Document:

Exhibit
10.01

 

SECURITIES
PURCHASE AGREEMENT

 

This
SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of February 10, 2005,
is made by and among DynTek, Inc., a Delaware corporation, with headquarters
located at 18881 Von Karman Ave., Suite 250, Irvine, California 92512 (the “Company”),
and the investors named on the signature pages hereto, together with their
permitted transferees (each, an “Investor” and collectively, the “Investors”).

 

RECITALS:

 

A.            The
Company and the Investors are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Section
4(2) of the Securities Act and Rule 506 under Regulation D.

 

B.            The
Investors desire, upon the terms and conditions stated in this Agreement, to
purchase in the aggregate of 14,807,692 shares of the Company’s Common Stock
(the “Common Shares”) and warrants, in the form of Exhibit A hereto, to
purchase such number of shares of the Company’s Common Stock (the “Warrant
Shares”) equal to twenty-five percent (25%) of the Common Shares, rounded down
to the nearest whole share (the “Warrants,” and collectively with the Common
Shares, the “Securities”), for an aggregate purchase price of Seven Million Six
Hundred Ninety-Nine Thousand Nine Hundred Ninety-Nine and 84/100 Dollars ($7,699,999.84)
(the “Purchase Price”).  The purchase
price per share of each Common Share and the corresponding Warrant for 0.25
shares is $0.52.

 

C.            Contemporaneously
with the execution and delivery of this Agreement, the parties hereto are
executing and delivering a Registration Rights Agreement under which the
Company has agreed to provide certain registration rights under the Securities
Act, the rules and regulations promulgated thereunder and applicable state
securities laws.

 

D.            The
capitalized terms used herein and not otherwise defined have the meanings given
them in Article IX hereof.

 

In
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Investors hereby agree as follows:

 

ARTICLE I

PURCHASE AND SALE OF SECURITIES

 

1.1           Purchase
and Sale of Securities.  At the
Closing, subject to the terms of this Agreement and the satisfaction or waiver
of the conditions set forth in Articles VI and VII hereof, the Company will
issue and sell to each Investor, and each Investor will (on a several and not a
joint basis) purchase from the Company, the number of Securities set forth
beneath such Investor’s name on the signature pages hereof.

 

1.2           Payment.  At or prior to the Closing, each Investor
will pay the purchase price for the number of Securities set forth beneath its
name on the signature pages hereof, by wire transfer of immediately available
funds in accordance with the wire instructions set forth on Exhibit B
hereto.

 

 

The Company shall deliver to each Investor the
deliverables identified in Article VII on the Closing Date and certificates
representing the Common Shares so purchased by such Investor within three (3)
business days following the Closing Date against delivery of the purchase price
as described above.

 

1.3           Closing
Date.  Subject to the satisfaction or
waiver of the conditions set forth in Articles VI and VII hereof, the Closing
will take place at 10:00 a.m. Pacific Standard Time on February 10, 2005 or at
such other date or time agreed upon by the parties to this Agreement (the “Closing
Date”).  The Closing will be held at the
offices of Stradling Yocca Carlson & Rauth or at such other place as the
parties agree.

 

ARTICLE II

INVESTOR’S REPRESENTATIONS AND WARRANTIES

 

Each
Investor represents and warrants to the Company, severally and solely with
respect to itself and its purchase hereunder and not with respect to any other
Investor, that:

 

2.1           Investment
Purpose.  The Investor is purchasing
the Securities for its own account and not with a present view toward the
public sale or distribution thereof, except pursuant to sales registered or
exempted from registration under the Securities Act; provided, however, that by
making the representation herein, the Investor does not agree to hold any of
the Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption from registration under the Securities
Act.

 

2.2           Accredited
Investor Status.  The Investor is an “accredited
investor” as defined in Rule 501(a) of Regulation D.  The Investor has delivered an Investor
Questionnaire in the form of Exhibit C to the Company.

 

2.3           Reliance
on Exemptions.  The Investor
understands that the Securities are being offered and sold to it in reliance
upon specific exemptions from the registration requirements of United States
federal and state securities laws and that the Company is relying upon the
truth and accuracy of, and the Investor’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the Investor set
forth herein in order to determine the availability of such exemptions and the
eligibility of the Investor to acquire the Securities.

 

2.4           Information.  The Investor and its advisors, if any, have
been furnished with all materials relating to the business, finances and
operations of the Company, and materials relating to the offer and sale of the
Securities, that have been requested by the Investor or its advisors, if
any.  The Investor and its advisors, if
any, have been afforded the opportunity to ask questions of the Company.  Neither such inquiries nor any other due
diligence investigation conducted by Investor or any of its advisors or
representatives modify, amend or affect the Investor’s right to rely on the
Company’s representations and warranties contained in Article III below.  The Investor acknowledges and understands
that its investment in the Securities involves a significant degree of risk.

 

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2.5           Governmental
Review.  The Investor understands
that no United States federal or state agency or any other government or
governmental agency has passed upon or made any recommendation or endorsement
of the Securities or an investment therein.

 

2.6           Transfer
or Resale.  The Investor understands
that:

 

(a)           except as
provided in the Registration Rights Agreement, the Securities have not been and
are not being registered under the Securities Act or any applicable state
securities laws and, consequently, the Investor may have to bear the risk of
owning the Securities for an indefinite period of time because the Securities
may not be transferred unless (i) the resale of the Securities is registered
pursuant to an effective registration statement under the Securities Act; (ii)
the Investor has delivered to the Company an opinion of counsel (in form, substance
and scope customary for opinions of counsel in comparable transactions) to the
effect that the Securities to be sold or transferred may be sold or transferred
pursuant to an exemption from such registration; (iii) the Securities are sold
or transferred pursuant to Rule 144; or (iv) the Securities are sold or
transferred to an affiliate (as defined in Rule 144) of the Investor;

 

(b)           any sale
of the Securities made in reliance on Rule 144 may be made only in accordance
with the terms of Rule 144 and, if Rule 144 is not applicable, any resale of
the Securities under circumstances in which the seller (or the person through
whom the sale is made) may be deemed to be an underwriter (as that term is
defined in the Securities Act) may require compliance with some other exemption
under the Securities Act or the rules and regulations of the SEC thereunder;
and

 

(c)           except as
set forth in the Registration Rights Agreement, neither the Company nor any
other person is under any obligation to register the Securities under the
Securities Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder.

 

2.7           Legends.  The Investor understands that until (a) the
Securities may be sold by the Investor under Rule 144(k) or (b) such time as
the resale of the Securities has been registered under the Securities Act as
contemplated by the Registration Rights Agreement, the certificates
representing the Securities will bear a restrictive legend in substantially the
following form (and a stop-transfer order may be placed against transfer of the
certificates for such Securities):

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.  THE SECURITIES MAY NOT BE SOLD, TRANSFERRED
OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER APPLICABLE SECURITIES LAWS, OR UNLESS OFFERED, SOLD OR
TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THOSE LAWS.

 

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The
legend set forth above will be removed and the Company will issue a certificate
without the legend to the holder of any certificate upon which it is stamped,
in accordance with the terms of Article V hereof.

 

2.8           Authorization;
Enforcement.  This Agreement and the
Registration Rights Agreement have been duly and validly authorized, executed
and delivered on behalf of the Investor and are valid and binding agreements of
the Investor enforceable in accordance with their terms, subject to the effect
of any applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and the application of general
principles of equity.

 

2.9           Residency.  The Investor is a resident of (or, if an
entity, has its principal place of business in) the jurisdiction set forth
immediately below such Investor’s name on the signature pages hereto.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Except
as set forth in the Schedule of Exceptions attached hereto, the Company
represents and warrants to the Investors that:

 

3.1           Organization
and Qualification.  The Company and
each of its Significant Subsidiaries is duly incorporated, validly existing and
in good standing under the laws of the jurisdiction in which it is
incorporated, with full power and authority (corporate and other) to own,
lease, use and operate its properties and to carry on its business as and where
now owned, leased, used, operated and conducted.  The Company and each of its Significant
Subsidiaries is duly qualified to do business and is in good standing in every
jurisdiction in which the nature of the business conducted by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing would not have a Material Adverse Effect.  The Company and each of its Significant
Subsidiaries have taken all necessary action to qualify to do business and be
in good standing in every jurisdiction in which the nature of the business
conducted by it makes such qualification necessary, except where the failure to
be so qualified or in good standing would not have a Material Adverse Effect.

 

3.2           Authorization;
Enforcement.  (a) The Company has all
requisite corporate power and authority to enter into and to perform its
obligations under this Agreement, the Registration Rights Agreement and the
Warrants, to consummate the transactions contemplated hereby and thereby and to
issue the Common Shares, the Warrants and the Warrant Shares issuable upon
exercise of the Warrants in accordance with the terms hereof and thereof; (b)
the execution, delivery and performance of this Agreement, the Registration
Rights Agreement and the Warrants by the Company and the consummation by it of
the transactions contemplated hereby and thereby (including without limitation
the issuance of the Common Shares, the Warrants and the Warrant Shares issuable
upon exercise of the Warrants) have been duly authorized by the Company’s Board
of Directors and no further consent or authorization of the Company, its Board
or Directors, or its stockholders is required; (c) this Agreement, the
Registration Rights Agreement and the Warrants have been duly executed by the
Company; and (d) each of this Agreement, the Registration Rights Agreement and
the Warrants constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, subject to the
effect of any applicable bankruptcy, insolvency, reorganization, or moratorium
or similar laws affecting the rights of creditors generally and the application
of general principles of equity.

 

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3.3           Capitalization.  As of the date hereof, the authorized capital
of the Company consists of 150,000,000 shares of Common Stock, $.0001 par value
per share, and 10,000,000 shares of preferred stock, $.0001 par value per share
(“Preferred Stock”).  As of January 31,
2005, there were 60,437,621 shares of Common Stock issued and outstanding and
604,297 shares of Preferred Stock issued and outstanding.  Except as disclosed in the SEC Documents,
there are no options, warrants and convertible securities of the Company, and
any other rights to acquire securities of the Company.  All outstanding securities of the Company are
validly issued, fully paid and nonassessable. 
No stockholder of the Company is entitled to any preemptive rights with
respect to the purchase of or sale of any securities by the Company.

 

3.4           Issuance
of Securities.  The Securities are
duly authorized and, upon issuance in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable, free from all
taxes, liens, claims, encumbrances and charges with respect to the issue
thereof, will not be subject to preemptive rights or other similar rights of
stockholders of the Company, and will not impose personal liability on the
holders thereof.  The Company has reserved
a sufficient number of shares of Common Stock for issuance upon exercise of the
Warrants, and upon payment of the exercise price and exercise of the Warrants
in accordance with its terms, the Warrant Shares will be validly issued, fully
paid and non-assessable, free from all taxes, liens, claims, encumbrances and
charges with respect to the issue thereof, will not be subject to preemptive
rights or other similar rights of stockholders of the Company and will not
impose personal liability on the holders thereof.

 

3.5           No
Conflicts; No Violation.

 

(a)           The
execution, delivery and performance of this Agreement, the Registration Rights
Agreement and the Warrants by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without
limitation, the issuance of the Common Shares, the Warrants and the Warrant
Shares issuable upon exercise of the Warrants) will not (i) conflict with or
result in a violation of any provision of its Certificate of Incorporation or
Bylaws or (ii) violate or conflict with, or result in a breach of any provision
of, or constitute a default (or an event which with notice or lapse of time or
both could become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement, indenture,
patent, patent license, or instrument to which the Company or any Subsidiary is
a party, (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including U.S. federal and state securities laws and the
rules and regulations of any self-regulatory organizations to which the Company
or any Subsidiary or any of the securities of the Company or any Subsidiary are
subject) applicable to the Company or any Subsidiary or by which any property
or asset of the Company or its subsidiaries is bound or affected, or
(iv) result in the imposition of a Lien on any assets of the Company or
any of its Subsidiaries, except with respect to (ii), (iii) and (iv) above, for
such conflicts, breaches, defaults, terminations, amendments, accelerations,
cancellations, violations and impositions as would not, individually or in the
aggregate, have a Material Adverse Effect.

