Exhibit 10.1


 


FIRST
AMENDMENT TO LOAN AND SECURITY AGREEMENT


 


FIRST AMENDMENT TO LOAN AND
SECURITY AGREEMENT dated as of November 19, 2008 (this “Amendment”),
among InfoLogix, Inc., a Delaware corporation (“Parent Borrower”),
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 corporation (“DDMS”) (Parent
Borrower, ISC, Embedded, Opt and DDMS are each referred to herein as a “Borrower”
and collectively as the “Borrowers”) and Hercules Technology Growth Capital, Inc.,
a Maryland corporation (“Lender”). 
Reference is made to that certain Loan and Security Agreement dated as
of May 1, 2008 by and among the Borrowers and the Lender (as amended and
in effect from time to time, the “Loan Agreement”).  Capitalized terms used herein and which are
not otherwise defined herein have the same meanings herein as specified in the
Loan Agreement.


 


RECITALS


 


WHEREAS, the
Borrowers and the Lender desire to amend the Loan Agreement as provided herein;


 


NOW, THEREFORE,
in consideration of the mutual agreements contained herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:


 


AGREEMENTS


 


§1.                               Amendments
to Loan Agreement.  The Loan
Agreement is hereby amended in the following respects:


 


(a)                                  Section 1.1
of the Loan Agreement is hereby amended by deleting the definition of “Consolidated
Total Leverage Ratio” in its entirety.


 


(b)                                 Section 1.1
of the Loan Agreement is hereby amended by adding the following definitions in
the appropriate alphabetical order:


 


“Amendment Effective Date” means November 19, 2008.”


 


“Cash Equivalents” means those items and accounts described in clause (ii) of
the definition of Permitted Investments.


 


“Fundamental Event Agreement” has the meaning given to it in the
definition of “Revolving Interest Rate”.


 


(c)                                  All
references to “cash equivalents” in each of the definitions of Cash, Permitted
Indebtedness and Permitted Liens, shall be deleted and replaced with the
defined term “Cash Equivalents”.


 

















 


(d)                                 The
definition of “Permitted Acquisition” in Section 1.1 of the Loan Agreement
is hereby amending by inserting “of clause (i) and (ii)” immediately
following “in each case” within the second parenthetical of the first paragraph
of such definition.


 


(e)                                  Section 1.1
of the Loan Agreement is hereby amended by amending and restating the following
definitions in their entirety as follows:


 


“Average Total Enterprise Value Differential” shall mean the amount, if
any, by which (i) the average of the Parent Borrower’s market capitalization
for the 30-day period preceding any payments described in Section 2.7(b) exceeds
(ii) $50,000,000.  In the event such
market capitalization does not exceed $50,000,000, then the Average Total
Enterprise Value Differential shall be deemed to be zero (0).


 


