Document:

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                                                                    EXHIBIT 10.5

This GUARANTEE AND POSTPONEMENT OF CLAIM is dated for reference May 30, 2007
(P948 Release No. 1)

BETWEEN:
      MICHAEL DAVIES, 33251 Questa Way, Dana Point, California 92629, USA.

                                    (hereinafter referred to as "the Guarantor")
                                                               OF THE FIRST PART
AND:
      0761291 B.C. Ltd., a British Columbia company (Incorporation
      No.BC0761291) which has its registered and records office located at
      Suite 107 - 20644 Eastleigh Crescent, Langley, British Columbia, V3A 4C4.

      Paul Hughes, 7288 Beechwood Street, Vancouver, B.C. V6P 5V4

      Eat-Me Foods, Ltd., 404-1066 Hamilton Street, Vancouver, B.C. V6B 2R9

                                       (hereinafter referred to as "the Lender")
                                                              OF THE SECOND PART

A. WHEREAS the Guarantor is associated in business with Reclamation Consulting
and Applications, Inc., a Colorado corporation (hereinafter referred to as the
"Borrower") and has a financial interest in the business success of the
Borrower;

B. AND WHEREAS the Lender has agreed to lend to the Borrower the sum of $400,000
on the security, INTER ALIA, of a Secured Convertible Debenture (hereinafter
referred to as "the "Debenture");

C. AND WHEREAS the Lender, as a condition of making the said loan to the
Borrower, has requested that the Guarantor provide the guarantee hereinafter
contained;

      NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the sum of
$400,000 now paid by the Lender to Reclamation Consulting and Applications, Inc.
(the sufficiency and receipt of which by the Borrower is hereby acknowledged by
the Guarantor), and in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the participants hereby agree each with
the other as follows:

ARTICLE 1 -- DEFINITIONS AND INTERPRETATION

1.1   "Indebtedness" includes any and all advances to and debts (whether for
      principal, interest or otherwise), obligations, endorsements, duties,
      responsibilities, guarantees, indemnities, undertakings, promises and
      liabilities of the Borrower to the Lender under the Debenture heretofore,
      now, or henceforth made, incurred or created, whether due or not due,
      absolute or contingent, determined or undetermined, or whether recovery
      upon such indebtedness may be or may henceforth become barred by reason of
      any statute of limitations or may be, or may henceforth become otherwise
      unenforceable and irrespective of the genuineness, validity or regularity
      thereof, or of any security therefor or of the existence or extent of any
      such security.

1.2   "Participant" means either party to this Agreement. "Participants" means
      both parties to this Agreement.

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1.3   "Person" means any natural person, partnership, trust, society, body
      corporate, body politic and any other legal entity, including (without
      limiting the generality of the foregoing) any ministry, department, agency
      of, or statutory body created by, any government, including a municipal
      government. The term "person" as used herein means "person or persons"
      wherever the circumstances to which the provisions of this Agreement are
      to be applied shall reasonably admit or require.

1.4   Where a word or an expression is defined in this Agreement, other parts of
      speech and grammatical forms of the same word or expression have
      corresponding meanings. The words and expressions defined in this article
      shall have the meanings herein set out throughout this Agreement
      irrespective of whether they are printed in a bold font or otherwise
      emphasized, and irrespective of whether the first letter of each appears
      in upper case or lower case type.

1.5   Wherever any pronoun is used in this Agreement, the same shall be
      construed to mean the masculine or the feminine, the singular or the
      plural, or the body politic or body corporate, where the context in which
      this term is found within this Agreement or the circumstances to which the
      provisions of this Agreement are to be applied shall reasonably admit or
      require.

1.6   The terms and conditions herein set out shall enure to the benefit of and
      shall bind each of the participants and his every successor in interest,
      including, without limiting the generality of the foregoing, any and all
      companies succeeding a corporate participant by reason of amalgamation,
      all receivers and receiver-managers, all liquidators, all
      trustees-inbankruptcy, all committees, personal representatives and heirs.

ARTICLE 2 -- GUARANTEE

2.1   The Guarantor hereby unconditionally guarantees and covenants to pay or to
      cause to be paid to the order of the Lender any and all indebtedness of
      the Borrower to the Lender at any time immediately up on the Lender's
      demand for the same only at the time of default of the loan agreement
      between the Lender and the Borrower.

