SHARE PURCHASE AGREEMENT
                            ------------------------



     THIS SHARE PURCHASE  AGREEMENT  ("Agreement")  is made this 7th day of May,
1998,  between Telos  Corporation,  a Maryland  corporation,  formerly named and
known  as C3,  Inc.  ("Telos"),  and  Union  Bank of  Switzerland  ("UBS"),  and
consented and agreed to by Union de Banques Suisses (Luxembourg) S.A.



                                 R E C I T A L S
                                 ---------------



     1.  UBS is the  owner  and  holder  of all of the  authorized,  issued  and
outstanding  Class B Redeemable  Preferred Stock of Telos,  with a face value of
seven million, five hundred thousand dollars and 00/100  ($7,500,000.00),  which
stock from July 1, 1995 through June 30, 1997 had a cumulative dividend rate per
annum equal to 11.125%  which  increased  to 14.125% per annum  thereafter,  and
which stock as of the date hereof has undeclared and unpaid  dividends  relating
to the Class B Redeemable  Preferred Stock totaling  approximately four million,
nine hundred thousand dollars ($4,900,000.00) (the "Preferred Shares").

     2.  UBS is  also  the  owner  and  holder  of one  million,  eight  hundred
thirty-seven  thousand,  seven  hundred and  seventy-three(1,837,773)  shares of
Telos' Class A Common  Stock,  no par value,  and has the ability to purchase an
additional  one  million,   three  hundred  twelve  thousand,  six  hundred  and
ninety-five (1,312,695) shares of Class A Common Stock purchasable upon exercise
of a Warrant pursuant to the terms of a certain Warrant  Agreement between Telos
and UBS dated January 14, 1992 (the "Common/Warrant Stock").

     3.  The  Preferred  Stock  and  the  Common/Warrant   Stock  are  sometimes
collectively referred to herein as the "Shares".

     4. Telos and UBS have agreed that Telos will  purchase  the Shares from UBS
as provided in this Agreement.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants contained herein, the parties hereby agree as follows:

                                    ARTICLE I
                                    ---------
                                    RECITALS
                                    --------

     SECTION  1.1  The  foregoing  Recitals  are  hereby  made  a part  of  this
Agreement.

                                   ARTICLE II
                                   ----------
                            ACQUISITION OF THE SHARES
                            
     The  sale  by UBS  and  the  purchase  by  Telos  of the  Shares  shall  be
consummated as set forth in this Article II.

                  SECTION 2.1       PURCHASE OF THE SHARES

                  2.1.1  Purchase  of the Shares by Telos.  Subject to the terms
and conditions  herein, UBS agrees to sell to Telos and Telos agrees to purchase
from UBS, the Shares,  which are all the equity interests UBS has in Telos for a
purchase  price of five  million,  five  hundred  thousand  dollars  and  00/100
($5,500,000.00) payable as follows:

                     (a)      The sum of five million dollars ($5,000,000.00)
by federal wired funds at the Closing, and
<PAGE>


                     (b)      The  sum of  five  hundred  thousand dollars
($500,000.00),  without interest,  on or before  November 7, 1998,  secured by 
a Letter of Credit from Nations  Bank, N.A., in the form of the Letter of Credit
attached hereto as Exhibit A.

                  SECTION 2.2       CLOSING

                  2.2.1  Closing  Date.  The closing of the sale and purchase of
the Shares  shall take place at the  offices of Union Bank of  Switzerland,  New
York Branch,  299 Park Avenue, New York, N.Y. 10171 on May 7, 1998 at 2:30 P.M.,
unless the parties hereto  otherwise  mutually shall agree. The time and date on
which the closing hereunder occurs is herein called the "Closing."

                  2.2.2  Deliveries  by UBS.  At Closing,  UBS will  deliver the
following to Telos:

                           Stock  certificates  representing  the Shares  
accompanied by stock powers duly executed in blank or duly executed instruments 
of  transfer, and any other documents that are necessary to transfer to Telos 
good title to such Shares.

