LOAN AGREEMENT




This Loan Agreement
(the "Agreement"), effective as of April 18, 2012 (the "Effective Date"), is
entered into by and among Technest Holdings, Inc., a Nevada corporation (the
"Company"); and Timothy King (collectively, the "Lenders" and individually, a
"Lender").




PRELIMINARY
STATEMENT




WHEREAS, the Company
has requested that the Lenders make loans to the Company in the aggregate
principal amount of $50,000.00; and




WHEREAS, the Lenders
are willing to make such loans under the terms and conditions set forth in this
Agreement.




NOW, THEREFORE, in
consideration of the premises and promises set forth in this Agreement, the
parties hereto agree as follows:




1.  The Loans




1.1

The Loans.
 Subject to the terms and conditions of this Agreement and the prior
satisfaction of the conditions precedent set forth in Section 5 hereof, each
Lender agrees to make loans (collectively, the "Loans" and individually a
"Loan") in an aggregate principal amount set forth opposite the name of each
Lender on Exhibit A hereto (each such amount being hereinafter referred
to as such Lender's "Commitment") to the Company at the Closing (as defined).
The closing shall take place at the offices of the Company at 10:00 a.m., local
time, on April 17, 2012, or at such other location, date and time as many be
agreed upon between the Company and the Lenders (the "Closing").




1.2

The Notes.
 The Loans made by the Lenders shall each be evidenced by a unsecured
convertible promissory note of the Company (collectively, the "Notes" and
individually, a "Note") in principal face amount of each Loan, payable to the
order of each Lender and otherwise substantially in the form attached hereto as
Exhibit B.




1.3

Interest.
 The Company will pay interest on the unpaid principal balance of each
Loan, accrued from the date such Loan is first made hereunder, until the
principal amount thereof is paid in full, at a rate of 5% per annum and in
accordance with such other terms specified in the Notes. Interest shall be
computed on the basis of a 365-day year for the actual number of days (including
the first day but excluding the last day) occurring in the period for which such
interest is payable. At the option of the Company, the accrued interest shall be
paid in either cash or Common Stock as provided in Section 1.4. 




1.4

Principal and
Interest Repayment.  Subject to Section 2, the outstanding principal
balance of the Notes, together with all accrued and unpaid interest thereon,
shall be payable in full on the earlier to occur of (i) October 17, 2013 [18
months from date of issuance] (the "Maturity Date"), (ii) the occurrence of an
Event of Default (defined herein), or (iii) the occurrence of a Change of
Control (defined herein) (collectively, the "Due Date"); provided that




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the Company shall extend the Maturity
Date with the written consent of at least the holders of a majority of the
principal amount of the Notes then outstanding (the "Majority Holders"). If the
Company elects to pay the all or a portion of the accrued interest in shares of
Common Stock, the number of shares of Common Stock of the Company to be issued
to the Lenders shall be determined by dividing (i) the unpaid accrued interest
on the Notes being converted by (ii) the Per Share Market Price (defined herein)
on the Trading Day immediately prior to the Due Date; provided the Per Share
Market Price shall not be less than $0.01 per share; provided further that the
Company shall not elect to pay any of the accrued interest in shares of Common
Stock if the Per Share Market Price on the Trading Day immediately prior to the
Due Date is less than or equal to $0.005 per share.




2.  Conversion




2.1

Conversion at
Option of Lender.  At the option of the Majority Holders, the entire
outstanding principal amount of the Notes shall be convertible upon surrender
to, and cancellation thereof by, the Company into shares of Common Stock, at any
time and from time to time, from and after the issuance of the Notes determined
by dividing (i) the entire outstanding principal amount of the Notes by (ii) the
Per Share Market Price (defined below) on the Trading Day (defined below)
immediately prior to the Company's receipt of the Conversion Notice (defined
below); provided in no event shall the Per Share Market Price be less than $0.01
per share. 




2.2.

Conversion on the
Event of Default or Change of Control.  If (i) an Event of Default
(defined herein) has occurred and remains uncured beyond any applicable cure
period, or (ii) a Change of Control has occurred, and the Majority Holders elect
to convert all amounts due under the Notes, then, upon notice to the Company of
such election and upon surrender to, and cancellation thereof by, the Company,
the entire outstanding principal amount shall be converted into the number of
shares of Common Stock of the Company determined by dividing  (i) the
entire outstanding principal amount of the Notes by (ii) the Per Share Market
Price on the Trading Day immediately prior to the Company's receipt of the
Conversion Notice; provided the Per Share Market Price shall not be less than
$0.01 per share.




