Document:

Exhibit
10.17

 

	
  

  	
  CAPITAL MARKETS

  EQUITY RESEARCH

  INVESTMENT BANKING

  CORRESPONDENT SERVICES

  STRATEGIC ALLIANCES

  

 

June 1, 2005

 

 

Darrel Posegate

Executive Vice
President/Chief Financial Officer

HF Financial Corp.

P.O. Box 5000

Sioux Falls, SD  57117 – 5000

 

Dear Darrel:

 

I am pleased to announce that First Tennessee Bank
National Association has approved a Three Million Dollar ($3,000,000.00)
increase HF Financial Corporation’s existing Revolving Line of Credit with
First Tennessee Bank.  The new Revolving
Line of Credit will total Six Million Dollars ($6,000,000.00).  HFC may use
advances under this line of credit for: 
i) capital infusion to its subsidiaries to support growth and/or bank or
branch acquisitions, ii) acquisition of bank holding companies, and iii) other
liquidity needs.  At or near maturity,
FTB will review the line of credit for the possibility of another one-year
extension.

 

The interest on the outstanding balance will be
payable quarterly at a variable rate per annum on the outstanding balance.  The variable rate of interest shall be 1⁄4%
discount to First Tennessee’s Base Rate, which is currently 6.00%.  Thus, your borrowing rate today would equal
5.75%.  The maturity
date of this commitment is May 29, 2006.

 

This indebtedness shall be governed by the original
covenants and conditions set forth in the commitment letter dated June 3,
2003.

 

Additionally, this letter
confirms the renewal and increase of Home Federal Bank’s Fed Funds
accommodation.  First Tennessee Bank has
increased this accommodation to Fifteen Million Dollars ($15,000,000.00).  This increase will go into
effect on June 30, 2005 and will cover the period from June 30, 2005
to June 30, 2006 and is subject to the following:

 

•                  In accordance with First Tennessee
Policy, this is not a confirmed line and is subject to cancellation at any
time.  Reasons for cancellation include,
but are not limited to changes in the financial condition, in the senior
management or the liquidity position of Home Federal Bank or the funding mix of
First Tennessee Bank.

 

FTN FINANCIAL GROUP

845 Crossover Lane, Suite 150

Memphis, Tennessee 38117

901.435.8080 / 800.456.5460

www.ftnfinancial.com

 

FTN Financial Group is a division of First Tennessee Bank National
Association. FTN Financial Group, through First Tennessee Bank or its
affiliates, offers investment products and services.

 

 

1

 

•                  Requests
for borrowing over the pre-approved limit will be considered on a case-to-case
basis.  Fed Funds purchases need not be
renewed on a daily basis. Continuous borrowings in excess of fourteen (14) days
must be secured in full by U. S. Government or Agency Securities.

 

•                  Requests
to borrow Fed Funds can be made by calling the Financial Institutions Division
at 1-800-934-8937 Extension 7981.  The
cutoff time for borrowing Fed Funds is 3:00 P.M. (CST).

 

Darrel, it is a pleasure
of First Tennessee Bank to provide these commitments/accommodations to your
institution and look forward to servicing the financial needs of the company in
the future.  Please do not hesitate to
call if you have any questions or concerns.

 

Sincerely,

 

 

	
  /s/ David House

  	
   

  

David House

Vice President

Correspondent ServicesExhibit
10.1

 

THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933; IT HAS BEEN ACQUIRED BY THE HOLDER FOR
INVESTMENT AND MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF EXCEPT AS MAY BE AUTHORIZED UNDER THE SECURITIES ACT OF 1933, AND
THE RULES AND REGULATIONS PROMULGATED THEREUNDER.

 

DYNTEK, INC.

SECURED PROMISSORY NOTE

September 20, 2005

$1,126,455.48

DynTek, Inc., a Delaware corporation (the “Company”), for value
received, hereby promises to pay to the order of C.W. Zublin, Jr. Trust, C.W.
Zublin Trustee (the “Holder”) or the Holder’s registered assigns, the sum of
One Million, One Hundred and Twenty-Six Thousand, Four Hundred and Fifty-Five
Dollars and Forty-Eight Cents ($1,126,455.48), or such lesser amount as shall
then equal the outstanding principal amount hereof and any unpaid accrued
interest hereon, as set forth below.