ARTICLE 3 -- REPRESENTATIONS AND WARRANTIES

3.1   The Guarantor represents and warrants to the Lender as follows:

      3.1.1 The execution and delivery of this Guarantee is not, and the
            performance of this Guarantee will not be, in contravention of, or
            in conflict with, any agreement, indenture or undertaking to which
            the Guarantor is a party or by which his property is or may be bound
            or affected and does not, and will not, cause any security interest,
            lien or other encumbrance to be created or imposed upon any such
            property, other than as herein contemplated.

      3.1.2 There is no litigation or other proceeding pending, or to the
            knowledge of the Guarantor, threatened against, or affecting him or
            his property which, if determined adversely to him, would have a
            materially adverse effect on his financial condition or property.

      3.1.3 The Guarantor is not in default with respect to any order, writ,
            injunction, decree or demand of any court of other governmental or
            regulatory authority which would have a materially adverse effect on
            his financial condition or property.

ARTICLE 4 -- GUARANTEE INDEPENDENT

4.1   The liability of the Guarantor hereunder is independent of the obligations
      of the Borrower, and a separate action may be brought and prosecuted
      against the Guarantor whether such action is brought or prosecuted against
      the Borrower or whether the Borrower is joined in any such action or
      actions. The liability of the Guarantor hereunder is independent of and
      not in consideration of or contingent upon the liability of any other
      person under any similar instrument and the release of, or cancellation
      by, any grantor of any similar instrument shall not act to release or
      otherwise affect the liability of the Guarantor hereunder.

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ARTICLE 5 -- AUTHORIZATION

5.1   The Guarantor authorizes the Lender, without notice or demand and without
      affecting the Guarantor's liability hereunder, from time to time:
      (a)   to take and to hold security for the payment of the indebtedness
            hereby guaranteed, or any part thereof, and to exchange, to enforce,
            to waive or to release any such security and to apply any such
            security and direct the order or manner of sale thereof as the
            Lender in its discretion may determine;
      (b)   to release or to substitute any one or more endorsers, guarantors
            and/or other obligors of this Guarantee or any other guarantee of
            the indebtedness hereby guaranteed, or any part thereof;
      (c)   to grant any other indulgence to the Borrower or to any other person
            in respect of the indebtedness hereby guaranteed; and/or
      (d)   to make advances under the Debenture to the Borrower or to such
            other person as any officer of the Borrower may direct.

ARTICLE 6 -- WAIVERS

6.1   The Guarantor waives the right to require the Lender to proceed against
      the Borrower, to proceed under or to exhaust any security held from the
      Borrower or to pursue any other remedy in the power of the Lender
      whatsoever and the Guarantor waives the right to have the property of the
      Borrower first applied to discharge the indebtedness hereby guaranteed.
      The Lender may, at its election, exercise any right or remedy against the
      Borrower or any security held by the Lender, including, without
      limitation, the right to foreclose upon any such security or to exercise
      any power of sale without affecting or impairing in any way the liability
      of the Guarantor hereunder, and the Guarantor waives any defense arising
      out of the absence, impairment or loss of any right of reimbursement,
      contribution or subrogation or any other right or remedy of the Guarantor
      against the Borrower, or any such security, whether resulting from such
      election by the Lender or otherwise. The Guarantor waives any defense
      arising by reason of the Borrower ceasing to be liable, either in whole or
      in part, to the Lender for the indebtedness hereby guaranteed by way of
      bankruptcy, insolvency or other proceedings whereby liability otherwise
      existing is extinguished by operation of law.

6.2   Until all of the indebtedness hereby guaranteed has been paid in full the
      Guarantor shall have no right of subrogation. The Guarantor waives any
      right to enforce any remedy which the Lender now has or may in future have
      against the Borrower in respect of the indebtedness hereby guaranteed, and
      the Guarantor waives any benefit of, and any right to participate in, any
      security, whether on real or personal property or otherwise, now or
      henceforth held by the Lender until the indebtedness hereby guaranteed has
      been paid in full. The Guarantor acknowledges that this Guarantee is
      security in addition to the Debenture and that the Guarantor is obligated
      to pay any indebtedness of the Borrower to the Lender remaining unpaid,
      notwithstanding any sale of the land and the payment of the proceeds of
      sale to the Lender. The Guarantor waives presentment, notice of
      nonperformance, protest, notice of protest, notice of dishonour and notice
      of acceptance of this Guarantee and of the creation or incurring of new or
      additional indebtedness of the Borrower to the Lender. The Guarantor
      assumes the responsibility for being and keeping himself informed of the
      financial condition of the Borrower, and of all other circumstances
      bearing upon the risk of nonpayment of the indebtedness which diligent
      inquiry would reveal and agrees that the Lender shall have no duty to
      advise the Guarantor of information known to it regarding any such
      condition or circumstance.

