Document:

Exhibit 10.4

 

EMPLOYMENT AGREEMENT

 

BETWEEN

 

NXT-ID, INC.

 

AND

GINO PEREIRA

(Executive)

THIS
EMPLOYMENT AGREEMENT (this “Agreement”), dated as of October 1, 2012 (the “Effective Date”) is entered
into by and between Nxt-ID, Inc., a Delaware corporation (the “Company”), and Gino Pereira, an individual with a physical
address at 51 Tram Drive, Oxford, CT 06478, (the “Executive”) (collectively, the “Parties,” individually,
a “Party”).

W I T N E S S E T H:

WHEREAS,
Employee has substantial experience in the Corporation’s business and is currently the Corporation’s President and
Chief Executive Officer; and

WHEREAS,
the Board has determined that it is in the best interest of the Company, its affiliates, and its stockholders to assure that the
Company will have the continued dedication of the Executive, notwithstanding the possibility, threat, or occurrence of a Change
in Control (as defined in Article Seven herein); and

NOW, THEREFORE,
in consideration of the premises and the mutual covenants and agreements set forth herein, the Parties, intending to be legally
bound, hereby agree as follows:

ARTICLE ONE

DEFINITIONS

1.            Definitions. As used in this Agreement:

 

1.1            The
term “Accrued Obligations,” when used in the case of the Executive’s death or disability shall mean the sum
of (1) the that portion Executive’s Base Salary that was not previously paid to the Executive from the last payment
date through the Date of Termination, and (2) an amount equal 24 months salary at the level of the Executive’s Base
Salary then in effect,

 

1.2            The
term “Automatic Extension” shall have the meaning set forth in Section 2.2 herein.

 

1.3            The term “Base Salary”, shall
have the meaning set forth in Section 3.1 herein.

 

1.4            The term “Board” shall have the
meaning set forth in the recitals.

 

1.5            The
term “Cause” shall have the meaning set forth in Section 4.3 herein.

 

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1.6            The term “Common Stock” shall
mean the Common Stock, par value $0.001, of the Company.

 

1.7            The term “Compensation Committee”
shall mean the Compensation Committee of the Company.

 

1.8            The term “Corporate Documents”
shall mean the Company’s Certificate of Incorporation, as amended and/or its Bylaws, as amended.

 

1.9            The term “Effective Date” shall
have the meaning set forth in the preamble.

 

1.10          The term “Good Reason” shall have
the meaning set forth in Section 4.4 herein.

 

1.11          The term “Initial Term” shall
have the meaning set forth in Section 2.2 herein.

 

1.12          The term “Severance Benefit”
shall have the meaning set forth in Section 4.7(a)(i) herein.

 

1.13          The term “Without Cause” shall
have the meaning set forth in Section 4.3 herein.

 

1.14          The
term “Without Good Reason” shall have the meaning set forth in Section 4.5 herein.

 

ARTICLE TWO

 

POSITION & DUTIES

 

2.            Employment.

 

2.1            Title. The
Executive shall serve as the President and Chief Executive Officer of the Company and agrees to perform services for
the Company and such other affiliates of the Company, as described in Section 3 herein.

 

2.2            Term. The
Executive’s employment shall be for an initial term of three (3) years (“Initial Term”), commencing on the
Effective Date. The Executive’s employment shall be automatically extended on the day after the second year
anniversary of the Effective Date (“Automatic Extension”), and on each anniversary date thereof, for additional
two (2) year periods.

 

2.3            Duties
and Responsibilities. The Executive shall report to the Board and in his capacity as an officer of the Company shall
perform such duties and services as may be appropriate and as are assigned to him by the Board. During the term of this
Agreement Executive shall, subject to the direction of the Board of the Company, oversee and direct the operations of the
Company, and shall perform such duties as are customarily performed by the President and Chief Executive Officer of a company
such as the Company or as are otherwise delegated to him from time to time by the Board.

 

2.4            Performance
of Duties. During the term of the Agreement, except as otherwise approved by the Board or as provided below, the
Executive agrees to devote his full business time, effort, skill and attention to the affairs of the Company and its
subsidiaries, will use his best efforts to promote the interests of the Company, and will discharge his responsibilities in a
diligent and faithful manner, consistent with sound business practices. The foregoing shall not, however, preclude Executive
from devoting reasonable time, attention and energy in connection with the following activities, provided that such
activities do not materially interfere with the performance of his duties and services hereunder:

 

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(a)            serving
as a director, consultant, or a member of a committee of any company or organization, if serving in such capacity does not involve
any conflict with the business of the Company or any subsidiary and such other company or organization is not in competition,
in any manner whatsoever, with the business of the Company or any of its subsidiaries;

 

(b)            fulfilling speaking engagements;

 

(c)            engaging
in charitable and community activities;

 

(d)            managing his personal business and investments; and

 

(e)            any other activity approved of by the Board. For purposes of this Agreement, any activity specifically listed on Schedule
A shall be considered as having been approved by the Board.

 

2.5            Representations
and Warranties of the Executive with Respect to Conflicts, Past Employers and Corporate Opportunities. The Executive represents
and warrants that:

 

(a)            his
employment by the Company will not conflict with any obligations which he has to any other person, firm or entity;

 

(b)            he
has not brought to the Company (during the period before the signing of this Agreement) and he will not bring to the Company any
materials or documents of a former or present employer, or any confidential information or property of any other person, firm
or entity; and

 

(c)            he
will not, without disclosure to and approval of the Board, directly or indirectly, assist or have an active interest in (whether
as a principal, stockholder, lender, employee, officer, director, partner, venturer, consultant or otherwise) in any person, firm,
partnership, association, corporation or business organization, entity or enterprise that competes with or is engaged in a business
which is substantially similar to the business of the Company; provided, however, that ownership of not more than two percent
(2%) of the outstanding securities of any class of any publicly held corporation shall not be deemed a violation of this Section
2.5; provided, further, that any investment specifically listed on Schedule A shall not be deemed a violation of this Section
2.5.

 

2.6            Activities
and Interests with Companies Doing Business with the Company. In addition to those activities and interests of Executive
disclosed on Schedule A attached hereto, Executive shall promptly disclose to the Board, in accordance with the
Company’s policies, full information concerning any interests, direct or indirect, he holds (whether as a principal,
stockholder, lender, executive, director, officer, partner, venturer, consultant or otherwise) in any business which, as
reasonably known to Executive, purchases or provides services or products to, the Company or any of its subsidiaries,
provided that the Executive need not disclose any such interest resulting from ownership of not more than two (2%) of the
outstanding securities of any class of any publicly held corporation.

 

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2.7           Other
Business Opportunities. Nothing in this Agreement shall be deemed to preclude the Executive from participating in other business
opportunities if and to the extent that: (a) such business opportunities are not directly competitive with, similar to the business
of the Company, or would otherwise be deemed to constitute an opportunity appropriate for the Company; (b) the Executive’s
activities with respect to such opportunities do not have a material adverse effect on the performance of the Executive’s
duties hereunder, and (c) the Executive’s activities with respect to such opportunity have been fully disclosed in writing
to the Board.

 

2.8            Reporting Location.
For purposes of this Agreement, the Executive’s reporting location shall
be Shelton, Connecticut, which shall include the area within a 40 mile radius from the Company’s current office.

 

ARTICLE THREE

COMPENSATION

3.            Compensation.

 

3.1            Base
Salary. Executive shall receive an initial annual base salary of One Hundred and Fifty Thousand Dollars ($150,000), until
such time as the Company has an effective registration statement with the SEC and has raised a minimum of One Million Five
Hundred Thousand dollars ($1,500,000). Upon the achievement of these two milestones, the base annual salary shall increase to
Three Hundred Thousand Dollars ($300,000), payable according to the Company’s normal payroll policies and procedures
(the “Base Salary”) and subject to all federal, state, and municipal withholding requirements. The Base Salary
shall be reviewed by the Board annually for adequacy.