2.3

Conversion at the
Option of the Company. At the option of the Company, thirty (30) days prior
to the Maturity Date, the entire outstanding principal amount of the Notes shall
be convertible upon surrender to, and cancellation thereof by, the Company into
shares of Common Stock determined by dividing (i) the entire outstanding
principal amount of the Notes by (ii) the Per Share Market Price (defined below)
on the Trading Day (defined below) thirty (30) days prior to the Maturity Date;
provided in no event shall the Per Share Market Price be less than $0.01 per
share; provided further that the Company shall not elect to convert the entire
outstanding principal amount of the Notes into shares of Common Stock if the Per
Share Market Price on the Trading Day thirty (30) days prior to the Maturity
Date is less than or equal to $0.005 per share.




2.4

Mechanics and
Effect of Conversion.  The conversion of the outstanding principal
amount of the Notes is subject to the following provisions:




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(a)

A Lender shall effect
a conversion by surrendering to the Company or its transfer agent the original
Note(s), duly endorsed, together with a completed form of conversion notice
attached hereto as Exhibit  C (the "Conversion Notice").  If
the Company is electing to convert the principal amount of the outstanding Notes
pursuant to Section 2.3, the Company shall deliver to the Lender a completed
Conversion Notice.  Each Conversion Notice shall specify the principal
amount to be converted and once given, shall be irrevocable. Not later than five
(5) Trading Days after the Company's receipt of the Conversion Notice, as the
case may be, the Company will deliver to the Lender a certificate or
certificates representing the number of shares of Common Stock being issued upon
the conversion of the outstanding principal amount of the Notes.  The
Lender agrees that if the Company delivers a Conversion Notice, it shall
surrender to the Company or its transfer agent the original Note(s), duly
endorsed within five (5) Trading Days and the Company will deliver to the Lender
a certificate or certificates representing the number of shares of Common Stock
being issued upon the conversion of the outstanding principal amount of the
Notes within five (5) Trading Days of receipt of the original Note(s).




(b)

The Company covenants
that it will at all times reserve and keep available out of its authorized and
unissued Common Stock solely for the purpose of issuance upon conversion of
outstanding principal amount and unpaid accrued interest on the Notes, as herein
provided, free from preemptive rights or any other actual or contingent purchase
rights of persons other than the Lenders, not less than 100% of such number of
shares of Common Stock as shall be issuable upon the conversion of the Notes
hereunder.  The Company covenants that all shares of Common Stock that
shall be so issuable shall, upon issuance, be duly and validly authorized,
issued and fully paid and nonassessable.




(c)

 Upon a conversion hereunder, the Company shall not be
required to issue stock certificates representing fractions of shares of Common
Stock, but may if otherwise permitted and unless waived by the Lender, make a
cash payment in respect of any final fraction of a share based on the Per Share
Market Price at such time.  If the Company elects not, or is unable, to
make such cash payment, the Lender shall be entitled to receive, in lieu of the
final fraction of a share, one whole share of Common Stock.




(d)

The
issuance of certificates for shares of Common Stock on conversion of the Notes
shall be made without charge to the Lenders thereof for any documentary stamp or
similar taxes that may be payable in respect of the issue or delivery of such
certificate, provided that the Company shall not be required to pay any tax that
may be payable in respect of any transfer involved in the issuance and delivery
of any such certificate upon conversion in a name other than that of the Lender
of the Notes so converted and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been
paid.




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(e)

Upon conversion of
the Notes, the Company will be forever released from all of its obligations and
liabilities under the Notes with regard to that portion of the principal amount
and accrued interest being converted including, without limitation, the
obligation to pay such portion of the principal amount and accrued interest.




2.5

Definitions.
 For the purposes hereof, the following terms shall have the following
meanings: 




(a)

"Business Day" means any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions in the
State of New York are authorized or required by law or other government action
to close.




(b)

"Change of Control"
shall mean any one of the following events:




(i)

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;




(ii)

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;





(iii)

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; 




(iv)

such
time as the Continuing Directors (as defined below) do not constitute a majority
of the Board (or, if applicable, the Board of Directors of a successor
corporation to the Company), where the term "Continuing Director" means a member
of the Board who was a member of the Board on the date of the execution of this
Agreement; or




(v)

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




(c)

"Closing Bid Price" shall mean the closing bid price (as reported
by Bloomberg L.P.) of the Common Stock on the OTC Bulletin Board or such other
exchange or trading facility on which the Common Stock is traded.




(d)

"Common
Stock" means the common stock, $.001 par value per share, of the Company, and
stock of any other class into which such shares may hereafter have been
reclassified or changed.




(e)

"Per Share Market
Price" means on any particular date (a) the Closing Bid Price




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per share of the Common Stock on such
date on the OTC Bulletin Board or other principal stock exchange or quotation
system on which the Common Stock is then listed or quoted or if there is no such
price on such date, then the Closing Bid Price on such exchange or quotation
system on the date nearest preceding such date, or (b) if the Common Stock is
not listed then on the OTC Bulletin Board or any stock exchange or quotation
system, the Closing Bid Price for a share of Common Stock in such other
over-the-counter market, as reported by the Nasdaq Stock Market or in the
National Quotation Bureau Incorporated or similar organization or agency
succeeding to its functions of reporting prices at the close of business on such
date, or (c) if the Common Stock is not then reported by the National Quotation
Bureau Incorporated or similar organization or agency succeeding to its
functions of reporting prices, then the "Pink Sheet" quotes for the relevant
date, as determined in good faith by the Board of Directors, or (d) if the
Common Stock is not then publicly traded the fair market value of a share of
Common Stock as determined in good faith by the Board of Directors.




