Document:

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Exhibit 10.3

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR
OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS
DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT.

                          COMMON STOCK PURCHASE WARRANT

                To Purchase __________ Shares of Common Stock of

                                SteelCloud, Inc.

                  THIS COMMON STOCK PURCHASE WARRANT (the "Warrant") CERTIFIES
that, for value received, _____________ (the "Holder"), is entitled, upon the
terms and subject to the limitations on exercise and the conditions hereinafter
set forth, at any time on or after October 24, 2003 (the "Initial Exercise
Date") and on or prior to the fifth anniversary of the Initial Exercise Date
(the "Termination Date") but not thereafter, to subscribe for and purchase from
SteelCloud, Inc., a corporation incorporated in the State of Virginia (the
"Company"), up to ____________ shares (the "Warrant Shares") of Common Stock,
par value $0.001 per share, of the Company (the "Common Stock"). The purchase
price of one share of Common Stock (the "Exercise Price") under this Warrant
shall be $5.8125, subject to adjustment hereunder. The Exercise Price and the
number of Warrant Shares for which the Warrant is exercisable shall be subject
to adjustment as provided herein. Capitalized terms used and not otherwise
defined herein shall have the meanings set forth in that certain Securities
Purchase Agreement (the "Purchase Agreement"), dated October 24, 2003, among the
Company and the purchasers signatory thereto.

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                  1. Title to Warrant. Prior to the Termination Date and subject
to compliance with applicable laws and Section 7 of this Warrant, this Warrant
and all rights hereunder are transferable, in whole or in part, at the office or
agency of the Company by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed. The transferee shall sign an investment letter in form and
substance reasonably satisfactory to the Company.

                  2. Authorization of Shares. The Company covenants that all
Warrant Shares which may be issued upon the exercise of the purchase rights
represented by this Warrant will, upon exercise of the purchase rights
represented by this Warrant, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).

                  3. Exercise of Warrant.

                           (a) Exercise of the purchase rights represented by
         this Warrant may be made at any time or times on or after the Initial
         Exercise Date and on or before the Termination Date by delivery to the
         Company of a duly executed facsimile copy of the Notice of Exercise
         Form annexed hereto (or such other office or agency of the Company as
         it may designate by notice in writing to the registered Holder at the
         address of such Holder appearing on the books of the Company);
         provided, however, within 5 Trading Days of the date said Notice of
         Exercise is delivered to the Company, the Holder shall have surrendered
         this Warrant to the Company and the Company shall have received payment
         of the aggregate Exercise Price of the shares thereby purchased by wire
         transfer or cashier's check drawn on a United States bank. Certificates
         for shares purchased hereunder shall be delivered to the Holder within
         the earlier of (i) 5 Trading Days after the date on which the Notice of
         Exercise shall have been delivered by facsimile copy or (ii) 3 Trading
         Days from the delivery to the Company of the Notice of Exercise Form by
         facsimile copy, surrender of this Warrant and payment of the aggregate
         Exercise Price as set forth above ("Warrant Share Delivery Date");
         provided, however, in the event the Warrant is not surrendered or the
         aggregate Exercise Price is not received by the Company within 5
         Trading Days after the date on which the Notice of Exercise shall be
         delivered by facsimile copy, the Warrant Share Delivery Date shall be
         extended to the extent such 5 Trading Day period is exceeded. This
         Warrant shall be deemed to have been exercised on the later of the date
         the Notice of Exercise is delivered to the Company by facsimile copy
         and the date the Exercise Price is received by the Company. The Warrant
         Shares shall be deemed to have been issued, and Holder or any other
         person so designated to be named therein shall be deemed to have become
         a holder of record of such shares for all purposes, as of the date the
         Warrant has been exercised by payment to the Company of the Exercise
         Price and all taxes required to be paid by the Holder, if any, pursuant
         to Section 5 prior to the issuance of such shares, have been paid. If
         the Company fails to deliver to the Holder a certificate or
         certificates representing the Warrant Shares pursuant to this Section
         3(a) by the third Trading Day following the Warrant Share Delivery
         Date, then the Holder will have the right to rescind such exercise. In
         addition to any other rights available to the Holder, if the Company
         fails to deliver to the Holder a certificate or certificates
         representing the Warrant Shares pursuant to an exercise by the fifth
         (5th) Trading Day after the Warrant Share Delivery Date, and if after
         such day the Holder is required by its broker to purchase (in an open
         market transaction or otherwise) shares of Common Stock to deliver in
         satisfaction of a sale by the Holder of the Warrant Shares which the
         Holder anticipated receiving upon such exercise (a "Buy-In"), then the
         Company shall (1) pay in cash to the Holder the amount by which (x) the
         Holder's total purchase price (including brokerage commissions, if any)
         for the shares of Common Stock so purchased exceeds (y) the amount
         obtained by multiplying (A) the number of Warrant Shares that the
         Company was required to deliver to the Holder in connection with the
         exercise at issue times (B) the price at which the sell order giving
         rise to such purchase obligation was executed, and (2) at the option of
         the Holder, either reinstate the portion of the Warrant and equivalent
         number of Warrant Shares for which such exercise was not honored or
         deliver to the Holder the number of shares of Common Stock that would
         have been issued had the Company timely complied with its exercise and
         delivery obligations hereunder. For example, if the Holder purchases
         Common Stock having a total purchase price of $11,000 to cover a Buy-In
         with respect to an attempted exercise of shares of Common Stock with an
         aggregate sale price giving rise to such purchase obligation of
         $10,000, under clause (1) of the immediately preceding sentence the
         Company shall be required to pay the Holder $1,000. The Holder shall
         provide the Company written notice indicating the amounts payable to
         the Holder in respect of the Buy-In, together with applicable
         confirmations and other evidence reasonably requested by the Company.
         Nothing herein shall limit a Holder's right to pursue any other
         remedies available to it hereunder, at law or in equity including,
         without limitation, a decree of specific performance and/or injunctive
         relief with respect to the Company's failure to timely deliver
         certificates representing shares of Common Stock upon exercise of the
         Warrant as required pursuant to the terms hereof.

