Unassociated Document


    EXHIBIT
      10.1

     

    EMPLOYMENT
      AGREEMENT

     

     

    EMPLOYMENT
      AGREEMENT (this
“Agreement”),
      dated as of January  14, 2008 (the “Effective
      Date”), by and among Technest Holdings, Inc. (the “Company”),
      a Nevada corporation, and Gino M. Pereira (the “Executive”)
      located in Oxford, Connecticut.

     

    WITNESSETH
      THAT

     

    WHEREAS,
      the Company wishes to
      employ the Executive to render services as the Chief Executive Officer of the
      Company on the terms and conditions set forth in this Agreement;
      and

     

    WHEREAS,
      the Executive wishes
      to be retained and employed by the Company on such terms and
      conditions;

     

    THEREFORE,
      in consideration of
      the premises, the mutual agreements set forth below and other good and valuable
      consideration, the receipt and adequacy of which are hereby acknowledged, the
      parties agree as follows:

     

    1.    Employment:  The
      Company hereby employs the Executive, and the Executive accepts such employment
      and agrees to perform services for the Company as described herein, for the
      period of time and upon the other terms and conditions set forth in this
      Agreement.

     

    2.    Term:  Unless
      terminated at an earlier date in accordance with Section 8 of this Agreement
      or
      otherwise extended by agreement of the parties, the term of the Executive’s
      engagement hereunder shall be for a period of 5 years (the “Term”),
      commencing on the Effective Date.  The period of engagement may be
      extended by written agreement between the parties, provided that certain
      provisions relating to compensation may change upon commencement of any
      extension hereto.

     

    3.    Position
      and
      Duties

     

    (a)    Service
      with the
      Company:  During the Term of the Executive’s engagement, the
      Executive shall be employed in the position of Chief Executive Officer of the
      Company.

     

    (b)    Service
      with
      Subsidiaries: During the Term of the Executive’s engagement, he may be
      appointed to serve as an officer or director of certain of the Company’s wholly
      or majority owned subsidiaries.  Such service shall be a duty and
      responsibility of the Executive and be governed by the terms of this employment
      agreement.  Such duties shall be performed by the Executive for no
      additional consideration.  As of the Effective Date, Executive is
      Chief Executive Officer of the Company’s wholly owned subsidiary, Genex
      Technologies, Inc.

     

    
      
        
        

      

      
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    (c)    Performance
      of Duties
      The Executive agrees to serve the Company faithfully and to the best of
      Executive’s ability and to devote his full working time, attention and efforts
      exclusively to the business and affairs of the Company during the Executive’s
      engagement by the Company. Any exceptions to this arrangement shall be subject
      to approval by the Company’s Board of Directors. The Executive hereby confirms
      that Executive is under no contractual commitments inconsistent with Executive’s
      obligations set forth in this Agreement and that, during the Term of this
      Agreement, Executive will not render or perform services to or for any other
      corporation, firm, entity or person which are inconsistent with the provisions
      of this Agreement.  While Executive remains employed by the Company,
      the Executive may participate in reasonable professional, charitable and/or
      personal investment activities including participating on the Board of other
      corporations, so long as such activities do not individually or in the aggregate
      interfere with the performance of Executive’s obligations under this
      Agreement.

     

    4.    Compensation

     

    (a)    Base
      Compensation:  As compensation for services to be rendered by
      the Executive under this Agreement, the Company shall pay to the Executive,
      during the Term of the Executive’s engagement and subject to the termination
      provisions of Section 8 of this Agreement, a base payment of $350,000 per year
      (the “Annual
      Salary”), which payment shall be paid in arrears in accordance with the
      Company’s normal procedure and policies.  The Executive shall be
      eligible for periodic cost of living or merit raises at the discretion of the
      Company.  In addition, the Company agrees to provide the Executive
      with $5,000 monthly for auto expense, home office expense, and other personal
      expenses.

