THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT
BE SOLD, TRANSFERRED OR ASSIGNED UNLESS IT IS SO REGISTERED OR AN EXEMPTION FROM
REGISTRATION IS AVAILABLE UNDER SAID ACT AND LAWS.
TELOS CORPORATION
COMMON STOCK PURCHASE
SERIES D WARRANT
This certifies that, for value received, Foreign & Colonial Enterprise
Trust Limited Partnership, c/o Berkeley Square House, Berkeley Square, London
W1X 5PA, England, is entitled to purchase and receive from Telos Corporation, a
Maryland corporation (the "Company"), during the period hereinafter provided,
300,000 fully paid and non-assessable shares of the $.01 par value common voting
stock of the Company (the "Common Stock") upon surrender hereof, at the
principal office of the Company in Ashburn, Virginia, and simultaneous payment
of the purchase price of $.01 for each share of the Common Stock so to be
purchased; such number of shares and such purchase price per share being
subject, however, to adjustment as hereinafter provided. The purchase price per
share, as adjusted from time to time, is hereinafter referred to as the
"Purchase Price."
This Warrant shall be exercisable commencing November 20, 1998, that being
the issuance date of that certain Series D Senior Subordinated Unsecured Note
Due October 1, 2000, issued by the Company to the Holder of this Series D
Warrant, and shall expire on October 1, 2000.
1. Purchase Price Adjustments.
a. General. The Purchase Price shall be subject to adjustment from time to
time pursuant to the terms of this Section 1.
b. Recapitalizations. If outstanding shares of the Company's Common Stock
shall be subdivided into a greater number of shares or a dividend in Common
Stock shall be paid in respect of Common Stock, the Purchase Price in effect
immediately prior to such subdivision or at the record date of such dividend
shall simultaneously with the effectiveness of such subdivision or immediately
after the record date of such dividend be proportionately reduced. If
outstanding shares of Common Stock shall be combined into a smaller number of
shares, the Purchase Price in effect immediately prior to such combination
shall, simultaneously with the effectiveness of such combination, be
proportionately increased.
c. Mergers, etc. If there shall occur any capital reorganization or
reclassification of the Company's Common Stock (other than a change in par value
or a subdivision or combination as provided for in Subsection 1b, above), or any
consolidation or merger of the Company with or into another corporation, or a
transfer of all or substantially all of the assets of the Company, then, as part
of any such reorganization, reclassification, consolidation, merger or sale, as
the case may be, lawful provision shall be made so that the registered Holder of
this Warrant shall have the right thereafter to receive upon the exercise hereof
the kind and amount of shares of stock or other securities or property which
such registered Holder would have been entitled to receive if, immediately prior
to any such reorganization, reclassification, consolidation, merger or sale, as
the case may be, such registered Holder had held the number of shares of Common
Stock which were then purchasable upon the exercise of this Warrant. In any such
case, appropriate adjustment (as reasonably determined in good faith by the
Board of Directors of the Company) shall be made in the application of the
provisions set forth herein with respect to the rights and interests thereafter
of the registered Holder of this Warrant, such that the provisions set forth in
this Section 1 (including provisions with respect to adjustment of the Purchase
Price) shall thereafter be applicable, as nearly as is reasonably practicable,
in relation to any shares of stock or other securities or property thereafter
deliverable upon the exercise of this Warrant.
d. Certificate of Adjustment. When any adjustment is required to be made
pursuant to this Section 1, the Company shall promptly mail to the registered
Holder a certificate setting forth the Purchase Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment. Such
certificate shall also set forth the kind and amount of stock or other
securities or property into which this Warrant shall be exercisable following
such adjustment.
2. Registration Rights.
a. Certain Definitions. As used in this Warrant, the following terms shall
have the following respective meanings:
"Commission" means the Securities and Exchange Commission, or any other
Federal agency at the time administering the Securities Act.
"Common Stock" means the common stock, $.01 par value per share, of the
Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any similar Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Registration Statement" means a registration statement filed by the
Company with the Commission for a public offering and sale of Common Stock
(other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a similar limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation).