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ARTICLE 7 -- SECURITY

7.1   This Guarantee and the agreements of the Guarantor herein contained shall
      take effect and shall be and are hereby declared to be binding upon the
      Guarantor notwithstanding any defect in or omission from any instrument
      under which the Lender has taken any security for the indebtedness hereby
      guaranteed, or any part thereof, or any non-registration or non-filing or
      defective registration or filing thereof. The Guarantor hereby further
      agrees that any loss of any security received by the Lender from the
      Borrower or any other person, whether occasioned through the fault of the
      Lender or otherwise, shall not discharge pro tanto or limit or lessen the
      liability of the Guarantor under this Guarantee.

ARTICLE 8 -- EVIDENCE OF INDEBTEDNESS

8.1   A certificate issued by the Lender which avers the amount of the
      indebtedness of the Borrower to the Lender remaining unpaid at any time
      shall be conclusive and binding evidence of the amount of the said
      indebtedness, and all right to question in any way the Lender's present or
      future method of dealing with the Borrower or any person now or in future
      liable to the Lender for the indebtedness hereby guaranteed, or any part
      thereof, or with any security now or henceforth held by the Lender, or
      with any property covered by such security, is hereby waived by the
      Borrower.

ARTICLE 9 -- PRINCIPAL DEBTOR

9.1   For greater certainty, it is hereby declared to be the intention of the
      participants that this Guarantee shall be construed so as to impose the
      like obligation upon the Guarantor, as if the Guarantor had covenanted as
      principal obligant with the Borrower with respect to the indebtedness
      hereby guaranteed.

ARTICLE 10 -- BANKRUPTCY

10.1  Upon the bankruptcy of the Borrower or of any surety of the whole or of
      any part of the indebtedness hereby guaranteed, the rights of the Lender
      shall not be affected or impaired by any omission by the Lender to prove
      its claim or to prove its full claim. The Lender may prove such claim as
      it sees fit and may refrain from proving any claim and in the discretion
      of the Lender may value as it sees fit or refrain from valuing any
      security held by it without in any way releasing, reducing, or otherwise
      affecting the liability to the Lender of the Guarantor.

ARTICLE 11 -- POSTPONEMENT OF CLAIMS

11.1  All indebtedness and liability, present and future of the Borrower to the
      Guarantor is hereby assigned to the Lender and postponed to the
      indebtedness of the Borrower to the Lender, and all monies received by the
      Guarantor in respect thereof are received in trust for the Lender and
      forthwith on receipt shall be paid to the Lender, the whole without
      limiting the liability of the Guarantor under this Guarantee.

ARTICLE 12 -- GOVERNING LAW AND JURISDICTION

12.1  This Agreement shall be governed by and shall be construed in accordance
      with both the procedural and the substantive laws of the Province of
      British Columbia, Canada, to the exclusion of the law of any other
      jurisdiction. By entering into this Agreement the participants:
      (a)   agree that any cause of action which arises in respect of the
      construction and/or the performance of this Agreement or any provision
      hereof shall be deemed to have arisen in the Province of British Columbia;
      and
      (b)   accept and to attorn to the jurisdiction of the Supreme Court of
      British Columbia. The participants agree that no resort shall be taken to
      any other Court or tribunal in any other jurisdiction, save only where and
      in those instances in which it shall become necessary to seek the
      enforcement of an Order of the Supreme Court of British Columbia beyond
      its territorial jurisdiction.

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12.2  In the event that there should be carried on any litigation between or
      among the participants in respect of the construction or the performance
      of this Agreement, the Guarantor hereby waives any conduct money and which
      may be required to be paid to him pursuant to the Rules of Court. The
      Guarantor agrees to bear all costs of his transportation and accommodation
      and all living expenses incurred by him for the purpose of attending at
      examinations for discovery and trials conducted in the Province of British
      Columbia.

ARTICLE 13 -- GENERAL PROVISIONS

13.1  All agreements, representations and warranties made herein shall survive
      the execution and delivery of this Guarantee.