“Consolidated Adjusted EBITDA” means, at any date of determination, an
amount equal to consolidated net income of Parent Borrower and its Subsidiaries
on a consolidated basis for the most recently completed applicable Measurement
Period, plus (a) the following to the extent deducted in calculating
such consolidated net income:  (i) Consolidated
Interest Expenses paid or accrued in such applicable Measurement Period, (ii) the
provision for Federal, state, local and foreign income taxes payable, (iii) depreciation
and amortization expense, (iv) other non-recurring expenses reducing such
consolidated net income which do not represent a cash item in such period or
any future period, in each case of or by Parent Borrower and its Subsidiaries
for such applicable Measurement Period, (v) non-cash charges for stock
based compensation, (vi) non-recurring cash fees, costs, charges and
expenses paid during such period incurred in connection with a Permitted
Acquisition or the transactions contemplated by this Agreement, (vii) non-recurring
non-cash write-offs or write-downs of demo Equipment not to exceed $750,000 in
the aggregate (in each case of or by the Parent Borrower and its Subsidiaries
for such applicable Measurement Period), (viii) cash severance expenses in
such amounts as are consistent with Parent Borrower’s severance plan as
approved by Parent Borrower’s board of directors and otherwise mutually agreed
upon by Parent Borrower and Lender, in the Lender’s reasonable discretion, (ix) cash
expenses described on Schedule 1.1 hereto for the fiscal quarter ending December 31,
2008, (x) fees, legal fees and expenses incurred and paid in connection
with the preparation and negotiation of the Amendment, but only to the extent
not paid or financed from proceeds of the Loans, (xi) fees and expenses of
professional advisers relating to structuring, negotiating and documenting a
proposed Fundamental Event Agreement and the transactions contemplated thereby,
and minus (b) the following, to the extent included in calculating
such consolidated net income:  (i) Federal,
state, local and foreign income tax credits and (ii) all non-cash items
increasing consolidated net income (in each case of or by Parent Borrower and
its Subsidiaries for such applicable Measurement Period).  For purposes of this calculation and without
duplication, with respect to any period of determination, the consolidated
adjusted EBITDA of a wholly-owned acquired Subsidiary acquired as a result of a
Permitted Acquisition, which shall be calculated in a manner consistent with
the methodology set forth for Consolidated Adjusted EBITDA herein, may be
included in the calculation of Consolidated Adjusted EBITDA as though such
Permitted Acquisition was consummated on the first day of the applicable
Measurement Period (the “Acquired Entity EBITDA”).  The Acquired Entity EBITDA shall be
calculated by reference to the 


 

















 


audited financial results of the acquired entity, if available for such
applicable Measurement Period, or if such audited financial results are not
available for such Measurement Period, any unaudited financial results or
management-prepared results as are approved by Lender in respect of such
acquired entity.  Further for the
purposes of this calculation and without duplication, with respect to any Measurement
Period during which the fee contemplated by Section 2.7(b) is paid to
Lender, in respect of such payment, the Consolidated Adjusted EBITDA for such
period(s) shall be reduced by the amount by which such payment exceeds the
aggregate of all accruals for non-cash items that reduced Consolidated Adjusted
EBITDA in prior Measurement Periods.


 


“Consolidated Total Leverage Ratio” means, as of the date of
determination, the ratio of (a) Consolidated Funded Indebtedness as of
such date to (b) Consolidated EBITDA on a consolidated basis for the most
recently completed Twelve Month Measurement Period.


 


“Maximum Revolving Loan Amount” means Nine Million and no/100 Dollars
($9,000,000.00).


 


“Maximum Term Loan Amount” means Twelve Million and No/100 Dollars
($12,000,000.00).


 


“Refinancing Event” means the closing of a loan with a lender other
than the Lender, the proceeds of which are applied to payoff the Secured
Obligations in full.


 


“Revolving Interest Rate” means


 


(a) for the period commencing on the Amendment
Effective Date to and including February 14, 2009, the greater of (i) eleven
and one-quarter percent (11.25%), and (ii) the prime rate as reported in
The Wall Street Journal plus 6.75%;


 


(b) for the period commencing on February 15,
2009 to and including May 15, 2009, the greater of (i) twelve and
one-quarter percent (12.25%), and (ii) the prime rate as reported in The
Wall Street Journal plus 7.75%, and


 


(c) for the period commencing on May 16,
2009 and at all times thereafter, the greater of (i) thirteen and
one-quarter percent (13.25%), and (ii) the prime rate as reported in The
Wall Street Journal plus 8.75%;


 


provided, however, that the
rate increases set forth in clauses (b) and (c) of this definition
will not be implemented in the event that Parent Borrower enters into a
binding, definitive agreement prior to February 15, 2009 for (i) the
sale, transfer or conveyance or other disposition of all or substantially all
of the assets of the Parent Borrower or its direct and indirect Subsidiaries, (ii) the
sale of all or substantially all of the Capital Stock of the Parent Borrower or
its direct or indirect Subsidiaries, (iii) a cash infusion in an amount of
at least $5,000,000, or (iv) the incurrence of Subordinated Indebtedness
in an amount of at least $5,000,000, each on terms and in form and substance
satisfactory to Lender in its discretion (a “Fundamental Event Agreement”); and
further provided, that the rate increase set forth in clause (c) of this
definition will not be implemented in the event that Parent Borrower enters
into a Fundamental Event Agreement during the period commencing February 15,
2009 and ending May 15, 2009.  If
any such Fundamental Event Agreement described herein is not consummated prior
to the earlier of (x) May 16, 2009, or (y) the occurrence of an
Event of Default, then such rate increases will be implemented retrospectively
(and in the case of an Event of Default of the type described 


