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CONVERTIBLE PROMISSORY NOTE

			
	$50,000.00

	Gaithersburg, Maryland

	 February 10, 2012

1.

FOR VALUE RECEIVED, the undersigned, Technest Holdings, Inc., a Nevada corporation (the “Maker”), hereby promises to pay to the order of Albert Friesen (the “Payee”), on August 10, 2012  (the “Maturity Date”) or as otherwise set forth in Section 1.4 of that certain Loan Agreement (as defined below), in lawful money of the United States of America, the principal amount of Fifty Thousand Dollars ($50,000.00), together with interest on the unpaid balance of said principal amount from time to time remaining outstanding, from the date hereof until maturity (howsoever such maturity shall occur), in like money, at said office, at a rate per annum equal to the Interest Rate and in accordance with that certain Loan Agreement (as defined below).

2.

Interest.  The Maker shall pay interest on the unpaid principal amount of this Note from its date of issuance until this Note is paid in full. This Note shall bear interest at the rate of 5% per annum from the date of issuance until paid in full (the “Interest Rate”).  Interest shall accrue and be payable on the Due Date.  Interest on this Note shall be computed on the basis of  a 365-day year for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable. The Maker shall have the option to pay the accrued interest in shares of Common Stock as set forth in Section 1.4 of the Loan Agreement.

3.

Conversion. The Payee shall have the right to convert the outstanding principal amount of this Note in accordance with Section 2 of the Loan Agreement. The mechanics and effect of such conversion are set forth in Section 2.3 of the Loan Agreement.

4.

 Voluntary Prepayment.  Upon not less than two Business Day’s notice to the Payee, the Maker may prepay, without premium or penalty thereon, the unpaid principal amount of this Note, in whole or in part, together with accrued interest hereon to the date of such prepayment on the principal amount prepaid.

5.

 Events of Default.  The occurrence of any of the following events shall constitute an “Event of Default” hereunder:

Maker shall fail to pay timely when due, the principal of, or accrued unpaid interest on, this Note or any other of the obligations hereunder and such failure continues for ten (10) Business Days after receipt of written notice thereof from the Majority Holders; or

Maker shall breach any representation made by Maker in any statement furnished concurrently herewith or hereafter to Payee by or on behalf of Maker; or

There exists an Event of Default as defined in Section 6.1 of the Loan Agreement;

Upon the happening of any Event of Default, the Majority Holders, at their option, upon written notice to Maker, may declare the unpaid principal portion of this Note and all accrued, earned 

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and unpaid interest on this Note to be forthwith due and payable, whereupon the said portion of this Note and all accrued, earned and unpaid interest shall become due and  payable by Maker without demand, presentment for payment, notice of nonpayment, protest, notice of protest, notice of intent to accelerate maturity, or any other notice of any kind (other than notice of acceleration of maturity) to Maker or any other person liable hereon or with respect hereto, all of which are expressly waived by Maker and each other Person liable hereon or with respect hereto, anything contained herein or in any document or instrument to the contrary notwithstanding; provided however that if elected by the Majority Holders, the Payee may converted the outstanding principal amount of and the accrued, earned and unpaid interest on the Note pursuant to Section 2.2 of the Loan Agreement. 

6.

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

7.

Limitation on Interest.  The Maker and the Payee and the holder of this Note specifically intend and agree to limit contractually the amount of interest payable under this Note to the maximum amount of interest lawfully permitted to be charged under applicable law.  Therefore, none of the terms of this Note shall ever be construed to create a contract to pay interest at a rate in excess of the maximum rate of permitted to be charged under applicable law, and neither the Maker nor any other party liable or to become liable hereunder shall ever be liable for interest in excess of the amount determined at such maximum rate, and the provisions of this Section 6 shall control over any contrary provision of this Note.

8.

Certain Waivers.  Maker waives demand, presentment for payment, notice of non-payment, protest, notice of protest, notice of intent to accelerate maturity, notice of acceleration of maturity and all other notice, filing of suit and diligence in collecting this Note and further agrees that it will not be necessary for any holder hereof, to enforce payment of this Note, to consent to any one or more extensions or postponements of time of payment of this Note on any terms or any other indulgences with respect hereto, without notice thereof to any of them.

9.

Replacement of Note.  Upon receipt of the Maker of evidence reasonably satisfactory to it of ownership of and the loss, theft, destruction or mutilation of this Note, and (a) in the case of loss, theft or destruction thereof, delivery of an indemnity reasonably satisfactory to the Maker; or (b) in the case of mutilation, upon surrender and cancellation this Note, the Maker, at its own expense, shall execute and deliver a new Note, dated and bearing interest from the date to which interest shall have been paid on this lost, stolen, destroyed or mutilated Note or dated the date of this lost, stolen, destroyed or mutilated Note if no interest shall have been paid hereon.

10.

 Governing Law.  This Note shall be governed by, and construed in accordance with, the laws of the State of Delaware.

11.

Amendments.  Neither this Note nor any of its provisions may be changed, waived or modified without the written consent of the Payee and the Maker.

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12.

Successors. This Note shall be a binding obligation of any successor of the Maker.

13. 

Defined Terms.  The terms set forth below shall have the meanings assigned to such terms as used in this Note:

“Common Stock” means Common Stock, $.001 par value, of the Maker.

 “Loan Agreement” shall mean that certain Loan Agreement dated as of February 10, 2012 by and among the Maker and Albert Friesen.