 

3.2            Cash
Bonus. The Executive shall be eligible for a cash bonus equal to an amount as determined by the Compensation Committee of
the Board or by the independent directors (as that term is defined by the stock exchange or market on which the
Company’s shares may be the traded).

 

3.3            Equity-Based
Compensation. The Executive shall be entitled to participate in all equity-based compensation plans offered by the
Company and as determined by the Board of Directors.

 

(a)            Upon
a Change of Control, all equity-based compensation will be deemed to have vested as of the Change of Control Effective Date
(as defined by Article 7 herein)..

 

3.4            Participation In Benefit Plans.

 

(a)            Retirement
Plans. Executive shall be entitled to participate, without any waiting or eligibility periods, in all qualified
retirement plans provided to other executive officers and other key employees.

 

(b)            Taxes.
The Company shall pay, on a grossed-up basis for federal, state, and local income taxes, the amount of any excise tax payable
by Executive as a result of any payments triggered by this Agreement, or other compensation agreements between Executive and the
Company, or any of its subsidiaries and any income tax payable by Executive as a result of any payments in Common Stock triggered
by this Agreement or other compensation agreements between Executive and the Company, or any of its subsidiaries, except as might
otherwise be provided such benefit plan.

 

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(c)            Life
Insurance. The Company will purchase life insurance on the life of Executive in an amount not less than
$3,000,000, the benefits of which will be payable one-half to the Executive’s beneficiary and one-half to the Company.
The Executive’s “beneficiary” is the person or persons (who may be designated concurrently, successively or
contingently) designated by the Executive in his last effective writing filed with the Company prior to his death, or if the
Executive shall have failed to make an effective designation, the Executive’s beneficiary is his spouse, if the
Executive is married and his spouse is living at the time of each payment, and otherwise his surviving children. The
Executive shall assist the Company in procuring such insurance by submitting to such examinations and by signing such
applications and other instruments as may be reasonable and as may be required by the insurance carriers to which application
is made for any such insurance. The Executive represents that, to the best of his knowledge, he is currently insurable at
standard premium rates for life insurance policies.

 

(d)            Employee
Benefit Plans and Insurance. The Executive shall have the right to participate in employee benefit plans and insurance
programs of the Company that the Company may sponsor from time to time and to receive customary Company benefits, if those
benefits are so offered. Nothing herein shall obligate Executive to accept such benefits if and when they are offered.

 

(e)            Vacation.

 

(i)            The
Executive shall be entitled to take such vacations, with pay, as are customary among other chief executive officers of
organizations of similar size and nature, which vacation level shall be reviewed by the Compensation Committee from time to
time. No more than 1.5 times (1.5x) Executive’s authorized annual vacation allocation may be accrued, at any given
time. In the event that Executive has reached his maximum authorized vacation allocation, accrual will not re-commence until
Executive uses some of his paid vacation credit and thereby brings the balance below his maximum. Accrued paid vacation
credit forfeited because of an excess balance can not be retroactively reapplied.

 

(ii)            Pay
will only be provided for any unused, accrued paid vacation credit at the time of Executive’s separation from the
business by the Company due to a reduction in force, by Executive upon retirement, or upon the death of an employee, provided
that Executive has been a regular full-time employee for three calendar months prior to such event. Termination of employment
for Cause by the Company, or Executive’s resignation, will result in the forfeiture of any unused paid vacation
credit.

 

(f)            Paid
Holidays. The Executive shall be entitled to such paid holidays as are generally available to all employees. As of the
date of this Agreement, the Company’s employees are permitted to observe ten (10) paid holidays.

 

3.5            Relocation
and Business-related Expenses. In the event that Executive is required to move from his primary residence and consents
to such move, then Executive shall be provided with relocation assistance as provided below:

 

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(a)            Housing
and Temporary Lodging. The Company will pay the costs, for the Executive and his family, of house-hunting trips and the cost
of transporting the Executive, his spouse, furniture, household effects, and vehicles, to the area in which the Company will be
headquartered. In addition, the Company will pay the cost of the Executive’s travel, temporary living expenses, including
housing, whether hotel or apartment, and meals, during the period prior to the Executive’s move to the city in which the
Company will be headquartered.

 

(b)            Reimbursement. Executive
shall be entitled to reimbursement within a reasonable time for all properly documented and approved expenses for travel. The
Company shall reimburse business expenses of Executive directly related to Company business, including, but not limited to,
airfare, lodging, meals, travel expenses, medical expenses while traveling not covered by insurance, business
entertainment, expenses associated with entertaining business persons, local expenses to governments or governmental
officials, tariffs, applicable taxes outside of the United States, special expenses associated with travel to certain
countries, supplemental life insurance or supplemental insurance of any kind or special insurance rates or charges for travel
outside the United States (unless such insurance is being provided by the Company), rental cars and insurance for rental
cars, and any other expenses of travel that are reasonable in nature or that have been otherwise pre-approved. Executive
shall be governed by the travel and entertainment policy in effect at the Company.

 

3.6            Severance
Benefit. In the event that Executive’s employment is terminated, other than for Cause, Executive shall receive
compensation pursuant to Section 4.7 herein.

 

3.7            Payroll
Procedures and Policies. All payments required to be made by the Company to the Executive pursuant to this Article Three
shall be paid on a regular basis in accordance with the Company’s normal payroll procedures and policies.

 

ARTICLE FOUR

 

TERMINATION OF EMPLOYMENT

4.1            Death. The
Executive’s employment shall terminate automatically upon the Executive’s death during the Employment
Term.

 

4.2            Disability. If
the Company determines in good faith that the Disability (as defined below) of the Executive has occurred during the
Employment Term, the Company may give the Executive notice of its intention to terminate the Executive’s employment. In
such event, the Executive’s employment hereunder shall terminate effective on the 30th day after receipt of
such notice by the Executive (the “Disability Effective Date”); provided, that, within the 30-day
period after such receipt, the Executive shall not have returned to full-time performance of the Executive’s duties.
For purposes of this Agreement, “Disability” shall mean the absence of the Executive from the Executive’s
duties hereunder on a full-time basis for an aggregate of 180 days within any given period of 270 consecutive days (in
addition to any statutorily required leave of absence and any leave of absence approved by the Company) as a result of
incapacity of the Executive, despite any reasonable accommodation required by law, due to bodily injury or disease or any
other mental or physical illness, which will, in the opinion of a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive’s legal representative, be permanent and continuous during the remainder
of the Executive’s life.

 

4.3            Termination by Company.

 

(a)            Termination for Cause.

 

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The Company
may terminate the Executive’s employment hereunder for Cause (as defined below). For purposes of this Agreement, “Cause”
shall mean:

 

(i)            the
willful and continued failure of the Executive to perform substantially the Executive’s duties hereunder (other than
any such failure resulting from bodily injury or disease or any other incapacity due to mental or physical illness) after a
written demand for substantial performance is delivered to the Executive by the Board or the Chairman of the Company, which
specifically identifies the manner in which the Board or the Chairman of the Company believes the Executive has not
substantially performed the Executive’s duties; or

 

(ii)            the
willful engaging by the Executive in illegal conduct or gross misconduct that is materially and demonstrably detrimental to
the Company and/or its affiliated companies, monetarily or otherwise.

 

For
purposes of this provision, no act, or failure to act, on the part of the Executive shall be considered “willful” unless
done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission
was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board, upon the instructions of the Chairman or another Board Member of Company, or based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best
interests of the Company and its affiliated companies. The cessation of employment of the Executive shall not be deemed to be for
Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative
vote of not less than two-thirds of the entire membership of the Board then in office at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with
counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive is guilty of the conduct
described in subparagraph (i) or (ii) above, and specifying the particulars thereof in detail.

 

(iii)            the
Executive’s conviction of, or plea of nolo contendere to, any felony of theft, fraud, embezzlement or violent
crime.

 

(b)            Termination without Cause.

 

All terminations by the Company that are
not for Cause, shall be considered Without Cause.

