Termination Agreement


    Exhibit
      10.4

    


    


    TERMINATION
      AGREEMENT

    


    THIS
      TERMINATION AGREEMENT (“Agreement”)
      is effective as of March 24, 2006 by and between Greenfield Capital Partners,
      LLC, a Delaware limited liability company (“Greenfield”), and Markland
      Technologies Inc., a Florida corporation (“Markland”).

     

    WHEREAS,
      Greenfield and Markland have entered into that certain letter agreement dated
      December 1, 2004 (“Placement
      Agent Agreement”);
      and

     

    WHEREAS,
      Greenfield and Markland have agreed to terminate the Placement Agent Agreement
      under the terms and conditions set forth below.

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants and undertakings contained herein, the
      parties hereto hereby agree as follows:

     

    1. Termination
      of Agreements.
      Greenfield and Markland hereby agree to terminate the Placement Agent Agreement,
      including, without limitation, any further obligation by Markland to pay
      compensation pursuant to Section 5 the Placement Agent Agreement.

     

    2. Series
      E Preferred Stock Issuance.
      In lieu
      of any compensation owed to Greenfield by Markland under the Placement Agent
      Agreement, Markland agrees to issue 166.67 shares of Markland’s Series E
      Preferred Stock (the “Series E Preferred Shares”) to Greenfield, convertible
      into 500,010 shares (the “Technest Shares”) of common stock of Technest
      Holdings, Inc., a Nevada corporation (“Technest”). Simultaneously with the
      initial issuance of Series E Preferred Stock to the “Investors” under that
      certain Redemption and Securities Purchase Agreement, dated as of the date
      hereof, between Markland and such Investors (the “Redemption Agreement”),
      Markland shall deliver to Greenfield the Series E Preferred Shares.

     

    3. Release
      by Markland.
      Markland, on behalf of itself and its affiliates, and their respective
      directors, officers, principals, shareholders, owners, affiliates, successors
      and assigns (collectively, “Markland Releasors”), hereby fully and
      unconditionally waives, releases, acquits, discharges and holds harmless
      Greenfield, its affiliates and their respective directors, officers, agents,
      representatives, employees, principals, members, owners, successors and assigns
      (collectively, “Greenfield Releasees”) of and from any and all claims, actions,
      causes of action, suits, debts, demands, damages, judgments, executions, costs,
      expenses, liabilities, duties, sums of money, bills, accounts, reckonings,
      bonds, securities, rights, indemnities, exonerations, covenants, contracts,
      controversies, agreements, promises, doings, omissions, losses, exposures and
      obligations of any kind whatsoever, whether known or unknown, whether in law
      or
      in equity (collectively, “Claims”), which the Markland Releasors have, had or
      claim to have had, against the Greenfield Releasees, from the beginning of
      the
      world through the date hereof; provided,
      however,
      that
      the Markland Releasors are not releasing the Greenfield Releasees from their
      obligations pursuant to this Agreement.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    4. Release
      by Greenfield.
      Greenfield, on behalf of itself and its affiliates, and their respective
      directors, officers, principals, shareholders, owners, affiliates, successors
      and assigns (collectively, “Greenfield Releasors”), hereby fully and
      unconditionally waives, releases, acquits, discharges and holds harmless
      Markland, its affiliates and their respective directors, officers, agents,
      representatives, employees, principals, shareholders, owners, successors and
      assigns (collectively, “Markland Releasees), from any and all Claims which the
      Greenfield Releasors have, had or claim to have had against the Markland
      Releasees, from the beginning of the world through the date hereof; provided,
      however,
      that
      the Greenfield Releasors are not releasing the Markland Releasees from their
      obligations under this Agreement.

     

    5. No
      Claims.
      Each of
      the Markland Releasors and Greenfield Releasors hereby represent and covenant
      that none of them has instituted, and they will not institute, any complaints,
      claims, charges, proceedings or lawsuits, with any governmental agency,
      regulatory or self-regulatory body, court or otherwise, against any of the
      Greenfield Releasees or Markland Releasees, respectively, by reason of, relating
      to or in connection with any Claim, arising at any time up to the date of this
      Agreement, presently known or unknown.