     

    (b)    Bonus

     

    (i)    Cash
      Compensation: In
      addition to the Annual Salary, the Executive shall be eligible to receive annual
      cash bonus compensation from time to time in amounts determined as
      follows:

     

    A.  The
      Executive shall be entitled to 5% of the Company’s EBITDA (Earning Before
      Interest, Taxes, Depreciation and Amortization) calculated on an annual basis
      at
      the end of the Company’s fiscal year, up to a maximum allowable cash bonus of
      300% of the Annual Salary (the “EBITDA  Bonus”),
      payable by the Company within 90 days of the end of the Company’s fiscal
      year.

     

    
      
        
        

      

      
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    (ii)    Equity
      Compensation:
      In addition to the Annual Salary, the EBITDA Bonus, the Executive shall be
      eligible to receive equity bonus compensation under the Company’s 2006 Stock
      Award Plan, in amounts determined as follows:

     

    The
      Executive shall be entitled to the amount of shares of Common Stock (the “Market
      Cap Bonus Shares”) calculated by dividing (x) 7% of the increase, if any,
      of the Market Capitalization (as defined below) of the Company’s Common Stock as
      of the prior fiscal year end compared to the following fiscal year end, by
      (y)
      the closing price of the Company’s Common Stock on the trading day immediately
      prior to the issuance of such shares.  Such Market Cap Bonus Shares
      shall be issued within 7 days of the end of the Company’s fiscal
      year.

     

    For
      purposes of this Agreement, “Market Capitalization” shall mean the average
      closing price of the Company’s Common Stock as traded on the Over-the-Counter
      Bulletin Board (or if the Common Stock is no longer listed on that market,
      the
      principal securities exchange or trading market on which the Common Stock is
      listed, quoted or traded), for 20 consecutive trading days ending immediately
      prior to the measurement date, multiplied by the average number of shares of
      the
      Company’s Common Stock outstanding for the same 20 consecutive trading
      days.

     

    As
      an
      example, the average closing price for the month of June 2007 was $0.50333
      per
      share and the average number of shares outstanding for the month of June 2007
      was 16,878,451 shares, for a Market Capitalization for the month of June 2007
      of
      $8,494,924.  If the Market Capitalization for the month of June 2008
      increases to $10,000,000 for an increase of approximately $1,505,076, the
      Executive would be entitled to approximately 140,473 shares ($105,355 (7% of
      the
      increase in Market Capitalization) divided by $.75, the closing price of the
      Company’s Common Stock on the trading day immediately prior to the issuance of
      such shares).

     

    (c)    Expenses:
      The Company
      shall pay or reimburse the Executive for all reasonable and necessary
      out-of-pocket expenses incurred by the Executive in the performance of the
      Executive’s duties under this Agreement, subject to the Company’s normal
      policies for expense authorization and verification.

     

    
      
        
        

      

      
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    (d)    Liability
      Insurance:
The Company agrees to maintain Directors and Officers liability insurance
      upon terms and conditions consistent with industry practices.

     

    (e)    Benefits:
      The
      Executive shall be entitled to receive and participate in all benefits offered
      to full-time Executives of the Company, including, but not limited to, health
      and dental insurance, life insurance, participation in the Company’s 401(k) plan
      and vacation benefits.

     

