**Exhibit 10.1**

 

**CONFIDENTIAL**

 

**THISPROPRIETARY FORM DOCUMENT IS BEING PROVIDED TO YOU ON A CONFIDENTIALBASIS.  BY ACCEPTING THIS DOCUMENT, YOUARE AGREEING, AND SHALL BE DEEMED TO HAVE AGREED, TO MAINTAIN THECONFIDENTIALITY OF THIS DOCUMENT, EXCEPT THAT THIS DOCUMENT MAY BE DISCLOSED(I) TO YOUR DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS (INCLUDING LEGAL COUNSELAND OTHER ADVISORS) ON A NEED-TO-KNOW BASIS AND SOLELY FOR THE PURPOSE OFREVIEWING THE PROPOSED TRANSACTION (IT BEING UNDERSTOOD THAT THE PERSONS TOWHOM SUCH DISCLOSURE IS MADE WILL BE INFORMED OF THE CONFIDENTIAL NATURE OFTHIS DOCUMENT AND INSTRUCTED TO KEEP THE DOCUMENT CONFIDENTIAL PURSUANT TO THETERMS HEREOF; AND THAT ANY FAILURE BY SUCH PERSONS TO MAINTAIN THECONFIDENTIALITY OF THIS DOCUMENT SHALL BE ATTRIBUTABLE TO YOU AND FOR WHICH YOUHEREBY ACCEPT FULL RESPONSIBILITY), (II) TO THE EXTENT REQUIRED BY APPLICABLELAWS OR REGULATIONS OR BY ANY SUBPOENA OR SIMILAR LEGAL PROCESS, OR (III) WITHTHE CONSENT OF GLOBAL TECHNOLOGY FINANCE, LLC. FOR PURPOSES OF THIS PARAGRAPH, “DOCUMENT” SHALL INCLUDE THIS DOCUMENTAND ALL INFORMATION RELATING HERETO PROVIDED BY GLOBAL TECHNOLOGY FINANCE, LLCAND/OR ITS SUBSIDIARIES.**

 

**ASSET PURCHASE AND**

**LIABILITY ASSUMPTION AGREEMENT**

 

This ASSETPURCHASE AND LIABILITY ASSUMPTION AGREEMENT, dated as of                        ,2005 (this “Agreement”), among Dyntek, Inc., a Delaware corporation (the“Seller Parent”), and Dyntek Services, Inc., a Delaware corporation(collectively with the Seller Parent, the “Sellers”), and New EnglandTechnology Finance, LLC, a Delaware limited liability company, as purchaser (“Purchaser”).

 

### 1.                                       Definitions.

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#### (a)                                  CertainDefined Terms.  As used herein, thefollowing terms shall have the following corresponding meanings:

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“Account” shall mean any and all rights of aSeller to payment for goods sold (but not services rendered), including,without limitation, receivables, accounts, contract rights, generalintangibles, payment intangibles and any and all such rights evidenced bychattel paper (whether electronic or tangible), instruments, letter of creditrights or documents, whether due or to become due and whether or not earned by

 

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performance, and whethernow or hereafter acquired or arising in the future and any proceeds arisingtherefrom or relating thereto.

 

“Accrued Freight Costs” shall mean all shippingcosts that are billed to Eligible Obligors.

 

“Affiliate” shall be as defined from time totime by the rules and regulations promulgated by the U.S. Securities andExchange Commission under the Securities Act of 1933, as amended.

 

“Asset Purchase Agreement” shall mean thatcertain Asset Purchase Agreement, dated as of the date hereof, among Purchaserand the Sellers, as such agreement may be amended, supplemented, restated,amended and restated, or otherwise modified from time to time pursuant to theterms thereof.

 

“Authorized Supplier” shall mean any Equipmentvendor that is approved in writing by Purchaser.  Purchaser may, upon written notice to theSeller Parent, cease to include any Equipment vendor as an Authorized Supplier.

 

“Backlog Account” shall mean an Account:  (i) that arises from a Bona Fide CustomerOrder received on or prior to the Termination Date; and (ii) for which therelated Equipment was ordered pursuant to a Backlog Purchase Order.

 

“Backlog Purchase Order” shall mean a purchaseorder issued by a Seller to an Authorized Supplier prior to the TerminationDate that is “billed to” Purchaser or a lender of Purchaser under an OtherFloor Plan Financing Agreement and for which the related Equipment was notshipped to the Account debtor on or prior to the Termination Date.

 

“Bankruptcy Event” shall mean with respect toany Person, such Person shall commence a voluntary case concerning itself underTitle 11 of the United States Code entitled “Bankruptcy,” as now or hereafterin effect, or any successor thereto (the “Bankruptcy Code”); or aninvoluntary case is commenced against such Person and the petition is notdismissed within sixty (60) days after commencement of the case; or a custodian(as defined in the Bankruptcy Code) is appointed for, or takes charge of, allor substantially all of the property of such Person, or such Person commencesany other proceeding under any reorganization, arrangement, adjustment of debt,relief of debtors, dissolution, insolvency or liquidation or similar law of anyjurisdiction whether now or hereafter in effect relating to such Person orthere is commenced against such Person any such proceeding which remainsundismissed for a period of sixty (60) days, or such Person is adjudicatedinsolvent or bankrupt; or any order of relief or other order approving any suchcase or proceeding is entered; or such Person suffers any appointment of anycustodian or the like for it or any substantial part of its property tocontinue undischarged or unstayed for a period of sixty (60) days; or suchPerson makes a general assignment for the benefit of creditors; or anycorporate action is taken by such Person for the purpose of effecting any ofthe foregoing.

 

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“Bona Fide Customer Order” shall mean any bonafide customer order from an Eligible Obligor that has a Purchase OrderReference Number; provided, that a telephonic order shall not constitutea Bona Fide Customer Order unless accompanied by a purchase order in writing.

 

“Change of Control” shall mean any of thefollowing:

 

(i)                                     withrespect to the Seller Parent, an acquisition by any individual, entity or group(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities ExchangeAct of 1934, as amended (the “Exchange Act”)) of beneficial ownership(within the meaning of Rule 13-d promulgated under the Exchange Act) of 50% ormore of either (a) the then outstanding shares of common stock of the SellerParent or (b) the combined voting power of the then outstanding votingsecurities of the Seller Parent entitled to vote generally in the election ofdirectors;

 

(ii)                                  withrespect to the Seller Parent, individuals who, as of the date hereof,constitute the Board of Directors (the “Board”) of the Seller Parent(the “Incumbent Board”) cease for any reason to constitute at least amajority of such Board; provided, however, that any individualwho becomes a member of such Board subsequent to the date hereof whoseelection, or nomination for election by shareholders of the Seller Parent wasapproved by a vote of at least a majority of the directors then comprising theIncumbent Board shall be considered as though such individual were a member ofthe Incumbent Board; provided, further that any such individualwhose initial assumption of office occurs as a result of either an actual orthreatened election contest (as such terms are used in Rule 14a-11 ofRegulation 14A promulgated under the Exchange Act) or other actual orthreatened solicitation of proxies or consents by or on behalf of a Personother than the Board shall not be so considered as a member of the IncumbentBoard;

 

(iii)                               withrespect to any Seller other than the Seller Parent, the failure of the SellerParent to own, directly or indirectly, 100% of the capital stock or otherequity interest in such Seller, except as otherwise permitted in advance inwriting by Purchaser in its sole discretion; or

 

(iv)                              theliquidation, winding up, dissolution of any Seller and/or sale of substantiallyall of the assets of any Seller.

 

“Collections” shall mean, with respect to anyPurchased Account:  (i) all funds thatare received by or on behalf of any Seller in payment of any amounts owed inrespect of such Purchased Account (including purchase price, finance charges,interest and all other charges) or Related Security, or applied to amounts owedin respect of such Purchased Account (including insurance payments and netproceeds of the sale or other disposition of repossessed goods or othercollateral or property of the related Account Debtor or any other Persondirectly or indirectly liable for the payment of such Purchased Account andavailable to be applied thereon) and Unapplied Credits, and (ii) all otherproceeds of such Purchased Account and/or any Related Security therefor.

 

“Contract” shall mean with respect to anyPurchased Account, any and all contracts, instruments, agreements, invoices,notes or other writings pursuant to which

 

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such Purchase Accountarises or that evidence such Purchased Account or under which an Account Debtorbecomes or is obligated to make payment in respect of such Purchased Account.

 

“Cost” shall mean with respect to an item ofEquipment, the aggregate amount incurred or otherwise paid by any Seller orPurchaser to the vendor or manufacturer thereof as evidenced by one or morevendor or manufacturer invoices, plus the Reserves, fees, expenses andtaxes (each as set forth on Annex A), less any special bid rebate(other than from any flooring provider) allocated to such purchase price ingood faith by Purchaser.  Cost shall begenerally consistent with those items included in Annex A attachedhereto.  Any exceptions or modificationsto the calculation or definition of Cost shall require the prior writtenapproval of Purchaser.

 

“Credit Insurance” shall mean credit insuranceissued under an insurance policy or account receivable credit protectionprovided pursuant to the terms of a factoring agreement obtained by eitherPurchaser or a Seller, in any case, which must be acceptable to Purchaser inits sole discretion.

 

“Customer Stocking Letter” shall mean acustomer stocking letter substantially in the form of Annex B attachedhereto.

 

“Deferred Purchase Price” shall have themeaning set forth in Section 3(h) below.

 

“DSO” shall mean receivables and inventory dayssales outstanding, and shall be calculated for each Month as follows: ((currentMonth’s ending Accounts, vendor receivables and inventory of the Sellers (forwhich the Eligible Vendor Liability has been assumed by Purchaser pursuant tothe terms hereof) less (the sum of the current Month’s Revenue, plusAccrued Freight Costs and sales tax charged on Purchased Accounts)) dividedby (prior Month’s Revenue plus Accrued Freight Costs and sales tax chargedon Purchased Accounts divided by prior Month’s days)) pluscurrent Month’s days; provided that the inventory shall be valued at thelower of Cost or market value.  Forexample, if:

 

current Month’s ending Accounts, vendor receivablesand inventory of the Sellers (for which the Eligible Vendor Liability has beenassumed by Purchaser pursuant to the terms hereof) = $150 million;

 

current Month’s Revenue plus Accrued FreightCosts and sales tax charged on Purchased Accounts = $80 million;

 

prior Month’s Revenue plus Accrued FreightCosts and sales tax charged on Purchased Accounts = $65 million;

 

prior Month’s days = 30;

 

current Month’s days = 30; then

 

DSO = (150-80) / (65/30) + 30 = 62.3

 

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“Eligible Account” shall mean each Accountthat:

 

(i)                                     arisesfrom a Bona Fide Customer Order; and

 

(ii)                                  arisesout of the sale of Equipment in the ordinary course of business of theapplicable Seller; and

 

(iii)                               doesnot arise out of a sale made to an Affiliate of any Seller for operational useby that Affiliate and not for subsequent sale to a customer of such Affiliate;and

 

(iv)                              hasno set-off, offset, claim, counterclaim, dispute or defense, genuine or otherwise,to the payment or collection of such Account; and

 

(v)                                 ispayable in U.S. dollars and the Equipment related thereto is located inside thecontinental United States, Canada or on a foreign military base (excluding theprovince of New Foundland, the Northwest Territories and the Territory ofNunavit); and

 

(vi)                              doesnot represent a guaranteed sale, a bill and hold transaction, asale-and-return, a sale on approval, a cash on delivery sale or a consignmentsale, or is not made pursuant to any other written agreement providing forrepurchase or return; and

 

(vii)                           theEquipment giving rise to such Account has been ordered pursuant to an EligiblePurchase Order, the Eligible Vendor Liability of which has been assumed byPurchaser pursuant to this Agreement, and shipped to the Account debtor, andthe Account otherwise represents a final sale; and

 

(viii)                        complieswith all applicable laws; and

 

(ix)                                isnot subject to any adverse security interest, lien or encumbrance (includingtax liens) other than those in favor of Purchaser; and

 

(x)                                   iseligible for Credit Insurance or otherwise approved as an Eligible Account byPurchaser in writing in advance; and

 

(xi)                                doesnot contain terms providing for payment in more than thirty (30) days from thedate of invoice; and

 

(xii)                             wouldqualify as an eligible Account under the Purchaser Senior Credit Agreement oran Other Floor Plan Financing Agreement.

