**EXHIBIT 10.4**

 

**THIRDAMENDMENT TO FORBEARANCE AGREEMENT**

 

**THIS THIRD AMENDMENT TO FORBEARANCE AGREEMENT**(this “***Amendment***”) isentered into this 23rd day of September, 2009, by and among **HERCULES TECHNOLOGY GROWTH CAPITAL, INC.**aMaryland corporation (“***Lender***”),and **INFOLOGIX, INC.,**a Delaware corporation(“***Infologix***”),**INFOLOGIX SYSTEMS CORPORATION**, aDelaware corporation (“***ISC***”), **EMBEDDED TECHNOLOGIES, LLC,**a Delaware limited liabilitycompany (“***Embedded***”), **OPT ACQUISITION, LLC,**a Pennsylvania limited liabilitycompany (“***OPT***”) and **INFOLOGIX — DDMS, INC.** a limited liability company (“***DDMS***”, and collectively withInfologix, ISC, Embedded and Opt, “***Borrower***”).  Capitalized terms used herein withoutdefinition shall have the same meanings given them in the Forbearance Agreement(as defined below).

 

**RECITALS**

 

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

 

**B.****                                   **Borrower and Lender haveentered 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 and the Second Amendment to Forbearance Agreement dated as of August 20,2009 (as so amended, the “***Forbearance Agreement***”),pursuant to which Lender agreed to forbear from exercising its remedies underthe Loan Agreement as a result of the Specified Default, subject to the termsand conditions, and for the period specified in the Forbearance Agreement.

 

**C.****                                   **Borrower and Lender haveagreed to amend the Forbearance Agreement upon the terms and conditions morefully set forth herein.

 

**AGREEMENT**

 

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

 

**1.****                                     ****AMENDMENTS**.

 

**Section 1 —Forbearance. **Section 1of the Forbearance Agreement is deleted in its entirety and replaced with thefollowing:

 

“1.                                 Forbearance.  Absent the occurrence of any failure byBorrower to perform its obligations set forth in this Agreement, Lender agreesto forbear from exercising any remedies available to it under the LoanAgreement, any of the other Loan Documents or Article 9 of the UniformCommercial Code, including without limitation any right of set-off, from thedate of this Agreement through and including the earlier of (i) October 12,2009 and (ii) the occurrence of a Forbearance Termination Event (asdefined below)(such period, the “Forbearance Period”).”

 

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**Section 2 —Forbearance Termination Events. **Section 2of the Forbearance Agreement is amended by deleting subparagraphs (i) and (ii) andreplacing them with the following:

 

“(i)                           Borrower failsto deliver to Lender on or before October 5, 2009 an executed term sheetproviding for the terms and conditions of a restructure of the Loan Agreementwith Lender;

 

(ii)                                  Borrower failsat any time to continue, in good faith, its negotiations with respect to arestructure of the Loan Agreement with Lender;”

 

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

 

**(a)****                                 **Borrower has the power andauthority to execute and deliver this Amendment and to perform its obligationsunder the Loan Agreement, as amended by this Amendment;

 

**(b)****                                 **the execution and deliveryby Borrower of this Amendment and the performance by Borrower of itsobligations under the Loan Agreement, as amended, have been duly authorized byall necessary action on the part of Borrower; and

 

**(c)****                                 **this Amendment has been dulyexecuted and delivered by Borrower and is the binding obligation of Borrower,enforceable against it in accordance with its terms, except as suchenforceability may be limited by bankruptcy, insolvency, reorganization,liquidation, moratorium or other similar laws of general application and equitableprinciples relating to or affecting creditors’ rights.

 

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

 

**3.****                                     ****LIMITATION**.  Theamendments set forth in this Amendment shall be limited precisely as writtenand shall not be deemed (a) to be a waiver or modification of any otherterm or condition of the Loan Agreement or of any other instrument or agreementreferred to therein or to prejudice any right or remedy which Lender may nowhave or may have in the future under or in connection with the Loan Agreementor any instrument or agreement referred to therein; or (b) to be a consentto any future amendment or modification or waiver to any instrument oragreement the execution and delivery of which is consented to hereby, or to anywaiver of any of the provisions thereof. Except as expressly amended hereby, the Loan Agreement shall continue infull force and effect.

 

**4.****                                     ****EFFECTIVENESS**.  ThisAmendment shall become effective upon the satisfaction of all the followingconditions precedent:

 

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

 

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**5.****                                     ****COUNTERPARTS**.  ThisAmendment may be signed in any number of counterparts, and by different partieshereto in separate counterparts, with the same effect as if the signatures toeach such counterpart were upon a single instrument.  All counterparts shall be deemed an originalof this Amendment.

 

**6.****                                     ****INTEGRATION**.  ThisAmendment and any documents executed in connection herewith or pursuant heretocontain the entire agreement between the parties with respect to the subjectmatter hereof and supersede all prior agreements, understandings, offers andnegotiations, oral or written, with respect thereto and no extrinsic evidencewhatsoever may be introduced in any judicial or arbitration proceeding, if any,involving this Amendment; except that any financing statements or otheragreements or instruments filed by Lender with respect to Borrower shall remainin full force and effect.

 

**7.****                                     ****GOVERNING LAW; VENUE.**  THIS AMENDMENT SHALL BE GOVERNED BY AND SHALLBE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OFCALIFORNIA.  Borrower and Lender eachsubmit to the exclusive jurisdiction of the State and Federal courts in SantaClara County, California.

 

[signaturepage follows]

 

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**IN WITNESS WHEREOF**, the parties have dulyauthorized and caused this Amendment to be executed as of the date firstwritten 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       |                |

 

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| **LENDER**:                                   |                      |
|-----------------------------------------------|---------------------------|
|                                          |                      |
| **HERCULES  TECHNOLOGY GROWTH CAPITAL, INC.** |                      |
|                                          |                      |
|                                          |                      |
| By:                                           | /s/ K. Nicholas Martitsch |   |
|                                          |                      |
| Name: K. Nicholas  Martitsch                  |                      |
|                                          |                      |
| Title:  Associate General Counsel             |                      |
|                                               |                           |  |

 

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