13.2  No failure or delay on the part of the Lender in the exercise of any
      power, right or privilege hereunder shall operate as a waiver thereof, nor
      shall any single or partial exercise of any such power, right or privilege
      preclude any other or further exercise of any such power, right or
      privilege. All powers, rights and privileges hereunder are in addition to,
      and not in substitution for, any powers, rights or privileges otherwise
      available.

13.3  No alteration, modification or waiver of this Guarantee or any of its
      terms, provisions or conditions shall be binding on the Lender unless made
      in writing.

13.4  Upon the execution and delivery by the Guarantor to the Lender of this
      Guarantee, this Guarantee shall be deemed to be finally executed and
      delivered by the Guarantor notwithstanding the failure or refusal of any
      other party to execute any like guarantee and shall not be subject to or
      affected by any promise or condition affecting or limiting the liability
      of the Guarantor except as set forth herein and no statement,
      representation, agreement or promise on the part of the Lender or any
      officer, employee or agent of the Lender unless contained herein forms any
      part of this guarantee, or has induced the making of it, or shall be
      deemed to affect the liability of the Guarantor hereunder.

13.5  Except as otherwise provided herein, any notice herein required or
      permitted to be given shall be in writing and may be sent by prepaid
      registered post, properly addressed, and if so sent shall be deemed to
      have been received 3 clear days after the mailing thereof, or may be
      delivered personally to a participant, and if so delivered shall be deemed
      to have been received at the time of delivery if a business day and
      otherwise if not a business day on the next succeeding business day. For
      the purpose hereof, the addresses of the participants shall be as shown on
      the first page hereof or such other address as may stipulated from time to
      time by notice in writing.

13.6  In case any provision of this Guarantee shall be invalid, illegal or
      unenforceable, such provision shall be severable from the rest of this
      Guarantee and the validity, legality and enforceability of the remaining
      provisions shall not in any way be affected or impaired thereby.

13.7  This Guarantee shall be binding upon the Guarantor and his heirs,
      successors, executors, administrators and assigns and shall enure to the
      benefit of the Lender and its successors and assigns. The Lender may
      assign this Guarantee or any of its rights and powers hereunder without
      notice, together with all or any of the indebtedness hereby guaranteed,
      and in such event the assignee shall have the same rights and remedies as
      if originally named herein in place of the Lender and be subject to all
      equities between the Lender and the Guarantor then applicable.

13.8  The headings of the Articles of this Guarantee are inserted for
      convenience only and shall not be deemed to constitute a part hereof.

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13.9  The Guarantor hereby agrees to be responsible for and to pay all costs and
      expenses, including, without limitation, reasonable solicitor's fees and
      accountant's fees, incurred by the Lender in connection with the
      collection from the guarantors of the indebtedness hereby guaranteed.

      IN WITNESS WHEREOF the Guarantor gives, grants, executes and delivers this
Guarantee to the Lender.

      SIGNED, SEALED & DELIVERED BY MICHAEL DAVIES THE PRESENCE OF THE
UNDERSIGNED WITNESS:

                                        /s/ Michael Davies
                                        ----------------------------------------
Signature                               MICHAEL DAVIES

Print NameExhibit
      4.1

     

    THIS
      DEBENTURE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
      OR
      THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
      SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
      TO
      SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
      COMPANY. THIS DEBENTURE MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
      ACCOUNT OR OTHER LOAN SECURED BY THIS DEBENTURE.

    

    THIS
      DEBENTURE IS SUBJECT TO THE TERMS AND CONDITIONS OF THE SUBORDINATION AGREEMENT,
      DATED THE DATE OF THIS DEBENTURE, BETWEEN THE HOLDER AND SILICON VALLEY
      BANK.

    

    Original
      Issue Date: May 31, 2007

     

    $1,650,000.00

    

    $1,650,000
      SECURED ORIGINAL ISSUE DISCOUNT DEBENTURE

    

    THIS
      DEBENTURE is a duly authorized and validly issued Debenture of Technest
      Holdings, Inc., a Nevada corporation, having its principal place of business
      at
      10411 Motor City Drive, Suite 650, Bethesda, Maryland 20817 (the “Company”),
      designated as its $1,650,000 Secured Original Issue Discount Debenture (the
      “Debenture”).