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                           (b) If this Warrant shall have been exercised in
         part, the Company shall, at the time of delivery of the certificate or
         certificates representing Warrant Shares, deliver to Holder a new
         Warrant evidencing the rights of Holder to purchase the unpurchased
         Warrant Shares called for by this Warrant, which new Warrant shall in
         all other respects be identical with this Warrant.

                           (c) The Holder shall not have the right to exercise
         any portion of this Warrant, pursuant to Section 3(a) or otherwise, to
         the extent that after giving effect to such issuance after exercise,
         the Holder (together with the Holder's affiliates), as set forth on the
         applicable Notice of Exercise, would beneficially own in excess of
         4.99% of the number of shares of the Common Stock outstanding
         immediately after giving effect to such issuance. For purposes of the
         foregoing sentence, the number of shares of Common Stock beneficially
         owned by the Holder and its affiliates shall include the number of
         shares of Common Stock issuable upon exercise of this Warrant with
         respect to which the determination of such sentence is being made, but
         shall exclude the number of shares of Common Stock which would be
         issuable upon (A) exercise of the remaining, nonexercised portion of
         this Warrant beneficially owned by the Holder or any of its affiliates
         and (B) exercise or conversion of the unexercised or nonconverted
         portion of any other securities of the Company (including, without
         limitation, any other Warrants) subject to a limitation on conversion
         or exercise analogous to the limitation contained herein beneficially
         owned by the Holder or any of its affiliates. Except as set forth in
         the preceding sentence, for purposes of this Section 3(c), beneficial
         ownership shall be calculated in accordance with Section 13(d) of the
         Exchange Act. To the extent that the limitation contained in this
         Section 3(c) applies, the determination of whether this Warrant is
         exercisable (in relation to other securities owned by the Holder) and
         of which a portion of this Warrant is exercisable shall be in the sole
         discretion of such Holder, and the submission of a Notice of Exercise
         shall be deemed to be such Holder's determination of whether this
         Warrant is exercisable (in relation to other securities owned by such
         Holder) and of which portion of this Warrant is exercisable, in each
         case subject to such aggregate percentage limitation, and the Company
         shall have no obligation to verify or confirm the accuracy of such
         determination. For purposes of this Section 3(c), in determining the
         number of outstanding shares of Common Stock, the Holder may rely on
         the number of outstanding shares of Common Stock as reflected in (x)
         the Company's most recent Form 10-Q or Form 10-K, as the case may be,
         (y) a more recent public announcement by the Company or (z) any other
         notice by the Company or the Company's Transfer Agent setting forth the
         number of shares of Common Stock outstanding. Upon the written or oral
         request of the Holder, the Company shall within two Trading Days
         confirm orally and in writing to the Holder the number of shares of
         Common Stock then outstanding. In any case, the number of outstanding
         shares of Common Stock shall be determined after giving effect to the
         conversion or exercise of securities of the Company, including this
         Warrant, by the Holder or its affiliates since the date as of which
         such number of outstanding shares of Common Stock was reported. The
         provisions of this Section 3(c) may be waived by the Holder upon, at
         the election of the Holder, not less than 61 days' prior notice to the
         Company, and the provisions of this Section 3(c) shall continue to
         apply until such 61st day (or such later date, as determined by the
         Holder, as may be specified in such notice of waiver).