 

















 


in Section 9.6, such rate increases shall automatically be
implemented retrospectively) as if such Fundamental Event Agreement was never
executed, and shall be in effect thereafter.


 


“Secured Obligations” means each Borrower’s obligations under this
Agreement and any Loan Document, including any obligation, of any kind or
nature, to pay any amount now owing or later arising to the Lender (whether or
not such performance is then required or contingent, or such amounts are
liquidated or determinable), whether or not evidenced by any note, agreement or
other instrument.  This term includes all
principal, interest (including all interest that accrues after the commencement
of any case or proceeding by or against any Borrower, in bankruptcy, whether or
not allowed in such case or proceeding), fees, attorneys’ fees and any other
sum chargeable to any Borrower under this Agreement or any of the other Loan
Documents.


 


“Term Loan Interest Rate” means


 


(a) for the period commencing on the Amendment
Effective Date to and including February 14, 2009, the sum of (i) the
greater of thirteen and one-quarter percent (13.25%), and the prime rate as reported
in The Wall Street Journal plus 8.75%; plus (ii) 1.75% per annum, with
respect to this clause (ii), payable in kind on the first business day of each
month, commencing December 1, 2008, by capitalizing the amount of such
interest accrued prior to such monthly payment date, and adding such amount to
the principal amount of the Term Loan;


 


(b) for the period commencing on February 15,
2009 to and including May 15, 2009, the sum of (i) the greater of
fourteen and one-quarter percent (14.25%), and the prime rate as reported in
The Wall Street Journal plus 9.75%, plus (ii) 1.75% per annum, with
respect to this clause (ii), payable in kind on the first business day of each
month by capitalizing the amount of such interest accrued prior to such monthly
payment date, and adding such amount to the principal amount of the Term Loan;
and


 


(c) for the period commencing on May 16,
2009 and at all times thereafter, the sum of (i) greater of fifteen and
one-quarter percent (15.25%), and the prime rate as reported in The Wall Street
Journal plus 10.75%; plus (ii) 1.75% per annum, with respect to this
clause (ii), payable in kind on the first business day of each month by
capitalizing the amount of such interest accrued prior to such monthly payment
date, and adding such amount to the principal amount of the Term Loan;


 


provided, however, that the
rate increases set forth in clauses (b) and (c) of this definition
will not be implemented in the event that Parent Borrower enters into a
Fundamental Event Agreement prior to February 15, 2009; and further
provided, that the rate increase set forth in clause (c) of this
definition will not be implemented in the event that Parent Borrower enters
into a Fundamental Event Agreement during the period commencing February 15,
2009 and ending May 15, 2009.  If
any such Fundamental Event Agreement described herein is not consummated prior
to the earlier of (x) May 16, 2009, or (y) the occurrence of an
Event of Default, then such rate increases will be implemented retrospectively
(and in the case of an Event of Default of the type described in Section 9.6,
such rate increases shall automatically be implemented retrospectively) as if
such Fundamental Event Agreement was never executed, and shall be in effect
thereafter.


