Exhibit 10.21

 

FIFTH AMENDMENT AND MODIFICATION

TO LOAN AND SECURITY AGREEMENT

 

THIS FIFTH AMENDMENT AND MODIFICATION TO LOAN AND SECURITY AGREEMENT (the
“Amendment”) is made effective as of the 26th day of March, 2008, by and among
INFOLOGIX SYSTEMS CORPORATION (formerly known as InfoLogix Inc.), a Delaware
corporation (“Infologix”), OPT ACQUISITION LLC, a Pennsylvania limited liability
company (“Optasia”), EMBEDDED TECHNOLOGIES, LLC, a Delaware limited liability
company (“Embedded” and together with Infologix and Optasia, jointly, severally
and collectively “Borrowers” and each a “Borrower”) and SOVEREIGN BANK (the
“Bank”).

 

BACKGROUND

 

A.            PURSUANT TO THAT CERTAIN LOAN AND SECURITY AGREEMENT DATED
MARCH 16, 2006 BY AND AMONG BORROWERS AND BANK (AS AMENDED BY THAT CERTAIN FIRST
AMENDMENT AND MODIFICATION TO LOAN AND SECURITY AGREEMENT DATED AUGUST 25, 2006
(THE “FIRST AMENDMENT”), THAT CERTAIN SECOND AMENDMENT AND MODIFICATION TO LOAN
AND SECURITY AGREEMENT DATED OCTOBER 31, 2006 (THE “SECOND AMENDMENT”), THAT
CERTAIN THIRD AMENDMENT AND MODIFICATION TO LOAN AND SECURITY AGREEMENT DATED
MARCH 23, 2007 (THE “THIRD AMENDMENT”), THAT CERTAIN FOURTH AMENDMENT AND
MODIFICATION TO LOAN AND SECURITY AGREEMENT DATED SEPTEMBER 30, 2007 (THE
“FOURTH AMENDMENT”) AND AS THE SAME MAY HEREAFTER BE AMENDED, MODIFIED,
SUPPLEMENTED OR RESTATED FROM TIME TO TIME, BEING REFERRED TO HEREIN AS THE
“LOAN AGREEMENT”), BANK AGREED, INTER ALIA, TO EXTEND TO BORROWERS THE FOLLOWING
CREDIT FACILITIES:  (I) A LINE OF CREDIT IN THE MAXIMUM PRINCIPAL AMOUNT OF
ELEVEN MILLION DOLLARS ($11,000,000.00), (II) A TERM LOAN IN THE ORIGINAL
PRINCIPAL AMOUNT OF ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000.00),
(III) A TERM LOAN IN THE ORIGINAL PRINCIPAL AMOUNT OF ONE MILLION DOLLARS
($1,000,000.00) AND (IV) A TERM LOAN IN THE ORIGINAL PRINCIPAL AMOUNT OF TWO
MILLION DOLLARS ($2,000,000.00).

 

B.            BORROWERS HAVE REQUESTED, AND BANK HAS AGREED TO AMEND THE LOAN
AGREEMENT IN ACCORDANCE WITH THE TERMS AND CONDITIONS CONTAINED HEREIN.

 

C.            ALL CAPITALIZED TERMS CONTAINED HEREIN AND NOT OTHERWISE DEFINED
HEREIN SHALL HAVE THE MEANINGS SET FORTH IN THE LOAN AGREEMENT.

 

NOW, THEREFORE, intending to be legally bound hereby, the parties hereto agree
as follows:

 

1.             WAIVER OF COVENANT DEFAULTS.

 

(A)           BANK HEREBY WAIVES ANY DEFAULT OR EVENT OF DEFAULT THAT EXISTS OR
MAY ARISE UNDER THE LOAN AGREEMENT SOLELY AS A RESULT OF THE FOLLOWING EVENTS
(COLLECTIVELY, THE “SPECIFIED DEFAULTS”):

 

(I)    FAILURE BY BORROWERS TO MAINTAIN THE MINIMUM ANNUAL NET INCOME SET FORTH
IN SECTION 8.1 OF THE LOAN AGREEMENT FOR THE SIX (6) MONTH PERIOD ENDED
DECEMBER 31, 2007.

 

(II)   FAILURE BY BORROWERS TO MAINTAIN THE FIXED CHARGE COVERAGE RATIO SET
FORTH IN SECTION 8.3 OF THE LOAN AGREEMENT FOR THE SIX (6) MONTH PERIOD ENDED
DECEMBER 31, 2007

 

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(III)  FAILURE BY BORROWERS TO LIMIT CAPITAL EXPENDITURES AS SET FORTH IN
SECTION 8.4 OF THE LOAN AGREEMENT AS OF BORROWERS’ FISCAL YEAR ENDED
DECEMBER 31, 2007.