"Registration Expenses" means the expenses described in Subsection e.
"Registrable Shares" means the shares of Common Stock issued or issuable
upon exercise of this Warrant or other Series D Warrants issued
contemporaneously; provided, however, that shares of Common Stock which are
Registrable Shares shall cease to be Registrable Shares upon any sale of such
Registrable Shares pursuant to a Registration Statement or Rule 144 under the
Securities Act. Wherever reference is made in this Warrant to a request or
consent of holders of a certain percentage of Registrable Shares, the
determination of such percentage shall include shares of Common Stock issuable
upon exercise of the Warrant even if such exercise conversion has not yet been
effected.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission issued
under such Act, as they each may, from time to time, be in effect.
"Stockholders" means the Holders and any persons or entities to whom the
rights granted under this Warrant are transferred by any Holders, their
successors or assigns pursuant to Section 4 hereof.
b. Required Registrations.
(1) At any time after the Company becomes eligible to file a Registration
Statement on Form S-3 (or any successor form relating to secondary offerings), a
Stockholder or Stockholders holding in the aggregate at least 20% of the
Registrable Shares issued pursuant to the Series D Warrants may request the
Company, in writing, to effect the registration on Form S-3 (or such successor
form), of Registrable Shares having an aggregate offering price of at least Five
Hundred Thousand Dollars ($500,000) (based on the then current public market
price). Upon receipt of any such request, the Company shall promptly give
written notice of such proposed registration to all Stockholders. Such
Stockholders shall have the right, by giving written notice to the Company
within 30 days after the Company provides its notice, to elect to have included
in such registration such of their Registrable Shares as such Stockholders may
request in such notice of election; provided that if the underwriter (if any)
managing the offering determines that, because of marketing factors, all of the
Registrable Shares requested to be registered by all Stockholders may not be
included in the offering, then all Stockholders who have requested registration
shall participate in the registration pro rata based upon the number of
Registrable Shares which they have requested to be so registered. Thereupon, the
Company shall, as expeditiously as possible, use its best efforts to effect the
registration on Form S-3 (or such successor form) of all Registrable Shares
which the Company has been requested to so register.
(2) The Company shall not be required to effect more than 3 registrations
pursuant to Subparagraph (1) above, nor shall the Company be required to effect
a registration pursuant to Subparagraph (1) above within six months after the
effective date of any other Registration Statement of the Company (other than on
Form S-3, or S-8, or any successor form).
(3) If at the time of any request to register Registrable Shares pursuant
to this Subsection b, the Company is engaged or has fixed plans to engage within
30 days of the time of the request in a registered public offering as to which
the Stockholders may include Registrable Shares pursuant to Subsection c or is
engaged in any other activity which, in the good faith determination of the
Company's Board of Directors, would be adversely affected by the requested
registration to the material detriment of the Company, then the Company may at
its option direct that such request be delayed for a period not in excess of six
months from the effective date of such offering or the date of commencement of
such other material activity, as the case may be.
c. Incidental Registration.
(1) Whenever the Company proposes to file a Registration Statement (other
than pursuant to Subsection b(1)) at any time and from time to time, it will,
prior to such filing, give written notice to all Stockholders of its intention
to do so and, upon the written request of a Stockholder or Stockholders given
within 20 days after the Company provides such notice (which request shall state
the intended method of disposition of such Registrable Shares), the Company
shall use its best efforts to cause all Registrable Shares which the Company has
been requested by such Stockholder or Stockholders to register to be registered
under the Securities Act to the extent necessary to permit their sale or other
disposition in accordance with the intended methods of distribution specified in
the request of such Stockholder or Stockholders; provided that the Company shall
have the right to postpone or withdraw any registration effected pursuant to
this Subsection c without obligation to any Stockholder.