 

(b)           Neither
the Company nor any Subsidiary is in violation of its Certificate of
Incorporation, Bylaws or other organizational documents and neither the Company
nor any Subsidiary is in default (and no event has occurred which with notice
or lapse of time or both could put the Company in default) under any agreement,
indenture or instrument to which the Company or Subsidiary is a party or by
which any property or assets of the Company or its Subsidiaries are bound or
affected, except for defaults as would not, individually or in the aggregate,
have a Material Adverse Effect.

 

5

 

(c)           Neither
the Company nor any Subsidiary is conducting its business in violation of any
law, ordinance or regulation of any governmental entity, the failure to comply
with which would, individually or in the aggregate, have a Material Adverse
Effect.

 

(d)           Except as
specifically contemplated by this Agreement and as required under the
Securities Act and any applicable state securities laws or any listing
agreement with any securities exchange or automated quotation system, neither
the Company nor any Subsidiary is required to obtain any consent, authorization
or order of, or make any filing or registration with, any court or governmental
agency or any regulatory or self regulatory agency in order for the Company to
execute, deliver or perform any of its obligations under this Agreement, the
Registration Rights Agreement or the Warrants, in each case in accordance with
the terms hereof or thereof, or to issue and sell the Securities in accordance
with the terms hereof.  All consents,
authorizations, orders, filings and registrations which the Company is required
to obtain pursuant to the preceding sentence have been obtained or effected on
or prior to the date hereof or are not required to be made or obtained until
after the date hereof.

 

3.6           SEC
Filings, Other Filings and Regulatory Compliance.  Since January 1, 2002, the Company has timely
made all filings required to be made by it under the Exchange Act.  The Company has delivered or made accessible
to the Investors true, accurate and complete copies of (a) Company’s Annual
Report on Form 10-K for the fiscal year ended June 30, 2004, (b) the Company’s
Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2004,
(c) the Company’s definitive proxy statement dated June 17, 2004 relating to
its Special Meeting of Stockholders, and (d) all the Company’s Current Reports
on Form 8-K filed since July 1, 2004 (the “SEC Reports”).  The SEC
Reports, when filed, complied in all material respects with all applicable
requirements of the Exchange Act and the Sarbanes-Oxley Act of 2002, if and to
the extent applicable, and the rules and regulations of the SEC thereunder
applicable to the SEC Reports.  None of
the SEC Reports, at the time of filing, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading in light of
the circumstances in which they were made. 
The Company has filed in a
timely manner all documents that the Company was required to file under the
Exchange Act during the twelve (12) months preceding the date of this
Agreement.  The Company is currently
eligible to register the resale of the Common Shares and Warrant Shares in a
secondary offering on a registration statement on Form S-3 under the Securities
Act.  The Company has taken, or
will have taken prior to the Closing, all necessary actions to maintain
eligibility of its Common Stock for trading on, OTC Bulletin Board under all
currently effective inclusion requirements. 
Each balance sheet included in the SEC Reports (including any related
notes and schedules) fairly presents in all material respects the consolidated
financial position of the Company as of its date, and each of the other
financial statements included in the SEC Reports (including any related notes
and schedules) fairly presents in all material respects the consolidated
results of operations of the Company for the periods or as of the dates therein
set forth in accordance with GAAP consistently applied during the periods
involved (except that the interim reports are subject to adjustments which
might be required as a result of year end audit adjustments and except as
otherwise stated therein). Such financial statements included in the SEC
Reports were, at that time they were filed, consistent with the books and
records of the Company in all material respects and complied as to form in all
material respects with then applicable accounting requirements and with the
rules and regulations of the SEC with respect thereto.  The Company keeps accounting records in
accordance with GAAP in which all material assets and liabilities, and all
material transactions, including off-balance sheet transactions, of the Company
are recorded in material conformity with applicable accounting principles.

 

6

 

3.7           Material
Changes.  Except as set forth in the
SEC Reports or otherwise disclosed herein, since June 30, 2004, there has been
no Material Adverse Effect in respect of the Company.  Except as set forth in the SEC Reports or
otherwise disclosed herein, since June 30, 2004 there has not been: (i) any
direct or indirect redemption, purchase or other acquisition by the Company of
any shares of the Common Stock; (ii) any declaration, setting aside or payment
of any dividend or other distribution by the Company with respect to the Common
Stock; (iii) any material liabilities (absolute, accrued or contingent)
incurred or assumed by the Company, other than current liabilities incurred in
the ordinary course of business, liabilities under contracts entered into in
the ordinary course of business, purchase price payment obligations incurred in
connection with the acquisitions of Red Rock Communications Solutions, Inc. and
Integration Technologies, Inc., and liabilities not required to be reflected on
the Company’s financial statements pursuant to GAAP; (iv) any Lien or adverse
claim on any of the Company’s material properties or assets, except for Liens
for taxes not yet due and payable, interests of lessors under operating capital
leases, purchase money liens, amounts deposited as security for surety bonds,
Liens incurred in the ordinary course of business or Liens that are not
material in amount to the Company and its Subsidiaries taken as a whole; (v)
any sale, assignment or transfer by the Company of any of its material assets,
tangible or intangible, except in the ordinary course of business; (vi) any
default by the Company in the payment of principal or interest in any material
amount, or violation of any material covenant, with respect to any outstanding
debt obligations that are material to the Company; (vii) any material changes
to the Company’s critical accounting policies or material deviations from
historical accounting and other practices in connection with the maintenance of
the issuer’s books and records; or (viii) any agreement or commitment to do any
of the foregoing.

 

3.8           Litigation.  Except as disclosed in the SEC Reports, there
is no action, suit, proceeding or investigation pending or, to the Company’s
knowledge, currently threatened against the Company or any of its Subsidiaries
that questions the validity of this Agreement or the right of the Company to
enter into it, or to consummate the transactions contemplated hereby, or that
could reasonably be expected to result, either individually or in the
aggregate, in a Material Adverse Effect on the Company.  The foregoing includes, without limitation,
actions pending or, to the Company’s knowledge, threatened involving the prior
employment of any of the Company’s employees or their use in connection with
the Company’s business of any information or techniques allegedly proprietary
to any of their former employers. 
Neither the Company nor any of its Subsidiaries is a party to or subject
to the provisions of any order, writ, injunction, judgment or decree of any
court or governmental authority.  Except
as disclosed in the SEC Reports, there is no action, suit, proceeding or
investigation by the Company or any of its Subsidiaries currently pending or
which the Company or any of its Subsidiaries currently intends to initiate,
which could reasonably be expected to have a Material Adverse Effect.

 

3.9           Rights of Registration,
Voting Rights, and Anti-Dilution. 
Except as contemplated in this Agreement and the Registration
Rights Agreement and for registration rights for which the Company has filed
one or more registration statements that are currently effective, the Company has not granted or agreed to grant any
registration rights, including piggyback rights, to any person and, to the
Company’s knowledge, no stockholder of the Company has entered into any
agreements with respect to the voting of capital shares of the Company. The
issuance of the Shares does not constitute an anti-dilution event for any
existing security holders of the Company, pursuant to which such security
holders would be entitled to additional securities or a reduction in the
applicable conversion price or exercise price of any securities.

 

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3.10         Intellectual
Property Rights.  The Company owns or
possesses the licenses or rights to use all patents, patent applications,
patent rights, inventions, know-how, trade secrets, trademarks, trademark
applications, service marks, service names, trade names and copyrights
necessary to enable it to conduct its business as now operated (the “Intellectual
Property”).  Except as set forth in the
SEC Documents, there are no material outstanding options, licenses or
agreements relating to the Intellectual Property, nor is the Company bound by
or a party to any material options, licenses or agreements relating to the
patents, patent applications, patent rights, inventions, know-how, trade
secrets, trademarks, trademark applications, service marks, service names,
trade names or copyrights of any other person or entity.  Except as disclosed in the SEC Documents,
there is no claim or action or proceeding pending or, to the Company’s
knowledge, threatened that challenges the right of the Company with respect to
any Intellectual Property.  Except as set
forth in the SEC Documents, to the knowledge of the Company, the Company’s
Intellectual Property does not infringe any intellectual property rights of any
other person which, if the subject of an unfavorable decision, ruling or
finding would have a Material Adverse Effect.

 

3.11         Tax
Status.  The Company has timely made
or filed all federal, state and foreign income and all other tax returns,
reports and declarations required by any jurisdiction to which it is subject
(unless and only to the extent that the Company has set aside on its books
provisions reasonably adequate for the payment of all unpaid and unreported
taxes) and has timely paid all taxes and other governmental assessments and
charges, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith, and has set aside on
its books provisions reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or
declarations apply.  To the knowledge of
the Company, there are no unpaid taxes claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Company know of no basis
for any such claim.  The Company has not
executed a waiver with respect to the statute of limitations relating to the
assessment or collection of any foreign, federal, state or local tax.  None of the Company’s tax returns is
presently being audited by any taxing authority.

 

3.12         Environmental
Laws.  The Company (i) is in
compliance with all applicable foreign federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental Laws”), (ii) has received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
its business and (iii) is in compliance with all terms and conditions of any
such permit, license or approval where, in each of the three foregoing clauses,
the failure to so comply would have, individually or in the aggregate, a
Material Adverse Effect.

 

3.13         No
Brokers.  The Company has taken no
action which would give rise to any claim by any person for brokerage
commissions, finder’s fees or similar payments relating to this Agreement or
the transactions contemplated hereby, except for dealings with B.Riley &
Co., Inc., whose commissions and fees will be paid for by the Company.

 

3.14         Insurance.  The Company is insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as management of the Company believes to be prudent and customary in
the businesses in which the Company is engaged.

 

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3.15         Employment
Matters.  The Company is in
compliance with all federal, state, local and foreign laws and regulations
respecting employment and employment practices, terms and conditions of
employment and wages and hours, except where failure to be in compliance would
not have a Material Adverse Effect. The Company is not bound by or subject to
(and none of its assets or properties is bound by or subject to) any written or
oral, express or implied, contract, commitment or arrangement with any labor
union, and no labor union has requested or, to the Company’s knowledge, has
sought to represent any of the employees, representatives or agents of the
Company.  There is no strike or other
labor dispute involving the Company pending, or to the Company’s knowledge,
threatened nor is the Company aware of any labor organization activity
involving its employees.  The Company is
not aware that any officer or key employee, or that any group of officers or
key employees, intends to terminate their employment with the Company, nor does
the Company have a present intention to terminate the employment of any of the
foregoing.

 

3.16         Employee
Benefit Plans.  Except as disclosed
in the SEC Documents, there are no employee, profit sharing, stock option, stock
purchase, pension, retirement, bonus, severance or deferred compensation plans
or arrangements or any other welfare or benefit plans or any unfunded
liabilities in respect of any such plans or arrangements of the Company, as
well as all employment agreements, whether written or oral, with any person,
and any contracts with any labor unions.

 

3.17         Investment
Company Status.  The Company is not
and upon consummation of the sale of the Securities will not be an “investment
company,” a company controlled by an “investment company” or an “affiliated
person” of, or “promoter” or “principal underwriter” for, an “investment
company” as such terms are defined in the Investment Company Act of 1940, as
amended.

 

3.18         Subsidiaries.  Except for the Subsidiaries listed in the
Schedule of Exceptions, the Company does not presently own or control, directly
or indirectly, any interest in any other corporation, association, joint
venture, partnership or other business entity and the Company is not a direct
or indirect participant in any joint venture or partnership.  Except for Dyntek Services, Inc. and Red Rock
Communications Solutions, Inc., the Company has no “significant subsidiary,” as
that term is defined in Rule 1-02(w) of Regulation S-X under the Securities Act
(“Significant Subsidiaries”).

