REGISTRATION RIGHTS AGREEMENT
Exhibit
4.16
This
Registration Rights Agreement (this “Agreement”)
is
made and entered into as of July 17, 2006, among Technest Holdings, Inc., a
Nevada corporation (the “Company”),
and
Crystal Research Associates, LLC (the “Holder”).
The
Company and the Holder hereby agree as follows:
1.
Definitions.
As
used
in this Agreement, the following terms shall have the following
meanings:
“Common
Stock”
means
common stock, par value $.001 per share of the Company.
“Effectiveness
Period”
shall
have the meaning set forth in Section
2.
“Indemnified
Party”
shall
have the meaning set forth in Section
5(c)
hereof.
“Indemnifying
Party”
shall
have the meaning set forth in Section
5(c)
hereof.
“Losses”
shall
have the meaning set forth in Section
5(a).
“Proceeding”
means
an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
“Prospectus”
means
the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Registration Statement,
and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
“Registrable
Securities”
means
the Shares and any securities issued or issuable upon any stock split, dividend
or other distribution recapitalization or similar event.
“Registration
Statement”
means
the registration statements required to be filed hereunder, including (in each
case) the Prospectus, amendments and supplements to such registration statement
or Prospectus, including pre- and post-effective amendments, all exhibits
thereto, and all material incorporated by reference or deemed to be incorporated
by reference in such registration statement.
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“Rule
415”
means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same purpose and
effect as such Rule.
“Rule
424”
means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same purpose and
effect as such Rule.
“Securities
Act”
means
the Securities Act of 1933, as amended.
“Shares”
shall
mean the shares of Common Stock underlying the Warrant.
“Trading
Days”
means
(i)
a day on which the Common Stock is traded on a trading market (other than the
OTC Bulletin Board), or (ii) if the Common Stock is not listed on a trading
market (other than the OTC Bulletin Board), a day on which the Common Stock
is
traded in the over-the-counter market, as reported by the OTC Bulletin Board,
(iii) if the Common Stock is not quoted on any trading market, a day on which
the Common Stock is quoted in the over-the-counter market as reported by the
National Quotation Bureau Incorporated (or any similar organization or agency
succeeding to its functions of reporting prices), or (iv) in the event that
the
Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof,
a Business Day.
“Warrant”
shall
mean the warrant to purchase Common Stock issued to the Holder in connection
with the Letter of Agreement dated July 17, 2006 between the Company and the
Holder.
2.
Registration.
(a)
If at
any time during the Effectiveness Period there is not an effective Registration
Statement covering the resale of all of the Registrable Securities and the
Company shall determine to prepare and file with the Commission a Registration
Statement relating to an offering for its own account or the account of others
under the Securities Act of any of its equity securities, other than on Form
S-4
or Form S-8 (each as promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely in connection
with
any acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans, then the Company
shall send to the Holder written notice of such determination and, if within
five business days after receipt of such notice, the Holder shall so request
in
writing, the Company shall include in such Registration Statement for resale
all
or any part of such Registrable Securities such holder requests to be
registered; provided, that, the Company shall not be required to register any
Registrable Securities pursuant to this Section 2(a) that are eligible for
resale pursuant to Rule 144 promulgated under the Securities Act or that are
the
subject of a then effective Registration Statement. Upon the effectiveness
of a
Registration Statement covering the Shares, the Company shall use its
commercially reasonable efforts to keep such Registration Statement continuously
effective under the Securities Act until the earlier of (a) the date on which
the Holder no longer owns any of the Registrable Securities, (b) until all
of
the Registrable Securities covered by such Registration Statement have been
sold
or may be sold without volume restrictions pursuant to Rule 144 as determined
by
the counsel to the Company pursuant to a written opinion letter to such effect,
addressed and acceptable to the Company’s transfer agent and the Holder (the
“Effectiveness
Period”);
and
(c) July 17, 2008. The Company shall promptly notify the Holder via email of
the
effectiveness of the Registration Statement.