(f)

"Trading Day" means (a) a day on which the Common Stock is traded
on the OTC Bulletin Board or other stock exchange or market on which the Common
Stock has been listed, or (b) if the Common Stock is not quoted on the OTC
Bulletin Board, a day on which the Common Stock is quoted in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding its functions of
reporting prices).




3.  Warrants




3.1

Issuance.
Subject to the terms and conditions of this Agreement and the prior satisfaction
of the conditions precedent set forth in Section 5 hereof, the Company agrees to
issue and deliver warrants for the purchase of Common Stock, par value $0.001,
of the Company, in substantially the form attached as Exhibit D hereto
(collectively, the "Warrants" and individually, a "Warrant"), to each Lender for
such number of shares of Common Stock as are set forth opposite the name of each
Lender on Exhibit A hereto. The issuance of the Warrants shall take place
on the Closing.




4.  Representations
and Warranties




4.1

Representations
and Warranties of the Company.  The Company hereby represents and
warrants that:




(a)

Organization,
Standing.  The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of Nevada, is duly qualified and
authorized to do business in every jurisdiction in which the failure to be so
qualified could reasonably be expected to have a material adverse effect on the
assets, liabilities, condition (financial or other), business, results of
operations or prospects of the Company (a "Material Adverse Effect"), and has
the requisite power and authority necessary to own its assets, carry on its
business and enter into and perform its obligations under this Agreement, the
Notes, the Warrants and all other documents, agreements or instruments entered
into as defined in connection therewith (collectively, the "Loan Documents" and
individually a "Loan Document").




(b)

Corporate
Authority, Etc.  The execution, delivery and performance of the




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Loan Documents are within the Company's
power and authority and have been duly authorized by all necessary action.
 The making and performance of the Loan Documents do not and under present
law will not require any consent or approval of any of the Company's
shareholders or any other person, do not and will not under present law violate
any law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award applicable to the Company, do not violate any provision
of the Company's Articles of Incorporation or bylaws, do not and will not result
in any breach of any material agreement, lease or instrument to which the
Company is a party or by which the Company or any of its assets are bound and
which could reasonably be expected to have a Material Adverse Effect, and do not
and will not give rise to any lien or charge upon any of the Company's
assets.




(c)

Validity of
Documents.  Each Loan Document, when executed and delivered, will be
the legal, valid and binding obligation of the Company enforceable against it in
accordance with its terms, except as the enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights.  No
authorization, consent, approval, license, exemption of or filing or
registration with any court, governmental agency or other tribunal, or any third
party is or under present law will be necessary to the validity or performance
by the Company of any Loan Document.




(d)

Capitalization.
 The authorized capital stock of the Company consists of (i) 495,000,000
shares of Common Stock, par value $.001 per share, of which 120,279,296 are
issued and outstanding, fully paid and non-assessable and (ii) 5,000,000 shares
of Preferred Stock, par value $.001 per share, 300 of which have been designated
as Series E 5% Convertible Preferred Stock and are issued and outstanding, fully
paid and non-assessable, with 3,850,125 shares of Preferred Stock available for
future issuance.  As of the date hereof, the 300 shares of Series E 5%
Convertible Preferred Stock are convertible into 6,754,173 shares of Common
Stock. As of the date hereof, Technest has issued options to purchase 45,720,000
shares of Technest Common Stock under its 2011 Equity Incentive Plan (the
"Technest Equity Plan"), with 7,280,000 shares of Technest Common Stock
available for future grants under the Technest Equity Plan.  




(e)

SEC Filings.
 Each report, schedule, registration statement and definitive proxy
statement filed by the Company with the Securities and Exchange Commission (the
"Commission") under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), since January 1, 2009 is available on EDGAR (as such documents
have since the time of their filing been amended, the "Information Documents"),
which are all the documents (other than preliminary material) that the Company
was required to file with the Commission since such date.  Except as
disclosed to the Lenders, as of their respective dates, the Information
Documents complied in all material respects with  the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder
applicable to the Information Documents, and none of the Information Documents
contained at the time they were filed, any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.  




