Document:

Exhibit
10.6

 

	
  Notice of Award of Restricted Stock under
  the 2005 Stock Incentive Plan and Award Agreement

  	
  AXS-One Inc.

  
	
   

  	
  ID: 132966911

  
	
   

  	
  301 Route 17 North

  
	
   

  	
  Rutherford, NJ 07070

  

 

[Name]

[Address]

 

ID:

 

You are hereby granted the following award of Restricted Stock.

 

Grant Number

Date of Grant

Purchase Price per Share:  $0.01

Total Number of Shares Granted

 

Vesting Schedule:

 

	
  Vesting Date

  	
   

  	
  Percentage Vested

  	
   

  
	
  1 year after
  grant date

  	
   

  	
  25

  	
  %

  
	
  2 years
  after grant date

  	
   

  	
  50

  	
  %

  
	
  3 years
  after grant date

  	
   

  	
  75

  	
  %

  
	
  4 years
  after grant date

  	
   

  	
  100

  	
  %

  

 

Notwithstanding the foregoing, the Restricted Stock shall become vested
and cease to be Restricted Stock upon the attainment of the following
performance goals (each goal below to be applied independently):

33% of the above number of shares of Restricted Stock shall become
vested as of December 31, [year of
grant] if AXS-One’s revenue in [such year] is at least $        
and its net profit margin is at least      %

33% of the above number of shares of Restricted Stock shall become
vested as of December 31, [year of
grant + 1] if AXS-One’s revenue in [such year] is at least $        
and its net profit margin is at least      %

33% of the above number of shares of Restricted Stock shall become
vested as of December 31, [year of grant
+ 2] if AXS-One’s revenue in [such year] is at least $        
and its net profit margin is at least      %

 

By your signature and AXS-One’s signature below, you and AXS-One agree
that this Restricted Stock Award is granted under and governed by the terms and
conditions of AXS-One’s 2005 Stock Incentive Plan and the Restricted Stock
Agreement enclosed herewith.

 

	
   

  	
   

  	
   

  
	
  For AXS-One Inc.

  	
   

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Participant

  	
   

  	
   

  	
  Date

  

 

 

AXS-ONE INC.

 

RESTRICTED
STOCK AGREEMENT UNDER THE

AXS-ONE INC.

2005 STOCK INCENTIVE PLAN

 

1.                                      Sale of Shares.  AXS-ONE INC. (the “Company”) hereby awards
to the individual named on the Cover Page hereto (the “Participant”) the number
of shares (“Shares”) of Common Stock of the Company, par value $0.01 per share
(“Common Stock”), set forth on the Cover Page, pursuant to the terms and
conditions of this Agreement and the Company’s 2005 Stock Incentive Plan (the “Plan”).  The date of grant of the Shares shall be as
set forth on the Cover Page (the “Grant Date”). 
To the extent required by law, the Participant shall pay the Company the
par value ($0.01) (the “Purchase Price”) for each Share awarded to the
Participant simultaneously with the execution of this Agreement in cash or cash
equivalents payable to the order of the Company.  Pursuant to the Plan and Section 2 of
this Agreement, the Shares are subject to certain restrictions, which
restrictions shall expire in accordance with the provisions of the Plan and Section 2
hereof.  While such restrictions are in
effect, the Shares subject to such restrictions shall be referred to herein as “Restricted
Stock.”

 

2.                                      Vesting.  The
Restricted Stock shall become vested and cease to be Restricted Stock (but
shall remain subject to the other terms of this Agreement and the Plan) as set
forth on the Cover Page if the Participant has been continuously employed by
the Company until such date  There shall
be no proportionate or partial vesting in the periods prior to the applicable
vesting dates and all vesting shall occur only on the appropriate vesting date.

 

3.                                      Restrictions on Transfer.  The
Participant shall not sell, negotiate, transfer, pledge, hypothecate, assign,
encumber or otherwise dispose of the Shares or grant any proxy with respect
thereto, except as specifically permitted by the Plan and this Agreement.  Any attempted Transfer in violation of this
Agreement and the Plan shall be void and of no effect and the Company shall
have the right to disregard the same on its books and records and to issue “stop
transfer” instructions to its transfer agent. 
Notwithstanding the foregoing, nothing herein or in the Plan shall
prohibit the Participant from pledging the Shares the Participant is granted
hereunder to the Company pursuant to a stock pledge agreement entered into
between the parties hereto.

