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.


 

















 


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 


 






(1) First
Business Day of the month.


 

















 


$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 


 






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


 

















 


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 


 

















 


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.


 

















 


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

  
				



 

















 


Schedule A to Forbearance
Agreement


 


Schedule Omitted for Filing