                  2.2.3  Deliveries by Telos. At Closing,  Telos will deliver to
UBS the following:

                           (a) By same day funds to a bank account designated in
advance by UBS, an amount equal to Five Million Dollars and 00/100 
($5,000,000.00).


                           (b) The  Letter of Credit for five  hundred  thousand
dollars and 00/100 ($500,000.00) attached hereto as Exhibit A.

                           (c) The  opinion  of counsel  referred  to in Section
2.6.2(d) hereof.

                  SECTION 2.3       REPRESENTATIONS AND WARRANTIES OF UBS

         UBS hereby represents and warrants to Telos the following:

                  2.3.1 No Encumbrance.  UBS has good title to and has not sold,
transferred or otherwise  encumbered any of the Shares. The Shares represent all
equity interests acquired by UBS in Telos, pursuant to or in connection with any
of  the  following   agreements,   including  any   amendments,   modifications,
supplements  or  restructuring  of any of such  agreements or any debt or equity
issued pursuant to such agreements:  (i) $20,000,000  principal amount of Senior
Exchange  Notes  due 1994  issued by C3,  Inc.  under an  indenture  dated as of
November 21, 1989 between C3, Inc. and The Connecticut National Bank, as trustee
(the "Trustee") and (ii)  $45,747,000  principal  amount of Senior  Subordinated
Exchange  Notes  due 1999  issued by C3,  Inc.  under an  indenture  dated as of
November 21, 1989 between C3, Inc. and the Trustee.

                  2.3.2 Corporate Powers' Non-Contravention of Laws. UBS has the
corporate  power and  authority to execute,  deliver and carry out the terms and
provisions of this Agreement.  UBS has taken all necessary  corporate  action to
authorize  the  execution,  delivery and  performance  of this  Agreement.  This
Agreement has been duly executed and delivered by UBS and constitutes the legal,
valid and binding  obligation of UBS  enforceable in accordance  with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization, and other
laws of general applicability  relating to or affecting creditors' rights and to
general equitable principles.  Neither the execution, delivery or performance by
UBS of this  Agreement  nor  compliance  with any of the  terms  and  provisions
hereof, nor the consummation of any of the transactions contemplated hereby will
contravene any law, statute,  rule or regulation of the United States,  New York
or  Luxembourg  or  any  existing  order,  writ,  injunction  or  decree  of any
governmental authority.
<PAGE>

                  2.3.3 Brokers. UBS has not incurred any liability,  contingent
or otherwise,  for any brokerage  fee,  commission or financial  advisory fee in
connection with the transactions contemplated by this Agreement.

                  2.3.4  Offering  of the  Shares.  Neither  UBS  or any  person
authorized or employed by UBS as agent, broker,  dealer or otherwise has offered
the Shares for sale to, or  solicited  any offers to buy the Shares of UBS from,
or otherwise  approached or negotiated  with respect thereto with, any person or
persons  other than Telos,  and neither UBS nor any person  acting on its behalf
has taken any action (including without  limitation any offer,  issuance or sale
of the Shares) which might subject the offering,  issuance or sale of the Shares
to the registration provisions of the Securities Act.

                  SECTION 2.4       REPRESENTATIONS AND WARRANTIES OF TELOS

         Telos hereby represents and warrants to UBS the following:

                  2.4.1 Organization and Good Standing; Business. Telos (i) is a
corporation,  duly  organized  and existing in good  standing  under the laws of
Maryland with all requisite  corporate power and authority to own its properties
and conduct its business as now being  conducted,  (ii) is duly  qualified to do
business as a foreign corporation in good standing in each jurisdiction where it
conducts its business or owns or leases property.

                  2.4.2  Authority.  Telos has full power and authority to enter
into and  perform  this  Agreement  in  accordance  with its  terms and has duly
authorized,  executed and delivered this Agreement,  except to the extent as may
be  limited  by  bankruptcy,  insolvency  or similar  laws and the  exercise  of
judicial discretion in applying general principles of equity.