 

4.                                      Forfeiture.  Upon a
Termination of Employment for any reason, all shares of Restricted Stock
subject to restriction shall be forfeited.

 

5.                                      Rights as a Holder of Restricted
Stock.  From and
after the issue date, the Participant shall have, with respect to the shares of
Restricted Stock, all of the rights of a holder of shares of Common Stock,
including, without limitation, the right to vote the Shares, to receive and
retain all regular cash dividends payable to holders of Shares of record on and
after the issue date (although such dividends will be treated, to the extent
required by applicable law, as additional compensation for tax purposes), and
to exercise all other rights, powers and privileges of a holder of Shares with
respect to the Restricted Stock, with the exceptions that (i) the
Participant shall not be entitled to delivery of the stock certificate or
certificates representing the Restricted Stock until such shares are no longer
Restricted Stock; (ii) the Company (or its designated agent) will retain
custody of the stock certificate or certificates representing the Restricted
Stock and any other property (“RS Property”) issued in respect of the

 

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Restricted
Stock, including stock dividends at all times such Shares are Restricted Stock;
(iii) no RS Property will bear interest or be segregated in separate accounts;
and (iv) the Participant shall not, directly or indirectly, Transfer the
Restricted Stock in any manner whatsoever.

 

6.                                      Taxes; Section 83(b)
Election.  The
Participant acknowledges, subject to the last sentence of this paragraph, that
(i) no later than the date on which any Restricted Stock shall have become
vested, the Participant shall pay to the Company, or make arrangements satisfactory
to the Company regarding payment of, any Federal, state or local taxes of any
kind required by law to be withheld with respect to any Restricted Stock which
shall have become so vested; (ii) the Company shall, to the extent permitted by
law, have the right to deduct from any payment of any kind otherwise due to the
Participant any Federal, state or local taxes of any kind required by law to be
withheld with respect to any Restricted Stock which shall have become so
vested, including that the Company may, but shall not be required to, sell a
number of Shares sufficient to cover applicable withholding taxes; and (iii) in
the event that the Participant does not satisfy (i) above on a timely basis,
the Company may, but shall not be required to, pay such required withholding
and treat such amount as a demand loan to you at the maximum rate permitted by
law, with such loan, at the Company’s sole discretion and provided the Company
so notifies the Participant within thirty (30) days of the making of the loan, secured
by the Shares and any failure by you to pay the loan upon demand shall entitle
the Company to all of the rights at law of a creditor secured by the
Shares.  The Company may hold as security
any certificates representing any Shares and, upon demand of the Company, the
Participant shall deliver to the Company any certificates in his or her
possession representing Shares together with a stock power duly endorsed in
blank.  The Participant also acknowledges
that it is his or her sole responsibility, and not the Company’s, to file
timely and properly any election under Section 83(b) of the Code, and any
corresponding provisions of state tax laws, if the Participant wishes to
utilize such election.  If the
Participant makes a Section 83(b) election, the Participant shall provide
the Company with a copy of the form submitted to the Internal Revenue Service.

 

7.                                      Legend.  In the
event that a certificate evidencing Restricted Stock is issued, the certificate
representing the Shares shall have endorsed thereon the following legends:

 

(a)                                  “THE
ANTICIPATION, ALIENATION, ATTACHMENT, SALE, TRANSFER, ASSIGNMENT, PLEDGE,
ENCUMBRANCE OR CHARGE OF THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO
THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THE AXS-ONE INC. (THE “COMPANY”)
2005 STOCK INCENTIVE PLAN (THE “PLAN”) AND AN AGREEMENT ENTERED INTO BETWEEN
THE REGISTERED OWNER AND THE COMPANY. 
COPIES OF SUCH PLAN AND AGREEMENT ARE ON FILE AT THE PRINCIPAL OFFICE OF
THE COMPANY.”