 

3.19         No
Conflict of Interest.  The Company is
not indebted, directly or indirectly, to any of its officers or directors or to
their respective spouses or children, in any amount whatsoever other than in
connection with expenses or advances of expenses incurred in the ordinary
course of business or relocation expenses of employees.  Except as set forth in the SEC Reports, none
of the Company’s officers, directors or employees, or any members of their
immediate families, are directly, or indirectly, indebted to the Company or, to
the best of the Company’s knowledge, have any direct or indirect ownership
interest in any entity with which the Company is affiliated or with which the
Company has a business relationship, or any entity which competes with the
Company, except that officers, directors, employees and/or stockholders of the
Company may own stock in (but not exceeding five percent (5%) of the
outstanding capital stock of) any publicly traded company that may compete with
the Company.  To the best of the Company’s
knowledge, none of the Company’s officers, directors or employees or any
members of their immediate families are, directly or indirectly, interested in
any material contract with the Company. 
The Company is not a guarantor or indemnitor of any indebtedness of any
other person or entity.

 

3.20         Reporting
Status; Eligibility to Use Form S-3. 
The Company’s Common Stock is registered under Section 12g of the
Exchange Act.  The Company currently
meets the “registrant eligibility” requirements set forth in the general
instructions to Form S-3 to enable the registration of

 

9

 

the Registrable Securities, as defined in the Registration Rights
Agreement and has no knowledge of any facts or circumstances which are
reasonably likely to change its compliance with such requirements or
eligibility to use Form S-3.

 

3.21         No
Manipulation of Stock.  The Company
has not taken and will not, in violation of applicable law, take, any action
designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock to facilitate
the sale or resale of the Common Shares.

 

3.22         Representations
Complete.  The representations and
warranties made by the Company in this Agreement, the statements made in any
certificates furnished by the Company pursuant to this Agreement, and the
statements made by the Company in any documents mailed, delivered or furnished
to the Investors in connection with this Agreement, taken as a whole, do not
contain and will not contain, as of their respective dates and as of the
Closing Date, any untrue statement of a material fact, nor do they omit or will
they omit, as of their respective dates or as of the Closing Date, to state any
material fact necessary in order to make the statements contained herein or
therein, in the light of the circumstances under which they were made, not
misleading.

 

ARTICLE IV

COVENANTS

 

4.1           Best
Efforts.  Each party will use its
best efforts to satisfy in a timely fashion each of the conditions to be
satisfied by it under Articles VI and VII of this Agreement.

 

4.2           Form D;
Blue Sky Laws.  The Company will
timely file a Notice of Sale of Securities on Form D with respect to the
Securities, as required under Regulation D. 
The Company will, on or before the Closing Date, take such action as it
reasonably determines to be necessary to qualify the Securities for sale to the
Investors under this Agreement under applicable securities (or “blue sky”) laws
of the states of the United States (or to obtain an exemption from such
qualification).

 

4.3           Continued
Eligibility to Use Form S-3. 
Throughout the Registration Period (as defined in the Registration
Rights Agreement), the Company will timely file all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC under
the reporting requirements of the Exchange Act, and the Company will not
terminate its status as an issuer required to file reports under the Exchange Act
even if the Exchange Act or the rules and regulations thereunder would permit
such termination.  The Company will take
all reasonably necessary action to continue to meet, the “registrant
eligibility” requirements set forth in the general instructions to Form S-3 to
enable the registration of the Registrable Securities as defined in the
Registration Rights Agreement.

 

4.4           Expenses.  The Company and each Investor is liable for,
and will pay, its own expenses incurred in connection with the negotiation,
preparation, execution and delivery of this Agreement and the other agreements
to be executed in connection herewith, including, without limitation, attorneys’
and consultants’ fees and expenses; provided, that if the transactions
contemplated hereby are consummated, the Company will pay reasonable fees and
expenses of one special counsel to the Investors, not to exceed $30,000.

 

4.5           Financial
Information.  As long as an Investor
owns any of the Securities or Warrant Shares, the financial statements of the
Company will be prepared in accordance with United States

 

10

 

generally accepted accounting principles, consistently applied, and
will fairly present in all material respects the consolidated financial
position of the Company and results of its operations and cash flows as of, and
for the periods covered by, such financial statements (subject, in the case of
unaudited statements, to normal year-end audit adjustments).

 

4.6           Notification
of Certain Matters.  Prior to the
Closing, each party hereto shall give prompt notice to the other party of the
occurrence, or non-occurrence, of any event which would be likely to cause any
representation and warranty herein to be untrue or inaccurate, or any covenant,
condition or agreement herein not to be complied with or satisfied.

 

4.7           Compliance
with Law.  As long as an Investor
owns any of the Securities or Warrant Shares, the Company will conduct its
business in compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business, including, without
limitation, all applicable local, state and federal environmental laws and
regulations, the failure to comply, individually or in the aggregate, with
which would have a Material Adverse Effect.

 

4.8           Sales
by Investors.  Each Investor will
sell any Securities sold by it in compliance with applicable prospectus
delivery requirements, if any, or otherwise in compliance with the requirements
for an exemption from registration under the Securities Act and the rules and
regulations promulgated thereunder.  No
Investor will make any sale, transfer or other disposition of the Securities in
violation of federal or state securities laws.

 

ARTICLE V

TRANSFER AGENT INSTRUCTIONS; REMOVAL OF LEGENDS

 

5.1           Issuance
of Certificates.  The Company will,
or will instruct its transfer agent to, issue certificates, registered in the
name of each Investor or its nominee, for the Securities and, promptly upon
exercise of any Warrants, the applicable Warrant Shares.  All such certificates will bear the
restrictive legend described in Section 2.7, except as otherwise specified in
this Article V.  The Company will not
give to its transfer agent any instruction other than as described in this
Article V and stop transfer instructions to give effect to Section 2.7 hereof
(prior to registration of the Securities under the Securities Act).  Nothing in this Section will affect in any
way the Investor’s obligations to comply with all applicable prospectus
delivery requirements, if any, upon resale of the Common Shares and/or Warrant
Shares.

 

5.2           Unrestricted
Securities.  If, unless otherwise
required by applicable state securities laws, (a) the Securities or Warrant
Shares represented by a certificate have been registered under an effective
registration statement filed under the Securities Act, (b) a holder of
Securities or Warrant Shares provides the Company and its transfer agent with
an opinion of counsel, in form, substance and scope customary for opinions of
counsel in comparable transactions, to the effect that a public sale or
transfer of such Securities or Warrant Shares may be made without registration
under the Securities Act and such sale either has occurred or may occur without
restriction on the manner of such sale or transfer, (c) such holder provides
the Company and its transfer agent with reasonable assurances that such
Securities or Warrant Shares can be sold under Rule 144, or (d) the Securities
or Warrant Shares represented by a certificate can be sold without restriction
as to the number of securities sold under Rule 144(k), the Company will permit
the transfer of the Securities or Warrant Shares, and the Company’s transfer
agent will issue one or more certificates, free from any restrictive legend, in
such name and in such denominations as specified by such holder.  Notwithstanding

 

11

 

anything herein to the contrary and subject to applicable securities
laws, the Securities or Warrant Shares may be pledged as collateral in
connection with a bona fide margin account or other lending arrangement;
provided that such pledge will not alter the provisions of this Article V with
respect to the removal of restrictive legends.

 

5.3           Enforcement
of Provision.  The Company acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to
the Investor by vitiating the intent and purpose of the transaction
contemplated hereby.  Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Article V will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Section, that the
Investor will be entitled, in addition to all other available remedies, to an injunction
restraining any breach and requiring immediate transfer of the Securities
and/or Warrant Shares, as applicable, without the necessity of showing economic
loss and without any bond or other security being required.

 

ARTICLE VI

CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL

 

The
obligation of the Company to issue and sell the Securities to each Investor at
the Closing is subject to the satisfaction by such Investor, on or before the
Closing Date, of each of the following conditions.  These conditions are for the Company’s sole
benefit and may be waived by the Company at any time in its sole discretion:

 

6.1           Execution
of Documents.  The Investor will have
executed this Agreement, the Investor Questionnaire and the Registration Rights
Agreement and will have delivered those agreements to the Company.

 

6.2           Purchase
Price.  The Investor will have
delivered the purchase price for the Securities to the Company in accordance
with this Agreement.

 

6.3           Representations
and Warranties.  The representations
and warranties of the Investor must be true and correct in all material
respects as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date, which
representations and warranties must be correct as of such date), and the
Investor will have performed and complied in all material respects with the
covenants and conditions required by this Agreement to be performed or complied
with by the Investor at or prior to the Closing.

 

6.4           No
Prohibition.  No statute, rule,
regulation, executive order, decree, ruling or injunction will have been
enacted, entered, promulgated or endorsed by or in any court or governmental
authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation
of any of the transactions contemplated by this Agreement or the Registration
Rights Agreement or the Warrants.

 

ARTICLE VII

CONDITIONS TO THE INVESTOR’S OBLIGATION TO PURCHASE

 

The
obligation of each Investor hereunder to purchase the Securities from the
Company at the Closing is subject to the satisfaction, on or before the Closing
Date, of each of the following

 

12

 

conditions.  These conditions are
for each Investor’s respective benefit and may be waived by any Investor at any
time in its sole discretion:

 

7.1           Execution
of Documents.  The Company will have
executed this Agreement, the Registration Rights Agreement and the Warrants and
will have delivered those Agreements to the Investor.

 

7.2           Representations
and Warranties.  Each of the
representations and warranties of the Company qualified by materiality must be
true and correct in all respects as of the Closing as though made at that time
(except for representations and warranties that speak as of a specific date,
which representations and warranties must be true and correct as of such date)
and each of the representations and warranties of the Company not qualified by
materiality must be true and correct in all material respects as of the Closing
as though made at that time (except for representations and warranties that
speak as of a specific date, which representations and warranties must be true
and correct as of such date) and the Company must have performed and complied
in all material respects with the covenants and conditions required by this
Agreement to be performed or complied with by the Company at or prior to the
Closing.  The Investor must have received
a certificate or certificates dated as of the Closing Date and executed by the
Chief Executive Officer or the Chief Financial Officer of the Company
certifying as to the matters in contained in this Section 7.2 and as to such
other matters as may be reasonably requested by such Investor, including, but
not limited to, the Company’s Certificate of Incorporation, Bylaws, Board of
Directors’ resolutions relating to the transactions contemplated hereby and the
incumbency and signatures of each of the officers of the Company who may execute
on behalf of the Company any document delivered at the Closing.

 

7.3           Opinion
of the Company’s Counsel.  The
Investors shall have received an opinion of the Company’s counsel, dated the
Closing Date, with respect to
legal matters customary for private offerings of this type.

 

7.4           No
Prohibitions.  No litigation,
statute, rule, regulation, executive order, decree, ruling or injunction will
have been enacted, entered, promulgated or endorsed by or in any court or
governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby which
prohibits the consummation of any of the transactions contemplated by this
Agreement or the Registration Rights Agreement or the Warrants and which could,
individually or in the aggregate, have a Material Adverse Effect.

 

7.5           Side
Letter.  The Company shall have
complied with all of its obligations set forth in the side letter between the
Company and SACC Partners L.P. dated the date hereof and as set forth as
Exhibit E hereto.

 

7.6           Irrevocable
Instructions.  Irrevocable transfer
agent instructions, in form and substance satisfactory to the Investors, will
have been delivered to the Company’s transfer agent instructing the transfer
agent to deliver certificates representing the Common Shares within three (3)
business days following the Closing Date.

 

13

 

7.7           Warrant
Certificates.  The Company shall have
delivered to the Investors certificates representing the Warrants purchased by
the Investors pursuant to this Agreement.