    5.    Confidential
      Information Except
      as permitted or directed by the Company’s Board of Directors in writing or as
      required by operation of law, during the Term of this Agreement or at any time
      thereafter, the Executive shall not divulge, furnish or make accessible to
      anyone or use in any way (other than in the ordinary course of business of
      the
      Company) any Confidential Information.  “Confidential
      Information” shall include any information of the Company or any
      affiliate, customer, subsidiary, supplier or other business associate of the
      Company or any affiliate (including but not limited to any trade secrets or
      other private matters) that the Executive has acquired or become acquainted
      with
      or will acquire or become acquainted with prior to the termination of the period
      of the Executive’s engagement by the Company (including engagement by the
      Company or any affiliated companies prior to the Effective Date) whether
      developed by the Executive or by others,  and which is not known or
      generally available to the general public or of a type which the Company has
      customarily made available to the general public including but not limited
      to
      any trade secrets, confidential or secret designs, processes, formulae, plans,
      devices or material (whether or not patented or patentable) directly or
      indirectly useful in any aspect of the business of the Company, any customer
      or
      supplier lists of the Company, any confidential or secret development or
      research work of the Company, or any other confidential or secret aspects of
      the
      business of the Company.  The Executive acknowledges that the
      above-described knowledge or information constitutes a unique and valuable
      asset
      of the Company and represents a substantial investment of time and expense
      by
      the Company, and that any disclosure or other use of such knowledge or
      information other than for the sole benefit of the Company would be wrongful
      and
      would cause irreparable harm to the Company.   Both during and
      after the Term of the Executive’s engagement, the Executive will refrain from
      any acts or omissions that would reduce the value of such knowledge or
      information to the Company.  The foregoing obligations of
      confidentiality shall not apply to any knowledge or information that is
      published and publicly available or which subsequently becomes generally
      publicly known in the form in which it was obtained from the Company, other
      than
      as a direct or indirect result of the breach of this Agreement by the
      Executive.

     

    
      
        
        

      

      
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    6.    Ventures  If,
      during the Term of the Executive’s engagement, the Executive is engaged in or
      associated with the planning or implementing of any project, program or venture
      involving the Company and a third party or parties, all right in such project,
      program or venture shall belong to the Company, unless prior written consent
      from the Company is obtained.  Except as approved by the Board, or its
      designee, the Executive shall not be entitled to any interest in such project,
      program or venture or to any commission, finder’s fee or other compensation in
      connection therewith other than the compensation to be paid to the Executive
      as
      provided in this Agreement.  The Executive shall disclose to the Board
      of Directors any arrangement through which the Executive acquires or may acquire
      any interest, direct or indirect, in any vendor or customer of the
      Company.

     

    7.    Intellectual
      Property
      Rights

     

    (a)    Disclosure
      and
      Assignment  The Executive will promptly disclose in writing to
      the Company complete information concerning each and every invention, discovery,
      improvement, device, design, apparatus, practice, process, method or product,
      whether patentable or not, made, developed, perfected, devised, conceived or
      first reduced to practice by the Executive, either solely or in collaboration
      with others, whether or not during regular working hours, relating either
      directly or indirectly to the business, products, practices or techniques of
      the
      Company or arising out of or relating to the services provided hereunder (the
      “Developments”).  The
      Executive, to the extent that Executive has the legal right so to do, hereby
      acknowledges that any and all of the Developments and all originals and copies
      of all notebooks, disks, tapes, computer programs, reports, proposals and
      materials evidencing, incorporating, constituting, representing or recording
      any
      Development or Confidential Information or any other information or materials
      furnished to Executive by the Company are the sole property of the
      Company.  The Executive agrees to assign and hereby does assign to the
      Company any and all of the Executive’s right title and interest throughout the
      world in and to any and all of the Developments and anything tangible which
      evidences, constitutes, represents or records any Development (the “Assignment”).  During
      the period commencing the day after the Executive’s last day performing services
      for the Company and ending one year after termination of the Executive’s
      engagement with the Company, at the request of the Company, the Executive will
      confer with the Company and its representatives for the purpose of disclosing
      all Developments to the Company, provided that such conference is at the
      Company’s expense and the Executive is compensated at an hourly rate equal to
      the Executive’s final Annual Salary divided by two-thousand eighty
      (2080).

     

    
      
        
        

      

      
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    (b)    Limitation
      on Section
      7(a)  The provisions of Section 7(a) shall not apply to any
      Development meeting the following conditions: (i) such Development was developed
      entirely on the Executive’s own time without the use of any Company equipment,
      supplies, facility or trade secret information; and (ii) such Development does
      not relate directly or significantly to the business of the Company, to the
      Company’s actual or demonstrably anticipated research or development; or result
      from any work performed by the Executive for the Company.

