Document:

Registration Rights Agreement

    Exhibit
      10.4

     

    REGISTRATION
      RIGHTS AGREEMENT

    

    This
      Registration Rights Agreement (“Agreement”), dated as of June 11, 2007, is made
      by and between MARKLAND TECHNOLOGIES, INC., a Florida corporation (“Company”),
      and SOUTHRIDGE
      PARTNERS LP, a Delaware limited partnership, SOUTHSHORE CAPITAL FUND LTD, a
      Cayman Islands corporation, ABERDEEN AVENUE LLC, a Cayman Islands limited
      liability company, BRITTANY CAPITAL MANAGEMENT LTD., a Bahamian corporation,
      ROBERT TARINI, GINO PEREIRA and syndicated investors (each such investor is
      an
“Investor,” and all such investors are, collectively, the
“Investors”).
      

    

    RECITALS

    

    WHEREAS,
      upon
      the terms and subject to the conditions of the Litigation Settlement, Securities
      Purchase, Relinquishment and Exchange Agreement (“Purchase Agreement”), as of
      even date, between the Investors and the Company, the Company has agreed to
      transfer to the Investors (other than Messrs. Tarini and Pereira) (i)
three
      million one hundred fifty-five thousand nine hundred forty-nine
      (3,155,949)
      shares
      of the Technest Common Stock (the “Purchased Technest Shares”), and (ii)
      5,879,322 shares of Technest Common Stock pursuant to conversions of shares
      of
      the Company’s Series G Convertible Preferred Stock, $0.0001 par value per share
      (the “Series G Conversion Shares,”), issued on even date; and

    

    WHEREAS,
      pursuant to the Purchase Agreement, Mr. Tarini and Mr. Pereira have agreed
      to
      relinquish the Company’s outstanding Series F Preferred Stock;

    

    WHEREAS,
      pursuant to the terms an equity grant dated October 20, 2006 Mr. Tarini and
      Mr.
      Pereira are entitled to an immediate grant of 500,000 shares of Common Stock
      of
      Technest as a consequence of the transactions contemplated by the Purchase
      Agreement which may be deemed to include a “change of control” of the Company
      and have agreed to relinquish such right in exchange for the immediate issuance
      to each of them of 375,000 shares of Technest Common Stock (750,000 shares
      in
      the aggregate, which, together with the Purchased Technest Shares and the Series
      G Conversion Shares, are referred to herein as the “Registrable Securities”);
      and 

    

    WHEREAS,
      to
      induce the Investors to execute and deliver the Purchase Agreement, the Company
      has agreed to provide certain registration rights under the Securities Act
      of
      1933, as amended, and the rules and regulations thereunder, or any similar
      successor statute (collectively, “Securities Act”), and applicable state
      securities laws with respect to the Registrable Securities;

    

    NOW,
      THEREFORE,
      in
      consideration of the premises and the mutual covenants contained herein and
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, the Company and the Investors hereby agree as
      follows:

    

    1.    Definitions.

    

    (a)   As
      used
      in this Agreement, the following terms shall have the following
      meaning:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (i)    “Business
      Day” means any
      day
      that is not a Saturday, Sunday, or legal holiday in the State of New York when
      commercial banking institutions are required to be closed.

     

    (ii)    “Closing
      Date” means the date of this Agreement.

    

    (iii)   “Investor”
      and “Investors” have the meaning set forth in the preamble to this
      Agreement.

    

    (iv)   “Potential
      Material Event” means any of the following: (a) possession by the Company of
      material information not ripe for disclosure in a Registration Statement (as
      defined below), which shall be evidenced by determinations in good faith by
      the
      Board of Directors of the Company that disclosure of such information in the
      Registration Statement would be detrimental to the business and affairs of
      the
      Company, or (b) any material engagement or activity by the Company which would,
      in the good faith determination of the Board of Directors of the Company, be
      adversely affected by disclosure in a Registration Statement at such time,
      which
      determination shall be accompanied by a good faith determination by the Board
      of
      Directors of the Company that the Registration Statement would be materially
      misleading absent the inclusion of such information.

     

    (v)    “Register”,
      “registered” and “registration” refer to a registration effected by preparing
      and filing a Registration Statement or Statements in compliance with the
      Securities Act and pursuant to Rule 415 under the Securities Act or any
      successor rule providing for offering securities on a delayed or continuous
      basis (“Rule 415”), and the declaration or ordering of effectiveness of such
      Registration Statement by the United States Securities and Exchange Commission
      (the “SEC”).

    

    (vi)    “Registration
      Statement” means a registration statement of the Company under the Securities
      Act.

    

    (vii)   “Technest”
      means Technest Holdings, Inc., a Nevada corporation.

    

    (viii)   “Technest
      Common Stock” means the common stock of Technest, $0.001 par value per
      share.

    

    (b)    
Capitalized
      terms used herein and not otherwise defined herein shall have the respective
      meanings set forth in the Purchase Agreement.