 

ARTICLE VIII

INDEMNIFICATION

 

In
consideration of each Investor’s execution and delivery of this Agreement and
its acquisition of the Securities hereunder, and in addition to all of the Company’s
other obligations under this Agreement and the Registration Rights Agreement
and the Warrants, the Company will defend, protect, indemnify and hold harmless
each Investor and each other holder of the Securities and all of their
stockholders, officers, directors, employees and direct or indirect investors
and any of the foregoing person’s agents or other representatives (including,
without limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the “Indemnitees”) from and
against any and all actions, causes of action, suits, claims, losses, costs,
penalties, fees, liabilities and damages, and expenses in connection therewith
(regardless of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys’ fees
and disbursements (the “Indemnified Liabilities”), incurred by an Indemnitee as
a result of, or arising out of, or relating to (a) any breach of any
representation or warranty made by the Company herein or in any other
certificate, instrument or document contemplated hereby or thereby, (b) any
breach of any covenant, agreement or obligation of the Company contained herein
or in any other certificate, instrument or document contemplated hereby or
thereby or (c) any cause of action, suit or claim brought or made against such
Indemnitee and arising out of or resulting from the execution, delivery,
performance, breach or enforcement of this Agreement or the Registration Rights
Agreement or Warrants by the Company.  To
the extent that the foregoing undertaking by the Company is unenforceable for
any reason, the Company will make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities that is permissible under
applicable law.

 

The
Indemnitees shall have the right to employ separate counsel in any such
proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnitees unless: (i) the
Company has agreed in writing to pay such fees and expenses; (ii) the Company
shall have failed to promptly assume the defense of such proceeding and to
employ counsel reasonably satisfactory to such Indemnitees in any such
proceeding; or (iii) the named parties to any such proceeding (including any
impleaded parties) include both such Indemnitees and the Company, and such
Indemnitees shall have been advised by counsel that a conflict of interest is
likely to exist if the same counsel were to represent such Indemnitees and the
Company (in which case, if such Indemnitees notify the Company in writing that
they elect to employ separate counsel at the expense of the Company, the
Company shall not have the right to assume the defense thereof and such counsel
shall be at the reasonable expense of the Company; provided, however, that in
no event shall the Company be responsible for the fees and expenses of more
than one separate counsel).  The Company
shall not be liable for any settlement of any such proceeding effected without
its written consent, which consent shall not be unreasonably withheld.  The Company shall not, without the prior
written consent of a majority of the Indemnitees, effect any settlement of any
pending proceeding in respect of which Indemnitees are a party, unless such
settlement includes an unconditional release of such Indemnitees from all
liabilities that are the subject matter of such proceeding.  Subject to the foregoing, all fees and
expenses (including reasonable fees and expenses to the extent incurred in
connection with investigating or preparing to defend any such proceeding in a
manner inconsistent with this Article VIII) of the Indemnitees shall be paid to
the Indemnitees as

 

14

 

incurred, within ten (10) business days of written notice thereof to
the Company, which notice shall be delivered no more frequently than on a
monthly basis; provided, that the Indemnitees shall reimburse the Company for
any and all such fees and expenses to the extent it is finally judicially
determined that such Indemnitees are not entitled to indemnification hereunder.

 

ARTICLE IX

DEFINITIONS

 

9.1            “Closing”
means the closing of the purchase and sale of the Securities under this
Agreement.

 

9.2           “Closing
Date” has the meaning set forth in Section 1.3.

 

9.3           “Common
Shares” has the meaning set forth in the Recitals.

 

9.4           “Common
Stock” means the common stock, par value $.0001 per share, of the Company.

 

9.5           “Company”
means DynTek, Inc.

 

9.6           “Environmental
Laws” has the meaning set forth in Section 3.11.

 

9.7           “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

9.8           “Exercise
Price” means $0.66 per share.

 

9.9           “Indemnified
Liabilities” has the meaning set forth in Article VIII.

 

9.10         “Indemnitees”
has the meaning set forth in Article VIII.

 

9.11         “Intellectual
Property” has the meaning set forth in Section 3.9.

 

9.12         “Investors”
means the investors whose names are set forth on the signature pages of this
Agreement, and their permitted transferees.

 

9.13         “Lien” means
any mortgage, pledge, security interest, encumbrance, lien or charge of any
kind (including any conditional sale or other title retention agreement, any
lease in the nature thereof, and the filing of or agreement to give any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction in connection with such mortgage, pledge, security interest,
encumbrance, lien or charge).

 

9.14         “Material
Adverse Effect” means a material adverse effect on (a) the business,
operations, prospects, assets, liabilities, rights, obligations or financial
condition of the Company and its Subsidiaries, taken as a whole, or (b) the
ability of the Company to perform its obligations pursuant to the transactions
contemplated by this Agreement or under the agreements or instruments to be
entered into or filed in connection herewith, including the Registration Rights
Agreement and the Warrants.  Without
limitation, the material breach of a contract involving more than $1,000,000,
the imposition of a government penalty of $250,000 or more, or the acceleration
of indebtedness of $500,000 or more shall be deemed a Material Adverse Effect.

 

15

 

9.15         “Preferred
Stock” has the meaning set forth in Section 3.3.

 

9.16         “Purchase
Price” has the meaning set forth in the Recitals.

 

9.17         “Registration
Rights Agreement” means the Registration Rights Agreement, dated as of the date
of this Agreement and among the parties to this Agreement, in the form attached
hereto as Exhibit D.

 

9.18         “Regulation
D” means Regulation D as promulgated under by the SEC under the Securities Act.

 

9.19         “Rule 144”
and “Rule 144(k)” mean Rule 144 and Rule 144(k), respectively, promulgated
under the Securities Act, or any successor rule.

 

9.20         “SEC” means
the United States Securities and Exchange Commission.

 

9.21         “SEC Reports”
has the meaning set forth in Section 3.6.

 

9.22         “Securities”
has the meaning set forth in the Recitals.

 

9.23         “Securities
Act” means the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute.

 

9.24         “Significant
Subsidiaries” has the meaning set forth in Section 3.18.

 

9.25         “Subsidiary”
means a Corporation or other business entity in which the Company controls,
either directly or indirectly, at least 50% of the voting power and which meets
the test of a significant subsidiary as defined in Rule 1-02(w) of Regulation
S-X promulgated under the Exchange Act.

 

9.26         “Warrants”
has the meaning set forth in the Recitals.

 

9.27         “Warrant
Shares” means the number of shares of Common Stock purchaseable by the
Warrants.

 

ARTICLE X

GOVERNING LAW; MISCELLANEOUS

 

10.1         Governing
Law; Jurisdiction; Jury Trial Waiver. 
This Agreement will be governed by and interpreted in accordance with
the laws of the State of California without regard to the principles of
conflict of laws.  The parties hereto
hereby submit to the exclusive jurisdiction of the United States federal and
state courts located in the County of Orange, State of California with respect
to any dispute arising under this Agreement, the agreements entered into in
connection herewith or the transactions contemplated hereby or thereby. EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT THAT IT MAY HAVE TO, AND AGREES NOT
TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY.

 

16

 

10.2         Counterparts;
Signatures by Facsimile.  This
Agreement may be executed in two or more counterparts, all of which are
considered one and the same agreement and will become effective when
counterparts have been signed by each party and delivered to the other
parties.  This Agreement, once executed
by a party, may be delivered to the other parties hereto by facsimile
transmission of a copy of this Agreement bearing the signature of the party so
delivering this Agreement.

 

10.3         Headings.  The headings of this Agreement are for
convenience of reference only, are not part of this Agreement and do not affect
its interpretation.

 

10.4         Severability.  If any provision of this Agreement is invalid
or unenforceable under any applicable statute or rule of law, then such
provision will be deemed modified in order to conform with such statute or rule
of law.  Any provision hereof that may
prove invalid or unenforceable under any law will not affect the validity or
enforceability of any other provision hereof.

 

10.5         Entire
Agreement; Amendments.  This
Agreement and the Registration Rights Agreement (including all schedules and
exhibits thereto) and the Warrants constitute the entire agreement among the
parties hereto with respect to the subject matter hereof and thereof.  There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein or
therein.  This Agreement supersedes all
prior agreements and understandings among the parties hereto with respect to
the subject matter hereof.  No provision
of this Agreement may be waived or amended other than by an instrument in
writing signed by the party to be charged with enforcement.

 

10.6         Notices.  Any notices required or permitted to be given
under the terms of this Agreement must be sent by certified or registered mail
(return receipt requested) or delivered personally or by courier (including a
recognized overnight delivery service) or by facsimile and will be effective
five days after being placed in the mail, if mailed by regular U.S. mail, or
upon receipt, if delivered personally, by courier (including a recognized
overnight delivery service) or by facsimile, in each case addressed to a
party.  The addresses for such
communications are:

 

	
  If to the Company:

  	
  Chief Financial Officer

  
	
   

  	
  DynTek, Inc.

  
	
   

  	
  18881 Von Karman Ave., Suite 250

  
	
   

  	
  Irvine, California 92512

  
	
   

  	
  Fax: (949) 955-0086

  
	
   

  	
   

  
	
   

  	
   

  
	
  With copies to:

  	
  Christopher Ivey, Esq.

  
	
   

  	
  Stradling Yocca Carlson & Rauth

  
	
   

  	
  660 Newport Center Drive, Suite 1600

  
	
   

  	
  Newport Beach, California 92660

  
	
   

  	
  Fax: (949) 725-4100

  

 

If to an Investor: To the address set forth immediately below such
Investor’s name on the signature pages hereto.

 

	
  With a copy to:

  	
  Peter J. Tennyson, Esq.

  
	
   

  	
  Paul, Hastings, Janofsky & Walker LLP

  
	
   

  	
  695 Town Center Drive, 17th Floor

  

 

17

 

	
   

  	
  Costa Mesa, California 92626

  
	
   

  	
  Fax: (949) 668-6337

  

 

Each
party will provide written notice to the other parties of any change in its
address in accordance with the notice provisions hereof.

 

10.7         Successors
and Assigns.  This Agreement is
binding upon and inures to the benefit of the parties and their successors and
assigns.  The Company will not assign
this Agreement or any rights or obligations hereunder without the prior written
consent of the Investors, and no Investor may assign this Agreement or any
rights or obligations hereunder without the prior written consent of the
Company.  Notwithstanding the foregoing,
an Investor may assign all or part of its rights and obligations hereunder to
any of its “affiliates,” as that term is defined under the Securities Act,
without the consent of the Company so long as the affiliate is an accredited
investor (within the meaning of Regulation D under the Securities Act) and
agrees in writing to be bound by this Agreement.  This provision does not limit the Investor’s
right to transfer the Securities pursuant to the terms of this Agreement or to
assign the Investor’s rights hereunder to any such transferee pursuant to the
terms of this Agreement.

 

10.8         Third
Party Beneficiaries.  This Agreement
is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other person.

 

10.9         No Other
Representations.  The Company makes
no representations or warranties in any oral or written information provided to
Investors, other than the representations and warranties included herein.

 

10.10       Further
Assurances.  Each party will do and
perform, or cause to be done and performed, all such further acts and things,
and will execute and deliver all other agreements, certificates, instruments
and documents, as another party may reasonably request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation
of the transactions contemplated hereby.

 

10.11       No
Strict Construction.  The language
used in this Agreement is deemed to be the language chosen by the parties to
express their mutual intent, and no rules of strict construction will be
applied against any party.

 

10.12       Equitable
Relief.  The Company recognizes that,
if it fails to perform or discharge any of its obligations under this
Agreement, any remedy at law may prove to be inadequate relief to the
Investors.  The Company therefore agrees
that the Investors are entitled to seek temporary and permanent injunctive
relief in any such case.

 

[SIGNATURE PAGE
FOLLOWS]

 

18

 

[SIGNATURE PAGE TO
SECURITIES PURCHASE AGREEMENT]

 

IN
WITNESS WHEREOF, the undersigned Investors and the Company have caused this
Securities Purchase Agreement to be duly executed as of the date first above
written.

