Exhibit 10.3

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”) is made and entered into
as of November 20, 2009, by and between Infologix, Inc., a Delaware corporation
(the “Company”), and Hercules Technology Growth  Capital, Inc., a Maryland
corporation (“Hercules”).

 

This Agreement is made pursuant to the Amended and Restated Loan and Security
Agreement dated as of November 20, 2009 (as amended, restated, supplemented,
modified or otherwise in effect from time to time, the “A/R Loan Agreement”) by
and among the Company, InfoLogix Systems Corporation, Embedded Technologies,
LLC, Opt Acquisition LLC and Infologix-DDMS, Inc. and Hercules.

 

Now, therefore, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the Company and Hercules agree as
follows:

 

1.                                       Definitions. Capitalized terms used and
not otherwise defined herein that are defined in the A/R Loan Agreement shall
have the meanings given such terms in the A/R Loan Agreement.  As used in this
Agreement, the following terms shall have the following meanings:

 

“Advice” shall have the meaning set forth in Section 6(c).

 

“Commission” means the United States Securities and Exchange Commission.

 

“Common Stock” means the common stock of the Company, par value $0.00001 and any
other class of securities into which such shares may hereafter have been
reclassified or changed.

 

“Demand Notice” shall have the meaning set forth in Section 2(c).

 

“Demand Registration” shall means any registration of Registrable Securities
under the Securities Act requested by Hercules pursuant to Section 2(d).

 

“Effectiveness Date” means the 120th calendar day following the conversion of a
Converted Debt Amount to Common Stock pursuant to Section 2.9 of the A/R Loan
Agreement, extended by a period of 60 additional days if the Commission reviews
the Initial Registration Statement, provided, however, in the event that the
Company is notified by the Commission that the Initial Registration Statement
will not be reviewed or is no longer subject to further review and comments, the
Effectiveness Date as to the Initial Registration Statement shall be the tenth
Trading Day following the date on which the Company is so notified if such date
precedes the dates required above; provided, further, that if the Effectiveness
Date falls on a Saturday, Sunday or other day that the Commission is closed for
business, the Effectiveness Date shall be extended to the next business day on
which the Commission is open for business.

 

“Effectiveness Period” shall have the meaning set forth in Section 2(a).

 

“Holder” or “Holders” means the holder or holders, as the case may be, from time
to time of Registrable Securities.

 

“Indemnified Party” shall have the meaning set forth in Section 5(b).

 

“Indemnifying Party” shall have the meaning set forth in Section 5(b).

 

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“Initial Registrable Securities” shall have the meaning set forth in
Section 2(a).

 

“Initial Registration Statement” shall have the meaning set forth in
Section 2(a).

 

“Liquidated Damages” shall have the meaning set forth in Section 2(d).

 

“Losses” shall have the meaning set forth in Section 5(a).

 

“Permitted Shares” means that number of (a) Shares and (b) Common Stock issued
or issuable upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the foregoing that the
Commission permits the Company to register for resale, issued by the Company to
Hercules, from time to time.

 

“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation, of which the Company, or any
member of its Board of Directors have actual knowledge, or a partial proceeding,
such as a deposition), whether commenced or threatened.

 

“Prospectus” means the prospectus included in the Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.

 

“Registrable Securities” means all of the Permitted Shares until, in the case of
any such security, (a) the earliest of (i) its effective registration under the
Securities Act and resale in accordance with the Registration Statement covering
it and (ii) its sale to the public pursuant to Rule 144 (or any similar
provision then in force) under the Securities Act, and (b) as a result of the
event or circumstance described in any of the foregoing clauses, the legend with
respect to transfer restrictions therein is removed or removable in accordance
with the terms of such legend.

 

“Registration Default” shall have the meaning set forth in Section 2(d).

 

“Registration Default Date” shall have the meaning set forth in Section 2(d).

 

“Registration Request” shall have the meaning set forth in Section 2(c).

 

“Registration Statement” means any registration statement required to be filed
hereunder, including the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same purpose and effect as such Rule.

 

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“Rule 415” means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same purpose and effect as such Rule.

 

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same purpose and effect as such Rule.

 

“Shares” shall mean the Common Stock issued by the Company to Hercules
(a) pursuant to the A/R Loan Agreement, including without limitation, pursuant
to Section 2.5(a) and 2.9 thereof, from time to time and (b) upon the exercise
of the warrant, dated as of the date hereof, to purchase 250,000 shares of
Common Stock.

