Exhibit 10.8
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into effective as of January 30, 2004, by and between DynTek, Inc., a Delaware
corporation (the "Company"), and Laurus Master Fund, Ltd. (the "Purchaser").
This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof, by and between the Purchaser and the Company (the
"Securities Purchase Agreement"), and pursuant to the Note and the Warrants
referred to therein.
The Company and the Purchaser hereby agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Securities Purchase Agreement shall have the meanings
given such terms in the Securities Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
"Commission" means the Securities and Exchange Commission.
"Common Stock" means shares of the Company's Class A common stock,
par value $0.0001 per share.
"Effectiveness Date" means the 90th day following the Filing Date.
"Effectiveness Period" shall have the meaning set forth in Section
2(a).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and any successor statute.
"Filing Date" means, with respect to the Registration Statement
required to be filed hereunder, fifteen (15) days following the effective date
of the registration statement to be filed by the Company for the shares of
common Stock underlying the original $3,500,000 convertible term note issued by
the Company to the Purchaser.
"Holder" or "Holders" means the Purchaser or any of its affiliates
or transferees to the extent any of them hold Registrable Securities.
"Indemnified Party" shall have the meaning set forth in Section
5(c).
"Indemnifying Party" shall have the meaning set forth in Section
5(c).
"Note" has the meaning set forth in the Securities Purchase
Agreement.
"Proceeding" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted
from a prospectus filed as part of an effective registration statement in
reliance upon Rule 430A promulgated under the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by the
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
"Registrable Securities" means the shares of Common Stock issued
upon the conversion of the Note and issuable upon exercise of the Warrants.
"Registration Statement" means each registration statement required
to be filed hereunder, including the Prospectus, amendments and supplements to
such registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.
"Rule 144" means Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 424" means Rule 424 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended, and
any successor statute.
"Securities Purchase Agreement" means the agreement between the
parties hereto calling for the issuance by the Company of $3,500,000 of
convertible Notes plus Warrants.
"Trading Market" means any of the NASD OTC Bulletin Board, NASDAQ
SmallCap Market, the Nasdaq National Market, the American Stock Exchange or the
New York Stock Exchange.
"Warrants" means the Common Stock purchase warrants issued pursuant
to the Securities Purchase Agreement or any other warrants issued by the Company
to the Holder on or before May 5, 2004.
2. Registration.
(a) On or prior to the Filing Date the Company shall prepare and
file with the Commission a Registration Statement covering the Registrable
Securities for an offering to be made on a continuous basis pursuant to
Rule 415. The Registration Statement shall be on Form S-B2 or Form S-3
(except if the Company is not then eligible to register for
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resale the Registrable Securities on Form S-B2 or Form S-3, in which case
such registration shall be on another appropriate form in accordance
herewith). The Company shall cause the Registration Statement to become
effective and remain effective as provided herein. The Company shall use
its reasonable commercial efforts to cause the Registration Statement to
be declared effective under the Securities Act as promptly as possible
after the filing thereof, but in any event no later than the Effectiveness
Date. The Company shall use its reasonable commercial efforts to keep the
Registration Statement continuously effective under the Securities Act
until the date which is the earlier date of when (i) all Registrable
Securities have been sold or (ii) all Registrable Securities may be sold
immediately without registration under the Securities Act and without
volume restrictions pursuant to Rule 144(k), as determined by the counsel
to the Company pursuant to a written opinion letter to such effect,
addressed and acceptable to the Company's transfer agent and the affected
Holders (the "Effectiveness Period").
