Contract
Exhibit
4.15
THIS
WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY
STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT
BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL
REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION
OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE
SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT
FROM
REGISTRATION.
WARRANT
TO PURCHASE STOCK
Company:
Technest Holdings, Inc., a Nevada corporation
Number
of
Shares: 200,000
Class
of
Stock: Common Stock, $0.001 par value per share
Warrant
Price: $1.89 per share
Issue
Date: July 17, 2006
Expiration
Date: July 17, 2011
THIS
WARRANT CERTIFIES THAT, for good and valuable consideration, CRYSTAL RESEARCH
ASSOCIATES, LLC (Crystal Research Associates, together with any successor or
permitted assignee or transferee of this Warrant or of any shares issued upon
exercise hereof, is referred to hereinafter as "Holder") is entitled to purchase
the number of fully paid and nonassessable shares (the "Shares") of the class
of
securities (the “Class”) of the above-named company (the "Company") at the
above-stated Warrant Price, all as set forth above and as adjusted pursuant
to
Article 2 of this Warrant, subject to the provisions and upon the terms and
conditions set forth in this Warrant.
ARTICLE
1. EXERCISE.
1.1 Method
of Exercise.
Holder
may exercise this Warrant by delivering the original of this Warrant together
with a duly executed Notice of Exercise in substantially the form attached
as
Appendix 1 to the principal office of the Company. Holder shall also deliver
to
the Company a check, wire transfer (to an account designated by the Company),
or
other form of payment acceptable to the Company for the aggregate Warrant Price
for the Shares being purchased.
1.2 Delivery
of Certificate and New Warrant.
Promptly after Holder exercises this Warrant and the Company receives payment
of
the aggregate Warrant Price, the Company shall deliver to Holder certificates
for the Shares acquired and, if this Warrant has not been fully exercised and
has not expired, a new Warrant representing the Shares not so
acquired.
1.3 Replacement
of Warrants.
On
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and, in the case of loss, theft or
destruction, on delivery of an indemnity agreement reasonably satisfactory
in
form and amount to the Company or, in the case of mutilation, or surrender
and
cancellation of this Warrant, the Company shall execute and deliver, in lieu
of
this Warrant, a new warrant of like tenor.
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1.4 Treatment
of Warrant Upon Acquisition of Company.
1.4.1 "Acquisition".
For
the purpose of this Warrant, "Acquisition" means any sale, license, or other
disposition of all or substantially all of the assets of the Company, or any
reorganization, consolidation, merger or sale of outstanding capital stock
of
the Company where the holders of the Company's securities before the transaction
beneficially own less than a majority of the outstanding voting securities
of
the surviving entity after the transaction.
1.4.2 Treatment
of Warrant at Acquisition.
A) Upon
the
written request of the Company, Holder agrees that, in the event of an
Acquisition in which the sole consideration is cash, either (a) Holder shall
exercise its purchase right under this Warrant and such exercise will be deemed
effective immediately prior to the consummation of such Acquisition or (b)
if
Holder elects not to exercise the Warrant, this Warrant will expire upon the
consummation of such Acquisition. The Company shall provide the Holder with
written notice of its request relating to the foregoing (together with such
reasonable information as the Holder may request in connection with such
contemplated Acquisition giving rise to such notice), which is to be delivered
to Holder not less than ten (10) days prior to the closing of the proposed
Acquisition.
B) Upon
the
written request of the Company, Holder agrees that, in the event of an
Acquisition that is an “arms length” sale of all or substantially all of the
Company’s assets (and only its assets) to a third party that is not an Affiliate
(as defined below) of the Company (a “True Asset Sale”), either (a) Holder shall
exercise its purchase right under this Warrant and such exercise will be deemed
effective immediately prior to the consummation of such Acquisition or (b)
if
Holder elects not to exercise the Warrant, this Warrant will continue until
the
Expiration Date if the Company continues as a going concern following the
closing of any such True Asset Sale. The Company shall provide the Holder with
written notice of its request relating to the foregoing (together with such
reasonable information as the Holder may request in connection with such
contemplated Acquisition giving rise to such notice), which is to be delivered
to Holder not less than ten (10) days prior to the closing of the proposed
Acquisition.