 

“Subsequent Registrable Securities Amount” shall have the meaning set forth in
Section 2(b).

 

“Subsequent Registration Statement” shall have the meaning set forth in
Section 2(b).

 

“Trading Day” shall mean any day during which the Nasdaq Stock Market shall be
open for business for trading.

 

“Trading Market” shall mean the Nasdaq Stock Market.

 

2.                                       Registration.

 

(a)                                  On or prior to the 120th calendar day
following the conversion of a Converted Debt Amount to Common Stock pursuant to
Section 2.9 of the A/R Loan Agreement, the Company shall prepare and file with
the Commission a Registration Statement covering the resale of at least the
greater of (i) the number of shares issued pursuant to such conversion, and
(ii) 25,000,000 shares, of Registrable Securities (the “Initial Registrable
Securities”) for an offering to be made on a continuous basis pursuant to
Rule 415 (the “Initial Registration Statement”).  The Initial Registration
Statement shall be on Form S-3 (except if the Company is not then eligible to
register for resale the Initial Registrable Securities on Form S-3, in which
case such registration shall be on another appropriate form in accordance
herewith).  Not less than ten business days prior to filing of the Initial
Registration Statement, the Company shall provide each Holder with a copy of the
Initial Registration Statement proposed to be filed and shall consider all
appropriate comments that are timely provided by such Holder with respect to the
Initial Registration Statement.  Subject to the terms of this Agreement, the
Company shall use its commercially reasonable best efforts to cause the Initial
Registration Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event prior to the
Effectiveness Date, and shall use its commercially reasonable best efforts to
keep the Initial Registration Statement continuously effective under the
Securities Act until (A) the Initial Registrable Securities have been sold, or
(B) subject to the next successive sentence, (1) Hercules, together with any of
its affiliates, owns less than 10% of the issued and outstanding Common Stock
and (2) the Registrable Securities may be sold free of any restrictions under
Rule 144 (the “Effectiveness Period”).  Upon the Initial Registration Statement
ceasing to be effective in connection with clause (B) of this section, the
Company shall take, at its sole expense, such further action, including the
provision of a legal opinion, as any Holder may  reasonably request from time to
time to enable such Holder to sell the Registrable Securities without
registration under the Securities Act.  The Company shall notify the Holders via
facsimile or electronic mail of the effectiveness of the Initial Registration
Statement within three Trading Days of the

 

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Company telephonically confirming effectiveness with the Commission.  The
Company shall, by 9:30 AM Eastern Time on the Trading Day that is three Trading
Days after the 90th calendar day following the Effectiveness Date, file a
Form 424(b)(5) with the Commission.

 

(b)                                 Following the Effectiveness Period, Hercules
may request the filing of an additional Registration Statement (a “Subsequent
Registration Statement”) covering at least 10,000,000 shares (the “Subsequent
Registrable Securities Amount”) of Registrable Securities (a “Registration
Request”).  Upon receipt of a Registration Request, the Company shall use its
commercially reasonable best efforts to, within 30 days of receipt of such
Registration Request, prepare and file a Subsequent Registration Statement,  if
such Registration Statement is on Form S-3, otherwise within 60 days of receipt
of such Registration Request, covering the Registrable Securities that are the
subject of the Registration Request and shall use its commercially reasonable
best efforts to cause such Subsequent Registration Statement to become effective
as soon as is practicable following its filing.  In filing a Subsequent
Registration Statement, the Company shall follow the same procedure of
preparing, filing and seeking effectiveness of the such Subsequent Registration
Statement as it did for the Initial Registration Statement, provided, however,
that the time periods in this section shall control.  Upon the sale of all of
the Registrable Securities covered by a Subsequent Registration Statement,
Hercules may submit one or more additional Subsequent Registration Requests
requesting the Company to prepare and file with the Commission a Subsequent
Registration Statement coving an additional amount of Registrable Securities
equal to the Subsequent Registrable Securities Amount and the Company will
follow the same procedure of preparing, filing and seeking effectiveness of such
Registration Statement as it did for the first Subsequent Registration
Statement.  The procedure set forth in this Section 2(b) shall be followed until
all of the Registrable Securities have been sold.