    

    2.    Requested
      Registration. In
      case
      the Company shall receive from the Investors holding rights to a majority of
      the
      Registrable Securities (“Initiating Holders”) a written request that the Company
      effect any registration, qualification or compliance with respect to Registrable
      Securities, the Company will: (i) promptly give written notice of the proposed
      registration, qualification or compliance to all other Investors; and (ii)
      as
      soon as practicable, use its best efforts to effect such registration,
      qualification or compliance (including, without limitation, appropriate
      qualification under applicable blue sky or other state securities laws and
      appropriate compliance with applicable regulations issued under the
      Securities

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

      Act
        and
        any other governmental requirements or regulations) as may be so requested
        and
        as would permit or facilitate the sale and distribution of all or such portion
        of such Registrable Securities as are specified in such request, together
        with
        all or such portion of the Registrable Securities of any Investor or Investors
        joining in such request as are specified in a written request received by
        the
        Company within twenty (20) days after receipt of such written notice from
        the
        Company; provided, however, that the Company shall not be obligated to take
        any
        action to effect any such registration, qualification or compliance pursuant
        to
        this Section 2: 

    

    

    (A)    in
      any
      particular jurisdiction in which the Company would be required to execute a
      general consent to service of process in effecting such registration,
      qualification or compliance, unless the Company is already subject to service
      in
      such jurisdiction and except as may be required by the Securities
      Act;

    

    (B)    during
      the period starting with the date sixty (60) days prior to the Company’s
      estimated date of filing of, and ending on the date six months immediately
      following the effective date of, any registration statement pertaining to
      securities of the Company (other than a registration of securities in a Rule
      145
      transaction, or with respect to an employee benefit plan), provided that the
      Company is actively employing in good faith all reasonable efforts to cause
      such
      registration statement to become effective; or

    

    (C)    after
      the
      Company has effected two such registrations in any twelve month period pursuant
      to this Section 2, and such registrations have been declared or ordered
      effective. 

    

    Subject
      to the foregoing clauses (A) through (C), the Company shall cause Technest
      to
      prepare and file a Registration Statement covering the Registrable Securities
      so
      requested to be registered as soon as practicable after receipt of the request
      or requests of the Initiating Holders, but in any event within one hundred
      eighty (180) days of such request or requests (the “Filing Date”). The Company
      shall use its best efforts to cause the Registration Statement relating to
      the
      Registrable Securities for which a request for registration has been made to
      become effective within two hundred seventy (270) days after the Filing Date
      (“Effective Date”). Such Registration Statement shall state that, in accordance
      with the Securities Act, it also covers such indeterminate number of additional
      shares of Technest Common Stock as may become issuable to prevent dilution
      resulting from stock splits, or stock dividends. 

    

    3.    Obligation
      of the Company.  In
      connection with the registration of the Registrable Securities set forth in
      Section 2 above, the Company shall cause each of the following:

    

    (a)    Keep
      the
      Registration Statement effective at all times until the earliest of (i) the
      date
      when the Investors may sell all Registrable Securities under Rule 144 without
      volume limitations, or (ii) the date the Investors no longer owns any of the
      Registrable Securities (collectively, the “Registration Period”), which
      Registration Statement (including any amendments or supplements, thereto and
      prospectuses contained therein) shall not contain any 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 the light of the circumstances
      under which they were made, not misleading;

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (b)    Prepare
      and file with the SEC such amendments (including post-effective amendments)
      and
      supplements to the Registration Statement and the prospectus used in connection
      with the Registration Statement as may be necessary to keep the Registration
      Statement effective at all times during the Registration Period, and, during
      the
      Registration Period, and to comply with the provisions of the Securities Act
      with respect to the disposition of all Registrable Securities of the Company
      and
      Technest covered by the Registration Statement until the expiration of the
      Registration Period.

    

    (c)    Permit
      a
      single firm of counsel designated by Investors to review the Registration
      Statement and all amendments and supplements thereto a reasonable period of
      time
      (but not less than three (3) Business Days) prior to their filing with the
      SEC,
      and not file any document in a form to which such counsel reasonably
      objects.

     

    (d)    Notify
      Investors and Investors’ legal counsel identified to the Company (“Investors’
Counsel”) (and, in the case of (i)(A) below, not less than one (1) Business Day
      prior to such filing) and (if requested by any such person) confirm such notice
      in writing no later than one (1) Business Day following the day (i): (A) when
      a
      prospectus or any prospectus supplement or post-effective amendment to the
      Registration Statement is proposed to be filed; (B) whenever the SEC notifies
      the Company whether there will be a “review” of such Registration Statement; (C)
      whenever the Company receives (or a representative of the Company receives
      on
      its behalf) any oral or written comments from the SEC with respect to a
      Registration Statement (copies or, in the case of oral comments, written or
      oral
      summaries of such comments shall be promptly furnished by the Company to
      Investors’ Counsel); and (D) with respect to the Registration Statement or any
      post-effective amendment, when the same has become effective; (ii) of any
      request by the SEC or any other Federal or state governmental authority for
      amendments or supplements to the Registration Statement or the prospectus or
      for
      additional information; (iii) of the issuance by the SEC of any stop order
      suspending the effectiveness of the Registration Statement covering any or
      all
      of the Registrable Securities or the initiation of any proceedings for that
      purpose; (iv) if at any time any of the representations or warranties of the
      Company contained in any agreement (including any securities purchase agreement)
      contemplated hereby ceases to be true and correct in all material respects;
      (v)
      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 (vi) of the occurrence of any event that to
      the
      knowledge of the Company makes any statement made in the Registration Statement
      or the 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, the 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 the light of the circumstances under which they were
      made, not misleading. In addition, the Company shall furnish Investors’ Counsel
      with copies of all intended written responses to the comments contemplated
      in
      clause (C) of this Section not later than one (1) Business Day in advance of
      the
      filing of such responses with the SEC so that the Investors shall have the
      opportunity to comment thereon.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (e)    Furnish
      to the Investors, (i) promptly after the same is prepared and publicly
      distributed, filed with the SEC, or received by the Company, one (1) copy of
      the
      Registration Statement, each preliminary prospectus and the prospectus, and
      each
      amendment or supplement thereto, and (ii) such number of copies of a prospectus,
      including a preliminary prospectus, and all amendments and supplements thereto
      and such other documents, as the Investors may reasonably request in order
      to
      facilitate the disposition of the Registrable Securities owned by the
      Investors;