 

















 


(f)                                    Section 2.1(b) of
the Loan Agreement is hereby amended and restated as follows:


 


“(b)                           Advance
Request.  To obtain a Revolving Loan
Advance, Parent Borrower, on its own behalf and on behalf of each Borrower,
shall complete, sign and deliver an Advance Request and Borrowing Base
Certificate (with such Borrowing Base Certificate reflecting any adjustments in
eligibility criteria requested by Lender whether or not any notice period in
respect of such adjustment shall have then elapsed), provided, however that if
Borrowers have submitted a Borrowing Base Certificate dated as of a date not
more than 3 Business Days prior to the submission of the Advance Request, then
the Parent Borrower shall not be required to submit a new Borrowing Base
Certificate in connection with such Advance Request unless adjustments are
required pursuant to the parenthetical in the foregoing clause.  Lender shall fund the Revolving Advance in
the manner requested by the Advance Request, provided
that each of the conditions precedent to such Revolving Advance is satisfied as
of the requested Advance Date.”


 


(g)                                 Section 2.2(a) of
the Loan Agreement is hereby amended and restated as follows:


 


“(b)                           Advances.  Subject to the terms and conditions of this
Agreement, Lender will make, and Borrowers agree to draw, on a joint and
several basis, a Term Loan Advance of $9,000,000.00 on the Closing Date.  Beginning on the Closing Date, and continuing
until January 1, 2009, Borrowers may request additional Term Loan Advances
in an aggregate amount up to $3,000,000.00 in minimum increments of
$100,000.00, provided, however, that the making of such additional Term Loan
Advance(s) shall be subject to Borrowers delivering a Compliance
Certificate demonstrating Borrowers’ pro forma compliance with the financial
covenants set forth in Section 7.20 after giving effect to the making of
such proposed additional Term Loan Advance. 
The aggregate outstanding Term Loan Advances may be up to the Maximum
Term Loan Amount.”


 


(h)                                 Section 2.6
of the Loan Agreement is hereby amended by adding the words “or acceleration”
immediately after the word “prepayment “ in the first line thereof.


 


(i)                                     Section 2.7(b) of
the Loan Agreement is hereby amended and restated as follows:


 


“Upon the earliest to occur of (i) demand from the Lender at any time
between June 30, 2009 and April 30, 2012, (ii) the acceleration
of the Secured Obligations, (iii) the Term Loan Maturity Date, and (iv) a
prepayment in full of Secured Obligations, Borrowers shall pay to Lender an
amount equal to the greater, as of such date of determination, of (x) $900,000,
and (y) an amount equal to three percent (3.0%) of the Average Total
Enterprise Value Differential of Parent Borrower.  Notwithstanding anything herein to the
contrary, with respect to any demand for such payment pursuant to clause (i) of
this Section 2.7(b), so long as no other Event of Default has occurred and
is continuing, the failure of Borrowers to pay the fee required by clause (i) of
this Section 2.7(b) upon demand thereunder, shall not be deemed an
Event of Default under this Agreement, if and only if, the payment of such fees
at the time of demand could reasonably be expected to result in the occurrence
of an event that, with the passage of time or giving of notice, or both, would
constitute an Event of Default under Section 7.20 (a “Liquidity Event”); provided,
however, that the Borrowers shall pay such fee immediately after the
passage of such Liquidity Event and that the foregoing grace period shall in no
way be deemed a 


 

















 


waiver of the payment of such fee, and in any event such required
payments under this Section 2.7 shall continue to be deemed a component of
Secured Obligations hereunder.”


 


(j)                                     Section 7.1
of the Loan Agreement is hereby amended by deleting the heading and lead
sentence thereof and replacing it with the following:


 


“Financial Reports and Compliance Certificate. Borrowers shall
furnish to Lender the financial reports listed hereinafter (the “Financial
Statements”), with delivery of the Financial Statements described in
subsections (a), (b) and (c), in each case to be accompanied by the
Compliance Certificate in the form attached as Exhibit F:”


 


(k)                                  Section 7.19
of the Loan Agreement is hereby amended and restated as follows:


 


“7.19  Notice of Defaults.  The Borrowers shall notify Lender promptly
upon the occurrence of an Event of Default, or upon the occurrence of any event
that, with the passage of time or the giving of notice, or both, would
constitute an Event of Default.”


 


(l)                                     Section 7.20
of the Loan Agreement is hereby amended and restated as follows:


 


“7.20 Financial Covenants.


 


(a)                                  Consolidated
Adjusted EBITDA.


