Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of July 8, 2010, by
and among UTEK Corporation (d/b/a Innovaro), a Delaware corporation, with
headquarters located at 2109 Palm Avenue, Tampa, Florida 33605 (the “Company”),
and the investors listed on the Schedule of Buyers attached hereto
(individually, a “Buyer” and collectively, the “Buyers”).

WHEREAS:

A. The Company and the Buyers desire to enter into this transaction to purchase
the Common Shares (as defined below) and Warrants (as defined below) pursuant to
a currently effective shelf registration statement on Form S-3, which has at
least $20,000,000 of initial offering price of unallocated securities available
for sale as of the date hereof (Registration Number 333-165859) (the
“Registration Statement”), which Registration Statement has been declared
effective in accordance with the Securities Act of 1933, as amended (the “1933
Act”), by the United States Securities and Exchange Commission (the “SEC”).

B. Each Buyer wishes to purchase, and the Company wishes to sell, upon the terms
and conditions stated in this Agreement, (i) that aggregate number of shares of
common stock, par value $0.01 per share, of the Company (the “Common Stock”) set
forth opposite such Buyer’s name in column (3) on the Schedule of Buyers
attached hereto (which aggregate number for all Buyers shall be 1,481,481 and
shall collectively be referred to herein as the “Common Shares”), (ii) warrants,
in substantially the form attached hereto as Exhibit A (the “Series A
Warrants”), to acquire up to that number of shares of Common Stock set forth
opposite such Buyer’s name in column (4) of the Schedule of Buyers (as
exercised, collectively, the “Series A Warrant Shares”), and (iii) warrants, in
substantially the form attached hereto as Exhibit B (the “Series B Warrants”
and, together with the Series A Warrants, the “Warrants”), to acquire up to that
number of shares of Common Stock set forth opposite such Buyer’s name in column
(5) of the Schedule of Buyers (as exercised, collectively, the “Series B Warrant
Shares” and, together with the Series A Warrant Shares, the “Warrant Shares”),
which Warrant Shares shall be issued pursuant to the Registration Statement or,
if such Registration Statement is not available at the time of issuance of such
Warrant Shares, shall be issued solely pursuant to the cashless exercise
provisions of the Warrant as securities exempt from registration pursuant to
Section 3(a)(9) of the 1933 Act.

C. The Common Shares, the Warrants and the Warrant Shares collectively are
referred to herein as the “Securities.”

NOW, THEREFORE, the Company and each Buyer hereby agree as follows:

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1. PURCHASE AND SALE OF COMMON SHARES AND WARRANTS.

(a) Purchase of Common Shares and Warrants.

(i) Common Shares and Warrants. Subject to the satisfaction (or waiver) of the
conditions set forth in Sections 6 and 7 below, the Company shall issue and sell
to each Buyer, and each Buyer severally, but not jointly, shall purchase from
the Company on the Closing Date (as defined below), (x) the number of Common
Shares as is set forth opposite such Buyer’s name in column (3) on the Schedule
of Buyers, (y) Series A Warrants to acquire up to that number of Series A
Warrant Shares as is set forth opposite such Buyer’s name in column (4) on the
Schedule of Buyers and (z) Series B Warrants to acquire up to that number of
Series B Warrant Shares as is set forth opposite such Buyer’s name in column
(5) on the Schedule of Buyers.

(ii) Closing. The date and time of the Closing (the “Closing Date”) shall be
10:00 a.m., New York City time, on the date hereof (or such later date as is
mutually agreed to by the Company and each Buyer) after notification of
satisfaction (or waiver) of the conditions to the Closing set forth in Sections
6 and 7 below at the offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New
York, New York 10022, but in any event no later than three (3) Trading Days
after the date hereof in accordance with Rule 15c6-1 promulgated under the 1934
Act (as defined below).

(iii) Purchase Price. The aggregate purchase price for the Common Shares and the
Warrants to be purchased by such Buyer at the Closing (the “Purchase Price”)
shall be the amount set forth opposite such Buyer’s name in column (5) of the
Schedule of Buyers.

(b) Form of Payment. On the Closing Date, (i) each Buyer shall pay its Purchase
Price to the Company for the Common Shares and the Warrants to be issued and
sold to such Buyer at the Closing, by wire transfer of immediately available
funds in accordance with the Company’s written wire instructions (less, in the
case of Hudson Bay Fund LP, the amount withheld pursuant to Section 4(f)) and
(ii) the Company shall (A) cause Computershare Trust Company, Inc. (together
with any subsequent transfer agent, the “Transfer Agent”) through the Depository
Trust Company (“DTC”) Fast Automated Securities Transfer Program, to credit such
aggregate number of Common Shares that such Buyer is purchasing as is set forth
opposite such Buyer’s name in column (3) of the Schedule of Buyers to such
Buyer’s or its designee’s balance account with DTC through its
Deposit/Withdrawal at Custodian system and (B) deliver to each Buyer the
Warrants (allocated in the amounts as such Buyer shall request) which such Buyer
is purchasing, in each case duly executed on behalf of the Company and
registered in the name of such Buyer or its designee.

2. BUYER’S REPRESENTATIONS AND WARRANTIES. Each Buyer, severally and not
jointly, represents and warrants with respect to only itself that:

(a) Organization; Authority. Such Buyer is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with the requisite power and authority to enter into and to
consummate the transactions contemplated by

 

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the Transaction Documents (as defined below) to which it is a party and
otherwise to carry out its obligations hereunder and thereunder. The execution,
delivery and performance by such Buyer of the transactions contemplated by this
Agreement has been duly authorized by all necessary action on the part of such
Buyer. This Agreement has been duly executed by such Buyer, and when delivered
by such Buyer in accordance with the terms hereof, will constitute the valid and
legally binding obligation of such Buyer, enforceable against it in accordance
with its terms, except (i) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights
generally, (ii) as enforceability of any indemnification and contribution
provisions may be limited under the federal and state securities laws and public
policy, and (iii) that the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.

(b) No Conflicts. The execution, delivery and performance by such Buyer of this
Agreement and the consummation by such Buyer of the transactions contemplated
hereby will not (i) result in a violation of the organizational documents of
such Buyer or (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which such Buyer is a party, or
(iii) result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws) applicable to such Buyer,
except in the case of clauses (ii) and (iii) above, for such conflicts,
defaults, rights or violations which would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
ability of such Buyer to perform its obligations hereunder.

(c) Investment Sophistication. Such Buyer is knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with respect to
investments in securities representing an investment decision like that involved
in the purchase of the Securities.

The Company acknowledges and agrees that each Buyer does not make or has not
made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section 2.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to each of the Buyers that, as of the date hereof and as of the Closing
Date:

(a) Shelf Registration Statement. A “shelf” registration statement on Form S-3
(File No. 333-165859) with respect to the Securities has been prepared by the
Company in conformity in all material respects with the requirements of the 1933
Act, and the rules and regulations (the “Rules and Regulations”) of the SEC
thereunder and has been filed with the SEC. The Company and the transactions
contemplated by this Agreement meet the requirements and comply with the
conditions for the use of Form S-3. The Registration Statement (as defined
below) meets the requirements of Rule 415(a)(1)(x) under the 1933 Act and
complies in all material respects with said rule. Copies of such registration
statement, including any amendments thereto, the base prospectus (meeting in all
material respects the requirements of the Rules and Regulations) contained
therein (the “Base Prospectus”) and the exhibits, financial

 

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statements and schedules, as finally amended and revised, have heretofore been
delivered by the Company to the Buyers. Such registration statement, together
with any registration statement filed by the Company pursuant to Rule 462(b)
under the 1933 Act, is herein referred to as the “Registration Statement”, which
shall be deemed to include all information omitted therefrom in reliance upon
Rules 430A, 430B or 430C under the 1933 Act and contained in the Prospectus
referred to below. The Registration Statement has become effective under the
1933 Act and no post-effective amendment to the Registration Statement has been
filed as of the date of this Agreement. The term “Prospectus” as used in this
Agreement means the Base Prospectus together with the final prospectus
supplement relating to the Securities (the “Prospectus Supplement”) first filed
with the SEC pursuant to and within the time limits described in Rule 424(b)
under the 1933 Act. Any reference herein to the Registration Statement, any
Preliminary Prospectus or the Prospectus or to any amendment or supplement to
any of the foregoing documents shall be deemed to refer to and include any
documents incorporated by reference therein, and, in the case of any reference
herein to the Prospectus, also shall be deemed to include any documents
incorporated by reference therein, and any supplements or amendments thereto,
filed with the SEC after the date of filing of the Prospectus Supplement under
Rule 424(b) under the 1933 Act and prior to the termination of the offering of
the Securities. The Company has not prepared or filed any prospectus other than
the Base Prospectus, the General Use Free Writing Prospectus and the Prospectus
Supplement.

(b) Prospectus. As of the Applicable Time (as defined below) and as of the
Closing Date (as defined below), neither (x) the General Use Free Writing
Prospectus(es) (as defined below) issued at or prior to the Applicable Time, the
Statutory Prospectus (as defined below), all considered together (collectively,
the “General Disclosure Package”), nor (y) any individual Limited Use Free
Writing Prospectus (as defined below), when considered together with the General
Disclosure Package, included or will include any untrue statement of a material
fact or omitted or will 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. As used in this subsection and elsewhere in this
Agreement:

(i) “Applicable Time” means 5:30 p.m. (New York time) on the date of this
Agreement or such other time as agreed to by the Company and the Buyers.

(ii) “Statutory Prospectus” as of any time means the Base Prospectus included in
the Registration Statement immediately prior to that time.

(iii) “Issuer Free Writing Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 under the 1933 Act, relating to the
Securities in the form filed or required to be filed with the SEC or, if not
required to be filed, in the form retained in the Company’s records pursuant to
Rule 433(g) under the 1933 Act.

(iv) “General Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is identified on Schedule I to this Agreement.

(v) “Limited Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is not a General Use Free Writing Prospectus.