     

    (f)    Use
      all
      diligent efforts to (i) register and/or qualify the Registrable Securities
      covered by the Registration Statement under such other securities or blue sky
      laws of such jurisdictions as the Investors may reasonably request and in which
      significant volumes of shares of Technest Common Stock are traded, (ii) prepare
      and file in those jurisdictions such amendments (including post-effective
      amendments) and supplements to such registrations and qualifications as may
      be
      necessary to maintain the effectiveness thereof at all times during the
      Registration Period, (iii) take such other actions as may be necessary to
      maintain such registrations and qualification in effect at all times during
      the
      Registration Period, and (iv) take all other actions reasonably necessary or
      advisable to qualify the Registrable Securities for sale in such jurisdictions:
      provided,
      however,
      that
      the Company shall not be required in connection therewith or as a condition
      thereto to (A) qualify to do business in any jurisdiction where it would not
      otherwise be required to qualify but for this Section 3(f), (B) subject itself
      to general taxation in any such jurisdiction, (C) file a general consent to
      service of process in any such jurisdiction, (D) provide any undertakings that
      cause more than nominal expense or burden to the Company or (E) make any change
      in its charter or by-laws or any then existing contracts, which in each case
      the
      Board of Directors of the Company determines to be contrary to the best
      interests of the Company and its stockholders;

     

    (g)    As
      promptly as practicable after becoming aware of such event, notify the Investors
      of the happening of any event of which the Company has knowledge, as a result
      of
      which the prospectus included in the Registration Statement, as then in effect,
      includes any untrue statement of a material fact or omits to state a material
      fact required to be stated therein or necessary to make the statements therein,
      in the light of the circumstances under which they were made, not misleading
      (“Registration Default”), and uses all diligent efforts to promptly prepare a
      supplement or amendment to the Registration Statement or other appropriate
      filing with the SEC to correct such untrue statement or omission, and any other
      necessary steps to cure the Registration Default, and deliver a number of copies
      of such supplement or amendment to the Investors as the Investors may reasonably
      request. Failure to cure the Registration Default within fifteen (15) Business
      Days shall result in the Company including liquidated damages of 1% of the
      cost
      of all Technest Common Stock constituting Registrable Securities then held
      by
      the Investors for each 15 day period or portion thereof, beginning on the date
      of suspension.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (h)    As
      promptly as practicable after becoming aware of such event, notify the Investors
      (or, in the event of an underwritten offering, the managing underwriters) of
      the
      issuance by the SEC of any notice of effectiveness or any stop order or other
      suspension of the effectiveness of the Registration Statement at the earliest
      possible time;

     

    (i)    Notwithstanding
      the foregoing, if at any time or from time to time after the date of
      effectiveness of the Registration Statement, the Company notifies the Investors
      in writing of the existence of a Potential Material Event (“Blackout Notice”),
      the Investors shall not offer or sell any Registrable Securities, or engage
      in
      any other transaction involving or relating to the Registrable Securities,
      from
      the time of the giving of notice with respect to a Potential Material Event
      until the Investors receive written notice from the Company that such Potential
      Material Event either has been disclosed to the public or no longer constitutes
      a Potential Material Event; provided,
      however,
      that (a)
      the Company may not so suspend the right to such holders of Registrable
      Securities for more than two ten (10) day periods in the aggregate during any
      12-month period (“Blackout Period”) with at least a ten (10) Business Day
      interval between such periods, during the periods the Registration Statement
      is
      required to be in effect, or (b) that if such Blackout Period exceeds the
      permitted ten (10) day periods, the Company shall pay damages of 1% of the
      cost
      of all Technest Common Stock constituting Registrable Securities then held
      by
      the Investors for each fifteen (15) day period or portion thereof, beginning
      on
      the date of the suspension.

    

    (j)    Use
      its
      commercially reasonable efforts to secure and maintain NASD authorization and
      quotation for such Registrable Securities on the over-the-counter bulletin
      board
      and, without limiting the generality of the foregoing, to arrange for at least
      two market makers to register with the National Association of Securities
      Dealers, Inc. (“NASD”) as such with respect to such Registrable Securities, or
      if eligible, to cause all the Registrable Securities covered by the Registration
      Statement to be listed on a national securities exchange and on each additional
      national securities exchange on which securities of the same class or series
      issued by the Company are then listed, if any, if the listing of such
      Registrable Securities is then permitted under the rules of such exchange;
      provided, however,
      that
      the Investors acknowledge that the Company does not currently meet the
      requirements for listing on a national securities exchange and that nothing
      in
      this section shall be construed to require the Company to pursue such
      qualification until such time as the Company satisfies such requirements for
      a
      period of not less than forty-five (45) days:

    

    (k)    Provide
      a
      transfer agent for the Registrable Securities not later than the Closing Date
      of
      the Registration Statement;