 

(b)                                 Any
legend required to be placed thereon by applicable blue sky laws of any state.
Notwithstanding the foregoing, in no event shall the Company be obligated to
issue a certificate representing the Restricted Stock prior to vesting as set
forth in Section 2 hereof.

 

8.                                      Securities Representations.  The Shares
are being issued to the Participant and this Agreement is being made by the
Company in reliance upon the following express representations and warranties
of the Participant.  The Participant
acknowledges, represents and warrants that:

 

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(a)                                  The
Participant has been advised that the Participant may be an “affiliate” within
the meaning of Rule 144 under the Securities Act and in this connection the
Company is relying in part on the Participant’s representations set forth in
this section;

 

(b)                                 The
Shares must be held indefinitely by the Participant unless (i) an exemption
from the registration requirements of the Securities Act is available for the
resale of such Shares or (ii) the Company files an additional registration
statement (or a “re-offer prospectus”) with regard to the resale of such Shares
and the Company is under no obligation to continue in effect a Form S-8
Registration Statement or to otherwise register the resale of the Shares (or to
file a “re-offer prospectus”);

 

(c)                                  The
exemption from registration under Rule 144 will not be available under current
law unless (i) a public trading market then exists for the Common Stock of the
Company, (ii) adequate information concerning the Company is then available to
the public, and (iii) other terms and conditions of Rule 144 or any exemption
therefrom are complied with and that any sale of the Shares may be made only in
limited amounts in accordance with such terms and conditions.

 

9.                                      Not an Employment Agreement.  Neither
the execution of this Agreement nor the issuance of the Shares hereunder
constitute an agreement by the Company to employ or to continue to employ the
Participant during the entire, or any portion of, the term of this Agreement,
including but not limited to any period during which any Shares are
outstanding.

 

10.                               Power of Attorney.  The
Company, its successors and assigns, is hereby appointed the attorney-in-fact,
with full power of substitution, of the Participant for the purpose of carrying
out the provisions of this Agreement and taking any action and executing any
instruments which such attorney-in-fact may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest. 
The Company, as attorney-in-fact for the Participant, may in the name
and stead of the Participant, make and execute all conveyances, assignments and
transfers of the Restricted Stock, other RS Property, Shares and property provided
for herein, and the Participant hereby ratifies and confirms that which the
Company, as said attorney-in-fact, shall do by virtue hereof.  Nevertheless, the Participant shall, if so
requested by the Company, execute and deliver to the Company all such
instruments as may, in the judgment of the Company, be advisable for this
purpose.

 

11.                               Miscellaneous.

 

(a)                                  This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, personal legal representatives, successors,
trustees, administrators, distributees, devisees and legatees.  The Company may assign to, and require, any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company or any affiliate by which the Participant is employed to expressly
assume and agree in writing to perform this Agreement.  Notwithstanding the foregoing, the
Participant may not assign this Agreement other than with respect to Shares
Transferred in compliance with the terms hereof.

 

(b)                                 This
award of Restricted Stock shall not affect in any way the right or power of the
Board of Directors (“Board”) or stockholders of the Company to make or
authorize

 

4

 

an adjustment,
recapitalization or other change in the capital structure or the business of
the Company, any merger or consolidation of the Company or subsidiaries, any
issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Common Stock, the dissolution or liquidation of the Company, any
sale or transfer of all or part of its assets or business or any other
corporate act or proceeding.

 

(c)                                  The
Participant agrees that the award of the Restricted Stock hereunder is special
incentive compensation and that it, any dividends paid thereon (even if treated
as compensation for tax purposes) and any other RS Property will not be taken
into account as “salary” or “compensation” or “bonus” in determining the amount
of any payment under any pension, retirement or profit-sharing plan of the
Company or any life insurance, disability or other benefit plan of the Company.

 

(d)                                 No
modification or waiver of any of the provisions of this Agreement shall be
effective unless in writing and signed by the party against whom it is sought
to be enforced.

 

(e)                                  This
Agreement may be executed in one or more counterparts, all of which taken
together shall constitute one contract.