(f)

Financial
Statements.  Each of the consolidated financial statements




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(including, in each case, any related
notes thereto) contained in the Information Documents (the "Technest
Financials"), (i) complied as to form in all material respects with the
published rules and regulations of the Securities and Exchange Commission
("SEC") with respect thereto, (ii) was prepared in accordance with GAAP applied
on a consistent basis throughout the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited interim financial
statements, as may be permitted by the SEC on Form 10-Q, 8-K or any successor
form under the Exchange Act and except that unaudited financial statements may
not contain footnotes and are subject to normal and recurring year-end audit
adjustments which will not, individually or in the aggregate, be material in
amount) and (iii) fairly presented in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries as at the
respective dates thereof and the consolidated results of the Company's
operations and cash flows for the periods indicated (subject in the case of any
unaudited financial statements to normal and recurring year-end adjustments).
 




4.2

Representations
and Warranties of Lenders.  Each Lender represents and warrants to the
Company that it:




(a) is an "accredited
investor" as such term is defined in Rule 501 under the Securities Act of 1933,
as amended (the "Securities Act").




(b) is acquiring the
Notes and Warrants for its own account for investment only and not with a view
to the distribution or public offering thereof within the meaning of the
Securities Act.




(c) understands that
the Notes and Warrants are being, and the shares of the Company's Common Stock
issuable upon the conversion of the Notes and/or exercise of the Warrants (the
"Conversion Shares") will be, upon such conversion or exercise, to it in
reliance on specific exemptions from the registration requirements of United
States federal and state securities laws and that the Company is relying in part
upon the truth and accuracy of, and such Lender's compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
the Lender set forth herein in order to determine the availability of such
exemptions and the eligibility of the Lender to acquire the Notes and
Warrants.




(d) understands that
the Notes and Warrants have not been and are not being, and the Conversion
Shares will not be, upon such conversion or exercise will not be, registered
under the Securities Act or any state securities laws, and may not be offered
for sale, sold, assigned or transferred unless (i) subsequently registered
thereunder, (ii) the Lender shall have delivered to the Company an opinion of
counsel, in a generally acceptable form, to the effect that the Notes, Warrants
or Conversion Shares may be sold, assigned or transferred pursuant to an
exemption from such registration, or (iii) the Notes, Warrants or Conversion
Shares can be sold, assigned or transferred pursuant to Rule 144 promulgated
under the Securities Act (or a successor rule thereto).




(e) is aware of the
provisions of Rule 144 promulgated under the Securities Act, which permits
limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things, (i) the
availability of certain current public information about the Company, (ii) the
resale occurring following the required holding period




7














under Rule 144 and (iii) the number of
shares being sold during any three-month period not exceeding specified
limitations.




(f) if the Lender is
not a United States person (as defined by Section 7701(a)(30) of the U.S.
Internal Revenue Code), hereby represents that Lender is satisfied as to the
full observance of the laws of its jurisdiction in connection with any
invitation to acquire the Notes, the Warrants and the Conversion Shares or any
use of this Agreement, including (i) the legal requirements within its
jurisdiction for the acquisition of the Notes, Warrants and Conversion Shares,
(ii) any foreign exchange restrictions applicable to such issuance, (iii) any
government or other consents that may need to be obtained, and (iv) the income
tax and other tax consequences, if any, that may be relevant to the acquisition,
holding, redemption, sale or transfer of the Notes, the Warrants and the
Conversion Shares.  The Company's issuance and Lender's acquisition and
continued ownership of the Notes, the Warrants and the Conversion Shares will
not violate any applicable securities or other laws of Lender's
jurisdiction.




(g) has received, has
had ample opportunity to review and has reviewed, a copy of this Agreement and
such other documents and information as it has deemed appropriate to make its
own analysis and decision to enter into this Agreement. 




(h) has, in
connection with such Lender's decision to acquire the Notes and the Warrants,
not relied upon any representations or other information (whether oral or
written) other than as set forth in the representations and warranties of the
Company contained herein.




(i) has had an
opportunity to discuss (i) the Company's business, management and financial
affairs with directors, officers and management of the Company and (ii) this
investment with representatives of the Company and ask questions of them and
such questions have been answered to such Lender's full satisfaction.




(j)  if Lender
is an individual, then Lender resides in the state or province identified in the
address of Lender set forth on Exhibit A; if Lender is a partnership,
corporation, limited liability company or other entity, then the office or
offices of Lender in which its investment decision was made is located at the
address or addresses of Lender set forth on Exhibit A.




(k) has the requisite
power and authority, and in the case of any Lender that is a natural person, is
competent, to execute and deliver this Agreement, to consummate the transactions
contemplated hereby and to comply with the provisions of this Agreement.
 The execution, delivery and performance of this Agreement by the Lender,
the consummation by the Lender of the transactions contemplated hereby and the
compliance by the Lender with the provisions of this Agreement have been duly
authorized by all necessary action on the part of the Lender, and no other
action or proceeding on the part of the Lender is necessary to authorize this
Agreement or to consummate the transactions contemplated hereby.  This
Agreement has been duly executed and delivered by the Lender and, assuming due
execution and delivery by the Company, constitutes the valid and binding
obligations of the Lender, enforceable against such Lender in accordance with
its terms.