     

    (c)    Copyrightable
      Material All right, title and interest in all copyrightable material that
      the Executive shall conceive or originate, either individually or jointly with
      others, and which arises out of the performance of this Agreement, will be
      the
      property of the Company and are by this Agreement assigned to the Company along
      with ownership of any and all copyrights in the copyrightable
      material.  Upon request and without further compensation therefore,
      but at no expense to the Executive, the Executive shall execute all papers
      and
      perform all other acts necessary to assist the Company to obtain and register
      copyrights on such material in any and all countries, except that the Executive
      shall be compensated at an hourly rate equal to the Executive’s final Annual
      Salary divided by two-thousand eighty (2080) for compliance with this provision
      following termination or expiration of this Agreement.  Executive
      agrees that to the extent the copyright laws of the United States apply to
      the
      Developments, the Developments constitute “works made for hire” as defined in
      the United States Copyright Act.  To the extent not considered as
      works made for hire, such works are hereby assigned to the Company under the
      Assignment provision of this Section 7.

     

    (d)    Executive
      hereby agrees, without payment of any additional consideration to Executive
      to:
      (i) promptly disclose all Developments to the Company; (ii) assist the Company
      in every reasonable manner to obtain patents or copyrights thereon in any and
      all countries for the Company’s benefit; and (iii) to execute all such patent
      applications, patent or copyright assignments and other lawful documents, and
      to
      take all such other actions, as the Company may request to otherwise carryout
      the purposes of this Agreement.  In connection with this Section 7,
      Executive hereby irrevocably grants power of attorney to the Company to act
      for
      and on Executive’s behalf to execute, register and file any such applications,
      and to do all other lawfully permitted acts to further the registration,
      prosecution and issuance of patents, copyrights or similar protections with
      the
      same legal force and effect as if executed by Executive.  The
      out-of-pocket cost of filing and prosecuting patent applications and obtaining
      copyright registration for the Developments shall be borne by the
      Company.

     

    
      
        
        

      

      
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    (e)    It
      is
      understood that this Section 7 applies, without limitation, to any and all
      oral
      communications and writings, including, without limitation, notes, drawings,
      specifications, schematics, flow charts, software, algorithms and engineering,
      sales, marketing and financial plans, and studies and reports that are prepared,
      compiled or acquired by or on behalf of Executive during the Term of this
      Agreement.

     

    8.    Termination
      of
      Engagement

     

    (a)    Grounds
      for
      Termination  The Executives engagement shall terminate prior to
      the expiration of the Term or any extension thereof in the event that at any
      time: (i) the Executive dies; (ii) the Company elects to terminate this
      Agreement for Cause, as defined in Section 8(b) below, and notifies the
      Executive in writing of such election; (iii) the Company elects to terminate
      this Agreement without Cause and notifies the Executive in writing of such
      election; (iv) the Executive elects to terminate this Agreement and notifies
      the
      Company in writing of such election; or (v) the Executive elects to terminate
      this Agreement for Good Reason, as defined below in Section 8(c) and notifies
      the Company in writing of such election.

     

    (b)    Cause
      Defined  “Cause” means that (i) the Executive has willfully or
      recklessly breached the provisions of Sections 5, 6 or 7 of this Agreement
      in
      any material respect; (ii) the Executive has engaged in willful misconduct
      which
      has resulted in material financial harm to the Company; (iii) the Executive
      has
      committed fraud or embezzlement in connection with the Company’s business; or
      (iv) the Executive has been convicted or has pleaded nolo contendere to a felony
      or a crime of moral turpitude.

     

    (c)    Good
      Reason
      Defined  “Good Reason” shall mean (i) the assignment of the
      Executive to any duties materially inconsistent in any respect with the
      Executive’s position (including status, offices, titles and reporting
      requirements), authority, duties or responsibilities as contemplated by Section
      3 of this Agreement or any other action by the Company which results in a
      material diminution in such position, authority, duties or responsibilities,
      excluding for this purpose an isolated, insubstantial and inadvertent action
      not
      taken in bad faith and which is remedied by the Company promptly after receipt
      of notice thereof given by the Executive; (ii) any termination or reduction
      of a
      material benefit under any benefits plan in which the Executive participates
      unless (1) there is substituted a comparable benefit prior to such termination
      or reduction or (2) benefits under such plan are terminated or reduced with
      respect to all employees of the Company previously granted benefits thereunder;
      or (iii) without limiting the generality of the foregoing, any material breach
      of this Agreement by the Company or any successor thereto.

