GENERAL RELEASE AND INDEMNIFICATION AGREEMENT

Exhibit 10.36

GENERAL RELEASE AND INDEMNIFICATION AGREEMENT

THIS GENERAL RELEASE AND INDEMNIFICATION AGREEMENT (“Agreement”) is made and entered into as of this 1st day of September 2006, by and among E-OIR Technologies, Inc., a Virginia corporation (“E-OIR”), Technest Holdings, Inc., a Nevada corporation (“Technest”), Xxxxxxxx Technologies, Inc., a Nevada corporation (“Xxxxxxxx”), and Xxxxxx Xxxxxx (“Xx. Xxxxxx”) (collectively, the “Parties”).

RECITALS

WHEREAS, on or about September 14, 2005, Xxxxxx X. Xxxxxxx, Xx. (“Xx. Xxxxxxx”) filed a Xxxx of Complaint in the Circuit Court of Spotsylvania County styled: Xxxxxx X. Xxxxxxx, Xx. x. Xxxxxxxx Technologies, et al., Case No.: CH04000835-00 (“Moulton Action”);

WHEREAS, Xx. Xxxxxxx seeks to amend his Xxxx of Complaint to add Technest as a defendant to the Xxxxxxx Action;

WHEREAS, with respect to the Xxxxxxx Action, any actions taken by or omissions of Xx. Xxxxxx occurred during and in his capacity as an director, officer, or employee of Xxxxxxxx;

WHEREAS, on or about July 11, 2005, Xxxxxxx Xxxxxxxx and Xxxx Xxxxxxxx (“Mr. and Xxx. Xxxxxxxx”) filed a Motion for Judgment in the Circuit Court for the City of Fredericksburg styled: Xxxxxxx Xxxxxxxx et al. x. Xxxxxxxx Technologies, Inc. et al., Case No. CL05000169-00 (“Xxxxxxxx Action”);

WHEREAS, the Xxxxxxx Action contains various claims against the Parties and the Xxxxxxxx Action contains three claims as follows: Breach of Severance Agreements (Count 1), Breach of Promissory Notes (Count II), and Breach of the Stock Purchase Agreement (Count III);

WHEREAS, on March 2, 2006, Mr. and Xxx. Xxxxxxxx filed a Motion for Partial Summary Judgment on Counts I and III of the Motion for Judgment in the Xxxxxxxx Action; and

WHEREAS, on May 4, 2006, the Court entered an Opinion Order, which granted Mr. and Xxx. Xxxxxxxx’ Motion for Partial Summary Judgment on Counts I and III of the Motion for Judgment in the Xxxxxxxx Action; and

WHEREAS, on July 26, 2006, the parties to the Xxxxxxx Action entered into a settlement agreement (“Xxxxxxx Settlement Agreement”) resolving all of their differences; and

WHEREAS, on July 27, 2006, EOIR and Technest entered into a Settlement Agreement (“Xxxxxxxx Settlement Agreement”), settling certain aspects of Counts I and II of the Xxxxxxxx Action.

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TERMS AND CONDITIONS

NOW, THEREFORE, in consideration of foregoing premises and intending to be legally bound hereby, and for other good and valuable consideration the receipt and adequacy of which is expressly acknowledged by the Parties, the Parties agree as follows:

1. E-OIR Releases.

E-OIR:

(i). fully, finally and forever acquits, quitclaims, releases and discharges Xxxxxxxx and its officers, directors, employees, agents, representatives, successors and assigns, including, without limitation, Xxxxxx Xxxxxx, of and from any and all obligations, claims, liabilities, damages, demands, debts, liens, deficiencies or cause or causes of action to, of or for the benefit (whether directly or indirectly) of E-OIR, at law or in equity, known or unknown, contingent or otherwise, whether asserted or unasserted, whether now known or hereafter discovered, whether statutory, in contract or in tort, as well as any other kind or character of action now held, owned or possessed (whether directly or indirectly) by E-OIR on account of, arising out of, related to, or concerning, whether directly or indirectly, proximately or remotely, the Xxxxxxx Action and the Xxxxxxxx Action, with the exception of the indemnification provided in Paragraph 7.A. herein;

(ii). acknowledges, represents, covenants and warrants that the obligations imposed by this release shall be forever binding, and that this release may not be modified, amended, annulled, rescinded or otherwise changed unless in writing signed by the parties, which expressly refers to this release and this Agreement; and

(iii). acknowledges, represents, covenants and warrants that E-OIR has not made any assignment or other transfer of any right, claim, or cause of action covered by this release to any individual, corporation, or any other legal entity whatsoever.