 

“Eligible Inventory” shall mean those balancesthat are the result of Equipment purchased pursuant to Eligible Purchase Ordersas evidenced by the costs listed on the vendor or manufacturer invoices issuedwith respect to any Eligible Purchase Order. For the avoidance of doubt, Eligible Inventory shall not include anyEquipment subject to Section 3(a)(4) hereof.

 

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“Eligible Obligor” shall mean only thoseAccount debtors (i) for which the amount of Accounts owed by such Accountdebtors is entitled to the benefits of Credit Insurance or (ii) which have beenapproved in writing in advance by Purchaser; provided, however,that for the purposes of this Agreement, no Account debtor shall be deemed anEligible Obligor in the event that (y) such Account debtor was deemed to be anEligible Obligor based on information that was provided fraudulently and (z)any Seller had actual knowledge or should have had reason to know that suchinformation was provided fraudulently.

 

“Eligible Purchase Order” shall mean a purchaseorder (i) issued by a Seller to an Authorized Supplier for Equipment, (ii) forwhich such Seller has a Bona Fide Customer Order from an Eligible Obligor withan estimated shipping date or acceptance date within thirty (30) days of thedate of such Bona Fide Customer Order, and (iii) for which the sale of therelated Equipment to the Eligible Obligor will create an Eligible Account.

 

“Eligible Vendor Liability” shall mean, withrespect to any Purchased Account, the liability to an Authorized Supplier forthe purchase price of Equipment purchased by a Seller from such AuthorizedSupplier pursuant to the related Eligible Purchase Order.

 

“Equipment” shall mean computers andcommunications equipment and related equipment and software.

 

“Fee Grid” shall mean the grid attached heretoas Schedule I.

 

“Fee Parameters” shall have the meaning setforth in Section 3(g) below.

 

“Final Liquidation Date” shall have the meaningset forth in the MSA.

 

“Finance and Servicing Fee” shall have themeaning set forth in Section 3(f) hereof.

 

“GAAP” shall mean Generally Accepted AccountingPrinciples in the United States of America from time to time applied on areasonable and consistent basis.

 

“Gross Profit” shall mean with respect to eachsale of Equipment creating a Purchased Account, Revenue generated by the saleof such Equipment less Cost for such Equipment.

 

“Gross Profit Margin” shall mean, for anyperiod, Gross Profit for such period divided by total Revenue for such period,as set forth on Annex A hereto.

 

“Intercreditor Agreement” shall mean anintercreditor agreement to be entered into by and between the senior lender ofthe Sellers and Purchaser, in form and substance reasonably satisfactory toPurchaser.

 

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“LIBOR Rate” shall mean the rate of interestpublished in the Wall Street Journal as the London Interbank Offered Rates forone Month as quoted on the first day of the Month.

 

“Lockbox Account” shall mean the lockboxaccount at the depository bank party to the Lockbox Agreement and identified asthe “Concentration Account” in the Lockbox Agreement, or such other account asdirected by Purchaser from time to time.

 

“Lockbox Agreement” shall mean that certainLockbox Agreement, dated as of the date hereof, among Purchaser, the Sellers,LaSalle Bank, National Association, as the depository bank, and The CIT Group/Commercial Services, Inc., ascollateral agent, as such agreement may be amended, supplemented, restated,amended and restated, or otherwise modified from time to time pursuant to theterms thereof.

 

“Material Adverse Effect” shall mean a materialadverse effect upon (i) the business, operations, properties, assets, orcondition (financial or otherwise) of the Sellers, taken as a whole, (ii) theability of any Seller to perform its obligations under this Agreement or anyother Transaction Document, (iii) the legality, validity, binding effect orenforceability against any Seller of this Agreement or any other TransactionDocument, or (iv) the ability of Purchaser to enforce any of its rights orremedies under this Agreement or any other Transaction Document.

 

“Month” shall mean each calendar monthcommencing with the month in which this Agreement becomes effective.

 

“MSA” shall mean that certain Master ServicingAgreement, dated as of the date hereof, among Purchaser and the Sellers, assuch agreement may be amended, supplemented, restated, amended and restated, orotherwise modified from time to time pursuant to the terms thereof.

 

“Other Floor Plan Financing Agreements” shallmean one or more agreements entered into by Purchaser with one or more lendersproviding for the financing of Equipment, in any case, as may be amended,supplemented, restated, amended and restated, or otherwise modified from timeto time pursuant to the terms thereof.

 

“Payment Date” shall mean, with respect to thePurchase Price for all Purchased Assets sold pursuant to this Agreement duringany Month or the Finance and Servicing Fee earned during any Month, the lastday of such Month plus the number of DSO days for the succeeding month, or ifsuch day shall not be a business day, the immediately succeeding business day.

 

“Person” shall mean any natural person,corporation, limited liability company, trust, joint venture, association,company, partnership, limited partnership, governmental authority or otherentity.

 

“Purchased Accounts” shall mean, collectively,the Eligible Accounts that are sold from time to time to Purchaser pursuant to,and subject to the terms and 

 

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conditions of, thisAgreement.  Upon the effectiveness of aPurchase Supplement, the Eligible Accounts set forth therein shall constitute “PurchasedAccounts” hereunder.  To the extentPurchaser elects to purchase a Backlog Account pursuant to Section 3(i)hereof, such Backlog Account shall be deemed to be a Purchased Account.

 

“Purchased Assets” shall mean the PurchasedAccounts, the Related Security and the Collections.

 

“Purchase Date” shall mean each date on which apurchase of Purchased Assets occurs pursuant to Section 2(a)hereof.

 

“Purchase Order Reference Number” shall meanthe customer reference number identifying a purchase order issued by an Accountdebtor.

 

“Purchase Price” shall mean, with respect toany Purchased Account and all other related Purchased Assets, 100% of the grossbook value of such Purchased Account.

 

“Purchase Supplement” shall mean a supplementto this Agreement that (i) is duly authenticated (within the meaning of theUCC) by a Seller, (ii) may be in physical or electronic form, (iii) includes alist by invoice sequences of Accounts offered for purchase thereby, whichinvoice sequences shall have the unique sequence identifier identifying suchAccount as being sold to Purchaser, as set forth in the Lockbox Agreement, (iv)includes evidence satisfactory to Purchaser that each Account offered forpurchase thereby is an Eligible Account and (v) is otherwise acceptable in formand substance to Purchaser in its sole discretion.

 

“Purchaser” shall have the meaning set forth inthe preamble to this Agreement.

 

“Purchaser Senior Credit Agreement” shall meanany factoring agreement, credit agreement, inventory and working capitalfinancing agreement or similar agreement between Purchaser and one or morepurchasers or lenders, as applicable, as such agreement may be amended, restated,supplemented, replaced or otherwise modified from time to time.

 

“Purchaser Senior Creditor” shall mean anyfactor or lender that enters into the Purchaser Senior Credit Agreement.

 

“Rebates” shall mean credits, rebates, bonusesand discounts offered, owing or payable by any Authorized Supplier,manufacturer, distributor, vendor or flooring provider in connection with anyEligible Purchase Order or the related Equipment, except for any volume ormarketing rebates.

 

“Related Security” means, with respect to anyPurchased Account:

 

(i)                                     allof the applicable Seller’s interest in any Equipment or other goods (includingreturned and repossessed Equipment and goods) and documentation of titleevidencing the shipment or storage of any Equipment or other goods (including

 

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returned and repossessedgoods), relating to any sale giving rise to such Purchased Account, and allcredits from vendors of the Equipment upon the return, recall or repurchasethereof to or by such vendor, and all Rebates;

 

(ii)                                  allbooks and records relating to, and all instruments and chattel paper that mayevidence, such Purchased Account or Equipment;

 

(iii)                               allother security interests or liens and property subject thereto from time totime purporting to secure payment of such Purchased Account, whether pursuantto the Contract related to such Purchased Account or otherwise, together withall UCC financing statements or similar filings relating thereto;

 

(iv)                              allof the applicable Seller’s rights, interests and claims under the Contracts andall guaranties, letters of credit, indemnities, insurance (including creditinsurance on any Purchased Account) and other agreements (including the relatedContract) or arrangements of whatever character from time to time supporting orsecuring payment of such Purchased Account or, where applicable, suchEquipment, or otherwise relating to such Purchased Account or Equipment,whether pursuant to the Contract related to such Purchased Account orotherwise;

 

(v)                                 anywarranties or other similar rights with respect to any of the Equipment; and

 

(vi)                              allproceeds and products of any of the foregoing.

 

“Renegotiation Notice” shall have the meaningset forth in Section 3(g) below.

 

“Reserves” shall mean provisions periodicallyincluded in Revenue for sales returns, cost for inventory shrink andobsolescence and cost for vendor accounts receivables, in each case, made inaccordance with GAAP.

 

“Revenue” shall mean with respect to each saleof Equipment related to a Purchased Account, (i) the purchase price invoiced tothe end user for such Equipment less (ii) the sum of any Accrued FreightCosts plus any sales tax.

 

“Schedule of Exceptions” shall mean ScheduleIV attached hereto.

 

“Seller Storage Site” shall have the meaningset forth in Section 3(a) hereof.

 

“Sellers” shall have the meaning set forth inthe preamble to this Agreement.

 

“Termination Date” shall mean the date on whichthis Agreement is terminated in accordance with Sections 3(g) or 11hereof.

 

“Termination Event” shall have the meaning setforth in Section 11(b) below.

 

“Termination Fee” shall have the meaning setforth in Section 11(e) below.

 

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“Termination Option” shall have the meaning setforth in Section 11(g) below.

 

“Transaction Documents” shall mean,collectively, this Agreement, the Lockbox Agreement, the MSA, the AssetPurchase Agreement, any Purchase Supplement and all other instruments,documents and agreements executed by or on behalf of any Seller and deliveredconcurrently herewith or at any time hereafter to Purchaser in connection withthe Purchased Accounts and other transactions contemplated by this Agreement,all as amended, supplemented, restated, amended and restated, or otherwise modifiedfrom time to time pursuant to the terms thereof.

 

“UCC” shall mean the Uniform Commercial Code asin effect in the State of New York from time to time.

 

“Unapplied Credits” shall mean any credits toan Account that are unapplied for six (6) consecutive Months and which, in thereasonable judgment of Purchaser, will not be applied in the future.

 

“Vendor Services” shall have the meaning setforth in Section 3(c) hereof.

 

#### (b)                                 OtherDefined Terms; Accounting Terms; GAAP. Terms used in this Agreement that are defined in the UCC but not definedin this Section 1 shall have the meanings given such terms in theUCC.  The definitions of terms hereinshall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronounshall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including”shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to havethe same meaning and effect as the word “shall”.  Unless the context requires otherwise or asotherwise expressly provided in this Agreement: (i) any definition of orreference to any agreement, instrument or other document herein shall beconstrued as referring to such agreement, instrument or other document as fromtime to time amended, restated, amended and restated, supplemented or otherwisemodified (subject to any restrictions on such amendments, supplements ormodifications set forth herein); (ii) any reference herein to any Person shallbe construed to include such Person’s successors and assigns; (iii) the words “herein”,“hereof” and “hereunder”, and words of similar import, shall be construed torefer to this Agreement in its entirety and not to any particular provisionhereof; (iv) all references herein to Sections, Annexes and Schedules shall beconstrued to refer to Sections of, and Annexes and Schedules to, this Agreement(unless expressly referring to another agreement); (v) all accounting terms nototherwise defined herein shall have the meanings assigned to them in conformitywith GAAP; and (vi) all calculations and other information required to be madeor delivered pursuant to this Agreement shall be prepared in accordance withGAAP as in effect at the time of such preparation.