 

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(c) Organization. The Company has been duly organized and is validly existing as
a corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement, the General Disclosure
Package and the Prospectus. The Company has no significant subsidiaries (as such
term is defined in Rule 1-02 of Regulation S-X promulgated by the SEC) other
than as listed in Exhibit 21 to the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2009 (the “Annual Report”) (collectively, the
“Subsidiaries”). Each of the Subsidiaries has been duly organized and is validly
existing as an entity in good standing under the laws of the jurisdiction of its
organization, with corporate or other entity power and authority to own or lease
its properties and conduct its business as described in the Registration
Statement, the General Disclosure Package and the Prospectus. The Company and
each of the Subsidiaries are duly qualified to transact business in all
jurisdictions in which the conduct of their business requires such
qualification, except where the failure to be so qualified would not reasonably
be expected to result in any material adverse effect on the business,
properties, assets, operations, results of operations, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries, individually or
taken as a whole, or on the transactions contemplated hereby and the other
Transaction Documents or by the agreements and instruments to be entered into in
connection herewith or therewith, or on the authority or ability of the Company
to perform its obligations under the Transaction Documents (as defined below)
(collectively a “Material Adverse Effect”). The outstanding shares of capital
stock of each of the Subsidiaries have been duly authorized and validly issued,
are fully paid and non-assessable and are owned by the Company or another
Subsidiary free and clear of all liens, encumbrances and equities and claims,
except as described in the Registration Statement and the Annual Report; and no
options, warrants or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligations into shares of capital stock
or ownership interests in the Subsidiaries are outstanding.

(d) Authorization; Enforcement; Validity. The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, the Irrevocable Transfer Agent Instructions (as defined in
Section 5(b)), the Warrants, the Lock-Up Agreement (as defined in Section 3(ss))
and each of the other agreements entered into by the parties hereto in
connection with the transactions contemplated by this Agreement (collectively,
the “Transaction Documents”) and to issue the Securities in accordance with the
terms hereof and thereof. The execution and delivery of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby, including, without limitation, the issuance of
the Common Shares, the issuance of the Warrants and the reservation for issuance
and the issuance of the Warrant Shares issuable upon exercise of the Warrants
have been duly authorized by the Company’s Board of Directors, and no further
filing, consent, or authorization is required by the Company’s Board of
Directors or its stockholders. This Agreement and the other Transaction
Documents of even date herewith have been duly executed and delivered by the
Company, and constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except (i) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally, (ii) as
enforceability of any indemnification and contribution provisions may be limited
under the federal and state securities laws and public policy and (iii) that the
remedy of specific performance and injunctive and other forms of

 

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equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefore may be brought.

(e) Issuance of Securities. The outstanding shares of Common Stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable; the Common Shares to be issued and sold by the Company have been
duly authorized and when issued and paid for as contemplated herein will be free
from all taxes, liens and charges with respect to the issue thereof, validly
issued, fully paid and non-assessable, and no preemptive rights of stockholders
exist with respect to any of the Common Shares or the issue and sale thereof.
The Warrants have been duly authorized by the Company and, when executed and
issued in accordance with this Agreement, will be duly executed and delivered
free from all taxes liens and charges with respect to the issuance thereof. As
of the Closing, a number of shares of Common Stock shall have been duly
authorized and reserved for issuance which equals or exceeds the maximum number
of Warrant Shares issuable upon exercise of the Warrants (assuming for purposes
hereof, that the Warrants are exercisable at the Exercise Price and without
taking into account any limitations on the Warrant Shares set forth in the
Warrants). Neither the filing of the Registration Statement nor the offering or
sale of the Securities as contemplated by this Agreement gives rise to any
rights, other than those which have been waived or satisfied, for or relating to
the registration of any shares of Common Stock. Upon issuance or exercise in
accordance with the Warrants, the Warrant Shares will be validly issued, fully
paid and nonassessable and free from all preemptive or similar rights, taxes,
liens and charges with respect to the issue thereof, with the holders being
entitled to all rights accorded to a holder of Common Stock.

(f) Equity Capitalization. As of the date hereof and as of the Closing Date, the
Company has or will have, as the case may be, an authorized, issued and
outstanding capitalization as is set forth in the Registration Statement and the
Prospectus (subject, in each case, to the issuance of shares of Common Stock
upon exercise of stock options and warrants disclosed as outstanding in the
Registration Statement and the Prospectus and the grant or issuance of options
or shares under existing equity compensation plans or stock purchase plans
described in the Registration Statement or the Prospectus and, in the case of
the Closing Date, to the issuance of the Securities in connection with the
transactions contemplated by this Agreement), and such authorized capital stock
conforms to the description thereof set forth in the Registration Statement and
the Prospectus. All of the Securities conform to the description thereof
contained in the Registration Statement and the Prospectus. The form of
certificates for the Warrant Shares will conform to the corporate law of the
jurisdiction of the Company’s incorporation.

(g) Disclosure.

(i) The SEC has not issued an order preventing or suspending the use of any
Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus
relating to the offering of the Securities, and no proceeding for that purpose
or pursuant to Section 8A of the 1933 Act has been instituted or, to the
Company’s knowledge, threatened by the SEC. The Registration Statement conforms,
and the Prospectus and any amendments or supplements thereto will conform, to
the requirements of the 1933 Act and the Rules and Regulations. The documents
incorporated, or to be incorporated, by reference in the Prospectus, at the time
filed

 

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with the SEC conformed in all material respects, or will conform in all
respects, to the requirements of the Securities Exchange Act of 1934, as amended
(the “1934 Act”) or the 1933 Act, as applicable, and the Rules and Regulations.
The Registration Statement and any amendment thereto do not contain, and on the
Closing Date will not contain, any untrue statement of a material fact and do
not omit, and on the Closing Date will not omit, to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. The Prospectus and any amendments and supplements thereto do not
contain, and on the Closing Date will not contain, any untrue statement of a
material fact; and do not omit, and on the Closing Date will not 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.

(ii) Each Issuer Free Writing Prospectus, as of its issue date and at all
subsequent times through the completion of the public offer and sale of the
Securities or until any earlier date that the Company notified or notifies the
Buyers as described in the next sentence, did not, does not and will not include
any information that conflicted, conflicts or will conflict with the information
contained in the Registration Statement or the Prospectus, including any
document incorporated by reference therein that has not been superseded or
modified. If at any time following issuance of an Issuer Free Writing
Prospectus, there occurred or occurs an event or development as a result of
which such Issuer Free Writing Prospectus included or would include an untrue
statement of a material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances, not misleading, the Company has notified or will notify promptly
the Buyers.

(iii) The Company confirms that neither it nor any other Person acting on its
behalf has provided any of the Buyers or their agents or counsel with any
information (other than the fact that the Company has entered into this
Agreement) that constitutes or could reasonably be expected to constitute
material, nonpublic information. The Company understands and confirms that each
of the Buyers will rely on the foregoing representations in effecting
transactions in securities of the Company. All disclosure provided to the Buyers
regarding the Company or any of its Subsidiaries, their business and the
transactions contemplated hereby, including the Schedules to this Agreement,
furnished by or on behalf of the Company does not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading. Other than the transactions contemplated by this
Agreement, no event or circumstance has occurred or information exists with
respect to the Company or any of its Subsidiaries or its or their business,
properties, prospects, operations or financial conditions, which, under
applicable law, rule or regulation, requires public disclosure or announcement
by the Company but which has not been so publicly announced or disclosed. For
the purpose of this Agreement, “Person” means an individual, a limited liability
company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency
thereof.

(h) Offering Materials. The Company has not, directly or indirectly, distributed
and will not distribute any offering material in connection with the offering
and sale of the Securities other than any Preliminary Prospectus, the
Prospectus, any Permitted Free Writing Prospectus (as defined below) and other
materials, if any, permitted under the 1933 Act.

 

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The Company will file with the SEC all Issuer Free Writing Prospectuses in the
time required under Rule 433(d) under the 1933 Act. The Company has not
conducted, or prepared any materials for, any electronic road show.

(i) Ineligible Issuer Status. At the time of filing the Registration Statement
and (ii) as of the date hereof (with such date being used as the determination
date for purposes of this clause (ii)), the Company was not and is not an
“ineligible issuer” (as defined in Rule 405 under the 1933 Act, without taking
into account any determination by the SEC pursuant to Rule 405 under the 1933
Act that it is not necessary that the Company be considered an ineligible
issuer), including, without limitation, for purposes of Rules 164 and 433 under
the 1933 Act with respect to the offering of the Securities as contemplated by
the Registration Statement.

(j) Financial Statements. The consolidated financial statements of the Company
and the Subsidiaries, together with related notes and schedules as set forth or
incorporated by reference in the Registration Statement, the General Disclosure
Package and the Prospectus, present fairly in all material respects the
financial position and the results of operations and cash flows of the Company
and the consolidated Subsidiaries, at the indicated dates and for the indicated
periods. Such consolidated financial statements and related schedules have been
prepared in accordance with United States generally accepted principles of
accounting (“GAAP”), consistently applied throughout the periods involved,
except as disclosed therein, and all adjustments necessary for a fair
presentation of results for such periods have been made. The summary and
selected consolidated financial data included or incorporated by reference in
the Registration Statement, the General Disclosure Package and the Prospectus
presents fairly in all material respects the information shown therein, at the
indicated dates and for the indicated periods, and such data has been compiled
on a basis consistent with the financial statements presented therein and the
books and records of the Company. All disclosures, if any, contained in the
Registration Statement, the General Disclosure Package and the Prospectus
regarding “non-GAAP financial measures” (as such term is defined by the Rules
and Regulations) comply in all material respects with Regulation G of the 1934
Act and Item 10 of Regulation S-K under the 1933 Act, to the extent applicable.
The Company and the Subsidiaries do not have any material liabilities or
obligations, direct or contingent (including any off-balance sheet obligations
or any “variable interest entities” within the meaning of Topic 810 of the
Financial Accounting Standards Board’s Accounting Standards Codification), not
disclosed in the Registration Statement, the General Disclosure Package and the
Prospectus. There are no financial statements (historical or pro forma) that are
required to be included in the Registration Statement, the General Disclosure
Package or the Prospectus that are not included as required.

(k) Accountants. Pender, Newkirk & Company, who have certified certain of the
financial statements filed with the SEC as part of, or incorporated by reference
in, the Registration Statement, the General Disclosure Package and the
Prospectus, is an independent registered public accounting firm with respect to
the Company and the Subsidiaries within the meaning of the 1933 Act and the
applicable Rules and Regulations and the Public Company Accounting Oversight
Board (United States) (the “PCAOB”).

(l) Weaknesses or Changes in Internal Accounting Controls. Neither the Company
nor any of the Subsidiaries is aware of (i) any material weakness in its
internal control over financial reporting or (ii) change in internal control
over financial reporting that has

 

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materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting.

(m) Sarbanes-Oxley. Solely to the extent that the Sarbanes-Oxley Act of 2002, as
amended, and the rules and regulations promulgated by the SEC and The NYSE Amex
Equities (the “Principal Market”) thereunder (collectively, the “Sarbanes-Oxley
Act”) has been applicable to the Company, there is and has been no failure on
the part of the Company to comply in all respects with any provision of the
Sarbanes-Oxley Act. The Company has taken all necessary actions to ensure that
it is in compliance in all respects with all provisions of the Sarbanes-Oxley
Act that are in effect with respect to which the Company is required to comply
and is actively taking steps to ensure that it will be in compliance with the
other provisions of the Sarbanes-Oxley Act which will become applicable to the
Company.