                  2.4.3 No Violation. The execution, delivery and performance of
this Agreement by Telos does not and will not (i) conflict with any provision of
the  Certificate of  Incorporation  or By-Laws of Telos or any law,  regulation,
order or similar  governmental  act applicable to Telos,  (ii) conflict with, or
result in the creation of any encumbrance, security interest, equity or right of
others  upon any of the  properties  or assets of Telos  under any of the terms,
conditions  or provisions  of any  agreement,  instrument or obligation to which
Telos may be bound or affected or (iii)  violate  any order,  writ,  injunction,
decree, statute, rule or regulation applicable to Telos and its assets.

                  2.4.4 Consents. No consent,  approval,  permit or license from
or filing with any  governmental  or  regulatory  authority  or other  person is
required  to be  obtained  or made by Telos in  connection  with the  execution,
delivery and performance by Telos of this Agreement.

                  2.4.5  No  Defaults.  Telos  is (i)  not in  violation  of any
provision of its  Certificate of  Incorporation  or By-Laws (or other  analogous
organizational  documents) or in default under or in violation of any agreement,
instrument  or  obligation  to which it is a party or by which it is bound or to
which any of its  properties  are subject and (ii) in compliance  with all laws,
regulations,  governmental orders and other governmental action applicable to it
or its business.

                  2.4.6   Brokers.   Telos  has  not  incurred  any   liability,
contingent or otherwise, for any brokerage fee, commission or financial advisory
fee (other than in favor of UBS or an affiliate of UBS) in  connection  with the
transactions contemplated by this Agreement.
<PAGE>

         SECTION 2.5       CONDITIONS TO CLOSING OF SHARE ACQUISITION

                  2.5.1  Conditions to Obligations of Telos.  The obligations of
Telos  under  Article II of this  Agreement  are subject to  satisfaction  or to
waiver by Telos,  on or prior to Closing,  of each of the  following  conditions
precedent:

                           (a)  Representations  and  Warranties;  Performance; 
Certificate.  The  representations and  warranties  of UBS  contained  in  
Article II of this  Agreement  or in any instrument,  list, certificate or 
writing delivered to Telos pursuant to Article II of this  Agreement  shall be 
correct in all  material  respects on and as of Closing with the same effect as 
though made on and as of such date by reference to the facts and circumstances 
then existing;  UBS shall have performed in all material respects each of their
obligations  and  agreements hereunder to be performed by it pursuant to this
Article II at or prior to Closing.

                           (b)  Absence  of  Orders.  No order  shall  have been
issued by any court or other governmental  body and not have  expired  or been
lifted or  dissolved,  and no statute,  rule or regulation  shall be enacted or 
issued, that would have as an effect to restrain or prohibit consummation of the
transactions  contemplated by this Agreement.

                           (c)  Approvals. UBS shall have obtained all required
consents and approvals to the consummation  of the transaction  contemplated by 
this Agreement.  UBS does not require  the  consent or  approval of any third
party in order to enter into and perform this Agreement.

                  2.6.2 Conditions to Obligations of UBS. The obligations of UBS
under Article II of this Agreement are subject to  satisfaction  or to waiver by
UBS, on or prior to Closing, of each of the following conditions precedent:

                           (a) Representations and Warranties;  Performance;  
Certificate.  The representations and warranties  of  Telos  contained  in  
Article  II of  this  Agreement  or in any instrument, list, certificate or 
writing delivered to UBS pursuant to Article II of this Agreement shall be 
correct in all material respects on and as of Closing with the same effect as
though made on and as of such date by reference  to the facts and circumstances 
then  existing;  Telos  shall  have  performed  in all material  respects  each
of its  obligations  and  agreements  hereunder  to be performed by it pursuant
to this Article II at or prior to Closing.

                           (b)  Absence  of  Orders.  No order  shall  have been
issued by any court or other governmental  body and not have  expired  or been 
lifted or  dissolved,  and no statute,  rule or regulation  shall be enacted or
issued,  that would have as an effect to restrain or prohibit consummation of
the transactions  contemplated by this Agreement.

                           (c) Approvals. Telos shall have obtained all required
consents and approvals to the consummation  of  the  transaction  contemplated
by  this  Agreement.  Executed counterpart copies of all consents referred to in
the preceding sentence will be delivered to UBS at Closing.