    

    FOR
      VALUE
      RECEIVED, the Company promises to pay to Shelter Island Opportunity Fund, LLC
      or
      its registered assigns (the “Holder”),
      or
      shall have paid pursuant to the terms hereunder, the principal sum of
      $1,650,000.00 by the Maturity Date, and to pay interest to the Holder on the
      aggregate outstanding principal amount of this Debenture in accordance with
      the
      provisions hereof. This Debenture is subject to the following additional
      provisions:

    

    Section
      1.    Definitions.
      For the
      purposes hereof, in addition to the terms defined elsewhere in this Debenture,
      (a) capitalized terms not otherwise defined herein shall have the meanings
      set
      forth in the Securities Purchase Agreement and (b) the following terms shall
      have the following meanings:

    

    “Bankruptcy
      Event”
means
      any of the following events: (a) the Company or any Significant Subsidiary
      (as
      such term is defined in Rule 1-02(w) of Regulation S-X) of the Company commences
      a case or other proceeding under any bankruptcy, reorganization, arrangement,
      adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
      or
      similar law of any jurisdiction relating to the Company or any Significant
      Subsidiary thereof; (b) there is commenced against the Company or any
      Significant Subsidiary thereof any such case or proceeding that is not dismissed
      within 60 days after commencement; (c) the Company or any Significant Subsidiary
      thereof is adjudicated insolvent or bankrupt or any order of relief or other
      order approving any such case or proceeding is entered; (d) the Company or
      any
      Significant Subsidiary thereof suffers any appointment of any custodian or
      the
      like for it or any substantial part of its property that is not discharged
      or
      stayed within 60 calendar days after such appointment; (e) the Company or any
      Significant Subsidiary thereof makes a general assignment for the benefit of
      creditors; (f) the Company or any Significant Subsidiary thereof calls a meeting
      of its creditors with a view to arranging a composition, adjustment or
      restructuring of its debts; or (g) the Company or any Significant Subsidiary
      thereof, by any act or failure to act, expressly indicates its consent to,
      approval of or acquiescence in any of the foregoing or takes any corporate
      or
      other action for the purpose of effecting any of the foregoing.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    “Change
      of Control Transaction”
means
      the occurrence after the date hereof of any of (i) an acquisition by an
      individual or legal entity or “group” (as described in Rule 13d-5(b)(1)
      promulgated under the Exchange Act), excluding Markland, of effective control
      (whether through legal or beneficial ownership of capital stock of the Company,
      by contract or otherwise) of in excess of 25% of the voting securities of the
      Company or any Subsidiary, or (ii) the Company or any Subsidiary merges into
      or
      consolidates with any other Person, or any Person merges into or consolidates
      with the Company or any Subsidiary and, after giving effect to such transaction,
      the stockholders of the Company immediately prior to such transaction own less
      than 50% of the aggregate voting power of the Company or the successor entity
      of
      such transaction, or the Company owns less than 50% of the aggregate voting
      power of such Subsidiary, or (iii) the Company or any Subsidiary sells or
      transfers all or substantially all of its assets to another Person, whether
      in
      one transaction or in a series of related transactions.

    

    “Event
      of Default”
shall
      have the meaning set forth in Section 5.

    

    “Maturity
      Date”
means
      the earlier of (i) May 31, 2010 and (ii) the date this Debenture is permitted
      or
      required to be paid in accordance with the terms hereof (whether as a result
      of
      a prepayment, acceleration or otherwise).

    

    “Original
      Issue Date”
means
      the date of the first issuance of this Debenture, regardless of any transfers
      of
      this Debenture and regardless of the number of instruments which may be issued
      to evidence this Debenture.

    

    Permitted
      Lien”
means
      the individual and collective reference to the following: (a) Liens for taxes,
      assessments and other governmental charges or levies not yet due or Liens for
      taxes, assessments and other governmental charges or levies being contested
      in
      good faith and by appropriate proceedings for which adequate reserves (in the
      good faith judgment of the management of the Company) have been established
      in
      accordance with GAAP; and (b) Liens imposed by law which were incurred in the
      ordinary course of the Company’s business, such as carriers’, warehousemen’s and
      mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in
      the ordinary course of the Company’s business, and which (x) do not individually
      or in the aggregate materially detract from the value of such property or assets
      or materially impair the use thereof in the operation of the business of the
      Company or (y) are being contested in good faith by appropriate proceedings,
      which proceedings have the effect of preventing for the foreseeable future
      the
      forfeiture or sale of the property or asset subject to such Lien.