 

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  DYNTEK,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

19

 

OMNIBUS
SIGNATURE PAGE TO

DYNTEK,
INC.

SECURITIES
PURCHASE AGREEMENT

 

The
undersigned hereby executes and delivers the Securities Purchase Agreement to
which this Signature Page is attached, which, together with all counterparts of
the Agreement and Signature Pages of the other parties named in said Agreement,
shall constitute one and the same document in accordance with the terms of the
Agreement.

 

 

	
   

  	
  Sign
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
	
   

  	
   

  
	
   

  	
  Number
  of Securities Purchased:

  
	
   

  	
   

  
	
   

  	
  Common
  Shares:

  	
   

  
	
   

  	
  Warrants
  (Number of Warrant Shares):

  	
   

  
								

 

If the name in which the
Share Certificates and Warrants are to be issued or the registered address of
the holder thereof is different than the name and address above, please provide
instructions below:

 

	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Registered
  Address:

  
	
   

  	
   

  
	
   

  	
   

  

 

 

SCHEDULE OF
INVESTORS

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SACC Partners, L.P.

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

Exhibit A

 

Form of Warrant

 

A-1

 

Exhibit B

 

Wire Transfer
Instructions

 

Please remit payment to:

 

Standard Federal

2600 Big Beaver Rd.

Troy, MI 48084

(888) 359-7306

Account Name: DynTek
Services, Inc.

ABA 072000805

Account # 6856286387

 

B-1

 

Exhibit C

 

Investor
Questionnaire

 

I certify that I am an Accredited
Investor because I fall within one of the following categories.

 

o            A
natural person whose individual net worth, or joint net worth with that person’s
spouse, at the time of his purchase exceeds $1,000,000;

 

o            A
natural person who had “Individual Income” in excess of $200,000 in each of the
two most recent years or joint income with that person’s spouse in excess of
$300,000 in each of those years and has a reasonable expectation of reaching
the same income level in the current year;

 

o            An
employee benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974, and the investment decision is made by a plan fiduciary,
as defined in Section 3(21) of such act, which is either a bank, savings and
loan association, insurance company or registered investment advisor or if the
employee benefit plan has total assets in excess of $5,000,000, or, if a
self-directed plan, with investment decisions made solely by persons that are
Accredited Investors;

 

o            A
bank as defined in Section 3(a)(2) of the Securities Act, or any savings and
loan association or other institution as defined in Section 3(a)(5)(A) of the
Securities Act, whether acting in its individual or fiduciary capacity;

 

o            A
broker or dealer registered pursuant to Section 15 of the Securities Exchange
Act of 1934, as amended;

 

o            An
insurance company as defined in Section 2(13) of the Securities Act;

 

o            An
investment company registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48) of that Act;

 

o            A
Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958;

 

o            A
plan established and maintained by a state, its political subdivisions, or any
agency or instrumentality of a state or its political subdivisions, for the
benefit of its employees, if such plan has total assets in excess of
$5,000,000;

 

o            A
private business development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940;

 

o            An
organization described in Section 501(c)(3) of the Internal Revenue Code,
corporation, Massachusetts or similar business trust, or partnership, not
formed for the specific purpose of acquiring the securities offered, with total
assets in excess of $5,000,000;

 

o            A
director, executive officer, or general partners of the issuer of the
securities being offered or sold, or any director, executive officer, or
general partner of a general partner of that issuer;

 

C-1

 

o            A
trust, with total assets in excess of $5,000,000, not formed for the specific
purpose of acquiring the securities offered, whose purchase is directed by a
sophisticated person who has such knowledge and experience in financial and
business matters that such person is capable of evaluating the merits and risks
of investing in the Company; or

 

o            An
entity in which all of the equity owners qualify under any of the above
subparagraphs.

 

Net Worth.  The term “net worth” means
the excess of total assets over total liabilities.  In calculating net worth, the stockholder may
include the estimated fair market value of the stockholder’s principal
residence as an asset.

 

Income.  In determining individual “income,”
the stockholder should add to the stockholder’s individual taxable adjusted
gross income (exclusive of any spousal income) any amounts attributable to tax
exempt income received, losses claimed as a limited partner in any limited
partnership, deductions claimed for depletion, contributions to an IRA or Keogh
retirement plan, alimony payments, and any amount by which income from
long-term capital gains has been reduced in arriving at adjusted gross income.

 

	
  Dated:   February      ,2005

  	
   

  

 

C-2

 

Exhibit D

 

Registration
Rights Agreement

 

D-1

 

Exhibit E

 

Side Letter

 

E-1Exhibit 10.02

 

REGISTRATION
RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT, dated as of February
10, 2005, is made by and among DynTek, Inc., a Delaware corporation, with
headquarters located at 18881 Von Karman Ave., Suite 250, Irvine, California 92512
(the “Company”), and the investors named on the signature pages hereto (the “Initial
Investors”).

 

RECITALS:

 

A.            In
connection with the Securities Purchase Agreement dated February 10, 2005
between the Initial Investors and the Company (the “Purchase Agreement”), the
Company has agreed, upon the terms and subject to the conditions of the
Purchase Agreement, to issue and sell to the Initial Investors an aggregate of 14,807,692
shares of the Company’s Common Stock (the “Common Shares”) and warrants to purchase
an aggregate of 3,701,919 shares of the Company’s Common Stock, subject to
adjustment (the “Warrants” and, collectively with the Common Shares, the “Securities”).

 

B.            In order
to induce the Initial Investors to execute and deliver the Purchase Agreement,
the Company has agreed to provide certain registration rights under the
Securities Act and applicable state securities laws with respect to the
Securities.

 

In consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Initial Investors hereby agree as follows:

 

ARTICLE I

DEFINITIONS

 

Capitalized terms used and not otherwise defined
herein have the respective meanings given them set forth in the Purchase
Agreement.  In addition, as used in this
Agreement, the following terms have the following meanings:

 

1.1           “Closing
Date” means the date on which the purchase of the Securities is consummated
pursuant to the Purchase Agreement.

 

1.2           “Common
Shares” means the shares of Common Stock sold pursuant to the Purchase
Agreement.

 

1.3           “Investors”
means the Initial Investors and any of their transferees or assignees who agree
to become bound by the provisions of this Agreement in accordance with Article
IX hereof.

 

1.4           “Registrable
Securities” means the Common Shares and the Warrant Shares, and any shares of
capital stock issued or issuable from time to time (with any adjustments) in
exchange for or otherwise with respect to the Common Shares or Warrant Shares
(including shares issued pursuant to Section 2.2 hereof).

 

1.5           “Registration
Period” means the period between the date of this Agreement and the earlier of
(i) the date on which (x) all of the Registrable Securities have been sold by
the Investors

 

 

pursuant to the Registration Statement and (y) are freely tradable
under the Securities Act (except that this clause (y) shall not apply with
respect to Shares sold to affiliates) and no additional Registrable Securities
may be issued in the future, (ii) the second anniversary of the last date on
which Warrant Shares are purchased under any then-outstanding Warrants, or
(iii) the date on which all the Registrable Securities may be immediately sold
by the Investors without registration and without restriction as to the number
of Registrable Securities to be sold, pursuant to Rule 144 or otherwise.

 

1.6           “Registration
Statement” means a Registration Statement of the Company filed under the
Securities Act.

 

1.7           The
terms “register,” “registered,” and “registration” refer to a registration
effected by preparing and filing a Registration Statement or statements in
compliance with the Securities Act and pursuant to Rule 415 and the declaration
or ordering of effectiveness of such Registration Statement by the SEC.

 

1.8           “Rule
415” means Rule 415 under the Securities Act, or any successor Rule providing
for offering securities on a continuous basis, and applicable rules and
regulations thereunder.

 

1.9           “Securities”
means the Common Shares and the Warrants sold pursuant to the Purchase
Agreement.

 

1.10         “Warrants”
means the warrants to purchase shares of the Company’s Common Stock sold
pursuant to the Purchase Agreement.

 

1.11         “Warrant
Shares” means the shares of the Company’s Common Stock that may be purchased
upon exercise of the Warrants.

 

ARTICLE II

REGISTRATION

 

2.1           Mandatory
Registration.  The Company shall file
with the SEC a Registration Statement on Form S-3 registering all of the
Registrable Securities for resale within 30 days after the Closing Date under
the Purchase Agreement.  If Form S-3 is
not available at that time, then the Company will file a Registration Statement
on such form as is then available to effect a registration of all of the Registrable
Securities, subject to the consent of the Investors, which consent will not be
unreasonably withheld.

 

2.2           Effectiveness
of the Registration Statement.  The
Company will use its best efforts to cause the Registration Statement to be
declared effective by the SEC as soon as practicable after filing, and in any
event no later than the 90th day after the Closing Date (the “Required
Effective Date”).  However, so long as
the Company filed the Registration Statement within 30 days after the Closing
Date, (a) if the SEC takes the position that registration of the resale of the
Registrable Securities by the Investors is not available under applicable laws,
rules and regulations and that the Company must register the offering of the
Registrable Securities as a primary offering by the Company, or (b) if the
Registration Statement receives SEC review, then the Required Effective Date
will be the 120th day after the Closing Date. 
In the case of an SEC response described in clause (a), the Company
will, within 40 business days after the date the Company receives such SEC
response,

 

2

 

file a Registration Statement as a primary offering.  The Company’s best efforts will include, but
not be limited to, promptly responding to all comments received from the staff
of the SEC.  If the Company receives
notification from the SEC that the Registration Statement will receive no
action or review from the SEC, then the Company will cause the Registration
Statement to become effective within five business days after such SEC
notification.  Once the Registration
Statement is declared effective by the SEC, the Company will cause the
Registration Statement to remain effective throughout the Registration Period,
except as permitted under Section 3.  On
the date of each monthly anniversary of the date on which any breach of this
Section 2.2 first occurs (including failure to file a Registration Statement or
to cause a Registration Statement to be declared effective within the time
periods set forth herein) until the applicable default is cured (each, a “Payment
Date”), the Company shall pay to each Investor as damages additional shares of
the Company’s Common Stock equal to 2.0% of the Common Shares purchased by such
Investor pursuant to the Purchase Agreement and all such shares shall become
Registrable Securities; provided, that the total number of shares of the
Company’s Common Stock payable pursuant to this Section 2.2 to any Investor
shall not exceed the lower of (i) the aggregate number of Common Shares
purchased pursuant to the Purchase Agreement by such Investor and (ii) the
number of shares, less one share, which, if issued, would have, at the time of
the Closing Date or Payment Date, required shareholder approval of such
issuance pursuant to Section 4350(i)(1)(D) of the Nasdaq Marketplace Rules
assuming that the Company is then subject to such rule.  In the event the number of shares of the
Company’s Common Stock issuable under this Section 2.2 is restricted by the
limitations in subsection (ii) of the previous sentence, the Company may waive
such limitation or, at the Company’s election, the balance of the damages
payable by the Company pursuant to this Section 2.2 may be paid in cash
(valuing the shares not so issued at the average of the closing prices of the
Company’s Common Stock over the twenty (20) trading days immediately preceding
the one-month anniversary of the default which requires the issuance of shares)
on the applicable Payment Date in accordance with payment instructions provided
by each Investor.

