DYNTEK, INC. WARRANT AMENDMENT AGREEMENT
EXHIBIT 99.4
DYNTEK, INC.
This Warrant Amendment Agreement (this “Warrant Amendment”) is entered into as of
January 10, 2008, by and among DynTek, Inc., a Delaware corporation (the “Company”), and
Xxxxx X. Xxxxxx, III (the “Holder”).
RECITALS
WHEREAS, pursuant to the terms of that certain Note Purchase Agreement, dated as of March 8,
2006, as amended (as so amended, the “Purchase Agreement”), the Company issued to the
Holder a warrant for the purchase of up to that number of shares of Common Stock of the Company
equal to 15.81% of the shares of capital stock of the Company outstanding at the time of exercise,
calculated on a fully diluted basis, with an exercise price of $0.001 per share (the
“Warrant”);
WHEREAS, concurrently with the execution of this Warrant Amendment, the Company is entering
into a First Amendment to Junior Secured Convertible Note Purchase Agreement and Security and
Pledge Agreement with Trust A-4 – Xxxxx X. Xxxxxx pursuant to which the Company shall issue and
sell to Trust A-4 an additional junior secured convertible promissory note in the initial principal
amount of $1,800,000 (the “New Debt Financing”);
WHEREAS, the Company and the Holder desire to amend the Warrant by amending the number of
shares issuable upon exercise thereof, such that the number of shares of Common Stock of the
Company issuable upon exercise of the Warrant shall be equal to 15.81% of the shares of capital
stock of the Company outstanding immediately following the consummation of the New Debt Financing,
calculated on a fully diluted basis;
WHEREAS, the number of shares of capital stock of the Company outstanding immediately
following the consummation of the New Debt Financing, calculated on a fully diluted basis, equals
342,705,100; and
WHEREAS, the number of shares of Common Stock of the Company issuable upon exercise of the
Warrant shall equal 54,205,392, subject to further adjustment as set forth in the Warrant.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual promises of the
parties, the parties agree as follows:
1. Amendment.
1.1 The first paragraph of the Warrant is hereby amended in its entirety to read as follows:
“This is to certify that, in exchange for the Warrantholder’s
commitment to purchase one or more of the Company’s Senior Secured
Promissory Notes, due March 1, 2010, in the original aggregate principal
amount of $5,300,000, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and subject to the
terms and conditions set forth below, the Warrantholder is entitled to
purchase, and the Company promises and agrees to sell and issue to the
Warrantholder, at any time on or after March 8, 2006 (the “Effective Date”),
pursuant to Section 2 hereof, up to 54,205,392 shares of Common Stock of the
Company, subject to further adjustment as set forth herein.”
1.2 Section 3(a) of the Warrant is hereby amended in its entirety to read as follows:
“(a) If the Company at any time or from time to time after the date of this
Warrant effects a subdivision of shares of its Common Stock, the number of shares of
Common Stock issuable to Warrantholder immediately before that subdivision shall be
proportionately increased, and conversely, if the Company at any time or from time
to time after the date of this Warrant combines shares of Common Stock into a
smaller number of shares, the number of shares of Common Stock issuable to
Warrantholder immediately before the combination shall be proportionately decreased.
Any adjustment under this clause (a) shall become effective at the close of
business on the date the subdivision or combination becomes effective. The number
of shares of Common Stock issuable to Warrantholder, as so adjusted, shall be
readjusted in the same manner upon the happening of any successive event or events
described in this Section 3(a). Notwithstanding the fact that the Company may divide
its Common Stock into a greater number of shares or combine its Common Stock into a
small number of shares, in no event shall the Exercise Price be increased as a
result of such action with respect to the Common Stock of the Company.”
1.3 Section 4 of the Warrant is hereby amended in its entirety to read as follows:
“4. Registration. Warrantholder shall have the registration rights as
set forth in that certain Registration Rights Agreement, dated as of the date of the
Warrant Amendment, by and among, the Company and the investors named on the
signature pages thereto.”
2. Effect of Amendment. Except as herein amended, the Warrant shall in all other
respects remain unchanged and shall remain in full force and effect following the effectiveness of
this Warrant Amendment.
3. Representations. The Company hereby represents and warrants as of the date hereof
that (i) it has full power and authority to enter into this Warrant Amendment; (ii) this Warrant
Amendment has been duly authorized, is valid and enforceable against it, and is not in
contravention of any law, order or agreement by which it is bound; and (iii) the authorized capital
stock of the Company consists of 450,000,000 shares of Common Stock, of which 58,234,989 shares are
issued and outstanding, and 10,000,000 shares of Preferred Stock, none of which are issued and
outstanding. The number of shares of Common Stock outstanding immediately following the
consummation of the New Debt Financing, calculated on a fully diluted basis, equals 342,705,100.
4. Counterparts. This Warrant Amendment may be executed in two or more counterparts,
each of which will be considered an original, but all of which together will constitute the same
instrument.
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5. Entire Agreement. This Warrant Amendment, the Warrant, the exhibits and schedules
thereto and the Registration Rights Agreement executed in connection herewith and therewith
represent the final agreement among the parties and may not be contradicted by evidence of prior,
contemporaneous, or unwritten oral agreements of the parties. There are no oral agreements between
the parties.
6. Governing Law. This Warrant Amendment will be governed and construed in accordance
with the laws of the State of Delaware without regard to principles of conflict of laws.
7. Survivial. All representations, warranties, covenants and agreements made herein
shall survive the execution and delivery of this Warrant Amendment.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the undersigned have caused this Warrant Amendment to be duly executed and
delivered as of the date first set forth above.
| THE COMPANY: DYNTEK, INC. |
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| By: | ||||
| Xxxxxx X. Xxxxxx, Xx. | ||||
| Chief Executive Officer | ||||
| HOLDER: | ||||
| XXXXX X. XXXXXX, III | ||||
By:
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