 

(f)                                    The
failure of any party hereto at any time to require performance by another party
of any provision of this Agreement shall not affect the right of such party to
require performance of that provision, and any waiver by any party of any
breach of any provision of this Agreement shall not be construed as a waiver of
any continuing or succeeding breach of such provision, a waiver of the
provision itself, or a waiver of any right under this Agreement.

 

(g)                                 The
headings of the sections of this Agreement have been inserted for convenience
of reference only and shall in no way restrict or modify any of the terms or
provisions hereof.

 

(h)                                 All
notices, consents, requests, approvals, instructions and other communications
provided for herein shall be in writing and validly given or made when
delivered, or on the second succeeding business day after being mailed by
registered or certified mail, whichever is earlier, to the persons entitled or
required to receive the same, at the addresses set forth on the Cover Page or
to such other address as either party may designate by like notice.  Notices to the Company shall be addressed to
its Secretary.

 

(i)                                     This
Agreement shall be construed, interpreted and governed and the legal
relationships of the parties determined in accordance with the internal laws of
the State of Delaware without reference to rules relating to conflicts of law.

 

(j)                                     By
executing this Agreement within 60 days after the day and year first written
above, the award of Restricted Stock shall be accepted by the Participant
within the time period required under Section 8.3(b) of the Plan.

 

12.                               Provisions of Plan Control.  This
Agreement is subject to all the terms, conditions and provisions of the Plan,
including, without limitation, the amendment provisions thereof, and to such
rules, regulations and interpretations relating to the Plan as may be adopted
by the Board or a committee of the Board and as may be in effect from time to
time.  The Plan is incorporated herein by
reference.  A copy of the Plan has been
delivered to the Participant.  If

 

5

 

and to the
extent that this Agreement conflicts or is inconsistent with the terms,
conditions and provisions of the Plan, the Plan shall control, and this
Agreement shall be deemed to be modified accordingly.  Unless otherwise indicated, any capitalized
term used but not defined herein shall have the meaning ascribed to such term
in the Plan.  This Agreement contains the
entire understanding of the parties with respect to the subject matter hereof
(other than any other documents expressly contemplated herein or in the Plan)
and supersedes any prior agreements between the Company and the Participant
with respect to the subject matter hereof.

 

6Exhibit 10.1

 

SEPARATION AND GENERAL
RELEASE AGREEMENT

 

This Separation and General
Release Agreement is made and entered into by and between DynTek, Inc., a
Delaware corporation (the “Company”), and Steven J. Ross, an individual (“Executive”),
as of the dates set forth below.

 

RECITALS

 

WHEREAS, Executive has
served as the Chief Executive Officer and a director of the Company since
February 2000;

 

WHEREAS, Executive
desires to resign his employment with the Company as of June 30, 2005 (the “Resignation
Date”);

 

WHEREAS, Executive and
the Company are parties to an Employment Agreement dated as of July 1, 2004
(the “Employment Agreement”), which the parties intend to terminate as of the
Resignation Date; and

 

WHEREAS, the Company
desires Executive to remain as a member of the Board of Directors of the
Company after the Resignation Date and Executive desires to remain on the Board
of Directors.

 

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

 

1.             Resignation
and Termination of Employment Agreement. 
Beginning on the Resignation Date, the Company and Executive hereby
agree to terminate the Employment Agreement and the Employment Agreement shall
be of no further force and effect as of such date.  In addition, effective on the Resignation
Date, Executive hereby resigns his position as Chief Executive Officer and
shall no longer be employed by the Company. 
The parties agree that termination of the Employment Agreement is by
mutual consent and that Executive shall not be entitled to receive any benefits
or compensation pursuant to the termination provisions, or any other
provisions, under the Employment Agreement after the Resignation Date, except
as specifically identified in this Agreement. 
Each of the parties agrees to use its best efforts up to the Resignation
Date to transfer the position of the Chief Executive Officer to a successor(s)
without disruption to the operations of the Company’s business.  Executive shall continue to serve as a member
of the Board of Directors of the Company after the Resignation Date until
September 30, 2005, at which time Executive hereby resigns as a member of the
Board of Directors of the Company.

 

2.             Compensation.  In reliance upon Executive’s promises,
representations and releases in this Agreement, the Company shall pay Executive
the following compensation.