 

                1.             Principal and
Interest.

                                (a)           Principal
Payments.  The principal amount of this Note shall be
paid in installments of $281,613.87 on October 15, 2005, $281,613.87 on January
15, 2005, $281,613.87 on April 15, 2006 and the balance payable in full on July
31, 2006 (the “Maturity Date”).

                                (b)           Interest Rate;
Payment.  The unpaid principal balance of this Note
shall bear simple interest at a rate equal to eight and nine-tenths percent
(8.9%) per annum from the date hereof until paid in full.  The accrued interest of this Note shall be
due and payable by the Company on the Maturity Date.  Interest shall be paid by issuing to the
Holder that number of whole shares of the common stock of the Company (the “Company
Common Stock”) equal to the accrued and unpaid interest divided by the lower of
(i) the average of the per share closing prices of the Company’s Common
Stock as reported on the OTC Bulletin Board, or other exchange or similar
market on which the Company’s Common Stock is regularly traded, if not traded
on the OTC Bulletin Board, for the 20 trading days ending on the second trading
day prior to the Maturity Date; or (ii) the price per share of Company
Common Stock paid by investors in the first Qualified Financing, as defined in
Section 6(b), after the date of this Note (the “Per Share Price”), with any
fraction of a share to be paid in cash as calculated using the Per Share
Price.  To effect the payment of the
Company Common Stock representing the interest, the Company shall submit to its
transfer agent on the Maturity Date an irrevocable instruction letter directing
its transfer agent to issue a stock certificate to the Holder representing the
shares of the Company Common Stock.

                                (c)           Usury Savings
Clause.  The Company and the Holder intend to comply
at all times with applicable usury laws. 
If at any time such laws would render usurious any amounts due under
this Note under applicable law, then it is the Company’s and the Holder’s
express intention that the Company not be required to pay interest on this Note
at a rate in excess of the maximum lawful rate, that the provisions of this
Section 1(b) shall control over all other provisions of this Note which may be
in apparent conflict hereunder, that such excess amount shall be immediately
credited to the principal balance of this Note (or, if this Note has been fully
paid, refunded by the Holder to the Company), and the provisions hereof shall
immediately reformed and the amounts thereafter decreased, so as to comply with
the then applicable usury law, but so as to permit the recovery of the fullest
amount otherwise due under this Note.

 

 

                2.             Prepayment. 
The Company may prepay, in whole or in part, the outstanding principal
and accrued interest under this Note by tender to the Holder of funds by check
or wire transfer of a portion or all of the outstanding principal, and by
payment of the Company Common Stock in accordance with Section 1(b) above with
respect to the accrued and unpaid interest.

                3.             Security
Interest.  The Company hereby pledges and grants to
Holder a continuing security interest in all of its right, title, and interest
in and to the Collateral (as such term is defined herein), to secure the prompt
payment and performance of all of the Company’s present debts, obligations, and
liabilities of whatever nature to the Holder, including, without limitation,
all obligations of the Company arising from or relating to this Note.  The Company hereby agrees to execute and
deliver such further documentation and take such further action as the Holder
may request in order to enforce and protect the aforesaid security
interest.  The Company hereby authorizes
the Holder to file one or more financing statements or continuation statements
in respect thereof, and amendments thereto, relating to all or any part of the
Collateral without the signature of the Company where permitted by law.  The security interest granted to the Holder
by the Company pursuant to this Note is and shall remain subordinate and junior
to the security interest the Company granted to New England Technology Finance,
LLC, a Delaware limited liability company (“NETF”), pursuant to that certain
Asset Purchase and Liability Assumption Agreement (the “APLA”), dated August 8,
2005, among the Company, NETF and DynTek Services, Inc., a Delaware corporation
and a wholly owned subsidiary of the Company, in all respects.  Pursuant to the APLA, (i) NETF provides
financing to the Company for certain product purchases to eligible customers on
an ongoing basis, which amount financed is borrowed by the Company, owed to
NETF and secured by the product purchased for the eligible customer (the “Equipment”)
and the accounts receivable created from the sale of Equipment by the Company
to such customers, and (ii) the Company sells and assigns certain accounts
receivable to NETF (collectively with the Equipment, the “NETF Assets”).