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5.  Conditions
Precedent




5.1

The Loans.
 The obligation of the Lenders to make each Loan is conditioned upon the
following:




(a)

Notes. With
respect to each Loan set forth on Exhibit A hereto, the Lenders shall
have received the Notes duly executed and delivered by the Company.




(b)

Warrants. With
respect to each Loan set forth on Exhibit A hereto, the Lenders shall
have received the Warrants duly executed and delivered by the Company.




(c)

No Default.
 Immediately after giving effect to each Loan, no Event of Default (as
defined in Section 6.1), or condition which with the giving of notice and/or
passage of time, or both, would constitute an Event of Default, shall exist.




(d)

Secretary's
Certificate.  The Lenders shall have received a certificate of the
secretary or assistant secretary of the Company certifying (i) as to true and
correct copies of the Company's Articles of Incorporation, bylaws and
authorizing resolutions, and (ii) as to the name, title and specimen signature
of the authorized officers executing this Agreement and any Note and
Warrant.




6.  Default




6.1

Events of
Default.  The Company shall be in default if any one or more of the
following events (each an "Event of Default") occurs:




(a)

Payments.
 The Company fails to pay the principal of or interest on any Note when due
and payable, or any other amount payable under any Note and such failure
continues for ten (10) Business Days after receipt of written notice thereof
from the Majority Holders.




(b)

Bankruptcy.
 The Company generally fails to pay its debts as its debts become due, is
dissolved or liquidated, makes an assignment for the benefit of creditors, files
a petition in bankruptcy, is adjudicated insolvent or bankrupt, petitions or
applies to any tribunal for any receiver or trustee, commences any proceeding
relating to itself under any bankruptcy, reorganization, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, has commenced
against it any such proceeding which remains undismissed for a period of ninety
(90) days, or indicates its consent to, approval of or acquiescence in any such
proceeding, or any receiver of or trustee for the Company or any substantial
part of the property of the Company is appointed, or if any such receivership or
trusteeship continues undischarged for a period of ninety (90) days.




(c)

Covenants.
 The Company fails to observe or perform any term, condition or covenant
contained in the Loan Documents, and such failure continues for thirty (30)
Business Days after receipt of written notice thereof from the holders of a
majority of the principal amount of the Notes then outstanding.




(d)

Misrepresentations.
 Any representation made by the Company herein




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shall have been incorrect in any
material respect when made.




6.2

Termination upon
Default.  In every event set forth in subsections 6.1(a)-(d) above,
upon the written notice of the Lenders the outstanding principal amount of and
any unpaid accrued interest on the Notes shall, at the option of the Majority
Holders, (a) become due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Company or (b)
be converted pursuant to Section 2.2 above. Upon the occurrence of an Event of
Default, the Company hereby agrees to pay all reasonable costs which may be
incurred by the Lenders in enforcing their rights under the Loan Documents.




7. Change of Control




7.1

Termination upon
Change of Control. In the event of a Change of Control, upon written notice
by the Company of the occurrence thereof to the Lenders, the outstanding
principal amount of and any unpaid accrued interest on the Notes shall, at the
option of the Majority Holders, (a) become due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Company or (b) be converted pursuant to Section 2.2 above.




8. Registration Right




8.1

Piggyback
Registration Right. The Lenders shall be entitled to one piggyback
registration statement right as more fully described in Exhibit E
attached hereto.




8.  Miscellaneous




8.1

Amendments.
 No amendment, modification, termination or waiver of this Agreement or any
provision hereof nor any consent to any departure by the Company herefrom shall
be effective unless the same is in writing and signed by each Lender and the
Company and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided however
that this Agreement may be amended without the consent of any of the Lenders for
the inclusion of additional parties whom will make loans to the Company pursuant
to the terms and conditions of this Agreement and whom shall be deemed "Lenders"
hereunder.




8.2

Governing Law.
 This Agreement and all rights and obligations of the parties hereunder
shall be governed by and be construed and enforced in accordance with the laws
of the State of Delaware without regard to Delaware or federal principles of
conflict of laws.




8.3

Notices.
 All notices, requests, demands, directions, declarations and other
communications between the Lenders and the Company provided for in this
Agreement, except as otherwise expressly provided, shall be mailed by registered
or certified mail, return receipt requested, or by overnight courier or
telegraphed, or faxed, or delivered in hand to the applicable party at its
address indicated opposite its name on the signature pages hereto.  The
foregoing shall be effective and deemed received three days after being
deposited in the mails, postage prepaid, addressed as aforesaid and shall
whenever sent by telegram, telegraph or fax delivered in hand, or by overnight
courier be effective when sent.  Any party may change its address by a
communication in accordance herewith.




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8.4

Severability.
 The invalidity, illegality or unenforceability in any jurisdiction of any
provision in or obligation under this Agreement shall not affect or impair the
validity, legality or enforceability of the remaining provisions or obligations
under this Agreement or of such provision or obligation in any other
jurisdiction.