(n) Litigation. There is no action, suit, claim or proceeding pending or, to the
knowledge of the Company, threatened against the Company or any of the
Subsidiaries before any court or administrative agency or otherwise which if
determined adversely to the Company or any of the Subsidiaries would have,
individually or in the aggregate, a Material Adverse Effect, except as set forth
in the Registration Statement, the General Disclosure Package and the
Prospectus.

(o) Title. The Company and the Subsidiaries have good and marketable title to
all of the material properties and assets reflected in the consolidated
financial statements hereinabove described or described in the Registration
Statement, the General Disclosure Package and the Prospectus, subject to no
lien, mortgage, pledge, charge or encumbrance of any kind except those reflected
in such financial statements or described in the Registration Statement, the
General Disclosure Package and the Prospectus or which are not material in
amount or would not materially interfere with the use to be made of such
properties or assets. The Company and the Subsidiaries occupy their leased
properties under valid and binding leases conforming in all material respects to
the description thereof set forth in the Registration Statement, the General
Disclosure Package and the Prospectus.

(p) Taxes. The Company and the Subsidiaries have filed all federal, state, local
and foreign tax returns which have been required to be filed and have paid all
taxes indicated by such returns and all assessments received by them or any of
them to the extent that such taxes have become due and are not being contested
in good faith and for which an adequate reserve for accrual has been established
in accordance with GAAP. All tax liabilities have been adequately provided for
in the consolidated financial statements of the Company in accordance with GAAP,
and the Company does not know of any actual or proposed additional material tax
assessments.

(q) Absence of Certain Changes. Since the respective dates as of which
information is given in the Registration Statement, the General Disclosure
Package and the Prospectus, as each may be amended or supplemented, there has
not been any Material Adverse Effect, and there has not been any material
transaction entered into by the Company or the Subsidiaries, other than
transactions in the ordinary course of business and transactions described in
the Registration Statement, the General Disclosure Package and the Prospectus,
as each may be amended or supplemented. The Company and the Subsidiaries have no
material contingent

 

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obligations which are not disclosed in the Company’s consolidated financial
statements which are included in the Registration Statement, the General
Disclosure Package and the Prospectus.

(r) No Conflicts. Neither the Company nor any of the Subsidiaries is or with the
giving of notice or lapse of time or both, will be after giving effect to the
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby (including, without limitation, the issuance of the Common Shares, the
Warrants, and the reservation for issuance and the issuance of the Warrant
Shares), (i) in violation of its certificate of incorporation, by-laws, any
certificate of designations or other organizational documents or (ii) in
violation of or in default under any agreement, lease, contract, indenture or
other instrument or obligation to which it is a party or by which it, or any of
its properties, is bound and, solely with respect to this clause (ii), which
violation or default would have a Material Adverse Effect. The execution and
delivery of this Agreement and the consummation of the transactions herein
contemplated and the fulfillment of the terms hereof will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust or other agreement or instrument
to which the Company or any Subsidiary is a party or by which the Company or any
Subsidiary or any of their respective properties is bound, or of the certificate
of incorporation or by-laws of the Company or any law, order, rule or regulation
judgment, order, writ or decree applicable to the Company or any Subsidiary of
any court or of any government, regulatory body or administrative agency or
other governmental body having jurisdiction, except to the extent that such
conflict, breach or default would not have a Material Adverse Effect.

(s) Contracts. There is no document, contract or other agreement required to be
described in the Registration Statement or Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required by the 1933 Act or the Rules and Regulations. Each description of a
contract, document or other agreement in the Registration Statement and the
Prospectus accurately reflects in all material respects the terms of the
underlying contract, document or other agreement. Each contract, document or
other agreement described in the Registration Statement and Prospectus or listed
in the exhibits to the Registration Statement or incorporated by reference is in
full force and effect and is valid and enforceable by and against the Company in
accordance with its terms (except as rights to indemnity and contribution
thereunder may be limited by federal or state securities laws and matter of
public policy and except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principle). Neither the Company nor any of its Subsidiaries nor, to
the Company’s knowledge, 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 or any other agreement or instrument to which the Company or its
Subsidiaries is a party or by which the Company or its Subsidiaries or their
respective properties or businesses may be bound, and no event has occurred
which with notice or lapse of time or both would constitute such a default, in
any such case in which the default or event, individually or in the aggregate,
would have a Material Adverse Effect.

(t) Regulatory Approvals. Each approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and delivery
by the Company of this Agreement

 

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and the consummation of the transactions herein contemplated (except such
additional steps as may be required by the SEC, the Financial Industry
Regulatory Authority, Inc. (the “FINRA”) or such additional steps as may be
required under state securities or Blue Sky laws) has been obtained or made and
is in full force and effect.

(u) Conduct of Business. Neither the Company nor any of its Subsidiaries is in
violation of any judgment, decree or order or any statute, ordinance, rule or
regulation applicable to the Company or its Subsidiaries, and neither the
Company nor any of its Subsidiaries will conduct its business in violation of
any of the foregoing, except in all cases for possible violations which could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Without limiting the generality of the foregoing, the Company is
not in violation of any of the rules, regulations or requirements of the
Principal Market and has no knowledge of any facts or circumstances that would
reasonably lead to delisting or suspension of the Common Stock by the Principal
Market in the foreseeable future.

(v) Intellectual Property. Except as described in the Registration Statement or
in any document incorporated by reference therein, the Company and each of the
Subsidiaries hold all material licenses, certificates and permits from
governmental authorities which are necessary to the conduct of their businesses
in the manner in which they are being conducted; the Company and the
Subsidiaries each own or possess the right to use all patents, patent rights,
trademarks, trade names, service marks, service names, copyrights, license
rights, know-how (including trade secrets and other unpatented and unpatentable
proprietary or confidential information, systems or procedures) and other
intellectual property rights (“Intellectual Property”) necessary to carry on
their business in all material respects in the manner in which it is being
conducted; to the Company’s knowledge, neither the Company nor any of the
Subsidiaries has infringed, and none of the Company or the Subsidiaries have
received notice of conflict with, any Intellectual Property of any other person
or entity. The Company has taken all steps reasonably necessary to secure
ownership interests in Intellectual Property created for it by any contractors.
There are no outstanding options, licenses or agreements of any kind relating to
the Intellectual Property of the Company that are required to be described in
the Registration Statement, the General Disclosure Package and the Prospectus
and are not described therein in all material respects. The Company is not a
party to or bound by any options, licenses or agreements with respect to the
Intellectual Property of any other person or entity that are required to be set
forth in the Prospectus and are not described therein in all material respects.
None of the technology employed by the Company and material to the Company’s
business has been obtained or is being used by the Company in violation of any
contractual obligation binding on the Company or, to the Company’s knowledge,
any of its officers, directors or employees or, to the Company’s knowledge,
otherwise in violation of the rights of any persons; the Company has not
received any written or oral communications alleging that the Company has
violated, infringed or conflicted with, or, by conducting its business as set
forth in the Registration Statement, the General Disclosure Package and the
Prospectus, would violate, infringe or conflict with, any of the Intellectual
Property of any other person or entity. The Company knows of no infringement by
others of Intellectual Property owned by or licensed to the Company.

(w) Manipulation of Prices. Neither the Company, nor to the Company’s knowledge,
any of its affiliates, has taken or may take, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to

 

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constitute, the stabilization or manipulation of the price of the shares of
Common Stock to facilitate the sale or resale of the Securities.

(x) Investment Company Act. Neither the Company nor any Subsidiary is or, after
giving effect to the offering and sale of the Securities contemplated hereunder
and the application of the net proceeds from such sale as described in the
Prospectus, and for so long any Buyer holds any Securities, will be an
“investment company” within the meaning of such term under the Investment
Company Act of 1940 as amended (the “1940 Act”), and the rules and regulations
of the SEC thereunder.

(y) Internal Accounting Controls.

(i) The Company and each of the Subsidiaries maintains a system of internal
accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management’s general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

(ii) The Company has established and maintains “disclosure controls and
procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the 1934 Act);
the Company’s “disclosure controls and procedures” are reasonably designed to
ensure that all information (both financial and non-financial) required to be
disclosed by the Company in the reports that it files or submits under the 1934
Act is recorded, processed, summarized and reported within the time periods
specified in the rules and regulations of the 1934 Act, and that all such
information is accumulated and communicated to the Company’s management as
appropriate to allow timely decisions regarding required disclosure and to make
the certifications of the Chief Executive Officer and Chief Financial Officer of
the Company required under the 1934 Act with respect to such reports.

(z) Industry and Market Data. The statistical, industry-related and
market-related data included in the Registration Statement, the General
Disclosure Package and the Prospectus are based on or derived from sources which
the Company reasonably and in good faith believes are reliable and accurate, and
such data agree in all material respects with the sources from which they are
derived.

(aa) Money Laundering Laws. The operations of the Company and the Subsidiaries
are and have been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, applicable money laundering
statutes and applicable rules and regulations thereunder (collectively, the
“Money Laundering Laws”), and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the
Company or any or its subsidiaries with respect to the Money Laundering Laws is
pending or, to the Company’s knowledge, threatened.

 

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(bb) Office of Foreign Assets Control. Neither the Company nor, to the Company’s
knowledge, any director, officer, agent, employee or affiliate of the Company is
currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will
not directly or indirectly use the proceeds of the offering, or lend, contribute
or otherwise make available such proceeds to any subsidiary, joint venture
partner or other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered by OFAC.

(cc) Insurance. The Company and each of the Subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as is adequate for the
conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar businesses.

(dd) Employee Benefits. The Company and each Subsidiary is in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder (“ERISA”); no “reportable event” (as
defined in ERISA) has occurred with respect to any “pension plan” (as defined in
ERISA) for which the Company and each Subsidiary would have any material
liability; the Company and each Subsidiary has not incurred and does not expect
to incur material liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “pension plan” or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the “Code”); and each “pension plan”
for which the Company or any Subsidiary would have any liability that is
intended to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by failure to
act, which would cause the loss of such qualification.

(ee) Employee Relations. (i) Neither the Company nor any of its Subsidiaries is
a party to any collective bargaining agreement or employs any member of a union.
The Company and its Subsidiaries believe that their relations with their
employees are good. No executive officer of the Company or any of its
Subsidiaries has notified the Company or any such Subsidiary that such officer
intends to leave the Company or any such Subsidiary or otherwise terminate such
officer’s employment with the Company or any such Subsidiary. No executive
officer of the Company or any of its Subsidiaries is, or is now expected to be,
in violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement, non-competition agreement, or
any other contract or agreement or any restrictive covenant, and the continued
employment of each such executive officer does not subject the Company or any of
its Subsidiaries to any liability with respect to any of the foregoing matters,
except where such violation would not, either individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.

