Verdi Agreement


    Exhibit
      10.5

    


    


    AGREEMENT

    


    This
      agreement (this “Agreement”) confirms the engagement of Verdi Consulting Inc., a
      Rhode Island corporation with a mailing address of c/o 100 Pheasant Drive,
      East
      Greenwich, RI 02818 (“VCI”), by Markland Technologies Inc., a Florida
      corporation with a business address of 88 Royal Little Drive, Providence, RI
      02904 (the “Company”), to act as: (i) the Company’s exclusive agent to arrange
      and negotiate the redemption of the Company’s Series D Convertible Preferred
      Stock in exchange for newly issued Series E Preferred Stock (the “EXCHANGE
      TRANSACTION”) with James LLC and affiliates.

    


    Services
      to be rendered by VCI include:

    


    (a)
      assisting the Company in analyzing its equity structure;

    


    (b)
      assisting the Company in preparation of basic terms and conditions for the
      EXCHANGE TRANSACTION; and

    


    (c)
      advising the Company as to strategy and tactics for negotiations related to
      such
      EXCHANGE TRANSACTION.

    


    1.
      RETENTION.
      Subject
      to the terms and conditions of this Agreement, the Company hereby engages VCI
      to
      act on behalf of the Company as its exclusive agent during the Authorization
      Period (as defined in Section 2 below) to arrange for the EXCHANGE TRANSACTION
      and VCI hereby accepts such engagement on the terms and conditions hereof.
      During the Authorization Period, except for VCI, the Company will not retain
      or
      consult with any person or entity to provide such services to the Company or
      any
      of its subsidiaries or affiliates.

    


    2.
      AUTHORIZATION
      PERIOD.
      VCI’s
      engagement under this Agreement shall become effective on the date of this
      Agreement and, unless extended by the Company and VCI in writing, shall expire
      upon the earlier of (i) the closing of the EXCHANGE TRANSACTION and (ii) one
      hundred eighty (180) days after the date of this Agreement, or terminated
      earlier as provided for herein (the “Authorization Period”). VCI shall be
      entitled to terminate its engagement hereunder at any time upon ten (10) days
      prior written notice to the Company. The Company agrees that neither it,its
      controlling equity holders, nor its management will initiate any discussions
      regarding an EXCHANGE TRANSACTION with James LLC or any of its affiliates during
      the term of this Agreement, except through VCI. In the event the Company or
      the
      Company’s management receive any inquiry regarding the EXCHANGE TRANSACTION
      after the date of this Agreement, VCI will be promptly informed of such inquiry
      so that VCI can evaluate it as it may impact any resulting
      negotiations.

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    3.
      COMPENSATION
      FOR SERVICES.
      Upon
      the closing of the EXCHANGE TRANSACTION, the Company shall pay VCI the
      compensation set forth below:

    


    (a) STOCK
      FEE.
      The
      Company shall pay VCI a stock fee of 500,000 fully paid shares (the “Technest
      Shares”) of common stock of Technest Holdings Inc., a Nevada corporation
      (“Technest”).

    


    4.
      PIGGYBACK
      REGISTRATION RIGHTS.
      The
      Company represents and warrants that the Technest Shares shall have piggyback
      registration rights and shall be included in the next registration statement
      filed by Technest with the Securities and Exchange Commission after the date
      hereof. The Company shall have Technest promptly do, make, execute or deliver,
      or cause to be done, made, executed or delivered, all further acts, documents
      and things as the may reasonably be required from time to time for the purpose
      of giving effect to this Section.

    


    5.
      SALES
      RESTRICTIONS.

    


    (a) Subject
      to Section 5(b) hereof, for a period commencing on the date of the closing
      of
      the EXCHANGE TRANSACTION and ending on the earlier of (i) twenty-four (24)
      months following the date of such closing and (ii) the date on which the
      Investors and/or their Affiliates have sold at least 67% of the Technest
      Conversion Shares underlying the shares of Series E Preferred Stock issued
      under
      the Redemption Agreement (determined on an as-converted basis) either in
      transactions registered under the Securities Act of 1933, as amended (the
“Securities Act”), or pursuant to Rule 144 under the Securities Act (such
      period, the “Restriction Period”), VCI agrees that it will not sell, assign,
      hypothecate or otherwise transfer: (a) any shares of Technest Common Stock,
      (b) any securities convertible into or exercisable or exchangeable for
      Technest Common Stock or (c) any options, warrants or rights carrying any
      rights to purchase Technest Common Stock, in each case without the prior written
      consent of a Majority Interest. Capitalized terms used in this Section 5 shall
      have the meanings ascribed to such terms in that certain Redemption and
      Securities Purchase Agreement, dated as of the date hereof, between the Company
      and the investors named therein (the “Redemption Agreement”).