    

    (l)    Cooperate
      with the Investors to facilitate the timely preparation and delivery of
      certificates for the Registrable Securities to be offered pursuant to the
      Registration Statement and enable such certificates for the Registrable
      Securities to be in such denominations or amounts as the case may be, as the
      Investors may reasonably request and registration in such names as the Investors
      may request; and, within five (5) Business Days after a Registration Statement
      which includes Registrable Securities is ordered effective by the SEC, the
      Company shall deliver, and shall cause legal counsel selected by the Company
      to
      deliver, to the transfer agent for the Registrable Securities (with copies
      to
      the Investors) an appropriate instruction and opinion of such counsel, if so
      required by the Company’s transfer agent; and

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (m)    Take
      all
      other reasonable actions necessary to expedite and facilitate distribution
      to
      the Investors of the Registrable Securities pursuant to the Registration
      Statement.

    

    4.    Obligations
      of the Investors.
      In
      connection with the registration of the Registrable Securities, each Investor
      shall have the following obligations;

    (a)    It
      shall
      be a condition precedent to the obligations of the Company to complete the
      registration pursuant to this Agreement with respect to the Registrable
      Securities of the Investor that the Investor shall timely furnish to the Company
      such information regarding itself, the Registrable Securities held by it, and
      the intended method of disposition of the Registrable Securities held by it,
      as
      shall be reasonably required to effect the registration of such Registrable
      Securities and shall timely execute such documents in connection with such
      registration as the Company may reasonably request.

     

    (b)    The
      Investor, by such Investor’s acceptance of the Registrable Securities, agrees to
      cooperate with the Company as reasonably requested by the Company in connection
      with the preparation and filing of the Registration Statement hereunder;
      and

    

    (c)    The
      Investor agrees that, upon receipt of any notice from the Company of the
      happening of any event of the kind described in Sections 3(g), 3(h) or 3(i)
      above, the Investor will immediately discontinue disposition of Registrable
      Securities pursuant to the Registration Statement covering such Registrable
      Securities until the Investor receives the copies of the supplemented or amended
      prospectus, or notice, contemplated by Sections 3(g), 3(h) or 3(i) and, if
      so
      directed by the Company, the Investor shall deliver to the Company (at the
      expense of the Company) or destroy (and deliver to the Company a certificate
      of
      destruction) all copies in the Investor’s possession, of the prospectus covering
      such Registrable Securities current at the time of receipt of such
      notice.

    

    (d)    Each
      Investor shall comply with all applicable securities laws in connection with
      its
      sale of Registrable Securities, including without limitation, any prospectus
      delivery requirements.

    

    5.    Expenses
      of Registration. (a)
      All
      reasonable expenses incurred in connection with Registrations, filings or
      qualifications pursuant to Sections 2 and 3, including, without limitation,
      all
      Registration, listing, and qualifications fees, printers and accounting fees,
      the fees and disbursements of counsel for the Company shall be borne by the
      Company. A fee for a single counsel for an Investor for the initial Registration
      Statement and for each Additional Registration Statement covering the
      Registrable Securities shall be borne by the Company (not to exceed
      $3,000).

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (b)    Except
      as
      otherwise provided for in Schedule
      5(b)
      attached
      hereto, the Company nor any of its subsidiaries has, as of the date hereof,
      and
      the Company shall not on or after the date of this Agreement, enter into any
      agreement with respect to its securities that is inconsistent with the rights
      granted to the Investors in this Agreement or otherwise conflicts with the
      provisions hereof. Except as otherwise provided for in Schedule
      5(b),
      the
      Company has not previously entered into any agreement granting any registration
      rights with respect to any of its securities to any person. Except as otherwise
      provided for in this Section 5, and without limiting the generality of the
      foregoing, without the written consent of the Investors, the Company shall
      not
      grant to any person the right to request the Company to Register any securities
      of the Company under the Securities Act unless the rights so granted are subject
      in all respects to the prior rights in full of the Investors set forth herein,
      and are not otherwise in conflict or inconsistent with the provisions of this
      Agreement and the other Transaction Documents (as defined in the Purchase
      Agreement).

    

    6.    Indemnification. After
      Registrable Securities are included in a Registration Statement under this
      Agreement:

     