(2) In connection with any registration under this Subsection c involving
an underwriting, the Company shall not be required to include any Registrable
Shares in such registration unless the holders thereof accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected by
it (provided that such terms must be consistent with this Warrant). If in the
opinion of the managing underwriter it is appropriate because of marketing
factors to limit the number of Registrable Shares to be included in the
offering, then the Company shall be required to include in the registration only
that number of Registrable Shares, if any, which the managing underwriter
believes should be included therein. If the number of Registrable Shares to be
included in the offering in accordance with the foregoing is less than the total
number of shares which the holders of Registrable Shares have requested to be
included, then the holders of Registrable Shares who have requested registration
and other holders of securities entitled to include them in such registration
shall participate in the registration pro rata based upon their total ownership
of shares of Common Stock (giving effect to the conversion into Common Stock of
all securities convertible thereinto). If any holder would thus be entitled to
include more securities than such holder requested to be registered, the excess
shall be allocated among other requesting holders pro rata in the manner
described in the preceding sentence.
d. Registration Procedures. If and whenever the Company is required by the
provisions of this Warrant to use its best efforts to effect the registration of
any of the Registrable Shares under the Securities Act, the Company shall:
(1) file with the Commission a Registration Statement with respect to such
Registrable Shares and use its best efforts to cause that Registration Statement
to become and remain effective;
(2) as expeditiously as possible prepare and file with the Commission any
amendments and supplements to the Registration Statement and the prospectus
included in the Registration Statement as may be necessary to keep the
Registration Statement effective, in the case of a firm commitment underwritten
public offering, until each underwriter has completed the distribution of all
securities purchased by it and, in the case of any other offering, until the
earlier of the sale of all Registrable Shares covered thereby or 120 days after
the effective date thereof;
(3) as expeditiously as possible furnish to each selling Stockholder such
reasonable numbers of copies of the prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as the selling Stockholder may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Shares owned
by the selling Stockholder; and
(4) as expeditiously as possible use its best efforts to register or
qualify the Registrable Shares covered by the Registration Statement under the
securities or Blue Sky laws of such states as the selling Stockholders shall
reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the selling Stockholders to consummate the
public sale or other disposition in such states of the Registrable Shares owned
by the selling Stockholder; provided, however, that the Company shall not be
required in connection with this Subparagraph (4) to qualify as a foreign
corporation or execute a general consent to service of process in any
jurisdiction.
If the Company has delivered preliminary or final prospectuses to the
selling Stockholders and after having done so the prospectus is amended to
comply with the requirements of the Securities Act, the Company shall promptly
notify the selling Stockholders and, if requested, the selling Stockholders
shall immediately cease making offers of Registrable Shares and return all
prospectuses to the Company. The Company shall promptly provide the selling
Stockholders with revised prospectuses and, following receipt of the revised
prospectuses, the selling Stockholders shall be free to resume making offers of
the Registrable Shares.
e. Allocation of Expenses. The Company will pay all Registration Expenses
of all registrations under this Warrant; provided, however, that if a
registration under Subsection b is withdrawn at the request of the Stockholders
requesting such registration (other than as a result of information concerning
the business or financial condition of the Company which is made known to the
Stockholders after the date on which such registration was requested) and if the
requesting Stockholders elect not to have such registration counted as a
registration requested under Subection b, the requesting Stockholders shall pay
the Registration Expenses of such registration pro rata in accordance with the
number of their Registrable Shares included in such registration. For purposes
of this Subsection e, the term "Registration Expenses" shall mean all expenses
incurred by the Company in complying with this Warrant, including, without
limitation, all registration and filing fees, exchange listing fees, printing
expenses, fees and expenses of counsel for the Company and the fees and expenses
of one counsel selected by the selling Stockholders to represent the selling
Stockholders, state Blue Sky fees and expenses, and the expense of any special
audits incident to or required by any such registration, but excluding
underwriting discounts, selling commissions and the fees and expenses of selling
Stockholders' own counsel (other than the counsel selected to represent all
selling Stockholders).
f. Indemnification and Contribution.
