Unassociated Document


     EXHIBIT
      10.3

     

    RESTRICTED
      STOCK GRANT AGREEMENT

    


     

    This
      Restricted Stock Purchase Agreement dated as of January 15, 2008 (this “Agreement”) is made
      by and between Technest Holdings, Inc., a Nevada corporation (including, as
      context requires, its subsidiaries the “Company”), and Nitin
      V. Kotak (the “Grantee”).

     

    1.    Definitions.  As
      used in this Agreement, the following terms shall have the following
      meanings:

     

    Qualified
      Sale:  The sale of all or substantially all of assets or issued
      and outstanding capital stock of the Company, or merger or consolidation
      involving the Company in which stockholders of the Company immediately before
      such merger or consolidation do not own immediately after such merger or
      consolidation capital stock or other equity interests of surviving corporation
      or entity representing more than fifty percent in voting power of capital stock
      or other equity interests of such surviving corporation or entity outstanding
      immediately after such merger or consolidation.

     

    Service:  Service
      as an employee, officer or director of, or a consultant or advisor to, the
      Company or its successors.

     

    Shares:  The
      shares of Common Stock issued to Grantee hereunder and any other securities
      of
      the Company which may be issued in exchange for or in respect of such shares
      of
      Common Stock, whether by way of stock split, stock dividend, combination of
      shares, reclassification, recapitalization, reorganization or any other
      means.

     

    Unvested
      Shares:  Any Shares that are not Vested Shares.

     

    Vested:
      Released from
      the Company’s Forfeiture Right (as defined in Section 5(a)).

     

    Vested
      Shares:  Any Shares that have vested in accordance with Section
      5(b).

     

    2.    Grant
      of
      Shares.  The Company hereby grants to Grantee, and Grantee
      hereby accepts from the Company, 50,000 shares of the Company’s common stock,
      $0.001 par value per share (“Common
      Stock”).  Grantee and the Company hereby agree that such shares
      are granted as compensation for Grantee’s Service to the Company.

     

    3.    Representations
      of
      Grantee.  Grantee represents to the Company, and agrees that
      the Company is entitled to rely on such representations, as
      follows:

     

    (a)    Grantee
      is
      acquiring the Shares for Grantee’s own account for investment, and not for, with
      a view to, or in connection with the resale or distribution
      thereof.  Grantee has no present intention to sell, hypothecate,
      distribute or otherwise transfer the Shares or any portion thereof or any
      interest therein.

     

    
      
         

      

      
        -1-

        
          

        

      

      
         

      

    

     

    (b)    In
      connection
      with Grantee’s acquisition of the Shares, Grantee accepts the condition that the
      Company may maintain “stop transfer” orders with respect to the Shares and that
      each certificate or other document evidencing the Shares will bear conspicuous
      legends in substantially the form set forth in Section 7 of this
      Agreement.

     

    (c)    Grantee
      has
      obtained all financial or legal advice as Grantee deems necessary with respect
      to Grantee’s acquisition of the Shares.  Grantee has fully
      investigated the Company and its business and financial condition, to include
      a
      review of the Company’s pubic filings with the Securities and Exchange
      Commission, and has knowledge of the Company’s current activities.

     

    4.    Restrictions
      on
      Transfer.  The following restrictions on transfer of the Shares
      shall apply:

     

    (a)    Unvested
      Shares.  Except for forfeitures of Unvested Shares to the
      Company as contemplated by Section 5, no Shares, nor any interest therein,
      may
      be sold, assigned, pledged or otherwise transferred until such Shares shall
      have
      Vested as defined in Section 5.

     

    (b)    Remedies.  No
      sale, assignment, pledge or other transfer of Shares shall be effective or
      given
      effect on the books of the Company unless all of the applicable provisions
      of
      this Section 4 have been duly complied with.  In addition to any other
      legal or equitable remedies which it may have, the Company may enforce its
      rights by actions for specific performance (to the extent permitted by law)
      and
      may refuse to recognize any transferee as one of its stockholders for any
      purpose, including, without limitation, for purposes of dividend and voting
      rights, until all applicable provisions hereof have been complied
      with.

     

    (c)    Lock-Up.  Grantee
      agrees that for a period of up to 180 days from the effective date of any
      registration of securities of the Company (upon request of the Company or the
      underwriters managing any underwritten offering of the Company’s securities), he
      or she will not sell, make any short sale or loan of, grant any option for
      the
      purchase of, or otherwise dispose of any Shares held by him or her without
      the
      prior written consent of the Company or such underwriters, as the case may
      be.

     

    (d)    Termination
      of
      Restrictions.  Section 4 shall terminate immediately prior to
      the consummation of a Qualified Sale.

