Exhibit 10.28

FIRST AMENDMENT TO SECOND

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
(this “Amendment”) is entered into as of September 27, 2010, by and among TELOS
CORPORATION, a Maryland corporation (“Administrative Borrower”), and WELLS FARGO
CAPITAL FINANCE, INC., (formerly known as Wells Fargo Foothill, Inc.), as agent
(“Agent”) for the Lenders (defined below) and as a Lender.

WHEREAS, Borrowers, Credit Parties, Agent and certain other financial
institutions from time to time party thereto (the “Lenders”) are parties to that
certain Second Amended and Restated Loan and Security Agreement dated as of
May 17th, 2010, (as amended, restated or otherwise modified from time to time,
the “Loan Agreement”);

WHEREAS, subject to the terms and conditions contained herein, Agent, Required
Lenders and Administrative Borrower have agreed to amend the Loan Agreement in
certain respects;

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

1. Defined Terms. Unless otherwise defined herein, capitalized terms used herein
shall have the meanings ascribed to such terms in the Loan Agreement.

2. Amendments to Loan Agreement. Subject to the satisfaction of the conditions
set forth in Section 4 hereof, the Loan Agreement is amended in the following
respects:

(a) Section 7.8(c) of the Loan Agreement is hereby amended by inserting the
following at the end of such section: “except as otherwise permitted pursuant to
Section 7.11”.

(b) Section 7.11 of the Loan Agreement is hereby amended and restated as
follows:

7.11 Distributions

Other than distributions or declaration and payment of dividends by a Company to
a Borrower, make any distribution or declare or pay any dividends (in cash or
other property, other than common Stock) on, or purchase, acquire, redeem,
exchange for Indebtedness, or retire any of any Company’s Stock, of any class,
whether now or hereafter outstanding (provided that (a) all or a portion of the
Private Preferred Stock may be redeemed so long as (i) the Obligations are
contemporaneously repaid in full in accordance with Section 3.6 or (ii)(A) no
Event of Default has occurred and is continuing, (B) the redemption price for
such Private Preferred Stock

 

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reflects a discount from par value of at least 10%, (C) Administrative Borrower
has provided written evidence in form and substance satisfactory to Agent of pro
forma compliance by Borrower with the financial covenants in Section 7.20,
(D) with respect to holders of Private Preferred Stock that are parties to a
standby agreement with Agent, such holders have executed a consent letter in
form and substance satisfactory to Agent and (E) the aggregate amount of Private
Preferred Stock redeemed pursuant to this clause (ii) does not exceed $2,500,000
and (b) Telos ID may make distributions to Parent and to the Class B Member in
an amount not to exceed the net profit of Telos ID for any applicable period of
determination).

(c) Section 7.17 of the Loan Agreement is hereby amended by deleting clause
(c) therein in its entirety and inserting the following in lieu thereof: “(c)
redemption of Private Preferred Stock pursuant to Section 7.11”

3. Ratification. This Amendment, subject to satisfaction of the conditions set
forth in Section 4 hereof, shall constitute an amendment to the Loan Agreement
and all of the Loan Documents as appropriate to express the agreements contained
herein. Except as specifically set forth herein, the Loan Agreement and the Loan
Documents shall remain unchanged and in full force and effect in accordance with
their original terms.

4. Conditions to Effectiveness. This Amendment shall become effective upon the
satisfaction of the following conditions precedent:

(a) Each party hereto shall have executed and delivered this Amendment to Agent;

(b) Agent shall have received the fee described in Section 5 hereof;

(c) Borrowers shall have delivered to Agent such documents, agreements and
instruments as may be requested or required by Agent in connection with this
Amendment, each in form and content acceptable to Agent;

(d) No Default or Event of Default shall have occurred and be continuing on the
date hereof or as of the date of the effectiveness of this Amendment; and

(e) All proceedings taken in connection with the transactions contemplated by
this Amendment and all documents, instruments and other legal matters incident
thereto shall be satisfactory to Agent and its legal counsel.

5. Amendment Fee. To induce Agent and Lenders to enter into this Amendment,
Borrowers shall pay to Agent, for the benefit of Lenders, a non-refundable fee
equal to $10,000 which shall be due and payable on the date hereof.

6. Reaffirmation and Confirmation. Administrative Borrower on behalf of each
Company hereby ratifies, affirms, acknowledges and agrees that the Loan
Agreement and the other Loan Documents represent the valid, enforceable and
collectible obligations of

 

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such Company, and further acknowledges on behalf of Administrative Borrower and
each Company that there are no existing claims, defenses, personal or otherwise,
or rights of setoff whatsoever with respect to the Loan Agreement or any other
Loan Document. Administrative Borrower on behalf of each Company hereby agrees
that this Amendment in no way acts as a release or relinquishment of the Liens
and rights securing payments of the Obligations. The Liens and rights securing
payment of the Obligations are hereby ratified and confirmed by Administrative
Borrower on behalf of each Company in all respects.