(ii) The Company and its Subsidiaries are in compliance with all federal, state,
local and foreign laws and regulations respecting labor, employment and
employment practices and benefits, terms and conditions of employment and wages
and hours, except where failure to be in compliance would not, either
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.

 

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(ff) Transactions with Affiliates. To the Company’s knowledge, there are no
affiliations or associations between any member of the FINRA and any of the
Company’s officers, directors or 5% or greater securityholders, except as set
forth in the Registration Statement. There are no relationships or related-party
transactions involving the Company or any of the Subsidiaries or, to the
knowledge of the Company, any other person required to be described in the
Prospectus which have not been described as required.

(gg) Environmental Laws. Neither the Company nor any of the Subsidiaries is in
violation of any statute, rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to the
use, disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, “environmental laws”), owns or operates any real
property contaminated with any substance that is subject to environmental laws,
is liable for any off-site disposal or contamination pursuant to any
environmental laws, or is subject to any claim relating to any environmental
laws, which violation, contamination, liability or claim would, individually or
in the aggregate, have a Material Adverse Effect; and the Company is not aware
of any pending investigation which would reasonably be expected to lead to such
a claim.

(hh) Listing; 1934 Act Registration. The Common Stock is listed for trading on
the Principal Market. The Company has taken no action designed to, or likely to
have the effect of, terminating the registration of the Common Stock under the
1934 Act or the listing of the Common Stock on the Principal Market, nor, has
the Company received any notification that the SEC or the Principal Market is
contemplating terminating such registration or listing.

(ii) Contributions; Foreign Corrupt Practices. Neither the Company nor any of
the Subsidiaries has made any contribution or other payment to any official of,
or candidate for, any federal, state or foreign office in violation of any law
which violation is required to be disclosed in the Prospectus.

(jj) No Integrated Offering. The Company has not sold or issued any securities
that would be integrated with the offering of the Securities contemplated by
this Agreement pursuant to the 1933 Act, the Rules and Regulations or the
interpretations thereof by the SEC or under the Company Guide of the NYSE Amex
Equities.

(kk) Brokerage Fees; Commissions. Except as described in the Registration
Statement and the Prospectus, neither the Company nor any of its Subsidiaries is
a party to any contract, agreement or understanding with any person that would
give rise to a valid claim against the Company or the Buyers for a brokerage
commission, finder’s fee or like payment in connection with the offering and
sale of the Securities. The Company shall pay, and hold the Buyer harmless
against, any liability, loss or expense (including, without limitation,
attorneys’ fees and out-of-pocket expenses) arising in connection with any such
claim.

(ll) Consents. Other than as described in Section 3(t) hereof, or as have been
obtained, filed or made, neither the Company nor any of its Subsidiaries is
required to obtain any consent, authorization or order of, or make any filing or
registration with, any court, governmental agency or any regulatory or
self-regulatory agency or any other Person in order for

 

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it to execute, deliver or perform any of its obligations under or contemplated
by the Transaction Documents, in each case in accordance with the terms hereof
or thereof. The Company and its Subsidiaries are unaware of any facts or
circumstances that might prevent the Company from obtaining or effecting any of
the registration, application or filings pursuant to the preceding sentence. The
Company is not in violation of the listing requirements of the Principal Market
and has no knowledge of any facts that would reasonably lead to delisting or
suspension of the Common Stock in the foreseeable future.

(mm) Acknowledgment Regarding Buyer’s Purchase of Securities. The Company
acknowledges and agrees that each Buyer is acting solely in the capacity of an
arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby and that no Buyer is (i) an officer
or director of the Company, (ii) to the knowledge of the Company, an “affiliate”
of the Company or any of its Subsidiaries (as defined in Rule 144 of the 1933
Act) or (iii) to the knowledge of the Company, a “beneficial owner” of more than
10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the
1934 Act). The Company further acknowledges that no Buyer is acting as a
financial advisor or fiduciary of the Company or any of its Subsidiaries (or in
any similar capacity) with respect to the Transaction Documents and the
transactions contemplated hereby and thereby, and any advice given by a Buyer or
any of its representatives or agents in connection with the Transaction
Documents and the transactions contemplated hereby and thereby is merely
incidental to such Buyer’s purchase of the Securities. The Company further
represents to each Buyer that the Company’s decision to enter into the
Transaction Documents has been based solely on the independent evaluation by the
Company and its representatives.

(nn) Dilutive Effect. The Company acknowledges that its obligation to issue the
Warrant Shares upon exercise of the Warrants in accordance with this Agreement
and the Warrants is, in each case, absolute and unconditional regardless of the
dilutive effect that such issuance may have on the ownership interests of other
stockholders of the Company.

(oo) Application of Takeover Protections; Rights Agreement. The Company and its
board of directors have taken all necessary action, if any, in order to exempt
the Company’s issuance of the Securities and any Buyer’s ownership of the
Securities from the provisions of any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Certificate of Incorporation
of the Company or the laws of the state of its incorporation which is or could
become applicable to any Buyer as a result of the transactions contemplated by
this Agreement, including, without limitation, the Company’s issuance of
Securities and any Buyer’s ownership of the Securities). The Company does not
have any stockholder rights plan or similar arrangement relating to
accumulations of beneficial ownership of Common Stock or a change in control of
the Company.

(pp) Subsidiary Rights. The Company or one of its Subsidiaries has the
unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital securities of its
Subsidiaries as owned by the Company or such Subsidiary.

 

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(qq) Off Balance Sheet Arrangements. There is no transaction, arrangement, or
other relationship between the Company and an unconsolidated or other off
balance sheet entity that is required to be disclosed by the Company in its 1934
Act filings and is not so disclosed or that otherwise would be reasonably likely
to have a Material Adverse Effect.

(rr) Transfer Taxes. On the Closing Date, all stock transfer or other similar
taxes (other than income or similar taxes) which are required to be paid in
connection with the sale and transfer of the Securities to be sold to each Buyer
hereunder will be, or will have been, fully paid or provided for by the Company,
and all laws imposing such taxes will be or will have been complied with.

(ss) Lock-Up. The Company has received a lock-up agreement in the form attached
hereto as Exhibit C executed and delivered by Gators Lender, LLC (the “Lock-Up
Agreement”) and has delivered a copy of the Lock-Up Agreement to each of the
Buyers.

(tt) Acknowledgement Regarding Buyers’ Trading Activity. Except as set forth in
Section 4(o), anything in this Agreement or elsewhere herein to the contrary
notwithstanding, it is understood and acknowledged by the Company (i) that none
of the Buyers have been asked by the Company or its Subsidiaries to agree, nor
has any Buyer agreed with the Company or its Subsidiaries, to desist from
purchasing or selling, long and/or short, securities of the Company, or
“derivative” securities based on securities issued by the Company or to hold the
Securities for any specified term; (ii) that past or future open market or other
transactions by any Buyer, including, without limitation, short sales or
“derivative” transactions, after the closing of the transaction contemplated by
this Agreement or future private placement transactions, may negatively impact
the market price of the Company’s publicly-traded securities; (iii) that any
Buyer, and counter parties in “derivative” transactions to which any such Buyer
is a party, directly or indirectly, presently may have a “short” position in the
Common Stock, and (iv) that each Buyer shall not be deemed to have any
affiliation with or control over any arm’s length counter-party in any
“derivative” transaction. Except as set forth in Section 4(o), the Company
further understands and acknowledges that (a) one or more Buyers may engage in
hedging and/or trading activities at various times during the period that the
Securities are outstanding and (b) such hedging and/or trading activities (if
any) could reduce the value of the existing stockholders’ equity interests in
the Company at and after the time that the hedging and/or trading activities are
being conducted. The Company acknowledges that such aforementioned hedging
and/or trading activities do not constitute a breach of this Agreement, the
Warrants or any of the documents executed in connection herewith.

(uu) U.S. Real Property Holding Corporation. The Company is not, has not ever
been, nor, while any Buyer holds any Securities, will not become, a U.S. real
property holding corporation within the meaning of Section 897 of the Code, and
the Company shall so certify upon any Buyer’s request.

(vv) Shell Company Status. The Company is not, and has never been, an issuer
identified in Rule 144(i)(1).

(ww) Bank Holding Company. Neither the Company nor any of its Subsidiaries or
Affiliates (as defined in Rule 405 of the 1933 Act) is, nor, while any Buyer
holds any

 

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Securities, will become, subject to the Bank Holding Company Act of 1956, as
amended (the “BHCA”) and to regulation by the Board of Governors of the Federal
Reserve System (the “Federal Reserve”). Neither the Company nor any of its
Subsidiaries or Affiliates owns or controls, nor, while any Buyer holds any
Securities, will own or control, directly or indirectly, five percent or more of
the outstanding shares of any class of voting securities or twenty-five percent
or more of the total equity of a bank or any entity that is subject to the BHCA
and to regulation by the Federal Reserve. Neither the Company nor any of its
Subsidiaries or Affiliates exercises, nor, while any Buyer holds any Securities,
will exercise, a controlling influence over the management or policies of a bank
or any entity that is subject to the BHCA and to regulation by the Federal
Reserve.

(xx) Placement Agent’s Fees. The Company shall be responsible for the payment of
any placement agent’s fees, financial advisory fees, or broker’s commissions
(other than for persons engaged by any Buyer or its investment advisor) relating
to or arising out of the transactions contemplated hereby. The Company shall
pay, and hold each Buyer harmless against any liability, loss or expense
(including, without limitation, attorney’s fees and out-of-pocket expenses)
arising in connection with such claim (other than for claims made by Persons
engaged by the Buyer). The Company acknowledges that it has engaged Raymond
James & Associates, Inc. (the “Agent”) as placement agent in connection with the
sale of Securities. Other than the Agent, neither the Company nor any of its
Subsidiaries has engaged any placement agent or other agent in connection with
the sale of the Securities.

4. COVENANTS.

(a) Best Efforts. Each party shall use its best efforts timely to satisfy each
of the conditions to be satisfied by it as provided in Sections 6 and 7 of this
Agreement.

(b) Maintenance of Registration Statement.

(i) For so long as any of the Warrants remain outstanding, the Company shall use
its reasonable best efforts to maintain the effectiveness of the Registration
Statement for the issuance thereunder of the Registrable Securities (as defined
below); provided that, if at any time while the Warrants are outstanding the
Company shall be ineligible to utilize Form S-3 (or any successor form) for the
purpose of issuance of the Registrable Securities the Company shall use its
reasonable best efforts to promptly amend the Registration Statement on such
other form as may be necessary to maintain the effectiveness of the Registration
Statement for this purpose. For the purpose of this Agreement, “Registrable
Securities” means (i) the Warrant Shares issued or issuable upon exercise of the
Warrants and (ii) any shares of capital stock of the Company issued or issuable
with respect to the Warrant Shares as a result of any stock split, stock
dividend, recapitalization, exchange or similar event or otherwise, without
regard to any limitations on exercise of the Warrants.