 


(i)                                     The
Borrowers shall not permit the Consolidated Adjusted EBITDA for any Three Month
Measurement Period ending during any fiscal month, commencing with the month
ending October 31, 2008 and ending with the month ending December 31,
2010, to be less than the amount set forth below opposite such Three Month
Measurement Period ending date:


 


	
  Measurement Period Ending

  	
   

  	
  Consolidated

  Adjusted EBITDA

  	
   

  
	
  October 31, 2008

  	
   

  	
  $

  	
  (600,000

  	
  )

  
	
  November 30, 2008

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  January 31, 2009

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  February 28, 2009

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  March 31, 2009

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  April 30, 2009

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  May 31, 2009

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  July 31, 2009

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  August 31, 2009

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  September 30, 2009

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  October 31, 2009

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
  November 30, 2009

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
  For each Three Month Measurement Period ending
  during any fiscal month commencing with the month ending on December 31,
  2009 to and including the month ending April 30, 2012

  	
   

  	
  $

  	
  3,000,000

  	
   

  



 

















 


(b)                                 Consolidated
Total Adjusted Leverage Ratio.


 


(i)                                     The
Borrowers shall not permit the Consolidated Total Adjusted Leverage Ratio for
any Twelve Month Measurement Period ending during any fiscal month commencing
with the month ending December 31, 2009, to be greater than the amount set
forth below opposite such Measurement Period ending date:


 


	
  Measurement Period Ending

  	
   

  	
  Consolidated Total

  Adjusted Leverage

  Ratio

  	
   

  
	
  December 31, 2009

  	
   

  	
  3.0 to 1

  	
   

  
	
  January 30, 2010

  	
   

  	
  3.0 to 1

  	
   

  
	
  February 28, 2010

  	
   

  	
  3.0 to 1

  	
   

  
	
  March 31, 2010

  	
   

  	
  2.75 to 1

  	
   

  
	
  April 30, 2010

  	
   

  	
  2.75 to 1

  	
   

  
	
  May 31, 2010

  	
   

  	
  2.75 to 1

  	
   

  
	
  June 30, 2010

  	
   

  	
  2.5 to 1

  	
   

  
	
  July 31, 2010

  	
   

  	
  2.5 to 1

  	
   

  
	
  August 31, 2010

  	
   

  	
  2.5 to 1

  	
   

  
	
  September 30, 2010

  	
   

  	
  2.25 to 1

  	
   

  
	
  October 31, 2010

  	
   

  	
  2.25 to 1

  	
   

  
	
  November 30, 2010

  	
   

  	
  2.25 to 1

  	
   

  
	
  For each Twelve Month Measurement Period ending on
  during any fiscal month commencing with the month ending December 31,
  2010, to and including the month ending April 30, 2012

  	
   

  	
  2.0 to 1

  	
   

  



 


(c)                                  Minimum
Cash On Hand.  The Borrowers shall
not permit at any time its unrestricted Cash on hand to be less than
$2,500,000.


 


(m)                               Section 7.22(a) is
hereby amended and restated in its entirety as follows:


 


“(a)  Intellectual Property.  On or before the thirtieth (30th) day after
the Amendment Effective Date, Borrowers shall take all actions reasonably
necessary to provide Lender with a first priority security interest in the
Intellectual Property, free and clear of all liens 


 

















 


and defects, and Borrowers shall provide to Lender a lien report
obtained by Borrowers and Borrowers’ expense, of the Intellectual Property
registered at the United States Patent and Trademark Office, United States
Copyright Office and Library of Congress, as applicable, which lien report
shall reflect the Lender’s first priority security interest in such Collateral,
free and clear of all liens and defects.”


 


(n)                                 Section 7.22(d) of
the Loan Agreement is hereby amended and restated in its entirety as follows:


 


“(d)  Securities Account Control Agreements.  On or before the thirtieth (30th) day after
the Amendment Effective Date, Borrowers shall deliver to Lender Account Control
Agreements with respect to each account holding Investment Property, in form and
substance reasonably satisfactory to the Lender.”