                4.             Collateral. 
“Collateral” shall mean all of the Company’s right, title and interest
in and to the following property (whether now existing or hereafter arising or
acquired wherever located); provided, that, such Collateral shall expressly
exclude any and all NETF Assets:

                                (a)           All present and future accounts,
accounts receivable agreements contracts, leases, contract rights, rights to
payment, instruments, documents, chattel paper, security agreements,
guaranties, letters of credit, undertakings, surety bonds, insurance policies,
notes and drafts, and all forms of obligations owing to the Company or in which
the Company may have any interest, however created or arising and whether or
not earned by performance;

                                (b)           All goods and equipment now owned or
hereafter acquired, including, without limitation, all machinery, fixtures,
vehicles, and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located;

                                (c)           All other contract rights and general
intangibles now owned or hereafter acquired, including, without limitation,
goodwill, trademarks, servicemarks, trade styles, trade names, patents, patent
applications, leases, license agreements, purchase orders, customers lists,
route lists, infringements, claims, computer programs, computer discs, computer
tapes, literature, reports, catalogs, design rights, income tax refunds,
payments of insurance and rights to payment of any kind;

                                (d)           All deposit accounts, securities,
securities entitlements, securities accounts, investment property, letters of
credit and certificates of deposit now owned or hereafter acquired and the
Company’s books relating to the foregoing;

                                (e)           All copyright rights, copyright
applications, copyright registrations and like protections in each work of
authorship and derivative work thereof, whether published or unpublished, now
owned or hereafter acquired; all trade secret rights, including all rights to
unpatented inventions, know-how, operating manuals, license rights and
agreements and confidential information, now owned or hereafter acquired; all
mask work or similar rights now owned or hereafter acquired; all claims for
damages by way of any past, present and future infringement of any of the
foreign; and

 

2

 

                                (f)            All the Company’s books and records
relating to the foregoing and any and all claims, rights and interests in any
of the above and all substitutions for, additions and accessions to and
proceeds thereof.

The Company agrees that it will not change its state
of organization or locations at which the Collateral is located without giving
the Holder at least thirty (30) days prior written notice thereof.  In addition, the Company agrees that it will
not (i) change its name, federal employer identification number, corporate
structure or identity, or (ii) create or operate under any new fictitious name
without giving the Holder at least thirty (30) days prior written notice
thereof.

                5.             Rights to
Collateral.  The Holder shall have such rights and
remedies with respect to the Collateral as are available under the provisions
of the Uniform Commercial Code, in addition to all other rights and remedies
existing at law, in equity, or by statute or provided in this Note, which may
be exercised without notice to, or consent by, the Company.

                6.             Defaults and
Remedies.

                                (a)           Events of
Default.  An “Event of Default” shall occur if:

                                                (i)            the Company shall default in the
payment of the principal or interest of this Note, when and as the same shall
become due and payable;

                                                (ii)           an involuntary proceeding shall be
commenced or an involuntary petition shall be filed in a court of competent
jurisdiction seeking (a) relief in respect of the Company, or of a substantial
part of its property or assets, under Title 11 of the United States Code, as
now constituted or hereafter amended, or any other Federal or state bankruptcy,
insolvency, receivership or similar law, (b) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Company, or for a substantial part of its property or assets, or (c) the
winding up or liquidation of the Company; and such proceeding or petition shall
continue undismissed for ninety (90) days, or an order or decree approving or
ordering any of the foregoing shall be entered; or

                                                (iii)          the Company shall (a) voluntarily
commence any proceeding or file any petition seeking relief under Title 11
of the United States Code, as now constituted or hereafter amended, or any
other Federal or state bankruptcy, insolvency, receivership or similar law, (b)
consent to the institution of, or fail to contest in a timely and appropriate
manner, any proceeding or the filing of any petition described in
paragraph (ii) of this Section 6(a), (c) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Company or any subsidiary, or for a substantial part
of its property or assets, (d) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (e) make a
general assignment for the benefit of creditors, (f) become unable, admit in
writing its inability or fail generally to pay its debts as they become due or
(g) take any action for the purpose of effecting any of the foregoing.

