agreements and Statutory Prospectus (as defined below). Canaccord shall use commercially reasonable efforts to assist the Selling Stockholder in obtaining performance by each Investor whose offer to purchase the Shares was solicited by Canaccord and accepted by the Selling Stockholder, but Canaccord shall not, except as otherwise provided in this Agreement, have any liability to the Selling Stockholder or the Company in the event any such purchase is not consummated for any reason. In connection with its commercially reasonable efforts to solicit offers to purchase the Shares, Canaccord shall only communicate information regarding the Company and/or the Selling Stockholder to potential purchasers of the Shares that is consistent with the information contained in the Statutory Prospectus. Under no circumstances will Canaccord or any of its affiliates be obligated to underwrite or purchase any of the Shares for its own account or otherwise provide any financing. Canaccord shall act solely as the Selling

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Stockholder’s agent and not as principal. Canaccord shall not have any authority to bind the Selling Stockholder with respect to any prospective offer to purchase Shares, and the Selling Stockholder shall have the sole right to accept offers to purchase Shares and may reject any such offer, in whole or in part.

          (b) As compensation for services rendered by Canaccord hereunder, on the Closing Date (as defined below), the Selling Stockholder shall pay or cause to be paid to Canaccord by wire transfer of immediately available funds to an account or accounts designated by Canaccord, an aggregate amount equal to four and one-half percent (4.5%) of the gross proceeds received by the Selling Stockholder from the sale of the Shares to Investors (the “ Agency Fee ”). Canaccord agrees that the foregoing compensation, together with any expense reimbursement payable hereunder, constitutes all of the compensation that Canaccord shall be entitled to receive in connection with the Offering contemplated hereby. Canaccord may allow concessions, or pay commissions, to other dealers participating in the offering of the Shares.

          (c) The Shares are being sold to the Investors at a price of $17.50 per share (the “ Purchase Price ”) as set forth on the cover page of the Statutory Prospectus. The purchases of Shares by the Investors shall be evidenced by the execution of the Subscription Agreements by each of the parties thereto in the form attached hereto as Exhibit A .

          (d) Prior to the earlier of ( i ) the date on which this Agreement is terminated and ( ii ) the Closing Date, neither the Company nor the Selling Stockholder shall, without the prior written consent of Canaccord, solicit or accept offers to purchase the Shares, otherwise than through Canaccord in accordance herewith.

          (e) No Shares which the Selling Stockholder has agreed to sell pursuant to this Agreement and the Subscription Agreements shall be deemed to have been purchased and paid for, or sold by the Selling Stockholder, until such Shares shall have been delivered to the Investor purchasing such Shares against payment therefor by such Investor. If the Selling Stockholder shall default in its obligations to deliver Shares to an Investor whose offer it has accepted, the Selling Stockholder shall indemnify and hold Canaccord harmless against any loss, claim, damage or liability directly or indirectly arising from or as a result of the default by the Company in accordance with the procedures set forth in Section 8(c) hereof.

          (f) Payment of the purchase price for, and delivery of the Shares shall be made at a closing (the “ Closing ”) at the offices of Haynes and Boone LLP, counsel for the Company, located at 1 Houston Center, 1221 McKinney, Suite 2100, Houston, TX 77010, at 10:00 a.m., Houston time, on April 26, 2010 or at such other time and date as Canaccord and the Selling Stockholder determine pursuant to Rule 15c6-1(a) under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”) (such date of payment and delivery being herein referred to as the “ Closing Date ”). Unless otherwise specified in the applicable Subscription Agreement, the Shares will be settled through the facilities of The Depository Trust Company’s DWAC system. Subject to the terms hereof, payment of the purchase price for the Shares shall be made to the Selling Stockholder in the manner set forth below by Federal Funds wire transfer, against delivery of the Shares to such persons and shall be registered in the name or names and shall be in such denominations as Canaccord may request at least one business day before the Closing Date. Payment of the purchase price for the Shares to be purchased by Investors shall be made

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by such Investors directly to the Selling Stockholder. Subject to the terms and conditions hereof, on the Closing Date, the Selling Stockholder shall pay to Canaccord the Agency Fee set forth in paragraph (b) above and reimburse Canaccord for the amount of expenses for which Canaccord is entitled to reimbursement pursuant hereto. At least one day prior to the Closing Date, Canaccord shall submit to the Selling Stockholder its bona fide estimate of the amount of expenses for which it is entitled to reimbursement pursuant hereto. As soon as reasonably practicable after the Closing Date, Canaccord shall submit to the Selling Stockholder its expense reimbursement invoice and the Selling Stockholder or Canaccord, as applicable, shall make any necessary reconciling payment(s) within thirty days of receipt of such invoices.