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(b)
Notwithstanding the provisions of Section
2(a),
the
Company shall not be obligated to include the Registrable Securities in a
registration statement covering (i) those shares of Common Stock comprising
any
dividend announced by Xxxxxxxx Technologies, Inc., to its stockholders, or
(ii)
shares of Common Stock subject to a firmly underwritten public
offering.
(c)
After
the date on which the Registration Statement is declared effective by the SEC,
the Company may delay the disclosure of material non-public information
concerning the Company by suspending the use of the prospectus included in
the
Registration Statement for a period of time not to exceed thirty (30)
consecutive Trading Days (each, a “Blackout
Period”)
if the
Board of Directors of the Company shall have determined in good faith that
it is
in the best interest of the Company to suspend such use; provided that the
Company shall promptly (i) notify the Holder in writing of the existence of
(but
in no event, without the prior written consent of the Holder, shall the Company
disclose to the Holder any facts or circumstances regarding) material non-public
information giving rise to a Blackout Period, (ii) advise the Holder in writing
to cease all sales under the Registration Statement until the end of the
Blackout Period and (iii) use commercially reasonable efforts to terminate
the
Blackout Period as promptly as possible. The Company may not declare more than
three Blackout Periods in any 365-calendar day period.
3.
Registration
Procedures.
In
connection with the Company's registration obligations hereunder, the Company
shall:
(a)
Not
less than two Trading Days prior to the filing of each Registration Statement
or
any related Prospectus or any amendment or supplement thereto (including any
document that would be incorporated or deemed to be incorporated therein by
reference), the Company shall permit the Holder to review the Registration
Statement and all amendments and supplements thereto prior to their filing
with
the Commission.
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(b)
(i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to the Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep a Registration Statement continuously
effective as to the Registrable Securities for the Effectiveness Period; (ii)
cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement (subject to the terms of this Agreement), and as so
supplemented or amended to be filed pursuant to Rule 424; (iii) respond promptly
to any comments received from the Commission with respect to the Registration
Statement or any amendment thereto and, upon written request of the Holder,
provide the Holder true and complete copies of all correspondence from and
to
the Commission relating to the Registration Statement; and (iv) comply in all
material respects with the provisions of the Securities Act and the Exchange
Act
with respect to the disposition of all Registrable Securities covered by the
Registration Statement during the applicable period in accordance (subject
to
the terms of this Agreement) with the intended methods of disposition by the
Holder thereof set forth in the Registration Statement as so amended or in
the
Prospectus as so supplemented.
(c)
Notify the Holder of Registrable Securities to be sold (which notice shall,
pursuant to clauses
(ii) through (v)
hereof,
be accompanied by an instruction to suspend the use of the Prospectus until
the
requisite changes have been made) promptly (and, in the case of (i)(A) below,
not less than two Trading Days prior to such filing) (i)(A) when a Prospectus
or
any Prospectus supplement or post-effective amendment to the Registration
Statement is proposed to be filed; (B) when the Commission notifies the Company
whether there will be a “review” of the Registration Statement and whenever the
Commission comments in writing on the Registration Statement; and (C) with
respect to the Registration Statement or any post-effective amendment, when
the
same has become effective; (ii) of any request by the Commission or any other
Federal or state governmental authority for amendments or supplements to the
Registration Statement or Prospectus or for additional information; (iii) of
the
issuance by the Commission of any stop order suspending the effectiveness of
a
Registration Statement covering any or all of the Registrable Securities or
the
initiation of any Proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale
in
any jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event or passage of time that makes
the financial statements included in the Registration Statement ineligible
for
inclusion therein or any statement made in the Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein
by
reference untrue in any material respect or that requires any revisions to
the
Registration Statement, Prospectus or other documents so that, in the case
of
the Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
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(d)
Promptly deliver to the Holder, without charge, as many copies of the Prospectus
or Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as the Holder may reasonably request. Subject to the terms
of
this Agreement, the Company hereby consents to the use of such Prospectus and
each amendment or supplement thereto by the Holder in connection with the
offering and sale of the Registrable Securities covered by such Prospectus
and
any amendment or supplement thereto.