(b) If: (i) the Registration Statement is not filed on or prior to
the Filing Date; (ii) the Registration Statement is not declared effective
by the Commission by the Effectiveness Date; (iii) after the Registration
Statement is filed with and declared effective by the Commission, the
Registration Statement ceases to be effective (by suspension or otherwise)
as to all Registrable Securities to which it is required to relate at any
time prior to the expiration of the Effectiveness Period (without being
succeeded immediately by an additional registration statement filed and
declared effective) for a period of time which shall exceed 30 days in the
aggregate per year or more than 20 consecutive calendar days; or (iv) the
Common Stock is not listed or quoted, or is suspended from trading on any
Trading Market for a period of three (3) consecutive Trading Days
(provided the Company shall not have been able to cure such trading
suspension within 30 days of the notice thereof or list the Common Stock
on another Trading Market); (any such failure or breach being referred to
as an "Event," and for purposes of clause (i) or (ii) the date on which
such Event occurs, or for purposes of clause (iii) the date which such 30
day or 20 consecutive day period (as the case may be) is exceeded, or for
purposes of clause (iv) the date on which such three (3) Trading Day
period is exceeded, being referred to as "Event Date"), then until the
applicable Event is cured, the Company shall pay to each Holder an amount
in cash, as liquidated damages and not as a penalty, equal to one half
percent (.5%) for each thirty (30) day period (prorated for partial
periods) on a daily basis of the original principal amount of the Note.
While such Event continues, such liquidated damages shall be paid not less
often than each thirty (30) days. Any unpaid liquidated damages as of the
date when an Event has been cured by the Company shall be paid within
three (3) days following the date on which such Event has been cured by
the Company.
(c) Within three business days of the Effectiveness Date, the
Company shall cause its counsel to issue a blanket opinion substantially
in the form attached hereto as Exhibit A, to the transfer agent stating
that the shares are subject to an effective registration statement and can
be reissued free of restrictive legend upon notice of a sale by Laurus and
confirmation by Laurus that it has complied with the prospectus delivery
requirements, provided that the Company has not advised the transfer agent
orally or in writing that the opinion has been withdrawn. Copies of the
blanket opinion required by this Section 2(c) shall be delivered to Laurus
within the time frame set forth above.
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3. Registration Procedures. If and whenever the Company is required by the
provisions hereof to effect the registration of any Registrable Securities under
the Securities Act, the Company will, as expeditiously as possible:
(a) prepare and file with the Commission the Registration Statement
with respect to such Registrable Securities, respond as promptly as
possible to any comments received from the Commission, and use its best
efforts to cause the Registration Statement to become and remain effective
for the Effectiveness Period with respect thereto, and promptly provide to
the Purchaser copies of all filings and Commission letters of comment
relating thereto;
(b) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the Prospectus used in
connection therewith as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of all Registrable
Securities covered by the Registration Statement and to keep such
Registration Statement effective until the expiration of the Effectiveness
Period;
(c) furnish to the Purchaser such number of copies of the
Registration Statement and the Prospectus included therein (including each
preliminary Prospectus) as the Purchaser reasonably may request to
facilitate the public sale or disposition of the Registrable Securities
covered by the Registration Statement;
(d) use its commercially reasonable efforts to register or qualify
the Purchaser's Registrable Securities covered by the Registration
Statement under the securities or "blue sky" laws of such jurisdictions
within the United States as the Purchaser may reasonably request,
provided, however, that the Company shall not for any such purpose be
required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified or to consent
to general service of process in any such jurisdiction;
(e) list the Registrable Securities covered by the Registration
Statement with any securities exchange on which the Common Stock of the
Company is then listed;
(f) immediately notify the Purchaser at any time when a Prospectus
relating thereto is required to be delivered under the Securities Act, of
the happening of any event of which the Company has knowledge as a result
of which the Prospectus contained in such 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 not misleading in light of the circumstances then
existing; and
(g) make available for inspection by the Purchaser and any attorney,
accountant or other agent retained by the Purchaser, all publicly
available, non-confidential financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors and employees to supply all
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publicly available, non-confidential information reasonably requested by
the attorney, accountant or agent of the Purchaser.
4. Registration Expenses. All expenses relating to the Company's
compliance with Sections 2 and 3 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, fees and expenses
(including reasonable counsel fees) incurred in connection with complying with
state securities or "blue sky" laws, fees of the NASD, transfer taxes, fees of
transfer agents and registrars, fees of, and disbursements incurred by, one
counsel for the Holders (to the extent such counsel is required due to Company's
failure to meet any of its obligations hereunder), are called "Registration
Expenses". All selling commissions applicable to the sale of Registrable
Securities, including any fees and disbursements of any special counsel to the
Holders beyond those included in Registration Expenses, are called "Selling
Expenses." The Company shall only be responsible for all Registration Expenses.