     2.  Representations and Warranties of the Company. The Company represents and warrants to Canaccord as of the date hereof, and as of the Closing Date and agree with Canaccord, as follows. (For the purposes of this Section 2, unless the context otherwise requires or as otherwise provided, “Company” shall mean and include the Company and its subsidiaries.)

          (a) Filing of Registration Statement . The Company has prepared and filed, in conformity with the requirements of the Securities Act of 1933, as amended (the “ Securities Act ”), and the published rules and regulations thereunder (the “ Rules and Regulations ”) adopted by the Securities and Exchange Commission (the “ Commission ”), a registration statement, including a prospectus, on Form S-3 (File No. 333-144349), which became effective as of July 24, 2007, relating to the Shares and the offering thereof (the “ Offering ”) from time to time in accordance with Rule 415(a)(1)(x) of the Rules and Regulations, and such amendments thereof as may have been required to the date of this Agreement. The term “ Registration Statement ” as used in this Agreement means the aforementioned registration statement, as amended at the time of such registration statement’s effectiveness for purposes of Section 11 of the Securities Act, (the “ Effective Time ”), including ( i ) all documents filed as a part thereof or incorporated or deemed to be incorporated by reference therein and ( ii ) any information in the corresponding Base Prospectus (as defined below) or a prospectus supplement filed with the Commission pursuant to Rule 424(b) under the Securities Act, to the extent such information is deemed pursuant to Rule 430A (“ Rule 430A ”), 430B (“ Rule 430B ”) or 430C (“ Rule 430C ”) under the Securities Act to be a part thereof at the Effective Time. For purposes of this Agreement, all references to the Registration Statement, the Base Prospectus, any Preliminary Prospectus (as defined below), the Statutory Prospectus (as defined in below) or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System (“ EDGAR ”). All references in this Agreement to amendments or supplements to the Registration Statement, the Base Prospectus, any Preliminary Prospectus or the Statutory Prospectus shall be deemed to mean and include the subsequent filing of any document under the Exchange Act prior to completion of distribution of the Shares and which is deemed to be incorporated therein by reference therein or otherwise deemed to be a part thereof.

          (b) Effectiveness of Registration Statement; Certain Defined Terms . The Company and the transactions contemplated by this Agreement meet the requirements and comply with the conditions for the use of Form S-3 under the Securities Act. The Registration Statement meets, and the offering and sale of the Shares as contemplated hereby complies with, the requirements of Rule 415 under the Securities Act. The Company has complied, to the Commission’s satisfaction, with all requests of the Commission for additional or supplemental

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information. No stop order preventing or suspending use of the Registration Statement, any Preliminary Prospectus or the Statutory Prospectus or the effectiveness of the Registration Statement has been issued by the Commission, and no proceedings for such purpose pursuant to Section 8A of the Securities Act against the Company or related to the Offering have been instituted or are pending or, to the Company’s knowledge, are contemplated or threatened by the Commission, and any request received by the Company on the part of the Commission for additional information has been complied with. As used in this Agreement:

     (1) “ Base Prospectus ” means the prospectus included in the Registration Statement at the Effective Time.

     (2) “ Disclosure Package ” means ( i ) the Statutory Prospectus, ( ii ) each Issuer Free Writing Prospectus, if any, filed or used by the Company on or before the Effective Time and listed on Schedule I hereto (other than a roadshow that is an Issuer Free Writing Prospectus but is not required to be filed under Rule 433 of the Rules and Regulations) and ( iii ) the pricing and other information as set forth on Exhibit B hereto, all considered together.