     

    6. Markland
      Representations, Warranties and Covenants.
      Markland represents, warrants and covenants, as applicable, that:

     

    a. Ownership
      of the Shares.
      Markland has good and valid title to the Technest Shares free and clear of
      all
      liens, charges, security interest, claims, agreements or other encumbrances
      of
      any nature whatsoever (other than restrictions imposed under applicable
      securities laws). There are no outstanding or authorized options, warrants,
      rights, calls, commitments, conversion rights, rights of exchange or other
      agreements of any character, contingent or otherwise, providing for the
      purchase, issuance or sale of any of the Technest Shares, or any arrangements
      that require or permit any shares of the Technest Shares to be voted by or
      at
      the discretion of anyone other than Markland, and there are no restrictions
      of
      any kind on the transfer of any of the Shares other than those restrictions
      under applicable state and federal securities laws. The Series E Preferred
      Shares, when issued and delivered in accordance with the terms of this Agreement
      shall be duly and validly issued, fully paid and nonassessable and will be
      free
      of restrictions on transfer, other than restrictions on transfer under
      applicable state and federal securities laws.

     

    b. Non-Contravention.
      The
      execution, delivery and performance of this Agreement and the consummation
      of
      the transactions contemplated hereby by Markland will not result in any material
      violation of any instrument, judgment, order, writ, decree or contract, statute,
      rule or regulation to which Markland is subject, or constitute, with or without
      the passage of time and giving of notice, an event that results in the creation
      of any lien, charge or encumbrance upon any of the Technest Shares.

     

    c. Compliance
      with Laws.
      Assuming the accuracy of the representations made by Greenfield in this
      Agreement, no consent, approval, order or authorization of registration,
      qualification, designation, declaration or filing with, any federal, state
      or
      local governmental authority, on the part of Markland, is required in connection
      with the consummation of the transactions and actions contemplated by this
      Agreement, except for (i) the filing of the Articles of Amendment to Markland’s
      Articles of Incorporation creating the Series E Preferred Stock (the “Series E
      Articles”) and (ii) federal or state securities law filings which have been made
      or will be made in a timely manner.

     


    
      
         

      

      
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    d. Markland’s
      Acquisition of the Technest Shares.
      Markland acquired the Technest Shares directly from Technest on or about August
      17, 2005 (“Acquisition Date”), for due consideration paid in full on the
      Acquisition Date. 

     

    7. Greenfield
      Representations, Warranties and Covenants.

     

    a. Investment
      Intent.
      Greenfield is acquiring shares the Series E Preferred Shares (and the related
      Technest Shares (as defined below)) for investment and not for, with a view
      to
      or in connection with the distribution thereof. The above sentence, however,
      shall not to limit Greenfield’s right to sell the Series E Preferred Shares and
      the underlying Technest Shares pursuant to applicable state and federal
      securities laws.

     

    b. Restricted
      Securities.
       Greenfield understands that neither the Series E Preferred Shares nor the
      Technest Shares issuable upon conversion of the Series E Preferred Shares being
      issued to Greenfield hereunder have 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 Series E Preferred
      Shares and the underlying Technest Shares shall bear a legend in substantially
      the form set forth below as well as any other legends required by applicable
      law, and Greenfield covenants that it shall not transfer Series E Preferred
      Shares or any underlying Technest Shares represented by any such certificate
      without complying with the restrictions on transfer described in the legends
      endorsed on such certificate:

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT”), OR REGISTERED OR
      QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY
      NOT
      BE TRANSFERRED UNLESS (A) COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER
      THE SECURITIES ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE STATE SECURITIES
      LAWS OR (B) EXEMPTIONS FROM SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS
      ARE
      AVAILABLE. AS A CONDITION TO PERMITTING ANY TRANSFER OF THESE SECURITIES, THE
      COMPANY MAY REQUIRE THAT IT BE FURNISHED WITH AN OPINION OF COUNSEL ACCEPTABLE
      TO THE COMPANY TO THE EFFECT THAT NO REGISTRATION OR QUALIFICATION IS LEGALLY
      REQUIRED FOR SUCH TRANSFER.

     

    c. Rule
      144.
       Greenfield 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.

     


    
      
         

      

      
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    d. Experience
      and Knowledge.
       Greenfield: (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.  Such Investor is aware of
      Markland’s business affairs and condition and Technest’s business affairs and
      condition and has acquired sufficient information about Markland and Technest
      to
      reach an informed and knowledgeable decision to acquire the Series E Preferred
      Shares and underlying Technest Shares. Greenfield acknowledges that it has
      read
      and understands the relative rights and preferences and other terms of the
      Series E Preferred Stock as set forth in the Series E Articles.

     

    8. Registration
      Rights.
      Markland shall have Technest register the Technest Shares together with those
      shares of Technest common stock registered on behalf of the Investors pursuant
      to the Redemption Agreement. Markland 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.

     

    9. Restrictions
      on Resale.

     

    a. Subject
      to Section 9(b) hereof, for a period commencing on the date of the issuance
      of
      the Series E Preferred Shares and ending on the earlier of (i) twenty-four
      (24)
      months following the date of such issuance 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”), Greenfield 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
      9
      shall have the meanings ascribed to such terms in the Redemption
      Agreement.