(1) In the event of any registration of any of the Registrable Shares under
the Securities Act pursuant to this Warrant, the Company will indemnify and hold
harmless the seller of such Registrable Shares, each underwriter of such
Registrable Shares, and each other person, if any, who controls such seller or
underwriter within the meaning of the Securities Act or the Exchange Act against
any losses, claims, damages or liabilities, joint or several, to which such
seller, underwriter or controlling person may become subject under the
Securities Act, the Exchange Act, state securities or Blue Sky laws 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 Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to such Registration Statement, or
arise out of or are based upon the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and the Company will reimburse such seller, underwriter
and each such controlling person for any legal or any other expenses reasonably
incurred by such seller, underwriter or controlling person 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 to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or omission made in such Registration Statement,
preliminary prospectus or final prospectus, or any such amendment or supplement,
in reliance upon and in conformity with information furnished to the Company, in
writing, by or on behalf of such seller, underwriter or controlling person
specifically for use in the preparation thereof.
(2) In the event of any registration of any of the Registrable Shares under
the Securities Act pursuant to this Warrant, each seller of Registrable Shares,
severally and not jointly, will indemnify and hold harmless the Company, each of
its directors and officers and each underwriter (if any) and each person, if
any, who controls the Company or any such underwriter within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages or
liabilities, joint or several, to which the Company, such directors and
officers, underwriter or controlling person may become subject under the
Securities Act, Exchange Act, state securities or Blue Sky laws 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 of a material fact
contained in any Registration Statement under which such Registrable Shares were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the Registration Statement, or any amendment or
supplement to the Registration Statement, or arise out of or are based upon any
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, if the statement or omission was
made in reliance upon and in conformity with information relating to such seller
furnished in writing to the Company by or on behalf of such seller specifically
for use in connection with the preparation of such Registration Statement,
prospectus, amendment or supplement; provided, however, that the obligations of
such Stockholders hereunder shall be limited to an amount equal to the proceeds
to each Stockholder of Registrable Shares sold in connection with such
registration.
(3) Each party entitled to indemnification under this Subsection f (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, provided, further, that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Subsection f. The Indemnified Party may participate in
such defense at such party's expense; provided, however, that the Indemnifying
Party shall pay such expense if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between the Indemnified Party and any other
party represented by such counsel in such proceeding. No Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation, and no Indemnified Party shall
consent to entry of any judgment or settle such claim or litigation without the
prior written consent of the Indemnifying Party.
(4) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any holder of
Registrable Shares exercising rights under this Warrant, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Subsection f 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 Subsection f
provides for indemnification in such case, or (ii) contribution under the
Securities Act may be required on the part of any such selling Stockholder or
any such controlling person in circumstances for which indemnification is
provided under this Subsection f; then, in each such case, the Company and such
Stockholder will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from others) in
such proportions so that such holder is responsible for the portion represented
by the percentage that the public offering price of its Registrable shares
offered by the Registration Statement bears to the public offering price of all
securities offered by such Registration Statement, and the Company is
responsible for the remaining portion; provided, however, that, in any such
case, (A) no such holder will be required to contribute any amount in excess of
the proceeds to it of all Registrable Shares sold by it pursuant to such
Registration Statement, and (B) no person or entity guilty of fraudulent
misrepresentation, within the meaning of Section 11(f) of the Securities Act,
shall be entitled to contribution from any person or entity who is not guilty of
such fraudulent misrepresentation.
g. Indemnification with Respect to Underwritten Offering. In the event that
Registrable Shares are sold pursuant to a Registration Statement in an
underwritten offering pursuant to Subsection b, the Company agrees to enter into
an underwriting agreement containing customary representations and warranties
with respect to the business and operations of an issuer of the securities being
registered and customary covenants and agreements to be performed by such
issuer, including without limitation customary provisions with respect to
indemnification by the Company of the underwriters of such offering.
h. Information by Holder. Each Stockholder including Registrable Shares in
any registration shall furnish to the Company such information regarding such
Stockholder and the distribution proposed by such Stockholder as the Company may
reasonably request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this Warrant.
i. "Stand-Off" Agreement". Each Stockholder, if requested by the Company
and the managing underwriter of an offering by the Company of Common Stock or
other securities of the Company pursuant to a Registration Statement, shall
agree not to sell publicly or otherwise transfer or dispose of any Registrable
Shares or other securities of the Company held by such Stockholder for a
specified period of time (not to exceed 180 days) following the effective date
of such Registration Statement; provided, that:
(1) such agreement shall only apply to the first Registration Statement
covering Common Stock to be sold on its behalf to the public in an underwritten
offering; and
(2) all Stockholders holding not less than the number of shares of Common
Stock held by such Stockholder (including shares of Common Stock issuable upon
the conversion of Shares, or other convertible securities, or upon the exercise
of options, warrants or rights) and all officers and directors of the Company
enter into similar agreements.
j. Termination. All of the Company's obligations to register Registrable
Shares under this Warrant shall terminate on the tenth anniversary of this
Warrant.