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                           (d) If at any time after one year from the date of
         issuance of this Warrant there is no effective Registration Statement
         registering the resale of the Warrant Shares by the Holder, this
         Warrant may also be exercised at such time by means of a "cashless
         exercise" in which the Holder shall be entitled to receive a
         certificate for the number of Warrant Shares equal to the quotient
         obtained by dividing [(A-B) (X)] by (A), where:

                  (A) =  the VWAP on the Trading Day immediately preceding
                         the date of such election;

                  (B) =  the Exercise Price of the Warrants, as adjusted; and

                  (X) =  the number of Warrant Shares issuable upon exercise
                         of the Warrants in accordance with the terms of this
                         Warrant.

                  4. No Fractional Shares or Scrip. No fractional shares or
scrip representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.

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                  5. Charges, Taxes and Expenses. Issuance of certificates for
Warrant Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance of such
certificate, all of which taxes and expenses shall be paid by the Company, and
such certificates shall be issued in the name of the Holder or in such name or
names as may be directed by the Holder; provided, however, that in the event
certificates for Warrant Shares are to be issued in a name other than the name
of the Holder, this Warrant when surrendered for exercise shall be accompanied
by the Assignment Form attached hereto duly executed by the Holder; and the
Company may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.

                  6. Closing of Books. The Company will not close its
stockholder books or records in any manner which prevents the timely exercise of
this Warrant, pursuant to the terms hereof.

                  7. Transfer, Division and Combination.

                           (a) Subject to compliance with any applicable
         securities laws and the conditions set forth in Sections 1 and 7(e)
         hereof and to the provisions of Section 4.1 of the Purchase Agreement,
         this Warrant and all rights hereunder are transferable, in whole or in
         part, upon surrender of this Warrant at the principal office of the
         Company, together with a written assignment of this Warrant
         substantially in the form attached hereto duly executed by the Holder
         or its agent or attorney and funds sufficient to pay any transfer taxes
         payable upon the making of such transfer. Upon such surrender and, if
         required, such payment, the Company shall execute and deliver a new
         Warrant or Warrants in the name of the assignee or assignees and in the
         denomination or denominations specified in such instrument of
         assignment, and shall issue to the assignor a new Warrant evidencing
         the portion of this Warrant not so assigned, and this Warrant shall
         promptly be cancelled. A Warrant, if properly assigned, may be
         exercised by a new holder for the purchase of Warrant Shares without
         having a new Warrant issued.

                           (b) This Warrant may be divided or combined with
         other Warrants upon presentation hereof at the aforesaid office of the
         Company, together with a written notice specifying the names and
         denominations in which new Warrants are to be issued, signed by the
         Holder or its agent or attorney. Subject to compliance with Section
         7(a), as to any transfer which may be involved in such division or
         combination, the Company shall execute and deliver a new Warrant or
         Warrants in exchange for the Warrant or Warrants to be divided or
         combined in accordance with such notice.

                           (c) The Company shall prepare, issue and deliver at
         its own expense (other than transfer taxes) the new Warrant or Warrants
         under this Section 7.

                           (d) The Company agrees to maintain, at its aforesaid
         office, books for the registration and the registration of transfer of
         the Warrants.