(c) Prospectus Supplement and Blue Sky. In the manner required by law, the
Company shall have delivered to the Buyers, and as soon as practicable after the
Closing the Company shall file, the Prospectus Supplement with respect to the
Securities as required under and in conformity with the 1933 Act, including Rule
424(b) thereunder. If required, the Company, on or before the Closing Date,
shall take such action as the Company shall reasonably

 

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determine is necessary in order to obtain an exemption for or to qualify the
Securities for sale to the Buyers at the Closing pursuant to this Agreement
under applicable securities or “Blue Sky” laws of the states of the United
States (or to obtain an exemption from such qualification), and shall provide
evidence of any such action so taken to the Buyers on or prior to the Closing
Date. The Company shall make all filings and reports relating to the offer and
sale of the Securities required under applicable securities or “Blue Sky” laws
of the states of the United States following the Closing Date.

(d) Use of Proceeds. The Company will use the proceeds from the sale of the
Securities in the manner described in the Registration Statement and the
Prospectus.

(e) Listing. The Company shall promptly secure the listing of all of the Common
Shares and Warrant Shares upon each securities exchange and automated quotation
system, if any, upon which the Common Stock is then listed, including the
Principal Market (subject to official notice of issuance) and shall use its
reasonable best efforts to maintain, in accordance with the Warrants, such
listing of all Warrant Shares from time to time issuable under the terms of the
Transaction Documents. The Company shall use reasonable best efforts to maintain
the authorization for quotation of the Common Stock on the Principal Market or
if such authorization is not able to be maintained, on another Eligible Market
(as defined in the Warrants). Neither the Company nor any of its Subsidiaries
shall take any action which would be reasonably expected to result in the
delisting or suspension of the Common Stock on the Principal Market. The Company
shall pay all fees and expenses in connection with satisfying its obligations
under this Section 4(e).

(f) Fees. Subject to Section 8 below, at Closing, the Company shall reimburse
Hudson Bay Fund LP (a Buyer) or its designee(s) for all actual and accountable
reasonable costs and expenses incurred in connection with the transactions
contemplated by the Transaction Documents (including all reasonable legal fees
and disbursements in connection therewith, documentation and implementation of
the transactions contemplated by the Transaction Documents and due diligence in
connection therewith). Hudson Bay Fund LP acknowledges that the Company has made
an advance payment in the amount of $50,000 to it in connection with the
foregoing provision. The Company shall be responsible for the payment of any
placement agent’s fees, financial advisory fees, or broker’s commissions (other
than for Persons engaged by any Buyer) relating to or arising out of the
transactions contemplated hereby. The Company shall pay, and hold each Buyer
harmless against, any liability, loss or expense (including, without limitation,
reasonable attorney’s fees and out-of-pocket expenses) arising in connection
with any claim relating to any such payment.

(g) Pledge of Securities. The Company acknowledges and agrees that the
Securities may be pledged by any holder of Securities (an “Investor”) in
connection with a bona fide margin agreement or other loan or financing
arrangement that is secured by the Securities. The pledge of Securities shall
not be deemed to be a transfer, sale or assignment of the Securities hereunder,
and no Investor effecting a pledge of Securities shall be required to provide
the Company with any notice thereof or otherwise make any delivery to the
Company pursuant to this Agreement or any other Transaction Document. The
Company hereby agrees, subject to applicable securities laws, to execute and
deliver such documentation as a pledgee of the

 

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Securities may reasonably request in connection with a pledge of the Securities
to such pledgee by an Investor.

(h) Disclosure of Transactions and Other Material Information. On or before 8:30
a.m., New York City time, on the first Business Day following the execution of
this Agreement, the Company shall issue a press release and file a Current
Report on Form 8-K describing the terms of the transactions contemplated by the
Transaction Documents in the form required by the 1934 Act and attaching the
material Transaction Documents (including, without limitation, this Agreement
(and all schedules of this Agreement), the form of Warrants and the form of the
Lock-Up Agreement) as exhibits to such filing (including all attachments, the
“8-K Filing”). As of immediately following the filing of the 8-K Filing with the
SEC, no Buyer shall be in possession of any material, nonpublic information
received from the Company, any of its Subsidiaries or any of their respective
officers, directors, employees or agents, that is not disclosed in the 8-K
Filing or in prior filings with the SEC. The Company shall not, and shall cause
each of its Subsidiaries and its and each of their respective officers,
directors, employees and agents, not to, provide any Buyer with any material,
nonpublic information regarding the Company or any of its Subsidiaries from and
after the filing of the 8-K Filing with the SEC without the express written
consent of such Buyer. If a Buyer has, or believes it has, received any such
material, nonpublic information regarding the Company or any of its Subsidiaries
provided in breach of the preceding sentence, it shall provide the Company with
written notice thereof in which case the Company shall, within five (5) Trading
Days (as defined in the Warrants) of receipt of such notice, make public
disclosure of any such material, nonpublic information provided in breach of the
preceding sentence. In the event of a breach of the foregoing covenant by the
Company, any of its Subsidiaries, or any of its or their respective officers,
directors, employees and agents, in addition to any other remedy provided herein
or in the Transaction Documents, a Buyer shall have the right to make a public
disclosure, in the form of a press release, public advertisement or otherwise,
of such material, nonpublic information without the prior approval by the
Company, its Subsidiaries, or any of its or their respective officers,
directors, employees or agents. No Buyer shall have any liability to the
Company, its Subsidiaries, or any of its or their respective officers,
directors, employees, stockholders or agents for any such disclosure. Subject to
the foregoing, neither the Company, its Subsidiaries nor any Buyer shall issue
any press releases or any other public statements with respect to the
transactions contemplated hereby; provided, however, that the Company shall be
entitled, without the prior approval of any Buyer, to make any press release or
other public disclosure with respect to such transactions (i) in substantial
conformity with the 8-K Filing and contemporaneously therewith and (ii) as is
required by applicable law, regulation or any Eligible Market on which the
Company’s securities are then listed or quoted (provided that in the case of
clause (i) each Buyer shall be consulted by the Company in connection with any
such press release or other public disclosure prior to its release). Without the
prior written consent of any applicable Buyer, neither the Company nor any of
its Subsidiaries or affiliates shall disclose the name of such Buyer in any
filing, announcement, release or otherwise other than in connection with the
Registration Statement unless such disclosure is required by law, regulation or
any Eligible Market on which the Company’s securities are then listed or quoted.

(i) Variable Securities. So long as any Buyer beneficially owns any Securities,
the Company shall not issue any other securities that would cause a breach or
default under the Warrants. For so long as any Securities remain outstanding,
the Company shall not, in

 

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any manner, issue or sell any rights, warrants or options to subscribe for or
purchase Common Stock or directly or indirectly convertible into or exchangeable
or exercisable for Common Stock at a price which varies or may vary with the
market price of the Common Stock, including by way of one or more reset(s) to
any fixed price, unless the conversion, exchange or exercise price of any such
security cannot be less than the then applicable Exercise Price (as defined in
the Warrants) with respect to the Common Stock into which any Warrant is
exercisable.

(j) Corporate Existence. For so long as any Buyer beneficially owns any
Warrants, the Company shall not be party to any Fundamental Transaction (as
defined in the Warrants) unless the Company is in compliance with the applicable
provisions governing Fundamental Transactions set forth in the Warrants.

(k) Reservation of Shares. The Company shall take all action necessary to at all
times have authorized, and reserved for the purpose of issuance, no less than no
less than (i) the maximum number of shares of Common Stock issuable upon
exercise of the Warrants (without taking into account any limitations on the
exercise of the Warrants set forth in the Warrants).

(l) Additional Issuances of Securities.

(i) For purposes of this Section 4(l), the following definitions shall apply.

(1) “Approved Stock Plan” means any employee benefit plan which has been
approved by the Board of Directors of the Company, pursuant to which the
Company’s securities may be issued to any employee, officer, director,
consultant or advisor for services provided to the Company.

(2) “Common Stock Equivalents” means, collectively, Options and Convertible
Securities.

(3) “Convertible Securities” means any stock or securities (other than Options)
convertible into or exercisable or exchangeable for Common Stock.

(4) “Excluded Securities” means any Common Stock issued or issuable: (i) in
connection with any Approved Stock Plan, (ii) upon exercise of the Warrants;
provided, that the terms of the Warrants are not amended, modified or changed on
or after the date hereof; (iii) upon exercise of any Options or Convertible
Securities which are outstanding on the day immediately preceding the date
hereof, provided that, the terms of such Options or Convertible Securities are
not amended, modified or changed on or after the date hereof, provided, further,
that a change in the exercise or conversion price or number of securities
issuable upon such exercise or conversion that occurs pursuant to the terms in
existence on the date hereof shall not be deemed to be an amendment,
modification or change for purposes of the immediately preceding proviso, and
(iv) in connection with mergers, acquisitions, strategic business partnerships
or joint ventures, in each case with non-affiliated third parties and otherwise
on an arm’s-length

 

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basis, the purpose of which is not to raise additional capital; provided that
any Common Stock issued or issuable in connection with any transaction
contemplated by clause (iv) above that is attributable to capital raising for
the Company or its Subsidiaries (other than nominal amounts of capital) shall
not be deemed to be Excluded Securities. Notwithstanding the foregoing, any
Common Stock issued or issuable to raise capital for the Company or its
Subsidiaries, directly or indirectly, in connection with any transaction
contemplated by clause (iv) above, including, without limitation, securities
issued in one or more related transactions or that result in similar economic
consequences, shall not be deemed to be Excluded Securities.

(5) “Options” means any rights, warrants or options to subscribe for or purchase
Common Stock or Convertible Securities.

(ii) From the date hereof until 180 days after the Closing Date (the “Trigger
Date”), the Company will not (A), directly or indirectly, file any registration
statement with the SEC other than the Registration Statement and shall not file
any Prospectus Supplement with respect to any Subsequent Placement, (B) directly
or indirectly, offer, sell, grant any option to purchase, or otherwise dispose
of (or announce any offer, sale, grant or any option to purchase or other
disposition of) any of its or its Subsidiaries’ equity or equity equivalent
securities, including without limitation any debt, preferred stock or other
instrument or security that is, at any time during its life and under any
circumstances, convertible into or exchangeable or exercisable for shares of
Common Stock or Common Stock Equivalents (any such offer, sale, grant,
disposition or announcement being referred to as a “Subsequent Placement”) or
(C) be party to any solicitations, negotiations or discussions with regard to
the foregoing.