     

    
      5.    Forfeiture
        of Unvested
        Shares.

       

      (a)    Forfeiture
        upon
        Termination.  In the event of the termination of Grantee’s
        Service by Grantee for any reason, upon the date of such termination (the
“Termination Date”)
        all the Unvested Shares shall be forfeited to the Company.  As a
        result of any forfeiture of Unvested Shares pursuant to this Section 5(a),
        the
        Company shall become the legal and beneficial owner of the Unvested Shares
        being
        forfeited and shall have all rights and interest therein or related thereto,
        and
        the Company shall have the right to transfer to its own name the number of
        Unvested Shares being forfeited to the Company, without further action by
        Grantee.

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

       

      (b)    Vesting.

       

      (i)    The
        Shares
        will become vested on January 14, 2009, provided, however,
        that the vesting of Shares on any such vesting date shall be conditioned
        upon
        Grantee’s continuing Service with the Company from the date hereof through such
        vesting date.

       

      (ii)    Notwithstanding
        Section 5(b)(i), all Shares shall be deemed to have vested immediately prior
        to
        the consummation of a Qualified Sale.

    

     

    6.    Custody
      of
      Certificates.  In order to facilitate the exercise of Section
      5(a), the Company or its counsel shall hold all certificates representing
      Unvested Shares, together with an adequate number of undated and otherwise
      blank
      stock powers executed by Grantee.  The Company shall have the right to
      cause transfers of Unvested Shares to be effected pursuant to Section
      5.  After any Shares become Vested Shares, the Company shall, upon
      request of Grantee, deliver to Grantee a certificate or certificates
      representing such Vested Shares.

     

    7.    Legends.  Each
      certificate representing Shares shall prominently bear legends in substantially
      the following forms:

     

    The
      Corporation is authorized to issue more than one class or series of
      stock.  The powers, designations, preferences and relative
      participating, optional or other special rights, and the qualifications,
      limitations or restrictions of such preferences and/or rights of each class
      of
      stock or series of any class set forth in the Certificate of Incorporation
      of
      the Corporation.  The Corporation will furnish a copy of the
      Certificate of Incorporation of the Corporation to the holder of this
      certificate without charge upon request.

     

    The
      securities represented by this certificate are subject to restrictions on
      transfer and reacquisition rights pursuant to the terms of a Restricted Stock
      Grant Agreement, as amended from time to time, between the owner of this
      certificate and the Corporation.  The Corporation will furnish a copy
      of this agreement to the holder hereof without charge upon written
      request.

     

    8.           
      Miscellaneous.

     

    (a)    Entire
      Agreement.  This Agreement in conjunction with the Employment
      Agreement constitute the entire agreement between the parties with respect
      to
      the subject matter hereof, and supersedes all prior agreements, negotiations,
      representations and proposals, written or oral, relating to such subject
      matter.

     

    (b)    Amendments.  Neither
      this Agreement nor any provision hereof may be changed or modified except by
      an
      agreement in writing executed by Grantee and on behalf of the
      Company.

     

    (c)    Binding
      Effect of the
      Agreement.  This Agreement shall inure to the benefit of, and
      be binding upon, the Company, Grantee and their respective estates, heirs,
      executors, transferees, successors, assigns and legal
      representatives.

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

    (d)    Provisions
      Severable.
      In the event that any provision of this Agreement shall be determined to be
      invalid, illegal or otherwise unenforceable by any court of competent
      jurisdiction, the validity, legality and enforceability of the other provisions
      of this Agreement shall not be affected thereby.  Any invalid, illegal
      or unenforceable provision of this Agreement shall be severed, and after any
      such severance, all other provisions hereof shall remain in full force and
      effect.

     

    (e)    Notices.  All
      notices under this Agreement shall be effective (i) upon personal or facsimile
      delivery, (ii) two business days after deposit in the United States mail as
      registered or certified mail postage fully prepaid, or (iii) one business day
      after pickup by any overnight commercial courier service, in each case sent
      or
      addressed to the Company at its principal office and to Grantee at his record
      address as carried in the stock records of the Company or at such other address
      as he or she may from time to time designate in writing to the
      Company.

     

    (f)    Construction.  A
      reference to a Section shall mean a Section of this Agreement unless otherwise
      expressly stated.  The titles and headings herein are for reference
      purposes only and shall not in any manner limit the construction of this
      Agreement which shall be considered as a whole.  The words “include,”
“includes” and “including” when used herein shall be deemed in each case to be
      followed by the words “without limitation.”  Whenever the context may
      require, any pronouns used herein shall include the corresponding masculine,
      feminine or neuter forms, and the singular form of names and pronouns shall
      include the plural and vice-versa.