 

(B)           THE WAIVERS SET FORTH IN SECTION 1(A) ABOVE ARE GIVEN SOLELY IN
CONNECTION WITH THE SPECIFIED DEFAULTS AND SOLELY FOR THE PERIODS DESCRIBED
THEREIN AND SHALL NOT BE DEEMED TO BE AN AGREEMENT, OBLIGATION OR COMMITMENT BY
BANK TO WAIVE BORROWER’S COMPLIANCE WITH ANY OF THE OTHER TERMS OR CONDITIONS IN
ANY OF THE LOAN DOCUMENTS OR ANY OTHER EVENTS OF DEFAULT, WHETHER NOW EXISTING
OR HEREAFTER ARISING, INCLUDING, WITHOUT LIMITATION, BORROWERS’ FAILURE TO
COMPLY WITH THE COVENANTS SET FORTH IN SECTIONS 8.1, 8.3 OR 8.4 OF THE LOAN
AGREEMENT AS OF ANY OTHER DATE AFTER THE DATE HEREOF.

 

2.             FINANCIAL COVENANTS.

 

(A)           SECTIONS 8.2 OF THE LOAN AGREEMENT IS HEREBY DELETED AND REPLACED
WITH THE FOLLOWING:

 

“8.2         Minimum Quarterly Net Income.  Borrowers shall have Net Income of
at least $0 for Borrowers’ fiscal quarter ending June 30, 2008 and as of the end
of each of the first three (3) fiscal quarters of Borrowers thereafter, measured
on a year-to-date basis.”

 

(B)           SECTIONS 8.3 OF THE LOAN AGREEMENT IS HEREBY DELETED AND REPLACED
WITH THE FOLLOWING:

 

“8.3         Fixed Charge Coverage Ratio.  Borrowers shall maintain a Fixed
Charge Coverage Ratio of not less than (i) 1.0 to 1.0 as of Borrowers’ fiscal
quarter ending June 30, 2008, (ii) 1.0 to 1.0 as of the end of Borrowers’ fiscal
quarter ending September 30, 2008 measured on a year-to-date basis and (iii) 1.2
to 1.0 as of the end of Borrowers’ fiscal quarter ending December 31, 2008 and
as of the end of each fiscal quarter of Borrowers thereafter, measured on a
rolling four quarter basis.

 

3.             AMENDMENT FEE.  UPON EXECUTION OF THIS AMENDMENT, BORROWERS SHALL
PAY TO BANK AN AMENDMENT FEE IN THE AMOUNT OF TEN THOUSAND DOLLARS ($10,000.00)
(THE “AMENDMENT FEE”) WHICH FEE MAY BE CHARGED AS A LINE ADVANCE (AS DEFINED IN
THE LOAN AGREEMENT) OR CHARGED TO ANY BANK ACCOUNT OF ANY BORROWER MAINTAINED
WITH BANK.  THE FOREGOING AMENDMENT FEE IS IN ADDITION TO THE INTEREST AND OTHER
AMOUNTS WHICH BORROWERS ARE REQUIRED TO PAY UNDER THE LOAN DOCUMENTS, AND IS
FULLY EARNED AND NONREFUNDABLE.

 

4.             AMENDMENT/REFERENCES.  THE LOAN AGREEMENT AND THE LOAN DOCUMENTS
ARE HEREBY AMENDED TO BE CONSISTENT WITH THE TERMS OF THIS AMENDMENT. ALL
REFERENCES IN THE LOAN AGREEMENT AND THE LOAN DOCUMENTS TO (A) THE “LOAN
AGREEMENT” SHALL MEAN THE LOAN AGREEMENT AS AMENDED HEREBY; AND (B) THE “LOAN
DOCUMENTS” SHALL INCLUDE THIS AMENDMENT AND ALL OTHER INSTRUMENTS OR AGREEMENTS
EXECUTED PURSUANT TO OR IN CONNECTION WITH THE TERMS HEREOF.