     

    
      
        
        

      

      
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    (d)    Effect
      of
      Termination  Notwithstanding any termination of this Agreement,
      the Executive, in consideration of the Executive’s engagement hereunder, shall
      remain bound by the provisions of this Agreement which specifically relate
      to
      periods, activities or obligations upon or subsequent to the termination of
      the
      Executive’s engagement, including without limitation Sections 5 and
      7.

     

    (e)    Surrender
      of Records and
      Property  Upon termination of the Executive’s engagement with
      the Company, the Executive shall deliver promptly to the Company all records,
      manuals, books, blank forms, documents, letters, memoranda, notes, notebooks,
      reports, data, tables, calculations or copies thereof that relate in any way
      to
      the business, products, practices or techniques of the Company, and all other
      property, trade secrets and confidential information of the Company, including,
      but not limited to, all documents that, in whole or in part, contain any trade
      secrets or confidential information of the Company, which in any of these cases
      are in Executive’s possession or under the Executive’s control.

     

    (f)    Payment
      Continuation  If the Executive’s engagement with the Company is
      terminated by the Company pursuant to clause (iii) of Section 8(a) of this
      Agreement or by the Executive pursuant to clause (v) of Section 8(a) of this
      Agreement, then the Company shall continue to pay to the Executive’s Annual
      Salary payments and shall continue to provide medical benefits comparable to
      those the Executive participated in during his engagement with the Company
      for
      the Executive and his eligible dependents for a period of one year from the
      date
      of termination, plus (i) the EBITDA Bonus calculated on the Company’s EBITDA as
      of the month immediately prior to  the date of termination and (ii)
      the Market Cap Bonus Shares calculated by dividing (x) 7% of the increase,
      if
      any, of the Market Capitalization as of the fiscal year end prior to the date
      of
      termination compared to the 20 trading days immediately preceding the date
      of
      termination by (y) the closing price for the trading day immediately preceding
      the date of termination.  Such share shall be issued as of the date of
      termination.

     

    
      
        
        

      

      
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    If
      the
      Executive’s engagement is terminated pursuant to clauses (i), (ii) or (iv) of
      Section 8(a) of this Agreement, the Executive’s right to Annual Salary payments
      and benefits shall immediately terminate, except as may otherwise be required
      by
      applicable law.

     

    (g)    Change
      of Control
      Notwithstanding the foregoing, in the event that a Change of Control (as defined
      below) occurs during the Term of this Agreement and the Executive is terminated
      by the Company as a result of such Change of Control (other than for Cause)
      or
      the Executive terminates for Good Reason as a result of the Change of Control,
      the Executive shall be entitled to the following benefits:

     

    (i)    Cash
      Compensation:
      The Company shall pay to the Executive, in cash within 30 days after the date
      of
      termination, (a) the amount equal to two multiplied by the Annual Salary,
      together with any earned Annual Salary through the date of termination and
      any
      accrued vacation pay and (b) (if the Change of Control occurs other than at
      the
      end of the Company’s fiscal year end) the EBITDA Bonus calculated on the
      Company’s EBITDA as of the month immediately prior to the Change of
      Control.

     

    (ii)    Equity
      Compensation:  The Market Cap Bonus Shares calculated by
      dividing (x) 7% of the increase, if any, of the Market Capitalization as of
      the
      fiscal year end prior to the Change of Control compared to the 20 trading days
      immediately preceding the Change of Control by (y) the closing price of the
      Company’s Common Stock on the trading day immediately prior to the issuance of
      such shares.  Such shares shall be issued no later than 5 days after
      the Change of Control.

