**Exhibit 10.6**

 

THE SECURITIES REPRESENTEDBY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, EXCHANGED, HYPOTHECATEDOR TRANSFERRED IN ANY MANNER EXCEPT PURSUANT TO A REGISTRATION OR AN EXEMPTIONFROM SUCH REGISTRATION.

 

PURCHASE WARRANT

 

Issued to:

 

[            ]

 

Exercisable to Purchase

 

500,000 Shares of Common Stock

 

 

of

 

 

**DYNTEK, INC.**

 

 

Void after October 26, 2015

 

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This is to certify that, inexchange for the Warrantholder’s commitment to purchase one or more of theCompany’s Secured Promissory Notes, due December 31, 2006, in the originalaggregate principal amount of up to $1,250,000, and for other good and valuableconsideration, the receipt and sufficiency of which is hereby acknowledged, andsubject to the terms and conditions set forth below, the Warrantholder isentitled to purchase, and the Company promises and agrees to sell and issue tothe Warrantholder, at any time on or after October 26, 2005 (the “EffectiveDate”), pursuant to Section 2 hereof, up to 500,000 shares of the Company’sCommon Stock at the Exercise Price.

 

This Warrant certificate isissued subject to the following terms and conditions:

 

# 1.             Definitions of Certain Terms.  Except as may be otherwise clearly requiredby the context, the following terms have the following meanings:

 

## (a)           “Adjustment Threshold” will initially be thegreater of $0.10 per share or the price per Share at which the Common Stock issold in the Rights Offering, subject to adjustment from time to time pursuantto Section 3(c) of this Agreement. If the Company has not completed or does not complete the RightsOffering, the Adjustment Threshold will be $0.10 per share, subject toadjustment as provided herein.

 

## (b)           “Common Stock” means the common stock, $0.0001 parvalue, of the Company.

 

## (c)           “Company” means DynTek, Inc., a Delawarecorporation.

 

## (d)           “Effective Date” has the meaning set forth in thepreamble to this Agreement.

 

## (e)           “Exercise Period” means the period of timecommencing on the Effective Date and ending at 5 p.m. Pacific Time on thetenth anniversary of the date on which the Warrant is first exercisable.

 

## (f)            “Exercise Price” means the price at which theWarrantholder may purchase one Share upon exercise of Warrants as determinedfrom time to time pursuant to the provisions hereof.  The initial Exercise Price will be thegreater of $0.10 per Share or the price per Share at which the Common Stock issold in the Rights Offering.  If theCompany has not completed or does not complete the Rights Offering, theExercise Price will be $0.10 per share, subject to adjustment as providedherein.

 

## (g)           “Rights Offering” means a proposed rights offeringpursuant to which the Company will distribute pro rata to the record holders ofits Common Stock non-transferable rights to subscribe for and purchase sharesof Common Stock.

 

## (h)           “Securities Act” means the Securities Act of 1933,as amended.

 

## (i)            “Securities Exchange Act” means the SecuritiesExchange Act of 1934, as amended.

 

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## (j)            “Share” or “Shares” refers to one or moreshares of Common Stock issuable on exercise of the Warrant.

 

## (k)           “Warrant” means the warrant evidenced by thiscertificate or any certificate obtained upon transfer or partial exercise ofthe Warrant evidenced by any such certificate.

 

## (l)            “Warrants” means all warrants issued pursuant tothe Note and Warrant Purchase Agreement by and among the Warrantholders and theCompany.

 

## (m)          “Warrantholder” means a record holder of the Warrantor Shares.  The initial Warrantholder isset forth on the cover page of this Warrant.

 

# 2.             Exercise of Warrants.  All or any part of the Warrant may beexercised during the Exercise Period by surrendering the Warrant, together withappropriate instructions, duly executed by the Warrantholder or by its dulyauthorized attorney, and delivery of payment in full by the Warrantholder, inlawful money of the United States, of the Exercise Price payable with respectto the Shares being purchased at the office of the Company, 19700 FairchildRoad, Suite 230, Irvine, California 92612, Attention: Chief FinancialOfficer, or at such other office or agency as the Company may designate.  The date on which such instructions and theExercise Price are received by the Company shall be the date of exercise.  Upon receipt of notice of exercise and theExercise Price, the Company shall immediately instruct its transfer agent toprepare certificates for the Shares to be received by the Warrantholder andshall use commercially reasonable efforts to cause such certificates to beprepared and delivered to the Warrantholder in accordance with theWarrantholder’s instructions within three business days after the date ofexercise.  If the Warrantholder shallprovide the Company with an opinion of counsel to the effect that the legendset forth on the face of this Warrant is not required, such certificates shallnot bear a legend with respect to the Securities Act.