     

    “Prime
      Rate”
means,
      at any date, the “Prime Rate,” as published in The
      Wall Street Journal
      (Eastern
      Edition) on such date or on the Trading Date immediately preceding such date
      if
      such date is not a Trading Date.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    “Securities
      Purchase Agreement”
means
      the Securities Purchase Agreement between the Company and the original Holder,
      dated as of the Original Issue Date, as amended, modified or supplemented from
      time to time in accordance with its terms.

    

    Section
      2.    Interest
      and Payments.

     

    a)    Interest
      Rate.
      Interest shall accrue each day on the aggregate outstanding principal amount
      of
      this Debenture at the rate per annum equal to the higher of (i) the sum of
      3.00%
      plus the Prime Rate on such date and (ii) 11.25%.

    

    b)    Payments
      of Principal and Interest.
      The
      outstanding principal amount of this Debenture, and all accrued interest
      thereon, will be payable in 33 equal monthly installments, each in the amount
      of
      $50,000, commencing on August 31, 2007 and
      continuing on the same day of each month thereafter until the Maturity Date.
      All
      unpaid principal on the Debenture, and accrued interest thereon, will be paid
      in
      full on the Maturity Date.

    

    c)    Method
      of Payment.
      All
      payments hereunder shall be made in immediately available funds on the date
      the
      same is due in such manner as directed by the Holder.

    

    d)    Interest
      Calculations.
      Interest shall be calculated on the basis of a 360-day year and shall accrue
      daily commencing on the Original Issue Date until payment in full of the
      principal sum, together with all accrued and unpaid interest and other amounts
      which may become due hereunder, has been made. 

    

    e)    Prepayment.
      The
      Company may prepay all or any portion of the principal amount of this Debenture
      upon at least two Trading Days’ notice to the Holder by paying the amount of
      principal desired to be prepaid and, if such prepayment occurs after September
      30, 2007, together with a payment equal to 10% of the amount being prepaid.
      All
      prepayments of principal hereunder shall be applied to the payment obligation
      of
      the Company under Section 2(b) in inverse order of maturity. At the option
      of
      the Holder upon notice to the Company, the principal amount of this Debenture
      and all accrued and unpaid interest hereon, shall become due and payable on
      the
      date on which a Change of Control Transaction shall have been consummated.
      

    

    f)    Termination
      Fee.
      On the
      Maturity Date (including, without limitation, as a result of the occurrence
      of a
      Change of Control with respect to EOIR), the Company shall pay to the Holder,
      as
      a termination fee (and not as a penalty), an amount equal to the product of
      (i)
      $45,000 and (ii) the number of months that have elapsed between the Original
      Issue Date and the date such payment is made by the Company to the Holder (the
      “Termination Fee”); it being understood and agreed that if any such month shall
      be less than a full calendar month, the Termination Fee payable for that month
      shall be pro rated based on the number of days elapsed during that
      month.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    Section
      3.    Registration
      of Transfers and Exchanges.
      

     

    a)    Different
      Denominations.
      This
      Debenture is exchangeable for an equal aggregate principal amount of Debenture
      of different authorized denominations, as requested by the Holder surrendering
      the same. No service charge will be payable for such registration of transfer
      or
      exchange.

     

    b)    Investment
      Representations.
      This
      Debenture has been issued subject to certain investment representations of
      the
      original Holder set forth in the Securities Purchase Agreement and may be
      transferred or exchanged only in compliance with the Securities Purchase
      Agreement and applicable federal and state securities laws and regulations.
      

    

    c)    Reliance
      on Debenture Register.
      Prior
      to due presentment for transfer to the Company of this Debenture, the Company
      and any agent of the Company may treat the Person in whose name this Debenture
      is duly registered on the Debenture Register as the owner hereof for the purpose
      of receiving payment as herein provided and for all other purposes, whether
      or
      not this Debenture is overdue, and neither the Company nor any such agent shall
      be affected by notice to the contrary.