C)
Upon
the
closing of any Acquisition other than those particularly described in
subsections (A) and (B) above, the successor entity shall assume the obligations
of this Warrant, and this Warrant shall be exercisable for the same securities,
cash, and property as would be payable for the Shares issuable upon exercise
of
the unexercised portion of this Warrant as if such Shares were outstanding
on
the record date for the Acquisition and subsequent closing. The Warrant Price
and/or number of Shares shall be adjusted accordingly.
As
used
herein “Affiliate”
shall
mean any person or entity that owns or controls directly or indirectly ten
percent (10%) or more of the stock of Company, any person or entity that
controls or is controlled by or is under common control with such persons or
entities, and each of such person’s or entity’s officers, directors, joint
venturers or partners, as applicable.
2
ARTICLE
2. ADJUSTMENTS
TO THE SHARES.
2.1 Stock
Dividends, Splits, Etc.
If the
Company declares or pays a dividend on the outstanding shares of the Class
payable in common stock or other securities, then upon exercise of this Warrant,
for each Share acquired, Holder shall receive, without cost to Holder, the
total
number and kind of securities to which Holder would have been entitled had
Holder owned the Shares of record as of the date the dividend occurred. If
the
Company subdivides the outstanding shares of the Class by reclassification
or
otherwise into a greater number of shares or takes any other action which
increase the amount of common stock into which the one share of the Class is
convertible, the number of Shares purchasable hereunder shall be proportionately
increased and the Warrant Price shall be proportionately decreased. If the
outstanding shares of the Class are combined or consolidated, by
reclassification or otherwise, into a lesser number of shares, the Warrant
Price
shall be proportionately increased and the number of Shares shall be
proportionately decreased.
2.2 Reclassification,
Exchange, Combinations or Substitution.
Upon
any reclassification, exchange, substitution, or other event that results in
a
change of the number and/or class of the securities issuable upon exercise
or
conversion of this Warrant, Holder shall be entitled to receive, upon exercise
or conversion of this Warrant, the number and kind of securities and property
that Holder would have received for the Shares if this Warrant had been
exercised immediately before such reclassification, exchange, substitution,
or
other event. The Company or its successor shall promptly issue to Holder an
amendment to this Warrant setting forth the number and kind of such new
securities or other property issuable upon exercise or conversion of this
Warrant as a result of such reclassification, exchange, substitution or other
event that results in a change of the number and/or class of securities issuable
upon exercise or conversion of this Warrant. The amendment to this Warrant
shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article 2 including, without
limitation, adjustments to the Warrant Price and to the number of securities
or
property issuable upon exercise of the new Warrant. The provisions of this
Article 2.2 shall similarly apply to successive reclassifications, exchanges,
substitutions, or other events.
2.3 No
Impairment.
The
Company shall not, by amendment of its Articles or Certificate (as applicable)
of Incorporation or through a reorganization, transfer of assets, consolidation,
merger, dissolution, issue, or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to
be
observed or performed under this Warrant by the Company, but shall at all times
in good faith assist in carrying out of all the provisions of this Article
2 and
in taking all such action as may be necessary or appropriate to protect Holder's
rights under this Article against impairment.
2.4 Fractional
Shares.
No
fractional Shares shall be issuable upon exercise of the Warrant and the number
of Shares to be issued shall be rounded down to the nearest whole Share.
2.5 Certificate
as to Adjustments.
Upon
each adjustment of the Warrant Price, the Company shall promptly notify Holder
in writing, and, at the Company’s expense, promptly compute such adjustment, and
furnish Holder with a certificate of its Chief Financial Officer setting forth
such adjustment and the facts upon which such adjustment is based. The Company
shall, upon written request, furnish Holder a certificate setting forth the
Warrant Price in effect upon the date thereof and the series of adjustments
leading to such Warrant Price.
3
ARTICLE
3. REPRESENTATIONS
AND COVENANTS OF THE COMPANY.
3.1 Representations
and Warranties.
