EXHIBIT 10.1

 

FORBEARANCE AGREEMENT

 

THIS FORBEARANCE AGREEMENT (this “Agreement”) is dated as of July 31, 2009 (the
“Effective Date”), by and among HERCULES TECHNOLOGY GROWTH CAPITAL, INC., a
Maryland corporation (“Lender”), and  InfoLogix, Inc., a Delaware corporation
(“Infologix”), Infologix Systems Corporation, a Delaware corporation (“ISC”),
Embedded Technologies, LLC, a Delaware limited liability company (“Embedded”),
Opt Acquisition, LLC, a Pennsylvania limited liability company (“Opt”) and
InfoLogix — DDMS, Inc., a Delaware limited liability company (“DDMS”, and
together with Infologix, ISC, Embedded and Opt, collectively hereinafter
referred to as “Borrower”).

 

RECITALS

 

A.            Lender and Borrower entered into that certain Loan and Security
Agreement dated as of May 1, 2008 (as amended, restated, modified and in effect
from time to time, the “Loan Agreement”), pursuant to which Lender, among other
things, made loans to Borrower (the “Loans”), which are evidenced by (a) a
Secured Revolver Promissory Note dated as of May 31, 2009 in the stated
principal amount of Nine Million US Dollars ($9,000,000) and (b) a Secured Term
Promissory Note dated as of May 31, 2009 in the stated principal amount of
Eleven Million Four Hundred Thousand US Dollars ($11,400,000) (together, the
“Notes”).

 

B.            In order to secure the prompt payment and performance of all
obligations owing by Borrower to Lender under the Loan Agreement, Borrower
granted Lender a first-priority, perfected security interest in and lien (the
“First Priority Lien”) upon substantially all of Borrower’s assets, including,
without limitation, all accounts, chattel paper, deposit accounts, documents,
equipment, general intangibles, instruments, inventory, investment property,
letters of credit, letter-of-credit rights, tort claims, and any proceeds
thereof (collectively, the “Collateral”) subject only to Permitted Liens.  The
First Priority Lien has been validly perfected and extends to all the cash
proceeds of the Collateral, including, but not limited to, all of Borrower’s
cash on hand (the “Cash Collateral”).

 

C.            To the extent not otherwise defined herein, all capitalized terms
shall have the meanings attributed to them under the Loan Agreement.

 

D.            Pursuant to Section 7.24 of the Loan Agreement, the Fundamental
Event Closing was to have occurred on or before July 31, 2009.  The Fundamental
Event Closing has not occurred by such date and, as a result, an Event of
Default has occurred and is continuing under Section 9.2 of the Loan Agreement
(the “Specified Default”).

 

E.             Lender is willing to forbear from exercising its remedies under
the Loan Agreement as a result of the Specified Default, subject to the terms
and conditions, and for the period specified in this Agreement.

 

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AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing and the mutual undertaking set
forth below, the parties agree as follows:

 

1.             Forbearance.  Absent the occurrence of any failure by Borrower to
perform its obligations set forth in this Agreement, Lender agrees to forbear
from exercising any remedies available to it under the Loan Agreement, any of
the other Loan Documents or Article 9 of the Uniform Commercial Code, including
without limitation any right of set-off, from the date of this Agreement through
and including the earlier of (i) September 30, 2009 and (ii) the occurrence of a
Forbearance Termination Event (as defined below) (such period, the “Forbearance
Period”).

 

2.             Forbearance Termination Events.  The occurrence of any one or
more of the following events after the date hereof shall constitute a
“Forbearance Termination Event” under this Agreement:

 

(i)       Borrower fails to pay when due and payable principal, interest, and
any other applicable fees under and in accordance with the Loan Agreement
(including, without limitation, the payment of interest of $267,058.75 and
$267,702.23 on August 3(1), 2009 and September 1, 2009, respectively);

 

(ii)      Borrower fails to provide Lender evidence that the events listed on
Schedule A to this Agreement have occurred on the dates set forth therein;

 

(iii)     the failure after the date hereof of any Borrower to comply with any
of the terms or undertakings of this Agreement;

 

(iv)     the date that any Borrower or any Affiliate thereof or any Person or
entity claiming by or through any Borrower joins in, assists, cooperates or
participates as an adverse party in any suit or other proceeding against Lender
or any of its Affiliates relating to the indebtedness referred to as the Secured
Obligations or any amounts owing hereunder in connection with or related to any
of the transactions contemplated by the Loan Documents, this Agreement or any
documents, agreements or instruments executed in connection with any of the
foregoing; or

 

(v)      an Event of Default (other than the Specified Default) occurs pursuant
to the Loan Documents; provided that, (a) Borrowers shall not be in default
under Section 7.20(c) of the Loan Agreement so long as they have unrestricted
cash of no less than

 

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(1) First Business Day of the month.