     (3) “ Issuer Free Writing Prospectus ” means any “issuer free writing prospectus,” as defined in Rule 433 of the Rules and Regulations relating to the Shares in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g) of the Rules and Regulations.

     (4) “ Preliminary Prospectus ” means any preliminary prospectus, subject to completion, relating to the Shares, filed by the Company with the Commission under the Securities Act for use in connection with the offering and sale of the Shares.

     (5) “ Statutory Prospectus ” means the Preliminary Prospectus, if any, and the Base Prospectus, each as amended and supplemented immediately prior to the Time of Sale, including any document incorporated by reference therein and any prospectus supplement.

     (6) “Time of Sale” means 3:55 p.m., New York City time, on the date of this Agreement.

          (c) Contents of Registration Statement . The Registration Statement complied when it became effective, complies as of the date hereof and, as amended or supplemented, at the Time of Sale and at all times during which a prospectus is required by the Securities Act to be delivered (whether physically or through compliance with Rule 172 under the Securities Act or any similar rule) in connection with any sale of Shares (the “ Prospectus Delivery Period ”), will comply, in all material respects, with the requirements of the Securities Act and the Rules and Regulations; the Registration Statement did not, as of the Effective Time, contain an 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; provided that the Company makes no representation or warranty in this subsection (c) with respect to statements in or omissions from the Registration Statement in reliance upon, and in conformity with, written

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information furnished to the Company and/or the Selling Stockholder by Canaccord specifically for inclusion therein, which information the parties hereto agree is limited to Canaccord’s Information (as defined in Section 9 hereof).

          (d) Incorporated Documents . Each of the documents incorporated or deemed to be incorporated by reference in the Registration Statement, at the time such document was filed with the Commission or at the time such document became effective, as applicable, complied, in all material respects, with the requirements of the Exchange Act, was filed on a timely basis with the Commission and did not include an 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.

          (e) Disclosure Package . The Disclosure Package, as of the Time of Sale, did not, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company makes no representations or warranty in this subsection (e) with respect to statements in or omissions from the Disclosure Package in reliance upon, and in conformity with, written information furnished to the Company by Canaccord specifically for inclusion therein, which information the parties hereto agree is limited to the Canaccord Information.

          (f) Distributed Materials; Conflict with Registration Statement . Other than the Base Prospectus, any Preliminary Prospectus and the Statutory Prospectus, neither the Company nor the Selling Stockholder has made, used, prepared, authorized, approved or referred to and will not make, use, prepare, authorize, approve or refer to any “written communication” (as defined in Rule 405 under the Securities Act) that constitutes an offer to sell or a solicitation of an offer to buy the Shares other than ( i ) any document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or Rule 134 under the Securities Act or ( ii ) the documents listed on Schedule I hereto and other written communications approved in advance by Canaccord.

          (g) Issuer Free Writing Prospectuses . Each Issuer Free Writing Prospectus, if any, conformed or will conform in all material respects to the requirements of the Securities 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, if any, when considered together with the Disclosure Package, as of its issue date and at all subsequent times through the completion of the Prospectus Delivery Period 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 Statutory Prospectus, including any document incorporated by reference therein and any prospectus supplement deemed to be a part thereof that has not been superseded or modified, or includes an untrue statement of a material fact or omitted or would omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances prevailing at the subsequent time, not misleading; provided that the Company makes no representation or warranty in this subsection (g) with respect to statements in or omissions from any Issuer Free Writing Prospectus in reliance upon, and in conformity with, written information furnished to the

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Company by Canaccord specifically for inclusion therein, which information the parties hereto agree is limited to the Canaccord Information.

          (h) Not an Ineligible Issuer . ( i ) At the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Securities Act) of the Shares and ( ii ) at the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405 under the Securities Act (“ Rule 405 ”).