5. Indemnification.
(a) In the event of a registration of any Registrable Securities
under the Securities Act pursuant to this Agreement, the Company will
indemnify and hold harmless the Purchaser, and its officers, directors and
each other person, if any, who controls the Purchaser within the meaning
of the Securities Act, against any losses, claims, damages or liabilities,
joint or several, to which the Purchaser, or such persons may become
subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of
any material fact contained in any Registration Statement under which such
Registrable Securities were registered under the Securities Act pursuant
to this Agreement, any preliminary Prospectus or final Prospectus
contained therein, or any amendment or supplement thereof, or arise out of
or are based upon 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, and will reimburse the Purchaser, and
each such person for any reasonable legal or other expenses incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company will not
be liable in any such case if and to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in
conformity with information furnished by or on behalf of the Purchaser or
any such person in writing specifically for use in any such document.
(b) In the event of a registration of the Registrable Securities
under the Securities Act pursuant to this Agreement, the Purchaser will
indemnify and hold harmless the Company, and its officers, directors and
each other person, if any, who controls the Company within the meaning of
the Securities Act, against all losses, claims, damages or liabilities,
joint or several, to which the Company or such persons may become subject
under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact which was furnished in writing by the Purchaser to the
Company expressly for use in (and such information is
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contained in) the Registration Statement under which such Registrable
Securities were registered under the Securities Act pursuant to this
Agreement, any preliminary Prospectus or final Prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are
based upon 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, and will reimburse the Company and each such
person for any reasonable legal or other expenses incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action, provided, however, that the Purchaser will be liable
in any such case if and only to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in
conformity with information furnished in writing to the Company by or on
behalf of the Purchaser specifically for use in any such document.
Notwithstanding the provisions of this paragraph, the Purchaser shall not
be required to indemnify any person or entity in excess of the amount of
the aggregate net proceeds received by the Purchaser in respect of
Registrable Securities in connection with any such registration under
applicable securities law.
(c) Promptly after receipt by a party entitled to claim
indemnification hereunder (an "Indemnified Party") of notice of the
commencement of any action, such Indemnified Party shall, if a claim for
indemnification in respect thereof is to be made against a party hereto
obligated to indemnify such Indemnified Party (an "Indemnifying Party"),
notify the Indemnifying Party in writing thereof, but the omission so to
notify the Indemnifying Party shall not relieve it from any liability
which it may have to such Indemnified Party other than under this Section
5(c) and shall only relieve it from any liability which it may have to
such Indemnified Party under this Section 5(c) if and to the extent the
Indemnifying Party is prejudiced by such omission. In case any such action
shall be brought against any Indemnified Party and it shall notify the
Indemnifying Party of the commencement thereof, the Indemnifying Party
shall be entitled to participate in and, to the extent it shall wish, to
assume and undertake the defense thereof with counsel reasonably
satisfactory to such Indemnified Party, and, after notice from the
Indemnifying Party to such Indemnified Party of its election so to assume
and undertake the defense thereof, the Indemnifying Party shall not be
liable to such Indemnified Party under this Section 5(c) for any legal
expenses subsequently incurred by such Indemnified Party in connection
with the defense thereof; if the Indemnified Party retains its own
counsel, then the Indemnified Party shall pay all fees, costs and expenses
of such counsel, provided, however, that, if the defendants in any such
action include both the Indemnified Party and the Indemnifying Party and
the Indemnified Party shall have reasonably concluded that there may be
reasonable defenses available to it which are different from or additional
to those available to the Indemnifying Party or if the interests of the
Indemnified Party reasonably may be deemed to conflict with the interests
of the Indemnifying Party, the Indemnified Party shall have the right to
select one separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such action, with the
reasonable expenses and fees of such separate counsel and other reasonable
expenses related to such participation to be reimbursed by the
Indemnifying Party as incurred.