 

(c)                                  At any point following the Effectiveness
Date, if the Company shall receive a notice from Hercules requesting that the
Company effect a Demand Registration (a “Demand Notice”), for at least 5,000,000
shares of the Registrable Securities specified in such Demand Notice, the
Company shall use its commercially reasonable best efforts to, within 30 days of
receipt of such Demand Notice, prepare and file a Registration Statement
covering the Registrable Securities that are the subject of the Demand Notice,
if such Registration Statement is on Form S-3, otherwise within 60 days of
receipt of such Demand Notice, and shall use its commercially reasonable best
efforts to cause such Registration Statement to become effective as soon as is
practicable following its filing.  Hercules may request three Demand
Registrations.  In filing a Registration Statement pursuant this Section 2(c),
the Company shall follow the same procedure of preparing, filing and seeking
effectiveness of such Registration Statement as it did for the Initial
Registration Statement, provided, however, that the time periods in this section
shall control.

 

(d)                                 If (i) the Initial Registration Statement is
not filed on or prior to the Effectiveness Date, (ii) a Subsequent Registration
Statement is not filed on or prior to the date 30 days after the Company
receives a Registration Request or 60 days as applicable, (iii) a Demand
Registration is not filed on or prior to the date 30 days after the Company
receives a Demand Notice, or 60 days as applicable or (iv) the Registration
Statement covering the Registrable Securities ceases to be effective or usable
in the case of the Initial Registration Statement, during the Effectiveness
Period, or in the case of any Subsequent Registration Statement or Demand
Registration Statement, at any time prior to the sale of all Registrable
Securities covered in such Registration Statements, subject to
Section 2(g) (without being succeeded on the same date immediately by a
post-effective amendment or supplement to a Registration Statement that cures
such failure and that is itself, in the case of a post-effective amendment,
declared effective within ten Trading Days of filing with the Commission) or the
Holders are not permitted to utilize the Prospectus

 

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therein to resell such Registrable Securities for 20 consecutive Trading Days or
in any individual case an aggregate of 30 Trading Days during any twelve-month
period (which need not be consecutive Trading Days) (any of the foregoing being
a “Registration Default” and for purposes of clauses (i), (ii) and (iii) the
date on which such Registration Default occurs, or for purposes of clause
(iv) the date on which such 20 or 30 Trading Day period, as applicable, is
exceeded, each being a “Registration Default Date”) then, subject to Section 3,
the Company shall pay to each Holder an amount in cash, as liquidated damages
and not a penalty (“Liquidated Damages”) equal to 1% of the sum of: (A) the
Converted Debt Amount which was converted into Common Stock pursuant to
Section 2.9 of the A/R Loan Agreement, plus (B) any interest paid through the
issuance of Shares pursuant to Section 2.5(a) of the A/R Loan Agreement, to
which the Registration Default relates.  The foregoing represents the sole
monetary remedy to any Holder in connection with any Registration Default.  The
Company shall pay the Holders any Liquidated Damages accrued for the first month
after a Registration Default Date within seven calendar days after the end of
such month, and any Liquidated Damages accrued for any subsequent month within
seven calendar days after the end of such month.  If the Company fails to pay
any Liquidated Damages pursuant to this Section in full within seven days after
the date payable, the Company will pay interest thereon at a rate of 8% per
annum (or such lesser maximum amount that is permitted to be paid by applicable
law) to the Holder, accruing daily from the date such Liquidated Damages are due
until such amounts, plus all such interest thereon, are paid in full.  A
Registration Default under clauses (i), (ii) and (iii) above shall be cured on
the date that the required Registration Statement is filed with the SEC and a
Registration Default under clause (iv) above shall be cured on the date that the
Registration Statement covering the Permitted Shares is declared effective by
the SEC or is otherwise usable.  Notwithstanding the foregoing, no Liquidated
Damages shall accumulate as to any Registrable Security from and after the
earlier of (x) the date such security is no longer a Registrable Security and
(y) expiration of the Effectiveness Period.

 

(e)                                  The Company shall not be liable for any
Liquidated Damages under Section 2(d) if the Holders are not permitted to
utilize the Prospectus because the Company is negotiating a merger,
consolidation, acquisition or sale of all or substantially all of its assets or
a similar transaction which, in the good faith judgment of the Board of
Directors, requires any Registration Statement to be amended to include
information in connection with such pending transaction (including the parties
thereto) and such information is not yet available or publicly disclosable, or
the Company is otherwise aware of such other material non-public information
which, in the good faith judgment of the Board of Directors, requires any
Registration Statement to be amended to include such other material non-public
information and such information is not yet publicly disclosable, for an
aggregate of 30 consecutive days.