 

If fewer than all the Sharespurchasable under the Warrant are purchased, the Company will, upon suchpartial exercise, execute and deliver to the Warrantholder a new Warrantcertificate (dated the date hereof), in form and tenor similar to this Warrantcertificate, evidencing that portion of the Warrant not exercised.  The Shares to be obtained on exercise of theWarrant will be deemed to have been issued, and any person exercising theWarrants will be deemed to have become a holder of record of those Shares, asof the date of the payment of the Exercise Price.

 

# 3.             Adjustments in Certain Events.  The number, class, and price of the Sharesfor which this Warrant is exercisable are subject to adjustment from time totime upon the happening of certain events as follows:

 

## (a)           If the outstanding shares of the Company’s Common Stockare divided into a greater number of shares, the Company sells or issues sharesof Common Stock (other than Excluded Stock) in the Rights Offering or adividend in stock is paid on the Common Stock, the number of Shares for whichthe Warrant is then exercisable will be proportionately increased and theExercise Price will be proportionately reduced; and,

 

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## conversely, if theoutstanding shares of Common Stock are combined into a smaller number of sharesof Common Stock, the number of Shares for which the Warrant is then exercisablewill be proportionately reduced and the Exercise Price will be proportionatelyincreased.  The increases and reductionsprovided for in this subsection 3(a) will be made with the intentand, as nearly as practicable, the effect that neither the percentage of thetotal equity of the Company obtainable on exercise of the Warrants nor theprice payable for such percentage upon such exercise will be affected by anyevent described in this subsection 3(a).

 

## (b)           In case of any change in the Common Stock through merger,consolidation, reclassification, reorganization, partial or completeliquidation, purchase of substantially all the assets of the Company, or otherchange in the capital structure of the Company, then, as a condition of suchchange, lawful and adequate provision will be made so that the holder of thisWarrant will have the right thereafter to receive upon the exercise of theWarrant the kind and amount of shares of stock or other securities or propertyto which he would have been entitled if, immediately prior to such event, hehad held the number of Shares obtainable upon the exercise of the Warrant.  In any such case, appropriate adjustment willbe made in the application of the provisions set forth herein with respect tothe rights and interest thereafter of the Warrantholder, to the end that theprovisions set forth herein will thereafter be applicable, as nearly asreasonably may be, in relation to any shares of stock or other propertythereafter deliverable upon the exercise of the Warrant.  The Company will not permit any change in itscapital structure to occur unless the issuer of the shares of stock or othersecurities to be received by the holder of this Warrant, if not the Company,agrees to be bound by and comply with the provisions of this Warrant.

 

## (c)           Subsequent to the effective date, if the Company shallsell or issue shares of Common Stock (other than Excluded Stock, as definedhereinafter, or shares issued pursuant to the Rights Offering) for aconsideration per share less than the Adjustment Threshold, then, upon suchsale or issuance, the Exercise Price shall be adjusted so that the ExercisePrice shall equal the price determined by dividing the aggregate amount ofconsideration, if any, received, or to be received, by the Company upon suchissuance or sale by the number of shares sold, issued or issuable.  Upon any adjustment of the Exercise Pricepursuant to this Section 3(c), the adjusted Exercise Price shall be theAdjustment Threshold with respect to future issuances by the Company after anysuch adjustment.

 

### (i)            For purposes of this Section 3(c),the consideration received by the Company for the issue of any shares of CommonStock shall be computed as follows:

 

#### (A)          insofar as it consists of cash, at the aggregate amount ofcash received by the Company before deducting any reasonable discounts,commissions or other expenses allowed, paid or incurred by the Company for anyunderwriting or otherwise in connection with such issuance;

 

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#### (B)           insofar as it consists of property other than cash, at thefair market value thereof at the time of such issue, as determined in goodfaith by the Company’s Board of Directors; and

 

#### (C)           in the event that it consists of consideration coveringboth cash and property, aggregate value of all such consideration so received,computed as provided in clauses (A) and (B) above, as reasonablydetermined in good faith by the Company’s independent auditors.