 

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$1,500,000 at any time during the Forbearance Period,(2) and (b) Borrower’s
entry into this Agreement and Borrower’s taking the actions contemplated in this
Agreement including without limitation the Schedule A hereto shall not
constitute an Event of Default under the Loan Documents.

 

3.             Lender’s Rights and Remedies.  Upon the termination of the
Forbearance Period, the agreements of the Lender to forbear from exercising its
rights and remedies in respect of the Specified Default shall automatically,
without the requirement of any notice to Borrower, terminate and the Lender
shall be free in its sole and absolute discretion to proceed to enforce any or
all of its rights and remedies set forth in this Agreement, the Loan Agreement,
the other Loan Documents and applicable law, including, without limitation, the
right to demand the immediate repayment of the Loans and the right to immediate
repayment of all other Secured Obligations in full

 

Any deficiency which exists after disposition of the Collateral will be paid
immediately by Borrower to Lender.  Any excess will be returned, without
interest and subject to the rights of third parties, to Borrower by Lender.

 

Lender’s rights and remedies under this Agreement shall be cumulative and in
addition to Lender’s rights and remedies under the Loan Documents and any other
agreement between Lender and Borrower.  Lender shall have all other rights and
remedies not inconsistent herewith as provided by applicable law. No exercise by
Lender of one right or remedy shall be deemed an election, and no waiver by
Lender of any default on Borrower’s part shall be deemed a continuing waiver. 
No delay by Lender shall constitute a waiver, election or acquiescence by
Lender.

 

4.             Forbearance Fee. Borrower shall pay to Lender a forbearance fee
of $412,171.41 equal to two percent (2%) of the Existing Indebtedness (as
defined in Section 6 below). Such forbearance fee shall be due and payable on
August 3, 2009.

 

5.             Release. In consideration of the foregoing, Borrower and its
successors, assigns, agents, and subsidiaries (collectively, the “Releasors”),
as applicable, release and forever discharge Lender, and its parents,
subsidiaries, affiliates, officers, directors, employees, agents, attorneys,
predecessors, successors and assigns, both present and former (collectively,
together with Lender, the “Releasees”), of and from any and all manner of action
and actions, causes of action, suits, debts, controversies, damages, judgments,
executions, claims and demands arising out of the Loan Agreement, asserted or
unasserted, in law or in equity, against any of the Releasees which any Releasor
ever had or now has on the date hereof, upon or by reason of any manner, cause,
causes or thing whatsoever, whether presently existing, suspected, known,
unknown, contemplated or anticipated.  Releasors specifically agree, represent,
and warrant that the matters released herein are not limited to matters which
are known or disclosed, and Releasors hereby waive any and all rights and
benefits which Releasors now have, or in the future

 

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(2) This will allow payment of forbearance fee and interest due during
Forbearance Period without violating 7.21(c).

 

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may have, conferred upon Releasors by virtue of the provisions of Section 1542
of the Civil Code of the State of California which provides as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

 

6.             Affirmation. The recitals above are hereby incorporated by
reference as though fully set forth herein.  Without limiting the generality of
the foregoing:

 

a)     Borrower acknowledges that, as of the Effective Date, the total principal
amount due Lender, including capitalized interest payments paid in kind and
added to the principal amount of the Term Loan, is $20,608,570,57 (the “Existing
Indebtedness”);

 

b)    Borrower irrevocably and unconditionally affirms that the Credit Documents
are in full force and effect and constitute the valid, legal, and binding
obligations of Borrower.  In connection therewith, Borrower further affirms that
the Lender holds a valid and enforceable lien and that said lien has been
validly perfected and extends upon all Collateral.

 

c)     Borrower further acknowledges that the Specified Default has occurred.