    


    (b) Notwithstanding
      the foregoing, the restrictions imposed in Section 5(a) shall be inapplicable
      with respect to transfers of shares of Technest Common Stock into the open
      market in sales registered under the Securities Act or sales pursuant to Rule
      144 under the Securities Act, which sales shall not exceed 1% of Technest’s
      outstanding shares of common stock during any 90 day period; provided
      that
      subject
      to Section 5(c) immediately below, any sales made pursuant this Section 5(b)
      shall be limited to 2,500 shares per day (based upon 20 trading days per month)
      (as appropriately adjusted for any stock split, combination, reorganization,
      recapitalization, reclassification, stock distribution, stock dividend or
      similar event).

    



    
      
        
        

      

      
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    (c) VCI
      agrees that it will not sell more than 10% of the Technest Shares into the
      open
      market in sales registered under the Securities Act or sales pursuant to Rule
      144 under the Securities Act during any calendar month; provided, however,
      that
      (A) if at any time during such calendar month, the average closing price of
      shares of Technest Common Stock over a period of five (5) consecutive trading
      days is equal to or greater than $10.00 (as appropriately adjusted for any
      stock
      split, combination, reorganization, recapitalization, reclassification, stock
      distribution, stock dividend or similar event), such limits shall be increased
      to 25% of the Technest Shares for such month and (B) if at any time during
      such
      calendar month, the average closing price of shares of Technest Common Stock
      over a period of five (5) consecutive trading days is equal to or less than
      $4.65 (as appropriately adjusted for any stock split, combination,
      reorganization, recapitalization, reclassification, stock distribution, stock
      dividend or similar event), such limits shall be decreased to 5% of the Technest
      Shares for such month. VCI shall provide that any transferees of shares of
      Technest Common Stock that received such shares in private transactions shall
      be
      bound by the same restrictions based on the number of shares of Technest Common
      Stock such transferees receive in their respective transactions.

    


    6.
      REPRESENTATIONS,
      WARRANTIES AND COVENANTS OF THE COMPANY.
      The
      Company represents, warrants, and covenants to VCI as follows:

    


    (a) Neither
      the Company nor any person acting on its behalf has taken, and the Company
      shall
      not and shall not permit its affiliates to take, directly or indirectly, any
      action so as to cause any of the transactions contemplated by this Agreement
      to
      not be exempt from registration or qualification under all applicable securities
      laws or which constitutes general advertising or general solicitation (as those
      terms are used in Regulation D under the Securities Act) with respect to the
      Technest Shares.

    


    (b) The
      Company shall take and shall cause its affiliates to take such actions as may
      be
      required to comply with this Agreement in all respects.

    


    (c) The
      Company will furnish, or cause to be furnished, to VCI such information as
      VCI
      believes necessary or appropriate to its engagement hereunder (all such
      information, the "INFORMATION"), and the Company represents that all such
      Information will be accurate and complete in all material respects. The Company
      will promptly notify VCI of any change that may be material to such information.
      It is understood that VCI will be entitled to rely on and use the Information
      and other information that is publicly available without independent
      verification, and will not be responsible in any respect for the accuracy,
      completeness or reasonableness of all such information or to conduct any
      independent verification.

    


    (d) The
      person executing the Agreement on behalf of the Company has been duly authorized
      to do so, and that this Agreement represents a valid and binding obligation
      of
      Company.

    



    
      
        
        

      

      
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    7.
      REPRESENTATIONS,
      WARRANTIES AND COVENANTS OF VCI.
      VCI
      represents, warrants, and covenants to the Company as follows:

    


    (a) The
      person executing the Agreement on behalf of the Company has been duly authorized
      to do so, and that this Agreement represents a valid and binding obligation
      of
      Company.

    


    (b) VCI
      is
      acquiring shares the Technest Shares for investment and not for, with a view
      to
      or in connection with the distribution thereof. The above sentence, however,
      shall not to limit VCI’s right to sell the Technest Shares pursuant to
      applicable state and federal securities laws.

    


    (c) VCI
      understands that the Technest Shares have not been registered under the
      Securities Act, or any state securities law, by reason of their issuance in
      a
      transaction exempt from the registration requirements of the Securities Act
      and
      such laws, and that such shares must be held indefinitely unless they are
      subsequently registered under the Securities Act and such laws or a subsequent
      disposition thereof is exempt from registration.  The certificates for the
      Technest Shares shall bear a legend to that effect as well as any other legends
      required by applicable law, and VCI covenants that it shall not transfer
      Technest Shares represented by any such certificate without complying with
      the
      restrictions on transfer described in the legends endorsed on such
      certificate.