(e)
Cooperate with the Holder to facilitate the timely preparation and delivery
of
certificates representing Registrable Securities to be delivered to a transferee
pursuant to a Registration Statement, which certificates shall be free of all
restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as the Holder may
request.
(f)
Upon
the occurrence of any event contemplated by this Section 3, as promptly as
reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to a Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither a Registration Statement nor such Prospectus
will
contain an untrue statement of a material fact or omit to state a material
fact
required to be stated therein or necessary to make the statements therein,
in
light of the circumstances under which they were made, not
misleading.
If the
Company notifies the Holder in accordance with clauses
(ii) through (v) of Section 3(c)
above to
suspend the use of the Prospectus until the requisite changes to such Prospectus
have been made, or the Company otherwise notifies the Holder of its election
to
suspend the availability of the Registration Statement and Prospectus pursuant
to Section
2(c),
then
the Holder shall suspend use of such Prospectus. The Company will use its
commercially reasonable efforts to ensure that the use of the Prospectus may
be
resumed as promptly as is practicable.
(g)
Comply with all applicable rules and regulations of the Commission.
(h)
Use
its commercially reasonable efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of any order suspending the effectiveness of a
Registration Statement.
(i)
The
Company may require, at any time prior to the second Trading Day prior to the
filing date of the Registration Statement, the Holder to furnish to the Company
a statement as to the number of shares of Common Stock beneficially owned by
the
Holder and, if requested by the Commission, the controlling person thereof,
within two Trading Days of the Company’s request.
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4.
Registration
Expenses.
All
fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The
fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the
principal market on which the Common Stock is then listed for trading, and
(B)
in compliance with applicable state securities or Blue Sky laws reasonably
agreed to by the Company in writing (including, without limitation, fees and
disbursements of counsel for the Company in connection with Blue Sky
qualifications or exemptions of the Registrable Securities and determination
of
the eligibility of the Registrable Securities for investment under the laws
of
such jurisdictions as requested by the Holder )), (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses requested by the Holder),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements
of
counsel for the Company, and (v) fees and expenses of all other persons retained
by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation
of
the transactions contemplated by this Agreement (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. In no event shall the Company be
responsible for any broker or similar commissions or any legal fees or other
costs of the Holder.
5.
Indemnification.
(a)
Indemnification
by the Company.
The
Company shall, notwithstanding any termination of this Agreement, indemnify
and
hold harmless the Holder, the officers, directors, and employees of the Holder,
each person who controls the Holder (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) and the officers, directors,
and employees of each such controlling person, to the fullest extent permitted
by applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, costs of preparation and
reasonable attorneys' fees) and expenses (collectively, “Losses”),
as
incurred, arising out of or relating to any untrue or alleged untrue statement
of a material fact contained in a Registration Statement, any Prospectus or
any
form of prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of prospectus
or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except to the extent, but only to the extent, that (1) such
untrue statements or omissions or alleged untrue statements or omissions are
based upon information regarding the Holder furnished in writing to the Company
by the Holder expressly for use therein, or to the extent that such information
relates to the Holder or the Holder’s proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing by
the
Holder expressly for use in a Registration Statement, such Prospectus or such
form of Prospectus or in any amendment or supplement thereto or (2) in the
case
of an occurrence of an event of the type specified in Section
2(c) or Section 3(c)(ii)-(v),
the use
by the Holder of an outdated or defective Prospectus after the Company has
notified the Holder in writing that the Prospectus is outdated or defective
and
prior to the receipt by the Holder of the Advice contemplated in Section
6(d).
The
Company shall notify the Holder promptly of the institution, threat or assertion
of any Proceeding arising from or in connection with the transactions
contemplated by this Agreement of which the Company is aware.
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(b)
Indemnification
by Holder.