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                           (e) If, at the time of the surrender of this Warrant
         in connection with any transfer of this Warrant, the transfer of this
         Warrant shall not be registered pursuant to an effective registration
         statement under the Securities Act and under applicable state
         securities or blue sky laws, the Company may require, as a condition of
         allowing such transfer (i) that the Holder or transferee of this
         Warrant, as the case may be, furnish to the Company a written opinion
         of counsel (which opinion shall be in form, substance and scope
         customary for opinions of counsel in comparable transactions and
         reasonably acceptable to the Company) to the effect that such transfer
         may be made without registration under the Securities Act and under
         applicable state securities or blue sky laws, (ii) that the holder or
         transferee execute and deliver to the Company an investment letter in
         form and substance acceptable to the Company and (iii) that the
         transferee be an "accredited investor" as defined in Rule 501(a)
         promulgated under the Securities Act.

                  8. No Rights as Shareholder until Exercise. This Warrant does
not entitle the Holder to any voting rights or other rights as a shareholder of
the Company prior to the exercise hereof. Upon the surrender of this Warrant and
the payment of the aggregate Exercise Price (or by means of a cashless
exercise), the Warrant Shares so purchased shall be and be deemed to be issued
to such Holder as the record owner of such shares as of the close of business on
the later of the date of such surrender or payment.

                  9. Loss, Theft, Destruction or Mutilation of Warrant. The
Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
or any stock certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it
(which, in the case of the Warrant, shall not include the posting of any bond),
and upon surrender and cancellation of such Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or stock certificate
of like tenor and dated as of such cancellation, in lieu of such Warrant or
stock certificate.

                  10. Saturdays, Sundays, Holidays, etc. If the last or
appointed day for the taking of any action or the expiration of any right
required or granted herein shall be a Saturday, Sunday or a legal holiday, then
such action may be taken or such right may be exercised on the next succeeding
day that is not a Saturday, Sunday or legal holiday.

                  11. Adjustments of Exercise Price and Number of Warrant
Shares; Stock Splits, etc. The number and kind of securities purchasable upon
the exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the happening of any of the following. In case
the Company shall (i) pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock to holders of its outstanding Common
Stock, (ii) subdivide its outstanding shares of Common Stock into a greater
number of shares, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue any shares of its
capital stock in a reclassification of the Common Stock, then the number of
Warrant Shares purchasable upon exercise of this Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company which it
would have owned or have been entitled to receive had such Warrant been
exercised in advance thereof. Upon each such adjustment of the kind and number
of Warrant Shares or other securities of the Company which are purchasable
hereunder, the Holder shall thereafter be entitled to purchase the number of
Warrant Shares or other securities resulting from such adjustment at an Exercise
Price per Warrant Share or other security obtained by multiplying the Exercise
Price in effect immediately prior to such adjustment by the number of Warrant
Shares purchasable pursuant hereto immediately prior to such adjustment and
dividing by the number of Warrant Shares or other securities of the Company
resulting from such adjustment. An adjustment made pursuant to this paragraph
shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.

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                  12. Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of any of its property, assets or
business to another corporation (including by way of a spinoff) and, pursuant to
the terms of such reorganization, reclassification, merger, consolidation or
disposition of assets, shares of common stock of the successor or acquiring
corporation, or any cash, shares of stock or other securities or property of any
nature whatsoever (including warrants or other subscription or purchase rights)
in addition to or in lieu of common stock of the successor or acquiring
corporation ("Other Property"), are to be received by or distributed to the
holders of Common Stock of the Company, then the Holder shall have the right
thereafter to receive, at the option of the Holder upon exercise of this
Warrant, the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and Other
Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of Warrant Shares
for which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 12. For purposes of
this Section 12, "common stock of the successor or acquiring corporation" shall
include stock of such corporation of any class which is not preferred as to
dividends or assets over any other class of stock of such corporation and which
is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 12 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.

                  13. Voluntary Adjustment by the Company. The Company may at
any time during the term of this Warrant reduce the then current Exercise Price
to any amount and for any period of time deemed appropriate by the Board of
Directors of the Company.

                  14. Notice of Adjustment. Whenever the number of Warrant
Shares or number or kind of securities or other property purchasable upon the
exercise of this Warrant or the Exercise Price is adjusted, as herein provided,
the Company shall give notice thereof to the Holder, which notice shall state
the number of Warrant Shares (and other securities or property) purchasable upon
the exercise of this Warrant and the Exercise Price of such Warrant Shares (and
other securities or property) after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made.