 

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### 2.                                       Sale.

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#### (a)                                  Purchase.  Upon the terms and subject to the conditionsset forth herein, each of the Sellers hereby agrees to sell, convey, transferand assign to Purchaser, and Purchaser hereby agrees to purchase and acceptsuch conveyance, transfer and assignment from each of the Sellers, on the termsand subject to the conditions set forth herein, of all of the applicable Seller’sright, title and interest, whether now owned or hereafter acquired, in, to andunder certain Purchased Accounts identified in a duly authenticated PurchaseSupplement, the Related Security and the Collections; provided that theTermination Date has not occurred.

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#### (b)                                 PurchasePrice.  The price for each PurchasedAccount and all other related Purchased Assets shall equal the Purchase Price,which shall be payable as set forth in Sections 3(b) and (h)below.

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### 3.                                       ProductFinancing and Assumption of Liability.

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#### (a)                                  ProductFinancing.  Purchaser hereby agrees tofinance the purchase price of any Equipment purchased by a Seller pursuant toan Eligible Purchase Order, which may be financed by Purchaser under thePurchaser Senior Credit Agreement, any Other Floor Plan Financing Agreements orunder separate terms.  All EligiblePurchase Orders shall have a unique sequence number mutually agreed to amongthe Sellers and Purchaser.  Subject to clause(b) below, the Sellers shall repay the purchase price of any Equipmentfinanced by Purchaser upon demand together with the Finance and Servicing Feeattributable to such Equipment as if it related to a Purchased Account, asdetermined by Purchaser in good faith; provided, that such amount shallbe immediately due and payable in U.S. dollars and in immediately availablefunds, without any demand or other notice by Purchaser, on the first date onwhich any of the following occurs:  (i)the underlying purchase order is no longer an Eligible Purchase Order; (ii) theresulting Account is not an Eligible Account or is not purchased under thisAgreement by Purchaser; and (iii) unless otherwise pre-approved by Purchaser inwriting, the related Equipment has not been shipped within thirty (30) days ofthe date of the related Bona Fide Customer Order.  In addition, each of the Sellers hereby agreeas follows:

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##### (1)                                  Tosecure the prompt payment and performance of its obligation to repay Purchaserfor the purchase price of any such Equipment, each of the Sellers hereby grantsto Purchaser a valid and first priority, perfected security interest and lienin all of such Seller’s right, title and interest in, to and under, whether ornot existing or hereafter acquired and wheresoever located, all such Equipmentand the proceeds thereof (including any Account created from the salethereof).  Each of the Sellers herebyauthorizes Purchaser to file any UCC financing statements or continuationstatements in any jurisdiction as Purchaser may deem necessary or desirable inorder to perfect and maintain such security interest.

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##### (2)                                  Eachof the Sellers shall arrange that all Equipment ordered by it be either shippeddirectly to the applicable Eligible Obligor or, in the event that in thereasonable judgment of such Seller such direct shipment is not practicable, bestored, pending shipment to such customers, at the sole cost and expense ofsuch Seller, in a commercially reasonable manner, at a location controlled byor under contract with such Seller that has been pre-approved by Purchaser inwriting (a “Seller Storage Site”). The applicable Seller shall provide Purchaser with prompt notice of theuse of and the Equipment stored in any Seller Storage Site and the location,owner and operator of any

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##### such SellerStorage Site.  Each of the Sellers agreesto use its best efforts to cause any third party lessor or warehouseman of anySeller Storage Site to acknowledge Purchaser’s and any Purchaser SeniorCreditor’s interest in the Equipment located at such lessor’s or warehouseman’sSeller Storage Site.

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##### (3)                                  Eachof the Sellers agrees that any Equipment which is billed to any Account debtorbut has not yet been shipped by such Seller shall be kept physically segregatedfrom all other Equipment in such Seller’s possession and such Equipment shallbe identifiable as “sold”.  Each of theSellers further agrees that any Equipment****purchased bysuch Seller with its own resources or credit provided from sources other thanPurchaser shall be shall be identifiable as “Property of Dyntek, Inc.” or “Propertyof Dyntek Services, Inc.”, as applicable, and shall be kept physically segregatedfrom all other Equipment in such Seller’s possession.

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##### (4)                                  Nopurchase of Equipment to support customer stocking levels or bill and holds (orthe like) are eligible to be financed under this Section 3(a) unless (y)a Seller provides prior written consent or (z) the Equipment so purchased issupported by a Customer Stocking Letter.

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#### (b)                                 Assumptionof Liability; Payment of Purchase Price. Upon the purchase of a Purchased Account, Purchaser hereby assumes allrelated Eligible Vendor Liability and no Seller shall have any furtherobligation to pay all or any portion of such Eligible Vendor Liability.  The assumption of Eligible Vendor Liabilityin any Month shall (i) constitute partial payment of the Purchase Price for thePurchased Assets sold under this Agreement during such Month in an amount equalto the aggregate amount of all such assumed Eligible Vendor Liability and (ii)terminate the obligation of the Sellers to repay the purchase price of therelated Equipment in connection with the product financing by Purchaserpursuant to clause (a) above.

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#### (c)                                  VendorServicing.  Purchaser agrees toservice and administer the payment of Eligible Purchase Orders to theapplicable Authorized Supplier (the “Vendor Services”).  For the avoidance of doubt, the VendorServices shall not include any Services (as such term is defined in the MSA).

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#### (d)                                 NoWarranty.  Each of the Sellers herebyacknowledges and agrees that Purchaser does not warrant any Equipment andPurchaser shall not be responsible for any Equipment that is defective or failsto conform to the warranties extended by the Authorized Supplier ormanufacturer of such Equipment.

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#### (e)                                  UnappliedCredits; Vendor Credits, Rebates and Discounts.  Each of the Sellers hereby acknowledges andagrees that any and all (a) Unapplied Credits and (b) Rebates are and shall bethe property of Purchaser.

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#### (f)                                    Financeand Servicing Fee.  Purchaser shallbe entitled to a finance and servicing fee (the “Finance and Servicing Fee”)in respect of the product financing and Vendor Services provided by Purchaserunder this Section 3 during each Month in an amount equal to the productof (y) 1 minus the applicable percentage set forth on the Fee Grid based uponthe Gross Profit Margin and the DSO for each Month times (z) the aggregateGross Profit for such Month; provided, that, notwithstanding anything tothe contrary contained herein, in the event

 

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#### the LIBOR Rate exceeds 3.50% during any Month, theapplicable percentage set forth on the Fee Grid for purposes of calculating theFinance and Servicing Fee for the immediately succeeding Month shall bedecreased by the amount by which the LIBOR Rate exceeded 3.50%.  In addition to the payment of the Finance andServicing Fee, as consideration for the product financing and Vendor Servicesprovided by Purchaser under this Section 3, the Sellers shall alsoprovide certain Services (as defined under the MSA) in connection with thePurchased Assets pursuant to the MSA.

####  

#### (g)                                 FeeParameter.  The Fee Grid has beencalculated based on the parameters contained in the table immediately below(the “Fee Parameters”).  If, atany time, the actual values deviate from those in the “Forecast Level” columnby more than the amount specified in the “Acceptable Range” column, Purchaser,in its election, may elect to terminate this Agreement in accordance with Section11 or may re-open negotiations regarding the amount and calculation of theFinancing and Servicing Fee by providing the Seller Parent with notice of itsdesire to re-open negotiations (such notice, the “Renegotiation Notice”).  Each of the Sellers and Purchaser agrees toconduct such negotiations, if any, in good faith.

 

| **Parameter**                                                 | ** ** | **Forecast Level**    | ** ** | **Acceptable Range**                                                      |
|---------------------------------------------------------------|------------|-----------------------|------------|---------------------------------------------------------------------------|
| Receivables  and Inventory DSO (including Vendor Receivables) |       | 70 days               |       | plus 15 days                                                              |
|                                                          |       |                  |       |                                                                      |
| Revenue                                                       |       | $4,000,000  per Month |       | not less  than $2,000,000 per Month averaged over trailing 3-Month period |

 

#### (h)                                 Paymentand Settlement of Purchase Price and Finance and Servicing Fee.

####  

##### (1)                                  Oneach Payment Date (a) Purchaser shall pay to the Seller Parent, for the benefitof the Sellers, the remaining Purchase Price for all Purchased Assets soldpursuant to this Agreement during the related Month (after deducting theaggregate amount of all Eligible Vendor Liability assumed by Purchaser duringsuch Month) and (b) the Sellers shall pay to Purchaser the Finance andServicing Fee earned in respect of such Month; provided, that thePurchase Price shall be payable on such Payment Date only to the extent thatPurchaser has retained and not paid to the Seller Parent, for the benefit ofthe Sellers, as of such Payment Date and after giving effect to the payment ofsuch Purchase Price, at least $750,000 (or such lesser amount as further setforth in Schedule II hereof) in aggregate deferred Purchase Price (suchretained amount, the “Deferred Purchase Price”).  Any Deferred Purchase Price retained byPurchaser shall be payable to the Seller Parent, for the benefit of theSellers, on the earliest to occur of (i) the Final Liquidation Date, (ii) thedate on which the Termination Option is consummated, and (iii) such earlierdate as determined by Purchaser in its sole discretion.

#####  

##### (2)                                  TheParties hereby agree that the remaining Purchase Price and the Finance andServicing Fee for any Month shall be netted and settled in U.S. dollars on theapplicable Payment Date.  In addition,any payment of Purchase Price shall be reconciled

 

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##### prior to paymentto deduct any other amounts then due and payable to Purchaser under anyTransaction Document.  Any net paymentsto the Seller Parent or Purchaser shall be made by wire transfer in immediatelyavailable funds to the account of either party as such party may indicate in awritten notice delivered to the other from time to time.

#####  

##### (3)                                  Notwithstandinganything to the contrary in this Section 3(h), but subject to theprovisions of Section 11, in the event that this Agreement is terminatedby Purchaser or the Seller Parent pursuant to Section 11, (a) the amountof the Deferred Purchase Price payable to the Sellers shall be retained byPurchaser so long as any amounts hereunder or under any other TransactionDocument may be due and owing to Purchaser, including, without limitation,pursuant to Sections 3, 8, 9, 11, or 14 and(b) the amount of the Deferred Purchase Price payable to the Sellers shall bereduced by any such amount due and owing to Purchaser hereunder or under anyother Transaction Document.  Any amountof the Deferred Purchase Price remaining after all amounts payable to Purchaserhereunder or under any other Transaction Document have been paid in full inimmediately available funds shall be promptly paid to the Seller Parent, forthe benefit of the Sellers.

#####  

##### (4)                                  Ifthe Seller Parent disagrees with any amounts retained or reduced by Purchaserpursuant to this Section 3(h), the Seller Parent may provide writtennotice to Purchaser setting forth the disputed amount and the reasons for suchdispute and Purchaser shall enter into good faith discussions with the SellerParent to resolve such dispute.

#####  

#### (i)                                     BacklogAccounts.  Upon the occurrence of theTermination Date, Purchaser, at its sole discretion, may elect to (i) purchaseany or all Backlog Accounts, in which case, any such Backlog Account shall bedeemed to be a Purchased Account and shall be subject to the terms hereofnotwithstanding the fact that such Account shall be created after theTermination Date and/or (ii) cancel any or all Backlog Purchase Orders or causeto be terminated any or all transaction authorizations (or the like) inconnection with any or all Backlog Purchase Orders.

