Exhibit 10.6


 


FIFTH
AMENDMENT TO FORBEARANCE AGREEMENT


 


THIS FIFTH AMENDMENT TO FORBEARANCE AGREEMENT (this “Amendment”) is
entered into this 15th day of October, 2009, 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 limited liability company (“DDMS”,
and collectively with Infologix, ISC, Embedded and Opt, “Borrower”).  Capitalized terms used herein without
definition shall have the same meanings given them in the Forbearance Agreement
(as defined below).


 


RECITALS


 


A.            Borrower and Lender have entered into that
certain Loan and Security Agreement dated as of May 1, 2008, as amended by
the Amendment No. 1 to the Loan and Security Agreement dated as of November 19,
2008 and theAmendment No. 2 to the Loan and Security Agreement dated as of
May 31, 2009 (as may be further amended, restated, or otherwise modified,
the “Loan Agreement”),
pursuant to which Lender has agreed to extend and make available to Borrower
certain advances of money.


 


B.            Borrower and Lender have entered into that
certain Forbearance Agreement dated as of July 31, 2009, as amended by the
Amendment to Forbearance Agreement, dated as of August 14, 2009, the
Second Amendment to Forbearance Agreement dated as of August 20, 2009, the
Third Amendment to Forbearance Agreement dated as of September 23, 2009,
and the Fourth Amendment to Forbearance Agreement dated as of September 30,
2009 (as so amended, the “Forbearance Agreement”),
pursuant to which Lender agreed 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 the Forbearance Agreement.


 


C.            Borrower and Lender have agreed to amend the
Forbearance Agreement upon the terms and conditions more fully set forth
herein.


 


AGREEMENT


 


NOW,
THEREFORE, in consideration of the foregoing Recitals and intending to be
legally bound, the parties hereto agree as follows:


 


1.             AMENDMENTS.


 


Section 1.1            Amendments
to Recitals.  Recital D of
the Forbearance Agreement is deleted in its entirety and replaced with the
following new Recital 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.  Pursuant to Section 7.20(c) of
the Loan Agreement, Borrower shall maintain at all times unrestricted Cash on
hand of not less than $2,500,000 (as reduced during the Forbearance Period
pursuant to the Forbearance Agreement to $1,500,000).  


 

















 


The
Borrower has failed to maintain at all times unrestricted Cash on hand of not
less than $1,500,000 during the period of July 31, 2009 through October 9,
2009 and, as a result an Event of Default has occurred and is continuing under Section 9.2
of the Loan Agreement.  The foregoing
Events of Default are hereinafter referred to, collectively, as the “Specified Covenant Default”.  Pursuant to Section 7.23 of the Loan
Agreement, Borrower was required to pay Lender the remaining balance of the
Restructuring Fee in the amount of $160,000 on the earliest of (i) September 30,
2009, (ii) the acceleration of the Secured Obligations and (iii) payment
in full of the Secured Obligations. 
Borrower has failed to make the required payment of $160,000 by such
date and, as a result, an Event of Default has occurred and is continuing under
Section 9.1 of the Loan Agreement (the “Specified
Payment Default” and, collectively with the Specified Covenant
Default, the “Specified Default”).


 


Section 1.2 —
Amendment to Forbearance.  Section 1
of the Forbearance Agreement is deleted in its entirety and replaced with the
following:


 


“1.           Forbearance.  Absent the occurrence of any failure by
Borrower to perform its obligations set forth in the 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) November 12,
2009 and (ii) the occurrence of a Forbearance Termination Event (as
defined below) (such period, the “Forbearance Period”).”


 


Section 1.3 —
Amendment to Forbearance Termination Events.  Section 2 of the
Forbearance Agreement is hereby amended by amending and restating in its
entirety clause (v) of such Section 2 as follows:


 


(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 Borrowers maintain unrestricted Cash at all times
during the Forbearance Period of not less than $750,000 and (b) Borrower’s
entry into this Agreement and Borrower’s taking the actions contemplated in
this Agreement (including, without limitation, the actions set forth on
Schedule A hereto) shall not constitute an Event of Default under the Loan
Documents.