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                  15. Notice of Corporate Action. If at any time:

                           (a) the Company shall take a record of the holders of
         its Common Stock for the purpose of entitling them to receive a
         dividend or other distribution, or any right to subscribe for or
         purchase any evidences of its indebtedness, any shares of stock of any
         class or any other securities or property, or to receive any other
         right, or

                           (b) there shall be any capital reorganization of the
         Company, any reclassification or recapitalization of the capital stock
         of the Company or any consolidation or merger of the Company with, or
         any sale, transfer or other disposition of all or substantially all the
         property, assets or business of the Company to, another corporation or,

                           (c) there shall be a voluntary or involuntary
         dissolution, liquidation or winding up of the Company;

then, in any one or more of such cases, the Company shall give to Holder the
same notice given to the record holders of its Common Stock. Each such written
notice shall be sufficiently given if addressed to Holder at the last address of
Holder appearing on the books of the Company and delivered in accordance with
Section 17(d).

                  16. Authorized Shares. The Company covenants that during the
period the Warrant is outstanding, it will reserve from its authorized and
unissued Common Stock a sufficient number of shares to provide for the issuance
of the Warrant Shares upon the exercise of any purchase rights under this
Warrant. The Company further covenants that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates for
the Warrant Shares upon the exercise of the purchase rights under this Warrant.
The Company will take all such reasonable action as may be necessary to assure
that such Warrant Shares may be issued as provided herein without violation of
any applicable law or regulation, or of any requirements of the Trading Market
upon which the Common Stock may be listed.

                  Except and to the extent as waived or consented to by the
Holder, the Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect the rights of Holder
as set forth in this Warrant against impairment. Without limiting the generality
of the foregoing, the Company will (a) not increase the par value of any Warrant
Shares above the amount payable therefor upon such exercise immediately prior to
such increase in par value, (b) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.

                                       8
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                  Before taking any action which would result in an adjustment
in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.

         17. Miscellaneous.

                           (a) Jurisdiction. All questions concerning the
         construction, validity, enforcement and interpretation of this Warrant
         shall be determined in accordance with the provisions of the Purchase
         Agreement.

                           (b) Restrictions. The Holder acknowledges that the
         Warrant Shares acquired upon the exercise of this Warrant, if not
         registered, will have restrictions upon resale imposed by state and
         federal securities laws.

                           (c) Nonwaiver. No course of dealing or any delay or
         failure to exercise any right hereunder on the part of Holder shall
         operate as a waiver of such right or otherwise prejudice Holder's
         rights, powers or remedies, notwithstanding all rights hereunder
         terminate on the Termination Date.

                           (d) Notices. Any notice, request or other document
         required or permitted to be given or delivered to the Holder by the
         Company shall be delivered in accordance with the notice provisions of
         the Purchase Agreement.

                           (e) Limitation of Liability. No provision hereof, in
         the absence of any affirmative action by Holder to exercise this
         Warrant or purchase Warrant Shares, and no enumeration herein of the
         rights or privileges of Holder, shall give rise to any liability of
         Holder for the purchase price of any Common Stock or as a stockholder
         of the Company, whether such liability is asserted by the Company or by
         creditors of the Company.

                           (f) Remedies. Holder, in addition to being entitled
         to exercise all rights granted by law, including recovery of damages,
         will be entitled to specific performance of its rights under this
         Warrant. The Company agrees that monetary damages would not be adequate
         compensation for any loss incurred by reason of a breach by it of the
         provisions of this Warrant and hereby agrees to waive the defense in
         any action for specific performance that a remedy at law would be
         adequate.

                           (g) Successors and Assigns. Subject to applicable
         securities laws, this Warrant and the rights and obligations evidenced
         hereby shall inure to the benefit of and be binding upon the successors
         of the Company and the successors and permitted assigns of Holder. The
         provisions of this Warrant are intended to be for the benefit of all
         Holders from time to time of this Warrant and shall be enforceable by
         any such Holder or holder of Warrant Shares.

                                       9
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                           (h) Amendment. This Warrant may be modified or
         amended or the provisions hereof waived with the written consent of the
         Company and the Holder.

                           (i) Severability. Wherever possible, each provision
         of this Warrant shall be interpreted in such manner as to be effective
         and valid under applicable law, but if any provision of this Warrant
         shall be prohibited by or invalid under applicable law, such provision
         shall be ineffective to the extent of such prohibition or invalidity,
         without invalidating the remainder of such provisions or the remaining
         provisions of this Warrant.