                           (d)  Opinion  of Counsel  for  Telos.  UBS shall have
received an opinion of Telos' counsel,  dated the date of the Closing,  in form
and substance  satisfactory to UBS' counsel, to the effect that:
<PAGE>

                                (i)  Telos is a corporation  duly  organized,  
validly  existing and in good standing under the laws of Maryland with the 
corporate power and authority to carry on its business;

                                (ii) all  corporate  and  other  proceedings
required by law, by the Certificate  of  Incorporation  or By-Laws  (or other 
analogous  organizational documents) of Telos, or by the provisions of this
Agreement to be taken by Telos in connection with the execution and delivery of 
this Agreement  and/or the due consummation of the  transactions contemplated 
by Article II hereby have been duly and validly taken;

                               (iii) neither the execution or delivery of this
Agreement  by UBS nor the consummation of the transactions  contemplated by 
Article II hereby (A) violates any  statute or law or any rule,  regulation,  
order,  judgment or decree of any court or governmental  authority normally
applicable to transactions of the type contemplated by this Agreement based on 
such counsel's experience,  (B) violates or  conflicts   with  or   constitutes
a  default  under  the   Certificate  of Incorporation or By-Laws (or other 
analogous organizational documents) of Telos, or  any  contract,   commitment, 
agreement,   understanding,   arrangement  or restriction  of any kind to which
Telos is a party,  or (C) will cause,  or give any person valid  grounds to 
cause,  the maturity of any liability or obligation of UBS to be accelerated or
will increase any such liability or obligation; and

                              (iv) this  Agreement  has been duly  executed  and
delivered by, and is a valid and binding  obligation of Telos,  enforceable  
against Telos in accordance with its respective terms,  except that (a) such 
enforcement may be subject to applicable bankruptcy, reorganization, insolvency
or other  laws,  now or  hereafter  in effect,  affecting  creditors' rights 
generally,  and (b) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable  defenses  and to  the  
discretion  of the court before which  any proceeding therefor may be brought.

                               (v) the repurchase by Telos of the Shares is
lawful under applicable Maryland law.


<PAGE>



                                   ARTICLE III
                                  MISCELLANEOUS

                  SECTION 3.1 NOTICES
                              -------

                  Any notice, request, instruction or other document to be given
under  this  Agreement  after the date  hereof by any party  hereto to any other
party  shall  be in  writing  and  shall  be  delivered  personally  or  sent by
registered or certified  mail,  postage  prepaid,  to the following  persons and
addresses,  or to such other  addresses or persons as any party may designate by
written notice to the other parties:

                           (a)      UBS:
                                    Union Bank of Switzerland
                                    c/o Union Bank Switzerland
                                    New York Branch
                                    299 Park Avenue
                                    New York, New York 10171
                                    Attn: L. Thomas Sperry
                                    Phone: (212) 821-3308
                                    Facsimile: (212) 821-3008

                           (b)      Union de Banques Suisses (Luxembourg) S.A.
                                    c/o Union Bank Switzerland
                                    299 Park Avenue
                                    New York, New York 10171
                                    Attn: L. Thomas Sperry
                                    Phone: (212) 821-3308
                                    Facsimile: (212) 821-3008

                           (b)      TELOS:
                                    William L.P. Brownley, V.P. and
                                    General Counsel
                                    Telos Corporation
                                    19886 Ashburn Road
                                    Ashburn, Virginia 20147
                                    Phone:  (703) 724-3645
                                    Facsimile: (703) 724-3855

                  SECTION 3.2       SURVIVAL OF RIGHTS
                                    ------------------

                  Except as herein  otherwise  provided  to the  contrary,  this
Agreement  shall be binding upon and inure to the benefit of the parties hereto,
their  successors  and  assigns.  Notwithstanding  any other  provision  of this
Agreement, the parties hereto acknowledge that (i) the rights and obligations of
UBS hereunder are those of UBS and its legal  successors,  and accordingly  that
this Agreement will survive the merger of UBS and Swiss Bank Corporation ("SBC")
and  (ii)  UBS  and  its  affiliates  may  provide  to SBC  and  its  affiliates
information related to the transactions  contemplated hereby or other parties to
said transactions for reasons related to such merger.

