Exhibit 10.96
TRANSACTION AGREEMENT
THIS TRANSACTION AGREEMENT (THIS "AGREEMENT") IS MADE THIS 29TH DAY OF
SEPTEMBER, 1999, BETWEEN TELOS CORPORATION, a MARYLAND CORPORATION ("TELOS") AND
ENTERWORKS, INC., a Delaware corporation ("Enterworks").
R E C I T A L S
WHEREAS, to finance the start up and operations of Enterworks, Telos
has loaned Enterworks approximately $30,000,000 as of the date hereof,
and presently intends to continue to fund the operations of Enterworks
in the ordinary course until the closing of the minimum amount offered
in the currently proposed private placement (the "Private Placement")
of up to $25,000,000 in common stock of the Company, par value $.01 per
share (the "Company Stock") by Deutsche Banc Alex. Xxxxx (the
"Placement Agent");
WHEREAS, Board of Directors of Enterworks, upon the advice of the
Placement Agent, has determined that it is necessary to restructure
Enterworks' balance sheet to provide for the forgiveness of the amounts
loaned to Enterworks by Telos through the date (the "Cancellation
Date") of the closing of the minimum amount in connection with the
Private Placement (the "Telos Shareholder Loan Amount") as provided
herein; and
WHEREAS, as part of the general restructuring of the balance sheet of
Enterworks in anticipation of the Private Placement, Enterworks has
agreed to issue Telos 4,000,000 shares of common stock, par value $.01
per share ("Common Stock") pursuant to the terms of this Agreement;
WHEREAS, Telos desires to contribute 1,000,000 shares of Enterworks
Common Stock owned by Telos to the capital of Enterworks for issuance
to certain members of management of Telos (the "Grantees") upon
exercise of options to be granted pursuant to Enterworks 1996 Stock
Option Plan;
A G R E E M E N T
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION ONE. ____BACKGROUND OF AGREEMENT. The agreements set forth in Sections
2, 3 and 4 below are entered into as part of a general restructuring of the
balance sheet of Enterworks upon the advice of the Placement Agent in order to
permit the successful offering of Common Stock in the Private Placement which
may alleviate the cash flow drain on Telos in connection with the funding of
Enterworks by Telos and provide Enterworks with the ability to seek additional
sources of funding other than Telos from and after the Private Placement.
SECTION TWO.______CANCELLATION OF INDEBTEDNESS. Telos hereby agrees, with effect
from Cancellation Date, to forgive and cancel the Telos Shareholder Loan Amount
on the Cancellation Date in the event Enterworks receives at least the minimum
offering amount in connection with the Private Placement on such date.
SECTION THREE.____SHARE ISSUANCE TO TELOS. Enterworks agrees to issue Telos,
with effect from the Cancellation Date, on the Cancellation Date, 4,000,000
shares of Common Stock, such shares upon issuance to be duly authorized, validly
issued, fully paid and non-assessable shares of Common Stock.
SECTION FOUR._____SHARE TRANSFER TO ENTERWORKS. Telos agrees to immediately
transfer to Enterworks 1,000,000 shares of Common Stock, for the purpose of
reserving such shares for issuance upon exercise of options granted to the
Grantees pursuant to the Enterworks 1996 Stock Option Plan.
SECTION FIVE._____CONTINUED FUNDING. Telos' present intention is to continue to
fund Enterworks in the ordinary course from the date hereof until the first
closing in connection with the Private Placement in order to facilitate a
successful consummation of the Private Placement; provided, however, that
circumstances may require Telos to discontinue such funding upon written notice
to Telos.
SECTION SIX.______GENERAL. This Agreement may not be supplemented, changed,
waived, discharged, terminated, modified or amended except by written instrument
executed by the parties hereto, and shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. The
Recitals set forth above shall be deemed to be a substantive part of this
Agreement and may be used to construe and interpret the terms hereof.
SECTION SEVEN.____GOVERNING LAW. All Questions Concerning the Construction,
Validity, Interpretation or Subject Matter of This Agreement Will be Governed by
and Construed in Accordance the Internal Law, and Not the Law of Conflicts, of
the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
TELOS CORPORATION
By: /s/ Xxxxxxx X.X. Xxxxxxxx
Name: Xxxxxxx X.X. Xxxxxxxx
Title: Vice President/General Counsel
ENTERWORKS, INC.
By: /s/ Dee Xxx Xxxxxx
Name: Dee Xxx Xxxxxx
Title: Vice President/General Counsel