 

5.             RELEASE.  EACH BORROWER AND GUARANTOR ACKNOWLEDGES AND AGREES
THAT IT HAS NO CLAIMS, SUITS OR CAUSES OF ACTION AGAINST BANK AND HEREBY
REMISES, RELEASES AND FOREVER DISCHARGES BANK, THEIR OFFICERS, DIRECTORS,
SHAREHOLDERS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS, AND ANY OF

 

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THEM, FROM ANY CLAIMS, SUITS OR CAUSES OF ACTION WHATSOEVER, IN LAW OR AT
EQUITY, WHICH ANY BORROWER OR GUARANTOR HAS OR MAY HAVE ARISING FROM ANY ACT,
OMISSION OR OTHERWISE, AT ANY TIME UP TO AND INCLUDING THE DATE OF THIS
AMENDMENT.

 

6.             ADDITIONAL DOCUMENTS; FURTHER ASSURANCES.  EACH BORROWER
COVENANTS AND AGREES TO EXECUTE AND DELIVER TO BANK, OR TO CAUSE TO BE EXECUTED
AND DELIVERED TO BANK CONTEMPORANEOUSLY HEREWITH, AT THE SOLE COST AND EXPENSE
OF SUCH BORROWER, THE AMENDMENT AND ANY AND ALL DOCUMENTS, AGREEMENTS,
STATEMENTS, RESOLUTIONS, SEARCHES, INSURANCE POLICIES, CONSENTS, CERTIFICATES,
LEGAL OPINIONS AND INFORMATION AS BANK MAY REQUIRE IN CONNECTION WITH THE
EXECUTION AND DELIVERY OF THIS AMENDMENT OR ANY DOCUMENTS IN CONNECTION
HEREWITH, OR TO FURTHER EVIDENCE, EFFECT, ENFORCE OR PROTECT ANY OF THE TERMS
HEREOF OR THE RIGHTS OR REMEDIES GRANTED OR INTENDED TO BE GRANTED TO BANK
HEREIN OR IN ANY OF THE LOAN DOCUMENTS, OR TO ENFORCE OR TO PROTECT BANK’S
INTEREST IN THE COLLATERAL.  ALL SUCH DOCUMENTS, AGREEMENTS, STATEMENTS, ETC.,
SHALL BE IN FORM AND CONTENT ACCEPTABLE TO BANK IN ITS SOLE DISCRETION.  EACH
BORROWER HEREBY AUTHORIZES BANK TO FILE, AT SUCH BORROWER’S COST AND EXPENSE,
FINANCING STATEMENTS, AMENDMENTS THERETO AND OTHER ITEMS AS BANK MAY REQUIRE TO
EVIDENCE OR PERFECT BANK’S CONTINUING SECURITY INTEREST AND LIENS IN AND AGAINST
THE COLLATERAL.  EACH BORROWER AGREES TO JOIN WITH BANK IN NOTIFYING ANY THIRD
PARTY WITH POSSESSION OF ANY COLLATERAL OF BANK’S SECURITY INTEREST THEREIN AND
IN OBTAINING AN ACKNOWLEDGMENT FROM THE THIRD PARTY THAT IT IS HOLDING THE
COLLATERAL FOR THE BENEFIT OF BANK.  EACH BORROWER WILL COOPERATE WITH BANK IN
OBTAINING CONTROL WITH RESPECT TO COLLATERAL CONSISTING OF DEPOSIT ACCOUNTS,
INVESTMENT PROPERTY, LETTER-OF-CREDIT RIGHTS AND ELECTRONIC CHATTEL PAPER.

 

7.             FURTHER AGREEMENTS AND REPRESENTATIONS.  EACH BORROWER DOES
HEREBY:

 

(A)           RATIFY, CONFIRM AND ACKNOWLEDGE THAT THE STATEMENTS CONTAINED IN
THE FOREGOING BACKGROUND AND IN SECTION 1 HEREOF ARE TRUE AND COMPLETE AND THAT,
AS AMENDED HEREBY, THE LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS ARE IN FULL
FORCE AND EFFECT AND ARE VALID, BINDING AND ENFORCEABLE AGAINST EACH BORROWER
AND ITS ASSETS AND PROPERTIES, ALL IN ACCORDANCE WITH THE TERMS THEREOF, AS
AMENDED;

 

(B)           COVENANT AND AGREE TO PERFORM ALL OF SUCH BORROWER’S OBLIGATIONS
UNDER THE LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS AMENDED;

 

(C)           ACKNOWLEDGE AND AGREE THAT AS OF THE DATE HEREOF, NO BORROWER HAS
ANY DEFENSE, SET-OFF, COUNTERCLAIM OR CHALLENGE AGAINST THE PAYMENT OF ANY BANK
INDEBTEDNESS OR THE ENFORCEMENT OF ANY OF THE TERMS OF THE LOAN AGREEMENT OR OF
THE OTHER LOAN DOCUMENTS, AS AMENDED;