 

4.4            Termination
by Executive. The Executive may terminate the Executive’s employment hereunder at any time during the Employment
Term for Good Reason (as defined below) For purposes of this Agreement, “Good Reason” shall mean any of the
following (without the Executive’s express written consent):

 

(a)            The
assignment to the Executive of any duties inconsistent in any respect with the Executive’s position (including status,
offices, titles and reporting requirements), duties, functions, responsibilities or authority as contemplated by Section 2.3
of this Agreement, or any other action by the Company that results in a diminution in such position, duties, functions,
responsibilities or authority, 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;

 

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(b)            Any
failure by the Company to comply with any of the provisions of Section 2.3 of this Agreement, other than 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;

 

(c)            The
Company’s requiring the Executive to be based at any office or location other than as provided in Section 2.8 of this
Agreement or the Company’s requiring the Executive to travel on the Company’s or its affiliated companies’
business to a substantially greater extent than during the three-year period immediately preceding the Effective Date;

 

(d)            Any
failure by the Company to comply with and satisfy Section 8.1 of this Agreement; or

 

(e)            Any
purported termination by the Company of the Executive’s employment hereunder otherwise than as expressly permitted by
this Agreement, and for purposes of this Agreement, no such purported termination shall be effective.

 

For purposes of this Section
4.4, any good faith determination of “Good Reason” made by the Executive shall be conclusive.

 

4.5            Notice
of Termination. Any termination of the
Executive’s employment hereunder by the Company or by the Executive (other than a termination pursuant to
Section 4.1) shall be communicated by a Notice of Termination (as defined below) to the other party hereto. For purposes of
this Agreement, a “Notice of Termination” shall mean a notice which (a) indicates the specific termination
provision in this Agreement relied upon, (b) in the case of a termination for Disability, Cause or Good Reason, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment
under the provision so indicated, and (c) specifies the Date of Termination (as defined in Section 4.7 below); provided,
however, that notwithstanding any provision in this Agreement to the contrary, a Notice of Termination given in connection
with a termination for Good Reason shall be given by the Executive within a reasonable period of time, not to exceed 120
days, following the occurrence of the event giving rise to such right of termination. The failure by the Company or the
Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Disability,
Cause or Good Reason shall not waive any right of the Company or the Executive hereunder or preclude the Company or the
Executive from asserting such fact or circumstance in enforcing the Company’s or the Executive’s rights
hereunder.

 

4.6            Date
of Termination. For purposes of this Agreement, the “Date of Termination” shall mean the effective date of
termination of the Executive’s employment hereunder, which date shall be (a) if the Executive’s employment is
terminated by the Executive’s death, the date of the Executive’s death, (b) if the Executive’s employment
is terminated because of the Executive’s Disability, the Disability Effective Date, (c) if the Executive’s
employment is terminated by the Company (or applicable affiliated company) for Cause or by the Executive for Good Reason, the
date on which the Notice of Termination is given, (d) if the Executive’s employment is terminated pursuant to Section
2.2, the date on which the Employment Term ends pursuant to Section 2.2 due to a party’s delivery of a Notice of
Termination thereunder, and (e) if the Executive’s employment is terminated for any other reason, the date specified in
the Notice of Termination, which date shall in no event be earlier than the date such notice is given; provided, however,
that if within 30 days after any Notice of Termination is given, the party receiving such Notice of Termination notifies the
other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute
is finally determined, either by mutual written agreement of the parties or by a final judgment, order or decree of a court
of competent jurisdiction (the time for appeal therefrom having expired and no appeal having been perfected).

 

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4.7            Obligations of the Company upon Termination.

 

(a)            Good
Reason or Change of Control; Other Than for Cause. If, during the Employment Term, the Company (or applicable affiliated
company) shall terminate the Executive’s employment hereunder other than for Cause or the Executive shall terminate the
Executive’s employment either for Good Reason:

 

(i)            the
Company shall pay to the Executive in a lump sum (A) the sum of (1) Executive’s Base Salary, if any, which has been
earned but not paid through the Termination Date, (2) the product of (x) the Annual Bonus and (y) a fraction, the numerator
of which is the number of days in the current fiscal year through the Termination Date and the denominator of which is 365,
and (3) any accrued vacation or other pay pursuant to the Corporation’s vacation policy, to the extent not previously
paid; and (B) an amount equal to the sum of (1) an amount equal to 36 months of Executive’s Base Salary and (2) the
Annual Bonus multiplied by a factor of 3;

 

(ii)            all
stock options, stock appreciation rights, and restricted stock shall immediately vest;

 

(iii)            all
stock options and stock appreciation rights shall be payable in Common Stock;

 

(iv)            all performance share shall immediately vest and

 

(v)            the
Company shall pay, on a grossed-up basis (as determined in the same manner as under Section 3.4(b) herein the amount of any
excise and income taxes payable by Executive as a result of any payments in Common Stock triggered by this Agreement, or
other agreements between Executive and the Company, or any of its subsidiaries.

 

to the extent not theretofore
paid or provided, the Company shall timely pay or provide to the Executive any other amounts or benefits required to be paid or
provided or which the Executive is eligible to receive under any plan, program, policy, practice or arrangement or contract or
agreement of the Company and its affiliated companies (such other amounts and benefits hereinafter referred to as the “Other
Benefits”).

 

(b)            Death.
If the Executive’s employment is terminated by reason of the Executive’s death during the Employment Term, this
Agreement shall terminate without further compensation obligations to the Executive’s legal representatives under this Agreement,
other than for (i) payment of Accrued Obligations (which shall be paid to the Executive’s estate or beneficiary, as applicable,
in a lump sum in cash within 90 days of the Date of Termination) and the timely payment or settlement of any other amount pursuant
the Other Benefits and (ii) treatment of all other compensation under existing plans as provided by the terms and rules of those
plans.

 

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(c)            Disability.
If the Executive’s employment is terminated by reason of the Executive’s
Disability during the Employment Term, this Agreement shall terminate without further compensation obligations to the Executive,
other than for (i) payment of Accrued Obligations (which shall be paid to the Executive in a lump sum in cash within 90 days of
the Date of Termination) and the timely payment or settlement of any other amount pursuant to the Other Benefits and (ii) treatment
of all other compensation under existing plans as provided by the terms and rules of those plans.

 

(d)            Cause; Other than for Good Reason.
If the Executive’s employment is terminated for Cause during the Employment Term, this Agreement shall terminate without
further compensation obligations to the Executive other than the obligation to pay to the Executive Base Salary through the Date
of Termination plus the amount of any compensation previously deferred by the Executive and any accrued vacation or other pay
pursuant to the Corporation’s vacation policy, in each case to the extent theretofore unpaid. If the Executive voluntarily
terminates the Executive’s employment during the Employment Term, excluding a termination either for Good Reason or (ii)
a Change of Control, this Agreement shall terminate without further compensation obligations to the Executive, other than for
that portion of Executive’s Base Salary that was not previously paid to the Executive from the last payment date through
the effective date of the Executive’s voluntary termination, any accrued vacation or other pay pursuant to the Corporation’s
vacation policy and the timely payment or provision of the Other Benefits, as provided in any applicable plan, and the Executive
shall have no further obligations nor liability to the Company. In such case, any amounts owed to the Executive shall be paid
to the Executive in a lump sum in cash within 90 days of the Date of Termination subject to applicable laws and regulations.

 

4.8            Continuation
of Payments During Disputes. The Parties agree that in the case of:

 

(a)            termination which the Company contends is for Cause, but Executive claims is not for Cause; or

 

(b)            termination
by Executive under Section 4.4 herein, the Company shall continue to pay all compensation due to Executive hereunder until
the resolution of such dispute, but the Company shall be entitled to repayment of all sums so paid, if it ultimately shall be
determined by a court of competent jurisdiction, in a final non-appealable decision, that the termination was for Cause or
such termination by Executive was not authorized under Section 4.4 herein, and all sums so repaid shall bear interest at the
prime rate as published in The Wall Street Journal on the date on which such court makes such determination. Any such
reimbursement of payments by Executive shall not include any legal fees or other loss, costs, or expenses incurred by the
Company, notwithstanding any provision of the Indemnification Agreement, which is attached as Exhibit A and is
considered a part of this Agreement.