     

    (g)    No
      Employment
      Agreement.  This Agreement shall not be construed as an
      agreement by the Company to employ Grantee, nor is the Company obligated to
      employ Grantee by reason of this Agreement or the issuance of the Shares to
      Grantee.

     

    (h)    Section
      83(b)
      Election.  Grantee will furnish to the Company a copy of any
      election made by Grantee under Section 83(b) of the Internal Revenue Code of
      1986, as amended, with respect to his acquisition of the Shares.

     

    (i)    Applicable
      Law.  This Agreement shall be construed and enforced in
      accordance with the laws of the State of Maryland, without regard to its
      principles of conflicts of laws.  Grantee consents to jurisdiction and
      venue in any state or federal court in State of Maryland for the purposes of
      any
      action relating to or arising out of this Agreement or any breach or alleged
      breach hereof, and to service of process in any such action by certified or
      registered mail, return receipt requested.

     

    (j)    Disposition
      of Shares;
      Purchase by Nominee or Designee.  Any Shares that the Company
      elects to purchase hereunder may be disposed of by it in such manner as it
      deems
      appropriate with or without restrictions on the transfer thereof, and the
      Company may require their transfer to a nominee or designee as part of any
      purchase of the Shares from Grantee.

     

    (k)    Withholding
      Taxes.  Grantee acknowledges and agrees that the Company has
      the right to deduct from payments of any kind otherwise due to Grantee any
      federal, state or local taxes of any kind required by law to be withheld with
      respect to the granting and vesting of the Shares to Grantee.  Grantee
      agrees that he or she shall, no later than the date as of which the value of
      any
      portion of the Shares first becomes includable in the gross income of the
      Grantee for Federal income tax purposes, pay to the Company, or make
      arrangements satisfactory to the Company regarding payment of any Federal,
      state, local and/or payroll taxes of any kind required by law to be withheld
      with respect such income.  The Company and its affiliates shall, to
      the extent permitted by law, have the right to deduct any such taxes from any
      payment of any kind otherwise due to the participant.

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    (l)    Arbitration.  Any
      dispute or controversy arising in connection with this Agreement shall be
      determined and settled by arbitration in Maryland by a panel of three members
      who shall be selected, and such arbitration shall be conducted, in accordance
      with the commercial arbitration rules of the American Arbitration
      Association.  Any award rendered therein shall be final and binding
      upon the parties hereto and their legal representatives and judgment upon any
      such award may be entered in any court having jurisdiction
      thereof.  Each party shall bear its own expenses, including fees and
      disbursements of its attorneys, accountants, and financial experts, and the
      parties shall each pay 50% of all arbitration fees and expenses of the
      arbitrators.

     

    (j)    Pursuant
      to
      Plan.  This grant of Restricted Stock shall be subject in every
      respect to the provisions of the Company’s 2006 Stock Incentive Plan (the “Plan”), as amended from
      time
      to time, which is incorporated herein by reference and made a part
      hereof.  The Grantee hereby accepts this grant of Restricted Stock
      subject to all the terms and provisions of the Plan and agrees that (i) in
      the
      event of any conflict between the terms hereof and those of the Plan, the latter
      shall prevail, and (ii) all decisions under and interpretations of the Plan
      by
      the Board of Directors of the Company or the Committee, as defined in the Plan,
      shall be final, binding and conclusive upon the Grantee and his heirs and legal
      representatives.

    


    [The
      remainder of this page is intentionally left blank.]

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have executed this Restricted Stock Grant
      Agreement as of the date first above written.

     

    
    

    
      	 	Technest
              Holdings,
              Inc.
	 	 
	 	 
	 	
              By:
/s/
                Gino M. Pereira

              Name: Gino M. Pereira

              Title: CEO

            
	 	 
	 	 
	 	
               

              GRANTEE:

            
	 	 
	 	 
	 	
              /s/
                Nitin V. Kotak

              Nitin V. Kotak

            


    

     

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

     

    STOCK
      POWER

    ([____________])

     

    FOR
      VALUE
      RECEIVED, [____________] hereby sells, assigns and transfers to Technest
      Holdings, Inc., a Nevada corporation (the “Company”), a total of ______________
      shares of the Common Stock of the Company standing in his name on the books
      of
      the Company represented by stock certificate number ___  to be
      delivered herewith, and does hereby irrevocably constitute and appoint
      ______________________ as attorney to transfer said shares on the books of
      the
      Company with full power of substitution in the premises.

     

     

    
    

    
      	Dated:
              ___________________	 
	 	 
	 	 
	 	
              ________________________

              [____________]

            
	 	 
	In
              the Presence
              of:	 
	
               

               

              _______________________________

              Name:

            	 


    

     

     

     

    -7-