     

    
      For
        purposes of this Section, any one of the following events shall be considered
        a
“Change of Control”: 

       

      (a)    the
        acquisition by any “person” (as such term is defined in Section 3(a)(9) of the
        Securities Exchange Act of 1934) of any amount of the Company’s Common Stock so
        that it holds or controls fifty percent (50%) or more of the Company’s Common
        Stock; 

       

      (b)    a
        merger
        or consolidation after which fifty percent (50%) or more of the voting stock
        of
        the surviving corporation is held by persons who were not stockholders of
        the
        Company immediately prior to such merger or consolidation;

       

      
        
          
          

        

        
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      (c)    the
        sale
        or disposition by the Company of all or substantially all of the Company’s
        assets to an entity in which immediately after such sale or disposition,
        the
        Company’s stockholders hold less than 50% of the combined voting power of such
        entity’s outstanding securities; or

       

      (d)    approval
        by
        the stockholders of the Company of a complete liquidation or dissolution
        of the
        Company.

       

      9.    Non-Competition.

       

      (a)    The
        Executive
        acknowledges and recognizes the highly competitive nature of the businesses
        of
        the Company and accordingly agrees as follows:

       

      (i)    During
        the
        Term of the Executive’s engagement and, for a period of one year following the
        date Executive ceases to be employed by the Company (the “Restricted
        Period”), the Executive will not, whether on Executive’s own behalf or on
        behalf of or in conjunction with any person, company, business entity or
        other
        organization engaged in a Competitive Business (as defined below), directly
        or
        indirectly solicit or assist in soliciting on behalf of any entity engaged
        in a
        Competitive Business, the business of any client or prospective
        client:

       

      (A)    with
        whom
        Executive had personal contact or dealings on behalf of the Company during
        the
        one year period preceding termination of Executive’s engagement with the
        Company;

       

      (B)    with
        whom
        Executives reporting to Executive have had personal contact or dealings on
        behalf of the Company during the one-year period immediately preceding the
        termination of the Executive’s engagement; or

       

      (C)    for
        whom
        Executive had direct or indirect responsibility during the one-year period
        immediately preceding Executive’s termination of employment.

    

     

    
      
        
        

      

      
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    (ii)    During
      the
      Restricted Period, Executive will not directly or indirectly:

     

    (A)    engage
      in a
      Competitive Business;

     

    (B)    enter
      the
      employ of, or render any services to, any person or entity (or any division
      of
      any person or entity) who or which engages in a Competitive Business; provided
      that Executive shall not be prohibited from rendering any services to any
      company that derives less than 10% of its revenues from a Competitive Business
      (a “Permitted
      Company”), if such services or employment relate solely to a business of
      the Company that is not in competition with a Competitive Business;

     

    (C)    acquire
      a
      financial interest in, or otherwise become actively involved with, any
      Competitive Business, directly or indirectly, as an individual, partner,
      shareholder, officer, director, principal, agent, trustee or consultant;
      provided, however, a Competitive Business shall not include a Permitted Company,
      or

     

    (D)    interfere
      with, or attempt to interfere with, business relationships (whether formed
      before, on or after the date of this Agreement) between the Company and
      customers, clients, suppliers partners, members or investors of the Company
      of
      which it is reasonable to expect that Executive is aware.

     

    (iii)    For
      purposes
      of this Agreement, “Competitive Business” means the development, manufacture,
      license, sale or provision of products or services that the Company currently,
      or at any time during the Term of this Agreement, sells, manufactures, licenses
      or provides.

     

    (iv)    Notwithstanding
      anything to the contrary in this Agreement, the Executive may, directly or
      indirectly own, solely as an investment, securities of any person engaged in
      a
      Competitive Business which is publicly traded on a national or regional stock
      exchange or on the over-the-counter market if the Executive (i) is not a
      controlling person of, or a member of a group which controls, such person and
      (ii) does not, directly or indirectly, own 5% or more of any class of securities
      of such person.