 


(o)                                 Section 7.22
of the Loan Agreement is hereby amended by adding the following subsection (h) immediately
following subsection (g) therein:


 


“(h) Commercial Finance Examination.  On or before December 30, 2008, Lender
shall have performed a completed commercial finance exam, the results of which
shall be satisfactory to the Lender in its sole discretion.  The performance of such an examination shall
not be counted as the collateral audit permitted for this calendar year
pursuant to Section 7.3(b).


 


(p)                                 Section 9.2
of the Loan Agreement is hereby amended and restated in its entirety as
follows:


 


“9.2  Covenants.  Any Borrower breaches or defaults in the
performance of any covenant or Secured Obligation under this Agreement, the
Notes, or any of the other Loan Documents, and (a) with respect to a
default under any covenant under this Agreement (other than under Sections 6,
7.5, 7.6, 7.7, 7.8, 7.9, 7.20, 7.21 or 7.22) such default continues for more
than fifteen (15) days after the earlier of the date on which (i) Lender
has given notice of such default to Parent Borrower and (ii) Parent
Borrower has actual knowledge of such default or (b) with respect to a
default under any of Sections 6, 7.5, 7.6, 7.7, 7.8, 7.9, 7.20, 7.21 or 7.22,
the occurrence of such default; or”


 


(q)                                 Exhibit B-2
of the Loan Agreement is hereby amended and restated in its entirety in the
form attached hereto as Exhibit B-2.


 


§2.                               Ratification
of Loan Documents, Etc.  Each
Borrower hereby adopts again, ratifies and confirms in all respects, as its own
act and deed: (i) each of the Loan Agreement and the other Loan Documents
to which such Borrower is a party; (ii) the grant of a security interest
under the Loan Agreement and the other Loan Document in the Collateral,
together with any and all UCC financing statements, United States Patent and
Trademark Office recordings, United States Copyright Office recordings, and
other instruments or documents previously executed in connection therewith to
create, evidence, perfect or preserve the priority of such security interest in
favor of the Lender; (iii) each of the other instruments or documents
delivered in connection with the Loan Agreement or any of the Loan Documents
and purported to be executed by it and acknowledges that all of the foregoing
Loan Documents and other instruments, documents, filings and recordings shall
continue in full force and effect.  Each
pledgor under a Pledge 


 

















 


Agreement hereby adopts
again, ratifies and confirms in all respects, as its own act and deed, each
pledge granted by such pledgor thereunder. 
By its signature below, each Borrower hereby consents to this Amendment,
and after taking into account this Amendment, acknowledges that this Amendment
shall not alter, release, discharge or otherwise affect any of its obligations
under any Loan Document under which such Borrower acts as a secondary obligor,
if any.


 


§3.                               Representations
and Warranties.  Each Borrower hereby represents and warrants
to the Lender as follows:


 


(a)                                  Each
of the representations and warranties of such Borrower contained in the Loan
Agreement as modified hereby or in any document or instrument delivered
pursuant to or in connection with the Loan Agreement as modified hereby are
true as of the date hereof and, after taking into account this Amendment, no
Event of Default has occurred and is continuing, and no event has occurred and
is continuing that, with the passage of time or giving of notice, or both,
would constitute an Event of Default; and


 


(b)                                 The
execution, delivery and performance of this Amendment and the transactions
contemplated hereby (i) are within the corporate or company authority of
each Borrower, as applicable, (ii) have been duly authorized by all
necessary corporate and company proceedings, as applicable, (iii) do not
conflict with or result in any material breach or contravention of any
provision of law, statute, rule or regulation to which any Borrower is
subject or any judgment, order, writ, injunction, license or permit applicable
to any Borrower so as to materially adversely affect the assets, business or
any activity of the Borrowers, and (iv) do not conflict with any provision
of the corporate charter, bylaws, certificate of organization or operating
agreement of any Borrower or any agreement or other instrument binding upon
them.  The execution, delivery and
performance of this Amendment will result in valid and legally binding
obligations of each Borrower enforceable against each in accordance with the
respective terms and provisions hereof.