    (a)    To
      the
      extent permitted by law, the Company will indemnify and hold harmless, the
      Investor(s), the directors, if any, of the Investor(s), the officers, if any,
      of
      the Investor(s), each person, if any, who controls Investor(s) within the
      meaning of the Securities Act or the Securities Exchange Act of 1934, as amended
      (the “Exchange Act”) (each, an “Indemnified Person”), against any losses,
      claims, damages, liabilities or expenses (joint or several) incurred
      (collectively, “Claims”) to which any of them may become subject under the
      Securities Act, the Exchange Act or otherwise, insofar as such Claims (or
      actions or proceedings, whether commenced or threatened, in respect thereof)
      arise out of or are based upon: (i) any untrue statement or alleged untrue
      statement of a material fact contained in the Registration Statement or any
      post-effective amendment thereof or the omission or alleged omission to state
      therein a material fact required to be stated therein or necessary to make
      the
      statements therein not misleading, (ii) any untrue statement or alleged untrue
      statement of a material fact contained in any preliminary prospectus if used
      prior to the effectiveness of such Registration Statement, or contained in
      the
      final prospectus (as amended or supplemented, if the Company files any amendment
      thereof or supplement thereto with the SEC) or the omission or alleged omission
      to state therein any material fact necessary to make the statements made
      therein, in the light of the circumstances under which the statements therein
      were made, not misleading or (iii) any violation or alleged violation by the
      Company of the Securities Act, the Exchange Act, any state securities law or
      any
      rule or regulation under the Securities Act, the Exchange Act or any state
      securities law (the matters in the foregoing clauses (i) through (iii) being
      collectively referred to as “Violations”). The Company shall reimburse the
      Investor(s) promptly as such expenses are incurred and are due and payable,
      for
      any reasonable legal fees or other reasonable expenses incurred by them in
      connection with investigating or defending any such Claim. Notwithstanding
      anything to the contrary contained herein, the indemnification agreement
      contained in this Section 6(a) shall not (i) apply to any Claims arising out
      of
      or based upon a Violation which occurs in reliance upon and in conformity with
      information furnished in writing to the Company by or on behalf of any
      Indemnified Person expressly for use in connection with the preparation of
      the
      Registration Statement or any such amendment thereof or supplement thereto,
      if
      such prospectus was timely made available by the Company pursuant to Section
      3(b) hereof; (ii) with respect to any preliminary prospectus, inure to the
      benefit of any such person from whom the person asserting any such Claim
      purchased the Registrable Securities that are the subject 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    thereof
      (or to the benefit of any person controlling such person) if the untrue
      statement or omission of material fact contained in the preliminary prospectus
      was corrected in the prospectus, as then amended or supplemented, if such
      prospectus was timely made available by the Company pursuant to Section 3(b)
      hereof; (iii) be available to the extent such Claim is based on a failure of
      the
      Investors to deliver or cause to be delivered the prospectus made available
      by
      the Company; or (iv) apply to amounts paid in settlement of any Claim if such
      settlement is effected without the prior written consent of the Company, which
      consent shall not be unreasonably withheld. The Investor(s) will indemnify
      the
      Company, its officers, directors and agents (including legal counsel) against
      any claims arising out of or based upon a Violation which occurs in reliance
      upon and in conformity with information furnished in writing to the Company,
      by
      or on behalf of such Investor(s), expressly for use in connection with the
      preparation of the Registration Statement, subject to such limitations and
      conditions set forth in the previous sentence. Such indemnity shall remain
      in
      full force and effect regardless of any investigation made by or on behalf
      of
      the Indemnified Person or indemnified party.

    

    (b)    Promptly
      after receipt by an Indemnified Person under this Section 6 of notice of the
      commencement of any action (including any governmental action), such Indemnified
      Person shall, if a Claim in respect thereof is to be made against any
      indemnifying party under this Section 6, 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 Indemnified Person, as the case may be; provided,
      however,
      that an
      Indemnified Person shall have the right to retain its own counsel with the
      reasonable fees and expenses to be paid by the indemnifying party, if, in the
      reasonable opinion of counsel retained by the indemnifying party, the
      representation by such counsel of the Indemnified Person and the indemnifying
      party would be inappropriate due to actual or potential differing interests
      between such Indemnified Person and any other party represented by such counsel
      in such proceeding. In such event, the Company shall pay for only one separate
      legal counsel for the Investor(s) selected by the Investor(s). 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 Indemnified Person under this Section 6, except to the extent
      that the indemnifying party is prejudiced in its ability to defend such action.
      The indemnification required by this Section 6 shall be made by periodic
      payments of the amount thereof during the course of the investigation or
      defense, as such expense, loss, damage or liability is incurred and is due
      and
      payable.

    

    7.    Contribution. To
      the
      extent any indemnification by an indemnifying party is prohibited or limited
      by
      law, the indemnifying party agrees to make the maximum contribution with respect
      to any amounts for which it would otherwise be liable under Section 6 to the
      fullest extent permitted by law; provided,
      however,
      that
      (a) no contribution shall be made under circumstances where the maker would
      not
      have been liable for indemnification under the fault standards set forth in
      Section 6; (b) no seller of Registrable Securities guilty of fraudulent
      misrepresentation (within the meaning of Section 11(f) of the Securities Act)
      shall be entitled to contribution from any seller of Registrable Securities
      who
      was not guilty of such fraudulent misrepresentation; and (c) contribution by
      any
      seller of Registrable Securities shall be limited in amount to the net amount
      of
      proceeds received by such seller from the sale of such Registrable
      Securities.

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    8.    Reports
      under Exchange Act.
      With a
      view to making available to the Investors the benefits of Rule 144 promulgated
      under the Securities Act or any other similar rule or regulation of the SEC
      that
      may at any time permit the Investors to sell securities of the Company to the
      public without registration ("Rule 144"), the Company agrees to use its
      reasonable best efforts to:

    

    (a)    make
      and
      keep public information available, as those terms are understood and defined
      in
      Rule 144;

    

    (b)    file
      with
      the SEC in a timely manner all reports and other documents required of the
      Company under the Exchange Act;

    

    (c)    furnish
      to the Investors so long as the Investors own Registrable Securities, promptly
      upon request, (i) a written statement by the Company that it has complied with
      the reporting requirements of Rule 144, the Securities Act and the Exchange
      Act,
      (ii) a copy of the most recent annual or quarterly report of the Company and
      such other reports and documents so filed by the Company solely if unavailable
      by EDGAR, and (iii) such other information as may be reasonably requested to
      permit the Investors to sell such securities pursuant to Rule 144 without
      registration; and 