 

(f)                                    Each Holder agrees to furnish to the
Company (i) a completed selling stockholder questionnaire not more than ten
Trading Days before the filing of any Registration Statement and (ii) such other
information the Company reasonably requires to prepare any Registration
Statement.  Each Holder further agrees that it shall not be entitled to be named
as a selling stockholder in any Registration Statement or use the Prospectus for
offers and resales of Registrable Securities at any time, unless such Holder has
returned this information to the Company.  Each Holder acknowledges and agrees
that the information in the selling stockholder questionnaire or request for
further information as described in this Section 2(f) will be used by the
Company in the preparation of any Registration Statement and hereby consents to
the inclusion of such information in any Registration Statement.

 

(g)                                 Subject to the subsequent sentence, the
Company shall not be required to file or keep effective any Subsequent
Registration Statement or Demand Registration when Hercules,

 

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together with any of its affiliates, owns less than 10% of the issued and
outstanding Common Stock and the Registrable Securities may be sold free of any
restrictions under Rule 144.  Upon such occurrence, the Company shall take, at
its sole expense, such further action, including the provision of a legal
opinion, as any Holder may reasonably request from time to time to enable such
Holder to sell the Registrable Securities without registration under the
Securities Act.

 

3.                                       Registration Procedures.

 

In connection with the Company’s registration obligations hereunder, the Company
shall:

 

(a)                                  (i) Prepare and file with the Commission
such amendments, including post-effective amendments, to any Registration
Statement and the Prospectus used in connection therewith as may be necessary to
keep the Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period; (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus supplement
(subject to the terms of this Agreement), and as so supplemented or amended to
be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible
to any comments received from the Commission with respect to the Registration
Statement or any amendment thereto; and (iv) comply in all material respects
with the provisions of the Securities Act and the Exchange Act with respect to
the disposition of all Registrable Securities covered by the Registration
Statement during the applicable period in accordance (subject to the terms of
this Agreement) with the intended methods of disposition by the Holders thereof
set forth in the Registration Statement as so amended or in such Prospectus as
so supplemented; provided, however, that each Holder shall be responsible for
the delivery of the Prospectus in accordance with Rule 172 under the Securities
Act, and each Holder agrees to dispose of Registrable Securities in compliance
with the plan of distribution described in the Registration Statement and
otherwise in compliance with applicable federal and state securities laws;

 

(b)                                 Notify the Holders of Registrable Securities
to be sold (which notice shall, pursuant to clauses (ii) through (v) hereof, be
accompanied by an instruction to suspend the use of the Prospectus until the
requisite changes have been made) as promptly as reasonably possible and (if
requested by any such Person) confirm such notice in writing no later than one
Trading Day following the day (i)(A) when a Prospectus or any Prospectus
supplement or post-effective amendment to the Registration Statement is filed;
and (B) with respect to the Registration Statement or any post-effective
amendment, when the same has become effective; (ii) of any request by the
Commission or any other Federal or state governmental authority for amendments
or supplements to the Registration Statement or Prospectus or for additional
information; (iii) of the issuance by the Commission or any other federal or
state governmental authority of any stop order suspending the effectiveness of
the Registration Statement covering any or all of the Registrable Securities or
the initiation of any Proceedings, for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event or passage of time that makes
the financial statements included in the Registration Statement ineligible for
inclusion therein or any statement made in the Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to the
Registration Statement, Prospectus or other documents so that, in the case of
the Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
provided that any and all of such

 

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information provided pursuant to clause (v) above shall remain confidential to
each Holder until such information otherwise becomes public, and such Holder
agrees not to trade on such information, unless disclosure by a Holder is
required by law; provide, further, notwithstanding each Holder’s agreement to
keep such information confidential, the Holders make no acknowledgement that any
such information is material, non-public information;

 

(c)                                  Use its commercially reasonable best
efforts to avoid the issuance of, or, if issued, obtain the withdrawal of
(i) any order suspending the effectiveness of the Registration Statement, or
(ii) any suspension of the qualification (or exemption from qualification) of
any of the Registrable Securities for sale in any jurisdiction, as soon as
practicable;

 

(d)                                 Furnish to each Holder, upon written request
of such Holder, without charge, at least one conformed copy of the Registration
Statement and each amendment thereto, including financial statements and
schedules, all documents incorporated or deemed to be incorporated therein by
reference to the extent requested by such Person, and all exhibits to the extent
requested by such Person (including those previously furnished or incorporated
by reference); provided, that the Company shall have no obligation to provide
any document pursuant to this clause that is available on the Commission’s EDGAR
system;