                                (b)           Acceleration. 
If an Acceleration Event (as defined herein) occurs before January 1,
2006, the outstanding principal of and all accrued interest on this Note shall
automatically become due and payable on January 1, 2006, and if an Acceleration
Event occurs on or after January 1, 2006, the outstanding principal of and all
accrued interest on this Note shall automatically become immediately due and
payable upon the occurrence of such an Acceleration Event, all without
presentment, demand, protest or notice of any kind, all of which are expressly
waived in Section 9 below.  An “Acceleration
Event” shall be any of the following events: (i) an Event of Default under
Section 6(a); (ii) a Sale Event (as hereinafter defined); (iii) the closing of
the next sale of shares of capital stock or securities convertible into shares
of capital stock in an equity financing, excluding the conversion or exercise
of outstanding securities of the Company, to institutional investors whose
primary business is investing involving the receipt by the Company of, in the
aggregate, gross proceeds of more than $5,000,000 (a “Qualified Financing”);
(iv) the closing of any fiscal quarter in which the Company, at the end of such
fiscal quarter, has working capital equal or greater than $3,000,000; or (v)
the termination of the Holder’s employment with the Company.  If any other Event of Default occurs under
Section 6(a)(i) and is continuing, the Holder, by written notice to the
Company, may declare the principal of and accrued interest on this Note to be
immediately due and payable.  A “Sale
Event “ means (i) the sale, transfer or other disposition of all or
substantially all of the Company’s assets, (ii) a merger or reorganization in
which securities possessing more than fifty percent (50%) of the total combined
voting power of the Company’s outstanding securities are transferred to a
person or persons different from those persons holding those securities
immediately prior to such transaction in a transaction approved by the
stockholders, or (iii) the sale, transfer, or other disposition of all of the
Company’s outstanding securities to a person or persons different from those
persons holding those securities immediately prior to such transaction.

 

3

 

                7.             Release and
Termination.  Upon payment in full of the outstanding
principal balance of the Note and all accrued interest thereon, Holder shall
promptly execute and deliver to the Company such documents, instruments,
termination statements and releases as shall be requested by the Company in
order to terminate and discharge all of the liens, security interests and
encumbrances created by or pursuant to this Note.

                8.             Loss, Etc., of
Note.  Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of this Note, and of
indemnity reasonably satisfactory to the Company if lost, stolen or destroyed,
and upon surrender and cancellation of this Note if mutilated, and upon
reimbursement of the Company’s reasonable incidental expenses, the Company
shall execute and deliver to the Holder a new Note of like date, tenor and
denomination.

                9.             Waiver. 
The Company hereby waives presentment, demand, notice of nonpayment,
protest and all other demands and notices in connection with the delivery,
acceptance, performance or enforcement of this Note.  If an action is brought for collection under
this Note, the Holder shall be entitled to receive all costs of collection,
including, but not limited to, its reasonable attorneys’ fees.

                10.           Notices. 
Any written notice, consent or other communication provided for in this
Note shall be delivered or sent by registered or certified U.S. Mail, with
postage prepaid, to the address set forth opposite below.  Such addresses may be changed by written
notice given as provided herein.

	
  If to the Company:

  	
   

  	
  DynTek, Inc.

  
	
   

  	
   

  	
  19700 Fairchild Road, Suite 350

  
	
   

  	
   

  	
  Irvine, CA 92612

  
	
   

  	
   

  	
   

  
	
  If to Holder:

  	
   

  	
  _____________________

  
	
   

  	
   

  	
  _____________________

  
	
   

  	
   

  	
  _____________________

  

 

                11.           Transferability. 
This Note evidenced hereby may not be pledged, sold, assigned or transferred
except with the express written consent of the Company, which may be withheld
in its sole discretion; provided, however, that any such transfer shall only be
made in compliance with applicable federal and state securities laws.  Any pledge, sale, assignment or transfer in
violation of the foregoing shall be null and void.

                12.           Successors and
Assigns.  Subject to Section 11, all of the covenants,
stipulations, promises, and agreements in this Note shall bind and inure to the
benefit of the parties’ respective successors and assigns, whether so expressed
or not.

                13.           Governing Law. 
This Note shall be governed by the laws of the State of California, and
the laws of such state (other than conflicts of laws principles) shall govern
the construction, validity, enforcement and interpretation hereof, except to
the extent federal laws otherwise govern the validity, construction,
enforcement and interpretation hereof.

IN WITNESS WHEREOF, the Company has caused
this Note to be issued this 20th day of September, 2005.

	
   

  	
  DynTek, Inc.

  
	
   

  	
   

  
	
   

  	
  /s/ Robert I. Webber

  
	
   

  	
  Robert I. Webber, President

  

 

 

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}]]