 

### (ii)           For purposes of this Section 3(c), “Excluded Stock”shall mean (A) all shares issuable upon the exercise or conversion ofcurrently outstanding warrants, options, other rights to purchase Common Stockand convertible securities outstanding as of the Effective Date, (B) allshares issued or issuable pursuant to any incentive plan or arrangementapproved by the Board of Directors for the benefit of the Company’s employees,officers, directors or consultants or others with important businessrelationships with the Company; provided that the number of shares issued orissuable to officers and directors of the Company who are reporting personsunder Section 16 of the Securities Exchange Act under this subsection andafter the Effective Date shall not exceed the number of shares equal to fivepercent (5%) of the fully diluted outstanding shares of Common Stock of theCompany, calculated using the treasury stock method immediately prior to theissuance of such shares of Common Stock, in the aggregate, subject toadjustment for subdivisions and combinations and net of any repurchases of suchshares or cancellations or expirations of rights to purchase, and; providedfurther, that said limitation shall not apply if the transaction is unanimouslyapproved by the Board of Directors of the Company if a member of the Board ofDirectors has been nominated by [                      ]

 

### (iii)          In the event of any change in the Exercise Price as aresult of the issuance of such rights, warrants or options or such convertiblesecurities, the Exercise Price shall be recomputed to reflect such change, butno further adjustment shall be made for the actual issuance of Common Stock orany payment of such consideration upon the exercise of any such rights,warrants or options or the conversion of such securities.

 

### (iv)          Upon the expiration of any such rights, warrants or optionsor the termination of any such rights or convertible securities, the ExercisePrice, to the extent in any way affected by or computed using such rights,warrants or options or convertible securities, shall be recomputed to reflectthe issuance of only the number of shares of Common Stock actually issued uponthe exercise of such rights, warrants or options or upon the conversion of suchsecurities.

 

## (d)           For purposes of this Section 3, the sale or issuanceby the Company of rights, warrants or options to purchase Common Stock orsecurities convertible into Common Stock shall be deemed to be the sale orissuance of shares of Common Stock (in which event the subsequent exercisethereof shall not be deemed to be a separate sale or issuance for purposes ofthis Section 3), and the consideration therefor shall consist of theconsideration received by the Company upon issuance of such rights,

 

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## warrants, options orconvertible securities plus any consideration to be received upon the exerciseor conversion thereof.

 

## (e)           When any adjustment is required to be made in the numberof Shares or other securities or property purchasable upon exercise of theWarrant, the Company will promptly determine the new number of such Shares orother securities or property purchasable upon exercise of the Warrant and (i) prepareand retain on file a statement describing in reasonable detail the method usedin arriving at the new number of such Shares or other securities or propertypurchasable upon exercise of the Warrant and (ii) cause a copy of suchstatement to be mailed to the Warrantholder within thirty (30) days after thedate of the event giving rise to the adjustment.

 

## (f)            No fractional shares of Common Stock or other securitieswill be issued in connection with the exercise of the Warrant, but the Companywill pay, in lieu of fractional shares, a cash payment therefor on the basis ofthe mean between the bid and asked prices of the Common Stock in the over thecounter market or the closing price on a national securities exchange or Nasdaqon the day immediately prior to exercise.

 

## (g)           If securities of the Company or securities of anysubsidiary of the Company are distributed pro rata to holders of Common Stock(other than Shares issued pursuant to the Rights Offering), such number of suchsecurities will be distributed to the Warrantholder or his assignee uponexercise of this Warrant as the Warrantholder or assignee would have beenentitled to if the portion of the Warrant evidenced by this Warrant certificatehad been exercised prior to the record date for such distribution.  The provisions with respect to adjustment ofthe Common Stock provided in this Section 3 will also apply to thesecurities to which the Warrantholder or his assignee is entitled under thissubsection 3(g).