    

    Section
      4.    Covenants.
      As long
      as any portion of this Debenture remains outstanding, the Company agrees as
      follows:

    

    a)    other
      than the Company’s obligations existing on the Original Issue Date to (i)
      Silicon Valley Bank and (ii) the Persons named in each of the Subordinated
      Debt
      Subordination Agreements, it shall not enter
      into, create incur,
      assume, guarantee or suffer to exist any indebtedness for borrowed money of
      any
      kind, including but not limited to, a guarantee, on or with respect to any
      of
      its property or assets now owned or hereafter acquired or any interest therein
      or any income or profits therefrom, unless in any such case, the obligations
      of
      the Company with respect thereto are not secured, directly or indirectly, by
      any
      assets of the Company and are subordinated to the obligations of the Company
      hereunder on terms satisfactory to the Holder;

     

    b)    other
      than Permitted Liens and Liens granted prior to the Original Issue Date to
      (i)
      Silicon Valley Bank and
      (ii)
      the Persons named in each of the Subordinated Debt Subordination
      Agreements,
      it
      shall not enter into, create, incur, assume or suffer to exist any Liens of
      any
      kind, on or with respect to any of its property or assets now owned or hereafter
      acquired or any interest therein or any income or profits
      therefrom;

    

    c)    it
      shall
      not amend its charter documents, including without limitation, the certificate
      of incorporation and bylaws, in any manner that materially and adversely affects
      any rights of the Holder;

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    d)    it
      shall
      not engage in any business other than as described in its SEC Reports filed
      with
      the Commission prior to the Original Issue Date and all activities related
      thereto; 

    

    e)    it
      shall
      not enter into any agreement with respect to any of the foregoing;
      

    

    f)    it
      shall
      comply in all material respects with all of its obligations under the License
      Agreement; 

    

    g)    it
      shall
      not amend or terminate, or consent to or suffer to exist any amendment or
      termination of, the License Agreement;
      

    

    h)    it
      shall
      pledge to the Holder (and execute and deliver to the Holder all pledge and
      security agreements and other documents and instruments as the Holder may
      request) all of the Company’s right, title and interest in and to all of the
      outstanding shares of capital stock of EOIR immediately
      following the release of the Lien held by Silicon Valley Bank in such shares
      (as
      long as EOIR is then still a Subsidiary of the Company);
      and

    

    i)    it
      shall
      comply with the provisions of Section 6.7 of the Loan and Security Agreement,
      dated August 4, 2006, as amended as of the Original Issue Date, among Silicon
      Valley Bank, the Company and the Subsidiaries of the Company named
      therein.

     

    Section
      5.    Events
      of Default.
      

    

    a)    “Event
      of Default”
means,
      wherever used herein, any of the following events (whatever the reason for
      such
      event and whether such event shall be voluntary or involuntary or effected
      by
      operation of law or pursuant to any judgment, decree or order of any court,
      or
      any order, rule or regulation of any administrative or governmental
      body):

    

    i.    any
      default in the payment of (A) the principal amount of this Debenture or (B)
      interest or other amounts owing to the Holder on this Debenture within two
      Trading Days as and when the same shall become due and payable (whether on
      the
      Maturity Date or by acceleration or otherwise);

     

    ii.    the
      Company shall fail to observe or perform any other covenant or agreement
      contained in this Debenture or any other Transaction Document to which it is
      a
      party which failure is not cured, if possible to cure, within the earlier to
      occur
      of
(A)
      two
Trading
      Days after notice of such failure sent by the Holder
      and
      (B) three Trading Days after the Company has become or should have become aware
      of such failure;

    

    iii.   a
      material default or any event of default (subject to any grace or cure period
      provided in the applicable agreement, document or instrument) shall occur under
      (A) any of the Transaction Documents or (B) any other material agreement, lease,
      document or instrument to which the Company or any Subsidiary is obligated
      (and
      not covered by clause (vi) below);

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

    

    iv.   any
      representation
      or warranty made in this Debenture, any other Transaction Documents, any written
      statement pursuant hereto or thereto or any other report, financial statement
      or
      certificate made or delivered to the Holder or any other Holder shall
      be
      untrue or incorrect in any material respect as of the date when made or deemed
      made;

    

    v.    the
      Company or any Significant Subsidiary shall be subject to a Bankruptcy
      Event;

     

    vi.    the
      Company or any Subsidiary shall default on any of its obligations under any
      mortgage, credit agreement or other facility, indenture agreement, factoring
      agreement or other instrument under which there may be issued, or by which
      there
      may be secured or evidenced, any indebtedness for borrowed money or money due
      under any long term leasing or factoring arrangement that (a) involves an
      obligation greater than $100,000, whether such indebtedness now exists or shall
      hereafter be created, and (b) results in such indebtedness becoming or being
      declared due and payable prior to the date on which it would otherwise become
      due and payable; or

    

    vii.    any
      monetary judgment, writ or similar final process shall be entered or filed
      against the Company, any Subsidiary or any of their respective property or
      other
      assets for more than $100,000, and such judgment, writ or similar final process
      shall remain unvacated, unbonded or unstayed for a period of 45 calendar
      days.