    

    (d)    at
      the
      request of any Investor of Registrable Securities, give its transfer agent
      irrevocable instructions (supported by an opinion of Company counsel, if
      required or requested by the transfer agent) to the effect that, upon the
      transfer agent’s receipt from such Investor of:

    

    (i)
      a
      certificate (a “Rule 144 Certificate”) certifying (A) that such Investor has
      held the shares of Registrable Securities which the Investor proposes to sell
      (the “Securities Being Sold”) for a period of not less than (1) year and (B) as
      to such other matters as may be appropriate in accordance with Rule 144 under
      the Securities Act, and 

    

    (ii)
      an
      opinion of counsel acceptable to the Company (for which purposes it is agreed
      that the initial Investor’s Counsel shall be deemed acceptable if such opinion
      is not given by Company Counsel) that, based on the Rule 144 Certificate,
      Securities Being Sold may be sold pursuant to the provisions of Rule 144, even
      in the absence of an effective Registration Statement, 

     

    the
      transfer agent is to effect the transfer of the Securities Being Sold and issue
      to the buyer(s) or transferee(s) thereof one or more stock certificates
      representing the transferred Securities Being Sold without any restrictive
      legend and without recording any restrictions on the transferability of such
      shares on the transfer agent’s books and records (except to the extent any such
      legend or restriction results from facts other than the identity of the
      Investor, as the seller or transferor thereof, or the status, including any
      relevant legends or restrictions, of the shares of the Securities Being Sold
      while held by the Investor). If the transfer agent requires any additional
      documentation at the time of the transfer, the Company shall deliver or cause
      to
      be delivered all such reasonable additional documentation as may be necessary
      to
      effectuate the issuance of an unlegended certificate.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    9.    Miscellaneous.

    

    (a)   Registered
      Owners.
      A person
      or entity is deemed to be a holder of Registrable Securities whenever such
      person or entity owns of record such Registrable Securities. If the Company
      receives conflicting instructions, notices or elections from two or more persons
      or entities with respect to the same Registrable Securities, the Company shall
      act upon the basis of instructions, notice or election received from the
      registered owner of such Registrable Securities.

    

    (b)   Rights
      Cumulative; Waivers.
      The
      rights of each of the parties under this Agreement are cumulative. The rights
      of
      each of the parties hereunder shall not be capable of being waived or varied
      other than by an express waiver or variation in writing. Any failure to exercise
      or any delay in exercising any of such rights shall not operate as a waiver
      or
      variation of that or any other such right. Any defective or partial exercise
      of
      any of such rights shall not preclude any other or further exercise of that
      or
      any other such right. No act or course of conduct or negotiation on the part
      of
      any party shall in any way preclude such party from exercising any such right
      or
      constitute a suspension or any variation of any such right.

    

    (c)   Benefit;
      Successors Bound.
      This
      Agreement and the terms, covenants, conditions, provisions, obligations,
      undertakings, rights, and benefits hereof, shall be binding upon, and shall
      inure to the benefit of, the undersigned parties and their heirs, executors,
      administrators, representatives, successors, and permitted assigns.

    

    (d)   Entire
      Agreement.
      This
      Agreement contains the entire agreement between the parties with respect to
      the
      subject matter hereof. There are no promises, agreements, conditions,
      undertakings, understandings, warranties, covenants or representations, oral
      or
      written, express or implied, between them with respect to this Agreement or
      the
      matters described in this Agreement, except as set forth in this Agreement
      and
      in the other documentation relating to the transactions contemplated by this
      Agreement. Any such negotiations, promises, or understandings shall not be
      used
      to interpret or constitute this Agreement.

     

    (e)    Assignment. The
      rights to have the Company register the Registrable Securities pursuant to
      this
      Agreement may be assigned by the Investor(s) to any transferee or assignee
      (the
      "Transferee"), only if: (a) the assignment relates to not less than one million
      dollars ($1,000,000) of Registrable Securities and the Transferee is an
      Accredited Investor under Regulation D not in competition with the Company;
      (b)
      the Company receives a legal opinion in form and substance satisfactory to
      the
      Company that the proposed

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

     transfer
      complies with federal and state securities laws and does not adversely effect
      the validity of the transactions executed (or to be executed) under this
      Agreement and the Purchase Agreement under federal and state securities laws;
      (c) the assignment requires that the Transferee be bound by all of the
      provisions contained in this Agreement, and the Investors, the Company and
      the
      Transferee enter into a written agreement, which shall be enforceable by the
      Company against the Transferee and by the Transferee against the Company, to
      assign such rights; and (d) immediately following such transfer or assignment
      the further disposition of such securities by the transferee or assignee is
      restricted under the Securities Act and applicable state securities laws. Prior
      to the assignment the Company shall have the right to perform its own due
      diligence regarding the Transferee and have the right to approve the assignment,
      provided that such approval shall not be unreasonably withheld. In the event
      of
      any delay in filing or effectiveness of the Registration Statement as a result
      of such assignment, the Company shall not be liable for any damages arising
      from
      such delay.

     

    (f)    Amendment.
      Any
      provision of this Agreement may be amended and the observance thereof may be
      waived (either generally or in a particular instance and either retroactively
      or
      prospectively), only with the written consent of the Company and the Investors.
      Any amendment or waiver effected in accordance with this Section 9(f) shall
      be
      binding upon the Company and any subsequent Transferees.