 

2.3           Piggyback
Registrations.

 

(a)           If,
at any time prior to the expiration of the Registration Period, the
Registration Statement contemplated in Section 2.1 above is not declared
effective with respect to all of the Registrable Securities and the Company decides
to register any of its securities for its own account or for the account of
others, then the Company will promptly give the Investors written notice
thereof and will use its best efforts to include in such registration all or
any part of the Registrable Securities requested by such Investors to be
included therein (excluding any Registrable Securities previously included in a
Registration Statement which has been declared effective and has not been
withdrawn).  This requirement does not
apply to Company registrations on Form S-4 or S-8 or their equivalents relating
to equity securities to be issued solely in connection with an acquisition of
any entity or business or equity securities issuable in connection with stock
option or other employee benefit plans. 
Each Investor must give its request for registration under this
paragraph to the Company in writing within 15 days after receipt from the
Company of notice of such pending registration. 
If the registration for which the Company gives notice is a public
offering involving an underwriting, the Company will so advise the Investors as
part of the above-described written notice. 
In that event, if the managing underwriter(s) of the public offering
impose a limitation on the number of shares of Common Stock that may be
included in the Registration Statement because, in such underwriter(s)’
judgment, such limitation would be necessary to effect an orderly public
distribution, then the Company will be obligated to include only such limited
portion, if any, of the Registrable Securities with respect to which such
Investors have requested inclusion hereunder. 
Any exclusion of Registrable Securities will be made pro rata among all
holders of the Company’s securities

 

3

 

seeking to include shares of Common Stock in proportion to the number
of shares of Common Stock sought to be included by those holders.  However, the Company will not exclude any
Registrable Securities unless the Company has first excluded all outstanding
securities the holders of which are not entitled by right to inclusion of such
securities in such Registration Statement or are not entitled pro rata
inclusion with the Registrable Securities.

 

(b)           No
right to registration of Registrable Securities under this Section 2.3 limits
in any way the registration required under Section 2.1 above.  The obligations of the Company under this
Section 2.3 expire upon the earlier of (i) the effectiveness of the
Registration Statement filed pursuant to Section 2.1 above, (ii) after the
Company has afforded the opportunity for the Investors to exercise registration
rights under this Section 2.3 for two registrations (provided, however, that
any Investor that has had any Registrable Securities excluded from any Registration
Statement in accordance with this Section 2.3 may include in any additional
Registration Statement filed by the Company the Registrable Securities so
excluded) or (iii) when all of the Registrable Securities held by any Investor
may be sold by such Investor under Rule 144 without being subject to any volume
restrictions.

 

2.4           Eligibility
to use Form S-3.  The Company
represents and warrants that it meets the requirements for the use of Form S-3
for registration of the sale by the Investors of the Registrable
Securities.  The Company will file all
reports required to be filed by the Company with the SEC in a timely manner so
as to preserve its eligibility for the use of Form S-3.

 

ARTICLE III

ADDITIONAL OBLIGATIONS OF THE COMPANY

 

3.1           Continued
Effectiveness of Registration Statement. 
Subject to the limitations set forth in Section 3.6, the Company will
keep the Registration Statement covering the Registrable Securities effective
under Rule 415 at all times during the Registration Period.  In the event that the number of shares
available under a Registration Statement filed pursuant to this Agreement is
insufficient to cover all of the Registrable Securities issued, the Company
will (if permitted) amend the Registration Statement or file a new Registration
Statement (on the short form available therefor, if applicable), or both, so as
to cover all of the Registrable Securities. 
The Company will file such amendment or new Registration Statement as
soon as practicable, but in no event later than 30 business days after the
necessity therefor arises (based upon the market price of the Common Stock and
other relevant factors on which the Company reasonably elects to rely).  The Company will use its best efforts to
cause such amendment or new Registration Statement to become effective as soon
as is practicable after the filing thereof, but in no event later than 90 days
after the date on which the Company reasonably first determines the need
therefor.

 

3.2           Accuracy
of Registration Statement.  Any
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) filed by the Company covering Registrable
Securities will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading.  The Company will prepare and
file with the SEC such amendments (including post-effective amendments) and
supplements to the Registration Statement and the prospectus used in connection
with the Registration Statement as may be necessary to permit sales pursuant to
the Registration Statement at all times during the Registration Period, and,
during such period, will comply with the provisions of the Securities Act

 

4

 

with respect to the disposition of all Registrable Securities of the
Company covered by the Registration Statement until the termination of the
Registration Period, or if earlier, until such time as all of such Registrable
Securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in the Registration
Statement.

 

3.3           Furnishing
Documentation.  The Company will
furnish to each Investor whose Registrable Securities are included in a
Registration Statement, or to its legal counsel, (a) promptly after such
document is filed with the SEC, one copy of any Registration Statement filed
pursuant to this Agreement and any amendments thereto, each preliminary
prospectus and final prospectus and each amendment or supplement thereto; and
(b) a number of copies of a prospectus, including a preliminary prospectus, and
all amendments and supplements thereto, and such other documents as the
Investor may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by the Investor. 
The Company will promptly notify by facsimile or email each Investor whose
Registrable Securities are included in any Registration Statement of the
effectiveness of the Registration Statement and any post-effective amendment.

 

3.4           Additional
Obligations.  The Company will use
its best efforts to (a) register and qualify the Registrable Securities covered
by a Registration Statement under such other securities or blue sky laws of
such jurisdictions as each Investor who holds (or has the right to hold)
Registrable Securities being offered reasonably requests, (b) prepare and file
in those jurisdictions any amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain their effectiveness during the Registration Period, (c) take any other
actions necessary to maintain such registrations and qualifications in effect
at all times during the Registration Period, and (d) take any other actions
reasonably necessary or advisable to qualify the Registrable Securities for
sale in such jurisdictions. 
Notwithstanding the foregoing, the Company is not required, in
connection with such obligations, to (i) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3.4, (ii) subject itself to general taxation in any such jurisdiction,
(iii) file a general consent to service of process in any such jurisdiction,
(iv) provide any undertakings that cause material expense or material burden to
the Company, or (v) make any change in its charter or bylaws, which in each
case the Board of Directors of the Company determines to be contrary to the
best interests of the Company and its stockholders.

 

3.5           Underwritten
Offerings.  If the Investors who hold
a majority in interest of the Registrable Securities being offered in an
offering pursuant to a Registration Statement or any amendment or supplement
thereto under this Agreement select underwriters reasonably acceptable to the
Company for such offering, the Company will enter into and perform its
obligations under an underwriting agreement in usual and customary form
including, without limitation, customary indemnification and contribution
obligations, with the managing underwriter of such offering.

 

3.6           Suspension
of Registration.

 

(a)           The
Company will notify (by telephone and also by facsimile and reputable overnight
courier) each Investor who holds Registrable Securities being sold pursuant to
a Registration Statement of the happening of any event of which the Company has
knowledge as a result of which the prospectus included in the Registration
Statement as then in effect includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading.  The Company
will make such notification as promptly as practicable (but in no

 

5

 

event more than two business days) after the Company becomes aware of
the event, will promptly (but in no event more than ten business days) prepare
and file a supplement or amendment to the Registration Statement to correct
such untrue statement or omission, and will deliver a number of copies of such
supplement or amendment to each Investor as such Investor may reasonably
request.

 

(b)           Notwithstanding
the obligations under Section 3.6(a), if in the good faith judgment of the
Company, following consultation with legal counsel, it would be detrimental to
the Company and its stockholders for resales of Registrable Securities to be
made pursuant to the Registration Statement due to the existence of a material
development or potential material development involving the Company which the
Company would be obligated to disclose in the Registration Statement, but which
disclosure would be premature or otherwise inadvisable at such time or would
reasonably be expected to have a material adverse effect upon the Company and
its stockholders, the Company will have the right to suspend the use of the
Registration Statement for a period of not more than forty-five days, provided,
however, that the Company may so defer or suspend the use of the Registration
Statement no more than one time in any twelve-month period.

 

(c)           Subject
to the Company’s rights under this Section 3, the Company will use its best
efforts to prevent the issuance of any stop order or other suspension of
effectiveness of a Registration Statement and, if such an order is issued, will
use its best efforts to obtain the withdrawal of such order at the earliest
possible time and to notify each Investor that holds Registrable Securities
being sold (or, in the event of an underwritten offering, the managing
underwriters) of the issuance of such order and the resolution thereof.

 

(d)           Notwithstanding
anything to the contrary contained herein or in the Purchase Agreement, if the
use of the Registration Statement is suspended by the Company, the Company will
promptly (but in no event more than two business days) give notice of the
suspension to all Investors whose securities are covered by the Registration
Statement, and will promptly (but in no event more than two business days)
notify each such Investor as soon as the use of the Registration Statement may
be resumed.  Notwithstanding anything to
the contrary contained herein or in the Purchase Agreement, the Company will
cause the Transfer Agent to deliver unlegended shares of Common Stock to a
transferee of an Investor in accordance with the terms of the Purchase
Agreement in connection with any sale of Registrable Securities with respect to
which such Investor has entered into a contract for sale prior to receipt of
notice of such suspension and for which such Investor has not yet settled,
unless otherwise prohibited by law.

 

3.7           Review
by the Investors.  The Company will
permit a single firm of legal counsel, designated by the Investors who hold a
majority in interest of the Registrable Securities being sold pursuant to a
Registration Statement (“Investor’s Counsel”), to review the Registration
Statement and all amendments and supplements thereto a reasonable amount of
time (not to exceed five (5) days) prior to their filing with the SEC, and will
not file any document in a form to which such counsel reasonably objects,
unless otherwise required by law in the opinion of the Company’s counsel.  The sections of any such Registration
Statement including information with respect to the Investors, the Investors’
beneficial ownership of securities of the Company or the Investors’ intended
method of disposition of Registrable Securities must conform to the information
provided to the Company by each of the Investors or Investors Counsel.

 

3.8           Comfort
Letter; Legal Opinion.  At the
request of the Investors who hold a majority in interest of the Registrable
Securities being sold pursuant to a Registration Statement, and on the date
that Registrable Securities are delivered to an underwriter for sale in
connection with the

 

6

 

Registration Statement, the Company will furnish to the Investors and
the underwriters (i) a letter, dated such date, from the Company’s independent
certified public accountants, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters; and (ii) an opinion, dated such
date, from counsel representing the Company for purposes of the Registration
Statement, in form and substance as is customarily given in an underwritten
public offering, addressed to the underwriters and Investors.

 

3.9           Due
Diligence; Confidentiality.

 

(a)           The
Company will make available for inspection by any Investor whose Registrable
Securities are being sold pursuant to a Registration Statement, any underwriter
participating in any disposition pursuant to the Registration Statement, and
any attorney, accountant or other agent retained by any such Investor or
underwriter (collectively, the “Inspectors”), all pertinent financial and other
records, pertinent corporate documents and properties of the Company
(collectively, the “Records”), as each Inspector reasonably deems necessary to
enable the Inspector to exercise its due diligence responsibility.  The Company will cause its officers,
directors and employees to supply all information that any Inspector may
reasonably request for purposes of performing such due diligence.

 

(b)           Each
Inspector will hold in confidence, and will not make any disclosure (except to
an Investor) of, any Records or other information that the Company determines
in good faith to be confidential, and of which determination the Inspectors are
so notified, unless (i) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in any Registration Statement, (ii) the
release of such Records is ordered pursuant to a subpoena or other order from a
court or government body of competent jurisdiction, (iii) the information in
such Records has been made generally available to the public other than by
disclosure in violation of this or any other agreement (to the knowledge of the
relevant Inspector), (iv) the Records or other information was developed
independently by an Inspector without breach of this Agreement, (v) the
information was known to the Inspector before receipt of such information from
the Company, or (vi) the information was disclosed to the Inspector by a third
party without restriction.  The Company
is not required to disclose any confidential information in the Records to any
Inspector unless and until such Inspector has entered into a confidentiality
agreement (in form and substance reasonably satisfactory to the Company) with
the Company with respect thereto, substantially in the substance of this
Section 3.9(b).  Each Investor will, upon
learning that disclosure of Records containing confidential information is
sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt notice to the Company and allow the Company,
at the Company’s expense, to undertake appropriate action to prevent disclosure
of, or to obtain a protective order for, the Records deemed confidential.  Nothing herein will be deemed to limit the
Investor’s ability to sell Registrable Securities in a manner that is otherwise
consistent with applicable laws and regulations.