2. Technest Releases.

Technest:

(i). fully, finally and forever acquits, quitclaims, releases and discharges Xxxxxxxx and its officers, directors, employees, agents, representatives, successors and assigns, including, without limitation, Xxxxxx Xxxxxx, of and from any and all obligations, claims, liabilities, damages, demands, debts, liens, deficiencies or cause or causes of action to, of or for the benefit (whether directly or indirectly) of Technest, at law or in equity, known or unknown, contingent or otherwise, whether asserted or unasserted, whether now known or hereafter discovered, whether statutory, in contract or in tort, as well as any other kind or character of action now held, owned or possessed (whether directly or indirectly) by Technest on account of, arising out of, related to, or concerning, whether directly or indirectly, proximately or remotely, the Xxxxxxx Action and the Xxxxxxxx Action, with the exception of the indemnification provided in Paragraph 7.B. herein.

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(iii). acknowledges, represents, covenants and warrants that Technest has not made any assignment or other transfer of any right, claim, or cause of action covered by this release to any individual, corporation, or any other legal entity whatsoever.

3. Xxxxxxxx Releases.

X. Xxxxxxxx:

(i). fully, finally and forever acquits, quitclaims, releases and discharges E-OIR and its officers, directors, employees, agents, representatives, successors and assigns of and from any and all obligations, claims, liabilities, damages, demands, debts, liens, deficiencies or cause or causes of action to, of or for the benefit (whether directly or indirectly) of Xxxxxxxx, at law or in equity, known or unknown, contingent or otherwise, whether asserted or unasserted, whether now known or hereafter discovered, whether statutory, in contract or in tort, as well as any other kind or character of action now held, owned or possessed (whether directly or indirectly) by Xxxxxxxx on account of, arising out of, related to, or concerning, whether directly or indirectly, proximately or remotely, the Xxxxxxx Action and the Xxxxxxxx Action, with the exception of the indemnification provided in Paragraph 5.A. herein;

(iii). acknowledges, represents, covenants and warrants that Xxxxxxxx has not made any assignment or other transfer of any right, claim, or cause of action covered by this release to any individual, corporation, or any other legal entity whatsoever.

X. Xxxxxxxx:

(i). fully, finally and forever acquits, quitclaims, releases and discharges Technest and its officers, directors, employees, agents, representatives, successors and assigns of and from any and all obligations, claims, liabilities, damages, demands, debts, liens, deficiencies or cause or causes of action to, of or for the benefit (whether directly or indirectly) of Xxxxxxxx, at law or in equity, known or unknown, contingent or otherwise, whether asserted or unasserted, whether now known or hereafter discovered, whether statutory, in contract or in tort, as well as any other kind or character of action now held, owned or possessed (whether directly or indirectly) by Xxxxxxxx on account of, arising out of, related to, or concerning, whether directly or indirectly, proximately or remotely, the Xxxxxxx Action and the Xxxxxxxx Action, with the exception of the indemnification provided in Paragraph 6.A. herein;

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X. Xxxxxxxx:

(i). fully, finally and forever acquits, quitclaims, releases and discharges Xx. Xxxxxx and his agents, heirs, representatives and assigns of and from any and all obligations, claims, liabilities, damages, demands, debts, liens, deficiencies or cause or causes of action to, of or for the benefit (whether directly or indirectly) of Xxxxxxxx, at law or in equity, known or unknown, contingent or otherwise, whether asserted or unasserted, whether now known or hereafter discovered, whether statutory, in contract or in tort, as well as any other kind or character of action now held, owned or possessed (whether directly or indirectly) by Xxxxxxxx on account of, arising out of, related to, or concerning, whether directly or indirectly, proximately or remotely, the Xxxxxxx Action and the Xxxxxxxx Action;