 

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ARTICLE FIVE

 

INDEMNIFICATION

 

5.           Indemnification.
The Executive shall be indemnified and held harmless pursuant to the terms and conditions set forth in the Indemnification
Agreement substantially in the form attached as Exhibit A hereto.

 

ARTICLE SIX

 

CONFIDENTIALITY

6.           Confidentially;
Non-Competition; and Non-Solicitation.

 

6.1           Confidentiality.
In consideration of employment by the Company and Executive’s receipt of the salary and other benefits associated with
Executive’s employment, and in acknowledgment that (a) the Company is engaged in the oil and gas business, (b)
maintains secret and confidential information, (c) during the course of Executive’s employment by the Company such
secret or confidential information may become known to Executive, and (d) full protection of the Company’s business
makes it essential that no employee appropriate for his or her own use, or disclose such secret or confidential information,
Executive agrees that during the time of Executive’s employment and for a period of two (2) years following the
termination of Executive’s employment with the Company, Executive agrees to hold in strict confidence and shall not,
directly or indirectly, disclose or reveal to any person, or use for his own personal benefit or for the benefit of anyone
else, any trade secrets, confidential dealings, or other confidential or proprietary information of any kind, nature, or
description (whether or not acquired, learned, obtained, or developed by Executive alone or in conjunction with others)
belonging to or concerning the Company or any of its subsidiaries, except (i) with the prior written consent of the Company
duly authorized by its Board, (ii) in the course of the proper performance of Executive’s duties hereunder, (iii) for
information (x) that becomes generally available to the public other than as a result of unauthorized disclosure by Executive
or his affiliates or (y) that becomes available to Executive on a nonconfidential basis from a source other than the Company
or its subsidiaries who is not bound by a duty of confidentiality, or other contractual, legal, or fiduciary obligation, to
the Company, or (iv) as required by applicable law or legal process.

 

6.2           Non-Competition. During
Executive’s employment with the Company and for so long as Executive receives any Severance Benefit or is receiving any
Severance Amount provided under this agreement in respect of the termination of his employment, Executive shall not be
engaged as an officer or executive of, or in any way be associated in a management or ownership capacity with any
corporation, company, partnership or other enterprise or venture which conducts a business which is in direct competition
with the business of the Company; provided, however, that Executive may own not more than two percent (2%) of the
outstanding securities, or equivalent equity interests, of any class of any corporation, company, partnership, or either
enterprise that is in direct competition with the business of the Company, which securities are listed on a national
securities exchange or traded in the over-the-counter market. For purposes of this Agreement, a lump sum payment equivalent
made to Executive shall be judged in relation to his most recent annual base salary to determine whether Executive is
continuing to receive a Severance Benefit or Severance Amount and shall be measured from the date such payment is received.
It is expressly agreed that the remedy at law for breach of this covenant is inadequate and that injunctive relief shall be
available to prevent the breach thereof.

 

6.3           Non-Solicitation.
Executive also agrees that he will not, directly or indirectly, during the term of his employment or within one (1) year
after termination of his employment for any reason, in any manner, encourage, persuade, or induce any other employee of the
Company to terminate his employment, or any person or entity engaged by the Company to represent it to terminate that
relationship without the express written approval of the Company. It is expressly agreed that the remedy at law for breach of
this covenant is inadequate and that injunctive relief shall be available to prevent the breach thereof.

 

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ARTICLE SEVEN

 

CHANGE OF CONTROL

 

7.           Certain Definitions.

 

7.1           Change of Control Effective Date.
The “Change of Control Effective Date” shall mean the first date during the Change of Control Period (as defined
in Section 7.2) on which a Change of Control occurs. Notwithstanding anything in this Agreement to the contrary, if a Change of
Control occurs and if the Executive’s employment with the Company (or applicable affiliated company) is terminated prior
to the date on which the Change of Control occurs, and if it is reasonably demonstrated by the Executive that such termination
of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control
or (ii) otherwise arose in connection with or anticipation of a Change of Control, then for all purposes of this Agreement the
“Change of Control Effective Date” shall mean the date immediately prior to the date of such termination of employment.

 

7.2           Change of Control Period. The
“Change of Control Period” shall mean the period commencing on the date of this Agreement and ending on the third
anniversary of such date; provided, however, that commencing on the date one year after the date hereof, and on each annual
anniversary of such date (such date and each annual anniversary thereof herein referred to as the “Renewal Date”),
the Change of Control Period shall be automatically extended so as to terminate three years after such Renewal Date.

 

7.3           Change of Control. For purposes
of this Agreement, a “Change of Control” shall mean:

 

(a)           the
acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
“Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 15% or
more of either (A) the then outstanding Common Shares the Company (the “Outstanding Shares”) or (B) the combined
voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors
(the “Outstanding Voting Securities”); provided, however, that for purposes of this Subsection 7.3(a) the
following acquisitions shall not constitute a Change of Control: (w) Company-sponsored recapitalization that is approved by
the Incumbent Board, as defined below; (x) a capital raise initiated by the Company where the Incumbent Board remains for at
least at least 548 days after the closing date of the raise, or (y) an acquisition of another company or asset(s) initiated
by the Company and where the Company’s shareholders immediately after the transaction own at least 51% of the shares of
the combined concern; or

 

(b)           individuals
who, as of the date of this Agreement, constitute the Company’s Board (the “Incumbent Board”) cease for any
reason to constitute a majority of such Board of Directors; provided, however , that any individual becoming a director of the
Company shareholders subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders
was approved by a vote of a majority of the directors of the Company then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of either an actual or threatened election contest or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Company Board; or

 

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(c)           consummation
of a reorganization, merger, amalgamation or consolidation of the Company, with or without approval by the shareholders of
the Company, in each case, unless, following such reorganization, merger, amalgamation or consolidation, (i) more than 50%
of, respectively, the then outstanding shares of common stock (or equivalent security) of the company resulting from such
reorganization, merger, amalgamation or consolidation and the combined voting power of the then outstanding voting securities
of such company entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly,
by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding
Shares and Outstanding Voting Securities immediately prior to such reorganization, merger, amalgamation or consolidation in
substantially the same proportions as their ownership, immediately prior to such reorganization, merger, amalgamation or
consolidation, of the Outstanding Shares and Outstanding Voting Securities, as the case may be, (ii) no Person (excluding a
parent of the Company that may come into being after the date of this Agreement through any transaction
deliberately undertaken by the Company after an affirmative vote of its Incumbent Directors and the Company shareholders),
any employee benefit plan (or related trust) of the Company or such company resulting from such reorganization, merger,
amalgamation or consolidation, and any Person beneficially owning, immediately prior to such reorganization, merger,
amalgamation or consolidation, directly or indirectly, 15% or more of the Outstanding Shares or Outstanding Voting
Securities, as the case may be) beneficially owns, directly or indirectly, 15% or more of, respectively, the then outstanding
shares of common stock (or equivalent security) of the company resulting from such reorganization, merger, amalgamation or
consolidation or the combined voting power of the then outstanding voting securities of such company entitled to vote
generally in the election of directors, and (ii) a majority of the members of the board of directors of the company resulting
from such reorganization, merger, amalgamation or consolidation were members of the Incumbent Board at the time of the
execution of the initial agreement providing for such reorganization, merger, amalgamation or consolidation; or

 

(d)           consummation
of a sale or other disposition of all or substantially all the assets of the Company, with or without approval by the
shareholders of the Company, other than to a corporation, with respect to which following such sale or other disposition, (i)
more than 50% of, respectively, the then outstanding shares of common stock (or equivalent security) of such corporation
and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the
election of directors is then beneficially owned, directly or indirectly, by all or substantially all the individuals and
entities who were the beneficial owners, respectively, of the Outstanding Shares and Outstanding Voting Securities
immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately
prior to such sale or other disposition, of the Outstanding Shares and Outstanding Voting Securities, as the case may be,
(ii) no Person (excluding the Company, any employee benefit plan (or related trust) of the Company or such corporation, and
any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 15% or more of
the Outstanding Shares or Outstanding Voting Securities, as the case may be) beneficially owns, directly or indirectly, 15%
or more of, respectively, the then outstanding shares of common stock (or equivalent security)
of such corporation or the combined voting power of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors, and (C) a majority of the members of the board of directors of such corporation
were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Incumbent Board
providing for such sale or other disposition of assets of the Company; or

 

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(e)           approval by the shareholders of
the Company of a complete liquidation or dissolution of the Company.