 

(c)           The
Company will hold in confidence, and will not make any disclosure of,
information concerning an Investor provided to the Company under this Agreement
unless (i) disclosure of such information is necessary to comply with federal
or state securities laws, (ii) the disclosure of such information is necessary
to avoid or correct a misstatement or omission in any Registration Statement,
(iii) the release of such information is ordered pursuant to a subpoena or
other order from a court or governmental body of competent jurisdiction, (iv) such
information has been made generally available to the public other than by
disclosure in violation of this Agreement or any other agreement, (v) the
information was disclosed to the Company by a third party without

 

7

 

restriction or (vi) such Investor consents to the form and content of
any such disclosure.  If the Company
learns that disclosure of such information concerning an Investor is sought in
or by a court or governmental body of competent jurisdiction or through other
means, the Company will give prompt notice to such Investor prior to making
such disclosure and allow such Investor, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information.

 

3.10         Transfer
Agent; Registrar.  The Company will
provide a transfer agent and registrar, which may be a single entity, for the
Registrable Securities not later than the effective date of the Registration
Statement.

 

3.11         Share
Certificates.  The Company will
cooperate with the Investors who hold Registrable Securities being sold and
with the managing underwriter(s), if any, to facilitate the timely preparation
and delivery of certificates (not bearing any restrictive legends) representing
Registrable Securities to be offered pursuant to a Registration Statement and
will enable such certificates to be in such denominations or amounts as the
case may be, and registered in such names as the Investors or the managing
underwriter(s), if any, may reasonably request, all in accordance with Article
V of the Purchase Agreement.

 

3.12         Plan
of Distribution.  At the request of
the Investors holding a majority in interest of the Registrable Securities
registered pursuant to a Registration Statement, the Company will promptly
prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to the Registration Statement, and the prospectus
used in connection with the Registration Statement, as may be necessary in
order to change the plan of distribution set forth in such Registration
Statement.

 

3.13         Securities
Laws Compliance.  The Company will
comply with all applicable laws related to any Registration Statement relating
to the offer and sale of Registrable Securities and with all applicable rules
and regulations of governmental authorities in connection therewith (including,
without limitation, the Securities Act, the Exchange Act and the rules and
regulations promulgated by the SEC).

 

3.14         Further
Assurances.  The Company will take
all other reasonable actions as any Investor or the underwriters, if any, may
reasonably request to expedite and facilitate disposition by such Investor of
the Registrable Securities pursuant to the Registration Statement.

 

ARTICLE IV

OBLIGATIONS OF THE INVESTORS

 

4.1           Investor
Information.  As a condition to the
obligations of the Company to complete any registration pursuant to this
Agreement with respect to the Registrable Securities of each Investor, such
Investor shall furnish to the Company such information regarding itself, the
Registrable Securities held by it and the intended method of disposition of the
Registrable Securities held by it as is reasonably required by the Company to
effect the registration of the Registrable Securities.  At least ten business days prior to the first
anticipated filing date of a Registration Statement for any registration under
this Agreement, the Company will notify each Investor of the information the
Company requires from that Investor if the Investor elects to have any of its
Registrable Securities included in the Registration Statement, other than
information contained in the Selling Securityholder Notice and Questionnaire
attached hereto as Annex A, which shall be

 

8

 

completed and delivered to the Company no later than five days after
the Closing Date.  If, within two
business days prior to the filing date, the Company has not received the
requested information from an Investor, then the Company may file the Registration
Statement without including Registrable Securities of that Investor.

 

4.2           Further
Assurances.  Each Investor will
cooperate with the Company, as reasonably requested by the Company, in
connection with the preparation and filing of any Registration Statement
hereunder, unless such Investor has notified the Company in writing of such
Investor’s election to exclude all of such Investor’s Registrable Securities
from the Registration Statement.

 

4.3           Suspension
of Sales.  Upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
3.6, each Investor will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until it receives copies of the supplemented or amended prospectus
contemplated by Section 3.6.  If so
directed by the Company, each Investor will deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a certificate of
destruction) all copies in the Investor’s possession (other than a limited
number of file copies) of the prospectus covering such Registrable Securities
that is current at the time of receipt of such notice.

 

4.4           Underwritten
Offerings.

 

(a)           If
Investors holding a majority in interest of the Registrable Securities being
registered (with the approval of the Initial Investors) determine to engage the
services of an underwriter, each Investor will enter into and perform such
Investor’s obligations under an underwriting agreement, in usual and customary
form, including, without limitation, customary indemnification and contribution
obligations, with the managing underwriter of such offering, and will take such
other actions as are reasonably required in order to expedite or facilitate the
disposition of the Registrable Securities, unless such Investor has notified
the Company in writing of such Investor’s election to exclude all of its
Registrable Securities from such Registration Statement.

 

(b)           Without
limiting any Investor’s rights under Section 2.1 hereof, no Investor may
participate in any underwritten distribution hereunder unless such Investor (a)
agrees to sell such Investor’s Registrable Securities on the basis provided in
any underwriting arrangements approved by the Investors entitled hereunder to
approve such arrangements, (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements, and (c)
agrees to pay its pro rata share of all underwriting discounts and commissions
applicable with respect to its Registrable Securities.

 

ARTICLE V

EXPENSES OF REGISTRATION

 

The Company will bear all reasonable expenses, other
than underwriting discounts and commissions, and transfer taxes, if any,
incurred in connection with registrations, filings or qualifications pursuant
to Articles II and III of this Agreement, including, without limitation, all
registration, listing and qualifications fees, printers and accounting fees,
the fees and disbursements of counsel for the Company, and the reasonable fees
and disbursements of one firm of legal counsel selected by the Initial
Investors pursuant to Section 3.7 hereof.

 

9

 

ARTICLE VI

INDEMNIFICATION

 

In the event that any Registrable Securities are
included in a Registration Statement under this Agreement:

 

6.1           To
the extent permitted by law, the Company will indemnify, defend and hold
harmless each Investor that holds such Registrable Securities, and agents,
employees, attorneys, accountants, underwriters (as defined in the Securities
Act) for such Investors and any directors or officers of such Investor or such
underwriter and any person who controls such Investor or such underwriter
within the meaning of the Securities Act or the Exchange Act (each, an “Investor
Indemnified Person”) against any losses, claims, damages, expenses or
liabilities (collectively, and together with actions, proceedings or inquiries
by any regulatory or self-regulatory organization, whether commenced or
threatened in respect thereof, “Claims”) to which any of them become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such Claims
arise out of or are based upon any of the following statements, omissions or
violations in a Registration Statement filed pursuant to this Agreement, any
post-effective amendment thereof or any prospectus included therein:  (a) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
post-effective amendment thereof or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, (b) any untrue statement or alleged untrue
statement of a material fact contained in the prospectus or any preliminary
prospectus (as it may be amended or supplemented) or the omission or alleged
omission to state therein any material fact necessary to make the statements
made therein, in light of the circumstances under which the statements therein
were made, not misleading, or (c) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act or any other law, including
without limitation any state securities law or any rule or regulation
thereunder (the matters in the foregoing clauses (a) through (c) being,
collectively, “Violations”).  Subject to
the restrictions set forth in Section 6.4 with respect to the number of legal
counsel, the Company will reimburse the Investors and each such attorney,
accountant, underwriter or controlling person and each such other Investor
Indemnified Person, promptly as such expenses are incurred and are due and
payable, for any legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any Claim.  Notwithstanding anything to the contrary
contained herein, the indemnification agreement contained in this Section 6.1
(i) does not apply to a Claim by an Investor Indemnified Person arising out of
or based upon a Violation that occurs in reliance upon and in conformity with
information furnished in writing to the Company by such Investor Indemnified
Person expressly for use in the Registration Statement or any such amendment
thereof or supplement thereto, if such prospectus or supplement thereto was
timely made available by the Company pursuant to Section 3.3 hereof; and (ii)
does not apply to amounts paid in settlement of any Claim if such settlement is
made without the prior written consent of the Company, which consent will not
be unreasonably withheld. This indemnity obligation will remain in full force
and effect regardless of any investigation made by or on behalf of the
Indemnified Persons and will survive the transfer of the Registrable Securities
by the Investors under Article IX of this Agreement.

 

6.2           In
connection with any Registration Statement in which an Investor is
participating, each such Investor will indemnify and hold harmless, to the same
extent and in the same manner set forth in Section 6.1 above, the Company, each
of its directors, each of its officers who signs the Registration Statement,
each person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act, and any other stockholder selling
securities pursuant to the Registration Statement or any of its directors or
officers or any person who controls such stockholder

 

10

 

within the meaning of the Securities Act or the Exchange Act (each a “Company
Indemnified Person”) against any Claim to which any of them may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such Claim
arises out of or is based upon any Violation, in each case to the extent (and
only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished to the Company by such Investor
expressly for use in such Registration Statement.  Subject to the restrictions set forth in Section
6.4 with respect to the number of legal counsel, such Investor will promptly
reimburse each Company Indemnified Person for any legal or other expenses
(promptly as such expenses are incurred and due and payable) reasonably
incurred by them in connection with investigating or defending any such
Claim.   However, the indemnity agreement
contained in this Section 6.2 does not apply to amounts paid in settlement of
any Claim if such settlement is effected without the prior written consent of
such Investor, which consent will not be unreasonably withheld, and no Investor
will be liable under this Agreement (including this Section 6.2 and Article
VII) for the amount of any Claim that exceeds the net proceeds actually
received by such Investor as a result of the sale of Registrable Securities
pursuant to such Registration Statement. 
This indemnity will remain in full force and effect regardless of any
investigation made by or on behalf of a Company Indemnified Party and will
survive the transfer of the Registrable Securities by the Investors under
Article IX of this Agreement.

 

6.3           If
any proceeding shall be brought or any claim asserted against any person
entitled to indemnity under Sections 6.1 or 6.2 hereof (an “Indemnified Party”),
such Indemnified Party promptly shall notify the person from whom indemnity is
sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all reasonable fees
and expenses incurred in connection with defense thereof; provided, however,
that the failure of any Indemnified Party to give such notice shall not relieve
the Indemnifying Party of its obligations or liabilities pursuant to this
Agreement, except (and only) to the extent that such failure shall have
proximately and materially adversely prejudiced the Indemnifying Party.

 

6.4           An
Indemnified Party shall have the right to employ separate counsel in any such
proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or
Indemnified Parties unless: (i) the Indemnifying Party has agreed in writing to
pay such fees and expenses; (ii) the Indemnifying Party shall have failed
promptly to assume the defense of such proceeding and to employ counsel
reasonably satisfactory to such Indemnified Party in any such proceeding; or
(iii) the named parties to any such proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and such
Indemnified Party shall have been advised by counsel that a conflict of
interest is likely to exist if the same counsel were to represent such
Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects to
employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and such
counsel shall be at the reasonable expense of the Indemnifying Party; provided,
however, that in no event shall the Indemnifying Party be responsible for the
fees and expenses of more than one separate counsel).  The Indemnifying Party shall not be liable
for any settlement of any such proceeding effected without its written consent,
which consent shall not be unreasonably withheld.  No Indemnifying Party shall, without the
prior written consent of the Indemnified Party, effect any settlement of any pending
proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability on Claims that are the subject matter of such proceeding.

 

11

 

6.5           Subject
to the foregoing, all reasonable fees and expenses of the Indemnified Party
(including fees and expenses to the extent incurred in connection with
investigating or preparing to defend such proceeding in a manner not inconsistent
with this Section) shall be paid to the Indemnified Party, as incurred, within
ten (10) Business Days of written notice thereof to the Indemnifying Party,
which notice shall be delivered no more frequently than on a monthly basis
(regardless of whether it is ultimately determined that an Indemnified Party is
not entitled to indemnification hereunder; provided, that the Indemnifying
Party may require such Indemnified Party to undertake to reimburse all such
fees and expenses to the extent it is finally judicially determined that such
Indemnified Party is not entitled to indemnification hereunder).