                           (j) Headings. The headings used in this Warrant are
         for the convenience of reference only and shall not, for any purpose,
         be deemed a part of this Warrant.

                              ********************

                                       10
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                  IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its officer thereunto duly authorized.

Dated:  October __, 2003
                                        STEELCLOUD, INC.

                                        By:
                                             --------------------------------
                                                  Name:
                                                  Title:

                                       11
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                               NOTICE OF EXERCISE

To:      SteelCloud, Inc.

                  (1) The undersigned hereby elects to purchase ________ Warrant
Shares of SteelCloud, Inc. pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise price in
full, together with all applicable transfer taxes, if any.

                  (2) Payment shall take the form of (check applicable box):

                           [ ] in lawful money of the United States; or

                           [ ] the cancellation of such number of Warrant Shares
                           as is necessary, in accordance with the formula set
                           forth in subsection 3(d), to exercise this Warrant
                           with respect to the maximum number of Warrant Shares
                           purchasable pursuant to the cashless exercise
                           procedure set forth in subsection 3(d).

                  (3) Please issue a certificate or certificates representing
said Warrant Shares in the name of the undersigned or in such other name as is
specified below:

                    ----------------------------------------

The Warrant Shares shall be delivered to the following:

                    ----------------------------------------

                    ----------------------------------------

                    ----------------------------------------

                  (4) Accredited Investor. The undersigned is an "accredited
investor" as defined in Regulation D promulgated under the Securities Act of
1933, as amended.

                                           [PURCHASER]

                                           By:
                                               ---------------------------------
                                           Name:
                                           Title:

                                           Dated:
                                                  ------------------------------

<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                  Do not use this form to exercise the warrant.)

         FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to

_______________________________________________ whose address is

                                                               .
---------------------------------------------------------------

---------------------------------------------------------------

                                            Dated:  ______________, _______

                  Holder's Signature:
                                     -----------------------------

                  Holder's Address:
                                     -----------------------------

                                     -----------------------------

                                     -----------------------------

Signature Guaranteed:  ___________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.Assignment of Humatech Promissory Note

ASSIGNMENT OF PROMISSORY NOTE 

AND CONSENT THERETO 

This Assignment of Note and Consent Thereto (this "Assignment") is entered into effective as of September 25, 2003, by and among ____________________________________* ("Assignor") and David Williams, an individual ("Assignee"), and consented to by Humatech, Inc., an Illinois corporation ("Consenting Party"), in connection with the proposed assignment (the "Assignment") by Assignor to Assignee of that certain Promissory Note executed by Consenting Party in favor of Assignor dated December 13, 2000 and attached hereto as Exhibit A (the "2000 Note"). 

RECITALS 

WHEREAS, Consenting Party executed the 2000 Note on ___________*, 2000, in the original principal amount of $240,000; 

 

WHEREAS, the 2000 Note provides for the repayment of the original $240,000, plus an additional $96,000, bringing the outstanding principal balance under the 2000 Note as of the date hereof to $336,000; 

WHEREAS, Assignee desires to purchase the 2000 Note from Assignor for the purchase price of $336,000 (the "Purchase Price"), said Purchase Price to be paid by delivery of a new promissory note executed by Assignee in favor of Assignor in the principal amount of the Purchase Price, as set forth in Exhibit B attached hereto (the "2003 Note"); 

WHEREAS, the Parties desire that the closing of the transactions contemplated hereby shall take place on or about October 13, 2003, upon receipt of signatures by all parties hereto. 

NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, Assignor and Assignee hereby agree as follows: 

1.  In consideration of the Purchase Price, delivered in the form of the 2003 Note, Assignor hereby sells and assigns to Assignee, its successors and assigns, WITHOUT RECOURSE as to the financial ability of the Consenting Party to pay, the 2000 Note, together with all of Assignor’s right, title and interest in the property covered by and described in the 2000 Note, and all of Assignor’s rights and remedies thereunder and under any guaranty or endorsement thereof, including the right to collect any and all installments due and to become due on the 2000 Note and to take, in Assignor’s or Assignee’s name, any and all actions Assignor might otherwise take. 