    


    (d) VCI
      understands that the exemption from registration afforded by Rule 144
      promulgated under the Securities Act depends upon the satisfaction of various
      conditions and that, if applicable, Rule 144 affords the basis for sales only
      in
      limited amounts.

    


    (e) VCI:
      (a) has sufficient knowledge and experience in business and financial
      matters and with respect to investment in restricted securities so as to enable
      it to analyze and evaluate the merits and risks of the investment contemplated
      hereby; (b) is able to bear the economic risk of such investment; and
      (c) is an “accredited investor” as defined in Rule 501(a) of Regulation D
      under the Securities Act.  VCI is aware of Technest’s business affairs and
      condition and has acquired sufficient information about Technest to reach an
      informed and knowledgeable decision to acquire the Technest Shares.

    


    (f) VCI
      agrees that all nonpublic information regarding the Company obtained by it
      in
      connection with its engagement under this Agreement will be held by VCI in
      strict confidence and will be used by VCI solely for the purpose of performing
      its obligations under this Agreement.

    



    
      
        
        

      

      
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    8.
      INDEMNIFICATION.
      In
      connection with the engagement pursuant to this Agreement, the Company agrees
      to
      indemnify and hold harmless VCI and its affiliates, the respective directors,
      officers, partners, agents, employees and attorneys (each, an “Indemnified
      Person”) from and against, and the Company agrees that no Indemnified Person
      shall have any liability to the Company or its owners, parents, affiliates,
      security holders or creditors for, any losses, claims, damages or liabilities
      (including actions or proceedings in respect thereof) (collectively “Losses”)
      (A) related to or arising out of (i) VCI’s actions or failures to act or (ii)
      actions or failures to act by an Indemnified Person with VCI’s consent or in
      reliance on our actions or failures to act, or (B) otherwise related to or
      arising out of the engagement; except that the Company shall not be responsible
      for any Losses of any Indemnified Person (and any Indemnified Person shall
      not
      be relieved of any liability to the Company or its owners, parents, affiliates,
      security holders or creditors for any of their Losses) to the extent such Losses
      have been finally judicially determined to have resulted from an Indemnified
      Person’s bad faith, gross negligence or willful misconduct.

    


    9.
      NOTICES.
      All
      notices, demands, consents, requests, instructions and other communications
      to
      be given or delivered or permitted under or by reason of the provisions of
      this
      Agreement or in connection with the transactions contemplated hereby shall
      be in
      writing and shall be deemed to be delivered and received by the intended
      recipient as follows: (a) if personally delivered, on the business day of such
      delivery (as evidenced by the receipt of the personal delivery service), (b)
      if
      mailed certified or registered mail return receipt requested, four (4) business
      days after being mailed, (c) if delivered by overnight courier (with all charges
      having been prepaid), on the business day of such delivery (as evidenced by
      the
      receipt of the overnight courier service of recognized standing), or (d) if
      delivered by facsimile transmission, on the business day of such delivery if
      sent by 6:00 p.m. in the time zone of the recipient, or if sent after that
      time,
      on the next succeeding business day (as evidenced by the printed confirmation
      of
      delivery generated by the sending party's facsimile machine). If any notice,
      demand, consent, request, instruction or other communication cannot be delivered
      because of a changed address of which no notice was given (in accordance with
      this section, or the refusal to accept same, the notice, demand, consent,
      request, instruction or other communication shall be deemed received on the
      second business day the notice is sent (as evidenced by a sworn affidavit of
      the
      sender). All such notices, demands, consents, requests, instructions and other
      communications will be sent to the following addresses or facsimile numbers
      as
      applicable:

    


    If
      to the
      Company, to:

    


    Markland
      Technologies Inc.

    88
      Royal
      Little Drive

    Providence,
      RI 02904

    Facsimile
      No:

    Attn.:
      Robert Tarini

    


    If
      to
      VCI:

    


    Mr.
      Chad
      Verdi, President of Verdi Consultant Services, Inc.

    100
      Pheasant Drive

    East
      Greenwich, RI 02818

    



    
      
        
        

      

      
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    10.
      INDEPENDENT
      CONTRACTOR.
      VCI
      shall be an independent contractor in providing its agent services hereunder.
      Nothing contained in this Agreement shall be deemed or construed to create
      a
      partnership or joint venture, to create the relationships of principal/agent,
      employer/employee, or otherwise create any fiduciary duty or any liability
      whatsoever of either party with respect to the indebtedness, liabilities,
      obligations or actions of the other party or any of their employees or agents,
      or any other person or entity, VCI shall not have any right to legally bind
      or
      otherwise obligate the Company in any manner whatsoever.