                  SECTION 3.3       INTERPRETATION AND GOVERNING LAW
                                    --------------------------------

                  When the  context  in which  words are used in this  Agreement
indicates  that such is the intent,  words in the singular  number shall include
the plural and vice  versa.  The  Article  headings  or titles and the tables of
contents  shall  not  define,  limit,  extend  or  interpret  the  scope of this
Agreement  or any  particular  Article.  This  Agreement  shall be governed  and
construed in accordance  with the laws of the State of Maryland  without  giving
effect to the conflicts of law provisions thereof.

                  SECTION 3.4       SEVERABILITY
                                    ------------

                  If any provision,  sentence,  phrase or word of this Agreement
or the application thereof to any person or circumstances shall be held invalid,
the remainder of this Agreement, or the application of such provision, sentence,
phrase, or word to persons or circumstances,  other than those as to which it is
held invalid, shall not be affected thereby.
<PAGE>

                  SECTION 3.5       AGREEMENT IN COUNTERPARTS
                                    -------------------------

                  This Agreement may be executed in several  counterparts,  each
of which shall be deemed an original,  but all of which shall constitute one and
the same  instrument.  In  addition,  this  Agreement  may contain more than one
counterpart  of the  signature  page and this  Agreement  may be executed by the
affixing of the  signatures  of each of the  parties to one of such  counterpart
signature  pages;  all of such signature  pages shall be read as though one, and
they  shall have the same  force and  effect as though  all of the  signers  had
signed a single signature page.

                  SECTION 3.6       THIRD PARTIES
                                    -------------

                  The agreements, covenants and representations contained herein
are for the benefit of the parties  hereto  inter se and are not for the benefit
of any third parties.

                  SECTION 3.7       ENTIRE AGREEMENT
                                    ----------------

                  This Agreement and the documents  referred to herein set forth
all the covenants, promises, agreements, conditions and understandings among the
parties  herein,  and  there  are  no  other  covenants,  promises,  agreements,
conditions or understandings, whether oral or written, among the parties hereto.

                  SECTION 3.8       ATTORNEYS' FEES
                                    ---------------

                  In the event  attorneys'  fees or other costs are  incurred to
secure  performance  of  any of  the  obligations  herein  provided  for,  or to
establish  damages for the breach  thereof,  or to obtain any other  appropriate
relief,  whether by way of prosecution or defense, the prevailing party shall be
entitled to recover  reasonable  attorneys' fees and costs necessarily  incurred
therein.

                  SECTION 3.9       ADDITIONAL DOCUMENTS
                                    --------------------

                  Each party hereto agrees to execute any and all documents, and
to perform  such other acts that may be  necessary  or  expedient to further the
purposes of this Agreement.

                  SECTION 3.10      EXHIBITS
                                    --------

                  All exhibits  referred to in this Agreement are  incorporated
into and made a part of this Agreement.


<PAGE>



       IN WITNESS  WHEREOF,  the  parties  have executed  this  Agreement as of
the day and year above written.


ATTEST OR WITNESS:                         TELOS CORPORATION, a Maryland
                                           corporation, formerly named
                                           and known as C3, Inc.


_________________________                   By: /s/ William L.P. Brownley

                                            Name: William L.P. Brownley

                                            Title: V.P. General Counsel



                                            UNION BANK OF SWITZERLAND


_________________________                   By:/s/ Bruce H. Mendelsohn

                                            Name:Bruce H. Mendelsohn

                                            Title: Attorney-In-Fact

_________________________                   By:/s/ M. Terri Reilly

                                            Name: M. Terri Reilly

                                            Title: Attorney-In-Fact



AGREED AND CONSENTED TO BY:

Union de Banques Suisses
(Luxembourg) S.A.

By:/s/ Bruce H. Mendelsohn

Name: Bruce H. Mendelsohn

Title: Attorney-In-Fact


By: /s/ N, Terri Reilly

Name: M. Terri Reilly

Title: Attorney-In-Fact