8.5

Counterparts.
 This Agreement and any amendment hereto or waiver hereof may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same
instrument.




8.6

Entire
Agreement.  The Loan Documents embody the entire agreement and
understanding between the Company and the Lenders and supersede all prior
agreements and understandings between the Company and the Lenders relating to
the subject matter thereof.




8.7

Expenses.
 Each party hereto shall be responsible for their own expenses incurred in
connection with the preparation, execution and delivery of this Agreement and
the Loan Documents and all related instruments and documents executed and
delivered in connection herewith.  




8.9

WAIVER OF JURY
TRIAL.  THE LENDERS AND THE COMPANY HEREBY WAIVE TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO,
OR CONNECTED WITH THIS AGREEMENT OR ANY LOAN DOCUMENT OR THE RELATIONSHIP
ESTABLISHED THEREUNDER.




8.10

Further
Assurances.  The Company, at its own expense, shall do, make, execute
and deliver all such additional and further acts, deeds, assurances, documents,
instruments and certificates as the Lenders may reasonably require, including,
without limitation, obtaining governmental and other third party consents and
approvals.




8.11

Successors and
Assigns.  The terms and provisions of this Agreement and the Loan
Documents shall be binding upon and inure to the benefit of the Company and the
Lenders and their respective successors and assigns, except that any transfer by
the Lenders to a non-affiliated entity shall require the written consent of the
Company. 




8.12

Maximum Rate.
 All agreements between the Company and the Lenders are hereby expressly
limited so that in no contingency or event whatsoever, whether by reason of
acceleration of maturity of the indebtedness evidenced hereby or otherwise,
shall the amount paid or agreed to be paid to the Lenders for the use,
forbearance or detention of the indebtedness evidenced hereby exceed the maximum
permissible under applicable law.  As used herein, the term "applicable
law" shall mean the law in effect as of the date hereof.  If, from any
circumstance whatsoever, fulfillment of any provision hereof or the Agreement at
the time performance of such provision shall be due, shall involve transcending
the limit of validity prescribed by law, then the obligation to be fulfilled
shall automatically be reduced to the limit of such validity, and if from any
circumstances the Lenders should ever receive as interest an amount which would
exceed the highest lawful rate, such amount which would be excessive interest
shall be applied to the reduction of the principal balance evidenced hereby and
not to the




11











payment of interest.  This
provision shall control every other provision of all agreements between the
Company and the Lenders.




IN WITNESS WHEREOF,
the parties hereto have each caused this Agreement to be duly executed on the
date first above written.




	
    	
    	
	
       
	
      COMPANY:
	
       

	
       
	
       
	
       

	
       
	
      Technest Holdings, Inc.
	
       

	
       
	
       
	
       

	
       
	
      By: /s/Shekhar
       Wadekar
	
       

	
       
	
      Name: Shekhar Wadekar
	
       

	
       
	
      Title: President
	
       






12











	
    	
    	
	
       
	
      LENDERS:
	
       

	
       
	
       
	
       

	
       
	
      By:  /s/ Timothy King
	
       

	
       
	
      Name: Timothy King
	
       

	
       
	
      Title:  
	
       

	
       
	
      Address:  16 Warren
      Road
	
       

	
       
	
                       Dedham,
      MA 02026
	
       






	
    	
    	
	
       
	
      By:  
	
       

	
       
	
      Name:

	
       
	
      Title:  

	
       
	
      Address:  

	
       
	
       

	
       
	
      By:  
	
       

	
       
	
      Name:

	
       
	
      Title:  

	
       
	
      Address:  

	
       
	
       

	
       
	
      By:  
	
       

	
       
	
      Name:

	
       
	
      Title:  

	
       
	
      Address:  

	
       
	
       

	
       
	
      By:  
	
       

	
       
	
      Name:

	
       
	
      Title:  

	
       
	
      Address:
   






13








EXHIBIT A




LENDERS'
COMMITMENTS





	
    	
    	
    	
    	
	
       
	
      Lender Name
      and

      Address
	
      Commitment (US
      $)
	
      Warrants
      (Number

      of Shares
      of

      Common
      Stock)
	
       

	
       
	
      Timothy King
	
      50,000.00
	
      500,000
	
       

	
       
	
       
	
       
	
       
	
       

	
       
	
       
	
       
	
       
	
       

	
       
	
       
	
       
	
       
	
       

	
       
	
       
	
       
	
       
	
       

	
       
	
      TOTAL
	
      50,000.00
	
      500,000
	
       







14








EXHIBIT
C




NOTICE OF
CONVERSION




(To be executed by the
registered holder to convert the outstanding principal of the Notes dated April
18, 2012 or the Company if it is electing to convert the outstanding principal
of the Notes)




The undersigned hereby
elects, in accordance with the terms and conditions of the Loan Agreement dated
April 18, 2012 and the Promissory Note dated April 18, 2012 (the "Note"), to
convert the outstanding principal amount of the Note into shares of Common
Stock, par value $0.001 per share (the "Common Stock"), of Technest
Holdings, Inc. (the "Company"), as of the date written below.  If
shares are to be issued in the name of a person other than undersigned, the
undersigned will pay all transfer taxes payable with respect thereto and is
delivering herewith such certificates and opinions as reasonably requested by
the Company in accordance therewith.  No fee will be charged to the
undersigned for any conversion, except for such transfer taxes, if any.