####  

### 4.                                       Effectiveness;True Sale; Disclaimer of Liability. Each of the Sellers and Purchaser agree that the sale and assignment ofeach Purchased Asset pursuant hereto shall be effected immediately andautomatically without any further act or acknowledgement on the part of anySeller, Purchaser or any other Person, but subject to Section 5below.  Each of the Sellers and Purchaserfurther agree that the sale and assignment of the Purchased Assets pursuanthereto is a sale and assignment of the Purchased Assets for valuableconsideration and shall in no event be construed as a sale and assignment ofthe Purchased Assets for security. Purchaser shall have no obligation or liability with respect to anyContracts or underlying obligations relating to the Purchased Assets (exceptfor any Eligible Vendor Liability that are assumed by Purchaser pursuant to Section3(b) above), and Purchaser shall have no obligation or liability to anyobligor thereon or Account debtor or customer or other client of any Seller(including any obligations to perform any of the obligations of any Sellerunder or in respect of Contracts or other underlying obligations relating tothe Purchased Assets).  The assumption ofany such obligation or liability by Purchaser is expressly disclaimed.

 

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### 5.                                       ConditionsPrecedent.

###  

#### (a)                                  Effectivenessof this Agreement.  The effectivenessof this Agreement is subject to the satisfaction of all of the conditions setforth below:

####  

##### (1)                                  Purchasershall have received, in form and substance satisfactory to Purchaser, the dulyexecuted Transaction Documents and all other documents, instruments,information, agreements, notes, guarantees, certificates, orders,authorizations, financing statements, mortgages and other documents whichPurchaser may reasonably request.

#####  

##### (2)                                  Purchasershall have received, in form and substance satisfactory to Purchaser, officer’scertificates from each Seller relating to the organization, existence and goodstanding of each Seller, the authorization of the transactions contemplatedhereby and the incumbency of the officers of each Seller.

#####  

##### (3)                                  Therepresentations and warranties of such Seller set forth in Section 6shall be true and correct in all material respects as of the date hereof.  Purchaser shall have received an officer’scertificate from each Seller confirming the foregoing.

#####  

##### (4)                                  Purchasershall have received, in form and substance satisfactory to Purchaser, allinformation which Purchaser has reasonably requested to conduct its duediligence on the Sellers.

#####  

##### (5)                                  Purchasershall have received the results of lien searches for each of the Sellers in alljurisdictions as Purchaser shall reasonably request.

#####  

##### (6)                                  Exceptas set forth in the Schedule of Exceptions, there shall not be pending or, tothe best knowledge of any Seller, threatened, any litigation, action, charge,claim, demand, suit, proceeding, petition, governmental investigation, orarbitration by, against, or affecting any Seller or any of its subsidiaries orany property of any Seller or any of its subsidiaries that has not beendisclosed by the Sellers to Purchaser in writing, and there shall have occurredno development in any such action, charge, claim, demand, suit, proceeding,petition, governmental investigation, or arbitration that, in Purchaser’sopinion, would reasonably be expected to have a Material Adverse Effect.

#####  

##### (7)                                  Eachof the Sellers shall have received all requisite governmental and third partyapprovals and consents, if any, necessary for the Sellers to enter into andperform their obligations under this Agreement, all satisfactory in form andsubstance to Purchaser.

#####  

##### (8)                                  Purchasershall have a received an opinion of counsel of the Sellers in form andsubstance reasonably satisfactory to Purchaser.

#####  

#### (b)                                 Purchases.  The obligation of Purchaser to purchasePurchased Assets on any Purchase Date shall be subject to the satisfaction ofall of the conditions set forth below:

 

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##### (1)                                  Purchasershall have received a duly authenticated Purchase Supplement.

#####  

##### (2)                                  Therepresentations and warranties contained herein and in the other TransactionDocuments shall be true, correct and complete in all material respects on andas of the applicable Purchase Date (except to the extent such representationsand warranties specifically relate to an earlier date, in which case suchrepresentations and warranties shall have been true, correct and complete inall material respects on and as of such earlier date).

#####  

##### (3)                                  Eachof the Sellers shall have performed in all material respects all agreementsrequired of such Seller under this Agreement and the other TransactionDocuments.

#####  

##### (4)                                  Exceptas set forth in the Schedule of Exceptions, there shall not be pending or, tothe best knowledge of any Seller, threatened, any litigation, action, charge,claim, demand, suit, proceeding, petition, governmental investigation, orarbitration by, against, or affecting any Seller or any of its subsidiaries orany property of any Seller or any of its subsidiaries that has not beendisclosed by the Sellers in writing to Purchaser, and there shall have occurredno development in any such action, charge, claim, demand, suit, proceeding,petition, governmental investigation, or arbitration that, in Purchaser’scommercially reasonable judgment, would reasonably be expected to have aMaterial Adverse Effect.

#####  

##### (5)                                  Eachof the Sellers shall have received all requisite governmental and third partyapprovals and consents, if any, all reasonably satisfactory in form andsubstance to Purchaser.

#####  

### 6.                                       Representationsand Warranties of the Sellers.  Exceptas set forth in the Schedule of Exceptions, each of the Sellers represents andwarrants to Purchaser the following:

###  

#### (a)                                  CorporateExistence and Power.  Each of theSellers is a corporation duly incorporated, validly existing and in goodstanding under the laws of the state of its incorporation and has all corporatepower and all material governmental licenses, authorizations, consents andapprovals required to carry on its business in each jurisdiction in which itsbusiness is now conducted and each such Seller is duly qualified to do businessin, and is in good standing in, every other jurisdiction in which the nature ofits business requires it to be so qualified, except where the failure to havesuch items or to be so qualified or in good standing would not have a MaterialAdverse Effect.

####  

#### (b)                                 Authorizationand Contravention.  The execution,delivery and performance by each of the Sellers of this Agreement and the otherTransaction Documents to which it is a party is within its corporate powers,have been duly authorized by all necessary corporate action, require no actionby or in respect of, or filing with, any governmental entity or officialthereof (except for UCC financing statements), and do not contravene, orconstitute a default under, any provision of applicable law, rule or regulationor of the certificate of incorporation of such Seller or of any agreement,judgment, injunction, order, writ, decree or

 

16

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other instrument binding uponthe Seller or result in the creation or imposition of any adverse lien orencumbrance on the assets of any Seller.

####  

#### (c)                                  LegalProceedings.  There are no judgmentsoutstanding, against, or affecting any of the property of any Seller nor isthere any action, charge, claim, demand, suit, proceeding, petition,governmental investigation, or arbitration now pending or, to the best of eachSeller’s knowledge after due inquiry, threatened against or affecting a Selleror any of its property which could reasonably be expected to result in aMaterial Adverse Effect.  No Seller hasreceived any opinion or memorandum or legal advice from legal counsel to theeffect that a Seller is exposed to any liability or disadvantage which couldreasonably be expected to result in a Material Adverse Effect.  None of the Sellers is in violation of anymaterial order of any court, arbitrator or governmental entity.

####  

#### (d)                                 Enforceability.  Each of this Agreement and the otherTransaction Documents has been duly executed and delivered and constitutes thelegal, valid and binding obligation of each of the Sellers, enforceable againstit in accordance with its terms, subject to applicable bankruptcy, insolvency,moratorium or other similar laws affecting the rights of creditors generally.

####  

#### (e)                                  GoodTitle.  Each of the Sellers has goodand marketable title to the Purchased Assets, free and clear of all liens,security interests or restrictions on transfer. Upon each sale, Purchaser shall acquire a valid ownership interest ineach Purchased Asset free and clear of all liens, security interests orrestrictions on transfer (except as created by Purchaser).

####  

#### (f)                                    Locationof Books and Records.  All books andrecords pertaining to the Purchased Assets owned by any Seller shall bemaintained solely and exclusively at the addresses set forth on Schedule IIIhereof and no such books and records shall be moved or transferred withoutgiving Purchaser thirty (30) days’ prior written notice.

####  

#### (g)                                 NoDefault.  No Seller is in default inthe performance, observance, or fulfillment of any of the obligations,covenants, or conditions contained in any of such Seller’s obligations underany Contract or Purchased Asset, except for any such default that could notreasonably be expected to have a Material Adverse Effect, and no conditionexists that, with the giving of notice or the lapse of time or both, wouldconstitute such a default under any Contract or Purchased Asset.

####  

#### (h)                                 NoViolation of Laws.  No Seller is inviolation of any law, ordinance, rule, regulation, order, policy, guideline, orother requirement of any domestic or foreign government or any instrumentalityor agency thereof, having jurisdiction over the conduct of such Seller’sbusiness or the ownership of such Seller’s properties, including, withoutlimitation, any violation relating to any use, release, storage, transport, ordisposal of any hazardous material, which violation would subject any Seller orany of its officers to criminal liability or have a Material Adverse Effect ona Seller’s business or operations and no such violation has been alleged.

####  

#### (i)                                     Disclosure;Accuracy of Information.  Allinformation furnished to Purchaser by or on behalf of any Seller concerning thePurchased Assets or the transactions contemplated by the Transaction Documents,the proceeds thereof, each Seller’s financial

 

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#### condition or otherwise, is and will be complete,accurate, and correct in all material respects at the time the same isfurnished.  The representations and warrantiesof the Sellers contained in the Transaction Documents and the informationcontained in the other documents, certificates and written statements furnishedto Purchaser by or on behalf of any Seller for use in connection with thetransactions contemplated by this Agreement or any other Transaction Document,when taken together, do not contain any untrue statement of a material fact oromit to state a material fact necessary in order to make the statementscontained herein or therein not materially misleading in light of thecircumstances in which the same were made. There is no fact known to any Seller (other than matters of a generaleconomic nature) that has had, or could reasonably be expected to result in, aMaterial Adverse Effect and that has not been disclosed herein or in such otherdocuments, certificates and statements furnished to Purchaser for use inconnection with the transactions contemplated this Agreement or any otherTransaction Document.  Any projectionsfurnished to Purchaser by or on behalf of any Seller are based upon good faithestimates and assumptions believed by the Sellers to be reasonable at the timemade, it being recognized by Purchaser that such projections as to futureevents are not to be viewed as facts and that actual results during the periodor periods covered by any such projections may differ from the projectedresults.

####  

#### (j)                                     NoBulk Sales.  No transactioncontemplated hereby requires compliance with any bulk sales act or similar law.

####  

#### (k)                                  Preference;Voidability.  Purchaser has givenreasonably equivalent value to the applicable Seller in consideration for thesale to Purchaser of the Purchased Assets by the applicable Seller, and eachsuch sale has not been made for or on account of an antecedent debt owed by theapplicable Seller to Purchaser.

####  

#### (l)                                     Useof Proceeds.  No proceeds of any salehereunder or under any other Transaction Document shall be used by any Sellerto acquire any security in any transaction which is subject to Section 12 ofthe Exchange Act or for any purpose that violates any applicable law, rule orregulation, including Regulation U of the Federal Reserve Board.

####  

#### (m)                               PurchasedAssets from Entities in Good Standing. Each of the Purchased Assets are originated or created by a Seller (orsubsidiary or affiliate thereof) that is in good standing under the laws of thestate of its incorporation and every other jurisdiction in which the nature ofits business requires it to be so qualified, except where the failure to be soqualified or in good standing would not have a Material Adverse Effect.

####  

#### (n)                                 ContinuingRepresentations.  Allrepresentations, and warranties contained in this Agreement shall be true andcorrect as of the date hereof and shall be deemed continuing.