(ii). acknowledges, represents, covenants and warrants that the obligations imposed by this release shall be forever binding, and that this release may not be modified, amended, annulled, rescinded or otherwise changed unless in writing signed by Xx. Xxxxxx and Xxxxxxxx, which expressly refers to this release and this Agreement; and

4. Xx. Xxxxxx Releases.

A. Xx. Xxxxxx:

(i). fully, finally and forever acquits, quitclaims, releases and discharges E-OIR and its officers, directors, employees, agents, representatives, successors and assigns of and from any and all obligations, claims, liabilities, damages, demands, debts, liens, deficiencies or cause or causes of action to, of or for the benefit (whether directly or indirectly) of Xx. Xxxxxx, at law or in equity, known or unknown, contingent or otherwise, whether asserted or unasserted, whether now known or hereafter discovered, whether statutory, in contract or in tort, as well as any other kind or character of action now held, owned or possessed (whether directly or indirectly) by Xx. Xxxxxx on account of, arising out of, related to, or concerning, whether directly or indirectly, proximately or remotely, the Xxxxxxx Action, with the exception of the indemnification provided in Paragraph 5.B. herein;

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(ii). acknowledges, represents, covenants and warrants that the obligations imposed by this release shall be forever binding, and that this release may not be modified, amended, annulled, rescinded or otherwise changed unless in writing signed by E-OIR and Xx. Xxxxxx, which expressly refers to this release and this Agreement; and

(iii). acknowledges, represents, covenants and warrants that Xx. Xxxxxx has not made any assignment or other transfer of any right, claim, or cause of action covered by this release to any individual, corporation, or any other legal entity whatsoever.

B. Xx. Xxxxxx:

(i). fully, finally and forever acquits, quitclaims, releases and discharges Technest and its officers, directors, employees, agents, representatives, successors and assigns of and from any and all obligations, claims, liabilities, damages, demands, debts, liens, deficiencies or cause or causes of action to, of or for the benefit (whether directly or indirectly) of Xx. Xxxxxx, at law or in equity, known or unknown, contingent or otherwise, whether asserted or unasserted, whether now known or hereafter discovered, whether statutory, in contract or in tort, as well as any other kind or character of action now held, owned or possessed (whether directly or indirectly) by Xx. Xxxxxx on account of, arising out of, related to, or concerning, whether directly or indirectly, proximately or remotely, the Xxxxxxx Action, with the exception of the indemnification provided in Paragraph 6.B. herein;

(ii). acknowledges, represents, covenants and warrants that the obligations imposed by this release shall be forever binding, and that this release may not be modified, amended, annulled, rescinded or otherwise changed unless in writing signed by Technest and Xx. Xxxxxx, which expressly refers to this release and this Agreement; and

C. Xx. Xxxxxx:

(i). fully, finally and forever acquits, quitclaims, releases and discharges Xxxxxxxx and its officers, directors, employees, agents, representatives, successors and assigns of and from any and all obligations, claims, liabilities, damages, demands, debts, liens, deficiencies or cause or causes of action to, of or for the benefit (whether directly or indirectly) of Xx. Xxxxxx, at law or in equity, known or unknown, contingent or otherwise, whether asserted or unasserted, whether now known or hereafter discovered, whether statutory, in contract or in tort, as well as any other kind or character of action now held, owned or possessed (whether directly or indirectly) by Xx. Xxxxxx on account of, arising out of, related to, or concerning, whether directly or indirectly, proximately or remotely, the Xxxxxxx Action, with the exception of the indemnification provided in Paragraph 7.C. herein;

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(ii). acknowledges, represents, covenants and warrants that the obligations imposed by this release shall be forever binding, and that this release may not be modified, amended, annulled, rescinded or otherwise changed unless in writing signed by Xxxxxxxx and Xx. Xxxxxx, which expressly refers to this release and this Agreement; and