 

ARTICLE EIGHT

MISCELLANEOUS

 

8.           Miscellaneous.

 

8.1           Benefit. This
Agreement shall inure to the benefit of and be binding upon each of the Parties, and their respective successors.
This Agreement shall not be assignable by any Party without the prior written consent of the other Party. The Company shall
require any successor, whether direct or indirect, to all or substantially all the business and/or assets of the Company to
expressly assume and agree to perform, by instrument in a form reasonably satisfactory to Executive, this Agreement and any
other agreements between Executive and the Company or any of its subsidiaries, in the same manner and to the same extent as
the Company.

 

8.2           Governing
Law. This Agreement shall be governed by, and construed in accordance with the laws of the State of New York without
resort to any principle of conflict of laws that would require application of the laws of any other jurisdiction; provided,
however, that Delaware law shall govern with respect to the Executive’s rights under a Change of Control under
Article Seven herein.

 

8.3           Counterparts. This
Agreement may be executed in counterparts and via facsimile, each of which shall be deemed to constitute an original, but all
of which together shall constitute one and the same Agreement. Each such counterpart shall become effective when one
counterpart has been signed by each Party thereto.

 

8.4           Headings. The
headings of the various articles and sections of this Agreement are for convenience of reference only and shall not be deemed
a part of this Agreement or considered in construing the provisions thereof.

 

8.5           Severability. Any
term or provision of this Agreement that shall be prohibited or declared invalid or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or declaration, without invalidating
the remaining terms and provisions hereof or affecting the validity or enforceability of such provision in any other
jurisdiction, and if any term or provision of this Agreement is held by any court of competent jurisdiction to be void,
voidable, invalid or unenforceable in any given circumstance or situation, then all other terms and provisions hereof, being
severable, shall remain in full force and effect in such circumstance or situation, and such term or provision shall remain
valid and in effect in any other circumstances or situation.

 

8.6           Construction. Use
of the masculine pronoun herein shall be deemed to refer to the feminine and neuter genders and the use of singular
references shall be deemed to include the plural and vice versa, as appropriate. No inference in favor of or against any
Party shall be drawn from the fact that such Party or such Party’s counsel has drafted any portion of this
Agreement.

 

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8.7           Equitable
Remedies. The Parties hereto agree that, in the event of a breach of this Agreement by either Party, the other Party, if
not then in breach of this Agreement, may be without an adequate remedy at law owing to the unique nature of the contemplated
relationship. In recognition thereof, in addition to (and not in lieu of) any remedies at law that may be available to the
non-breaching Party, the non-breaching Party shall be entitled to obtain equitable relief, including the remedies of specific
performance and injunction, in the event of a breach of this Agreement, by the Party in breach, and no attempt on the part of
the non-breaching Party to obtain such equitable relief shall be deemed to constitute an election of remedies by the
non-breaching Party that would preclude the non-breaching Party from obtaining any remedies at law to which it would
otherwise be entitled.

 

8.8           Attorney’s
Fees. If any Party hereto shall bring an action at law or in equity to enforce its rights under this Agreement, the
prevailing Party in such action shall be entitled to recover from the Party against whom enforcement is sought its costs and
expenses incurred in connection with such action (including fees, disbursements and expenses of attorneys and costs of
investigation). [In the event that Executive institutes any legal action to enforce Executive’s legal rights hereunder,
or to recover damages for breach of this Agreement, Executive, if Executive prevails in whole or in part, shall be entitled
to recover from the Company reasonable attorneys’ fees and disbursements incurred by Executive with respect to the
claims or matters on which Executive has prevailed.]

 

8.9           No
Waiver. No failure, delay or omission of or by any Party in exercising any right, power or remedy upon any breach or
default of any other Party, or otherwise, shall impair any such rights, powers or remedies of the Party not in breach or
default, nor shall it be construed to be a waiver of any such right, power or remedy, or an acquiescence in any similar
breach or default; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any
Party of any provisions of this Agreement must be in writing and be executed by the Parties and shall be effective only to
the extent specifically set forth in such writing.

 

8.10          Remedies
Cumulative. All remedies provided in this Agreement, by law or otherwise, shall be cumulative and not alternative.

 

8.11          Amendment.
This Agreement may be amended only by a writing signed by all of the Parties hereto.

 

8.12          Entire
Contract. This Agreement and the documents and instruments referred to herein constitute the entire contract between the parties
to this Agreement and supersede all other understandings, written or oral, with respect to the subject matter of this Agreement.

 

8.13          Survival.
This Agreement shall constitute a binding obligation of the Company and any successor thereto. Notwithstanding any other provision
in this Agreement, the obligations under Articles 5 and 6 shall survive termination of this Agreement.

 

8.14          Savings
Clause. Notwithstanding any other provision of this Agreement, if the indemnification provisions in Exhibit A hereto
or any portion thereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless
indemnify Executive as to Expenses, judgments, fines, penalties and amounts paid in settlement with respect to any Proceeding
to the full extent permitted by any applicable portion of this Agreement that shall not have been invalidated and to the fullest
extent permitted by applicable law.

 

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8.15           Modifications
and Waivers. Notwithstanding any other provision of this Agreement, the indemnification provisions in Exhibit A hereto
and the Change of Control provisions Article Seven herein, may be amended from time to time to reflect changes in Delaware law
or for other reasons.

 

8.16           Notices.
All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been given
(i) when delivered by hand or (ii) if mailed by certified or registered mail with postage prepaid, on the third day after the
date on which it is so mailed:

 

(a)           if to Executive:

 

Gino Pereira

51 Tram Drive

Oxford
CT 06478

 

(b)           if to the Company:

 

Nxt-ID, Inc.,

4 Research Drive

Suite 402

Shelton, CT 06484

 

Attn:
Chairman, Compensation Committee

 

or to such other address as may have
been furnished to Executive by the Company or to the Company by Executive, as the case may be.

 

8.17           No
Limitation. Notwithstanding any other provision of this Agreement, for avoidance of doubt, the parties confirm that the foregoing
does not apply to or limit Executive's rights under Delaware law or the Company's Corporate Documents.

 

IN
'WITNESS WHEREOF, the parties have set their hands and seals hereunto on the date first above written.

 

	NXT-ID, INC.	 	EXECUTIVE
	 	 	 
	By: David R. Gust	 	By: /s/ Gino Pereira
	Name: David R. Gust	 	Name: Gino Pereira
	Title: Independent Director	 	 

 

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Schedule A

Outside Activities

Gino Pereira

	Company or

Project Name	Nature of

Business	Date Hired or

Commenced

Involvement	Position	Compensation	Annual Time Commitment,

(time away from office)
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 

 

 

 

 

 

Dated: August , 2012

 

Initials: Executive:
_____Company: ______

 

 

 

 

 

 

 

 

 

    	

    	 	

    
 

 

Exhibit A

Indemnification AgreementExhibit 10.5

 

AGREEMENT

 

THIS AGREEMENT
(this “Agreement”) is made and entered into as of August 19, 2011 (the “Effective Date”),
among 3D-ID, LLC., a Florida limited liability company having its principal place of business at 1721 Winding Ridge Circle SE,
Palm Bay, FL 32909 (“3D-ID”), Technest Holdings, Inc., a Nevada corporation(“Technest”),
and Genex Technologies, Incorporated (“Genex”), both having a principal place of business at 10411 Motor City
Drive, Suite 650, Bethesda, MD 20817. 3D-ID,Technest and Genex are collectively referred to herein as the “Parties”
and each sometimes referred to as a “Party”.