(iii) From the Trigger Date until the second anniversary of the Closing Date the
Company will not, directly or indirectly, effect any Subsequent Placement unless
the Company shall have first complied with this Section 4(l)(iii).

(1) The Company shall deliver to each Buyer a written notice (the “Offer
Notice”) of any proposed or intended issuance or sale or exchange (the “Offer”)
of the securities being offered (the “Offered Securities”) in a Subsequent
Placement, which Offer Notice shall (w) identify and describe the Offered
Securities, (x) describe the price and other terms upon which they are to be
issued, sold or exchanged, and the number or amount of the Offered Securities to
be issued, sold or exchanged, (y) identify the persons or entities (if known) to
which or with which the Offered Securities are to be offered, issued, sold or
exchanged and (z) (i) from the Trigger Date until the first anniversary of the
Closing Date, offer to issue and sell to or exchange with such Buyers all of the
Offered Securities, and (ii) from the day after the first anniversary of the
Closing Date until the second anniversary of the Closing Date, offer to issue
and sell to or exchange with such Buyers at least 50% of the Offered Securities,
allocated among such Buyers (a) based on such Buyer’s pro rata portion of the
Common Shares and Warrants purchased hereunder (the “Basic Amount”), and
(b) with respect to each Buyer that elects to purchase its Basic Amount, any
additional portion of the Offered Securities attributable to the Basic Amounts
of other Buyers as such Buyer shall indicate it will purchase or acquire should
the other Buyers subscribe for less than their Basic Amounts (the
“Undersubscription Amount”).

 

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(2) To accept an Offer, in whole or in part, such Buyer must deliver a written
notice to the Company prior to the end of the third (3rd) Business Day after
such Buyer’s receipt of the Offer Notice (the “Offer Period”), setting forth the
portion of such Buyer’s Basic Amount that such Buyer elects to purchase and, if
such Buyer shall elect to purchase all of its Basic Amount, the
Undersubscription Amount, if any, that such Buyer elects to purchase (in either
case, the “Notice of Acceptance”). If the Basic Amounts subscribed for by all
Buyers are less than the total of all of the Basic Amounts, then each Buyer who
has set forth an Undersubscription Amount in its Notice of Acceptance shall be
entitled to purchase, in addition to the Basic Amounts subscribed for, the
Undersubscription Amount it has subscribed for; provided, however, that if the
Undersubscription Amounts subscribed for exceed the difference between the total
of all the Basic Amounts and the Basic Amounts subscribed for (the “Available
Undersubscription Amount”), each Buyer who has subscribed for any
Undersubscription Amount shall be entitled to purchase only that portion of the
Available Undersubscription Amount as the Basic Amount of such Buyer bears to
the total Basic Amounts of all Buyers that have subscribed for Undersubscription
Amounts, subject to rounding by the Company to the extent its deems reasonably
necessary. Notwithstanding anything to the contrary contained herein, if the
Company desires to modify or amend the terms and conditions of the Offer prior
to the expiration of the Offer Period, the Company may deliver to the Buyers a
new Offer Notice and the Offer Period shall expire on the third (3rd) Business
Day after such Buyer’s receipt of such new Offer Notice.

(3) The Company shall have ten (10) Business Days from the expiration of the
Offer Period above to offer, issue, sell or exchange all or any part of such
Offered Securities as to which a Notice of Acceptance has not been given by the
Buyers (the “Refused Securities”) pursuant to a definitive agreement (the
“Subsequent Placement Agreement”) and only upon terms and conditions (including,
without limitation, unit prices and interest rates) that are not more favorable
to the acquiring person or persons or less favorable to the Company than those
set forth in the Offer Notice and (ii) to publicly announce (a) the execution of
such Subsequent Placement Agreement, and (b) either (x) the consummation of the
transactions contemplated by such Subsequent Placement Agreement or (y) the
termination of such Subsequent Placement Agreement, which shall be filed with
the SEC on a Current Report on Form 8-K with such Subsequent Placement Agreement
and any documents contemplated therein filed as exhibits thereto.

(4) In the event the Company shall propose to sell less than all the Refused
Securities (any such sale to be in the manner and on the terms specified in
Section 4(l)(iii)(3) above), then each Buyer may, at its sole option and in its
sole discretion, reduce the number or amount of the Offered Securities specified
in its Notice of Acceptance to an amount that shall be not less than the number
or amount of the Offered Securities that such Buyer elected to purchase pursuant
to Section 4(l)(iii)(2) above multiplied by a fraction, (i) the numerator of
which shall be the number or amount of Offered Securities the Company actually
proposes to issue, sell or exchange (including Offered Securities to be issued
or sold to Buyers pursuant to Section 4(l)(iii)(3) above prior to such
reduction) and (ii) the denominator of which shall be the original amount of the
Offered Securities. In the event that any Buyer so elects to reduce the number
or

 

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amount of Offered Securities specified in its Notice of Acceptance, the Company
may not issue, sell or exchange more than the reduced number or amount of the
Offered Securities unless and until such securities have again been offered to
the Buyers in accordance with Section 4(l)(iii)(1) above.

(5) Upon the closing of the issuance, sale or exchange of all or less than all
of the Refused Securities, the Buyers shall acquire from the Company, and the
Company shall issue to the Buyers, the number or amount of Offered Securities
specified in the Notices of Acceptance, as reduced pursuant to
Section 4(l)(iii)(3) above if the Buyers have so elected, upon the terms and
conditions specified in the Offer. Notwithstanding anything to the contrary
contained in this Agreement, if the Company does not consummate the closing of
the issuance, sale or exchange of all or less than all of the Refused
Securities, within ten (10) Business Days of the expiration of the Offer Period,
the Company shall issue to the Buyers, the number or amount of Offered
Securities specified in the Notices of Acceptance, as reduced pursuant to
Section 4(l)(iii)(3) above if the Buyers have so elected, upon the terms and
conditions specified in the Offer. The purchase by the Buyers of any Offered
Securities is subject in all cases to the preparation, execution and delivery by
the Company and the Buyers of a purchase agreement relating to such Offered
Securities reasonably satisfactory in form and substance to the Buyers and their
respective counsel.

(6) Any Offered Securities not acquired by the Buyers or other persons in
accordance with Section 4(l)(iii)(3) above may not be issued, sold or exchanged
until they are again offered to the Buyers under the procedures specified in
this Agreement.

(7) The Company and the Buyers agree that if any Buyer elects to participate in
the Offer, neither the Subsequent Placement Agreement with respect to such Offer
nor any other transaction documents related thereto (collectively, the
“Subsequent Placement Documents”) shall include any term or provisions whereby
any Buyer shall be required to agree to any restrictions in trading as to any
securities of the Company owned by such Buyer prior to such Subsequent
Placement.

(8) Notwithstanding anything to the contrary in this Section 4(l) and unless
otherwise agreed to by the Buyers, the Company shall either confirm in writing
to the Buyers that the transaction with respect to the Subsequent Placement has
been abandoned or shall publicly disclose its intention to issue the Offered
Securities, in either case in such a manner such that the Buyers will not be in
possession of material non-public information, by the fifteenth (15th) Business
Day following delivery of the Offer Notice. If by the fifteenth (15th) Business
Day following delivery of the Offer Notice no public disclosure regarding a
transaction with respect to the Offered Securities has been made, and no notice
regarding the abandonment of such transaction has been received by the Buyers,
such transaction shall be deemed to have been abandoned and the Buyers shall not
be deemed to be in possession of any material, non-public information with
respect to the Company. Should the Company decide to pursue such transaction
with respect to the Offered Securities, the Company shall provide each Buyer
with another Offer Notice and each Buyer will again have the right of
participation set forth in

 

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this Section 4(l)(iii). The Company shall not be permitted to deliver more than
one such Offer Notice to the Buyers in any 60 day period.

(iv) The restrictions contained in subsections (ii) and (iii) of this
Section 4(l) shall not apply in connection with the issuance of any Excluded
Securities.

(m) Lock-Up. The Company shall not amend or waive any provision of the Lock-Up
Agreement except to extend the term of the lock-up period and shall enforce the
provisions of the Lock-Up Agreement in accordance with their terms.

(n) Closing Documents. On or prior to fourteen (14) calendar days after the
Closing Date, the Company agrees to deliver, or cause to be delivered, to each
Buyer and Schulte Roth & Zabel LLP executed copies of the Transaction Documents,
Securities and other document required to be delivered to any party pursuant to
Section 7 hereof.

(o) Certain Restrictions on Purchases and Sales. During each of (i) the period
beginning on the fifteenth (15th) Trading Day prior to the First Adjustment Date
(as defined in the Series B Warrants) and ending on the First Adjustment Date
and (ii) the period beginning on the fifteenth (15th) Trading Day prior to the
Second Adjustment Date (as defined in the Series B Warrants) and ending on the
Second Adjustment Date, (x) the Company agrees not to, and shall cause its
officers and directors not to, purchase shares of Common Stock if the aggregate
purchase price of the Common Stock to be purchased by the Company and its
officers and directors on any Trading Day would exceed 25% of the Daily Dollar
Trading Volume (as defined below) of the Common Stock on such Trading Day and
(y) each Buyer agrees not to sell shares of Common Stock if the aggregate sales
price of the Common Stock to be sold by such Buyer on any Trading Day would
exceed 25% of the Daily Dollar Trading Volume of the Common Stock on such
Trading Day. As used herein, “Daily Dollar Trading Volume” means, on any date of
determination, the product of (i) the daily trading volume of the Common Stock
as reported by Bloomberg (as defined in the Warrants) on such Trading Day and
(ii) the Weighted Average Price (as defined in the Warrants) of the Common Stock
on such Trading Day.

(p) No Integrated Transactions. None of the Company, its Subsidiaries, their
affiliates and any Person acting on their behalf will take any action or steps
referred to in Section 3(jj) that would cause the offering of the Securities to
be integrated with other offerings for purposes of any applicable stockholder
approval provisions.

5. REGISTER; TRANSFER AGENT INSTRUCTIONS.

(a) Register. The Company shall maintain at its principal executive offices (or
such other office or agency of the Company as it may designate by notice to each
holder of Securities), a register for the Warrants in which the Company shall
record the name and address of the Person in whose name the Warrants have been
issued (including the name and address of each transferee)), the number of
Warrant Shares issuable upon exercise of the Warrants held by such Person. The
Company shall keep the register open and available at all times during business
hours for inspection of any Buyer or its legal representatives.