 

## (h)           In the event (i) the Company establishes a recorddate to determine the holders of any class of securities who are entitled toreceive any dividend or other distribution or (ii) there occurs any changein the Common Stock through merger, consolidation, reclassification,reorganization, partial or complete liquidation, purchase of substantially allof the assets of the Company or other change in the capital structure of theCompany, the Company shall give to the holder hereof a notice specifying (a) thedate of such record date for the purpose of such dividend or distribution and adescription of such dividend or distribution, (b) the date on which anysuch merger, consolidation, reclassification, reorganization, sale, liquidationor other change in the capital structure of the Company is expected to becomeeffective, and (c) the time, if any, that is to be fixed, as to when theholders of record of Common Stock (or other securities) shall be entitled toexchange their shares of Common Stock (or other securities) for securities orother property deliverable upon such merger, consolidation, reclassification,reorganization, sale, liquidation or other change in the capital structure ofthe Company.  Such written notice shallbe given to the holder of this Warrant at least ten (10) days prior to thedate specified in such notice on which any such action is to be taken.

 

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# 4.             Mandatory Registration.

 

## (a)           No later than fifteen days after the mailing of the RightsOffering materials to holders of the Company’s Common Stock, the Company shallfile with the Securities and Exchange Commission a Registration Statement on Form S-3meeting the requirements of the Securities Act registering (i) all Shareswhich may be acquired upon the exercise of the Warrants and (ii) allshares of Common Stock to be issued pursuant to the Rights Offering.  If Form S-3 is not available to theCompany at that time, then the Company will file a Registration Statement onsuch form as is then available to effect a registration with the Securities andExchange Commission.  The Company shalluse its best efforts to have the Registration Statement declared effectivewithin 90 days after it is filed.

 

## (b)           Within fifteen days following the earliest of (i) February 26,2005, if the Company has not consummated the Rights Offering by such date; (ii) thedate the Company determines it is unable to register the Warrants on the sameRegistration Statement with which the shares issued pursuant to the RightsOffering will be registered; or (ii) the date the Company abandons theRights Offering, the Company shall file a Registration Statement, on Form S-3or such other form as the Company is eligible to file, with the Securities andExchange Commission registering all Warrants. The Company shall use its best efforts to have the RegistrationStatement declared effective within 90 days after it is filed.

 

## (c)           Once the Registration Statement is declared effective bythe SEC, the Company will cause the Registration Statement to remain effectiveunder Rule 415 of the Securities Act until the earlier of (i) thedate all Warrants are exercised and converted into Shares or (ii) theexpiration of the Exercise Period.

 

# 5.             Reservation of Shares.  The Company agrees that the number of sharesof Common Stock or other securities sufficient to provide for the exercise ofthe Warrant upon the basis set forth above will at all times during the term ofthe Warrant be reserved for exercise.  Ifat any time the Company does not have a sufficient number of shares of CommonStock or other securities authorized to provide for the exercise of theWarrant, the Company shall take such actions as may be reasonably necessary toincrease the number of authorized shares of Common Stock or other securities toprovide for exercise of the Warrant.

 

# 6.             Validity of Shares.  All Shares or other securities delivered uponthe exercise of the Warrant will be duly and validly issued in accordance withtheir terms, and, in the case of capital stock, will, when issued and deliveredin accordance with their terms against payment therefor as provided in theWarrant, be fully paid and nonassessable, and the Company will pay alldocumentary and transfer taxes, if any, in respect of the original issuancethereof upon exercise of the Warrant.

 

# 7.             Transfer.  This Warrant may be freely sold, transferred,assigned or hypothecated by the Warrantholder. The Warrant may be divided or combined, upon

 

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# request to the Company bythe Warrantholder, into a certificate or certificates evidencing the sameaggregate number of Warrants.

 

# 8.             No Rights as a Stockholder.  Except as otherwise provided herein, theWarrantholder will not, by virtue of ownership of the Warrant, be entitled toany rights of a stockholder of the Company but will, upon written request tothe Company, be entitled to receive such quarterly or annual reports as theCompany distributes to its stockholders.

 

# 9.             Notice. Any notices required or permitted to be given under the terms of thisWarrant must be sent by certified or registered mail (return receipt requested)or delivered personally or by courier (including a recognized overnightdelivery service) or by facsimile and will be effective five (5) daysafter being placed in the mail, if mailed by regular U.S. mail, or uponreceipt, if delivered personally, by courier (including a recognized overnightdelivery service) or by facsimile, in each case addressed to a party.  The addresses for such communications are:

 

Ifto the Company:

 

ChiefFinancial Officer

DynTek, Inc.