 

(D)           ACKNOWLEDGE AND AGREE THAT ALL REPRESENTATIONS AND WARRANTIES OF
EACH BORROWER CONTAINED IN THE LOAN AGREEMENT AND/OR THE OTHER LOAN DOCUMENTS,
AS AMENDED, ARE TRUE, ACCURATE AND CORRECT IN ALL MATERIAL RESPECTS ON AND AS OF
THE DATE HEREOF AS IF MADE ON AND AS OF THE DATE HEREOF;

 

(E)           REPRESENT AND WARRANT THAT NO DEFAULT OR EVENT OF DEFAULT EXISTS,
EXCEPT AS PROVIDED FOR IN SECTION 1(A) HEREIN;

 

(F)            COVENANT AND AGREE THAT SUCH BORROWER’S FAILURE TO COMPLY WITH
ANY OF THE TERMS OF THIS AMENDMENT OR ANY OTHER INSTRUMENT OR AGREEMENT EXECUTED
OR DELIVERED IN CONNECTION HEREWITH, SHALL CONSTITUTE AN EVENT OF DEFAULT UNDER
THE LOAN AGREEMENT AND EACH OF THE OTHER LOAN

 

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DOCUMENTS SUBJECT TO ANY APPLICABLE NOTICE AND CURE PERIODS PROVIDED FOR
THEREIN; AND

 

(G)           ACKNOWLEDGE AND AGREE THAT NOTHING CONTAINED HEREIN, AND NO
ACTIONS TAKEN PURSUANT TO THE TERMS HEREOF, ARE INTENDED TO CONSTITUTE A
NOVATION OF ANY OF THE NOTES, THE LOAN AGREEMENT OR OF ANY OF THE OTHER LOAN
DOCUMENTS AND, EXCEPT AS SPECIFICALLY SET FORTH IN SECTION 1 HEREOF, SECTION 1
OF THE FIRST AMENDMENT, SECTION 1 OF THE SECOND AMENDMENT AND SECTION 1 OF THE
THIRD AMENDMENT, DOES NOT CONSTITUTE A RELEASE, TERMINATION OR WAIVER OF ANY
EXISTING EVENT OF DEFAULT OR OF ANY OF THE LIENS, SECURITY INTERESTS, RIGHTS OR
REMEDIES GRANTED TO THE BANK IN ANY OF THE LOAN DOCUMENTS, WHICH LIENS, SECURITY
INTERESTS, RIGHTS AND REMEDIES ARE HEREBY EXPRESSLY RATIFIED, CONFIRMED,
EXTENDED AND CONTINUED AS SECURITY FOR ALL BANK INDEBTEDNESS.

 

Each Borrower acknowledges and agrees that Bank is relying on the foregoing
agreements, confirmations, representations and warranties of each Borrower and
the other agreements, representations and warranties of each Borrower contained
herein in agreeing to the amendments contained in this Amendment.

 

8.             FEES, COST, EXPENSES AND EXPENDITURES.  IN ADDITION TO THE
AMENDMENT FEE, BORROWERS WILL PAY ALL OF BANK’S REASONABLE EXPENSES IN
CONNECTION WITH THE REVIEW, PREPARATION, NEGOTIATION, DOCUMENTATION AND CLOSING
OF THIS AMENDMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
HEREUNDER, INCLUDING WITHOUT LIMITATION, FEES, DISBURSEMENTS, EXPENSES AND
DISBURSEMENTS OF COUNSEL RETAINED BY BANK AND ALL FEES RELATED TO FILINGS,
RECORDING OF DOCUMENTS, SEARCHES, ENVIRONMENTAL ASSESSMENTS AND APPRAISAL
REPORTS, WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREUNDER ARE CONSUMMATED.

 

9.             NO WAIVER.  NOTHING CONTAINED HEREIN CONSTITUTES AN AGREEMENT OR
OBLIGATION BY BANK TO GRANT ANY FURTHER AMENDMENTS TO THE LOAN AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS.  EXCEPT AS SPECIFICALLY SET FORTH IN SECTION 1
HEREOF, SECTION 1 OF THE FIRST AMENDMENT, SECTION 1 OF THE SECOND AMENDMENT AND
SECTION 1 OF THE THIRD AMENDMENT, NOTHING CONTAINED HEREIN CONSTITUTES A WAIVER
OR RELEASE BY BANK OF ANY EVENT OF DEFAULT OR OF ANY RIGHTS OR REMEDIES
AVAILABLE TO BANK UNDER THE LOAN DOCUMENTS OR AT LAW OR IN EQUITY.

