Exhibit 99.6
DC ASSET MANAGEMENT LLC
000 XXXXX XXXXXX
XXX XXXX, XXX XXXX 00000
As of September 1, 2004
DynTek, Inc.
00000 Xxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Chairman, CEO and President
Dear Xx. Xxxx:
This letter, when executed by the parties hereto, will memorialize our
understanding and constitute an agreement between DynTek, Inc., a Delaware
corporation (the "Company"), and DC Asset Management LLC ("DCAM"), pursuant to
which the Company agrees to retain DCAM and DCAM agrees to be retained by the
Company under the terms and conditions set forth below:
1. The Company hereby retains DCAM to negotiate, evaluate and structure
merger, acquisition and other transactions, and DCAM hereby accepts such
retention, for a term commencing on the date hereof and ending on September 1,
2005. As compensation for the services DCAM will provide to the Company, the
Company shall within thirty days of the execution of this Agreement, issue to
DCAM five-year warrants to purchase 1,150,000 shares of the Company's common
stock, $.0001 par value per share (the "Common Stock"). A form of such warrant
is attached hereto as Exhibit A (the "Warrants"). The Company agrees to provide
to DCAM such registration rights with respect to the shares of Common Stock
underlying the Warrants as set forth in Exhibit B attached hereto. The parties,
prior to any registration, agree to enter into a customary form of
indemnification agreement.
2. The Company shall reimburse DCAM for any and all reasonable expenses
incurred by DCAM in the performance of its duties hereunder, and DCAM shall
account for such expenses to the Company by submission of vouchers reasonably
satisfactory to the Company setting forth in reasonable detail the amount and
reason for such cost or expense.
3. All obligations of DCAM contained herein shall be subject to DCAM's
reasonable availability for such performance, in view of the nature of the
requested service and the amount of notice received. DCAM shall devote such time
and effort to the performance of its duties hereunder as DCAM shall determine is
reasonably necessary for such performance. DCAM may look to such others for such
factual information, investment recommendations, economic advice and/or
research, upon which to base its advice to the Company hereunder, as it shall
deem appropriate. The Company shall furnish to DCAM all information relevant to
the performance by DCAM of its obligations under this Agreement, or particular
projects as to which DCAM is acting as advisor, which will permit DCAM to know
all facts material to the
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advice to be rendered, and all materials or information reasonably requested by
DCAM. In the event that the Company fails or refuses to furnish any such
material or information reasonably requested by DCAM, and thus prevents or
impedes DCAM's performance hereunder, any inability of DCAM to perform shall not
be a breach of its obligations hereunder.
4. Subject to Section 5, nothing contained in this Agreement shall limit
or restrict the right of DCAM or of any partner, affiliate, employee, agent or
representative of DCAM, to be a partner, director, officer, employee, agent or
representative of, or to engage in, any other business, whether or not of a
similar nature to the Company's business, nor to limit or restrict the right of
DCAM to render services of any kind to any other corporation, firm, individual
or association.
5. DCAM will hold, and will use its commercially reasonable efforts to
cause its officers, directors, employees, consultants, advisors, and agents to
hold, in confidence any confidential information which the Company provides to
DCAM pursuant to this Agreement. DCAM may disclose such information to its
officers, directors, employees, consultants, advisors and agents, in connection
with the services to be rendered as contemplated by this Agreement, so long as
such persons are informed by DCAM of the confidential nature of such information
and are directed by DCAM to treat such information confidentially in accordance
herewith. Notwithstanding the foregoing, DCAM shall not be required to maintain
confidentiality with respect to information (i) which is or becomes part of the
public domain; (ii) of which DCAM had independent knowledge prior to disclosure
to it by the Company; (iii) which comes into the possession of DCAM in the
normal and routine course of its own business from and through independent
non-confidential sources; or (iv) which is required to be disclosed by DCAM by
governmental requirements. If DCAM is requested or required (by oral questions,
interrogatories, requests for information or document subpoenas, civil
investigative demands, or similar process) to disclose any confidential
information supplied to it by the Company, or the existence of other
negotiations in the course of its dealings with the Company or its
representatives, DCAM shall, unless prohibited by law, promptly notify the
Company of such request(s) so that the Company may seek an appropriate
protective order.
6. Because we will be acting on your behalf, it is our practice to receive
indemnification. A copy of our standard indemnification provisions (the
"Indemnification Provisions") is attached to this Agreement and is incorporated
herein and made a part hereof.
7. This Agreement may not be transferred, assigned or delegated by any of
the parties hereto without the prior written consent of the other party hereto.
8. The failure or neglect of the parties hereto to insist, in any one or
more instances, upon the strict performance of any of the terms or conditions of
this Agreement, or their waiver of strict performance of any of the terms or
conditions of this Agreement, shall not be construed as a waiver or
relinquishment in the future of such term or condition, but the same shall
continue in full force and effect.
9. Any notices hereunder shall be sent to the Company and to DCAM at their
respective addresses set forth above. Any notice shall be given by hand
delivery, facsimile transmission or overnight delivery or courier service,
against receipt therefor, and shall be
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deemed to have been given when received. Either party may designate any other
address to which notice shall be given, by giving written notice to the other of
such change of address in the manner herein provided.
10. This Agreement has been made in the State of New York and shall be
construed and governed in accordance with the laws thereof without giving effect
to principles governing conflicts of law.
11. This Agreement contains the entire agreement between the parties, may
not be altered or modified, except in writing and signed by the party to be
charged thereby, and supersedes any and all previous agreements between the
parties relating to the subject matter hereof.