     

    
      
        
        

      

      
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    (v)    During
      the
      Restricted Period, the Executive will not, whether on the Executive’s own behalf
      or on behalf of or in conjunction with any person, company, business entity
      or
      other organization whatsoever, directly or indirectly:

     

    (A)    solicit
      or
      encourage any employee of the Company to leave the employment of the Company;
      or

     

    (B)    hire
      any such
      employee who was employed by the Company as of the date of Executive’s
      termination of employment with the Company or who left the employment of the
      Company coincident with, or within six months prior to or after, the termination
      of Executive’s employment with the Company. Notwithstanding the foregoing,
      Executive will not be restricted from hiring any employee who is terminated
      without Cause by the Company.

     

    (vi)    During
      the
      Restricted Period, Executive will not, directly or indirectly, solicit or
      encourage to cease to work with the Company any individual consultant then
      under
      contract with the Company.

     

    (b)    It
      is
      expressly understood and agreed that although the Executive and the Company
      consider the restrictions contained in this Section 9 to be reasonable, if
      a final judicial determination is made by a court of competent jurisdiction
      that
      the time or territory or any other restriction contained in this Agreement
      is an
      unenforceable restriction against the Executive, the provisions of this
      Agreement shall not be rendered void but shall be deemed amended to apply as
      to
      such maximum time and territory and to such maximum extent as such court may
      judicially determine or indicate to be enforceable. Alternatively, if any court
      of competent jurisdiction finds that any restriction contained in this Agreement
      is unenforceable, and such restriction cannot be amended so as to make it
      enforceable, such finding shall not affect the enforceability of any of the
      other restrictions contained herein.

     

    10.   Indemnification
      - In
      the event that the Executive is made, or threatened to be made, a party to
      any
      action or proceeding, whether civil or criminal, by reason of the fact that
      the
      Executive is or was a director, officer, or member of a committee of the Board
      or serves or served any other corporation, partnership, joint venture, trust,
      the Executive benefit plan or other enterprise in any capacity at the request
      of
      the Company, or resulting from any of the Executive’s actions in any of the
      foregoing roles the Executive shall be indemnified by the Company and the
      Company shall advance the Executive’s related expenses to the fullest extent
      permitted by law (including without limitation, damages, costs and reasonable
      attorney fees), as may otherwise be provided in the Company’s Articles of
      Incorporation and By Laws as incurred and will start prior to any judicial
      preceding. The Company further covenants not to amend or repeal any provisions
      of the Articles of Incorporation or Bylaws of the Company in any manner which
      would adversely affect the indemnification or exculpatory provisions contained
      therein as they pertain to acts. The provisions of this Section are intended
      to
      be for the benefit of, and shall be enforceable by, each indemnified party
      and
      the Executive’s heirs and representatives. 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 obligations set forth in this Section
      10.

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    11.    Miscellaneous

     

    (a)    Counterparts  This
      Agreement may be executed in separate counterparts, each of which will be an
      original and all of which taken together shall constitute one and the same
      agreement, and any party hereto may execute this Agreement by signing any such
      counterpart.

     

    (b)    Severability  Whenever
      possible, each provision of this Agreement shall be interpreted in such a manner
      as to be effective and valid under the applicable law, but if any provision
      of
      this Agreement is held to be invalid, illegal or unenforceable under any
      applicable law or rule, the validity, legality and enforceability of the other
      provisions of this Agreement will not be affected or impaired
      thereby.  In furtherance and not in limitation of the foregoing,
      should the duration or geographical extent of, or business activities covered
      by, any provision of this Agreement be in excess of that which is valid and
      enforceable under applicable law, then such provision shall be construed to
      cover only that duration, extent or activities which may validly and enforceably
      be covered.

     

    (c)    Assignability  Neither
      this Agreement nor any right, remedy, obligation or liability arising hereunder
      or by reason hereof shall be assignable (including by operation of law) by
      either party without the prior written consent of the other party to this
      Agreement.