    

    (g)    Severability.
      Each
      part of this Agreement is intended to be severable. In the event that any
      provision of this Agreement is found by any court or other authority of
      competent jurisdiction to be illegal or unenforceable, such provision shall
      be
      severed or modified to the extent necessary to render it enforceable and as
      so
      severed or modified, this Agreement shall continue in full force and
      effect.

    

    (h)    Notices.
      Notices
      required or permitted to be given hereunder shall be in writing and shall be
      deemed to be sufficiently given when personally delivered (by hand, by courier,
      by telephone line facsimile transmission, receipt confirmed, or other means)
      or
      sent by certified mail, return receipt requested, properly addressed and with
      proper postage pre-paid (i) if to the Company, at its executive office and
      (ii)
      if to the Investors, at the address set forth under its name in the Purchase
      Agreement, with a copy to its designated attorney, or at such other address
      as
      each such party furnishes by notice given in accordance with this Section 9(h),
      and shall be effective, when personally delivered, upon receipt and, when so
      sent by certified mail, five (5) Business Days after deposit with the United
      States Postal Service.

    

    (i)    Governing
      Law.
      This
      Agreement shall be governed by the interpreted in accordance with the laws
      of
      the State of New York without reference to its conflicts of laws rules or
      principles. Each of the parties consents to the exclusive jurisdiction of the
      federal courts of the State of New York in connection with any dispute arising
      under this Agreement and hereby waives, to the maximum extent permitted by
      law,
      any objection, including any objection based on forum
      non coveniens,
      to the
      bringing of any such proceeding in such jurisdictions. Each
      of
      the parties hereby waives a trial by jury in any action, proceeding or
      counterclaim brought by either of the parties hereto against the other in
      respect of any matter arising out of or in connection with this
      Agreement.

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (j)    Consents.
      The
      person signing this Agreement on behalf of each party hereby represents and
      warrants that he has the necessary power, consent and authority to execute
      and
      deliver this Agreement on behalf of that party.

    

    (k)    Further
      Assurances.
      In
      addition to the instruments and documents to be made, executed and delivered
      pursuant to this Agreement, the parties hereto agree to make, execute and
      deliver or cause to be made, executed and delivered, to the requesting party
      such other instruments and to take such other actions as the requesting party
      may reasonably require to carry out the terms of this Agreement and the
      transactions contemplated hereby.

    

    (l)    Section
      Headings.
      The
      Section headings in this Agreement are for reference purposes only and shall
      not
      affect in any way the meaning or interpretation of this Agreement.

    

    (m)   Construction.
      Unless
      the context otherwise requires, when used herein, the singular shall be deemed
      to include the plural, the plural shall be deemed to include each of the
      singular, and pronouns of one or no gender shall be deemed to include the
      equivalent pronoun of the other or no gender.

    

    (n)    Execution
      in Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original but all of which shall constitute one and the same agreement.
      This Agreement, once executed by a party, may be delivered to the other party
      hereto by telephone line facsimile transmission of a copy of this Agreement
      bearing the signature of the party so delivering this Agreement. A facsimile
      transmission of this signed Agreement shall be legal and binding on all parties
      hereto.

    
 

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      parties have caused this Registration Rights Agreement to be duly executed
      by
      their respective officers thereunto duly authorized as of the day and year
      first
      above written.

     

    
      	 	
              COMPANY:

               

              MARKLAND
                TECHNOLOGIES, INC.

               

              By:   
                /s/ Gino
                Pereira                                                    

              Name:
                Gino Pereira

              Title:
                Chief Financial Officer

              

              INVESTORS:

               

              SOUTHRIDGE
                PARTNERS LP

               

              By:   
                /s/ Henry
                Sargent                                                 

              Name:
                Henry Sargent

              Title:
                Manager of General Partner

              

              SOUTHSHORE
                CAPITAL FUND LTD

               

              By:    
                Illegible                                                                  

              Name:
                Navigator Management, Ltd.

              Title:
                Director

              

              ABERDEEN
                AVENUE LLC

               

              By:    
                Illegible                                                                  

              Name:
                Navigator Management, Ltd.

              Title:
                Director

              

              BRITTANY
                CAPITAL MANAGEMENT LTD.

               

              By:   
                /s/ Barry W.
                Herman                                             

              Name:
                Barry W. Herman

              Title:
                President

              

               

              ROBERT
                TARINI

               

                
                /s/ Robert
                Tarini                                                          

              

              GINO
                PEREIRA

               

                
                /s/ Gino
                Pereira                                                            

            

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

       

    Schedule
      5(b)

     

     

     

     

     

     

     

     

    15Lease Assumption and Indemnification Agreement

Exhibit
    10.5
    

    LEASE
      ASSUMPTION AND INDEMNIFICATION AGREEMENT

     

    This
      Lease Assumption and Indemnification Agreement (this “Agreement”) is made this
      11th
      day of
      June, 2007, by and between Robert Tarini (the “Executive”), a resident of the
      State of Rhode Island, and Markland Technologies, Inc., and its subsidiaries
      and
      affiliates (collectively, the “Company”). The signatories to this Agreement will
      be referred to jointly as the “Parties.” 