 


§4.                               Conditions
to Effectiveness.  This Amendment
shall become effective upon the receipt by the Lender of each of the following:


 


(a)                                  executed
originals of this Amendment, the Revolving Note, as amended hereby, in the form
attached hereto as Exhibit B-2, and all other documents and instruments
reasonably required by Lender to effectuate the transactions contemplated
hereby, in all cases in form and substance reasonably acceptable to Lender;


 


(b)                                 payment
of an Amendment Fee in an amount equal to $315,000.00;


 


(c)                                  certified
copy of resolutions of each Borrower’s board of directors or members or
managers as applicable evidencing approval of the Amendment and other
transactions evidenced by the Loan Documents, as amended;


 


(d)                                 results
of UCC and, except as set forth in Section 7.22(i), intellectual property
searches and with respect to the Collateral indicating no Liens other than
Permitted Liens and otherwise in form and substance satisfactory to the Lender;


 


(e)                                  such
other documents as Lender may reasonably request.


 

















 


§5.                               Effect
of Amendment.  Except as
expressly set forth herein, this Amendment does not constitute an amendment or
waiver of any term or condition of the Loan Agreement or any other Loan
Document, and all such terms and conditions shall remain in full force and
effect and are hereby ratified and confirmed in all respects.  Nothing contained in this Amendment shall be
construed to imply a willingness on the part of the Lender to grant any similar
or other future waivers or amendments of any of the terms and conditions of the
Loan Agreement or the other Loan Documents. 
Nothing contained herein shall in any way prejudice, impair or otherwise
adversely affect any rights or remedies of the Lender under the Loan Agreement,
as amended, or any other Loan Document. 
This Amendment shall constitute a Loan Document.


 


§6.                               Waiver
of Existing Event of Default.  Subject to the terms and conditions set forth
herein and in reliance upon the representations and warranties of the Borrowers
in the Loan Agreement and in this Amendment, the Lender hereby waive the Event
of Default resulting from Borrowers’ violation of the financial covenant
contained in Section 7.20(a)(i) of the Loan Agreement for the Twelve
Month Measurement Period ending September 30, 2008 (the “Specified Event
of Default”).  The waiver shall not
extend to or affect any other obligations of the Borrowers contained in the
Loan Agreement or any other Loan Documents and shall not impair or prejudice
any rights consequent thereon.  Except to
the extent of the aforementioned waiver, the Lender hereby expressly reserves
all of its rights and remedies under the Loan Agreement, as amended hereby, the
other related Loan Documents and applicable law in respect of any and all
Events of Default, or events that, with the passage of time or giving of
notice, or both, would constitute Events of Default, under the Loan Agreement
and the related Loan Documents now existing or hereafter arising.  Failure of the Lender to exercise any right
or remedy shall not constitute a waiver of that or any other right or remedy.


 


§7.                               Governing
Law.  This Amendment shall be
governed by and construed in accordance with the laws of the State of
California.


 


§8.                               Counterparts.  This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.  Delivery of an executed counterpart of a
signature page of this Amendment by telecopy shall be effective as delivery
of a manually executed counterpart of this Amendment.


 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]


 
















 


IN WITNESS WHEREOF, Borrowers and Lender have duly executed and
delivered this First Amendment to Loan and Security Agreement as of the day and
year first above written.


 


	
   

  	
  BORROWERS:

  
	
   

  	
   

  	
   

  
	
   

  	
  INFOLOGIX, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ John A
  Roberts

  
	
   

  	
   

  	
  John A. Roberts, Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INFOLOGIX
  SYSTEMS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  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: INFO LOGIX
  INC., its sole Member

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John A
  Roberts

  
	
   

  	
   

  	
  John A. Roberts,
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INFOLOGIX –
  DDMS, INC.