(b) Transfer Agent Instructions. The Company shall issue irrevocable
instructions to the Transfer Agent, and any subsequent transfer agent, to issue
certificates or

 

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credit shares to the applicable balance accounts at DTC, registered in the name
of each Buyer or its respective nominee(s), for the Warrant Shares in such
amounts as specified from time to time by each Buyer to the Company upon
exercise of the Warrants in the form of Exhibit D attached hereto (the
“Irrevocable Transfer Agent Instructions”). The Company represents and warrants
that no instruction other than the Irrevocable Transfer Agent Instructions
referred to in this Section 5 will be given by the Company to the Transfer
Agent, and any subsequent transfer agent with respect to the Securities, and
that the Securities shall otherwise be freely transferable on the books and
records of the Company as and to the extent provided in this Agreement and the
other Transaction Documents. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to a Buyer. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Section 5 will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Section 5, that a
Buyer shall be entitled, in addition to all other available remedies, to an
order and/or injunction restraining any breach and requiring immediate issuance
and transfer, without the necessity of showing economic loss and without any
bond or other security being required.

6. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

The obligation of the Company hereunder to issue and sell the Common Shares and
the related Warrants to each Buyer at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for the Company’s sole benefit
and may be waived by the Company at any time in its sole discretion by providing
each Buyer with prior written notice thereof:

(i) Such Buyer shall have executed each of the Transaction Documents to which it
is a party and delivered the same to the Company.

(ii) Such Buyer and each other Buyer shall have delivered to the Company the
Purchase Price for the Common Shares and the related Warrants being purchased by
such Buyer at the Closing by wire transfer of immediately available funds
pursuant to the wire instructions provided by the Company.

(iii) The representations and warranties of such Buyer shall be true and correct
in all material respects (except for those representations and warranties that
are qualified by materiality or Material Adverse Effect, which shall be true and
correct in all respects) as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties that speak
as of a specific date, which shall be true and correct as of such specified
date), and such Buyer shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by such Buyer at or prior
to the Closing Date.

7. CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.

The obligation of each Buyer hereunder to purchase the Common Shares and the
related Warrants at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these
conditions are for each Buyer’s sole benefit

 

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and may be waived by such Buyer at any time in its sole discretion by providing
the Company with prior written notice thereof:

(i) The Company shall have duly executed and delivered to such Buyer (i) each of
the Transaction Documents and (ii) the Common Shares (allocated in such amounts
as such Buyer shall request), being purchased by such Buyer at the Closing
pursuant to this Agreement, and (iii) the related Warrants (allocated in such
amounts as such Buyer shall request) being purchased by such Buyer at the
Closing pursuant to this Agreement.

(ii) Such Buyer shall have received the opinion of Sutherland Asbill & Brennan
LLP, the Company’s counsel, dated as of the Closing Date, in substantially the
form of Exhibit E attached hereto.

(iii) The Company shall have delivered to such Buyer a copy of the Irrevocable
Transfer Agent Instructions, in the form of Exhibit D attached hereto, which
instructions shall have been delivered to and acknowledged in writing by the
Transfer Agent.

(iv) The Company shall have delivered to such Buyer a certificate (or a fax or
pdf copy of such certificate) evidencing the formation and good standing of the
Company and each of its Subsidiaries in such entity’s jurisdiction of formation
issued by the Secretary of State (or comparable office) of such jurisdiction, as
of a date within ten (10) days of the Closing Date.

(v) The Company shall have delivered to such Buyer a certificate (or a fax or
pdf copy of such certificate) evidencing the Company’s qualification as a
foreign corporation and good standing issued by the Secretary of State (or
comparable office of each jurisdiction in which the Company conducts business
and is required to so qualify, as of a date within ten (10) days of the Closing
Date.

(vi) The Company shall have delivered to such Buyer a certified copy of the
Certificate of Incorporation as certified by the Secretary of State of the State
of Delaware (or a fax or pdf copy of such certificate) within ten (10) days of
the Closing Date.

(vii) The Company shall have delivered to such Buyer a certificate, executed by
the Secretary of the Company and dated as of the Closing Date, as to (i) the
resolutions consistent with Section 3(d) as adopted by the Company’s Board of
Directors in a form reasonably acceptable to such Buyer, (ii) the Certificate of
Incorporation and (iii) the Bylaws, each as in effect at the Closing, in the
form attached hereto as Exhibit F.

(viii) The representations and warranties of the Company shall be true and
correct in all material respects (except for those representations and
warranties that are qualified by materiality or Material Adverse Effect, which
shall be true and correct in all respects) as of the date when made and as of
the Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date, which shall be true and correct as
of such specified date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by the Company at or prior to the Closing Date. Such Buyer shall have
received a certificate, executed by the Chief

 

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Executive Officer of the Company, dated as of the Closing Date, to the foregoing
effect in the form attached hereto as Exhibit G.

(ix) The Company shall have delivered to such Buyer a letter from the Transfer
Agent certifying the number of shares of Common Stock outstanding as of a date
within five days of the Closing Date.

(x) The Common Stock (I) shall be designated for quotation or listed on the
Principal Market and (II) shall not have been suspended, as of the Closing Date,
by the SEC or the Principal Market from trading on the Principal Market nor
shall suspension by the SEC or the Principal Market have been threatened, as of
the Closing Date, either (A) in writing by the SEC or the Principal Market or
(B) by falling below the minimum listing maintenance requirements of the
Principal Market.

(xi) The Company shall have obtained all governmental, regulatory or third party
consents and approvals, if any, necessary for the sale of the Securities.

(xii) The Registration Statement shall be effective and available for the
issuance and sale of the Securities hereunder and the Company shall have
delivered to such Buyer the Prospectus and the Prospectus Supplement as required
thereunder.

(xiii) The Company shall have delivered to such Buyer such other documents
relating to the transactions contemplated by this Agreement as such Buyer or its
counsel may reasonably request.

8. TERMINATION. In the event that the Closing shall not have occurred with
respect to a Buyer on or before five (5) Business Days from the date hereof due
to the Company’s or such Buyer’s failure to satisfy the conditions set forth in
Sections 6 and 7 above (and the nonbreaching party’s failure to waive such
unsatisfied condition(s)), the nonbreaching party shall have the option to
terminate this Agreement with respect to such breaching party at the close of
business on such date without liability of any party to any other party;
provided, however, that if this Agreement is terminated pursuant to this
Section 8, the Company shall remain obligated to reimburse Hudson Bay Fund, LP
for the expenses described in Section 4(f) above to the extent that it is a
non-breaching Buyer.

9. MISCELLANEOUS.

(a) Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or

 

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proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.

(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party; provided that a facsimile signature shall be
considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile
signature.

(c) Headings. The headings of this Agreement are for convenience of reference
and shall not form part of, or affect the interpretation of, this Agreement.

(d) Severability. If any provision of this Agreement is prohibited by law or
otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or
unenforceable shall be deemed amended to apply to the broadest extent that it
would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this
Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter
hereof and the prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the parties.
The parties will endeavor in good faith negotiations to replace the prohibited,
invalid or unenforceable provision(s) with a valid provision(s), the effect of
which comes as close as possible to that of the prohibited, invalid or
unenforceable provision(s).

(e) Entire Agreement; Amendments. This Agreement and the other Transaction
Documents supersede all other prior oral or written agreements between the
Buyers, the Company, their affiliates and Persons acting on their behalf with
respect to the matters discussed herein, and this Agreement, the other
Transaction Documents and the instruments referenced herein and therein contain
the entire understanding of the parties with respect to the matters covered
herein and therein and, except as specifically set forth herein or therein,
neither the Company nor any Buyer makes any representation, warranty, covenant
or undertaking with respect to such matters. No provision of this Agreement may
be amended other than by an instrument in writing signed by the Company and the
holders of at least a two-thirds of the aggregate number of Common Shares issued
and issuable hereunder, and any amendment to this Agreement made in conformity
with the provisions of this Section 9(e) shall be binding on all Buyers and
holders of Securities as applicable. No provision hereof may be waived other
than

 

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by an instrument in writing signed by the party against whom enforcement is
sought. No such amendment shall be effective to the extent that it applies to
less than all of the holders of the applicable Securities then outstanding. No
consideration shall be offered or paid to any Person to amend or consent to a
waiver or modification of any provision of any of the Transaction Documents
unless the same consideration also is offered to all of the parties to the
Transaction Documents, holders of Common Shares and holders of Warrants. The
Company has not, directly or indirectly, made any agreements with any Buyers
relating to the terms or conditions of the transactions contemplated by the
Transaction Documents except as set forth in the Transaction Documents. Without
limiting the foregoing, the Company confirms that, except as set forth in this
Agreement, no Buyer has made any commitment or promise or has any other
obligation to provide any financing to the Company or otherwise.

(f) Notices. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one Business Day after deposit with an overnight
courier service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall be:

If to the Company:

UTEK Corporation

2109 Palm Avenue

Tampa, Florida 33605

Telephone:         (813) 754-4330

Facsimile:          (813) 241-4748

Attention:          Doug Schaedler

with a copy (for informational purposes only) to:

Sutherland Asbill & Brennan LLP

1275 Pennsylvania Avenue, N.W.

Washington, D.C. 20004

Telephone:      (202) 383-0805

Facsimile:       (202) 637-3593

Attention:       Harry S. Pangas

If to the Transfer Agent:

 

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Computershare Trust Company, Inc.

250 Royall Street

Canton, MA 02021

Telephone:      (800) 962-4284

Facsimile:       (312) 601-2312

Attention:       Shareholder Services Department

If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers, with copies to such Buyer’s representatives as set forth on the Schedule
of Buyers,

with a copy (for informational purposes only) to:

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Telephone:      (212) 756-2000

Facsimile:       (212) 593-5955

Attention:       Eleazer N. Klein, Esq.

or to such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or
(C) provided by an overnight courier service shall be rebuttable evidence of
personal service, receipt by facsimile or receipt from an overnight courier
service in accordance with clause (i), (ii) or (iii) above, respectively.

(g) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns,
including any purchasers of the Warrants. The Company shall not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the holders of at least a majority of the aggregate number of Common
Shares issued hereunder, including by way of a Fundamental Transaction (unless
the Company is in compliance with the applicable provisions governing
Fundamental Transactions set forth in the Warrants). A Buyer may assign some or
all of its rights hereunder without the consent of the Company, in which event
such assignee shall be deemed to be a Buyer hereunder with respect to such
assigned rights

(h) No Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

(i) Survival. Unless this Agreement is terminated under Section 8, the
representations and warranties of the Company and the Buyers contained in
Sections 2 and 3, and the agreements and covenants set forth in Sections 4, 5
and 9 shall survive the Closing. Each Buyer shall be responsible only for its
own representations, warranties, agreements and covenants hereunder.