          (i) Due Incorporation . The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Texas, with the corporate power and authority to own its properties and to conduct its business as it is currently being conducted and as described in the Registration Statement, the Statutory Prospectus and the Disclosure Package. The Company is duly qualified to transact business and is in good standing as a foreign corporation or other legal entity in each other jurisdiction in which its ownership or leasing of property or the conduct of its business requires such qualification, except where the failure to be so qualified or in good standing or have such power or authority ( i ) would not have, individually or in the aggregate, a material adverse effect upon, the business, operations, properties, financial condition, or results of operations of the Company, taken as a whole, or ( ii ) impair in any material respect the power or ability of the Company to perform its obligations under this Agreement or to consummate any transactions contemplated by the Agreement and the Subscription Agreements, including the issuance and sale of the Shares (any such effect as described in clauses (i) or (ii), a “ Material Adverse Effect ”).

          (j) Subsidiaries . Except as otherwise described in the Registration Statement, the Statutory Prospectus and the Disclosure Package, the Company has no subsidiaries and does not own any beneficial interest, directly or indirectly, in any corporation, partnership, joint venture or other business entity.

          (k) Due Authorization and Enforceability . The Company has the full right, power and authority to enter into this Agreement, and to perform and discharge its obligations hereunder; and this Agreement has been duly authorized, executed and delivered by the Company, and constitutes a valid, legal and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as rights to indemnity hereunder may be limited by federal or state securities laws and except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally and subject to general principles of equity and limitations on the granting of equitable remedies.

          (l) The Shares . The Shares are duly and validly authorized and issued and are fully paid and nonassessable, and are not subject to any statutory or contractual preemptive rights or other rights to subscribe for or purchase or acquire any shares of Common Stock of the Company that have not been waived or complied with, and conform in all material respects to the description thereof contained in the Disclosure Package and the Statutory Prospectus and such description conforms in all material respects to the rights set forth in the instruments defining the same.

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          (m) Capitalization . The information regarding the capitalization of the Company contained in the Statutory Prospectus and the Disclosure Package is fairly presented on a basis consistent with the Company’s financial statements. The certificates evidencing the Shares, if any, are in due and proper legal form and, when issued, were duly authorized for issuance by the Company. The authorized capital stock of the Company conforms as to legal matters to the description thereof contained in the Statutory Prospectus and the Disclosure Package. The issued and outstanding shares of capital stock of the Company have been duly authorized and validly issued, are fully paid and nonassessable, and have been issued in compliance with all federal and state securities laws. None of the outstanding shares of Common Stock was issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase or acquire any securities of the Company. There are no authorized or outstanding shares of capital stock, options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable for, any capital stock of the Company other than those described in the Statutory Prospectus and the Disclosure Package. The description of the Company’s stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, as described in the Statutory Prospectus and the Disclosure Package, accurately and fairly present the information required to be shown with respect to such plans, arrangements, options and rights. The outstanding shares of Common Stock owned by persons other than affiliates of the Company (as defined in the Rules and Regulations) had a market value greater than $100 million within the sixty days prior to the date hereof.

          (n) No Conflict . The execution, delivery and performance by the Company of this Agreement, and the consummation of the transactions contemplated hereby, will not conflict with or result in a breach or violation of, or constitute a default under (nor constitute any event which with or without notice, lapse of time or both would result in any breach or violation of or constitute a default under), give rise to any right of termination or other right or the cancellation or acceleration of any right or obligation or loss of a benefit under, or give rise to the creation or imposition of any lien, encumbrance, security interest, claim or charge upon any property or assets of the Company pursuant to ( i ) any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company is a party or by which the Company or any of its properties may be bound or to which any of its property or assets is subject, ( ii ) result in any violation of the provisions of the charter or by-laws of the Company, or ( iii ) result in any violation of any law, statute, rule, regulation, judgment, order or decree of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Company or any of its properties or assets.

          (o) No Consents Required . No approval, authorization, consent or order of or filing, qualification or registration with, any court or governmental agency or body, foreign or domestic, which has not been made, obtained or taken and is not in full force and effect, is required in connection with the Company’s execution, delivery and performance of this Agreement, the consummation by the Company of the transactions contemplated hereby.

          (p) Preemptive Rights . There are no preemptive rights or other rights (other than rights which have been waived in writing in connection with the transactions contemplated by this Agreement or otherwise satisfied) to subscribe for or to purchase any shares of Common Stock or shares of any other capital stock or other equity interests of the Company, or any

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agreement or arrangement between the Company and any of the Company’s stockholders, or to the Company’s knowledge, between or among any of the Company’s shareholders, which grant special rights with respect to any shares of the Company’s capital stock or which in any way affect any stockholder’s ability or right to alienate freely or vote such shares.