12. This Agreement shall be binding upon the parties hereto and their
respective heirs, administrators, successors and permitted assigns.
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If you are in agreement with the foregoing, please execute two copies of
this letter in the space provided below and return them to the undersigned.
Yours truly,
DC ASSET MANAGEMENT LLC
By: /s/ Xxxxxxx Xxxxxxxxx
Name: Xxxxxxx Xxxxxxxxx
Title: President
ACCEPTED AND AGREED TO
AS OF THE DATE FIRST
ABOVE WRITTEN:
DYNTEK, INC.
By: /s/ Xxxxxx Xxxx
Name: Xxxxx Xxxx
Title: CEO
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INDEMNIFICATION PROVISIONS
DynTek, Inc., a Delaware corporation (the "Company"), agrees to indemnify
and hold harmless DC Asset Management LLC ("DCAM") against any and all losses,
claims, damages, obligations, penalties, judgments, awards, liabilities, costs,
expenses and disbursements (and any and all actions, suits, proceedings and
investigations in respect thereof and any and all legal and other costs,
expenses and disbursements in giving testimony or furnishing documents in
response to a subpoena or otherwise) (each a "Liability"), including, without
limitation, the costs, expenses and disbursements, as and when incurred, of
investigating, preparing or defending any such action, suit, proceeding or
investigation (whether or not in connection with litigation in which DCAM is a
party), directly or indirectly, relating to, based upon, arising out of, or in
connection with, its acting for the Company under the Agreement, dated as of
September 1, 2004, between the Company and DCAM to which these indemnification
provisions are attached and form a part (the "Agreement"), except to the extent
that any such Liability is found in a final judgment by a court of competent
jurisdiction (not subject to further appeal) to have resulted primarily and
directly from DCAM's gross negligence or willful misconduct. The Company also
agrees that DCAM shall not have any liability (whether direct or indirect, in
contract or tort or otherwise) to the Company for or in connection with the
engagement of DCAM, except to the extent that any such liability is found in a
final judgment by a court of competent jurisdiction (not subject to further
appeal) to have resulted primarily and directly from DCAM's gross negligence or
willful misconduct.
The indemnification provisions shall be in addition to any liability which
the Company may otherwise have to DCAM or the persons identified below in this
sentence and shall extend to the following: DCAM, its affiliated entities,
partners, employees, legal counsel, agents and controlling persons (within the
meaning of the federal securities laws), and the officers, directors, employees,
legal counsel, agents and controlling persons of any of them. All references to
DCAM in these indemnification provisions shall be understood to include any and
all of the foregoing.
If any action, suit, proceeding or investigation is commenced, as to which
DCAM proposes to demand indemnification, it shall notify the Company with
reasonable promptness (but any failure by DCAM to notify the Company shall not
relieve the Company from its obligations hereunder); and the Company shall
promptly assume the defense of such action, suit, proceeding or investigation,
including the employment of counsel (reasonably satisfactory to DCAM) and
payment of fees and expenses. DCAM shall have the right to retain its own
counsel of its own choice to represent it and such counsel shall, to the extent
consistent with its professional responsibilities, cooperate with the Company
and any counsel designated by the Company, but the fees and expenses of such
counsel employed by DCAM shall be at the expense of DCAM unless (i) the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such action, (ii) the Company shall not have
promptly employed counsel reasonably satisfactory to DCAM, or (iii) DCAM shall
have reasonably concluded that there may be one or more legal defenses available
to it which are different from or additional to those available to the Company,
in any of which events such fees and expenses shall be borne by the Company and
the Company shall not have the right to direct the defense of such action on
behalf of DCAM. The Company shall be liable for any settlement
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of any claim against DCAM made with the Company's written consent, which consent
shall not be unreasonably withheld. The Company shall not, without the prior
written consent of DCAM, settle or compromise any claim, or permit a default or
consent to the entry of any judgment in respect thereof, unless such settlement,
compromise or consent includes, as unconditional term thereof, the giving by the
claimant to DCAM of an unconditional release from all liability in respect of
such claim.
In order to provide for just and equitable contribution, if a claim for
indemnification pursuant to these indemnification provisions is made but it is
found in a final judgment by a court of competent jurisdiction (not subject to
further appeal) that such indemnification may not be enforced in such case, even
though the express provisions hereof provide for indemnification in such case,
then the Company, on the one hand, and DCAM, on the other hand, shall contribute
to the losses, claims, damages, obligations, penalties, judgments, awards,
liabilities, costs, expenses, and disbursements to which the indemnified persons
may be subject in accordance with the relative benefits received by the Company,
on the one hand, and DCAM, on the other hand, and also the relative fault of the
Company, on the one hand, and DCAM, on the other hand, in connection with the
statements, acts or omissions which resulted in such losses, claims, damages,
obligations, penalties, judgements, awards, liabilities, costs, expenses or
disbursements and the relevant equitable considerations shall also be
considered. No person found liable for a fraudulent misrepresentation shall be
entitled to contribution from any person who is not also found liable for such
fraudulent misrepresentation. Notwithstanding the foregoing, DCAM shall not be
obligated to contribute any amount hereunder that exceeds the amount of fees
previously received by DCAM pursuant to the Agreement.
Neither termination nor completion of the engagement of DCAM referred to
above shall affect these indemnification provisions which shall then remain
operative and in full force and effect.
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EXHIBIT A
EXHIBIT B