3. Exercise of Warrant.
a. The Company covenants that it will at all times maintain an available
and adequate reserve of duly authorized but unissued share of its Common Stock,
free from preemptive rights, sufficient to effect the full exercise of this
Warrant as herein provided, and that it will at all times maintain in full force
and effect an appropriate permit of the Delaware Commissioner of Corporations
authorizing the issuance and sale by the Company of all shares of Common Stock
issuable upon exercise of this Warrant by the holder.
The Company covenants that all shares of Common Stock issuable upon the
exercise of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and free from all taxes, liens and charges with respect to the
issue thereof.
The holder hereof may surrender this Warrant for exchange at the principal
office of the Company. Within a reasonable time thereafter and without expense
(other than transfer taxes, if any) to each holder, the Company shall issue in
exchange therefor, in such denominations (of not less than 100 shares) and
issued in such name or names as the holder shall designate (if permitted by the
Federal Securities laws and the relevant Blue Sky law(s), as amended from time
to time), a new certificate or certificates dated the date hereof evidencing the
right to purchase the same aggregate number of shares of Common Stock as are
evidenced hereby, and otherwise containing the same provisions and subject to
the same terms and conditions of this certificate.
Upon surrender of this Warrant at the office of the Company accompanied by
payment of the appropriate Purchase Price of the Common Stock in cash or as
otherwise allowed herein, the Company shall forthwith cause to be executed,
issued and delivered to the holder of the Warrant a certificate or certificates
for the proper number of shares of common stock or other securities of the
Company; and the Company covenants that the issuance of this Warrant shall
constitute full authority to those of its officers who are charged with the duty
of issuing stock certificates to promptly execute, issue and deliver to the
holder of the Warrant the necessary certificate for shares of Common Stock or
other securities of the Company required by such exercise.
This Warrant may be exercised in accordance with its terms prior to
expiration as a whole, or from time to time in part. In the event of partial
exercise of the Warrant, the Company shall, in addition to delivery of the
securities thereby purchased, deliver to the holder of the Warrant, a new
Warrant for the remaining shares then subject to the unexercised portion of the
Warrant; such new Warrant being dated the date hereof and otherwise containing
the same provisions and subject to the same conditions and subject to the same
terms and conditions as this Warrant. Certificates for shares of Common Stock or
other securities of the Company issuable by reason of the exercise of Warrants
shall be dated and shall be effective as of the date of the surrender of the
Warrants for exercise or acceptance of the offering of shares or other
securities, as the case may be, and the payment of the appropriate Purchase
Price, notwithstanding any delay in the actual execution, issuance or delivery
of the certificates or securities so purchased.
This Warrant shall be registered on the books of the Company, which shall
be kept at its principal office for that purpose, and shall be transferable only
on said books by the holder hereof in person or by duly authorized attorney upon
surrender of this Warrant properly endorsed.
b. This Warrant may be exercised by the holder hereof, in whole or in part,
by surrendering this Warrant at the principal office of the Company, or at such
other office or agency as the Company may designate, accompanied by payment in
full, in lawful money of the United States, of the Purchase Price payable in
respect of the number of Warrant Shares purchased upon such exercise.