 

10.           INCONSISTENCIES. TO THE EXTENT OF ANY INCONSISTENCIES BETWEEN THE
TERMS AND CONDITIONS OF THIS AMENDMENT AND THE TERMS AND CONDITIONS OF THE LOAN
AGREEMENT OR THE OTHER LOAN DOCUMENTS, THE TERMS AND CONDITIONS OF THIS
AMENDMENT SHALL PREVAIL. ALL TERMS AND CONDITIONS OF THE LOAN AGREEMENT AND
OTHER LOAN DOCUMENTS NOT INCONSISTENT HEREWITH SHALL REMAIN IN FULL FORCE AND
EFFECT AND ARE HEREBY RATIFIED AND CONFIRMED BY BORROWERS.

 

11.           BINDING EFFECT.  THIS AMENDMENT, UPON DUE EXECUTION HEREOF, SHALL
BE BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES HERETO AND THEIR
RESPECTIVE SUCCESSORS AND ASSIGNS.

 

12.           GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO
CONFLICT OF LAW PRINCIPLES.

 

13.           SEVERABILITY.  THE PROVISIONS OF THIS AMENDMENT AND ALL OTHER LOAN
DOCUMENTS ARE DEEMED TO BE SEVERABLE, AND THE INVALIDITY OR UNENFORCEABILITY OF
ANY PROVISION SHALL NOT AFFECT OR IMPAIR THE REMAINING PROVISIONS WHICH SHALL
CONTINUE IN FULL FORCE AND EFFECT.

 

14.           MODIFICATIONS.  NO MODIFICATION OF THIS AMENDMENT OR ANY OF THE
LOAN DOCUMENTS SHALL BE BINDING OR ENFORCEABLE UNLESS IN WRITING AND SIGNED BY
OR ON BEHALF OF THE PARTY AGAINST

 

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WHOM ENFORCEMENT IS SOUGHT.

 

15.           HEADINGS.  THE HEADINGS OF THE ARTICLES, SECTIONS, PARAGRAPHS AND
CLAUSES OF THIS AMENDMENT ARE INSERTED FOR CONVENIENCE ONLY AND SHALL NOT BE
DEEMED TO CONSTITUTE A PART OF THIS AMENDMENT.

 

16.           COUNTERPARTS.  THIS AMENDMENT MAY BE EXECUTED IN MULTIPLE
COUNTERPARTS, EACH OF WHICH SHALL CONSTITUTE AN ORIGINAL AND ALL OF WHICH
TOGETHER SHALL CONSTITUTE THE SAME AGREEMENT.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,
have caused this Amendment to be executed the day and year first above written.

 

 

INFOLOGIX SYSTEMS CORPORATION
(formerly known as InfoLogix Inc.)

 

 

 

 

 

By:

      /s/ John A. Roberts

 

John A. Roberts, Chief Financial Officer

 

 

 

OPT ACQUISITION LLC

 

 

 

 

 

By:

      /s/ John A. Roberts

 

John A. Roberts, Chief Financial Officer

 

EMBEDDED TECHNOLOGIES, LLC

 

By:  INFOLOGIX SYSTEMS
CORPORATION (formerly known as
InfoLogix Inc.), its sole Member

 

 

 

 

 

By:

      /s/ John A. Roberts

 

John A. Roberts, Chief Financial Officer

 

 

 

SOVEREIGN BANK

 

 

 

 

 

By:

          /s/ Steven Fahringer

 

 

Steven Fahringer, Vice President

 

 

The undersigned, intending to be legally bound hereby, consents and agrees to
the foregoing Fifth Amendment and Modification to Loan and Security Agreement
dated of even date herewith (the “Agreement”), and all terms thereof and further
agrees that (a) such Agreement shall in no way affect or impair the
undersigned’s obligations under that certain Surety Agreement from the
undersigned to Bank dated November 29, 2006 (the “Surety”), that certain
Securities Pledge Agreement from the undersigned to Bank dated November 29, 2006
(the “Pledge Agreement”), or under any other documents executed or delivered
pursuant thereto or in connection therewith; (b) the terms of the Surety and
Pledge Agreement are hereby ratified and confirmed, all as of the date hereof.

 

 

INFOLOGIX, INC. (formerly known as
New Age Translation, Inc.)

 

 

 

 

 

By:

      /s/ John A. Roberts

 

John A. Roberts, Chief Financial Officer

 

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