19700Fairchild Road, Suite 230

Irvine,California 92612

Fax     (949)955-0086

 

If to a Warrantholder:  to the address set forth immediately belowthe Warrantholder’s name on the signature pages hereto.

 

Eachparty will provide written notice to the other parties of any change in itsaddress.

 

# 10.           Governing Law; Jurisdiction; Jury Trial Waiver.  This Warrant will be governed by andinterpreted in accordance with the laws of the State of California withoutregard to the principles of conflict of laws. The parties hereto hereby submit to the exclusive jurisdiction of theUnited States federal and state courts located in the County of Orange, Stateof California with respect to any dispute arising under this Warrant. EACHPARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT THAT IT MAY HAVE TO, AND AGREESNOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER ORIN CONNECTION HEREWITH.

 

# 11.           Entire Agreement. This Warrant, the exhibits and schedules hereto, and the documentsreferred to herein, constitute the entire agreement and understanding of theparties hereto with respect to the subject matter hereof, and supersede allprior and contemporaneous agreements and understandings, whether oral orwritten, between the parties hereto with respect to the subject matter hereof.

 

# 12.           Waiver; Consent. This Warrant may not be changed, amended, terminated, augmented,rescinded or discharged (other than by performance), in whole or in part,except by a writing executed by the parties hereto, and no waiver of any of the

 

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# provisions or conditions ofthis Warrant or any of the rights of a party hereto shall be effective orbinding unless such waiver shall be in writing and signed by the party claimedto have consented thereto.  Any amendmentor waiver signed by Warrantholders holding Warrants to purchase a majority ofall of the Shares issuable upon exercise of the Warrants then outstanding shallbe binding upon all Warrantholders.

 

# 13.           No Impairment. The Company will not, by amendment of its Certificate of Incorporation,or through reorganization, consolidation, merger, dissolution, issue or sale ofsecurities, sale of assets or any other voluntary action, avoid or seek toavoid the observance or performance of any of the terms of this Warrant, butwill at all times in good faith assist in the carrying out of all such termsand in the taking of all such action as may be necessary or appropriate inorder to protect the rights of the Warrantholder of this Warrant againstdilution or other impairment.

 

# 14.           Remedies. The Company stipulates that the remedies at law of the Warrantholder ofthis Warrant in the event of any default or threatened default by the Companyin the performance of or compliance with any of the terms of this Warrant arenot adequate and may be enforced by a decree for the specific performance ofany agreement contained herein or by an injunction against a violation of anyof the terms hereof or otherwise.

 

# 15.           Severability. If one or more provisions of this Warrant are held to be unenforceableunder applicable law, such provision shall be excluded from this Warrant andthe balance of the Warrant shall be interpreted as if such provision were soexcluded and the balance shall be enforceable in accordance with its terms.

 

[SIGNATURES ON FOLLOWING PAGE]

 

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[SIGNATURE PAGE TO PURCHASE WARRANT]

 

IN WITNESS WHEREOF, theparties hereto have executed this Warrant effective as of the date set forthbelow.

 
|   | Dated  as of October    , 2005                                                                                                                   |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
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|   | DYNTEK,  INC.                                                                                                                                                        |
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|   | Agreed  and Accepted as of October    , 2005                                                                                                     |
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NOTICE OF EXERCISE

 

To:          DYNTEK, INC.

 

The undersigned herebyelects to purchase                    shares of Common Stock (the “Shares”) of DynTek, Inc., a Delawarecorporation (the “Company”) pursuant to the terms of the attachedWarrant, and tenders herewith payment of the purchase price pursuant to theterms of the Warrant.

 

Please issue certificatesrepresenting the Common Stock purchased hereunder in the names and in thedenominations indicated below.

 

Please issue a new Warrantfor the unexercised portion of the attached Warrant, if any, in the name of theundersigned.

 

 
| Dated:                    |   |   |   |   |
|---------------------------|--------|--------|--------|--------|
|                      |   |
| No. Warrant  Shares: |   |   | Name:  |   |   |
|                      |   |
| Print  Name of            |   |
| Stockholder:              |   |   | Title: |   |   |
|                           |        |        |        |        |  |  |  |  |

 

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