Exhibit 10.2
First Amendment to Services Agreement
and termination of escrow
This First Amendment to Services Agreement and Termination of Escrow
("Amendment") is made as of April 27, 2004, by and among DynTek, Inc., a
Delaware corporation ("DI"), DynTek Services, Inc., a Delaware corporation
("DSI" which, together with DI, may be jointly referred to as "DynTek"), and
Young ▇▇▇▇▇▇▇▇, P.C., a Mississippi professional corporation ("YW") who agree as
follows:
1. Recitals.
(a) DynTek and YW entered into that certain Services Agreement dated
March 1, 2004 (the "Services Agreement"). DSI and Child Support Technologies,
Inc. ("CST") entered into a ProductivIT Sale Agreement and a ProductivIT
Maintenance Agreement dated March 1, 2004 (jointly, the "ProductivIT
Agreements"). Capitalized terms not otherwise defined herein shall have the
meanings assigned to them in the Services Agreement.
(b) Pursuant to the terms of an escrow letter, the Services
Agreement and the ProductivIT Agreements have been held in escrow pending
receipt of the consents required under Section 6 of the Services Agreement.
DynTek and YW have been unable to secure, as of this date, the following
consents: (1) Kansas Shawnee County 3rd Judicial District; (2) North Carolina,
Hanover County, CSE; (3) North Carolina Beaufort County CSE; and (4) North
Carolina, Wake County, CSE (collectively, the "Managed Contracts without
Consents"). DynTek and YW have been able to secure the consents of the
governmental entities needed to allow YW to manage the following Managed
Contracts: (1) Kansas, Department of Social and Rehabilitative Services, CSE;
and (2) Nebraska, Department of Health and Human Services, Call Center Services
(collectively, the "Managed Contracts with Consents").
(c) DynTek and YW desire to amend the Services Agreement to have YW
begin operations as to the Managed Contracts with Consents while they continue
to seek consents for the Managed Contracts without Consents. DynTek, YW and CST
desire to terminate the escrow of the Services Agreement and the ProductivIT
Agreements.
2. The escrow of the Services Agreement and the ProductivIT Agreements
is hereby terminated. YW and DynTek will immediately begin all actions and
obligations consistent with the Services Agreement applicable to the Managed
Contracts with Consents. DSI and CST will immediately begin all actions and
obligations consistent with the ProductivIT Agreements.
3. DynTek will use, and will continue to use, its best efforts to
obtain the required consents for the Managed Contracts without Consents. DynTek
will use and continue to use its best efforts to preserve the Managed Contracts
without Consents and comply with the contractual terms of those contracts. As
consents are obtained for the Managed Contracts without Consents, YW and DynTek
will immediately begin all actions and obligations consistent with the Services
Agreement applicable to each additional contract for which consent is obtained.
4. Paragraph 3(a) of the Services Agreement is amended and restated in
its entirety to read as follows:
Management Fee. DynTek shall pay YW a management fee (the
"Management Fee") during the Term equal to the greater of: (x)
twelve percent (12%) of the gross Contract Revenues arising under
all of the Managed Contracts (regardless of whether consents have
been obtained or YW is providing any services to a
Managed Contract, and regardless of whether DynTek receives payment
under a Managed Contracts.), or (y) a monthly amount based on the
following schedule:
(i) 3/2004 through 6/2004 $61,714 per month
(ii) 7/2004 through 12/2004 $61,916 per month
(iii) 1/2005 through 6/2005 $62,117 per month
(iv) 7/2005 through 12/2005 $37,723 per month
(v) 1/2006 $30,828 per month
(vi) 2/2006 through 6/2006 $26,868 per month
(vii) 7/2006 through 8/2008 $27,077 per month
(viii) 9/2008 through 7/2010 $14,117 per month
The Management Fee shall be paid monthly within fifteen (15) days of
the end of each month. DynTek shall use best efforts to diligently
and promptly collect all Contract Revenues. If there is a material
contract change provision that reduces gross Contract Revenues to
DynTek under all of the Managed Contracts with Consents by more than
five percent (5%) per annum, the parties shall negotiate in good
faith an adjustment to the Management Fee. If the parties fail to
reach an agreement on such adjustment within thirty (30) days of
such change, they shall submit the matter to binding arbitration in
accordance with Section 15(f).
5. Within 4 business days of the execution of this Amendment, DynTek
shall pay YW the Management Fee for March 2004 of $61,714.00 and CST shall pay
DSI $200,000.00 of accrued license fees under the ProductivIT Agreements.
6. Except as amended and supplemented hereby, the Services Agreement
remains in full force and effect and DynTek and YW ratify and confirm the
Services Agreement as so amended and supplemented.
IN WITNESS WHEREOF, the parties have executed and delivered this Amendment
as of the date first written above.
Young ▇▇▇▇▇▇▇▇, P.C. DynTek, Inc. DynTek Services, Inc.
By: ___________________ By: ___________________ By: _____________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President Title: President & CEO Title: President & CEO
The undersigned joins in the execution of this Amendment solely as to the
termination of the escrow pursuant to Section 2 hereof and the payment
provisions of Section 5 hereof applicable to it.
Child Support Technologies, Inc.
By: ___________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President