 

ARTICLE VII

CONTRIBUTION

 

If the indemnification provided for in Article VI is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage or expense referred to
herein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party, on the one hand, and of the indemnified party, on the
other, in connection with the statements or omissions that resulted in such
loss, liability, claim, damage or expense, as well as any other relevant
equitable considerations; provided, that in no event shall any contribution by
a Investor under this Article VII exceed the net proceeds from the offering
received by such Investor, except in the case of fraud by such Investor.  The relative fault of the indemnifying party
and of the indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties’ relative
intent, knowledge, access to information, and opportunity to correct or prevent
such statement or omission.

 

ARTICLE VIII

EXCHANGE ACT REPORTING

 

In order to make available to the Investors the
benefits of Rule 144 or any similar rule or regulation of the SEC that may at
any time permit the Investors to sell securities of the Company to the public
without registration, the Company will:

 

(a)           File
with the SEC in a timely manner, and make and keep available, all reports and
other documents required of the Company under the Securities Act and the
Exchange Act so long as the Company remains subject to such requirements and
file and make available of such reports and other documents as required for the
applicable provisions of Rule 144; and

 

(b)           Furnish
to each Investor, so long as such Investor holds Registrable Securities,
promptly upon the Investor’s request, (i) a written statement by the Company
that it has complied with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act, (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents filed by
the Company with the SEC, and (iii) such other information as may be reasonably
requested to permit the Investors to sell such securities pursuant to Rule 144
without registration.

 

12

 

ARTICLE IX

ASSIGNMENT OF REGISTRATION RIGHTS

 

The rights of the Initial Investors hereunder,
including the right to have the Company register Registrable Securities
pursuant to this Agreement, may be assigned by the Initial Investors to
transferees or assignees of all or any portion of the Registrable Securities,
but only if (a) the Investor agrees in writing with the transferee or assignee
to assign such rights, and a copy of such agreement is furnished to the Company
within a reasonable time after such assignment, (b) the Company is, within a
reasonable time after such transfer or assignment, furnished with written
notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being transferred
or assigned, (c) after such transfer or assignment, the further disposition of
such securities by the transferee or assignee is restricted under the
Securities Act and applicable state securities laws, (d) at or before the time
the Company received the written notice contemplated by clause (b) of this
sentence, the transferee or assignee agrees in writing with the Company to be
bound by all of the provisions contained herein, (e) such transfer is made in
accordance with the applicable requirements of the Purchase Agreement, and (f)
the transferee is an “accredited investor” as that term is defined in Rule 501
of Regulation D.

 

ARTICLE X

AMENDMENT OF REGISTRATION RIGHTS

 

This Agreement may be amended and the obligations
hereunder may be waived (either generally or in a particular instance, and
either retroactively or prospectively) only with the written consent of the
Company and of the Investors who then hold a majority of the Registrable
Securities.  Any amendment or waiver
effected in accordance with this Article X is binding upon each Investor and
the Company.

 

ARTICLE XI

MISCELLANEOUS

 

11.1         Conflicting
Instructions.  A person or entity is
deemed to be a holder of Registrable Securities whenever such person or entity
owns of record such Registrable Securities. 
If the Company receives conflicting instructions, notices or elections
from two or more persons or entities with respect to the same Registrable
Securities, the Company will act upon the basis of instructions, notice or
election received from the registered owner of such Registrable Securities.

 

11.2         Notices.  Any notices required or permitted to be given
under the terms of this Agreement will be given as set forth in the Purchase
Agreement.

 

11.3         Waiver.  Failure of any party to exercise any right or
remedy under this Agreement or otherwise, or delay by a party in exercising
such right or remedy, does not operate as a waiver thereof.

 

11.4         Governing
Law.  This Agreement will be governed
by and interpreted in accordance with the federal securities laws and the laws
of the State of California without regard to the principles of conflict of
laws.  The parties hereto hereby submit
to the exclusive jurisdiction of the United States federal and state courts located
in the County of Orange, State of California with respect to any dispute
arising under this Agreement, the agreements entered into in connection
herewith or the transactions contemplated hereby or thereby. EACH PARTY HEREBY
IRREVOCABLY WAIVES

 

13

 

ANY RIGHT THAT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL
FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH
ANY TRANSACTION CONTEMPLATED HEREBY.

 

11.5         Severability.  If any provision of this Agreement is invalid
or unenforceable under any applicable statute or rule of law, then such
provision will be deemed modified in order to conform with such statute or rule
of law.  Any provision hereof that may
prove invalid or unenforceable under any law will not affect the validity or
enforceability of any other provision hereof.

 

11.6         Entire
Agreement.  This Agreement and the
Purchase Agreement (including all schedules and exhibits thereto) constitute
the entire agreement among the parties hereto with respect to the subject
matter hereof and thereof.  There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein or therein.  This
Agreement supersedes all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof.

 

11.7         Successors
and Assigns.  Subject to the
requirements of Article IX hereof, this Agreement inures to the benefit of and
is binding upon the successors and assigns of each of the parties hereto.  Notwithstanding anything to the contrary
herein, including, without limitation, Article IX, the rights of an Investor
hereunder are assignable to and exercisable by a bona fide pledgee of the
Registrable Securities in connection with an Investor’s margin or brokerage
accounts.

 

11.8         Headings.  The headings of this Agreement are for
convenience of reference only, are not part of this Agreement and do not affect
its interpretation.

 

11.9         Counterparts.  This Agreement may be executed in two or more
counterparts, each of which is deemed an original but all of which constitute
one and the same agreement.  This
Agreement, once executed by a party, may be delivered to the other party hereto
by facsimile transmission, and facsimile signatures are binding on the parties
hereto.

 

11.10       Further
Assurances.  Each party will do and
perform, or cause to be done and performed, all such further acts and things,
and will execute and deliver all other agreements, certificates, instruments
and documents, as another party may reasonably request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation
of the transactions contemplated hereby.

 

11.11       Consents.  Unless otherwise provided in this Agreement,
all consents and other determinations to be made by the Investors pursuant to
this Agreement will be made by the Investors holding a majority in interest of
the Registrable Securities.

 

11.12       No
Strict Construction.  The language
used in this Agreement is deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied
against any party.

 

[SIGNATURES
ON FOLLOWING PAGE]

 

14

 

[SIGNATURE
PAGE TO REGISTRATION RIGHTS AGREEMENT]

 

IN WITNESS WHEREOF, the undersigned Investors and the
Company have caused this Registration Rights Agreement to be duly executed as
of the date first above written.

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  DYNTEK, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

15

 

OMNIBUS
SIGNATURE PAGE TO

DYNTEK,
INC.

REGISTRATION
RIGHTS AGREEMENT

 

The undersigned hereby executes and delivers the
Registration Rights Agreement to which this Signature Page is attached, which,
together with all counterparts of the Agreement and Signature Pages of the
other parties named in said Agreement, shall constitute one and the same
document in accordance with the terms of the Agreement.

 

	
   

  	
  Sign Name:

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
	
   

  	
  Number of Common
  Shares:

  	
   

  
	
   

  	
  Number of
  Warrant Shares:

  	
   

  
				

 

i

 

ANNEX A

 

Dyntek,
Inc.

 

Selling
Securityholder Notice and Questionnaire

 

The undersigned beneficial
owner of common stock, $.0001 par value per share (the “Common Stock”)
of Dyntek, Inc. (the “Company”) (the “Registrable Securities”)
understands that the Company has filed or intends to file with the Securities
and Exchange Commission (the “Commission”) a registration statement on
Form S-3 (the “Registration Statement”) for the registration and resale
under Rule 415 of the Securities Act of 1933, as amended (the “Securities
Act”), of the Registrable Securities, in accordance with the terms of the
Registration Rights Agreement, dated as of February      ,
2005 (the “Registration Rights Agreement”), among the Company and the
Investors named therein.  A copy of the
Registration Rights Agreement is available from the Company upon request at the
address set forth below.  All capitalized
terms not otherwise defined herein shall have the meanings ascribed thereto in
the Registration Rights Agreement.

 

Certain legal consequences
arise from being named as a selling securityholder in the Registration
Statement and the related prospectus. 
Accordingly, holders and beneficial owners of Registrable Securities are
advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a selling securityholder in the
Registration Statement and the related prospectus.

 

NOTICE

 

The undersigned beneficial owner
(the “Selling Securityholder”) of Registrable Securities hereby elects
to include the Registrable Securities owned by it and listed below in Item 3
(unless otherwise specified under such Item 3) in the Registration Statement.

 

A-1

 

The undersigned hereby
provides the following information to the Company and represents and warrants
that such information is accurate:

 

QUESTIONNAIRE

 

	
  1.

  	
  Name.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Full Legal Name of Selling
  Securityholder

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Full Legal Name of
  Registered Holder (if not the same as (a) above) through which Registrable
  Securities Listed in Item 3 below are held:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Full Legal Name of Natural
  Control Person (which means a natural person who directly or indirectly alone
  or with others has power to vote or dispose of the securities covered by the
  questionnaire):

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.  Address for Notices to Selling
  Securityholder:

  
	
   

  
	
   

  
	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Fax:

  	
   

  
	
   

  	
  Contact Person:

  	
   

  
	
   

  
	
  3.  Beneficial
  Ownership of Registrable Securities:

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Type and Amount of
  Registrable Securities beneficially owned:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
										

 

A-2

 

	
  4.  Broker-Dealer Status:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Are you a broker-dealer?

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Yes  o

  	
   

  	
  No  o

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Note:

  	
  If yes, the Commission’s
  staff has indicated that you should be identified as an underwriter in the
  Registration Statement.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Are you an affiliate of a
  broker-dealer?

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Yes  o

  	
   

  	
  No  o

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  If you are an affiliate of
  a broker-dealer, do you certify that you bought the Registrable Securities in
  the ordinary course of business, and at the time of the purchase of the
  Registrable Securities to be resold, you had no agreements or understandings,
  directly or indirectly, with any person to distribute the Registrable
  Securities?

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Yes  o

  	
   

  	
  No  o

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Note:

  	
  If no, the Commission’s
  staff has indicated that you should be identified as an underwriter in the
  Registration Statement.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.  Beneficial Ownership of Other Securities of
  the Company Owned by the Selling Securityholder.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Except
  as set forth below in this Item 5, the undersigned is not the beneficial or
  registered owner of any securities of the Company other than the Registrable
  Securities listed above in Item 3.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Type and Amount of Other
  Securities beneficially owned by the Selling Securityholder:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
																						

 

A-3

 

	
  6.  Relationships
  with the Company:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Except as
  set forth below, neither the undersigned nor any of its affiliates, officers,
  directors or principal equity holders (owners of 5% of more of the equity
  securities of the undersigned) has held any position or office or has had any
  other material relationship with the Company (or its predecessors or
  affiliates) during the past three years.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  State any exceptions here:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
							

 

The undersigned agrees to
promptly notify the Company of any inaccuracies or changes in the information
provided herein that may occur subsequent to the date hereof at any time while
the Registration Statement remains effective.

 

By signing below, the
undersigned consents to the disclosure of the information contained herein in
its answers to Items 1 through 6 and the inclusion of such information in the
Registration Statement and the related prospectus.  The undersigned understands that such
information will be relied upon by the Company in connection with the
preparation or amendment of the Registration Statement and the related
prospectus.

 

IN WITNESS WHEREOF the
undersigned, by authority duly given, has caused this Notice and Questionnaire
to be executed and delivered either in person or by its duly authorized agent.

 

	
  Dated:

  	
   

  	
   

  	
  Beneficial
  Owner:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
								

 

PLEASE
FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
THE ORIGINAL BY OVERNIGHT MAIL, TO:

 

Dyntek, Inc.

c/o Stradling
Yocca Carlson & Rauth

660 Newport Center
Drive, Suite 1600

Newport Beach,
CA  92660

Attention:  Christopher D. Ivey

 

A-4

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