The
Holder shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, officers, and employees, each Person who controls the
Company (within the meaning of Section 15 of the Securities Act and Section
20
of the Exchange Act), and the directors, officers, or employees of such
controlling Persons, to the fullest extent permitted by applicable law, from
and
against all Losses (as determined by a court of competent jurisdiction in a
final judgment not subject to appeal or review) arising out of or based upon
any
untrue statement of a material fact contained in any Registration Statement,
any
Prospectus, or any form of prospectus, or in any amendment or supplement
thereto, or arising solely out of or based solely upon: (i) the Holder’s failure
to comply with the prospectus delivery requirements of the Securities Act or
(ii) any omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading to the extent, but only to the
extent, such untrue statement or omission is contained in any information so
furnished in writing by the Holder to the Company specifically for inclusion
in
such Registration Statement or such Prospectus or to the extent that (1) such
untrue statements or omissions are based upon information regarding the Holder
furnished to the Company by the Holder for use therein, or to the extent such
information relates to the Holder or the Holder's proposed method of
distribution of the Registrable Securities and was reviewed and approved by
the
Holder for use in the Registration Statement, such Prospectus or such form
of
Prospectus or in any amendment or supplement thereto or (2) in the case of
an
occurrence of an event of the type specified in Section
2(c) or Section 3(c)(ii)-(v),
the use
by the Holder of an outdated or defective Prospectus after the Company has
notified the Holder in writing that the Prospectus is outdated or defective
and
prior to the receipt by the Holder of the Advice contemplated in Section
6(d).
(c)
Conduct
of Indemnification Proceedings.
If any
Proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an "Indemnified
Party"),
such Indemnified Party shall promptly notify the Person from whom indemnity
is
sought (the "Indemnifying
Party")
in
writing, and the Indemnifying Party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party
and
the payment of all fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that such failure
shall have prejudiced the Indemnifying Party.
An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; or (2) the Indemnifying Party shall have failed promptly to assume
the
defense of such Proceeding and to employ counsel reasonably satisfactory to
such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified
Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that a material conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying Party
(in
which case, if such Indemnified Party notifies the Indemnifying Party in writing
that it elects to employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the right to assume the defense
thereof and the expense of one such counsel for the Holder shall be at the
expense of the Indemnifying Party). The Indemnifying Party shall not be liable
for any settlement of any such Proceeding effected without its written consent,
which consent shall not be unreasonably withheld. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter
of
such Proceeding.
-7-
Subject
to the terms of this Agreement, all fees and expenses of the Indemnified Party
(including reasonable fees and expenses to the extent incurred in connection
with investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within thirty days of written notice thereof to the Indemnifying
Party
(regardless of whether it is ultimately determined that an Indemnified Party
is
not entitled to indemnification hereunder; provided, that the Indemnifying
Party
may require such Indemnified Party to undertake to reimburse all such fees
and
expenses to the extent it is finally judicially determined that such Indemnified
Party is not entitled to indemnification hereunder).
(d)
Contribution.
If a
claim for indemnification under Section
5(a) or 5(b)
is
unavailable to an Indemnified Party (by reason of public policy or otherwise),
then each Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party as
a
result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions, statements or omissions that resulted in such Losses as well
as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission
of a
material fact, has been taken or made by, or relates to information supplied
by,
such Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in Section
5(c),
any
reasonable attorneys' or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have
been
indemnified for such fees or expenses if the indemnification provided for in
this Section was available to such party in accordance with its
terms.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section
5(d)
were
determined by pro rata allocation or by any other method of allocation that
does
not take into account the equitable considerations referred to in the
immediately preceding paragraph.
The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties.
6.
Miscellaneous.
(a)
Amendments
and Waivers.
The
provisions of this Agreement, including the provisions of this sentence, may
not
be amended, modified or supplemented, and waivers or consents to departures
from
the provisions hereof may not be given, unless the same shall be in writing
and
signed by the Company and the Holder.
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(b)
No
Inconsistent Agreements.
Neither
the Company nor any of its subsidiaries has entered, as of the date hereof,
nor
shall the Company or any of its subsidiaries, on or after the date of this
Agreement, enter into any agreement with respect to its securities, that
conflicts with the provisions hereof, except for such agreements, the
conflicting provisions of which have been waived.
(c)
Compliance.
The
Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to the Registration Statement.
(d)
Discontinued
Disposition.