 

(e)                                  Promptly deliver to each Holder, upon
written request of such Holder, without charge, as many copies of the Prospectus
or Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request in connection with
resales by the Holder of Registrable Securities.  Subject to the terms of this
Agreement, the Company hereby consents to the use of such Prospectus and each
amendment or supplement thereto by each of the selling Holders in connection
with the offering and sale of the Registrable Securities covered by such
Prospectus and any amendment or supplement thereto, except after the giving of
any notice pursuant to Section 3(b);

 

(f)                                    Prior to any resale of Registrable
Securities by a Holder, use its commercially reasonable efforts to register or
qualify or cooperate with the selling Holders in connection with the
registration or qualification (or exemption from the Registration or
qualification) of such Registrable Securities for the resale by the Holder under
the securities or Blue Sky laws of such jurisdictions within the United States
as any Holder reasonably requests in writing, to keep each registration or
qualification (or exemption therefrom) effective during the Effectiveness Period
and to do any and all other acts or things reasonably necessary to enable the
disposition in such jurisdictions of the Registrable Securities covered by each
Registration Statement; provided that the Company shall not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or subject the Company to any material tax in any such jurisdiction
where it is not then so subject or file a general consent to service of process
in any such jurisdiction;

 

(g)                                 If requested by the Holders, cooperate with
the Holders to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be delivered to a transferee pursuant to
the Registration Statement, which certificates shall be free of all restrictive
legends, and to enable such Registrable Securities to be in such denominations
and registered in such names as any such Holders may request;

 

(h)                                 Upon the occurrence of any event
contemplated by this Section 3, as promptly as reasonably possible under the
circumstances taking into account the Company’s good faith assessment of any
adverse consequences to the Company and its shareholders of the premature
disclosure of such event, prepare a supplement or amendment, including a
post-effective amendment, to any Registration Statement or a supplement to the
related Prospectus or any

 

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document incorporated or deemed to be incorporated therein by reference, and
file any other required document so that, as thereafter delivered, neither the
Registration Statement nor such Prospectus will contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.  If the Company notifies the Holders in
accordance with clauses (ii) through (v) of Section 3(b) above to suspend the
use of any Prospectus until the requisite changes to such Prospectus have been
made, then the Holders shall suspend use of such Prospectus.  The Company will
use its commercially reasonable best efforts to ensure that the use of the
Prospectus may be resumed as promptly as is practicable.  The Company shall be
entitled to exercise its right under this Section 3(h) to suspend the
availability of the Registration Statement and Prospectus for a period not to
exceed 90 days (which need not be consecutive days) in any 365 day period;

 

(i)                                     Comply with all applicable rules and
regulations of the Commission and the Trading Market; and

 

(j)                                     Be permitted to require each selling
Holder to furnish to the Company (i) a certified statement as to the number of
shares of Common Stock beneficially owned by such Holder, (ii) if required by
the Commission, the person thereof that has voting and dispositive control over
the Shares and (iii) any further information required by the Commission.  During
any periods that the Company is unable to meet its obligations hereunder with
respect to the registration of the Registrable Securities solely because any
Holder fails to furnish such information within five Trading Days of the
Company’s request, any Liquidated Damages that are accruing at such time as to
such Holder only shall be tolled and any Registration Default that may otherwise
occur solely because of such delay shall be suspended as to such Holder only,
until such information is delivered to the Company; provided, however, that if
the failure of any one Holder affects the Company’s ability to meet its
obligations with respect to the registration of all of the Registrable
Securities, all Liquidated Damages that are accruing at such time as to all
Holders shall be tolled and any Registration Default that may otherwise occur
solely because of such delay shall be suspended as to all Holders until such
information is delivered to the Company.