          (q) Registration Rights . There are no contracts, agreements or understandings between the Company and any person granting such person the right (other than rights which have been waived in writing in connection with the transactions contemplated by this Agreement or otherwise satisfied) to require the Company to register any securities with the Commission.

          (r) Independent Accountants . UHY LLP, whose reports on the consolidated financial statements of the Company are incorporated by reference in the Registration Statement, the Statutory Prospectus and the Disclosure Package, is ( i ) an independent public accounting firm within the meaning of the Securities Act, ( ii ) a registered public accounting firm (as defined in Section 2(a)(12) of the Sarbanes-Oxley Act of 2002 (the “ Sarbanes-Oxley Act ”)), and ( iii ) to the Company’s knowledge, not in violation of the auditor independence requirements of the Sarbanes-Oxley Act. Except as disclosed in the Registration Statement and as pre-approved in accordance with the requirements set forth in Section 10A of the Exchange Act, UHY LLP has not been engaged by the Company to perform any “prohibited activities” (as defined in Section 10A of the Exchange Act).

          (s) Financial Statements . The consolidated financial statements of the Company, together with the related schedules and notes thereto, set forth or incorporated by reference in the Registration Statement, the Statutory Prospectus and the Disclosure Package comply in all material respects with the applicable requirements of the Securities Act and the Exchange Act, as applicable, and present fairly in all material respects ( i ) the financial condition of the Company as of the dates indicated and ( ii ) the consolidated results of operations, stockholders’ equity and changes in cash flows of the Company for the periods therein specified; and such financial statements and related schedules and notes thereto have been prepared in conformity with United States generally accepted accounting principles, consistently applied throughout the periods involved (except as otherwise stated therein and subject, in the case of unaudited financial statements, to the absence of footnotes and normal year-end adjustments). There are no other financial statements (historical or pro forma) that are required to be included or incorporated by reference in the Registration Statement, the Statutory Prospectus or the Disclosure Package; and the Company does not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations), not disclosed in the Registration Statement, the Disclosure Package and the Statutory Prospectus; and all disclosures contained in the Registration Statement, the Disclosure Package and the Statutory Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply with Regulation G of the Exchange Act and Item 10(e) of Regulation S-K under the Securities Act, to the extent applicable, and present fairly the information shown therein and the Company’s basis for using such measures.

          (t) Absence of Material Changes . Subsequent to the respective dates as of which information is given in the Registration Statement, the Statutory Prospectus and the Disclosure Package, and except as may be otherwise stated or incorporated by reference in the Registration Statement, the Statutory Prospectus and the Disclosure Package, there has not been

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( i ) any Material Adverse Effect, ( ii ) any transaction which is material to the Company and out of the ordinary course of business, ( iii ) any obligation, direct or contingent (including any off-balance sheet obligations), incurred by the Company, which is material to the Company, ( iv ) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company, ( v ) any change in the capital stock (other than a change in the number of outstanding shares of Common Stock due to the issuance of shares upon the exercise of outstanding options or warrants or the conversion of convertible indebtedness), or material change in the short-term debt or long-term debt of the Company (other than upon conversion of convertible indebtedness) or any issuance of options, warrants, convertible securities or other rights to purchase the capital stock (other than grants of stock options under the Company’s stock option plans existing on the date hereof) of the Company.

          (u) Legal Proceedings . There are no legal or governmental actions, suits, claims or proceedings pending or, to the Company’s knowledge, threatened or contemplated to which the Company is or would be a party or of which any of their respective properties is or would be subject at law or in equity, before or by any federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency, or before or by any self-regulatory organization or other non-governmental regulatory authority which are required to be described in the Registration Statement, the Disclosure Package or the Statutory Prospectus or a document incorporated by reference therein and are not so described therein, or which, singularly or in the aggregate, if resolved adversely to the Company, would reasonably be likely to result in a Material Adverse Effect or prevent or m


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