####  

### 7.                                       Covenantsof the Sellers.  At all times fromthe date hereof to the earlier of the Final Liquidation Date and the date onwhich the Termination Option is consummated:

###  

#### (a)                                  Conductof Business.  Each of the Sellersshall do all things necessary to remain duly incorporated, validly existing andin good standing as a domestic corporation in its jurisdiction of incorporationand maintain all requisite authority to conduct its business in eachjurisdiction in which its business is conducted except where the failure to doso would not have a

 

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material adverse effect on theability of the applicable Seller to perform their respective obligationshereunder.

####  

#### (b)                                 Compliancewith Laws.  Each of the Sellers shallcomply with all laws, rules, regulations, orders, writs, judgments,injunctions, decrees or awards to which it or its respective properties may besubject, except where the failure to do so would not have a Material AdverseEffect.

####  

#### (c)                                  Compliancewith Contracts.  Each of the Sellersshall timely and fully perform and comply with all material provisions,covenants and other promises required to be observed by the applicable Sellerunder the Contracts.

####  

#### (d)                                 SaleTreatment.  Each of the Sellers shalltreat the purchases under this Agreement for all purposes as sales and to theextent any such reporting is required, shall report the transactionscontemplated by this Agreement on all relevant books, records, financialstatements and other applicable documents as a sale of Purchased Assets to Purchaser.

####  

#### (e)                                  OwnershipInterest.  Each of the Sellers shall,at its expense, take all action necessary or desirable to establish andmaintain a valid and enforceable ownership interest in the Purchased Assets,free and clear of all liens, security interests or restrictions on transfer(except as created by Purchaser), in favor of Purchaser (or its assignee,including any Purchaser Senior Creditor), including taking such action toperfect, protect or more fully evidence the interest of Purchaser (or its assignee,including any Purchaser Senior Creditor), as Purchaser may reasonably request.

####  

#### (f)                                    NoSales, Liens, Etc.  No Seller shallsell, assign (by operation of law or otherwise) or otherwise dispose of, orcreate or suffer to exist any liens, security interests or restrictions ontransfer upon (including the filing of any financing statement) or with respectto (i) any of the Purchased Assets, or (ii) the Lockbox Account, except ascreated by Purchaser or as expressly set forth in the Lockbox Agreement.

####  

#### (g)                                 NoExtension or Amendment of Purchased Accounts.  No Seller shall extend, amend or otherwisemodify the terms of any Purchased Accounts, or amend, modify or waive terms orconditions of the Contract related thereto, which extension, amendment ormodification would materially adversely affect the collectibility thereof.

####  

#### (h)                                 Change in Payment Instructions; LockboxAccount.  No Seller shall make any change in itsinstructions to Account debtors regarding payments (including with respect toreceivables that are not Purchased Accounts) to be made to the Lockbox Account,unless such instructions are made at the written request of or with the writtenconsent of Purchaser.  No Seller shallmaintain any lockbox or other collection account other than the Lockbox Account.  If the Termination Date occurs, no Sellershall establish a new lockbox or other collection account or enter into a newlockbox agreement until the earliest to occur of (i) the Final LiquidationDate, (ii) the date on which the Termination Option is consummated, and (iii)such earlier date as determined by Purchaser in its sold discretion.

####  

#### (i)                                     Changein Name or Organization.  No Sellershall change its name, identity, type of organization, jurisdiction oforganization, organizational structure or the location

 

19

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#### of its chief executive office, unless at least thirty(30) days prior to the effective date of any such change the applicable Sellernotifies Purchaser of such change and delivers to Purchaser such documents,instruments or agreements, executed by the applicable Seller as are necessaryto reflect such change and to continue the perfection of Purchaser’s ownershipinterests in the Purchased Assets.

####  

#### (j)                                     Noticeof Change of Control.  The Seller Parentshall promptly (and in any event at least twenty (20) business days prior theeffectiveness of any such Change of Control) provide Purchaser with writtennotice of any proposed Change of Control; provided, that, in the eventsuch proposed Change of Control is subject to any confidentiality restrictions,Purchaser will agree to be bound by such restrictions.

####  

#### (k)                                  IntercreditorAgreement.  The Sellers herebycovenant and agree that prior to any Seller entering into any secured financingarrangement with a lender pursuant to which any Seller grants a securityinterest that covers assets of the same type as the Purchased Assets, theSellers shall deliver to Purchaser a duly executed Intercreditor Agreement orother agreement in form and substance reasonably acceptable to Purchaser.

####  

#### (l)                                     SalesTax.  The Sellers shall be solelyliable for the payment of, and shall promptly pay when due, all sales taxesresulting from the sales of Equipment giving rise to the Purchased Assets.  The Sellers shall be solely liable for thecost and expense of filing all such tax returns.

####  

(m)                               NoSales from Entities Not in Good Standing. The Sellers hereby covenant and agree that they shall not sell anyPurchased Assets to Purchaser that is originated or created by an entity that isnot in good standing good standing under the laws of the state of itsincorporation or any other jurisdiction in which the nature of its businessrequires it to be so qualified, except where the failure to be so qualified orin good standing would not have a Material Adverse Effect.

 

### 8.                                       Breachof Representation, Warranty or Covenant; Remedy.  If any Seller breaches any representation,warranty or covenant set forth in Section 6 or 7 hereof inrespect of any Purchased Account, the Sellers shall promptly upon Purchaser’swritten request (and, in any event, within five (5) business days after receiptthereof) purchase from Purchaser such Purchased Account at a repurchase priceequal to the outstanding face amount of such Purchased Account.

###  

### 9.                                       RepurchaseObligation.  The Sellers irrevocablyagree that, promptly upon Purchaser’s written request (and, in any event,within five (5) business days after receipt thereof), they shall purchase fromPurchaser:

###  

(a)                                  PurchasedAccounts at a purchase price equal to the outstanding face amount of suchPurchased Account if (i) the Account debtor thereunder was not an EligibleObligor on the date the Account was created or (ii) the Account was not anEligible Account on the date the Account was created or (iii) the purchase orderfor the related Equipment was not an Eligible Purchase Order on the date thepurchase order was made or (iv) such Account remains uncollected after onehundred and fifty (150) days from the date of invoice;

 

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(b)                                 vendorreceivables resulting from special bids or Equipment returns that the vendorrejects as non-valid claims, in each case, related to the Purchased Accounts,at a purchase price equal to the outstanding face amount thereof; or

 

(c)                                  debitbalances owing by any Equipment vendor in respect of any Eligible VendorLiability which remains uncollected after one hundred and fifty (150) days fromthe date of the Eligible Purchase Order, at a purchase price equal to theoutstanding face amount thereof; or

 

(d)                                 anyEquipment, the sale of which created a Purchased Account, returned by anAccount debtor that the Sellers or Purchaser are unable to return to a vendorat a purchase price equal to the outstanding face amount of the relatedEligible Vendor Liability;

 

provided,however, that no Seller shall have an obligation to repurchase anyPurchased Account or Equipment pursuant to this Section 9 until thedate which is one hundred and fifty (150) days after the invoice date for suchPurchased Account or Equipment; provided, further, that in nocase shall any Seller have any obligation to repurchase any Purchased Accountor Equipment pursuant to this Agreement solely as a result of the financialinability of the Account debtor to pay (as opposed to the unwillingness to pay)for the purchase of such Equipment. Purchaser shall give the Seller Parent thirty (30) days’ notice ofinvoices to be repurchased. Notwithstanding anything to the contrary contained herein, the Sellersshall be obligated to immediately repurchase (but in no event later thanfifteen (15) days after receipt of notice from Purchaser) any Purchased Accountpursuant to this Section 9 with respect to Accounts which, at thetime of the relevant transaction, any Seller knew, or reasonably should have known,that (x) the Account debtor thereunder was not an Eligible Obligor on the datethe Account was created or (y) the Account was not an Eligible Account on thedate the Account was created or (z) the purchase order for the relatedEquipment was not an Eligible Purchase Order on the date the purchase order wasissued.

 

### 10.                                 Grantof Security Interest. Notwithstanding the express intent of the parties hereto, if thepurchase and sale of the Purchased Assets under this Agreement is held ordeemed not to be a sale under applicable law or is held or deemed to be apledge of security for a loan, in such event, (a) each of the Sellersshall be deemed to have granted and does hereby grant to Purchaser a firstpriority security interest in the entire right, title and interest of suchSeller in, to and under all Purchased Assets and all proceeds thereof ascollateral security for all obligations of the Sellers under this Agreement andthe other Transaction Documents and (b) this Agreement shall constitute asecurity agreement under applicable law. Each of the Sellers hereby authorizes Purchaser to file any UCCfinancing statements or continuation statements in any jurisdiction asPurchaser may deem necessary or desirable in order to perfect and maintain theinterests of Purchaser in the Purchased Assets.

###  

### 11.                                 Termination.

###  

#### (a)                                  Term.  Subject to Sections 3(g), 11(b),11(c) and 11(d) hereof, the term of this Agreementshall be three (3) years from the date hereof; provided, however,that this Agreement shall automatically be extended for additional periods ofone year unless this Agreement has been terminated earlier as provided under Sections3(g) or 11.

 

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#### (b)                                 PurchaserTermination.  Purchaser shall havethe right to terminate this Agreement upon the occurrence of one of thefollowing events (and this Agreement shall automatically terminate upon theoccurrence of the event set forth in clause (3) below) (each, a “TerminationEvent”):

####  

##### (1)                                  thetermination of the MSA;

#####  

##### (2)                                  anySeller shall default in the performance of any of its material obligationsunder this Agreement or any of the other Transaction Documents and such defaultshall continue unremedied for thirty (30) days after the earlier of (x) writtennotice of such default has been delivered by Purchaser to the Seller Parent and(y) the date upon which any Seller has knowledge of such default;

#####  

##### (3)                                  aBankruptcy Event shall have occurred with respect to any Seller or is likely tooccur, in the reasonable judgment of Purchaser;

#####  

##### (4)                                  theSeller Parent provides notice to Purchaser of a proposed Change of Controlunder Section 7(j) hereto and Purchaser, within ten (10) businessdays of receipt of such notice, provides written notice to the Seller Parentthat it does not consent to the proposed Change of Control, in which case, thisAgreement will terminate upon the effective date of such proposed Change ofControl or such earlier date as agreed to between the Seller Parent andPurchaser.  The Seller Parent agrees toprovide Purchaser all information Purchaser shall reasonably request toevaluate such proposed Change of Control including, but not limited to,purchase agreements, financing commitments and financial projections;

#####  

##### (5)                                  anyevent or condition occurs which results in the acceleration of the maturity ofthe senior secured indebtedness of any Seller (except for the indebtedness setforth on the Schedule of Exceptions) or enables the holder or holders ofsuch indebtedness to accelerate the maturity thereof;

#####  

##### (6)                                  thePurchaser Senior Creditor terminates the Purchaser Senior Credit Agreement orany financing agreement or a default otherwise occurs thereunder which defaultis not cured or waived;

#####  

##### (7)                                  theSellers are unable to operate within the Fee Parameters as set forth in Section 3(g),and such inability continues for a period of fifteen (15) consecutive days;

#####  

##### (8)                                  theoccurrence of any of the following:  (i) theoccurrence of any event that has a Material Adverse Effect; or (ii) amaterial impairment of the ability of any Seller to perform under thisAgreement and the other Transaction Documents; or

#####  

##### (9)                                  anyof the representations or warranties made by any Seller in this Agreement orany other Transaction Document shall be untrue in any material respect whenmade or deemed made.

 

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#### (c)                                  Terminationby Prior Notice.  The Sellers, on theone hand, and Purchaser, on the other hand, shall each have the right toterminate this Agreement at any time for any reason upon one hundred twenty(120) days prior written notice to the other party.