 

4.                                       Registration Expenses. All fees and
expenses incident to the performance of or compliance with this Agreement by the
Company shall be borne by the Company whether or not any Registrable Securities
are sold pursuant to the Registration Statement.  The fees and expenses referred
to in the foregoing sentence shall include, without limitation, (i) all
registration and filing fees (including, without limitation, fees and expenses
(A) with respect to filings required to be made with the Trading Market on which
the Common Stock are then listed for trading and (B) in compliance with
applicable state securities or Blue Sky laws reasonably requested by the Holder
and reasonably agreed to by the Company in writing (including, without
limitation, fees and disbursements of counsel for the Company in connection with
Blue Sky qualifications or exemptions of the Registrable Securities and
determination of the eligibility of the Registrable Securities for investment
under the laws of such jurisdictions as requested by the Holders); (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses for a Holder if the printing
of prospectuses is reasonably requested by such Holder); (iii) messenger,
telephone and delivery expenses related to the Company’s obligations hereunder;
(iv) fees and disbursements of counsel for the Company; (v) Securities Act
liability insurance, if the Company so desires such insurance; and (vi) fees and
expenses of all other Persons retained by the Company in connection with the
consummation of the transactions contemplated by this Agreement.  In addition,
the Company shall be responsible for all of its internal expenses incurred in
connection with the consummation of the transactions

 

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contemplated by this Agreement (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any annual audit and the fees and expenses incurred in connection
with the listing of the Registrable Securities on any securities exchange as
required hereunder, including all fees and expenses of the depositary.  In no
event shall the Company be responsible for any underwriting, broker or similar
fees or commissions of any Holder.

 

5.                                       Indemnification.

 

(a)                                  (i) Indemnification by the Company. The
Company shall, notwithstanding any termination of this Agreement, indemnify and
hold harmless each Holder, the officers, directors, members, partners, agents,
brokers (including brokers who offer and sell Registrable Securities as
principal as a result of a pledge or any failure to perform under a margin call
of Ordinary Shares), investment advisors and employees of each of them, each
Person who controls any such Holder (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) and the officers, directors,
members, partners, agents and employees of each such controlling Person, to the
fullest extent permitted by applicable law, from and against any and all losses,
claims, damages, liabilities, judgments, fines, penalties, charges, costs
(including, without limitation, reasonable attorneys’ fees) and expenses
(collectively, “Losses”), as incurred, arising out of or relating to any untrue
or alleged untrue statement of a material fact contained in the Registration
Statement, any Prospectus or any form of prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or
relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of any
Prospectus or form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, except to the extent,
but only to the extent, that (A) such untrue statements or omissions are based
solely upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and approved in writing
by such Holder thereof expressly for use in the Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or supplement thereto,
or (B) in the case of an occurrence of an event of the type specified in
Section 3(b)(ii)-(v), the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by such Holder of
the Advice contemplated in Section 6(c).

 

(ii)  Indemnification by Holders. Each Holder shall, notwithstanding any
termination of this Agreement, severally and not jointly, indemnify and hold
harmless the Company, its directors, officers, agents and employees, each Person
who controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling Persons, to the fullest extent permitted by
applicable law, from and against all Losses, as incurred, arising out of or are
related to any untrue or alleged untrue statement of a material fact contained
in any Registration Statement, any Prospectus, or any form of prospectus, or in
any amendment or supplement thereto or in any preliminary prospectus, or arising
out of or relating to any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein (in
the case of any Prospectus, or any form of prospectus or supplement thereto, in
light of the circumstances under which they were made) not misleading (i) to the
extent, but only to the extent, that such untrue statements or omissions are
based solely upon information regarding such Holder furnished in writing to the
Company by such Holder thereof expressly for use therein, (ii) to the extent,
but only to the extent, that such information relates to such Holder or such
Holder’s proposed method of distribution of Registrable Securities and was
reviewed and approved in

 

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writing by such Holder or agent thereof expressly for use in a Registration
Statement, such Prospectus or such form of Prospectus or in any amendment or
supplement thereto, or (iii) in the case of an occurrence of an event of the
type specified in Section 3(b)(ii)-(v) to the extent, but only to the extent,
related to the use by such Holder of an outdated or defective Prospectus after
the Company has notified such Holder in writing that the Prospectus is outdated
or defective and prior to the receipt by such Holder of the Advice contemplated
in Section 6(c).

 

(b)                                 Conduct of Indemnification Proceedings. If
any Proceeding shall be brought or asserted against any Person entitled to
indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall
promptly notify the person from whom indemnity is sought (the “Indemnifying
Party”) in writing, and the Indemnifying Party shall have the right to assume
the defense thereof, including the employment of counsel reasonably satisfactory
to the Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any Indemnified
Party to give such notice shall not relieve the Indemnifying Party of its
obligations or liabilities pursuant to this Agreement, except (and only) to the
extent that it shall be finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) that such
failure shall have prejudiced the Indemnifying Party.