 

recitals

 

whereas,
Technest and Genex have developed expertise in the area of three-dimensional imaging (the “Field”) and have
certain intellectual property, equipment and software in the Field, including but not limited to the contents set forth in Exhibit
A attached hereto (collectively, referred to as the “Technology”), that 3D-ID is interested in further developing;

 

WHEREAS, in its efforts
to further develop this expertise, 3D-ID wishes to obtain a license from Technest and Genex to use the Technology, and Technest
and Genex wish to grant such a license to 3D-ID according to the terms and conditions set forth herein.

 

now,
therefore, in consideration of the foregoing premises and the terms and conditions herein contained, it is hereby agreed
between the Parties as follows:

 

		1.	License to 3D-ID.  Subject to the terms and conditions of
this Agreement, Technest and Genex hereby grant to 3D-ID a perpetual sub-licensable, exclusive, worldwide license to make, have
made, use, sell, offer for sale and import products and to practice any method under the Intellectual Property (as defined below)
in the Markets (as defined below), including but not limited to the use of the Technology for the manufacture and distribution
of products, and a non-exclusive license to the same in all other markets outside the Markets. The “Intellectual Property”
refers to, collectively, all trademarks, trade secrets, know-how, proprietary information and other intellectual property of Technest
and Genex currently developed by Technest and/or Genex, including, without limitation, in each instance, all specifications, engineering
drawings, schematics, bills of materials, software source and object code and algorithms, wiring diagrams, test procedures, assembly
drawings, artwork, and other documents or files related to the Technology. The “Markets” shall mean products
to be sold to or for use by, and services to be provided to, (a) the United States Department of Defense (including but not limited
to the U.S. Army, U.S. Navy, U.S. Air Force and U.S. Marine Corp.), (b) the United States Department of Homeland Security (including
the following Agencies: Federal Emergency Management Agency, Transportation Security Administration, Customs and Border Protection,
Immigration and Customs Enforcement, Coast Guard, Secret Service and any successor agencies performing comparable functions), (c)
the U.S. intelligence agencies (including, but not limited to, the Central Intelligence Agency, the Federal Bureau of Intelligence,
the Defense Intelligence Agency, National Security Agency, National Geospatial Intelligence Agency, National Reconnaissance Office
and any successor agencies performing comparable functions), (d) any local or state agencies of the United States performing comparable
functions, (e)state and local law enforcement agencies, including detention centers, (f)the state departments of motor vehicles,
and (g)the video games industry in the U.S. Technest shall be given prior written notice of any sublicense or transfer of 3D-ID’s
rights hereunder. The foregoing license will only be transferable to a party that agrees in writing to be bound by the terms of
this Agreement in connection with any merger, acquisition, consolidation, or other business combination, or sale of all or substantially
all of 3D-ID’s assets relating to the Intellectual Property.

 

    	 

    	 

    

 

		1.1.	Ownership of Improvements, Modifications and Additions. 3D-ID shall
solely own all right, title and interest in and to all improvements, modifications, additions, inventions, original works of authorship,
developments, concepts, and trade secrets, whether or not patentable or registrable under copyright or similar laws, and any and
all patents issued with respect thereto, to the Technology, which 3D-ID, its affiliates, employees and/or contractors may solely
make, conceive, or develop or reduce to practice, or cause to be conceived or developed or reduced to practice.

 

2.     Duties of the Parties. In connection with the licenses granted hereunder, 3D-ID hereby acknowledges receipt of the
items set forth in Exhibit A. 3D-ID shall use reasonable commercial efforts to further develop the Technology for the manufacture
and distribution of products and/or services using the Technology in the Markets.

 

		3.	Compensation.
                                                                                                         In consideration of the
                                                                                                         license of rights affected
                                                                                                         by this Agreement, 3D-ID
                                                                                                         shall pay Technest a
                                                                                                         royalty equal to 5% of
                                                                                                         “Net Sales”
                                                                                                         of Royalty Bearing Products
                                                                                                         (as defined below) sold
                                                                                                         with respect to which
                                                                                                         the 3D-ID has received
                                                                                                         final payment during
                                                                                                         each calendar quarter
                                                                                                         after the date hereof,
                                                                                                         such royalty to be payable
                                                                                                         in accordance with the
                                                                                                         terms of this Section
                                                                                                         3. “Net Sales”
                                                                                                         means revenues received
                                                                                                         and recognized in accordance
                                                                                                         with GAAP, as follows:
                                                                                                         the invoice price of
                                                                                                         Royalty-Bearing Products
                                                                                                         sold or licensed by 3D-ID
                                                                                                         to third parties. “Royalty-Bearing
                                                                                                         Product” means:
                                                                                                         (i) a product the manufacture,
                                                                                                         use, offer for sale,
                                                                                                         sale or importation of
                                                                                                         which requires and/or
                                                                                                         involves the Intellectual
                                                                                                         Property or the Technology
                                                                                                         and (ii) the provision
                                                                                                         of services by 3D-ID
                                                                                                         involving Intellectual
                                                                                                         Property and/or the Technology.

 

		3.1.	Royalty Reporting and Payment. 3D-ID shall make quarterly written reports to Technest within
30 days after the end of each calendar quarter. Each such report must in reasonable detail explain the basis for the royalty due
hereunder as a result of receipts from Net Sales during the previous quarter, including the relevant markets the Royalty Bearing
Products were sold in. Technest shall treat such reports as the confidential information of 3D-ID, and shall not disclose it to
third parties. Concurrently with the making of each such report, 3D-ID shall pay Technest the royalty due, if any, in relation
to such report.

 

		3.2.	Records; Inspection. 3D-ID shall keep complete, true and accurate books of account and records
for the purpose of determining the royalty amounts payable hereunder. Such books and records must be kept at the principal place
of business of 3D-ID for a period of not less than two years following the end of the calendar quarter to which they pertain. Technest
may audit such books to ensure 3D-ID’s compliance with this Agreement, provided that each such audit: (i) occurs during business
hours, and upon no less than ten business days notice to 3D-ID; (ii) is conducted by a certified public accountant chosen by Technest
and approved by 3D-ID, such approval not to be unreasonably withheld; (iii) the results of such audit are considered the confidential
information of Technest, and both Technest and the auditor will be required to sign a non-disclosure and non-use agreement limiting
disclosure and use of such information; and (iv) occurs no sooner than one year after the most recent prior audit. Technest shall
pay all expenses relating to each audit, unless an audit reveals an underpayment exceeding 10% of the amount stated for the period
covered by the audit, in which case all costs relating to the inspection and any unpaid amounts will be paid by 3D-ID.

    	1

    	 

    

 

		3.3.	Minimum Royalty Payments. 3D-ID agrees to make royalty payments of not less than $15,000 in the
aggregate with respect to Net Sales of Royalty Bearing Products occurring in the Markets during the first two years after the date
hereof, which payment is to be made within thirty (30) days of the end of the second contract year and royalty payments of not
less than $20,000 with respect to Net Sales of Royalty Bearing Products occurring in the Markets in each contract year thereafter.
If 3D-ID does not make the minimum payments within thirty (30) days of the end of any contract year beginning in the second contract
year, the exclusive license granted under Section 1 with respect to the Markets shall automatically become non-exclusive in nature.

 

	4.	Representations and Warranties of the Parties. 3D-ID,Technest
                                 and Genex hereby each represent and warrant to the other Parties that, as of the date hereof,
                                 the following statements are true and correct:

 

	 	4.1.	Organization. It is an organization duly organized and
                                  validly existing under the laws of its jurisdiction of incorporation or organization, and has
                                  the corporate power and authority to enter into and perform this Agreement.

 

		4.2.	Authorization. All action on its part of necessary for the authorization, execution and
delivery of this Agreement to which it is a party and for the performance of all of its obligations hereunder and thereunder has
been taken, and this Agreement to which it is a party when, fully executed and delivered, shall constitute a valid, legally binding
and enforceable obligation of such Party.

 

		4.3.	Government and Other Consents. No consent, authorization, license, permit, registration
or approval of, or exemption or other action by, any governmental authority, or any other person, is required of it in connection
with its execution, delivery and performance of this Agreement, or if any such consent is required, it has satisfied the applicable
requirements.