Conversion
calculations:




	
    	
	
       
	
       

	
       
	
      Date to effect
      conversion

	
       
	
       

	
       
	
       

	
       
	
      Amount of principal
      to be converted

	
       
	
       

	
       
	
       

	
       
	
      Number of shares of
      Common Stock to be issued

	
       
	
       

	
       
	
       

	
       
	
      Applicable
      conversion price

	
       
	
       

	
       
	
       

	
       
	
      Name of
  Holder

	
       
	
       

	
       
	
       

	
       
	
       

	
       
	
      Address of
    Holder






	
    	
	
       
	
       

	
       
	
      Authorized
  Signature






15











EXHIBIT E




1.

Piggyback
Registration Right




1.1
Definitions.  For purposes of this Section, the following terms shall
have the meanings set forth below:




(a) A "Blackout
Event" means any of the following: (a) the possession by the Company of material
information that is not ripe for disclosure in a registration statement or
prospectus, as determined reasonably and in good faith by the Chief Executive
Officer or the Board of Directors of the Company or that disclosure of such
information in the Registration Statement or the prospectus constituting a part
thereof would be materially detrimental to the business and affairs of the
Company; or (b) any material engagement or activity by the Company which would,
in the reasonable and good faith determination of the Chief Executive Officer or
the Board of Directors of the Company, be materially adversely affected by
disclosure in a registration statement or prospectus at such time.  




(b) "Included
 Shares" shall mean any Registrable Shares included in a Registration.




(c) "Registrable
Shares" shall mean the shares of Common Stock issuable upon conversion of the
Notes and exercise of the Warrants and shares or securities issued as a result
of stock split, stock dividend or reclassification of such shares.




(d) "Registration"
shall mean a registration of securities under the Securities Act. 




(e) "Registration
Period" with respect to any Registration Statement the period commencing the
effective date of the Registration Statement and ending upon withdrawal or
termination of the Registration Statement.




(f) "Registration
Statement" shall mean the registration statement, as amended from time to time,
filed with the Commission in connection with a Registration. 




1.2

Piggyback
Registration. Unless the Registrable Shares can be sold under the provisions
of Rule 144 of the Securities Act, if the Company shall determine to register
any Common Stock under the Securities Act for sale in connection with a public
offering of Common Stock (other than pursuant to an employee benefit plan or a
merger, acquisition or similar transaction on Form S-8 or S-4 or their
equivalent), the Company will give written notice thereof to the Lenders and
will include in such Registration Statement any of the Registrable Shares which
Lender may request be included by a writing delivered to the Company within five
(5) Business Days after the notice given by the Company to the Lenders;
provided, however, that if the offering is to be firmly
underwritten, and the representative of the underwriters of the offering refuse
in writing to include in the offering all of the shares of Common Stock
requested




16











by the Company and others, the shares to
be included shall be allocated first to the Company and any shareholder who
initiated such Registration and then among the others based on the respective
number of shares of Common Stock held by such persons.  If the Company
decides not to, and does not, file a Registration Statement with respect to such
Registration, or after filing determines to withdraw the same before the
effective date thereof, the Company will promptly so inform the Lenders, and
will not be obligated to complete the registration of the Registrable Shares
included therein.  The Company shall not be required to effect more than
one Registration pursuant to this Section.  The Company will pay all costs
and expenses of such registration other than underwriting discounts or brokerage
fees or commissions in connection with the sale of the Included Shares and fees
and costs of accountants, attorneys or others retained by Lender.




1.3

Certain
Covenants. In connection with any Registration: 




(a)

At
least three Business Days prior to the filing with the Commission of the
Registration Statement (or any amendment thereto) or the prospectus forming a
part thereof (or any supplement thereto), the Company shall provide draft copies
thereof to the participating Lenders and shall consider incorporating into such
documents such comments as the participating Lenders (and its counsel) may
propose to be incorporated therein.  Notwithstanding the foregoing, no
prospectus supplement, the form of which has previously been provided to the
participating Lenders, need be delivered in draft form to Lender.




(b)

The Company shall
promptly notify the participating Lenders upon the occurrence of any of the
following events in respect of the Registration Statement or the prospectus
forming a part thereof: (i) the receipt of any request for additional
information from the Commission or any other federal or state governmental
authority, the response to which would require any amendments or supplements to
the Registration Statement or related prospectus; (ii) the issuance by the
Commission or any other federal or state governmental authority of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose; or (iii) the receipt of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.