The
Company represents and warrants to, and agrees with, the Holder as
follows:
(a) All
Shares which may be issued upon the exercise of the purchase right represented
by this Warrant, and all securities, if any, issuable upon conversion of the
Shares, shall, upon issuance, be duly authorized, validly issued, fully paid
and
nonassessable, and free of any liens and encumbrances except for restrictions
on
transfer provided for herein or under applicable federal and state securities
laws.
3.2 Notice
of Certain Events.
If the
Company proposes at any time (a) to declare any dividend or distribution upon
the outstanding shares of the same class and series as the Shares, whether
in
cash, property, stock, or other securities and whether or not a regular cash
dividend; (b) to offer for subscription or sale pro rata to the holders of
the
outstanding shares of the same class and series as the Shares any additional
shares of any class or series of the Company's stock; (c) to effect any
reclassification, reorganization or recapitalization of any of its stock; or
(d)
to effect an Acquisition or to liquidate, dissolve or wind up; then, in
connection with each such event, the Company shall give Holder: (1) at least
10
days prior written notice of the date on which a record will be taken for such
dividend, distribution, or subscription rights (and specifying the date on
which
the holders of shares of the same class and series as the Shares will be
entitled thereto) or for determining rights to vote, if any, in respect of
the
matters referred to in (c) and (d) above; and (2) in the case of the matters
referred to in (c) and (d) above at least 10 days prior written notice of the
date when the same will take place (and specifying the date on which the holders
of shares of the same class and series as the Shares will be entitled to
exchange their shares for the securities or other property deliverable upon
the
occurrence of such event).
3.3 Registration
Under Securities Act of 1933, as amended.
The
Company agrees that the Shares shall have certain incidental, or “Piggyback,”
registration rights pursuant to and as set forth in the Registration Rights
Agreement between the Company and Holder.
3.4 No
Shareholder Rights.
Except
as provided in this Warrant, Holder will not have any rights as a shareholder
of
the Company until the exercise of this Warrant.
3.5 Certain
Information.
The
Company agrees to provide Holder at any time and from time to time with such
information as Holder may reasonably request for purposes of Holder’s compliance
with regulatory, accounting and reporting requirements applicable to
Holder.
ARTICLE
4. REPRESENTATIONS,
WARRANTIES OF THE HOLDER.
The
Holder represents and warrants to the Company as follows:
4
4.1 Purchase
for Own Account.
This
Warrant and the securities to be acquired upon exercise of this Warrant by
Holder will be acquired for investment for Holder’s account, not as a nominee or
agent, and not with a view to the public resale or distribution within the
meaning of the Act. Holder also represents that it has not been formed for
the
specific purpose of acquiring this Warrant or the Shares.
4.2 Disclosure
of Information.
Holder
has received or has had full access to all the information it considers
necessary or appropriate to make an informed investment decision with respect
to
the acquisition of this Warrant and its underlying securities. Holder further
has had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of this Warrant and its
underlying securities and to obtain additional information (to the extent the
Company possessed such information or could acquire it without unreasonable
effort or expense) necessary to verify any information furnished to Holder
or to
which Holder has access.
4.3 Investment
Experience.
Holder
understands that the purchase of this Warrant and its underlying securities
involves substantial risk. Holder has experience as an investor in securities
of
companies in the development stage and acknowledges that Holder can bear the
economic risk of such Holder’s investment in this Warrant and its underlying
securities and has such knowledge and experience in financial or business
matters that Holder is capable of evaluating the merits and risks of its
investment in this Warrant and its underlying securities and/or has a
preexisting personal or business relationship with the Company and certain
of
its officers, directors or controlling persons of a nature and duration that
enables Holder to be aware of the character, business acumen and financial
circumstances of such persons.
4.4 Accredited
Investor Status.
Holder
is an “accredited investor” within the meaning of Regulation D promulgated under
the Act.
4.5 The
Act.
Holder
understands that this Warrant and the Shares issuable upon exercise hereof
have
not been registered under the Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of the Holder’s investment intent as expressed herein. Holder understands
that this Warrant and the Shares issued upon any exercise hereof must be held
indefinitely unless subsequently registered under the 1933 Act and qualified
under applicable state securities laws, or unless exemption from such
registration and qualification are otherwise available.