####  

#### (d)                                 SellersTermination.  The Sellers shall havethe right to terminate this Agreement, without penalty under Section 11(e) orfurther notice, upon the occurrence of any of the following events:

####  

##### (1)                                  Purchasershall default in the performance of any of its material obligations under thisAgreement or the other Transaction Documents and such default shall continueunremedied for thirty (30) days after written notice of such default has beendelivered by the Seller Parent to Purchaser; or

#####  

##### (2)                                  aBankruptcy Event shall have occurred with respect to Purchaser.

#####  

#### (e)                                  TerminationFee.  In the event that thisAgreement is terminated (i) by Purchaser pursuant to Section 3(g) orSections 11(b)(1), (2), (3), (4), (7), (8) or(9) or (ii) by the Sellers pursuant to Section 11(c),the Sellers shall immediately pay Purchaser a termination fee of:  (x) $500,000 to the extent the TerminationDate occurs on or prior to the first anniversary of the date hereof, (y)$400,000 to the extent the Termination Date occurs after the first anniversaryof the date hereof and on or prior to the second anniversary of the datehereof, and (z) $300,000 to the extent the Termination Date occurs after thesecond anniversary of the date hereof and on or prior to the third anniversaryof the date hereof (such fee, the “Termination Fee”).

####  

#### (f)                                    Survivalof Terms.  The provisions of Sections3(d), 3(e), 3(f), 3(h), 4, 6, 8,9, 10, 11, 13, 14 and 15 of thisAgreement shall survive the termination of this Agreement.  The provisions of Section 7 ofthis Agreement shall survive the termination of this Agreement until theearlier of the Final Liquidation Date and the date on which the TerminationOption is consummated.

####  

#### (g)                                 TerminationOption.  Upon the occurrence of theTermination Date, Purchaser shall have no further obligation to purchaseAccounts or to provide any product financing, Vendor Services or otherwiseunder Section 3 of this Agreement. Subject to the remainder of this Section 11(g), the SellerParent shall have the option, at its sole discretion (such option, the “TerminationOption”) and at its sole expense, for ten (10) business days after thedate of the termination of this Agreement, to purchase from Purchaser (to theextent owned by Purchaser) all, but not less than all, of both of (i) theoutstanding Purchased Assets at a purchase price equal to the sum of (y) theaggregate Eligible Vendor Liability assumed by Purchaser in respect of suchPurchased Assets and (z) the Finance and Servicing Fee attributable to suchPurchased Assets, and (ii) the outstanding Accounts purchased by Purchaserunder the Asset Purchase Agreement at a purchase price equal to the book value(net of Reserves) of such outstanding Accounts less the amount of anyaccrued and unpaid Servicing Fee (as defined in the MSA).  For the avoidance of doubt, to the extentPurchaser elects to purchase a Backlog Account pursuant to Section 3(i) hereof,such Backlog Account shall be deemed to be a Purchased Account and shall bepurchased by the Seller Parent at the purchase price set forth in clause (i) aboveto the extent the Termination Option is exercised.  Purchaser’s

 

23

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#### obligation to consummate the Termination Option issubject to the satisfaction of the following conditions precedent:

####  

##### (1)                                  Purchasershall have received duly executed documents governing the Termination Option,which documents shall be in form and substance satisfactory to Purchaser in itssole discretion and in any event shall state that (y) any such purchase shallbe without recourse to Purchaser and (z) Purchaser disclaims any representationor warranty with respect to any such property, as well as the existence (ornot) of any liens, encumbrances or restrictions on transferability on or withrespect to such property in favor of any entity other than Purchaser or itslenders;

#####  

##### (2)                                  Purchasershall have received all necessaryconsents, payoff letters, lien releases and termination statements from its creditorspermitting it to consummate the Termination Option;

#####  

##### (3)                                  Purchasershall have received in immediately available funds the purchase price for theTermination Option and all fees and costs (including attorney’s fees) incurredby Purchaser in connection with the Termination Option;

#####  

##### (4)                                  no action, suit, or proceeding shall bepending or threatened before any court or quasi-judicial or administrativeagency of any federal, state, local, or foreign jurisdiction or before anyarbitrator wherein an unfavorable injunction, judgment, order, decree, ruling,or charge would (y) prevent consummation of the Termination Option or (z) causethe Termination Option to be rescinded following consummation; and

#####  

##### (5)                                  Purchaser shall have received such othercertificates, instruments, documents or agreements as it may reasonablyrequest.

#####  

### 12.                                 Joinder.  A subsidiary of the Seller Parent may join asa seller under this Agreement upon satisfaction of the following conditions(and upon the satisfaction of such conditions, such subsidiary shall be a “Seller”for all purposes under this Agreement and the Transaction Documents):

###  

#### (a)                                  TheTermination Date shall not have occurred.

####  

#### (b)                                 Purchasershall have received a joinder agreement in form and substance reasonablysatisfactory to Purchaser that is duly executed by such subsidiary and pursuantto which such subsidiary shall join as a party to each of the TransactionDocuments.

####  

#### (c)                                  Purchasershall have received the results of lien searches for such subsidiary in alljurisdictions as Purchaser shall reasonably request.

####  

#### (d)                                 Purchasershall have received an authorization from such subsidiary to file such UCCfinancing statements as Purchaser may deem necessary or desirable in order toperfect and maintain the interests of Purchaser in the Purchased Assets, andPurchaser shall have made such filings.

####  

#### (e)                                  Thereshall not be pending or, to the best knowledge of any Seller, threatened, anylitigation, action, charge, claim, demand, suit, proceeding, petition,

 

24

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#### governmental investigation, or arbitration by,against, or affecting any Seller or any of its subsidiaries or any property ofsuch Seller or any of its subsidiaries, and there shall have occurred nodevelopment in any such action, charge, claim, demand, suit, proceeding,petition, governmental investigation, or arbitration that, in each case, inPurchaser’s opinion, would reasonably be expected to have a Material AdverseEffect.

####  

#### (f)                                    Therepresentations and warranties contained herein and in the other TransactionDocuments shall be true, correct and complete in all material respects on andas of the joinder date (except to the extent such representations andwarranties specifically relate to an earlier date, in which case such representationsand warranties shall have been true, correct and complete in all materialrespects on and as of such earlier date).

####  

#### (g)                                 Eachof the Sellers shall have performed in all material respects all agreementsrequired of such Seller under this Agreement and the other TransactionDocuments.

####  

#### (h)                                 Suchsubsidiary shall have received all requisite governmental and third partyapprovals and consents, all satisfactory in form and substance to Purchaser.

####  

#### (i)                                     Purchasershall have a received an opinion of counsel of such subsidiary in form andsubstance reasonably satisfactory to Purchaser.

####  

### 13.                                 Administration.

###  

#### (a)                                  TheSeller Parent, as the agent for the Sellers, shall, from time to time, executeand deliver to Purchaser confirmatory schedules of the Purchased Accounts,together with one (1) copy of each invoice, acceptable evidence ofshipment and such other documentation and proofs of delivery as Purchaser mayreasonably require.  Each of the Sellersagrees to prepare and mail all invoices relating to all Purchased Accounts, butPurchaser may do so at Purchaser’s option. Each of the Sellers agrees to execute and deliver to Purchaser suchfurther instruments of assignment, financing statements, and instruments offurther assurance as Purchaser may reasonably require.  Each of the Sellers authorizes Purchaser tofile such UCC financing statements and continuation statements as Purchaser maydeem necessary or desirable in order to perfect and maintain the interests ofPurchaser in the Purchased Assets.  Eachof the Sellers further agrees that Purchaser may file this Agreement or a copyhereof as such UCC financing statement.

####  

#### (b)                                 Eachof the Sellers shall instruct all Account debtors, or cause all Account debtorsto be instructed, to cause all Collections and all other payments or othercollections in respect of receivables originated by any Seller that are notPurchased Accounts to be deposited directly to the Lockbox Account.

####  

#### (c)                                  Ifany remittances in respect of a Purchased Asset are made directly to any Selleror employees or agents of any Seller in their individual capacity and not asagent for Purchaser, then such party shall act as trustee of an express trustfor Purchaser’s benefit, hold the same as Purchaser’s property, and deliver thesame to Purchaser forthwith in kind. Purchaser and/or such designee as Purchaser may from time to timeappoint are hereby appointed each Seller’s attorney-in-fact to endorse suchSeller’s name on any and all checks or other forms of remittances received byPurchaser where such endorsement is required to effect

 

25

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#### collection and transmit notices to Account debtors, insuch Seller’s or Purchaser’s name, that amounts owing by them have beenassigned and are payable directly to Purchaser; this power, being coupled withan interest, is irrevocable.

####  

#### (d)                                 Eachof the Sellers shall supply Account debtors, in the format required by Accountdebtors, with all forms, documents, certificates, etc. that Account debtorsrequire to process the Purchased Accounts for payment.

####  

#### (e)                                  IfPurchaser requests, each Seller shall provide Purchaser with copies of all ofsuch Seller’s bills of lading or proofs of delivery and supplier invoices andreceiving evidence and of such Seller’s sales registry, sales journal, or otherinformation regarding sales, including customer open order reports.

####  

#### (f)                                    Eachof the Sellers agrees that from time to time, at its expense, it shall promptlyexecute and deliver all instruments and documents and take all actions as may benecessary or as Purchaser may reasonably request in order to perfect or protectthe interest of Purchaser in the Purchased Assets or to enable Purchaser toexercise or enforce any of its rights hereunder.

####  

#### (g)                                 Notwithstandinganything to the contrary in this Section 13, the parties heretoacknowledge that the Sellers shall service the Purchased Assets for Purchaseras further set forth in the MSA.  Theterms of the MSA shall govern to the extent there is any conflict between the termsof this Section 13 and the terms of the MSA.

####  

### 14.                                 Indemnification.  Without limiting any other rights that anysuch Person may have hereunder or under applicable law, the Sellers herebyindemnify and hold harmless Purchaser and its successors, transferees andassigns and all officers, directors, shareholders, controlling persons,employees and agents of any of the foregoing (each, an “Indemnified Party”),forthwith on demand, from and against any and all damages, losses, claims,liabilities and related costs and expenses, including reasonable attorneys’fees and disbursements (collectively, the “Indemnified Amounts”),arising out of or relating to this Agreement, the other Transaction Documentsor the ownership of any Purchased Asset, excluding, however,(x) Indemnified Amounts to the extent resulting from gross negligence orwillful misconduct on the part of such Indemnified Party (it being the intentof the Sellers to indemnify the Indemnified Parties for their negligence) and(y) the Account debtor’s failure to pay when due the unpaid balance of anyPurchased Account as a result of the financial inability of such Account debtorto pay or the insolvency thereof (except as otherwise specifically provided inthis Agreement including, without limitation, Sections 8 and 9hereof).  Without limiting the foregoing,the Sellers hereby indemnify and hold harmless each Indemnified Party forIndemnified Amounts arising out of or relating to:

###  

#### (a)                                  thebreach of any representation or warranty made by any Seller pursuant to or inconnection with this Agreement or any other Transaction Document;

####  

#### (b)                                 anyfailure of any Seller to perform any of its duties or obligations hereunder; orthe nonconformity of any Purchased Account or the related Contract orunderlying obligations with any applicable law, rule or regulation;

 

26

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#### (c)                                  anyclaim resulting from the sale of the Equipment or services related to anyPurchased Account or the furnishing of or failure to furnish such Equipment orservices; or any products liability claim arising out of or in connection withEquipment or services that are the subject of any Purchased Account;

####  

#### (d)                                 anytax, including sales tax (but excluding income tax of Purchaser), orgovernmental fee or charge, all interest and penalties thereon or with respectthereto, and all out-of-pocket costs and expenses, including the fees andexpenses of counsel in defending against the same, which may arise by reason ofthe purchase or ownership of any Purchased Account, including any additionaltaxes, penalties or any other amounts payable by Purchaser as a result of theSellers’ failure to properly file all tax returns in a timely manner or,notwithstanding any review of the tax returns by Purchaser, as a result of anerror or other noncompliance by the Sellers in the preparation of any such taxreturns;

####  

#### (e)                                  anycommingling of collections of the Purchased Accounts with funds of any Selleror any of its affiliates; and

####  

#### (f)                                    anyinvestigation, litigation or proceeding related to this Agreement or the use ofproceeds of purchases hereunder or the ownership of, or in respect of, anyPurchased Account or related Contract.