 

An Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the reasonable fees
and expenses of such counsel shall be at the expense of such Indemnified Party
or Parties unless: (i) the Indemnifying Party has agreed in writing to pay such
fees and expenses; (ii) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding; (iii) the Indemnifying Party shall have
failed promptly to employ counsel reasonably satisfactory to such Indemnified
Party in any such Proceeding; or (iv) the named parties to any such Proceeding
(including any impleaded parties) include both such Indemnified Party and the
Indemnifying Party, and such Indemnified Party shall reasonably believe that a
material conflict of interest is likely to exist if the same counsel were to
represent such Indemnified Party and the Indemnifying Party (in which case, if
such Indemnified Party notifies the Indemnifying Party in writing that it elects
to employ separate counsel at the expense of the Indemnifying Party, the
reasonable fees and expenses of one separate counsel shall be at the expense of
the Indemnifying Party).  The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld.  No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of
such Proceeding.

 

The Indemnified Party shall promptly reimburse the Indemnifying Party for that
portion of such reasonable fees and expenses applicable to such actions for
which such Indemnified Party is not entitled to indemnification hereunder,
determined based upon the relative faults of the parties.

 

(c)                                  Contribution. If the indemnification under
Section 5(a) is unavailable to an Indemnified Party or insufficient to hold an
Indemnified Party harmless for any Losses, then the Indemnifying Party shall
contribute to the amount paid or payable by such Indemnified Party, in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions, statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations.  The relative fault of such Indemnifying Party and Indemnified
Party shall be determined by reference to, among other

 

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things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material fact,
has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission.  The amount paid or payable by a party as a
result of any Losses shall be deemed to include, subject to the limitations set
forth in Section 5(b), any reasonable attorneys’ or other reasonable fees or
expenses incurred by such party in connection with any Proceeding to the extent
such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms.

 

The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(c) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.

 

The indemnity and contribution agreements contained in this Section are in
addition to any other liability that the Indemnifying Parties may have to the
Indemnified Parties.

 

6.                                       Miscellaneous.

 

(a)                                  Remedies. Subject to Section 2(d), (i) in
the event of a breach by the Company or by a Holder, of any of their obligations
under this Agreement, each Holder or the Company, as the case may be, in
addition to being entitled to exercise all rights granted by law and under this
Agreement, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement and (ii) the Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate

 

(b)                                 Compliance.  Each Holder covenants and
agrees that it will comply with the prospectus delivery requirements of the
Securities Act as applicable to it in connection with sales of Registrable
Securities pursuant to the Registration Statement and shall sell the Registrable
Securities only in accordance with a method of distribution described in the
Registration Statement.

 

(c)                                  Discontinued Disposition.  Each Holder
agrees by its acquisition of such Registrable Securities that, upon receipt of a
notice from the Company of the occurrence of any event of the kind described in
Section 3(b)(ii) through Section 3(b)(v), such Holder will forthwith discontinue
disposition of such Registrable Securities under the Registration Statement
until it is advised in writing (the “Advice”) by the Company that the use of the
applicable Prospectus may be resumed, and has received copies of any additional
or supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus or Registration Statement subject to Section 3(d). 
The Company agrees and acknowledges that any periods during which the Holder is
required to discontinue the disposition of the Registrable Securities during the
Effectiveness Period hereunder shall be subject to the provisions of Sections
2(d), 2(e) and 3(h), as applicable.  The Company will use its commercially
reasonable best efforts to ensure that the use of the Prospectus may be resumed
as promptly as it practicable.

 

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(d)                                 Piggy-Back Registrations. If at any time
during the Effectiveness Period there is not an effective Registration Statement
covering all of the Registrable Securities and the Company shall determine to
prepare and file with the Commission a registration statement relating to an
offering for its own account or the account of others under the Securities Act
of any of its equity securities, other than on Form S-4 or Form S-8 (each as
promulgated under the Securities Act) or their then equivalents relating to
equity securities to be issued solely in connection with any acquisition of any
entity or business or equity securities issuable in connection with the stock
option or other employee benefit plans, then the Company shall send to each
Holder a written notice of such determination and, if within fifteen days after
the date of such notice, any such Holder shall so request in writing, the
Company shall include in such registration statement all or any part of such
Registrable Securities such Holder requests to be registered.