 

		4.4.	Effect of Agreement. Its execution, delivery and performance of this Agreement to which
it is a party will not (i) violate its organizational documents, (ii) violate any judgment, order, writ, injunction or decree of
any court applicable to it, (iii) have any effect on its compliance with any applicable licenses, permits or authorizations which
would materially and adversely affect such Party or its ability to perform under this, or (iv) result in the breach of, give rise
to a right of termination, cancellation or acceleration of any obligation with respect to (presently or with the passage of time),
or otherwise be in conflict with any term of, or affect the validity or enforceability of, any agreement or other commitment to
which it is a party and which would materially and adversely affect such Party or its ability to perform under this Agreement.

 

    	2

    	 

    

 

		4.5.	Litigation. There are no actions, suits or proceedings pending or, to such Party’s
knowledge, threatened, against it which question its right to enter into or perform this Agreement, or which question the validity
of this Agreement.

 

		5.	Confidential Information. The Parties acknowledge that each Party hereto and its
employees, agents, affiliates or subcontractors (collectively, the “Recipient”) may be exposed to certain Confidential
Information (as defined below) of the other Parties to this Agreement (the “Disclosing Party”). Any Confidential
Information of the Disclosing Party disclosed pursuant to this Agreement may be used only for the purpose related to this Agreement.
The Recipient (i) will hold the Disclosing Party’s Confidential Information in strict confidence; (ii) will not disclose
the Confidential Information to any third party without the written consent of the Disclosing Party and will take all reasonable
steps to prevent such disclosure (which steps will include, without limitation, at least the same degree of care, but not less
than a reasonable degree of care, and security precautions that the Recipient uses to protect its own confidential information);
and (iii) will only use or disclose such Confidential Information within the Recipient’s own organization on a need-to-know
basis or to the extent required to be disclosed by the Recipient to comply with applicable laws or regulations or judicial order,
in which event the Recipient shall provide prior written notice of such mandated disclosure to the Disclosing Party and shall cooperate
with the Disclosing Party (at the Disclosing Party’s expense) in connection with any efforts thereby to prevent or limit
such disclosure. Moreover, the Recipient agrees to transmit Confidential Information only to the Recipient’s partners, directors,
officers, employees, agents, advisors, and affiliates or those of the Recipient’s affiliates only on a need-to-know basis
and who are informed by the Recipient of the confidential nature of the Confidential Information and who agree to be bound by the
terms of this section or a confidentiality agreement with terms at least as restrictive as those set forth herein. The Recipient
will be responsible for any breach of any provision of this Agreement by the Recipient’s affiliates, partners, directors,
officers, employees, agents, and advisors and those of the Recipient’s affiliates. Confidential Information will be maintained
in confidence indefinitely. Each Party shall immediately notify the other in writing of any known or perceived misappropriation
or disclosure of the Confidential Information, whether such misappropriation or disclosure is a result of a negligent or an intentional
act of the Recipient or a third party. “Confidential Information” means (i) all ideas, concepts, techniques
or know-how tending to give the Disclosing Party a commercial advantage (including, without limitation, any patentable inventions
and original works of authorship, such as computer software, customer lists, specifications, business plans, trade secrets, and
the like) and (ii) any other information labeled “CONFIDENTIAL” and provided to the Recipient by the Disclosing Party.
Confidential Information shall not include any information that: (a) Is contained in a printed publication prior to the date of
this Agreement; (b) Is or becomes publicly known through no wrongful act or failure to act on the part of the Recipient; (c) Is
known by the Recipient without any proprietary restrictions at the time of receipt of such information from the Disclosing Party
or becomes known to the Recipient without proprietary restrictions from a source other than the Disclosing Party; or (d) Is independently
developed by the Recipient without reference to the Confidential Information disclosed by the Disclosing Party. The timing and
content of any announcements, press releases or other public statements concerning this Agreement and the relationship of the Parties
hereunder will occur upon, and be determined by, mutual agreement and consent of the Parties. The foregoing notwithstanding, nothing
herein shall prohibit any Party to this Agreement from making any public disclosure regarding this Agreement and the nature and
status of the transaction contemplated herein if in the opinion of counsel to such Party such disclosure is required under applicable
laws.

 

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	6.	Term and Termination.

 

		6.1.	Term. The term of this Agreement shall commence as of the Effective
Date and, unless and until terminated sooner as set forth below, shall continue for an initial term of five (5) years and thereafter
shall continue until either Party provides the other Party written notice at least sixty (60) days prior to the effective date
of termination.

 

		6.2.	Events Permitting Termination. Any Party to this Agreement shall
have the right to terminate this Agreement, effective immediately, upon written notice to the other Parties in the event any of
the following should occur: (a) A Party engages in fraudulent conduct; (b) A Party becomes insolvent; is adjudicated bankrupt;
a receiver, trustee or custodian is appointed for it; there is an assignment of a Party’s business for the benefit of creditors;
or one of the Parties liquidates or dissolves; (c) A Party fails to function as a viable and operative concern or to conduct its
operations in the normal course of business.

 

		6.3.	Material Breach. Other than for occurrences covered by Section 6.2
hereof, a Party shall have the right to terminate this Agreement upon thirty (30) days written notice if a Party materially breaches
or fails to perform any of its obligations, representations or undertakings hereunder and fails to cure such breach or failure
within such thirty (30) day notice period.

 

		6.4.	Losses Due to Termination. Under no circumstances shall a Party be
liable to the other Party by reason of termination of the Agreement for indemnification, compensation, reimbursement, or damages
for loss of prospective compensation, goodwill or loss thereof, or expenditures, investments, leases, or any type of commitment
made in connection with the business of such Party or in reliance on the existence of this Agreement including, but not limited
to advertising and promotion costs, costs of supplies, termination of employees, employee salaries, and other such costs and expenses.

 

		6.5.	Licenses; Advertising Material. Upon the termination of this Agreement
for any reason, (i) all rights and licenses granted to 3D-ID hereunder immediately shall terminate; and (ii) each Party shall return
to corresponding Party all tangible manifestations of Confidential Information of the other Party in its possession, specifically
3D-ID shall return the items set forth in Exhibit A.

 

	7.	Miscellaneous.

 

    	4

    	 

    

 

 

		7.1.	Prior Agreements. This Agreement cancels and supersedes all prior agreements and understandings,
oral or written, entered into by and between the Parties. This Agreement, including the Exhibits appended hereto, sets forth the
entire understanding of the Parties with respect to its subject matter and may be changed or amended only by a writing signed by
duly authorized officers of all of the Parties. All captions and headings contained in this Agreement are for convenience only
and are not a part of this Agreement.

 

		7.2.	Notices. All notices under this Agreement shall be in writing and
shall be by registered or certified air mail or overnight courier or sent via facsimile to the addresses or numbers listed on the
signature page of this Agreement.

 

		7.3.	Choice of Law. The validity, interpretation, and performance of this
Agreement shall be controlled by and construed under the laws of the State of Delaware, as if performed wholly within the state
and without giving effect to the principles of conflict of law.

 

		7.4.	No Waiver. No waiver of rights under this Agreement by any Party
shall constitute a subsequent waiver of this or any other right under this Agreement.

 

		7.5.	Force Majeure. No Party shall be liable in damages or have the right
to terminate this Agreement for any delay or default in performing hereunder if such delay or default is caused by conditions beyond
its control including, but not limited to Acts of God, Government restrictions (including the denial or cancellation of any export
or other necessary license), wars, insurrections and/or any other cause beyond the reasonable control of the Party whose performance
is affected.

 

		7.6.	Assignment. Other than as set forth in Section 1, neither this Agreement
nor any rights under this Agreement shall be assigned or otherwise transferred by any Party (by operation of law or otherwise)
without the prior written consent of the other Parties. Notwithstanding the foregoing, a Party shall have the right to assign this
Agreement without the other Parties’ consent to an entity that acquires all or substantially all of its stock or assets,
whether by way of merger, acquisition, operation of law or otherwise. This Agreement shall bind and inure to the benefit of the
successors and permitted assigns of the Parties.