     

    Preamble
      

     

    WHEREAS,
      the
      Executive served the Company as its Chief Executive Officer and Director;
      and

     

    WHEREAS,
      in
      conjunction with certain agreements made between the Company and certain
      Investors, including Aberdeen LLC et al., including, among others, the agreement
      titled “Litigation Settlement, Securities Purchase, Relinquishment and Exchange
      Agreement”, the Executive has agreed to assume the Company’s lease agreement for
      the Company’s office located at 222 Metro Center Blvd, Warwick, RI and to
      indemnify the Company against any and all liabilities arising from the
      aforementioned lease agreement; and

    

    WHEREAS,
      in
      consideration for such lease assumption and indemnification, the Executive
      will
      receive $50,000 from the Company.

     

    NOW,
      THEREFORE, in
      reliance on the representations contained herein and in consideration of the
      mutual promises, covenants and obligations contained herein, and for other
      good
      and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the Parties agree as follows: 

     

    1.0 Lease
      Assumption

     
      

    The
      Company presently has a five year lease for office and warehouse space at 222
      Metro Center Blvd, Warwick RI (the “Lease”). Of that five year period
      approximately four years remain on the Lease. The Company agrees that this
      lease
      obligation represents a potential liability in excess of $670,000. The Executive
      agrees to assume the Lease obligation in consideration of receipt of $50,000
      from the Company. The Executive hereby agrees to pay, perform and discharge
      all
      obligations of Company under the Lease as and when the same shall become due,
      whether or not the landlord under the Lease has consented to the Assignment
      thereof to the Executive or his designee. The Company agrees that if the
      Executive hereafter secures the consent of the landlord under the Lease to
      an
      assignment or sublease thereof to the Executive or his designee the Company
      will
      so assign or sublease the Lease to the Executive or his designee, as applicable,
      and will enter into whatever documents, instruments or agreements may be
      required in connection therewith so long as such documents, instruments and
      agreements do not alter in any respect the relative rights and obligations
      created under this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.0 Indemnification

    

    2.1
      In the
      event that the Company is made, or threatened to be made, a party to any action
      or proceeding alleging that the Company is in violation of any provision of
      the
      Lease, whether monetary or non-monetary, including, without limitation, an
      allegation of non-payment or any other commitment of the Company under the
      Lease
      (a “Proceeding”)
      the
      Company shall be indemnified by the Executive for all costs, claims, losses,
      damages and expenses incurred by the Company in connection therewith and the
      Executive shall advance the Company’s related expenses to the fullest extent
      permitted by law. The provisions of this Section are intended to be for the
      benefit of, and shall be enforceable by the Company. If the Company or any
      of
      its successors or assigns (i) shall consolidate with or merge into any other
      corporation or entity and shall not be the continuing or surviving corporation
      or entity of such consolidation or merger or (ii) shall transfer all or
      substantially all of its properties and assets to such person, then and in
      each
      such case, proper provisions shall be made so that the successors and assigns
      of
      the Company shall assume all of the benefits set forth in this Section
      2.1.

     

    2.2 If
      any Proceeding shall be brought or asserted against the Company, the Company
      shall promptly notify the Executive in writing, and the Executive shall assume
      the defense thereof, including the employment of counsel reasonably satisfactory
      to the Company and the payment of all fees and expenses incurred in connection
      with defense thereof; provided, that the failure of the Company to give such
      notice shall not relieve the Executive of its obligations or liabilities
      pursuant to this Section 2, except (and only) to the extent that such failure
      shall have prejudiced the Executive.

     

    The
      Company 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 the Company unless: (1) the Executive has
      agreed in writing to pay such fees and expenses; (2) the Company has reasonably
      concluded that there may be a conflict of interest between the Executive and
      the
      Company in the conduct of any such defense; or (3) the Executive shall have
      failed promptly to assume the defense of such Proceeding and to employ counsel
      reasonably satisfactory to the Company in any such Proceeding. The Executive
      shall not be liable for any settlement of any such Proceeding effected without
      its written consent, which consent shall not be unreasonably withheld.  
Subject to the terms of this Section 2, all fees and expenses of the Company
      (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 Company, as incurred,
      within thirty days of written notice thereof to the Executive. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    3.0  Miscellaneous 

     

    3.1  This
      Agreement is binding not only on the Parties themselves, but also on their
      successors, assigns, heirs, agents and personal representatives. The rights
      under this Agreement may not be assigned by either Party without the consent
      of
      the other Party. 

     

    3.2  This
      Agreement, along with any exhibits, constitutes the complete agreement between,
      and contains all of the promises and undertakings of, the Parties. It may not
      be
      revised or modified without the mutual written consent of the
      Parties.

     

    3.3  The
      Executive acknowledges and agrees that he has had sufficient time to consider
      this Agreement and to seek legal advice concerning its meaning. 

     

    3.4  This
      Agreement shall in all respects be interpreted, enforced, and governed under
      the
      laws of the State of Rhode Island, without regard to its conflict of law
      provisions.   

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    THEREFORE,
      having
      fully read and understood the terms of this Agreement, the Parties sign their
      names below with the intention that they shall be bound by it. 

     

    
      	 	 	 	
              Markland
                Technologies, Inc.

               

               

            
	/s/ Robert
              Tarini	 	 	/s/ Gino
              Pereira
	
              
Robert
              Tarini 	 	 	
              
Gino
              Pereira
	 	 	 	CFO,
              Director
	 	 	 	 
	Date:
               June 9th,
              2007 	 	 	 Date:
               June 9th,
              2007

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}]]