 

* Information Removed

Pursuant to Confidentiality Request

	 
	 	Page 1 of 5	 
	

	 

 

2.  Assignor warrants that (i) the 2000 Note and any accompanying notes, guaranties, waivers and/or other instruments (collectively "Contracts") are true, valid and genuine and represent existing valid and enforceable obligations in accordance with their terms; (ii) all signatures, names, addresses, amounts and other statements and facts contained therein are true and correct; (iii) the Contracts (including their form and substance and the computation of all charges) and the transactions underlying the obligations (including any sale and delivery) conform to all applicable laws, rules, regulations, ordinances and orders; and (iv) the present unpaid balance shown on the 2000 Note as set forth in the Recitals is correct, the funds have been delivered to the Consenting Party under the Contract in satisfactory condition and has been accepted by the Consenting Party, or their assigns, the Contracts are not and will not at any time be subject to any defense, claim, counterclaim or set-off and Assignor will comply with all its obligations under the Contracts. In addition, Assignor shall indemnify and save Assignee harmless from any loss, damage or expense, including attorneys’ fees, incurred by Assignee as a result of Assignor’s breach of any of the terms of this assignment or any of the warranties, obligations or undertakings described herein. 

3.  Assignor agrees that Assignee may in Assignor’s name endorse all accompanying notes and all remittances received. Assignor waives notice of acceptance hereof as well as presentment, demand, protest and notice of non-payment and protest as to all contracts heretofore, now, or hereafter signed, accepted, endorsed or assigned to Assignee. Assignor waives all exemptions and homestead laws and any other demands and notices required by law, and Assignor waives all set-offs and counterclaims. Assignee may at any time, without consent of Assignor, without notice to Assignor and without affecting or impairing the obligations of Assignor hereunder, do any of the following: (a) renew, extend, modify, release or discharge any obligation of the Consenting Party or any persons obligated on the Contracts or on any accompanying note or guaranty, ("the Contract Obligations"); (b) accept partial payments of the Contract Obligations; (c) accept new or additional documents, instruments or agreements relating to or in substitution of the Contract Obligations; (d) settle, release (by operation of law or otherwise), compound, compromise, collect or liquidate any of the Contract Obligations and the security therefor in any manner; (e) consent to the transfer or return of security and take and hold additional security or guaranties for the Contract Obligations; (f) amend, exchange, release or waive any security or guaranty; or (g) bid and purchase at any sale of the Contracts or security and apply any proceeds and security and direct the order and manner of sale. Assignor shall have no authority to, and will not, without Assignee’s prior written consent, accept collections, repossess or consent to the return of the property described in the Contracts or modify the terms thereof or of any accompanying note or guaranty. Assignee’s knowledge at any time of any breach of or non-compliance with any of the foregoing shall not constitute any waiver by Assignee. 

 

* Information Removed

Pursuant to Confidentiality Request

	 
	 	Page 2 of 5	 
	

	 

 

4.  Consenting Party warrants and agrees that: (i) Consenting Party hereby consents to the Assignment by Assignor to Assignee of the Contracts; (ii) nothing in this Assignment shall be construed to modify, waive, release, or otherwise affect, as between Assignor and Consenting Party (prior to the date of this Assignment) or Assignee and Consenting Party (following the date of this Assignment), any of the provisions of the Contracts; (iii) in the event of any conflict between the Assignment and the Contracts, this Assignment shall prevail; (iv) following the date of this Assignment, Assignor shall not be liable for any of the obligations under the Contracts; (v) following the date of this Assignment, Consenting Party shall remain fully liable for all of its obligations under the Contracts; (vi) this Assignment shall not be construed as a consent by Consenting Party to any further assignment by Assignor or Assignee; and (vii) to the best of Consenting Party’s knowledge, the Contracts are in full force and effect, there are no uncured defaults on the part of any party to the Contracts, and there are no existing offsets or defenses which either party has against enforcement of the Contracts. 

IN WITNESS WHEREOF, the undersigned parties have duly executed this Assignment as of the date first written above. 

	
"Assignor" 
	
"Assignee" 

	
 
	
 

	
_____/s/_________________________* 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
________/s/______________________
	
__/s/__David Williams_____________________

	
By:  _____________* 
	
David Williams, an individual 

	
Its:  _____________* 
	
Dated: September 25, 2003 

	
Dated:      September 25, 2003 
	
 

	
 
	
 

	
 
	
 

	
"Consenting Party" 
	
 

	
 
	
 

	
Humatech, Inc. 
	