    

    b)    Remedies
      Upon Event of Default.
      If any
      Event of Default hereunder occurs, the outstanding principal amount of this
      Debenture plus accrued but unpaid interest and other amounts owing in respect
      thereof through the date of acceleration, shall become, at the Holder’s
      election, immediately due and payable. Commencing after the occurrence of any
      Event of Default hereunder and during its continuance, the interest rate on
      this
      Debenture shall accrue at an interest rate equal to 18.00% per annum. In
      connection with such acceleration described herein, the Holder need not provide,
      and the Company hereby waives, any presentment, demand, protest or other notice
      of any kind, and the Holder may immediately and without expiration of any grace
      period enforce any and all of its rights and remedies hereunder and all other
      remedies available to it under applicable law and the Transaction Documents.
      Such acceleration may be rescinded and annulled by Holder at any time prior
      to
      payment hereunder and the Holder shall have all rights as a holder of the
      Debenture until such time, if any, as the Holder receives full payment pursuant
      to this Section 5(b). No such rescission or annulment shall affect any
      subsequent Event of Default or impair any right consequent thereon.

     

    Section
      6.    Miscellaneous.
      

    

    a)    Notices.
      Any and
      all notices or other communications or deliveries to be provided by the Holder
      hereunder shall be delivered as set forth in the Securities Purchase Agreement.
      

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

       

    

    b)    Absolute
      Obligation.
      Except
      as expressly provided herein, no provision of this Debenture shall alter or
      impair the obligation of the Company, which is absolute and unconditional,
      to
      pay the principal of, and accrued interest, as applicable, on this Debenture
      at
      the time, place, and rate, and in the coin or currency, herein prescribed.
      This
      Debenture is a direct, unconditional and secured debt obligation of the Company.
      

     

    c)    Lost
      or Mutilated Debenture.
      If this
      Debenture shall be mutilated, lost, stolen or destroyed, the Company shall
      execute and deliver, in exchange and substitution for and upon cancellation
      of a
      mutilated Debenture, or in lieu of or in substitution for a lost, stolen or
      destroyed Debenture, a new Debenture for the principal amount of this Debenture
      so mutilated, lost, stolen or destroyed, but only upon receipt of evidence
      of
      such loss, theft or destruction of such Debenture, and of the ownership hereof,
      reasonably satisfactory to the Company.

    

    d)    Governing
      Law.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Debenture shall be governed by and construed and enforced in accordance
      with the internal laws of the State of New York, without regard to the
      principles of conflict of laws thereof. 

    

    e)    Waiver.
      Any
      waiver by the Holder of a breach of any provision of this Debenture shall not
      operate as or be construed to be a waiver of any other breach of such provision
      or of any breach of any other provision of this Debenture. The failure of the
      Holder to insist upon strict adherence to any term of this Debenture on one
      or
      more occasions shall not be considered a waiver or deprive that party of the
      right thereafter to insist upon strict adherence to that term or any other
      term
      of this Debenture. Any waiver by the Holder must be in writing.

     

    f)    Severability.
      If any
      provision of this Debenture is invalid, illegal or unenforceable, the balance
      of
      this Debenture shall remain in effect, and if any provision is inapplicable
      to
      any Person or circumstance, it shall nevertheless remain applicable to all
      other
      Persons and circumstances. If it shall be found that any interest or other
      amount deemed interest due hereunder violates the applicable law governing
      usury, the applicable rate of interest due hereunder shall automatically be
      lowered to equal the maximum rate of interest permitted under applicable law.
      

    

    g)    Next
      Business Day.
      Whenever any payment or other obligation hereunder shall be due on a day other
      than a Business Day, such payment shall be made on the next succeeding Business
      Day.

    

    h)    Headings.
      The
      headings contained herein are for convenience only, do not constitute a part
      of
      this Debenture and shall not be deemed to limit or affect any of the provisions
      hereof.

    

    (Signature
      Page Follows)

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the Company has caused this Debenture to be duly executed
      by a
      duly authorized officer as of the date first above indicated.

     

    
      	 	 	 
	 	
              TECHNEST
                HOLDINGS, INC.

            
	 
 	 
 	 
 
	 	By:  	/s/ Gino
              M. Pereira
	 	
              
Name:
              Gino M. Pereira
	 	Title:
              Chief
              Financial Officer

       

    

    8

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