c. The holder hereof may, at its option, elect to pay some or all of the
Purchase Price payable upon an exercise of this Warrant by canceling a portion
of this Warrant exercisable for such number of Warrant Shares as is determined
by dividing (i) the total Purchase Price payable in respect of the number of
Warrant Shares being purchased upon such exercise by (ii) the excess of the Fair
Market Value per share of Common Stock as of the effective date of exercise (the
"Exercise Date") over the Purchase Price per share. The Fair Market Value per
share of Common Stock shall be determined as follows:
(1) If the Common Stock is listed on a national securities exchange, the
NASDAQ National Market System, the NASDAQ system, or another nationally
recognized exchange or trading system as of the Exercise Date, the Fair Market
Value per share of Common Stock shall be deemed to be the last reported sale
price per share of Common Stock thereon on the Exercise Date; or, if no such
price is reported on such date, such price on the next preceding business day
(provided that if no such price is reported on the next preceding business day,
the Fair Market Value per share of Common Stock shall be determined pursuant to
Clause (2)).
(2) If the Common Stock is not listed on a national securities exchange,
the NASDAQ National Market System, the NASDAQ system or another nationally
recognized exchange or trading system as of the Exercise Date, the Fair Market
Value per share of Common Stock shall be deemed to be the amount most recently
determined by the Board of Directors to represent the fair market value per
share of the Common Stock (including without limitation a determination for
purposes of granting Common Stock options or issuing Common Stock under an
employee benefit plan of the Company); and, upon request of the holder hereof,
the Board of Directors (or a representative thereof) shall promptly notify the
holder hereof of the Fair Market Value per share of Common Stock.
Notwithstanding the foregoing, if the Board of Directors has not made such a
determination within the three-month period prior to the Exercise Date, then (A)
the Fair Market Value per share of Common Stock shall be the amount next
determined by the Board of Directors to represent the fair market value per
share of the Common Stock (including without limitation a determination for
purposes of granting Common Stock options or issuing Common Stock under an
employee benefit plan of the Company), (B) the Board of Directors shall make
such a determination within 30 days of a request by the holder hereof that it do
so, and (C) the exercise of this Warrant pursuant to this Subsection 2c shall be
delayed until such determination is made.
4. Transfers of Rights. This Warrant, and the rights and obligations of
each holder hereof, may be assigned by such holder hereof to any person or
entity to which not fewer than 100 Shares (issued or issuable under this
Warrant) are transferred by such holder hereof, and such transferee shall be
deemed a "holder hereof" for purposes of this Warrant; provided that the
transferee provides written notice of such assignment to the Company.
5. General.
a. Notices. All notices, requests, consents, and other communications under
this Warrant shall be in writing and shall be delivered by hand or mailed by
first class certified or registered mail, return receipt requested, postage
prepaid:
If to the Company, at 19886 Ashburn Road, Ashburn, VA 20147, Attention:
President, or at such other address or addresses as may have been furnished in
writing by the Company to the Holders, with a copy to the Chief Financial
Officer and General Counsel; or
If to a holder hereof, at his or its address set forth above, or at such
other address or addresses as may have been furnished to the Company in writing
by such holder hereof.
Notices provided in accordance with this Section 5 shall be deemed
delivered upon personal delivery or two business days after deposit in the mail.
b. Entire Agreement. This Warrant embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.
c. Amendments and Waivers. Any term of this Warrant may be amended and the
observance of any term of this Warrant may be waived (either generally or in a
particular instance and either retroactively or prospectively), with the written
consent of the Company and the holders of at least 90% of the Registrable
Shares; provided, that this Warrant may be amended with the consent of the
holders of less than all Registrable Shares only in a manner which affects all
Registrable Shares in the same fashion. No waivers of or exceptions to any term,
condition or provision of this Warrant, in any one or more instances, shall be
deemed to be, or construed as, a further or continuing waiver of any such term,
condition or provision.
d. Fractional Shares. The Company shall not be required upon the exercise
of this Warrant to issue any fractional shares, but shall make an adjustment
therefor in cash on the basis of the Fair Market Value per share of Common
Stock, as determined in good faith by the Board of Directors or as quoted if the
Common Stock is publicly traded on the day the Warrant was exercised.
Executed in Ashburn, Virginia as of the 20th day of November, 1998.
TELOS CORPORATION
By:/s/ William L.P. Brownley
William L.P. Brownley
Vice President and General Counsel
[SEAL]
Attest:/s/ Gerald D. Calhoun, Secretary