 

(a)           Salary
Continuation.  The Company shall
provide Executive with salary continuation in an amount equal to Executive’s
base salary on the Resignation Date, less legally required withholdings, on
regularly scheduled paydays commencing on the day after the Resignation Date
(i.e. July 1, 2005) and continuing for eleven months thereafter (i.e. until May
31, 2006).  In addition, if Executive,
despite good faith, diligent efforts to obtain employment, has not become

 

 

employed in a position
reasonably similar to his position at the Company prior to May 31, 2006, the
Company shall continue payment of Executive’s salary until the earlier of (i)
the expiration of an additional six-month period or (ii) Executive’s acceptance
of employment.  It is the intent of the
Company to prepay a portion of the salary continuation in a lump sum payment
depending on the then-current liquidity of the Company and cash position
Company at the time, at the Company’s discretion.

 

(b)           Insurance
Benefits.  The Company shall continue
to pay the premiums for medical and other insurance benefits currently in place
for the Executive, including for continued health insurance coverage for
Executive and his currently insured dependents for eleven months following the
Resignation Date, provided that Executive makes a timely election to continue
such coverage under COBRA.  In addition,
if Executive, despite good faith, diligent efforts to obtain employment, has
not become employed in a position that provides health insurance benefits by
May 31, 2006, the Company shall continue to pay the above health insurance
premiums for Executive until the earlier of (i) the expiration of an additional
six-month period or (ii) Executive’s acceptance of employment.  After such period, Executive may continue his
health insurance coverage at his own expense if and for so long as such
coverage may be permitted under COBRA.

 

(c)           Additional
Payment.  In lieu of additional
amounts under Executive’s Employment Agreement, the Company shall pay Executive
an amount equal to fifty percent (50%) of Executive’s base salary on the
Resignation Date, less legally required withholdings, which shall be paid in
equal installments on regularly scheduled paydays commencing after the
Resignation Date for a period of six months. 
The Company may elect to prepay any portion of the bonus compensation in
a lump sum payment at any time in its sole discretion.

 

(d)           Lease
Reimbursement.  The Company will
reimburse Executive for monthly lease payments and utilities and similar related
expenses under that certain lease agreement for an apartment used by Company
personnel located at 601 West 57th Street, New York, New York for
the remainder of the current term.

 

(e)           Equipment. 
Executive shall be entitled to retain the personal equipment listed on
the attached Schedule A, and to the extent that the Company has any
ownership rights to such equipment, the Company hereby transfers and assigns
such rights to Executive.

 

(g)           Cessation
of Board Fees.  Effective on the
Resignation Date, all board of director fees shall terminate.

 

3.             Options.  The Company shall issue to Executive on the Resignation
Date an option agreement under the 2005 Stock Incentive Plan for the purchase
of up to 1,320,000 shares of the Company’s Common Stock at an exercise price
equal to the lower of the average closing price of the Common Stock as reported
on the OTC Bulletin Board during June, 2005, or $.58; provided, that if the
average of the closing bid and asked prices of the Common Stock on the
Resignation Date (the “FMV”) is higher than the lower amount above, the
exercise price shall be the lower of the FMV and the other amount above.

 

4.             Publicity.  The parties agree, as part of the Agreement,
to mutual non-disparagement provisions. 
Each party agrees that it or he will not disparage or talk negatively
about the other party to anyone.  Neither
party shall make any public announcement relating to the transactions
contemplated by this Agreement without the prior written consent of the other
party which shall not

 

2

 

be unreasonably
withheld; provided, however, that the Company may make such public disclosures
concerning these matters as may be required under the applicable securities
laws, including without limitation, the filing of this Agreement as an exhibit
to the Company’s filings under the Securities Exchange Act of 1934, as amended.