 

		7.7.	Severability. In the event that any of the terms of this Agreement
become or are declared to be illegal or otherwise unenforceable by any court of competent jurisdiction, such term(s) shall be null
and void and shall be deemed deleted from this Agreement. All remaining terms of this Agreement shall remain in full force and
effect. Notwithstanding the foregoing, if this paragraph becomes applicable and, as a result, the value of this Agreement is materially
impaired for any Party, as determined by such Party in its sole discretion, then the affected Party may terminate this Agreement
by written notice to the other.

 

    	5

    	 

    

 

		7.8.	Arbitration. IN THE EVENT OF A DISPUTE HEREUNDER WHICH CANNOT BE
RESOLVED BY THE PARTIES AMONG THEMSELVES, SUCH DISPUTE SHALL BE SETTLED BY BINDING ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL
ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION AND JUDGMENT ON THE AWARD RENDERED BY THE ARBITRATION PANEL MAY BE ENTERED
IN ANY COURT OR TRIBUNAL OF COMPETENT JURISDICTION. THE PARTIES AGREE THAT ALL ARBITRATIONS OCCURRING UNDER THIS SECTION SHALL
BE HELD IN THE INITIATING PARTY’S CITY OF THEIR CHOICE. THE PARTIES AGREE THAT THE AAA OPTIONAL RULES FOR EMERGENCY MEASURES
OF PROTECTION SHALL APPLY TO THE PROCEEDINGS. THE INITIATING PARTY WILL HAVE ARBITRATION HELD IN THE CITY OF THEIR CHOICE. NOTWITHSTANDING
THE ARBITRATION PROVISIONS, IN THE EVENT OF THE NEED FOR INJUNCTIVE RELIEF BY ANY PARTY IN ORDER TO ENFORCE THE TERMS AND CONDITIONS
OF THIS AGREEMENT, ANY PARTY SHALL BE FREE TO INSTITUTE LITIGATION IN ANY APPROPRIATE FORUM TO ADDRESS THE EQUITABLE ISSUES RAISED
BY SUCH PARTY’S CONDUCT.

 

 

    	6

    	 

    

 

IN WITNESS WHEREOF, the Parties hereto have caused
this Agreement to be duly executed. Each Party warrants and represents that its respective signatories whose signatures appear
below have been and are on the date of signature duly authorized to execute this Agreement.

 

 

3D-ID, LLC 

 

	 	/s/ Gino Pereira	 
	Name:	Gino Pereira	 
	 	 	 
	Title: 	Managing Partner	 
	 	 	 
	 	 	 
	Date:	August 16, 2011	 
	Address:	1721 Winding Ridge Circle SE	 
	 	Palm Bay, FL 32909	 
	 	FAX:203 888 7399	 
	 	Attention: Gino Pereira	 

 

 

Technest Holdings, Inc.

 

	 	/s/ Shekhar Wadekar	 
	Name:	Shekhar Wadekar	 
	 	 	 
	Title:	Chief Executive Officer	 
	 	 	 
	 	 	 
	Date:	August 19, 2011	 
	Address:	10411 Motor City Drive, Suite 650	 
	 	Bethesda, MD 20817	 
	 	FAX: (301) 767-2811	 
	 	Attention:  Shekhar Wadekar	 

 

 

 

    	7

    	 

    

 

Genex Technologies, Incorporated

 

	 	/s/ Shekhar Wadekar	 
	Name :	Shekhar Wadekar	 
	 	 	 
	Title:	President	 
	 	 	 
	 	 	 
	Date:	August 19, 2011	 
	Address:	10411 Motor City Drive, Suite 650	 
	 	Bethesda, MD 20817	 
	 	FAX: (301) 767-2811	 
	 	Attention:  Shekhar Wadekar	 

 

 

 

    	8

    	 

    

 

EXHIBIT A

 

	Item #	Product Description	QTY
	1	Shuttle X 3.01 GHZ mini Computer with an EuraCard frame grabber	1
	2	3D FaceCam, model FACE CAM500-34	1
	3	3D FaceCam (FC800-688-22651-38105-1279b)	1
	4	Manfrotto Tripod	2
	5	Belkin Power strip	1
	6	WellCam system with monitor and power supply	1
	7	WellCam camera	2
	8	WellCam system in Pelican 1490 case	1
	9	Pelican 1400 case	1
	10	IMPERX IPX-4M15-L camera	1
	11	CameraLink power supply	1
	12	AXIS EVI-D30 12 variable zoom camera	1
	13	Swann Security c500 CCD color camera	1
	14	Color TFT LCD monitor	1
	15	Micro compact KPC CCD camera lenses	12
	16	Micro compact KPC CCD camera	2
	17	Power supply adaptors	5
	18	Network server case	1
	19	More Power supply adaptors	5
	20	Three level camera ring with 19 KPC-EX20H cameras	1
	21	One level camera ring with 5 or 6 KPC-EX20H cameras	3
	22	SOS-4 Vision system	2
	23	SOS vision system (model IS 1)	1
	24	Small Pelican case	1

 

    	9

    	 

    

 

	25	AirPlus Xtreme G wireless router	1
	26	Netgear Prosafe 8 port Gigabit switch (GS108)	1
	27	More power supply adaptors	3
	28	Battery Lithium MnO2 BA 5390/u	1
	29	More power supply adaptors	4
	30	Utilitech motion sensor control #182164	1
	31	Sets of SOS cables	4
	32	SOS power supply	1
	33	DPTex Passive Infrared Detector CX-702	2
	34	DS ATO Gateway	5
	35	SH-5316-BZ Motion Sensor	2
	36	Marshall Electronics V-LCD4-Pro-l High resolution 4” LCD monitor	1
	37	Camera Ring mechanical structure for 8 sensors	1
	38	S.BATT12.6 battery	5
	39	Small Electronic chips	3
	40	Archer Filed personal computer	1
	41	STUDS SOS Vision Systems	2
	42	Pelican 1150 cases	3
	43	Genex camera system with two big grey cameras	1
	44	Camera vision system with 3 KPC-EX20H cameras	1
	45	AXIS 2120 Network Camera	1
	46	IQeye3 Camera system from IQinVision	1

 

	Note:	 (1) Items #1 to #43 are in the possession ofDavid Tunnell;
	 	 (2) Items #44 to #46 are in the possession of Libin Zhang on behalf of David Tunnell

 

 

    	10

    	 

    

 

Software and Trademarks:

WellCam

STUDS

SOS

Cerberus

FaceCam

3D SketchArtist

3D FaceMap

3D FaceMatch

3D Enroll

 

 

Patents:

 

	Patent Title	Serial/Patent/
 Registration Number
	Method and Apparatus for High 
 Resolution Three Dimensional Display	6,064,423
	Omni-Directional Cameras	D436,612
	High Speed Three Dimensional 
 Imaging Method	6,028,672
	Method and System for Three-Dimensional 
 Imaging Using Light Pattern Having 
 Multiple Sub-Patterns	6,700,669
	Method And Apparatus for Omnidirectional 
 Three Dimensional Imaging	6,744,569
	Face Recognition System and Method	7,221,809
	A System and a Method for Three-Dimensional Imaging Systems	7,349,104
	Method and Apparatus for an Interactive 
 Volumetric Three Dimensional Display	7,098,872
	Face Recognition System and Method	7,876,931
	Method and Apparatus for Omni-Directional 
 Video Surveillance System	7,940,299
	A System and a Method for a 
 Smart Surveillance System	7,358,498
	A High Speed Three Dimensional 
 Imaging Method	6,147,760
	Method And Apparatus for Modeling Via a 
 Three-Dimensional Image Mosaic System	6,819,318
	Method and System for a Three 
 Dimensional Facial Recognition System	7,804,997
	Method and Apparatus for Omnidirectional 
 Three-Dimensional Imaging	6,304,285
	Method and Apparatus for Generating Structural Pattern Illumination	6,937,348

 

 

12

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