ARTICLE
5. MISCELLANEOUS.
5.1 Term:
This
Warrant is exercisable in whole or in part at any time and from time to time
on
or before the Expiration Date.
5.2 Legends. This
Warrant and the Shares (and the securities issuable, directly or indirectly,
upon conversion of the Shares, if any) shall be imprinted with a legend in
substantially the following form:
THIS
WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE
ACT, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED
UNDER
SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION OF LEGAL COUNSEL
IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM
REGISTRATION.
5
5.3 Compliance
with Securities Laws on Transfer.
This
Warrant and the Shares issuable upon exercise of this Warrant (and the
securities issuable, directly or indirectly, upon conversion of the Shares,
if
any) may not be transferred or assigned in whole or in part without compliance
with applicable federal and state securities laws by the transferor and the
transferee (including, without limitation, the delivery of investment
representation letters and legal opinions reasonably satisfactory to the
Company, as reasonably requested by the Company).
5.4
Transfer Procedure.
Subject
to the provisions of Article 5.3 and upon providing the Company with written
notice, Holder and any subsequent Holder may transfer all or part of this
Warrant or the Shares issuable upon exercise of this Warrant (or the Shares
issuable directly or indirectly, upon conversion of the Shares, if any) to
any
transferee, provided, however, in connection with any such transfer, Holder
will
give the Company notice of the portion of the Warrant being transferred with
the
name, address and taxpayer identification number of the transferee and Holder
will surrender this Warrant to the Company for reissuance to the transferee(s)
(and Holder if applicable). The Company may refuse to transfer this Warrant
or
the Shares to any person who directly competes with the Company.
5.5 Notices.
All
notices and other communications from the Company to the Holder, or vice versa,
shall be deemed delivered and effective when given personally or mailed by
first-class registered or certified mail, postage prepaid, at such address
as
may have been furnished to the Company or Holder, as the case may (or on the
first business day after transmission by facsimile) be, in writing by the
Company or such holder from time to time. All notices to Holder shall be
addressed as follows until the Company receives notice of a change of address
in
connection with a transfer or otherwise:
Crystal
Research Associates, LLC
[
]
Notice
to
the Company shall be addressed as follows until Holder receives notice of a
change in address:
Technest
Holdings, Inc.
Chief
Financial Officer
Xxx
XxXxxxxx Xxxxxx, 0xx
Xxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
5.6 Waiver.
This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which enforcement
of such change, waiver, discharge or termination is sought.
6
5.7 Attorney’s
Fees.
In the
event of any dispute between the parties concerning the terms and provisions
of
this Warrant, the party prevailing in such dispute shall be entitled to collect
from the other party all costs incurred in such dispute, including reasonable
attorneys’ fees.
5.8 Counterparts.
This
Warrant may be executed in counterparts, all of which together shall constitute
one and the same agreement.
5.9 Governing
Law.
This
Warrant shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts, without giving effect to its principles regarding
conflicts of law.
|
“COMPANY”
TECHNEST
HOLDINGS, INC.
By:
/s/ Xxxx Xxxxxxx
Name:______________________________
(Print)
Title: Chief
Financial Officer
|
|
“HOLDER”
CRYSTAL
RESEARCH ASSOCIATES, LLC
By:
/s/
Name:______________________________
(Print)
Title:
|
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APPENDIX
1
NOTICE
OF EXERCISE
1. Holder
elects to purchase ___________ shares of the Common Stock of __________________
pursuant to the terms of the attached Warrant, and tenders payment of the
purchase price of the shares in full.
2. Please
issue a certificate or certificates representing the shares in the name
specified below:
___________________________________________
Holders
Name
___________________________________________
___________________________________________
(Address)
3.
By its
execution below and for the benefit of the Company, Holder hereby restates
each
of the representations and warranties in Article 4 of the Warrant as the date
hereof.
HOLDER:
____________________________
By:__________________________
Name:________________________
Title:_________________________
(Date):________________________
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