 

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(j) Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as are
reasonably necessary in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

(k) Indemnification. (i) In consideration of each Buyer’s execution and delivery
of the Transaction Documents and acquiring the Securities thereunder and in
addition to all of the Company’s other obligations under the Transaction
Documents, the Company shall defend, protect, indemnify and hold harmless each
Buyer and all of their stockholders, partners, members, officers, directors,
employees and direct or indirect investors and any of the foregoing Persons’
agents or other representatives (including, without limitation, those retained
in connection with the transactions contemplated by this Agreement)
(collectively, the “Indemnitees”), as incurred, from and against any and all
actions, causes of action, suits, claims, losses, costs, penalties, fees,
liabilities and damages, and expenses in connection therewith (irrespective of
whether any such Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable fees and disbursements of counsel
(the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or
arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
(b) any breach of any covenant, agreement or obligation of the Company contained
in the Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby or (c) any cause of action, suit or claim brought
or made against such Indemnitee by a third party that is not an Affiliate of
such Indemnitee (including for these purposes a derivative action brought on
behalf of the Company) and arising out of or resulting from (i) the execution,
delivery, performance or enforcement of the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, (ii) any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Securities or (iii) the
status of such Buyer or holder of the Securities as an investor in the Company
pursuant to the transactions contemplated by the Transaction Documents. To the
extent that the foregoing undertaking by the Company may be unenforceable for
any reason, the Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.

(ii) Promptly after receipt by an Indemnitee under this Section 9(k) of notice
of the commencement of any action or proceeding (including any governmental
action or proceeding) involving an Indemnified Liability, such Indemnitee shall,
if a claim for indemnification in respect thereof is to be made against any
indemnifying party under this Section 9(k), deliver to the indemnifying party a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnitee; provided, however, that an Indemnitee
shall have the right to retain its own counsel with the fees and expenses of not
more than one counsel for such Indemnitee to be paid by the indemnifying party,
if, in the reasonable opinion of the Indemnitee, the

 

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representation by such counsel of the Indemnitee and the indemnifying party
would be inappropriate due to actual or potential differing interests between
such Indemnitee and any other party represented by such counsel in such
proceeding. Legal counsel referred to in the immediately preceding sentence
shall be selected by the Investors holding at least a majority of the
Registrable Securities. The Indemnitee shall cooperate fully with the
indemnifying party in connection with any negotiation or defense of any such
action or Indemnified Liabilities by the indemnifying party and shall furnish to
the indemnifying party all information reasonably available to the Indemnitee
that relates to such action or Indemnified Liabilities. The indemnifying party
shall keep the Indemnitee fully apprised at all times as to the status of the
defense or any settlement negotiations with respect thereto. No indemnifying
party shall be liable for any settlement of any action, claim or proceeding
effected without its prior written consent, provided, however, that the
indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the
Indemnitee, consent to entry of any judgment or enter into any settlement or
other compromise which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnitee of a release from all
liability in respect to such Indemnified Liabilities or litigation. Following
indemnification as provided for hereunder, the indemnifying party shall be
subrogated to all rights of the Indemnitee with respect to all third parties,
firms or corporations relating to the matter for which indemnification has been
made. The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnitee under this Section 9(k),
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action.

(iii) The indemnification required by this Section 9(k) shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Liabilities are
incurred.

(iv) The indemnity agreements contained herein shall be in addition to (x) any
cause of action or similar right of the Indemnitee against the indemnifying
party or others, and (y) any liabilities the indemnifying party may be subject
to pursuant to the law.

(l) No Strict Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

(m) Remedies. Each Buyer and each holder of the Securities shall have all rights
and remedies set forth in the Transaction Documents and all rights and remedies
which such holders have been granted at any time under any other agreement or
contract and all of the rights which such holders have under any law. Any Person
having any rights under any provision of this Agreement shall be entitled to
enforce such rights specifically (without posting a bond or other security), to
recover damages by reason of any breach of any provision of this Agreement and
to exercise all other rights granted by law. Furthermore, the Company recognizes
that in the event that it fails to perform, observe, or discharge any or all of
its obligations under the Transaction Documents, any remedy at law may prove to
be inadequate relief to the Buyers. The Company therefore agrees that the Buyers
shall be entitled to seek

 

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temporary and permanent injunctive relief in any such case without the necessity
of proving actual damages and without posting a bond or other security.

(n) Rescission and Withdrawal Right. Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Buyer exercises a right, election, demand or option
under a Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then such Buyer may rescind or
withdraw, in its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights.

(o) Payment Set Aside. To the extent that the Company makes a payment or
payments to the Buyers hereunder or pursuant to any of the other Transaction
Documents or the Buyers enforce or exercise their rights hereunder or
thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other Person under any law (including, without limitation, any
bankruptcy law, foreign, state or federal law, common law or equitable cause of
action), then to the extent of any such restoration the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.

(p) Independent Nature of Buyers’ Obligations and Rights. The obligations of
each Buyer under any Transaction Document are several and not joint with the
obligations of any other Buyer, and no Buyer shall be responsible in any way for
the performance of the obligations of any other Buyer under any Transaction
Document. Nothing contained herein or in any other Transaction Document, and no
action taken by any Buyer pursuant hereto or thereto, shall be deemed to
constitute the Buyers as, and the Company acknowledges, and each Buyer confirms,
that the Buyers do not so constitute, a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Buyers are
in any way acting in concert or as a group, and the Company will not assert any
such claim with respect to such obligations or the transactions contemplated by
the Transaction Documents and the Company acknowledges, and each Buyer confirms,
that the Buyers are not acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents. The
Company acknowledges and each Buyer confirms that it has independently
participated in the negotiation of the transaction contemplated hereby with the
advice of its own counsel and advisors. Each Buyer shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of any other Transaction Documents,
and it shall not be necessary for any other Buyer to be joined as an additional
party in any proceeding for such purpose.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

COMPANY: UTEK CORPORATION

By:

     

Name:

 

Title:

[Signature Page to Securities

Purchase Agreement]

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IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

BUYERS: [BUYER]

By:

     

Name:

 

Title:

[Signature Page to Securities

Purchase Agreement]

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EXHIBITS

 

Exhibit A    Form of Series A Warrant Exhibit B    Form of Series B Warrant
Exhibit C    Form of Lock-Up Agreement Exhibit D    Form of Irrevocable Transfer
Agent Instructions Exhibit E    Form of Opinion of Company’s Counsel Exhibit F
   Form of Secretary’s Certificate Exhibit G    Form of Officer’s Certificate

SCHEDULES

 

Schedule I    List of General Use Free Writing Prospectus

Issuer Free Writing Prospectus dated July 8, 2010

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EXHIBIT C

Form of Lock-Up Agreement

July __, 2010

UTEK Corporation

2109 Palm Avenue

Tampa, Florida 33605

 

  Re:

UTEK Corporation – Lock-Up Agreement

Dear Sirs:

This Lock-Up Agreement is being delivered to you in connection with the
Securities Purchase Agreement (the “Purchase Agreement”), dated as of July __,
2010 by and among UTEK Corporation (the “Company”) and the investors party
thereto (the “Buyers”), with respect to the issuance of (i) shares of Common
Stock, par value $0.01 per share (the “Common Stock”) and (ii) series A and
series B warrants (collectively, the “Warrants”) which Warrants will be
exercisable to purchase Common Stock. Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings set forth in the
Purchase Agreement.

In order to induce the Buyers to enter into the Purchase Agreement, the
undersigned agrees that, commencing on the date hereof and ending on the six
month anniversary of the Closing Date (the “Lock-Up Period”), the undersigned
will not (i) sell, offer to sell, contract or agree to sell, hypothecate,
pledge, grant any option to purchase, make any short sale or otherwise dispose
of or agree to dispose of, directly or indirectly, any shares of Common Stock,
or establish or increase a put equivalent position or liquidate or decrease a
call equivalent position within the meaning of Section 16 of the Securities and
Exchange Act of 1934, as amended and the rules and regulations of the Securities
and Exchange Commission promulgated thereunder with respect to any shares of
Common Stock owned directly by the undersigned (including holding as a
custodian) or with respect to which the undersigned has beneficial ownership
within the rules and regulations of the Securities and Exchange Commission, or
(ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of any shares of
Common Stock, owned directly by the undersigned (including holding as a
custodian) or with respect to which the undersigned has beneficial ownership
within the rules and regulations of the Securities and Exchange Commission,
whether any such transaction is to be settled by delivery of such securities, in
cash or otherwise, (collectively, the “Undersigned’s Shares”).

The foregoing restriction is expressly agreed to preclude the undersigned or any
affiliate of the undersigned from engaging in any hedging or other transaction
which is designed to or which reasonably could be expected to lead to or result
in a sale or disposition of the Undersigned’s Shares even if the Undersigned’s
Shares would be disposed of by someone other than the undersigned. Such
prohibited hedging or other transactions would include, without limitation, any
short sale or any purchase, sale or grant of any right (including, without
limitation, any put or call

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option) with respect to any of the Undersigned’s Shares or with respect to any
security that includes, relates to, or derives any significant part of its value
from the Undersigned’s Shares.

Notwithstanding the foregoing, the undersigned may transfer the Undersigned’s
Shares as a bona fide gift or gifts, provided that the donee or donees thereof
agree to be bound in writing by the restrictions set forth herein. The
undersigned now has, and, except as contemplated by the immediately preceding
sentence, for the duration of this Lock-Up Agreement will have, good and
marketable title to the Undersigned’s Shares, free and clear of all liens,
encumbrances, and claims whatsoever. The undersigned also agrees and consents to
the entry of stop transfer instructions with the Company’s transfer agent and
registrar against the transfer of the Undersigned’s Shares except in compliance
with the foregoing restrictions.

The undersigned understands and agrees that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned’s heirs, legal
representatives, successors, and assigns.

This Lock-Up Agreement may be executed in two counterparts, each of which shall
be deemed an original but both of which shall be considered one and the same
instrument.

This Lock-Up Agreement will be governed by and construed in accordance with the
laws of the State of New York, without giving effect to any choice of law or
conflicting provision or rule (whether of the State of New York, or any other
jurisdiction) that would cause the laws of any jurisdiction other than the State
of New York to be applied. In furtherance of the foregoing, the internal laws of
the State of New York will control the interpretation and construction of this
Lock-Up Agreement, even if under such jurisdiction’s choice of law or conflict
of law analysis, the substantive law of some other jurisdiction would ordinarily
apply.

[Remainder of page intentionally left blank]

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Very truly yours,    Exact Name of Stockholder    Authorized Signature    Title

 

Agreed to and Acknowledged: UTEK CORPORATION By:      

Name:

  Title: