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EXHIBIT 10.4
LOCK-UP AGREEMENT
THIS LOCK-UP AGREEMENT (the "AGREEMENT") is made and entered
into as of the 14th day of February, 2005,
between Technest Holdings, Inc., a
Nevada corporation ("TECHNEST"), and the
individuals that execute and deliver a
Counterpart Signature Page hereof, and
sometimes collectively referred to herein
as the "SHAREHOLDERS" and each, a
"SHAREHOLDER." For all purposes of this
Agreement, "Shareholder" includes any
"affiliate, controlling person of
Shareholder, agent, representative or other
person with whom Shareholder is
acting in concert with.
WHEREAS, Markland Technologies, Inc, a Florida corporation
(the "BUYER"), is acquiring Common Stock of
Technest (the "CHANGE IN CONTROL
TRANSACTION"); and
WHEREAS, the Buyer that is participating in the Change in
Control Transaction has identified a
potential reorganization, merger or
acquisition for Technest that may or may
not be completed or if completed, may
or may not be beneficial to Technest and
its stockholders (the "REORGANIZATION
TRANSACTION"); and
WHEREAS, in order to facilitate the consummation of the
transactions contemplated by the Change in
Control Transaction and the
Reorganization Transaction and to protect
the Company, the Shareholders have
agreed to enter into this Agreement and to
restrict the public sale, assignment,
transfer, conveyance, hypothecation or
alienation of the Common Stock, all on
the terms set forth below.
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants contained herein, the
receipt and sufficiency of which are
hereby acknowledged, the parties hereto
agree as follows:
1. Except as otherwise expressly provided herein, and except
as each Shareholder may be otherwise
restricted from selling shares of Common
Stock, each Shareholder agrees (a) not to
directly or indirectly, sell, offer,
contract or grant any option to sell
(including without limitation any short
sale), pledge, transfer, establish an open
"put equivalent position" within the
meaning of Rule 16a-1(h) under the
Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), or enter into any
swap, hedge or other arraignment to
transfer any economic consequences of
ownership or otherwise dispose of any of
the Common Stock or publicly announce the
undersigned's intention to do any the
foregoing, for the period commencing on the
execution and delivery of this
Agreement and until the earlier of (i) the
seven (7) month period from the
filing of a Form 8-K ("SUCCESSOR ISSUER
8-K") in connection with the Closing of
the Reorganization Transaction and (ii)
such time as there shall be an effective
registration statement providing for the
sale of the Shareholders' Common Stock
(the "LOCK-UP PERIOD");
2. An appropriate legend describing this Agreement shall be
imprinted on each stock certificate
representing Common Stock covered hereby,
and the transfer records of Technest
transfer agent shall reflect such
appropriate restrictions.
3. During the Lock-Up Period, Technest shall maintain its
"reporting" status with the Securities and
Exchange Commission; file all reports
that are required to be filed by it during
such period; and use its best efforts
to ensure that the Common Stock is
continually quoted for public trading on a
nationally recognized medium of no less
significance than the OTC Electronic
Bulletin Board of the National Association
of Securities Dealers, Inc. (the
"NASD"), the NASDAQ Small Cap or a
recognized national stock exchange.
4. Each Shareholder signing this Agreement shall have the
right to have any shares of Common Stock
subject to this Agreement included in
the next registration statement to be filed
by Technest for the sale of its
Common Stock (other than a registration
statement on Forms S-8 or S-4).
Notwithstanding anything to the contrary
set forth herein, Technest may, in its
sole discretion and in good f