 

	
 
	
 

	
 
	
 

	
______/s/ John D. Rottweiler__________
	
 

	
By:  John D. "J.D." Rottweiler 
	
 

	
Its:  Secretary and Director 
	
 

	
Dated:      October 13, 2003 
	
 

 

 

	
    * Information Removed 

Pursuant to Confidentiality Request 

	 	Page 3 of 5	 
	

	 

Exhibit A 

2000 Note 

 

	
     * Information Removed 

Pursuant to Confidentiality Request 

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PROMISSORY NOTE 

$240,000.00   ___________* 2000 

               Houston, Texas 

HumaTech, Inc., an Illinois corporation, hereby promises to pay on or before April 15, 2001, to the order of ________________________________* at _______________,* _____________,* the sum of Two Hundred Forty Thousand Dollars ($240,000.00). Initial funding to be $180,000 with additional funds to be disbursed on an as needed basis. A disbursement schedule will be provided. 

An additional amount of $96,000.00 will be paid to ___________________________ _______________ *after the initial principal balance is paid in full. 

HumaTech, Inc. assigns all proceeds from the sale of the TurboFeeder? product line to ___________________________________* until all funds are repaid. 

If not so paid, all principal, at the option of the Holder, or its assigns, shall become immediately due and payable. 

Undersigned shall pay upon demand any and all expenses, including reasonable attorney fees, incurred or paid by Holder without suit or action in attempting to collect funds due under this Note. In the event an action is instituted to enforce or interpret any of the terms of this Note including but not limited to any action or participation by Undersigned in , or in connection with, a case or proceeding under the Bankruptcy Cody or any successor statute, the prevailing party shall be entitled to recover all expenses reasonably incurred at, before and after trial, on appeal, and on review whether or not taxable as costs, including, without limitation, attorney fees, witness fees (expert and otherwise), deposition costs, copying charges and other expenses. 

	
/s/ David G. Williams 
	
 
	
Date: 
	
December 13, 2000 

	

			

	
HumaTech, Inc. 
	
 
	
 
	
 

	
David G. Williams, President 
	
 
	
 
	
 

	
*Information Removed 

Pursuant to Confidentiality Request 

	 	 	 

 

 

Exhibit B 

2003 Note 

 

	
    * Information Removed 

Pursuant to Confidentiality Request 

	 	Page 5 of 5	 

 

PROMISSORY NOTE 

$336,000.00                          Date:  October 13, 2003

                                                                                                                           

For value received, the undersigned David G. Williams ("the Promisor") promises to pay to the order of _________________________________,* (the "Payee"), at _______________,* ____,* _____________, *(or at such other place as the Payee may designate in writing) the sum of $336,000.00 with interest from October 13, 2003, on the unpaid principal at the rate of 5.00% annually. 

The unpaid principal and accrued interest shall be payable in MONTHLY installments of $1,965.01, beginning on November 13, 2003, and continuing until October 13, 2028, (the "Due Date"), at which time the remaining unpaid principal or principal and interest shall be due in full. 

All payments on this Note shall be applied first in payment of accrued interest and any remainder in payment of principal. 

The Promisor reserves the right to prepay this Note (in whole or in part) prior to the due date with no prepayment penalty. 

If any payment obligation under this Note is not paid when due, the Promisor promises to pay all costs of collection, including reasonable attorney fees, whether or not a lawsuit is commenced as part of the collection process. 

If any one or more of the provisions of this Note are determined to be unenforceable, in whole or in part, for any reason, the remaining provisions shall remain fully operative. 

All payments of principal and interest on this Note shall be paid in the legal currency of the United States. Promisor waives presentment for payment, protest, and notice of protest and nonpayment of this Note. 

No renewal or extension of this Note, delay in enforcing any right of the Payee under this Note, or assignment by Payee of this Note shall affect the liability of the Promisor. All rights of the Payee under this Note are cumulative and may be exercised concurrently or consecutively at the Payee’s option. 

This Note shall be construed in accordance with the laws of the State of Arizona. 

	
*Information Removed 

Pursuant to Confidentiality Request 

	 	 	 
	

	 

Signed this 13th day of October , 2003 , at Mesa, Arizona. 

First Promisor 

David G. Williams 

	
By: 
	
/s/ David G. Williams 

		

	
 
	
David G. Williams 

 

Page 2 of 2 

	
*Information Removed 

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