 


2.             BORROWER’S
REPRESENTATIONS AND WARRANTIES.  Each Borrower represents and warrants that:


 


(a)           Borrower has the corporate or limited
liability company power and authority to execute and deliver this Amendment and
to perform its obligations under the Loan Documents and the Agreement, as
amended by this Amendment;


 


(b)           the execution and delivery by Borrower of
this Amendment and the performance by Borrower of its obligations under the
Loan Documents and the 


 


2

















 


Agreement, as amended, have
been duly authorized by all necessary corporate and limited liability company
action on the part of Borrower;


 


(c)           this Amendment has been duly executed and
delivered by Borrower and the Agreement, as amended by this Amendment is the
binding obligation of Borrower, enforceable against it in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium or other similar laws of general
application and equitable principles relating to or affecting creditors’
rights; and


 


Borrower understands and
acknowledges that Lender is entering into this Amendment in reliance upon, and
in partial consideration for, the above representations and warranties, and
agrees that such reliance is reasonable and appropriate.


 


3.             LIMITATION.  The amendments and forbearances set forth in
this Amendment and the Agreement, as amended hereby, shall be limited precisely
as written and shall not be deemed (a) to be a waiver or modification of
any other term or condition of the Loan Agreement or of any other instrument or
agreement referred to therein or to prejudice any right or remedy which Lender
may now have or may have in the future under or in connection with the Loan
Agreement or any instrument or agreement referred to therein; or (b) to be
a consent to any future amendment or modification or waiver to any instrument
or agreement the execution and delivery of which is consented to hereby, or to
any waiver of any of the provisions thereof. 
Except as expressly amended hereby, the Loan Agreement and the other
Loan Documents shall continue in full force and effect.


 


4.             EFFECTIVENESS.  This Amendment shall become effective upon
the satisfaction of all the following conditions precedent:


 


4.1          Amendment.  Borrower and Lender shall have duly executed
and delivered this Amendment to Lender.


 


4.2.          Fee Letter.  Borrower shall deliver to Lender a duly
executed fee letter relating to the proposed restructuring described in the
Summary of Revised Indicative Terms and Conditions for the InfoLogix
Restructuring Proposal, dated October 14, 2009, such fee letter to be in
form, scope and substance satisfactory to Lender.


 


5.             REAFFIRMATION
OF 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 and the other Loan Documents, 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 


 


3

















 


and benefits which Releasors
now have, or in the future 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.             COUNTERPARTS.  This Amendment may be signed in any number of
counterparts, and by different parties hereto in separate counterparts, with
the same effect as if the signatures to each such counterpart were upon a
single instrument.  All counterparts
shall be deemed an original of this Amendment.


 


7.             INTEGRATION.  This Amendment and any documents executed in
connection herewith or pursuant hereto contain the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
agreements, understandings, offers and negotiations, oral or written, with
respect thereto and no extrinsic evidence whatsoever may be introduced in any
judicial or arbitration proceeding, if any, involving this Amendment; except
that any financing statements or other agreements or instruments filed by
Lender with respect to Borrower shall remain in full force and effect.


 


8.             GOVERNING
LAW; VENUE.  THIS
AMENDMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.  Borrower and Lender each submit to the
exclusive jurisdiction of the State and Federal courts in Santa Clara County,
California.


 


[signature
page follows]


 


4

















 


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


 


	
  BORROWER:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  INFOLOGIX, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John A. Roberts

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: Jay Roberts

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title: Chief Financial Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  INFOLOGIX SYSTEMS CORPORATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ John A. Roberts

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: Jay Roberts

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title: Chief Financial
  Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  OPT ACQUISITION, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ John A. Roberts

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: Jay Roberts

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title: Chief Financial Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EMBEDDED TECHNOLOGIES, LLC

  	
   

  	
   

  
	
  By: INFOLOGIX, INC. its
  sole member

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ John A. Roberts

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: Jay Roberts

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title: Chief Financial
  Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  INFOLOGIX — DDMS, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ John A. Roberts

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: Jay Roberts

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title: Chief Financial Officer

  	
   

  	
   

  



 

















 


	
  LENDER:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ K. Nicholas Matitsch

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: K. Nicholas
  Martitsch

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:
  Associate General Counsel