(c)

The Company shall
furnish to Lender with respect to the Included Shares registered under the
Registration Statement (and to each underwriter, if any, of such Shares) such
number of copies of prospectuses and such other documents as Lender may
reasonably request, in order to facilitate the public sale or other disposition
of all or any of the Included Shares by Lender pursuant to the Registration
Statement.




(d)

The Company shall
bear and pay all expenses incurred by it and Lender (other than underwriting
discounts, brokerage fees and commissions and fees and expenses of more than one
law firm) in connection with the registration of the Included Shares pursuant to
the Registration Statement. 




(e)

 As a condition
to including Registrable Shares in a Registration Statement, Lender must provide
to the Company such information regarding itself, the Registrable Shares held by
it and the intended method of distribution of such Shares as shall be required
to effect the registration of the Registrable Shares and, if the offering is
being




17











underwritten, Lender must provide such
powers of attorney, indemnities and other documents as may be reasonably
requested by the managing underwriter including but not limited to an
underwriting agreement.




(f)

Following the
effectiveness of the Registration Statement, upon receipt from the Company of a
notice that the Registration Statement contains an untrue statement of material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made, Lender will immediately discontinue
disposition of Included Shares pursuant to the Registration Statement until the
Company notifies Lender that it may resume sales of Included Shares and, if
necessary, provides to Lender copies of the supplemental or amended
prospectus.




1.4

Blackout
Event.  The Company shall not be obligated to file a post-effective
amendment or supplement to the Registration Statement or the prospectus
constituting a part thereof during the continuance of a Blackout Event;
provided, however, that no Blackout Event may be deemed to exist for more than
90 days.  Without the express written consent of Lender, if required to
permit the continued sale of the Included Shares by Lender, a post-effective
amendment or supplement to Registration Statement or the prospectus constituting
a part thereof must be filed no later than the 91st day following
commencement of a Blackout Event.




1.5

Indemnification by
the Company.  The Company agrees to indemnify and hold harmless Lender,
and its officers, directors and agents, and each person, if any, who controls
Lender within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act from and against any and all losses, claims, damages and
liabilities caused by (i) any violation or alleged violation by the Company of
the Securities Act, Exchange Act, any state Securities laws or any rule or
regulation promulgated under the Securities Act, Exchange Act or any state
Securities laws, (ii) any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or prospectus relating to
the Included Shares (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary prospectus,
or (iii) caused by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances under which they were made, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information furnished in writing to the Company by Lender or on Lender's behalf
expressly for use therein.




1.6

Indemnification by
Lender.  Lender agrees to indemnify and hold harmless the Company, its
officers, directors and agents and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to Lender, but only with respect to information furnished in writing by Lender
or on Lender's behalf expressly for use in any registration statement or
prospectus relating to the Registrable Shares, or any amendment or supplement
thereto, or any preliminary prospectus. 




1.7

Indemnification
Procedures. In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section, such person (an "Indemnified
Party") shall promptly notify the




18











person against whom such indemnity may
be sought (the "Indemnifying Party") in writing and the Indemnifying Party shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Party, and shall assume the payment of all fees
and expenses; provided that the failure of any Indemnified Party so to notify
the Indemnifying Party shall not relieve the Indemnifying Party of its
obligations hereunder except to the extent (and only to the extent that) that
the Indemnifying Party is materially prejudiced by such failure to notify.
 In any such proceeding, any Indemnified Party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such counsel or
(ii) in the reasonable judgment of such Indemnified Party representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them.  It is understood that the Indemnifying
Party shall not, in connection with any proceeding or related proceedings in the
same jurisdiction, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) at any time
for all such Indemnified Parties (including in the case of Lender, all of its
officers, directors and controlling persons) and that all such fees and expenses
shall be reimbursed as they are incurred.  In the case of any such separate
firm for the Indemnified Parties, the Indemnified Parties shall designate such
firm in writing to the Indemnifying Party.  The Indemnifying Party shall
not be liable for any settlement of any proceeding effected without its written
consent (which consent shall not be unreasonably withheld or delayed), but if
settled with such consent, or if there be a final judgment for the plaintiff,
the Indemnifying Party shall indemnify and hold harmless such Indemnified
Parties from and against any loss or liability (to the extent stated above) by
reason of such settlement or judgment.  No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability arising out
of such proceeding.




1.8

Contribution.
 To the extent any indemnification by an Indemnifying Party is prohibited
or limited by law, the Indemnifying Party agrees to make the maximum
contribution with respect to any amounts for which, he, she or it would
otherwise be liable under this Section to the fullest extent permitted by law;
provided, however, that (i) no contribution shall be made under circumstances
where a party would not have been liable for indemnification under this Section
and (ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning used in the Securities Act) shall be
entitled to contribution from any party who was not guilty of such fraudulent
misrepresentation. 




19