 

7.             No Waiver. The forbearance granted herein is a conditional,
limited, temporary forbearance relating solely to the Specified Default and
shall be in effect only during the Forbearance Period. The powers conferred upon
Lender by this Agreement are solely to protect its rights hereunder and under
the Credit Documents and its interest in the Collateral and shall not impose any
duty upon Lender to exercise any such powers.  Lender has not waived, and is not
by this Agreement waiving, any Event of Default that may exist or be continuing
on the Effective Date or any Event of Default that may occur after the Effective
Date.  No omission or delay by Lender at any time to enforce any right or remedy
reserved to it shall be a waiver of any such right or remedy to which Lender is
entitled, and shall not alter, modify, amend, or in any way affect any of the
terms, conditions, obligations, covenants, or agreements contained in the Credit
Documents, all of which are ratified and affirmed in all respects and shall
continue in full force and effect.

 

8.             Entire Agreement. The terms and conditions of this Agreement
shall be incorporated by reference into the Loan Documents as though set forth
in full therein.  In the event of any inconsistency between the provisions of
this Agreement and any provision of any of the Loan Documents, the terms and
provisions of this Agreement

 

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shall govern and control.  Except to the extent specifically amended or
superseded by the terms of this Agreement, all of the provisions of the Loan
Documents shall remain in full force and effect to the extent in effect on the
date hereof.  The Loan Documents, as modified by this Agreement, constitute the
complete agreement among the parties and supersedes any prior written or oral
agreements, writings, communications, or understandings of the parties with
respect to the subject matter thereof.  Upon the Effective Date, each reference
in the Loan Documents to “this Agreement,” “hereunder,” “hereof,” or words of
like import, shall mean and be a reference to the Loan Documents as amended
hereby. No modification, amendment, or waiver of any of the provisions of this
Agreement shall be effective unless in writing signed by both parties.

 

9.             Notices. All notices, reports, or other correspondence or
information to be transmitted to the parties pursuant to this Agreement shall be
transmitted as set forth in the Loan Agreement.

 

10.           Successors and Assigns. The provisions of this Agreement and the
Loan Documents shall inure to the benefit of and be binding on Borrower and its
permitted successor and assigns (if any).  Borrower shall not assign its
obligations under this Agreement or any of the Loan Documents without Lender’s
express prior written consent, and any such attempted assignment shall be void
and of no effect.  Lender may assign, transfer, or endorse its rights hereunder
and under the Loan Documents without prior notice to Borrower, and all of such
rights shall inure to the benefit of Lender’s successors and assigns.

 

11.           No Strict Construction. This Agreement is the result of
negotiations between Borrower and Lender, has been reviewed by their respective
legal counsel during all of the negotiations which preceded the execution of
this Agreement, and is the product of the efforts of all parties.  Lender’s
involvement in the preparation of this Agreement is for the convenience of all
parties and the parties agree that the terms of this Agreement shall not be
construed against Lender solely by virtue of such preparation.

 

12.           Counterparts. This Agreement may be executed in any number of
counterparts, any and all of which shall be deemed to be original.

 

13.           Due Authorization. Each person signing this Agreement hereby
represents and warrants that he or she is authorized to so sign and that the
execution, formation, and performance of this Agreement by the parties hereto is
duly authorized.

 

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IN WITNESS WHEREOF the parties have caused this Agreement to be duly executed as
of the date and year first written above.

 

 

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

 

 

 

 

 

By

/s/ David T. Gulian

 

Name

David T. Gulian

 

Title

President

 

 

 

 

 

 

 

INFOLOGIX, INC.

 

 

 

 

 

By:

/s/ David T. Gulian

 

David Gulian, President

 

 

 

INFOLOGIX SYSTEMS CORPORATION

 

 

 

 

 

By:

/s/ David T. Gulian

 

David Gulian, President

 

 

 

OPT ACQUISITION LLC

 

 

 

 

 

By:

/s/ David T. Gulian

 

David Gulian, President

 

 

 

EMBEDDED TECHNOLOGIES, LLC

 

By:  INFO LOGIX INC., its sole Member

 

 

 

 

 

By:

/s/ David T. Gulian

 

David Gulian, President

 

 

 

INFOLOGIX – DDMS, INC.

 

 

 

 

 

By:

/s/ David T. Gulian

 

David Gulian, President

 

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Schedule A to Forbearance Agreement

 

Schedule Omitted for Filing

 

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