####  

### 15.                                 Legaland Financing Expenses.

###  

#### (a)                                  TheSellers shall immediately pay Purchaser all expenses (including reasonable attorney’sfees) incurred by Purchaser, directly or indirectly, in connection with orrelated to the negotiation, documentation, preparation, consummation andexecution of this Agreement and the other Transaction Documents up to anaggregate amount of $50,000.  Inaddition, the Sellers shall immediately pay Purchaser all expenses (includingattorney’s fees) incurred by Purchaser, directly or indirectly, in connectionwith or related to the administration, enforcement, ongoing maintenance andtermination of this Agreement and the other Transaction Documents.  Such amounts will be paid upon delivery ofinvoices detailing such expenses, by debiting any amounts payable to any Selleror, if no such amounts are payable a Seller, by the Sellers by wire transfer inimmediately available funds.  In theevent of a dispute among the parties hereto for which the parties hereto areunable to reach a mutually agreeable resolution in a reasonable matter of timeand fail to utilize arbitration in Section 16, the party that is unsuccessfulin such litigation will pay the legal costs for both parties.

####  

#### (b)                                 Inthe event Purchaser incurs, directly or indirectly, additional Costs notcontemplated in Annex A, the Sellers shall immediately pay Purchasersuch Costs upon notice by Purchaser; provided, that the Sellers shallnot have any obligation under this Section 15(b) to the extentsuch additional Costs arise solely from the gross negligence or willfulmisconduct of Purchaser as determined in an arbitration pursuant to Section 16or by a final judgment of a court of competent jurisdiction.

 

27

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### 16.                                 Miscellaneous.

###  

#### (a)                                  Amendment.  The terms of this Agreement shall not bealtered, modified, amended or supplemented in any manner whatsoever except bywritten instrument signed by all parties hereto and delivered by each party tothe other.

####  

#### (b)                                 NoWaiver; Cumulative Remedies.  Nofailure to exercise and no delay in exercising, on the part of Purchaser, anyright, remedy, power or privilege hereunder, shall operate as a waiver thereof;nor shall any single or partial exercise of any right, remedy, power orprivilege hereunder preclude any other or further exercise thereof or theexercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privilegesherein provided are cumulative and not exhaustive of any rights, remedies,powers and privilege provided by law.

####  

#### (c)                                  Notices.  Any written notice to be given under thisAgreement shall be in writing addressed to the respective party as follows (orsuch other address as may have been designated in a written notice to the otherparties):

####  

If to Purchaser:

 

New England Technology Finance, LLC

c/o Global Technology Finance LLC

1301 Dove Street, Suite 750

Newport Beach, CA 92660

Attention: Mr. Paul Stemler

Telephone No.:  (949) 955-1866

Facsimile No.:  (949) 955-1907

Email address:  pstemler@4gtf.com

 

with a copy to:

 

Latham & Watkins LLP

633 West Fifth Street, Suite 4000

Los Angeles, CA 90071-2007

Attention: Dominic Yoong

Telephone No.:  (213) 891-8704

Facsimile No.:  (213) 891-8763

Email address:  dominic.yoong@lw.com

 

If to a Seller:

 

c/o Dyntek, Inc.

19700 Fairchild Road, Suite 350

Irvine, CA 92612

Attention: Chief Financial Officer

Telephone No.:  (949) 955-0078

Facsimile No.:  (949) 955-0086

Email address:  Robert.Webber@dyntek.com

 

28

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with a copy to:

 

Stradling Yocca Carlson & Rauth

660 Newport Center Drive, Suite 1600

Newport Beach, California 92660

Attention: Christopher D. Ivey

Telephone No.:  (949) 725-4000

Facsimile No.:  (949) 823-5121

Email address:  civey@SYCR.com

 

All written notices will be personally served,telecopied, emailed or sent by overnight courier service or United States mailand will be deemed to have been given:  (i) ifdelivered in person, when delivered; (ii) if delivered by telecopy, on thedate of transmission if transmitted on a business day before 4:00 p.m.(New York, New York time) or, if not, on the next succeeding business day; (iii) ifdelivered by overnight courier, when delivered; (iv) if emailed, whenreceived; or (v) if by United States mail, four (4) business daysafter depositing the same in the United States mail, postage prepaid andproperly addressed.

 

#### (d)                                 Assignment.  This Agreement may not be assigned by anySeller without Purchaser’s prior written consent.  Each of the Sellers acknowledges and agreesthat Purchaser may assign as collateral its right, title and interest in thisAgreement and the other Transaction Documents to its lenders or factors,including the Purchaser Senior Creditor.

####  

#### (e)                                  BindingEffect.  This Agreement shall inureto the benefit of and be binding upon the parties hereto and their respectivesuccessors and permitted assigns.  ThePurchaser Senior Creditor is intended by the parties hereto to be a third-partybeneficiary of this Agreement.

####  

#### (f)                                    EntireAgreement.  This Agreement, togetherwith any and all other Transaction Documents, constitute the final and entireagreement among the parties hereto and supersedes any and all priorcommitments, agreements, representations, and understandings, whether writtenor oral, relating to the subject matter hereof and may not be contradicted orvaried by evidence of prior, contemporaneous, or subsequent oral agreements ordiscussions of the parties hereto.

####  

#### (g)                                 GoverningLaw.  THIS AGREEMENT SHALL BECONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORKAPPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO THECONFLICT OF LAWS PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAWOTHER THAN THE LAW OF THE STATE OF NEW YORK.

####  

#### (h)                                 DisputeResolution.  Except where injunctiverelief is sought, in the event of a dispute between the parties for which theparties are unable to reach a mutually agreeable resolution in a reasonablematter of time, the dispute shall be submitted to arbitration under thecommercial arbitration rules of the American Arbitration Association thenin effect.  There shall be a panel ofthree arbitrators mutually agreed to by the parties (each party selecting onearbitrator and the two arbitrators then selecting a third arbitrator); eacharbitrator shall have experience in and understanding of the subject matter ofthe controversy.  The hearing shall be

 

29

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#### held at a mutually acceptable geographic location andshall be no more than five (5) days in duration.  After the hearing, the panel shall decide thecontroversy and render a written decision setting forth the issues adjudicated,the resolution thereof and the reasons for the award.  Such decision shall be binding on allparties.  Payment of the expenses ofarbitration, including the fee of the arbitrators, shall be assessed by thepanel based on the extent to which each party prevails.

####  

#### (i)                                     SUBMISSIONTO JURISDICTION.  SUBJECT TO SECTION 16(h),EACH OF THE SELLERS HEREBY CONSENTS TO THE JURISDICTION OF ANY LOCAL, STATE, ORFEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW YORK, THE STATE OF NEWYORK.  IF ANY SELLER PRESENTLY IS, OR INTHE FUTURE BECOMES, A NONRESIDENT OF THE STATE OF NEW YORK, SUCH SELLER HEREBYWAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICEOF PROCESS MAY BE MADE UPON SUCH SELLER BY CERTIFIED OR REGISTERED MAIL,RETURN RECEIPT REQUESTED, DIRECTED TO SUCH SELLER, AT THE ADDRESS OF SUCHSELLER OR THE SELLER PARENT APPEARING IN PURCHASER’S RECORDS AND SERVICE SOMADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED ASAFORESAID.

####  

#### (j)                                     WAIVEROF JURY TRIAL.  SUBJECT TO SECTION 16(h),EACH OF THE SELLERS AND PURCHASER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO AJURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THISAGREEMENT OR ANY OTHER TRANSACTION DOCUMENTS EXECUTED IN CONNECTION WITH THISAGREEMENT OR ANY DEALINGS BETWEEN THE SELLERS AND PURCHASER RELATING TO THESUBJECT MATTER OF THIS TRANSACTION AND THE BUSINESS RELATIONSHIP THAT IS BEINGESTABLISHED.  THE SELLERS AND PURCHASEREACH ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO ABUSINESS RELATIONSHIP, THAT EACH OF THE SELLERS AND PURCHASER HAS ALREADYRELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH OF THESELLERS AND PURCHASER WILL CONTINUE TO RELY ON THIS WAIVER IN ANY RELATEDFUTURE DEALINGS BETWEEN EACH SELLER AND PURCHASER.  THE SELLERS AND PURCHASER FURTHER WARRANT ANDREPRESENT THAT THEY EACH KNOWINGLY AND VOLUNTARILY WAIVE THEIR RESPECTIVE JURYTRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

####  

#### (k)                                  Headings.  Section headings herein are includedherein for convenience of reference only and shall not constitute a part hereoffor any other purpose or be given any substantive effect.

####  

#### (l)                                     Severabilityof Provisions.  In the event that anyprovision of this Agreement is deemed to be invalid by reason of the operationof any law or by reason of the interpretation placed thereon by any court, thisAgreement shall be construed as not containing such provision, the invalidityof such provision will not affect the validity of any other provision of thisAgreement and all other provisions of this Agreement which are otherwise lawfuland valid shall remain in full force and effect.

####  

#### (m)                               Counterparts.  This Agreement may be executed in multiplecounterparts, each of which shall be deemed to be an original, and all of whichtogether shall constitute one

 

30

----

 

#### and the same instrument.  Delivery of an executed counterpart of thisAgreement by facsimile or electronic mail shall be equally as effective as deliveryof an original executed counterpart of this Agreement.

####  

#### (n)                                 Setoff.  Each of the Sellers hereby agrees thatPurchaser is authorized at any time or from time to time, upon ten (10) businessdays written notice to the Seller Parent (or one (1) business day noticeif the Termination Date has occurred), to setoff and to appropriate and applyany and all amounts held by Purchaser for the account of the Sellers(including, without limitation, any Deferred Purchase Price or Management Fee)against and on account of any amounts due and owing to Purchaser by any Sellerat any time, including, without limitation, amounts due and owing to Purchaserpursuant to Sections 3(d), 8, 9 or 14 of thisAgreement or otherwise under the other Transaction Documents.

####  

#### (o)                                 Jointand Several Liability.  Each of theSellers hereby agree that the obligations of the Sellers under this Agreementand the other Transaction Documents shall be joint and several and shall, tothe fullest extent permitted by law, be unconditional irrespective of (i) thevalidity or enforceability, avoidance or subordination of the obligations ofthe other Sellers or of any document evidencing all or any part of theobligations of the other Sellers, (ii) the absence of any attempt tocollect the obligations from the other Sellers or any other security therefor,or the absence of any other action to enforce the same, (iii) the waiver,consent, extension, forbearance or granting of any indulgence by Purchaser withrespect to the obligations of the other Sellers, or any part thereof, or anyother agreement now or hereafter executed by the other Sellers and delivered toPurchaser, (iv) the failure by Purchaser to take any steps to perfect andmaintain its interests in, or to preserve its rights to, any security for theobligations of the other Sellers or any Purchased Asset, or (v) any othercircumstances which might constitute a legal or equitable discharge or defenseof a Seller.  With respect to each Seller’sobligations arising as a result of the joint and several liability of theSellers under the Transaction Documents, each Seller hereby waives, until theearlier of the Final Liquidation Date and the date on which the TerminationOption is consummated, any right to enforce any right of subrogation or any remedywhich Purchaser now has or may hereafter have against such Seller, any endorseror any guarantor of all or any part of the obligations, and any benefit of, andany right to participate in, any security or collateral given to Purchaser tosecure payment of the obligations or any other liability of the Sellers toPurchaser.  Purchaser may proceeddirectly and at once, without notice, against any Seller to collect and recoverthe full amount, or any portion of the obligations, without first proceedingagainst any other Seller or any other Person, or against any security orcollateral for the obligations.  EachSeller consents and agrees that Purchaser shall be under no obligation tomarshal any assets in favor of such Seller or against or in payment of any orall of the obligations.