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(d) In order to provide for just and equitable contribution in the
event of joint liability under the Securities Act in any case in which
either (i) the Purchaser, or any officer, director or controlling person
of the Purchaser, makes a claim for indemnification pursuant to this
Section 5 but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact
that this Section 5 provides for indemnification in such case, or (ii)
contribution under the Securities Act may be required on the part of the
Purchaser or such officer, director or controlling person of the Purchaser
in circumstances for which indemnification is provided under this Section
5; then, and in each such case, the Company and the Purchaser will
contribute to the aggregate losses, claims, damages or liabilities to
which they may be subject (after contribution from others) in such
proportion so that the Purchaser is responsible only for the portion
represented by the percentage that the public offering price of its
securities offered by the Registration Statement bears to the public
offering price of all securities offered by such Registration Statement,
provided, however, that, in any such case, (A) the Purchaser will not be
required to contribute any amount in excess of the public offering price
of all such securities offered by it pursuant to such Registration
Statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 10(f) of the Securities
Act) will be entitled to contribution from any person or entity who was
not guilty of such fraudulent misrepresentation.
6. Representations and Warranties.
(a) The Common Stock of the Company is registered pursuant to
Section 12(b) or 12(g) of the Exchange Act and, except with respect to
certain matters which the Company has disclosed to the Purchaser on
Schedule 4.21 to the Securities Purchase Agreement, the Company has timely
filed all proxy statements, reports, schedules, forms, statements and
other documents required to be filed by it under the Exchange Act. The
Company has filed (i) its Annual Report on Form 10-K for the fiscal year
ended June 30, 2003 and (ii) its Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 2003 (collectively, the "SEC Reports").
Each SEC Report was, at the time of its filing, in substantial compliance
with the requirements of its respective form and none of the SEC Reports,
nor the financial statements (and the notes thereto) included in the SEC
Reports, as of their respective filing dates, contained any untrue
statement of a material fact or omitted 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
financial statements of the Company included in the SEC Reports comply as
to form in all material respects with applicable accounting requirements
and the published rules and regulations of the Commission or other
applicable rules and regulations with respect thereto. Such financial
statements have been prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a consistent basis during the
periods involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto or (ii) in the case of unaudited
interim statements, to the extent they may not include footnotes or may be
condensed) and fairly present in all material respects the financial
condition, the results of operations and the
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cash flows of the Company and its subsidiaries, on a consolidated basis,
as of, and for, the periods presented in each such SEC Report.
(b) The Common Stock is listed for trading on the Nasdaq SmallCap
Market and satisfies all requirements for the continuation of such listing
(other than its "bid price being less than $1.00 on the date hereof). The
Company has not received any notice that its Common Stock will be delisted
from the Nasdaq SmallCap Market (except for prior notices which have been
fully remedied) or that the Common Stock does not meet all requirements
for the continuation of such listing.
(c) Neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf, has directly or indirectly made any offers
or sales of any security or solicited any offers to buy any security under
circumstances that would cause the offering of the Securities pursuant to
the Securities Purchase Agreement to be integrated with prior offerings by
the Company for purposes of the Securities Act which would prevent the
Company from selling the Common Stock pursuant to Rule 506 under the
Securities Act, or any applicable exchange-related stockholder approval
provisions, nor will the Company or any of its affiliates or subsidiaries
take any action or steps that would cause the offering of the Securities
to be integrated with other offerings.
(d) The Warrants, the Note and the shares of Common Stock which the
Purchaser may acquire pursuant to the Warrants and the Note are all
restricted securities under the Securities Act as of the date of this
Agreement. The Company will not issue any stop transfer order or other
order impeding the sale and delivery of any of the Registrable Securities
at such time as such Registrable Securities are registered for public sale
or an exemption from registration is available, except as required by
federal or state securities laws.
(e) The Company understands the nature of the Registrable Securities
issuable upon the conversion of the Note and the exercise of the Warrant
and recognizes that the issuance of such Registrable Securities may have a
potential dilutive effect. The Company specifically acknowledges that its
obligation to issue the Registrable Securities is binding upon the Company
and enforceable regardless of the dilution such issuance may have on the
ownership interests of other shareholders of the Company.