 

5.             General
Release.

 

(a)           Release by
Executive.  In exchange for the
consideration provided to Executive as set forth above and except for the
rights granted to Executive under this Agreement or rights as a stockholder of
the Company, Executive agrees to waive and release all claims, known and
unknown, which he has or might otherwise have had against the Company on behalf
of itself and its parent, subsidiaries and related entities and their past and
present officers, directors, agents, employees, stockholders, insurers,
attorneys and successors, arising prior to the date Executive executes this
Agreement, including, without limitation, all claims relating in any way to any
aspect of his employment, compensation, or the cessation of his employment with
the Company, the Age Discrimination in Employment Act of 1967, the Americans
with Disabilities Act of 1990, Title VII of the Civil Rights Act of 1964,
42 U.S.C. section 1981, the Fair Labor Standards Act, the California Fair
Employment and Housing Act, California Government Code section 12900, et
seq., the Unruh Civil Rights Act, California Civil Code section 51,
all provisions of the California Labor Code; the Employee Retirement Income
Security Act, 29 U.S.C. section 1001, et  seq., all as
amended; any other federal, state or local law, regulation or ordinance or
public policy, contract, tort or property law theory, or any other cause of
action whatsoever that arose on or before the date Executive executes this
Agreement.

 

(b)           Release by
Company.  The Company, on behalf of
itself and its parent, subsidiaries, and related entities and their past and
present officers and directors, agrees to waive and release all claims which it
may have against Executive, whether known or unknown, suspected or unsuspected,
that arose on or before the date the Company executes this Agreement, including
without limitation, all claims regarding any aspect of Executive’s employment,
the cessation of his employment, any other federal, state or local law, regulation
or ordinance or public policy, contract, tort or property law theory, or any
other cause of action whatsoever.

 

(c)           Unknown
Claims.  It is further understood and
agreed that as a condition of this Agreement, all rights under
Section 1542 of the Civil Code of the State of California are expressly
waived by the Company and Executive. 
Such Section reads as follows:

 

“A
general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.”

 

Notwithstanding Section 1542, and for the purpose
of implementing a full and complete release and discharge of each party, the
other party expressly acknowledges that this general release is intended to
include and does include in its effect, without limitation, all claims which
the other party does not know or suspect to exist in his or its favor at the
time of execution hereof, and that this Agreement expressly contemplates the
extinguishment of all such claims.

 

3

 

(d)           Discrimination.  The release in this Agreement also includes,
but is not limited to, claims arising under federal, state or local law for
age, race, sex or other forms of employment discrimination and
retaliation.  In accordance with the
Older Workers Benefit Protection Act, Executive hereby knowingly and
voluntarily waives and releases all rights and claims, known or unknown,
arising under the Age Discrimination in Employment Act of 1967, as amended,
which he might otherwise have had against the Company.  Executive is hereby advised that he should
consult with an attorney before signing this Agreement and that he has 21 days
in which to consider and accept this Agreement by signing and returning this
Agreement to the Company.  In addition,
Executive has a period of seven days following his execution of this Agreement
in which he may revoke this Agreement. 
If Executive does not advise the Company by a writing received by the
Company within such seven day period of his intent to revoke the Agreement, the
Agreement will become effective and enforceable upon the expiration of seven
days.

 

6.             Confidential Information.  Executive shall hold all Confidential
Information relating to the Company in strict confidence and shall not use,
disclose or otherwise communicate the Confidential Information to anyone other
than the Company without the prior written consent of the Company.  “Confidential Information” includes, without
limitation, financial information, trade secrets, business plans, business
methods or practices, market studies, customer lists, referral lists and other
proprietary business information of the Company.  “Confidential Information” shall not include
information which is or becomes in the public domain through no action by
Executive or information which is generally disclosed by the Company to third
parties without restrictions on such third parties.  Executive shall return all Confidential Information
to the Company upon the Resignation Date.

 

7.             Solicitation of Customers.  For a period after the Resignation Date,
equal to the greater of (a) one (1) year or (b) the period during which
Executive receives payment of any compensation or benefits under this
Agreement, Executive shall not influence or attempt to influence, directly or
indirectly, any customer of the Company to divert its business away from the
Company.  In connection with the
foregoing, the parties acknowledge that the customer lists of the Company and
information retained by the Company regarding such customers constitute
Confidential Information and trade secrets of the Company that provide the
Company with independent economic value.