####  

#### (p)                                 Agencyof the Seller Parent.  Each of theSellers appoints the Seller Parent as its agent for all purposes relevant tothis Agreement and the other Transaction Documents, including, withoutlimitation, the giving and receipt of notices and the execution and delivery ofall documents, instruments and certificates contemplated herein and therein andall modifications hereto and thereto. Any acknowledgment, consent, direction, certification or other actionwhich might otherwise be valid or effective only if given or taken by all ofthe Sellers acting singly or jointly, or both, shall be valid and effective ifgiven or taken only by the Seller Parent, whether or not any of the otherSellers joins therein.

 

(*Signature Pages Follow*)

 

31

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IN WITNESS WHEREOF, the Sellers and Purchaser havecaused this Asset Purchase and Liability Assumption Agreement to be executed bytheir respective duly authorized officers as of the day first written above.

 
| ** ** | **SELLERS:**                          |
|------------|---------------------------------------|
|       |                                  |
|       | DYNTEK,  INC.                         |
|       |                                  |
|       |                                  |
|       | By                                    |   |   |
|       | Name:                                 |
|       | Title:                                |
|       |                                  |
|       |                                  |
|       | DYNTEK  SERVICES, INC.                |
|       |                                  |
|       |                                  |
|       | By                                    |   |   |
|       | Name:                                 |
|       | Title:                                |
|       |                                  |
|       |                                  |
| ** ** | **PURCHASER:**                        |
|       |                                  |
|       |                                  |
|       | NEW  ENGLAND TECHNOLOGY FINANCE,  LLC |
|       |                                  |
|       |                                  |
|       | By                                    |   |   |
|       | Name:                                 |
|       | Title:                                |

 

----

 

**SCHEDULE I**

 

----

 

**SCHEDULE II**

 

----

 

**SCHEDULE III**

 

**ADDRESSE(S)**

 

19700Fairchild Road, Suite 350

Irvine, CA 92612

 

24401 Halstead Road

Farmington Hills, Michigan 48335

 

----

 

**SCHEDULE IV**

 

**SCHEDULE OF EXCEPTIONS**

 

----

 

**Annex A**

 
| **Income Statement:**               | ** ** | **MTD** | ** ** | **PY MTD** | ** ** | **YTD** | ** ** | **PY YTD** | ** ** |
|-------------------------------------|------------|---------|------------|------------|------------|---------|------------|------------|------------|
|                                |       |    |       |       |       |    |       |       |       |
| **Revenue**                         |       |    |       |       |       |    |       |       |       |
| Sales  Revenue                      |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| Integration  Sales                  |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| Sales -  Freight                    |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| Sales  Discounts                    |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| Vendor  Commissions                 |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| Sales -  Restock Charge             |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| Sales  Returns Reserve Provision    |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| Software  Sales                     |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| Customer  Cash Discounts            |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
|                                |       |    |       |       |       |    |       |       |       |
| Total Revenue                       |       |    |       |       |       |    |       |       |       |
| **Cost of  Goods**                  |       |    |       |       |       |    |       |       |       |
| Cost of Goods                       |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| Integration  Cost of Goods          |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| COGS -  Freight                     |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| COGS - Price  Rebates (Special Bid) |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| COGS -  Invoice to PO Cost Variance |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| COGS -  Invoice to PO Qty Variance  |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| COGS - IC  Cost Adjustments         |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| COGS - IC  Cogs Adjustments         |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| COGS -  Purchase Price Variance     |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| COGS - Do  Adjustment               |       | xxx     |       | xxx        |       | xxx     |       | Xxx        |       |
| COGS -  Physical to Perpetual       |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| Restocking  Charge                  |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| Vendor AR  Reserve Provision        |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| Inventory  Reserve Provision        |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| Inventory  Cost Adj                 |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| Price  Protection Claimed           |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| Vendor  Rebates (MDF)               |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| Freight In                          |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| Freight Out                         |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| DO Freight  Out                     |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| Software  COGS                      |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| Software  Rebates                   |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| Credit Card  Expense                |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| Property &  Other Taxes    |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| General  Insurance                  |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
| Bank Fees                           |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
|                                |       |    |       |       |       |    |       |       |       |
| Total Cost  of Goods Sold           |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |
|                                |       |    |       |       |       |    |       |       |       |
| Gross Profit                        |       | xxx     |       | xxx        |       | xxx     |       | xxx        |       |

 
| **Balance Sheet**                             | ** ** | **Current Year** | ** ** | **Prior Month** | ** ** | **Prior Year** | ** ** |
|-----------------------------------------------|------------|------------------|------------|-----------------|------------|----------------|------------|
|                                          |       |             |       |            |       |           |       |
| **Assets**                                    |       |             |       |            |       |           |       |
| Cash — Main  Account                     |       | xxx              |       | xxx             |       | xxx            |       |
| Controlled  Disbursements                     |       | xxx              |       | xxx             |       | xxx            |       |
| Cash — COD                               |       | xxx              |       | xxx             |       | xxx            |       |
| Total Cash                                    |       |             |       |            |       |           |       |
|                                          |       |             |       |            |       |           |       |
| Accounts  Receivable                          |       | xxx              |       | xxx             |       | xxx            |       |
| Accounts  Receivable — COD               |       | xxx              |       | xxx             |       | xxx            |       |
| AR Refund  Clearing                           |       | xxx              |       | xxx             |       | xxx            |       |
| Accrued  Revenue                              |       | xxx              |       | xxx             |       | xxx            |       |
| Allowance  for Sales Returns                  |       | xxx              |       | xxx             |       | xxx            |       |
| Total Trade A/R                               |       |             |       |            |       |           |       |
|                                          |       |             |       |            |       |           |       |
| Inventory                                     |       | xxx              |       | xxx             |       | xxx            |       |
| Drop Ship  Inventory                          |       | xxx              |       | xxx             |       | xxx            |       |
| Non-Stock  Inventory                          |       | xxx              |       | xxx             |       | xxx            |       |
| Inventory in  Transit                         |       | xxx              |       | xxx             |       | xxx            |       |
| Reserve for  Inventory Shrinkage              |       | xxx              |       | xxx             |       | xxx            |       |
| Total Inventory                               |       |             |       |            |       |           |       |
| **Liabilities**                               |       |             |       |            |       |           |       |
| Merchandise  Accounts Payable                 |       | xxx              |       | xxx             |       | xxx            |       |
| Accrued  Accounts Payable                     |       | xxx              |       | xxx             |       | xxx            |       |
| Accounts  Payable — TBR                  |       | xxx              |       | xxx             |       | xxx            |       |
| Accounts  Payable — EDI Merch Uncst      |       | xxx              |       | xxx             |       | xxx            |       |
| Merchandise  Received                         |       | xxx              |       | xxx             |       | xxx            |       |
| Total Payables                                |       |             |       |            |       |           |       |
| Vendor  Receivables (Special Bid)             |       | xxx              |       | xxx             |       | xxx            |       |
| Vendor  Receivables (Returns)                 |       | xxx              |       | xxx             |       | xxx            |       |
| Vendor  Clearing                              |       | xxx              |       | xxx             |       | xxx            |       |
| Vendor  Receivables (MDF)                     |       | xxx              |       | xxx             |       | xxx            |       |
| Vendor  Receivable (Price Protection)         |       | xxx              |       | xxx             |       | xxx            |       |
| Total Vendor A/R                              |       |             |       |            |       |           |       |
| IBM  Floorplan Accounts Payable               |       | xxx              |       | xxx             |       | xxx            |       |
| IBM Working  Capital                          |       | xxx              |       | xxx             |       | xxx            |       |
| IBM Uncosted  Floorplan Payments              |       | xxx              |       | xxx             |       | xxx            |       |
| Wire  Transfers — lender                 |       | xxx              |       | xxx             |       | xxx            |       |
| Uncosted  Credits — lender               |       |             |       |            |       |           |       |
| Total Floorplan Financing                     |       |             |       |            |       | xxx            |       |
| Sales Tax  Payable — all states required |       | xxx              |       | xxx             |       | xxx            |       |
|                                          |       |             |       |            |       |           |       |
| Intercompany  with SPF                        |       | xxx              |       | xxx             |       | xxx            |       |
|                                          |       |             |       |            |       |           |       |
| Year to date  Income                          |       | xxx              |       | xxx             |       | xxx            |       |
| Distributions                                 |       | xxx              |       | xxx             |       | xxx            |       |

 

Note — All balance sheet accounts will need to be supported by areconciliation on Monthly basis with the exception of:  Cash — Main (daily); Inventory (daily); DOInventory (daily).

 

Note — Bank Fees are fees related to cash accounts, lockbox accountsand other cash management services provided by the Lockbox Bank.

 

----

 

**Annex B**

 

**CUSTOMER STOCKINGLETTER**

 

Date xxx

 

[Seller]

[Address]

[Address]

 

Attention: [                   ],Vice President of Finance

 

Subject: **CUSTOMER STOCKING PROGRAM –PO#xxxxxx-xx OE# xxxxxx-xx**

 

Dear [          ]:

 

[xxx Corp.] hereby agrees that each product covered by the balance ofthe above referenced purchase order which [Seller] on or before [xxx date],identifies through labeling or otherwise, as belonging to [xxx Corp.] shall,effective of the time of such identification, be deemed to have been dulyshipped to [xxx Corp.], FOB [Seller], [ADDRESS], and that title to, and theresult of loss with respect to, such product shall pass to [xxx Corp.] at thattime.  [Seller] will invoice [xxx Corp.]for such product at the time of identification and payment shall be made net 30days after invoice. Such payment and timeliness of payment is guaranteed by[xxx Corp.].

 

[xxx Corp ] further requests that [Seller] warehouse such product for[xxx Corp.] until such date as [xxx Corp.] shall designate, but in no eventbeyond [xxx date], and agrees to pay (Terms net 30 days) [Seller] for suchwarehousing services at the rate of $xxx [must be at least $1.00] per palletper month, the charges for which services are not included in, are in additionto, the product shown on the above-referenced invoice(s).  At this date, [Seller] will ship theinventory to [xxx Corp.] at the following address.  Notwithstanding such warehousing by [Seller],[xxx Corp.] shall be responsible for insuring the product from the time ofidentification forward.

 

The above is agreed to and accepted by:

 
|                                                                                                                                       |   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Authorized Signature                                                                                                                       |
|                                                                                                                                       |
|                                                                                                                                       |
|                                                                                                                                       |   |
| Title                                                                                                                                      |
|                                                                                                                                       |
|                                                                                                                                       |   |
| Date                                                                                                                                       |
|                                                                                                                                       |
| cc.                                                                                                                                        |
| [                    ],  CFO           |
| [                    ],  VP Operations |
|                                                                                                                                            |        |  |  |

 

 

NOTES:

Letter must be on End Customer Letterhead;

Letter must be executed by the customer;

PO must accompany letter;

If no PO available, the exact amount of the order must be indicated infirst sentence and a supporting document (detail of order / salesacknowledgement) must accompany the letter.

 

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