(f) Except for agreements made in the ordinary course of business or
which have been disclosed in Exchange Act Filings, there is no agreement
that has not been filed with the Commission as an exhibit to a
registration statement or to a form required to be filed by the Company
under the Exchange Act, the breach of which could reasonably be expected
to have a material and adverse effect on the Company and its subsidiaries,
or would prohibit or otherwise interfere with the ability of the Company
to enter into and perform any of its obligations under this Agreement in
any material respect.
(g) The Company will at all times have authorized and reserved a
sufficient number of shares of Common Stock for the full conversion of the
Note and exercise of the Warrants.
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7. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or by a
Holder, of any of their respective obligations under this Agreement, each
Holder or the Company, as the case may be, in addition to being entitled
to exercise all rights granted by law and under this Agreement, including
recovery of damages, will be entitled to specific performance of its
rights under this Agreement.
(b) No Piggyback on Registrations. Except as and to the extent
specified in Schedule 7(b) hereto. Neither the Company nor any of its
security holders (other than the Holders in such capacity pursuant hereto)
may include securities of the Company in any Registration Statement other
than the Registrable Securities, and the Company shall not after the date
hereof enter into any agreement providing any such right for inclusion of
shares in the Registration Statement to any of its security holders.
Except as and to the extent specified in Schedule 7(b) hereto, the Company
has not previously entered into any agreement granting any registration
rights with respect to any of its securities to any Person that have not
been fully satisfied.
(c) Compliance. Each Holder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of Registrable Securities
pursuant to the Registration Statement.
(d) Discontinued Disposition. Each Holder agrees by its acquisition
of such Registrable Securities that, upon receipt of a notice from the
Company of the occurrence of a Discontinuation Event (as defined below),
such Holder will forthwith discontinue disposition of such Registrable
Securities under the applicable Registration Statement until such Holder's
receipt of the copies of the supplemented Prospectus and/or amended
Registration Statement or until it is advised in writing (the "Advice") by
the Company that the use of the applicable Prospectus may be resumed, and,
in either case, has received copies of any additional or supplemental
filings that are incorporated or deemed to be incorporated by reference in
such Prospectus or Registration Statement. The Company may provide
appropriate stop orders to enforce the provisions of this paragraph. For
purposes of this Section 7(d), a "Discontinuation Event" shall mean (i)
when the Commission notifies the Company whether there will be a "review"
of such Registration Statement and whenever the Commission comments in
writing on such Registration Statement (the Company shall provide true and
complete copies thereof and all written responses thereto to each of the
Holders); (ii) any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to such Registration
Statement or Prospectus or for additional information; (iii) the issuance
by the Commission of any stop order suspending the effectiveness of such
Registration Statement covering any or all of the Registrable Securities
or the initiation of any Proceedings for that purpose; (iv) the receipt by
the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening
of any Proceeding for such purpose; and/or (v) the occurrence of any event
or passage of time that makes the financial statements included in such
Registration Statement ineligible for inclusion therein or any statement
made in such Registration Statement or
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Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires any
revisions to such Registration Statement, Prospectus or other documents so
that, in the case of such Registration Statement or Prospectus, as the
case may be, it will not contain any untrue statement of a material fact
or omit to state any 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.
(e) Piggy-Back Registrations. If at any time during the
Effectiveness Period there is not an effective Registration Statement
covering all of the Registrable Securities and the Company shall determine
to prepare and file with the Commission a registration statement relating
to an offering for its own account or the account of others under the
Securities Act of any of its equity securities, other than on Form S-4 or
Form S-8 (each as promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely in
connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other employee
benefit plans, respectively, then the Company shall send to each Holder
written notice of such determination and, if within fifteen days after
receipt of such notice, any such Holder shall so request in writing, the
Company shall include in such registration statement all or any part of
such Registrable Securities such holder requests to be registered to the
extent the Company may do so without violating registration rights of
others which exist as of the date of this Agreement, and subject to
customary underwriter cutbacks applicable to all holders of registration
rights (except to the extent modified by agreements which exist as of the
date of this Agreement and have been fully disclosed to Purchaser by
Company either in any Exchange Act Filing and the exhibits thereto or
otherwise) and subject to obtaining any required consent of any selling
stockholder(s) to such inclusion under such registration statement.