    


    11.
      MISCELLANEOUS.

    


    (a)
      ATTORNEYS’
      FEES.
      If any
      party to this Agreement brings an action directly or indirectly based upon
      this
      Agreement or the matters contemplated hereby against another party, the
      prevailing party shall be entitled to recover, in addition to any other
      appropriate amounts, its reasonable costs and expenses in connection with such
      proceeding, including, but not limited to, reasonable attorneys' fees and
      expenses and court costs.

    


    (b)
      AMENDMENT.
      This
      Agreement may not be modified, amended, altered or supplemented, except by
      a
      written agreement executed by each of the parties hereto.

    (c)
      ENTIRE
      AGREEMENT.
      This
      Agreement contains the entire understanding and agreement of the parties
      relating to the subject matter hereof and supersedes all prior and/or
      contemporaneous understandings and agreements of any kind and nature (whether
      written or oral) among the parties with respect to such subject matter, all
      of
      which are merged herein.

    


    (d)
      WAIVER.
      Any
      waiver by a party hereto of any breach of or failure to comply with any
      provision or condition of this Agreement by any other party hereto shall not
      be
      construed as, or constitute, a continuing waiver of such provision or condition,
      or a waiver of any other breach of, or failure to comply with, any other
      provision or condition of this Agreement, any such waiver to be limited to
      the
      specific matter and instance for which it is given. No waiver of any such breach
      or failure or of any provision or condition of this Agreement shall be effective
      unless in a written instrument signed by the party granting the waiver and
      delivered to the other party hereto in the manner provided for in the Notice
      section hereof. No failure or delay by any party to enforce or exercise its
      rights hereunder shall be deemed a waiver hereof, nor shall any single or
      partial exercise of any such right or any abandonment or discontinuance of
      steps
      to enforce such rights, preclude any other or further exercise thereof or the
      exercise of any other right.

    



    
      
        
        

      

      
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    (e)
      GOVERNING
      LAW; JURISDICTION.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Rhode Island applicable to agreements made and to be performed in
      that
      state, without regard to any of its principles of conflicts of laws or other
      laws that would result in the application of the laws of another jurisdiction.
      The parties shall make reasonable efforts to resolve any dispute concerning
      this
      Agreement, its construction or its alleged breach by face-to-face negotiations.
      Each of the parties unconditionally and irrevocably consents to the exclusive
      jurisdiction of the courts of the State of Rhode Island to any suit, action
      or
      proceeding arising out of or relating to this Agreement, and each of the parties
      hereby unconditionally and irrevocably waives any objection to venue in any
      such
      court or to assert that any such court is an inconvenient forum, and agrees
      that
      service of any summons, complaint, notice or other process relating to such
      suit, action or other proceeding may be effected in the manner provided in
      the
      Notice section hereof. Each of the parties hereby unconditionally and
      irrevocably waives the right to a trial by jury in any such action, suit or
      other proceeding.

    


    (f)
      BINDING
      EFFECT, NO ASSIGNMENT.
      This
      Agreement shall be binding upon and shall inure to the benefit of the parties
      hereto and their respective successors and permitted assigns. Neither this
      Agreement nor any right, interest or obligation hereunder may be assigned by
      the
      Company without the prior written consent of VCI, and any attempt to do so
      shall
      be void and of no force and effect.

    


    (g)
      COUNTERPARTS.
      This
      Agreement may be executed in two (2) or more counterparts (including by
      facsimile signature, which shall constitute a legal and valid signature), and
      by
      the different parties hereto in separate counterparts, each of which when
      executed shall be deemed to be an original, and all of which, when taken
      together, shall constitute one and the same document. This Agreement shall
      become effective when one or more counterparts, taken together, shall have
      been
      executed and delivered by all of the parties.

    


    


    [SIGNATURE
      PAGES FOLLOW]


    
      
        
        

      

      
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    ACCEPTED
      AND AGREED TO

    this
      ____
      day of March 2006

     

    
 

    Markland
      Technologies, Inc.

    


     

    By:
      /s/
      Robert
      Tarini                                     


    Name:
      Robert Tarini    

    Title:
      CEO

    


    


    Verdi
      Consulting Inc.

    
 

    By:
      /s/
      Chad
      Verdi                                        


    Name:
      Chad Verdi     

    Title:
      President

    


    8