 

Notwithstanding the foregoing, if any requested registration pursuant to this
section involves an underwritten offering by the Company, and the managing
underwriter shall advise the Company the distribution of all or a portion of the
Registrable Securities requested to be included in the registration concurrently
with the securities being registered by the Company would materially adversely
affect the distribution of such securities by the Company for its own account,
then (i) the number of Registrable Securities so requested to be included in
such registration shall be reduced to that number of shares which, in the good
faith judgment of the managing underwriter, can be sold in such offering, and
this reduced number shall be allocated pro rata among such Holders on the basis
of the number of Registrable Securities requested to be so registered by such
Holders, and (ii) if the requesting Holders are participating in a primary
offering by the Company, the Company will include in such registration, to the
extent of the number of securities which the Company is so advised can be sold
in such offering, (A) first, securities that the Company proposes to issue and
sell for its own account and any preferred securities proposed to be so
registered, and (B) second, Registrable Securities requested to be registered by
the Holders thereof pursuant to this Section allocated pro rata among such
Holders and such on the basis of the number of Registrable Securities to be so
registered.

 

(e)                                  Amendments and Waivers.  The provisions of
this Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the same shall be in writing and
signed by the Company and each Holder of the then outstanding Registrable
Securities.  Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders and that does not directly or indirectly affect the rights of
other Holders may be given by Holders of all of the Registrable Securities to
which such waiver or consent relates; provided, however, that the provisions of
this sentence may not be amended, modified, or supplemented except in accordance
with the provisions of the immediately preceding sentence.

 

(f)                                    Notices.  Any and all notices or other
communications or deliveries required or permitted to be provided hereunder
shall be delivered as set forth in the A/R Loan Agreement.

 

(g)                                 Successors and Assigns.  This Agreement
shall inure to the benefit of and be binding upon the successors and permitted
assigns of each of the parties and shall inure to the benefit of each Holder. 
The Company may not assign its rights or obligations hereunder without the prior
written consent of all of the Holders of the then outstanding Registrable
Securities.  Each Holder may assign a portion of their respective rights
hereunder to any purchaser of Registrable Securities in a transaction not
otherwise covered by a Registration Statement, provided such Holder has
transferred to such purchaser shares of Common Stock constituting at

 

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least 5% of the issued and outstanding shares of Common Stock, and the purchaser
executes a joinder to this Agreement.

 

(h)                                 No Inconsistent Agreements.  Neither the
Company nor any of its Subsidiaries has entered, as of the date hereof, nor
shall the Company or any of its subsidiaries, on or after the date of this
Agreement, enter into any agreement with respect to its securities, that would
have the effect of impairing the rights granted to the Holders in this
Agreement.

 

(i)                                     Execution and Counterparts.  This
Agreement may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement.  In the event that any signature is
delivered by facsimile transmission or email via .pdf, such signature shall
create a valid binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.

 

(j)                                     Governing Law.  All questions concerning
the construction, validity, enforcement and interpretation of this Agreement
shall be determined with the provisions of the A/R/ Loan Agreement.

 

(k)                                  Cumulative Remedies.  The remedies provided
herein are cumulative and not exclusive of any remedies provided by law.

 

(l)                                     Severability.  If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated,
and the parties hereto shall use their commercially reasonable efforts to find
and employ an alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or restriction. 
It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.

 

(m)                               Headings.  The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

 

(n)                                 Independent Nature of Holders’ Obligations
and Rights.  The obligations of each Holder hereunder are several and not joint
with the obligations of any other Holder hereunder, and no Holder shall be
responsible in any way for the performance of the obligations of any other
Holder hereunder other than as specified in this Agreement.  Nothing contained
herein or in any other agreement or document delivered at any closing, and no
action taken by any Holder pursuant hereto or thereto, shall be deemed to
constitute the Holders as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Holders are in any way
acting in concert with respect to such obligations or the transactions
contemplated by this Agreement.  Each Holder shall be entitled to protect and
enforce its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Holder to be joined as an
additional party in any proceeding for such purpose.

 

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

 

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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.

 

 

INFOLOGIX, INC.

 

 

 

 

 

By:

/s/ David T. Gulian

 

Name:

David T. Gulian

 

Title:

Chief Executive Officer and President

 

 

 

 

 

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

 

 

 

 

 

By:

/s/ K. Nicholas Martitsch

 

Name:

K. Nicholas Martitsch

 

Title:

Assistant General Counsel

 

Signature Page to Registration Rights Agreement

 

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