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Unassociated Document

    EXHIBIT
      10.2

     

    EMPLOYMENT
      AGREEMENT

     

    EMPLOYMENT
      AGREEMENT (this
“Agreement”),
      dated as of January 14, 2008 (the “Effective
      Date”), by and among Technest Holdings, Inc. (with its subsidiaries, the
      “Company”),
      a Nevada corporation, and Nitin V. Kotak (the “Executive”)
      located in Silver Spring, Maryland.

     

    WITNESSETH
      THAT

     

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

     

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

     

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

     

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

     

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

     

    3.           
      Position and
      Duties

     

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

     

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

     

    
      
        
        

      

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

     

    4.           
      Compensation

     

    (a)           
      Base
      Compensation:  As compensation for services to be rendered by
      the Executive under this Agreement, the Company shall pay to the Executive,
      during the Term of the Executive’s engagement and subject to the termination
      provisions of Section 8 of this Agreement, a base payment of $220,000 per year
      (the “Annual
      Salary”), which payment shall be paid in arrears in accordance with the
      Company’s normal procedure and policies.  The Executive shall be
      eligible for periodic cost of living or merit raises at the discretion of the
      Company.

     

    (b)           
      Bonus

     

    (i)
Cash
      Compensation: In
      addition to the Annual Salary, the Executive shall be eligible to receive cash
      bonus compensation from time to time as determined by the Board of Directors
      of
      the Company or a compensation committee of the Board of Directors of the
      Company, or subset of such committee, composed in accordance with the corporate
      governance requirements of the applicable listing exchange.

     

     (ii)
      Equity
      Compensation: In addition to the Annual Salary and cash bonus, the
      Executive shall be eligible to receive equity bonus compensation from time
      to
      time in amounts and upon conditions determined by the Board of Directors of
      the
      Company, or a compensation committee of the Board of Directors of the Company
      or
      a subset of such committee, composed in accordance with the corporate governance
      requirements of the applicable listing exchange.

     

    
      
        
        

      

      
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    Initial
      Grant of
      Stock:  Within three business days of the Effective Date, the
      Company shall issue to the Executive fifty thousand (50,000) shares of the
      Company’s Common stock (the “Shares”)
      pursuant to the Company’s 2006 Stock Award Plan and in accordance with the
      restricted stock agreement between the Company and the Executive in the form
      previously approved by Company’s Board of Directors (the “Restricted
      Stock Agreement”), provided, however, that the Shares shall vest on the
      first anniversary of the Effective Date.

     

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

     

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

     

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

    

    5.           
      Confidential
      Information   Except as permitted
      or directed
      by the Company’s Board of Directors in writing or as required by operation of
      law, during the Term of this Agreement or at any time thereafter, the Executive
      shall not divulge, furnish or make accessible to anyone or use in any way (other
      than in the ordinary course of business of the Company) any Confidential
      Information.  “Confidential Information” shall include any information
      of the Company or any affiliate, customer, subsidiary, supplier or other
      business associate of the Company or any affiliate (including but not limited
      to
      any trade secrets or other private matters) that the Executive has acquired
      or
      become acquainted with or will acquire or become acquainted with prior to the
      termination of the period of the Executive’s engagement by the Company
      (including engagement by the Company or any affiliated companies prior to the
      Effective Date) whether developed by the Executive or by
      others,  and

     

    
      
        
        

      

      
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     which
      is not known or generally available to the general public or of a type which
      the
      Company has customarily made available to the general public including but
      not
      limited to any trade secrets, confidential or secret designs, processes,
      formulae, plans, devices or material (whether or not patented or patentable)
      directly or indirectly useful in any aspect of the business of the Company,
      any
      customer or supplier lists of the Company, any confidential or secret
      development or research work of the Company, or any other confidential or secret
      aspects of the business of the Company.  The Executive acknowledges
      that the above-described knowledge or information constitutes a unique and
      valuable asset of the Company and represents a substantial investment of time
      and expense by the Company, and that any disclosure or other use of such
      knowledge or information other than for the sole benefit of the Company would
      be
      wrongful and would cause irreparable harm to the Company.   Both
      during and after the Term of the Executive’s engagement, the Executive will
      refrain from any acts or omissions that would reduce the value of such knowledge
      or information to the Company.  The foregoing obligations of
      confidentiality shall not apply to any knowledge or information that is
      published and publicly available or which subsequently becomes generally
      publicly known in the form in which it was obtained from the Company, other
      than
      as a direct or indirect result of the breach of this Agreement by the
      Executive.