     

    b. Notwithstanding
      the foregoing, the restrictions imposed in Section 9(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 9(c) immediately below, any sales made pursuant this Section 9(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. Greenfield
      agrees that (i) it will not convert more than 16.67 Series E Preferred Shares
      during any calendar month and (ii) it will not sell more than 10% of the
      Technest Shares (calculated on an as-converted basis) underlying its Series
      E
      Preferred 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.
      Greenfield 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.

     

    10. Redemption
      Agreement.
      Greenfield acknowledges that, other than the rights to have the Technest Shares
      registered together with the Technest common stock issuable to the Investors,
      it
      has none of the rights of an Investor under the Redemption
      Agreement.

     

    11. No
      Derogation; Confidentiality.
      Markland and Greenfield each agree not to make any critical, derogatory, or
      untruthful statement about the other party, its affiliates or their respective
      directors, officers, principals, shareholders, owners, successors and assigns
      or
      to any of the other party’s past, present or future clients, customers,
      investors, competitors, markets, employees, or any other persons (including,
      but
      not limited to, the press or other media). Recognizing the confidentiality
      of
      the information contained herein, it is understood and agreed by the parties
      that the parties will agree to keep any matters relating to this Agreement
      confidential and agree not to disclose them to any other person after the
      execution of this Agreement by all parties, except as may be required (i) by
      the
      order of a court of competent jurisdiction, (ii) by any governmental, regulatory
      agency or self-regulatory organization requiring such disclosure or (iii) to
      comply with any applicable law requiring such disclosure, in all cases after
      providing the other parties with ten (10) days prior written notice and, if
      requested, proof of the applicability of such requirement.

     

    12. Further
      Acts.
      Each
      party hereto shall each promptly do, make, execute or deliver, or cause to
      be
      done, made, executed or delivered, all further acts, documents and things as
      may
      reasonably be required from time to time for the purpose of giving effect to
      this Agreement.

     

    13. Authority.
      Each
      party hereto represents and warrants that it has the full right, authority
      and
      power to enter into this Agreement and to carry out its provisions. The
      execution, delivery and performance by such party of this Agreement has been
      duly authorized by all necessary action and no other action is required in
      connection therewith. 

     


    
      
         

      

      
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    14. Binding
      Effect.
      Each
      party hereto represents and warrants that this Agreement has been duly executed
      and delivered by such respective party and constitutes its legal, valid and
      binding obligation enforceable against it in accordance with its terms.


     

    15.  Severability
      and Governing Law.
      If any
      provision (or portion thereof) of this Agreement is declared void or
      unenforceable by a court of competent jurisdiction, all other provisions or
      other portions thereof shall nonetheless remain in full force and effect. This
      Agreement shall be governed by, and construed and enforced in accordance with
      the laws of the State of New York, without giving effect to conflict of law
      principles.

     

    16. Waiver.
      The
      waiver by any party of a breach of any provision or portion thereof of this
      Agreement shall not be construed as a waiver of any subsequent breach. The
      failure of a party to insist upon strict adherence to any provision or portion
      thereof of this Agreement on one or more occasions shall not be considered
      a
      waiver or deprive that party of the right thereafter to insist upon strict
      adherence to that provision or any other provision of this Agreement. Any waiver
      must be in writing.

     

    17. Assignment.
      This
      Agreement may not be transferred or assigned by any party without the other
      parties’ written consent, and shall be binding upon, and shall inure to, the
      benefit of the parties and their successors and assigns.

     

    18. Entire
      Agreement; All Prior Agreements Superceded; Counterparts.
      This
      Agreement constitutes the entire agreement between the parties with regard
      to
      the subject matter contained herein. This Agreement supercedes all prior
      agreements, written or oral, relating to the subject matter of this Agreement.
      This Agreement may be signed in one or more counterparts, each of which is
      an
      original and all of which together form one and the same
      instrument.

     

    THE
      REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK

     


    
      
         

      

      
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    IN
      WITNESS WHEREOF, the parties have executed this Termination Agreement effective
      as of the date first set forth above. 

    


    
      	 	 	 
	 	Greenfield
              Capital Partners, LLC
	 
 	 
 	 
 
	 	By:  	/s/ Michael
              Byl                                                                           
              
	 	Michael Byl, President 
	 	 




    
      	 	 	 
	 	Markland
              Technologies, Inc.
	 
 	 
 	 
 
	 	By:  	/s/ Robert
              Tarini                                                                         
              
	 	Robert Tarini, Chief Executive
              Officer


    

     

     

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