 

8.             Non-Competition.  For the period during which Executive
continues to serve as a director of the Company, Executive shall not, directly
or indirectly, in any capacity:

 

(a)           Engage, own
or have any interest in;

 

(b)           Manage,
operate, join, participate in, accept employment with, render advice to, or
become interested in or be connected with;

 

(c)           Furnish
consultation or advice to; or

 

(d)           Permit his
name to be used in connection with;

 

any person or entity that competes with the business
of the Company.  Notwithstanding the
foregoing, holding five percent (5%) or less of an interest in the equity,
stock options or debt of any publicly traded company shall not be considered a
violation of this Section 8.

 

4

 

9.             Miscellaneous
Provisions.

 

(a)           Notices.  Any notice given hereunder to the Company or
to Executive shall be deemed sufficiently given if mailed by registered or
certified mail, return receipt requested, postage prepaid, or sent by overnight
delivery service, by facsimile or by Email as follows:

 

If to the Company:

 

DynTek, Inc.

19700 Fairchild
Road, Suite 350

Irvine, CA  92612

Attention: Chief
Operating Officer

Facsimile number:
(949) 271-0800

Email address:
casper.zublin@dyntek.com

 

If to Executive:

 

7 Canyon Rim

Newport Coast, CA
92657

Facsimile number:
(949) 721-1544

Email address:
sjamesross@aol.com

 

(b)           Governing
Law.  This Agreement is made under
and shall be governed by and construed in accordance with the laws of the State
of California.

 

(c)           Assignment.  Neither this Agreement nor any duties or obligations
under this Agreement may be assigned by either party without the prior written
consent of the other party; provided, however, that the Company may assign this
Agreement in connection with any sale or transfer of the business to which it
relates, whether by merger, sale of assets, sale of stock or otherwise.

 

(d)           Attorneys’
Fees.  If any action is brought to
enforce or interpret the provisions of this Agreement, the prevailing party in
such action will be entitled to its reasonable attorneys’ fees and costs
incurred, in addition to any other relief to which such party may be entitled.

 

(e)           Waiver of
Breach.  The waiver of either party
of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach of this Agreement.

 

(f)            Severability.  To the extent any provision of this Agreement
shall be invalid or unenforceable, it shall be considered deleted herefrom and
the remainder of such provision and of this Agreement shall be unaffected and
shall continue in full force and effect. 
In furtherance and not in limitation of the foregoing, should the
duration or scope of any provision covered by any provision of this Agreement
be in excess of that which is valid and enforceable under applicable law, then
such provision shall be construed to cover only the maximum duration or extent
that may validly and enforceably be covered under applicable law.

 

(g)           Authority.  Each of the Company and Executive warrants
and represents that it or he is authorized to execute and deliver this
Agreement.

 

5

 

(h)           Further
Assurances.  Each party agrees to
execute such other and further instruments and documents as may be necessary or
proper in order to complete the transactions contemplated by this Agreement.

 

(i)            Amendments.  No amendment or modification of this
Agreement shall be deemed effective unless made in writing signed by the
parties hereto.

 

(j)            Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

(k)           Integration.  Executive and the Company agree that this
Agreement and the stock option agreement to be issued pursuant to Section 3
hereof are the sole agreements between them regarding the subject matter herein
and embodies all terms, promises, representations, and understanding regarding
the subject matter herein, and that no representations, inducements, or
promises have been made except as expressly stated herein.

 

(l)            Interpretation.  This Agreement shall not be construed against
any party merely because that party drafted or revised the provision in
question, and it shall not be construed as an admission by the Company or
Executive of any improper, wrongful, or unlawful actions, or any other
wrongdoing against the other, and each party specifically disclaims any
liability to or wrongful acts against the other.

 

6

 

IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the date and
year set forth below.

 

 

	
   

  	
  DYNTEK , INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  May 26, 2005

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Casper Zublin

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Casper Zublin, Chief
  Operating Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  STEVEN J. ROSS

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  May 26, 2005

  	
   

  	
  /s/ Steven J. Ross

  	
   

  
							

 

7

 

SCHEDULE
A

 

Personal
Equipment

 

All cellphones, home office computer & network equipment and laptop
currently in use by Executive

 

8

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