  
	
   

  	
  By:

  	
  /s/ John A
  Roberts

  
	
   

  	
   

  	
  John A. Roberts,
  Chief Financial Officer

  



 

















 


	
   

  	
  Accepted in Palo Alto, California:

  
	
   

  	
  LENDER:

  
	
   

  	
   

  	
   

  
	
   

  	
  HERCULES TECHNOLOGY
  GROWTH

  CAPITAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature:

  	
  /s/ K. Nicholas
  Martitsch

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name:

  	
  K. Nicholas Martitsch

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Associate General
  Counsel

  
				



 

















 


EXHIBIT
B-2


 


SECURED
REVOLVING PROMISSORY NOTE


 


	
  $9,000,000

  	
   

  	
  Maturity Date:
  November 19, 2009

  



 


FOR VALUE RECEIVED, each of InfoLogix, Inc., a Delaware
corporation, InfoLogix System Corporation, a Delaware Corporation, Embedded
Technologies, LLC a Delaware Limited Liability Company, Opt Acquisition LLC a
Pennsylvania Limited Liability Company, and InfoLogix-DDMS, Inc, a Delaware
Corporation, jointly and severally (each a “Borrower” and collectively, the “Borrowers”)
hereby promises to pay to the order of Hercules Technology Growth Capital, Inc.,
a Maryland corporation or the holder of this Note (the “Lender”) at 400
Hamilton Avenue, Suite 310, Palo Alto, CA 94301 or such other place of
payment as the holder of this Secured Revolving Promissory Note (this “Promissory
Note”) may specify from time to time in writing, in lawful money of the United
States of America, the principal amount of Nine Million and No/100 Dollars
($9,000,000) or such other principal amount as Lender has advanced to
Borrowers, together with interest thereon, all as provided in the Loan
Agreement referred to below.


 


This Promissory Note is a Revolving Note referred to in, and is
executed and delivered in connection with, that certain Loan and Security
Agreement, by and among Borrowers and Lender, dated May 1, 2008, as
amended by First Amendment to Loan and Security Agreement dated November 19,
2008 (as the same may from time to time be amended, modified or supplemented in
accordance with its terms, the “Loan Agreement”), and is entitled to the
benefit and security of the Loan Agreement and the other Loan Documents (as
defined in the Loan Agreement), to which reference is made for a statement of
all of the terms and conditions thereof. 
All payments shall be made in accordance with the Loan Agreement.  All terms defined in the Loan Agreement shall
have the same definitions when used herein, unless otherwise defined
herein.  An Event of Default under the
Loan Agreement shall constitute a default under this Promissory Note.


 


Each Borrower waives presentment and demand for payment, notice of
dishonor, protest and notice of protest under the UCC or any applicable
law.  Each Borrower agrees to make all
payments under this Promissory Note without setoff, recoupment or deduction and
regardless of any counterclaim or defense. 
This Promissory Note has been negotiated and delivered to Lender and is
payable in the State of California.  This
Promissory Note shall be governed by and construed and enforced in accordance
with, the laws of the State of California, excluding any conflicts of law rules or
principles that would cause the application of the laws of any other
jurisdiction.


 


	
   

  	
  INFOLOGIX, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John A
  Roberts

  
	
   

  	
   

  	
  John A. Roberts, Chief Financial Officer

  



 

















 


	
   

  	
  INFOLOGIX
  SYSTEMS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  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: INFO LOGIX
  INC., its sole Member

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ John A
  Roberts

  
	
   

  	
   

  	
  John A. Roberts, Chief Financial Officer

  
	
   

  	
  INFOLOGIX –
  DDMS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John A
  Roberts

  
	
   

  	
   

  	
  John A. Roberts,
  Chief Financial Officer

  



 


2

















 


Schedule 1.1


 


Expenses Added
Back to Definition of Consolidated Adjusted EBITDA


 


Discontinued S-1
(secondary offering) in an aggregate amount not to exceed $200,000 Pre-paid
fees associated with acquisitions in an aggregate amount not to exceed $170,578
Severance expenses incurred prior to the Amendment Effective Date in the approximate
aggregate amount of $60,000.


 


3