5. E-OIR Indemnification.

A. E-OIR:

(i). expressly agrees to indemnify and hold harmless Xxxxxxxx and its officers, directors, employees, agents, representatives, successors and assigns, of and from any and all obligations, losses, claims, damages, liabilities, demands, debts, liens, costs and expenses of Xxxxxxxx and/or its officers, directors, employees, agents, successors and assigns that may be asserted by, or may arise out of, whether directly or indirectly, proximately or remotely, a final judgment or award of costs or attorneys’ fees by a court of competent jurisdiction on or any settlement mutually agreeable to the Parties of Counts I and II of the Xxxxxxxx Action (the Parties agree to bear their own costs and attorneys’ fees incurred in defending the Xxxxxxxx Action); and

(ii). acknowledges, represents, covenants and warrants that the obligations imposed by this Agreement shall be forever binding, and that this Agreement may not be modified, amended, annulled, rescinded or otherwise changed unless in writing signed by Xxxxxxxx and E-OIR, which expressly refers to this Agreement.

B. E-OIR:

(i). expressly agrees to indemnify and hold harmless Xx. Xxxxxx, his heirs, agents, representatives, and assigns, of and from any and all obligations, losses, claims, damages, liabilities, demands, debts, liens, costs and expenses of Xx. Xxxxxx and his agents, successors and assigns that may be asserted by, or may arise out of, whether directly or indirectly, proximately or remotely, the Xxxxxxx Action; provided, however, that E-OIR shall not be required to contribute to any expenses incurred by Xx. Xxxxxx prior to the date of the Agreement; and

(ii). acknowledges, represents, covenants and warrants that the obligations imposed by this Agreement shall be forever binding, and that this Agreement may not be modified, amended, annulled, rescinded or otherwise changed unless in writing signed by Xx. Xxxxxx and E-OIR, which expressly refers to this Agreement.

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6. Technest Indemnification.

A. Technest:

(i). expressly agrees to indemnify and hold harmless Xxxxxxxx and its officers, directors, employees, agents, representatives, successors and assigns, of and from any and all obligations, losses, claims, damages, liabilities, demands, debts, liens, costs and expenses of Xxxxxxxx and/or its officers, directors, employees, agents, successors and assigns resulting from a final judgment or award of costs or attorney’s fees by a court of competent jurisdiction on or any settlement mutually agreeable to the Parties of Counts I and II of the Xxxxxxxx Action (the Parties agree to bear their own costs and attorneys’ fees incurred in defending the Xxxxxxxx Action); and

B. Technest:

(ii). acknowledges, represents, covenants and warrants that the obligations imposed by this Agreement shall be forever binding, and that this Agreement may not be modified, amended, annulled, rescinded or otherwise changed unless in writing signed by Xx. Xxxxxx and Technest, which expressly refers to this Agreement.

7. Xxxxxxxx Indemnification.

X. Xxxxxxxx:

(i). expressly agrees to indemnify and hold harmless E-OIR and its officers, directors, employees, agents, representatives, successors and assigns, of and from any and all obligations, losses, claims, damages, liabilities, demands, debts, liens, costs and expenses of E-OIR and/or its officers, directors, employees, agents, successors and assigns that may be asserted by, or may arise out of, whether directly or indirectly, proximately or remotely, a final judgment or award of costs or attorney’s fees by a court of competent jurisdiction on or any settlement mutually agreeable to the Parties of Count III of the Xxxxxxxx Action (the Parties agree to bear their own costs and attorneys’ fees incurred in defending the Xxxxxxxx Action); and

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X. Xxxxxxxx:

(i). expressly agrees to indemnify and hold harmless Technest and its officers, directors, employees, agents, representatives, successors and assigns, of and from any and all obligations, losses, claims, damages, liabilities, demands, debts, liens, costs and expenses of Technest and/or its officers, directors, employees, agents, successors and assigns that may be asserted by, or may arise out of, whether directly or indirectly, proximately or remotely, a final judgment or award of costs or attorney’s fees by a court of competent jurisdiction on or any settlement mutually agreeable to the Parties of Count III of the Xxxxxxxx Action (the Parties agree to bear their own costs and attorneys’ fees incurred in defending the Xxxxxxxx Action); and