     

    (d)    Modification,
      Amendment,
      Waiver or Termination   No provision of this Agreement may
      be modified, amended, waived or terminated except by an instrument in writing
      signed by the parties to this Agreement.  No course of dealing between
      the parties will modify, amend, waive or terminate any provision of this
      Agreement or any rights or obligations of any party under or by reason of this
      Agreement.  No delay on the part of the Company or the Executive in
      exercising any right hereunder shall operate as a waiver of such
      right.  No waiver, express or implied, by the Company of any right or
      breach by the Executive shall constitute a waiver of any other right or breach
      by the Executive.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    (e)           
      Notices  All
      notices, consents, requests, instructions, approvals or other communications
      provided for herein shall be in writing and delivered by personal delivery,
      overnight courier, mail, electronic facsimile or e-mail addressed to the
      receiving part at the address set forth herein.  All such
      communications shall be effective when received.

     

    If
      to the
      Company:

     

    Technest
      Holdings, Inc.

    Attention:
      General Counsel

    10411
      Motor City Drive, Suite 650

    Bethesda,
      MD 20817

     

    If
      to the
      Executive

     

    Gino
      M.
      Pereira

    c/o
      Technest Holdings, Inc.

    10411
      Motor City Drive, Suite 650

    Bethesda,
      MD 20817

     

    Any
      party
      may change the address set forth above by notice to the other party given as
      provided herein.

     

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

     

    (g)    Governing
      LawALL MATTERS RELATING
      TO THE
      INTERPREATION, CONSTRUCTION, VALIDITY AND ENFORCEMENT OF THE AGREEMENT SHALL
      BE
      GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MARYLAND, WITHOUT GIVING EFFECT
      TO
      ANY CHOICE OF LAW PROVISIONS THEREIN.

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

    (h)    Venue;
      Fees and
      Expenses Any action at law, suit in equity or judicial proceeding arising
      directly, indirectly, or otherwise in connection with, out of, related to or
      from this Agreement, or any provision hereof, shall be litigated only in the
      state courts located in the State of Maryland, County of Montgomery or the
      federal courts in the district which covers such county.  The
      Executive and the Company consent to the jurisdiction of such
      courts.  The prevailing party shall be entitled to recover its
      reasonable attorneys’ fees and costs in any such action.

     

    (i)    Waiver
      of Right to Jury
      Trial  Each party hereto hereby waives, except to the extent
      otherwise required by applicable law, the right to trial by jury in any legal
      action or proceeding between the partied hereto arising out of or in connection
      with this Agreement.

     

    (j)    Third-Party
      Benefit  Nothing in this Agreement, express or implied, is
      intended to confer upon any other person any rights, remedies, obligations
      or
      liabilities of any nature whatsoever.

     

    (k)    Withholding
      Taxes  The Company may withhold from any benefits payable under
      this Agreement all federal, state, city or other taxes as shall be required
      pursuant to any law or governmental regulation or ruling.

     

    (l)    Prior
      Employment
      Agreement  The Company and the Executive hereby acknowledge
      that the Employment Agreement entered into March 13, 2006 between the Company
      and the Executive is terminated and of no further force and effect (other than
      the provisions set forth in the Agreement between the Company and the Executive
      dated December 31, 2007).

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

       

    

    THE
      PARTIES ACKNOWLEDGE THAT EACH HAS READ THIS AGREEMENT, UNDERSTANDS IT, AND
      AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS.  FURTHER, THE PARTIES
      AGREE THAT THIS AGREEMENT AND ANY EXHIBITS HERETO ARE THE COMPLETE AND EXCLUSIVE
      STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES, WHICH SUPERSEDES ALL PROPOSALS
      AND ALL PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS BETWEEN
      THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF, INCLUDING THE EMPLOYMENT
      AGREEMENT DATED MARCH 13, 2006 (OTHER THAN THE PROVISIONS SET FORTH IN THE
      AGREEMENT BETWEEN THE COMPANY AND THE EXECUTIVE DATED DECEMBER 31,
      2007).

     

    ACCEPTED
      AND AGREED:

     

    
    

    
      	Technest
              Holdings,
              Inc.	Gino
              Miguel
              Pereira
	 	 
	 	 
	 	 
	/s/
              Nitin V. Kotak, CFO	/s/
              Gino M. Pereira
	 	 
	 	 
	Date:
1/14/08	Date:
1/14/08


    

     

     

     

    -16-