The
Holder agrees by its acquisition of such Registrable Securities that, upon
receipt of a notice from the Company of the occurrence of any event of the
kind
described in Section
2(c) or Sections 3(c)(ii)
or (v),
the
Holder will forthwith discontinue disposition of such Registrable Securities
under a Registration Statement until the Holder's receipt of the copies of
the
supplemented Prospectus and/or amended Registration Statement contemplated
by
Section
3(f),
or
until it is advised in writing (the "Advice")
by the
Company that the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph.
(e)
Notices.
Any and
all notices or other communications or deliveries required or permitted to
be
provided hereunder shall be delivered as set forth in the Letter of Agreement
between the parties.
(f)
Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the successors
and
permitted assigns of each of the parties. The Company may not assign its rights
or obligations hereunder without the prior written consent of the Holder. The
Holder may assign their respective rights hereunder in the manner and to
successors as permitted under the Plan of Distribution, provided however that
in
conjunction with any such assignment, the Holder shall obtain from the successor
and provide to the Company, a written agreement by such successor to be bound
by
each of the provisions of this Agreement.
(g)
Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any signature
is
delivered by facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were the original thereof.
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(h)
Governing
Law.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the Commonwealth of Massachusetts, without regard
to
the principles of conflicts of law thereof. Each party hereby irrevocably
submits to the jurisdiction of the state and federal courts sitting in the
City
of Boston, County of Suffolk, 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
improper. Each party hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
(i)
Cumulative
Remedies.
The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
(j)
Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their reasonable efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction.
(k)
Headings.
The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
********************
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IN
WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
TECHNEST
HOLDINGS, INC.
By:
/s/ Xxxx
Xxxxxxx
Name:
Xxxx
Xxxxxxx
Title: Chief
Financial
Officer
CRYSTAL
RESEARCH ASSOCIATES, LLC
By:
__/s/__________________________________________
Name:
__________________________________________
Title:
___________________________________________
-11-
Annex
A
Plan
of Distribution
Each
Selling Stockholder (the “Selling
Stockholders”)
of the
common stock (“Common
Stock”)
of
Technest Holdings, Inc., a Nevada corporation (the “Company”)
and
any of their pledgees, assignees and successors-in-interest may, from time
to
time, sell any or all of their shares of Common Stock on the Over the Counter
Bulletin Board or any other stock exchange, market or trading facility on which
the shares are traded or in private transactions. These sales may be at fixed
or
negotiated prices. A Selling Stockholder may use any one or more of the
following methods when selling shares:
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits the Selling Stockholder;
|
|
·
|
block
trades in which the broker-dealer will attempt to sell the shares
as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
·
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for
its
account;
|
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
·
|
privately
negotiated transactions;
|
|
·
|
broker-dealers
may agree with the Selling Stockholders to sell a specified number
of such
shares at a stipulated price per
share;
|
|
·
|
a
combination of any such methods of sale;
or
|
|
·
|
any
other method permitted pursuant to applicable
law.
|
The
Selling Stockholders may also sell shares under Rule 144 under the Securities
Act of 1933, as amended (the “Securities
Act”),
if
available, rather than under this prospectus. Broker-dealers engaged by the
Selling Stockholders may arrange for other brokers-dealers to participate in
sales. Broker-dealers may receive commissions or discounts from the Selling
Stockholders (or, if any broker-dealer acts as agent for the purchaser of
shares, from the purchaser) in amounts to be negotiated. Each Selling
Stockholder does not expect these commissions and discounts relating to its
sales of shares to exceed what is customary in the types of transactions
involved.
The
Selling Stockholders may from time to time pledge or grant a security interest
in some or all of the Shares owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may
offer and sell the shares of Common Stock from time to time under this
prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act amending the list of Selling
Stockholders to include the pledgee, transferee or other successor in interest
as Selling Stockholders under this prospectus.
-12-
The
Selling Stockholders also may transfer the shares of Common Stock in other
circumstances, in which case the transferees, pledgees or other successors
in
interest will be the selling beneficial owners for purposes of this
prospectus.
The
Company is required to pay certain fees and expenses incurred by the Company
incident to the registration of the shares. The Company has agreed to indemnify
the Selling Stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.
-13-