     

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

     

    7.           
      Intellectual Property
      Rights

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

    
      
        
        

      

      
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    8.           
      Termination of
      Engagement

     

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

    (f)           
      Payment
      Continuation  If the Executive’s engagement with the Company is
      terminated by the Company pursuant to clause (iii) of Section 8(a) of this
      Agreement or by the Executive pursuant to clause (v) of Section 8(a) of this
      Agreement, then the Company shall continue to pay to the Executive’s Annual
      Salary payments  and shall continue to provide medical benefits
      comparable to those the Executive participated in during his engagement with
      the
      Company for the Executive and his eligible dependents for a period of one year
      from the date of such termination.  If the Executive’s engagement is
      terminated pursuant to clauses (i), (ii) or (iv) of Section 8(a) of this
      Agreement, the Executive’s right to Annual Salary payments and benefits shall
      immediately terminate, except as may otherwise be required by applicable
      law.

     

    (g)           
      Change of
      Control Notwithstanding the foregoing, in the event that a Change of
      Control (as defined below) occurs during the Term of this Agreement and the
      Executive is terminated as a result of such Change of Control (other than for
      Cause), the Company shall pay to the Executive, in cash within 30 days after
      the
      date of termination, the amount equal to the Annual Salary, together with any
      earned Annual Salary through the date of termination and any accrued vacation
      pay. For purposes of this Section, any one of the following events shall be
      considered a “Change of Control”:

     

    
      	
                              (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; or
                

            

    

    

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

    

    
      
        
        

      

      
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    9.           
      Non-Competition.

     

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

     

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

     

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

     

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

     

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

     

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

     

    (A) engage
      in a Competitive Business;

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

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

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

     

    11.           
      Miscellaneous

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

     If
      to the Company:

     

     Technest
      Holdings,
      Inc.

     Attention:
      General
      Counsel

     10411
      Motor City Drive, Suite
      650

     Bethesda,
      MD 20817

     

     If
      to the Executive

     

     Nitin
      V. Kotak

     c/o
      Technest Holdings,
      Inc.

     10411
      Motor City Drive, Suite 650  

     Bethesda,
      MD 20817

     

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

     

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

       

      
        
          
          

        

        
          -
            11
            -

          
            

          

        

        
          
          

        

         

      

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

       

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

       

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

       

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

       

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

    

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

     

    
      
        
        

      

      
        -
          12
          -

        
          

        

      

      
        
        

      

    

     

    THE
      PARTIES ACKNOWLEDGE THAT EACH HAS READ THIS AGREEMENT, UNDERSTANDS IT, AND
      AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS.  FURTHER, THE PARTIES
      AGREE THAT THIS AGREEMENT AND ANY EXHIBITS HERETO ARE THE COMPLETE AND EXCLUSIVE
      STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES, WHICH SUPERSEDES ALL PROPOSALS
      AND ALL PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS BETWEEN
      THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF.

     

    
    

    
      	ACCEPTED
              AND
              AGREED: 	 
	 	 
	Technest
              Holdings,
              Inc. 	Nitin
              V.
              kotak 
	 	 
	/s/
              Gino M. Pereira,
              CEO                                  
              	/s/
              Nitin V.
              Kotak                                             
              
	 	 
	 	 
	Date:           
              January 14,
              2008                           
              	Date:           
              January 14,
              2008                           

    

     

     

     

    -
      13
      -Unassociated Document

     EXHIBIT
      10.3

     

    RESTRICTED
      STOCK GRANT AGREEMENT

    

     

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

     

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

     

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

     

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

     

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

     

    Unvested
      Shares:  Any Shares that are not Vested Shares.

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        -1-

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      5.    Forfeiture
        of Unvested
        Shares.

       

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

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

       

      (b)    Vesting.

       

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

       

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

    

     

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

     

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

     

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

     

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

     

    8.           
      Miscellaneous.

     

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

     

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

     

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

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

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

     

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

    

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

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

     

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

     

    
    

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

              Name: Gino M. Pereira

              Title: CEO

            
	 	 
	 	 
	 	
               

              GRANTEE:

            
	 	 
	 	 
	 	
              /s/
                Nitin V. Kotak

              Nitin V. Kotak

            

    

     

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

     

    STOCK
      POWER

    ([____________])

     

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

     

     

    
    

    
      	Dated:
              ___________________	 
	 	 
	 	 
	 	
              ________________________

              [____________]

            
	 	 
	In
              the Presence
              of:	 
	
               

               

              _______________________________

              Name:

            	 

    

     

     

     

    -7-

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