(f) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, unless the same shall be in writing and signed by
the Company and the Holders of the then outstanding Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to depart
from the provisions hereof with respect to a matter that relates
exclusively to the rights of certain Holders and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of
at least a majority of the Registrable Securities to which such waiver or
consent relates; provided, however, that the provisions of this sentence
may not be amended, modified, or supplemented except in accordance with
the provisions of the immediately preceding sentence.
(g) Notices. Any notice or request hereunder may be given to the
Company or the Purchaser at the respective addresses set forth below or as
may hereafter be specified in a notice designated as a change of address
under this Section 7(g). Any notice or request hereunder shall be given by
registered or certified mail, return receipt requested, hand delivery,
overnight mail, Federal Express or other national overnight next day
carrier (collectively, "Courier") or telecopy (confirmed by mail). Notices
and requests shall be, in the case of those by hand delivery, deemed to
have been given when
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delivered to any party to whom it is addressed, in the case of those by
mail or overnight mail, deemed to have been given three (3) business days
after the date when deposited in the mail or with the overnight mail
carrier, in the case of a Courier, the next business day following timely
delivery of the package with the Courier, and, in the case of a telecopy,
when confirmed. The address for such notices and communications shall be
as follows:
If to the Company: DynTek, Inc.
00000 Xxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
with a copy to:
Xxxxx Peabody LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Facsimile: 000-000-0000
If to a Purchaser: To the address set forth under
such Purchaser name on the
signature pages hereto.
If to any other Person who is
then the registered Holder: To the address of such Holder
as it appears in the stock
transfer books of the Company
or such other address as may be designated in writing hereafter in
accordance with this Section 7(g) by such Person.
(h) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of
each of the parties and shall inure to the benefit of each Holder. The
Company may not assign its rights or obligations hereunder without the
prior written consent of each Holder. Each Holder may assign their
respective rights hereunder in the manner and to the Persons as permitted
under the Notes and the Security Agreement with the prior written consent
of the Company, which consent shall not be unreasonably withheld.
(i) Execution and Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed
to be an original and, all of which taken together shall constitute one
and the same Agreement. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile
signature were the original thereof.
-11-
(j) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be
governed by and construed and enforced in accordance with the internal
laws of the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all Proceedings
concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement shall be commenced exclusively
in the state and federal courts sitting in the City of New York, Borough
of Manhattan. Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in the City
of New York, Borough of Manhattan for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not
to assert in any Proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such Proceeding is improper.
Each party hereto hereby irrevocably waives personal service of process
and consents to process being served in any such Proceeding by mailing a
copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any
and all right to trial by jury in any legal proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby. If
either party shall commence a Proceeding to enforce any provisions of a
Transaction Document, then the prevailing party in such Proceeding shall
be reimbursed by the other party for its reasonable attorneys fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such Proceeding.
(k) Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
(l) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as
that contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(m) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS]
-12-
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
DYNTEK, INC. LAURUS MASTER FUND, LTD.
By: _____________________________ By: _________________________________
Name: _____________________________ Name: _________________________________
Title: _____________________________ Title: _________________________________
Address for Notices:
00000 Xxx Xxxxxx Xxxxxx
Xxxxx 000 000 Xxxxx Xxxxxx - 00xx Xxxxx
Xxxxxx, XX 00000 Xxx Xxxx, XX 00000
Attention: Chief Financial Officer Attention: Xxxxxx Grin
Facsimile: (000) 000-0000 Facsimile: 000-000-0000
-13-
EXHIBIT A
[Month __, 200_]
[American Stock Transfer & Trust Company]
Re: [Company Name]. Registration Statement on Form [S-_]
Ladies and Gentlemen:
As counsel to[company name] , a Delaware corporation (the "Company"), we
have been requested to render our opinion to you in connection with the resale
by the individuals or entitles listed on Schedule A attached hereto (the
"Selling Stockholders"), of an aggregate of [amount]shares (the "Shares") of the
Company's Common Stock.