Capitalized terms not defined herein shall have the meaning ascribed to such terms in the Loan Agreement.

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EXECUTED AND EFFECTIVE as of the day and year first above written.

		
	 
	MAKER:

	 
	 

	 
	Technest Holdings, Inc.

			
	 
	By: 

	/s/ Shekhar Wadekar

	 
	 
	Name: Shekhar Wadekar

	 
	 
	Title: Chief Executive Officer

4NOVA/HUBER PROMISSORY NOTE

THIS NOTE HAS NOT BEEN THE SUBJECT OF REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE, AND THE SAME HAS BEEN ISSUED IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THIS NOTE MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT AS PERMITTED UNDER SUCH SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.

PROMISSORY NOTE

		
	$40,000.00

	Gaithersburg, MD

February 10, 2012

FOR VALUE RECEIVED, the undersigned, TECHNEST HOLDINGS, INC., a Nevada corporation (the “Maker”), hereby promises to pay SOUTHRIDGE PARTNERS II LP or registered assigns (the “Holder”), the principal amount equal to Forty Thousand dollars ($40,000.00) (the “Principal Amount”) multiplied by a redemption premium equal to 115% of such Principal Amount, on or before August 31, 2012 (the “Maturity Date”), together with interest on such Principal Amount equal to eight percent (8%) per annum.  All payments made hereunder shall be made in immediately available funds by wire transfer.

The following shall constitute an “Event of Default”:

a.

The Maker shall default in the payment of principal plus interest on this Note when due and same shall continue for a period of three (3) business days; or

b.

The Maker shall (1) make an assignment for the benefit of creditors or commence proceedings for its dissolution; or (2) apply for or consent to the appointment of a trustee, liquidator or receiver for its or for a substantial part of its property or business; or

c.

A trustee, liquidator or receiver shall be appointed for the Maker or for a substantial part of its property or business without its consent and shall not be discharged within thirty (30) days after such appointment; or

d.

Any governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control of the whole or any substantial portion of the properties or assets of the Maker and shall not be dismissed within thirty (30) days thereafter; or

e.

any money judgment, writ or warrant of attachment, or similar process in excess of Five Hundred Thousand ($500,000) Dollars shall be entered or filed against the Maker or any of its properties or other assets and shall remain unpaid, unvacated, unbonded or unstayed for a period of thirty (30) days; or

f.

Bankruptcy, reorganization, insolvency or liquidation proceedings or other proceedings for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Maker and, if instituted against the Maker, shall not be dismissed within thirty (30) days after such institution or the Maker shall by any action or answer approve of, consent to, or acquiesce in any such proceedings or admit the material allegations of, or default in answering a petition filed in any such proceeding; 

Then, or at any time thereafter, and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) in the Holder's sole discretion, the Holder may consider all obligations under this Note immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Maker, and the Holder may immediately enforce any and all of the Holder's rights and remedies provided herein or any other rights or remedies afforded by law.  

Presentment.  Except as set forth herein, the Maker waives presentment, demand and presentation for payment, notice of nonpayment and dishonor, protest and notice of protest and expressly agrees that this Note or any payment hereunder may be extended from time to time by the Holder without in any way affecting the liability of the Maker.

Maximum Rate.  All provisions herein made are expressly limited so that in no event whatsoever, whether by reason of advancement of proceeds hereof, acceleration of maturity of the unpaid balance hereof or otherwise, shall the amount paid or agreed to be paid to Holder for the use of the money advanced or to be advanced hereunder exceed the maximum rate of interest allowed to be charged under applicable law (the “Maximum Rate”), regardless of whether or not there has been an acceleration of the payment of principal as set forth herein. If, from any circumstances whatsoever, the fulfillment of any provision of this Note or any other agreement or instrument now or hereafter evidencing, securing or in any way relating to the indebtedness evidenced hereby shall involve the payment of interest in excess of the Maximum Rate, then, ipso facto, the obligation to pay interest hereunder shall be reduced to the Maximum Rate; and if from any circumstance whatsoever, Payee shall ever receive interest, the amount of which would exceed the amount collectible at the Maximum Rate, such amount as would be excessive interest shall be applied to the reduction of the principal balance remaining unpaid hereunder and not to the payment of interest. This provision shall control every other provision in any and all other agreements and instruments existing or hereafter arising between the Maker and Holder with respect to the indebtedness evidenced hereby. 

Collection.  In the event this Note is placed in the hands of an attorney for collection, or if Holder incurs any costs incident to the collection of the indebtedness evidenced hereby, the Maker agrees to pay to Holder an amount equal to all such costs, including without limitation all reasonable attorneys' fees and all court costs. 

Construction; Governing Law.  The validity and construction of this Note and all matters pertaining hereto are to be determined in accordance with the laws of the State of New York 

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without regard to the conflicts of law principles thereof.   Both parties hereby waive all right to a trial by jury in the event in connection with any legal action between the parties arising from this Note.

Amendments.  Neither this Note nor any of its provisions may be changed, waived or modified without the written consent of the Holder.

Successors.  This Note shall be a binding obligation of any successor of the Maker.  

IN WITNESS WHEREOF, the Maker, by its appropriate officers thereunto duly authorized, has executed this Note as of this 10th day of February, 2012.

			
	 
	TECHNEST HOLDINGS, INC.

	 

				
	 
	By: 

	/s/ Shekhar Wadekar

	 

	 
	Name: Shekhar Wadekar

	 

	 
	Title: Chief Executive Officer

	 

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