7. Miscellaneous.

(a) Warranties and Absence of Defaults. To induce Agent and Lenders to enter
into this Amendment, Administrative Borrower hereby represents and warrants to
Agent and Lenders that:

(i) The execution, delivery and performance by it of this Amendment and each of
the other agreements, instruments and documents contemplated hereby are within
its corporate power, have been duly authorized by all necessary corporate
action, have received all necessary governmental approval (if any shall be
required), and do not and will not contravene or conflict with any provision of
law applicable to it, its articles of incorporation and by-laws, any order,
judgment or decree of any court or governmental agency, or any agreement,
instrument or document binding upon it or any of its property;

(ii) each of the Loan Agreement and the other Loan Documents, as amended by this
Amendment, are the legal, valid and binding obligation of each Company party
thereto enforceable against it in accordance with its terms, except as the
enforcement thereof may be subject to (A) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditor’s rights generally, and (B) general principles of equity;

(iii) the representations and warranties contained in the Loan Agreement and the
other Loan Documents are true and accurate as of the date hereof with the same
force and effect as if such had been made on and as of the date hereof; and

(iv) each Company has performed all of its obligations under the Loan Agreement
and the Loan Documents to be performed by it on or before the date hereof and as
of the date hereof, it is in compliance with all applicable terms and provisions
of the Loan Agreement and each of the Loan Documents to be observed and
performed by it and no Event of Default or Default has occurred.

(b) Expenses. Administrative Borrower on behalf of each Company hereby agrees
that Companies, jointly and severally, shall pay on demand all costs and
expenses of Agent and each Lender (including the reasonable fees and expenses of
outside counsel) in connection with the preparation, negotiation, execution,
delivery and administration of this Amendment and all other instruments or
documents provided for herein or delivered or to be delivered hereunder or in
connection herewith. In addition, Administrative Borrower on behalf

 

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of each Company hereby agrees that Companies, jointly and severally, shall pay,
and save Agent harmless from all liability for, any stamp or other taxes which
may be payable in connection with the execution or delivery of this Amendment or
the Loan Agreement, as amended hereby, and the execution and delivery of any
instruments or documents provided for herein or delivered or to be delivered
hereunder or in connection herewith. All obligations provided herein shall
survive any termination of the Loan Agreement as amended hereby.

(c) Governing Law. This Amendment shall be a contract made under and governed by
the internal laws of the State of Illinois.

(d) Counterparts. This Amendment may be executed in any number of counterparts,
and by the parties hereto on the same or separate counterparts, and each such
counterpart, when executed and delivered, shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same Amendment.
Delivery of an executed counterpart of a signature page of this Amendment by
facsimile or by electronic transmission of a portable document file (PDF) or
similar file shall be effective as delivery of a manually executed counterpart
of this Amendment.

8. Release.

(a) In consideration of the agreements of Agent and Lenders contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Administrative Borrower on behalf of each Company and
such Company’s successors, assigns, and other legal representatives, hereby
absolutely, unconditionally and irrevocably releases, remises and forever
discharges Agent and Lenders, and their successors and assigns, and their
present and former shareholders, affiliates, subsidiaries, divisions,
predecessors, directors, officers, attorneys, employees, agents and other
representatives (Agent, each Lender and all such other Persons being hereinafter
referred to collectively as the “Releasees” and individually as a “Releasee”),
of and from all demands, actions, causes of action, suits, covenants, contracts,
controversies, agreements, promises, sums of money, accounts, bills, reckonings,
damages and any and all other claims, counterclaims, defenses, rights of
set-off, demands and liabilities whatsoever (individually, a “Claim” and
collectively, “Claims”) of every name and nature, known or unknown, suspected or
unsuspected, both at law and in equity, which such Company or any of its
successors, assigns, or other legal representatives may now or hereafter own,
hold, have or claim to have against the Releasees or any of them for, upon, or
by reason of any circumstance, action, cause or thing whatsoever which arises at
any time on or prior to the day and date of this Amendment, including, without
limitation, for or on account of, or in relation to, or in any way in connection
with any of the Loan Agreement, or any of the other Loan Documents or
transactions thereunder or related thereto.

(b) Administrative Borrower on behalf of each Company hereby acknowledges and
agrees that such Company understands, acknowledges and agrees that the release
set forth above may be pleaded as a full and complete defense and may be used as
a basis for an injunction against any action, suit or other proceeding which may
be instituted, prosecuted or attempted in breach of the provisions of such
release.

 

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(c) Administrative Borrower on behalf of each Company hereby acknowledges and
agrees that such Company agrees that no fact, event, circumstance, evidence or
transaction which could now be asserted or which may hereafter be discovered
shall affect in any manner the final, absolute and unconditional nature of the
release set forth above.

[signature pages follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized and delivered as of the
date first above written.

 

AGENT:

WELLS FARGO CAPITAL FINANCE, INC.

(formerly known as Wells Fargo Foothill, Inc.), a California corporation

By  

/s/ David J. Sanchez

Name   David J. Sanchez Title   Director   ADMINISTRATIVE BORROWER: TELOS
CORPORATION, a Maryland corporation By  

/s/ Michael P. Flaherty

Name   Michael P. Flaherty Title  

Executive VP, General Counsel,

Chief Administrative Officer

 

Signature Page to First Amendment to Second Amended and Restated Loan and
Security Agreement