A Registration Statement on Form [S-3] under the Securities Act of 1933,
as amended (the "Act"), with respect to the resale of the Shares was declared
effective by the Securities and Exchange Commission on [date]. Enclosed is the
Prospectus dated [date]. We understand that the Shares are to be offered and
sold in the manner described in the Prospectus.
Based upon the foregoing, upon request by the Selling Stockholders at any
time while the registration statement remains effective, it is our opinion that
the Shares have been registered for resale under the Act and new certificates
evidencing the Shares upon their transfer or re-registration by the Selling
Stockholders may be issued without restrictive legend. We will advise you if the
registration statement is not available or effective at any point in the future.
Very truly yours,
[Company counsel]
Schedule A
Shares
Selling Stockholder R/N/O Being Offered
------------------- ----- -------------
Schedule 7(b)
Name Shares
-------------------------------- ------------
21st Century Investor LLC 120,000
Xxxxx, Xxxxxx 1,440,000
Xxxxxx, Xxxxxxx 840,000
Xxxx Xxxxxxxx Irrevocable Trust 138,000
Xxxxxxxx, Xxxxxxx X. 240,000
Xxxxxxx, Xxxxxxx X. 132,000
Xxxxxxxx, Xxxxx X. 60,000
Barnet Xxxxxxx Trust 120,000
Xxxxxx, Xxxxxx 60,000
Xxx-Xxxxxx, Arie 180,000
Xxxx, Xxxx 120,000
Xxxxxxxxx, Xxx 60,000
Xxxxxxxx, Xxxxx X. 60,000
Xxxxxxxxxx, Xxxxx 24,000
Xxxxx, Xxxxxx 24,000
Xxxxx, Xxxxxx 24,000
Xxxxxxx, Xxxxxxx 60,000
Broadband Capital Management 360,000
Brunnschweiler, Christian and
Xxxxx 153,000
C. Xxxxx Xxxxx Revocable Trust 237,600
Xxxxxx, Xxxxxxx X. 60,000
Xxxxxxxx, Xxxxxxxxx 68,000
Xxxxxx, Xxxxxxx 60,000
Xxxxxxxxxxx, Xxxxx 48,000
Xxxxx, Xxxxxxx (South West
Securities as XXX Custodian) 489,600
Xxxxx, Xxxxxxx and Xxxxx 771,800
Xxxxx, Xxxxx (South West
Securities as XXX Custodian) 91,800
Xxxxx, Xxxxxxx 240,000
Xxxxxxxxx, Xxxxxx 000,000
Xx Xxxxxxxx, Xx 24,000
XxXxxxxx, Xxxxxxxx 414,400
Xxxxx, Xxxxxx 240,000
Xxxxxxx, Xxx 71,400
Xxxxxx Capital LLC 466,667
Xxxxxxxx, Xxxx 60,000
Xxxxx, Xxxxxxx 60,000
Xxxxxx, X. Xxxxxx 120,000
Xxxxxxx, Xxxx 34,000
Xxxxxxxx, Xxxxxx 26,400
Xxxxxxx, Xxxxxx 36,000
Xxxxxxxx, Xxxx and Xxxxxxx 60,000
X.X. Xxxxxxxx 75,758
Xxxxxx, X. Xxxxx 60,000
Xxxxx, Xxxxxxx X. 240,000
Xxxx, Xxxxxxx 100,800
Xxxxxx, Xxxxxx 60,000
Xxxxxxx, Xxxxx 90,000
-2-
Name Shares
-------------------------------- ------------
Xxxxxxxx, Xxxxxx 18,000
Xxxxxx Xxxxxxxx Irrevocable