X. Xxxxxxxx:

(i). expressly agrees to indemnify and hold harmless Xx. Xxxxxx and his agents, heirs, representatives, and assigns, of and from any and all obligations, losses, claims, damages, liabilities, demands, debts, liens, costs and expenses of Xx. Xxxxxx and his agents, heirs, representatives, and assigns that may be asserted by, or may arise out of, whether directly or indirectly, proximately or remotely, in connection with the Xxxxxxx Action and Xxxxxxxx Action; and

8. Construction.

This Agreement is the entire understanding and agreement among the Parties and incorporates and merges herein all prior discussions, understandings, and agreements, express or implied, oral or written, among the Parties. This Agreement is intended to be a fully integrated document. The Parties each acknowledge that they have not executed this Agreement in reliance on any representation, inducement, promise, agreement or warranty that is not contained or referenced in this Agreement and that they have made such independent investigation of the facts pertaining to the Xxxxxxx Action and Xxxxxxxx Action and of all matters pertaining to the actions, as they deemed necessary, and that they are relying solely upon their own investigation of the facts and are not relying in any way (and acknowledges that it would be unreasonable to so rely) upon any statement, silence, act or omission of any other Party in entering into this Agreement other than those representations specifically set forth in writing herein.

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9. Choice of Law.

This Agreement and the performance of the Parties hereunder shall be construed and interpreted in accordance with the laws of the Commonwealth of Massachusetts.

10. Negotiated Document.

The Parties agree that this Agreement is a negotiated document and that, in any action arising out of the construction, interpretation, validity, or performance of this Agreement, it shall not be construed against the drafter.

11. Authority.

Each of the signatories hereto represents and warrants to be duly authorized to fully and completely resolve the disputes described in this Agreement, make the releases and indemnities contained in this Agreement, and to bind the Party on whose behalf the signatory has agreed to act to the terms and conditions contained in this Agreement.

12. Counterparts and Electronic Signatures.

This Agreement may be executed in counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts together shall constitute the same Agreement. The Parties expressly acknowledge the applicability of Massachusetts General Laws, Chapter 110G, the Uniform Electronic Signatures Act to the execution of this Agreement.

13. Miscellaneous.

A. This Agreement is binding upon and shall inure to the benefit of the Parties hereto, their respective agents, employees, representatives, attorneys, assigns, and successors in interest;

B. Each obligation of each party under this Agreement is material;

C. The Parties expressly incorporate by reference and make part of this Agreement all Recitals set forth above;

D. Should any portion, term or provision of this Agreement be declared or determined by any court to be illegal, invalid or unenforceable, the validity of the remaining portions, terms and provisions shall not be affected thereby and this Agreement will remain valid and fully enforceable, and the illegal, invalid or unenforceable portion, term or provision shall be deemed not to be part of this Agreement; and

E. Any notice hereunder shall be mailed to the undersigned at their current place of business by certified mail.

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IN WITNESS WHEREOF, the Parties set their hands and seals, as of the date(s) set forth below.

	/s/ Xxxxxx Xxxxxx		/s/ Xxxxxx X. Xxxxxx
	Xxxxxxxx Technologies, Inc.		E-OIR Technologies, Inc.
	By: Xxxxxx Xxxxxx		By: Xxxxxx X. Xxxxxx
	Title: CEO		Title: CEO/President

	Dated: August 31, 2006		Dated: September 1, 2006

	/s/ Xxxxxx X. Xxxxxx		/s/ Xxxxxx Xxxxxx
	Technest Holdings, Inc.		Xxxxxx Xxxxxx
	By: Xxxxxx X. Xxxxxx
	Title: CEO		Dated: August 31, 2006

	Dated: September 1, 2006

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GENERAL RELEASE AND INDEMNIFICATION AGREEMENT

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