Trust 138,000
Xxxx, Xxxxxxxxxxx and Xxxxxxx 261,830
Xxxxx, Xxxxxx and Claire 60,000
Laurus Master Fund, Ltd. (3) 4,313,889
Leviticus Partners LP 600,000
Xxxxxxxxx, Xxxxxxxxx 84,000
Xxxxx , Xxxxx 120,000
Xxxxxx, Xxxxxxx 24,000
Xxxxxxx, Xxxxxx 204,000
Xxxxx, Xxxxxxx 14,000
XxXxxxxx, Xxx 102,000
Xxxxxx, Xxxxxxx 120,000
Xxxxxxxxxx, Xxxxxx 78,000
MSR Consultants 227,273
Xxxxxxx, Xxxxxx 60,000
Network 1 Private Placement
Pursuant to 2/27/04 Placement
Agent Agreement 2,492,000
Onischenko,Tarras 24,000
Page, Xxxx 36,000
Xxxxxxxxx, Xxxxx 24,000
Xxxxxx X. Xxxxxx Trust 60,000
Xxxxxx, Xxxxxxxxx X. 300,000
Xxxxxx, Jr., Xxxxx 420,000
Puma, Xxxxxx 1,071,200
Xxxxxx, Xxxxx and Xxxxxxx
Xxxxxxx 24,000
RBD Limited 240,000
Realty Appraisal Defined
Benefit Pension Plan 78,000
XX Xxxxx & Co. 2,067,692
Xxxxxxxxx, Xxxxxx 48,000
Xxxxxxxxx, Xxxxxxx 480,000
Xxxxxxxx, Xxxxx 600,000
Xxxxxxxx, Xxxxx and Victoria 227,273
Xxxx, Xxxxxxx and Xxxxxx 78,000
Xxxx, Xxxxx 12,000
Xxxxxxxxxxx, Xxxx 720,000
Schrifrien, Xxxxxx 24,000
Xxxxxxx, Xxxxxx and Xxxxx 177,600
Xxxxxxx, Xxxxxxx 60,000
Silvaslian, Xxxxx X. 120,000
Silvaslian, Xxxxx X. and Xxxxxxx 290,000
Xxxxxxxxx, Xxxxx 30,000
Xxxxxxxxx Xxxxx MD Trust 120,000
Xxxxxxx, Xxxxxxx X. and Xxxxxxx
X. 120,000
Trust for the Young Family 120,000
Xxxxx, Xxxxxx X. 189,600
Xxxx, Xxxxxxx 69,600
Xxxxxx, Xxx 120,000
Xxxxx, Xxxxxxx 333,854
Xxxxxxx Xxxxxxxx Trust 240,000
Xxxxxxxxxx, Xxx X. 360,000
-3-
Name Shares
-------------------------------- ------------
Xxxx, Xxxx 263,158
Xxxxxx, X. Xxxxxxx 652,175
Alki Fund Ltd 164,348
Alki Partners L.P. 226,956
Alpha Capital AG 456,522
Bridges and Pipes LLC 652,175
Cranshire Capital L.P. 456,522
DKR Soundshore Oasis Holding
Fund LTD. 326,087
Xxxxxx Capital LLC 1,182,099
Xxxxxxxxxx, Xxxxx X. 12,717
Greenwich Growth Fund Limited 130,436
Kaywell, Xxxxx X. 58,695
Xxxxxx Xxxxx Capital L.P. 525,000
Xxxxxxxxxx, Xxxxx 114,456
Raven Offshore Master L.P. 521,739
RHP Master Fund, Ltd 652,175
Rockwood Group, LLC 130,436
Xxxxxxxx, Xxxxx 391,305
Sands Brothers Venture Capital 65,217
Sands Brothers Venture Capital II 65,217
Sands Brothers Venture Capital III 391,305
Sands Brothers Venture Capital IV 130,436
Xxxxxxxxxxx X.X. 652,175
Sunrise Equity Partners, L.P. 525,000
TCMP3 Partners 391,305
The Balboa Fund, L.P. 501,669
The Balboa Fund, LTD 270,173
The Chelonia Fund, Ltd. 206,420
Treeline Investment Partners,
L.P. 130,436
Whalehaven Fund Limited 130,436
-4-
