**EXHIBIT10.3**

** **

**SECONDAMENDMENT TO FORBEARANCE AGREEMENT**

 

**THIS SECOND AMENDMENT TO FORBEARANCE AGREEMENT**(this “***Amendment***”) isentered into this 20th day of August, 2009, by and among **HERCULES TECHNOLOGY GROWTH CAPITAL, INC.**aMaryland corporation (“***Lender***”),and **INFOLOGIX, INC.,**a Delaware corporation(“***Infologix***”),Infologix Systems Corporation, a Delaware corporation (“***ISC***”),**EMBEDDED TECHNOLOGIES, LLC,**a Delawarelimited liability company (“***Embedded***”),**OPT ACQUISITION, LLC,**a Pennsylvanialimited liability company (“***OPT***”) andInfologix – DDMS, Inc. a limited liability company (“***DDMS***”,and collectively with Infologix, 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 have entered into thatcertain Loan and Security Agreement dated as of May 1, 2008, Amendment No. 1to 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, and that certain Forbearance Agreement dated as of July 31, 2009 (asmay 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 have entered into thatcertain Forbearance Agreement dated as of July 31, 2009, (as may beamended, restated, or otherwise modified, the “***ForbearanceAgreement***”), pursuant to which Lender agreed to forbear fromexercising its remedies under the Loan Agreement as a result of the SpecifiedDefault, subject to the terms and conditions, and for the period specified inthe Forbearance Agreement.

 

**C.****           **Borrower and Lender have agreed to amend the ForbearanceAgreement upon the terms and conditions more fully 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**.

 

**SCHEDULE ATO FORBEARANCE AGREEMENT**. Schedule A to Forbearance Agreement is amended by deleting paragraph 2and replacing it with the following:

 

“2.           Borrower fails to file with the Securities andExchange Commission on or before August 21, 2009 either (a) a proxystatement seeking stockholder approval for the Equity Investment or (b) aregistration statement relating to the issuance of shares in a rights offeringto its stockholders with minimum anticipated proceeds of $15 million toBorrower.”

 

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

 

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**(a)****          **Borrower has the corporate 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 delivery by Borrower ofthis Amendment and the performance by Borrower of its obligations under theLoan Agreement, as amended, have been duly authorized by all necessarycorporate action on the part of Borrower;

 

**(c)****          **this Amendment has been duly executed anddelivered by Borrower and is the binding obligation of Borrower, enforceableagainst it in accordance with its terms, except as such enforceability may belimited by bankruptcy, insolvency, reorganization, liquidation, moratorium orother similar laws of general application and equitable principles relating toor affecting creditors’ rights; and

 

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**.  The amendments set forth in this Amendmentshall be limited precisely as written and shall not be deemed (a) to be awaiver or modification of any other term or condition of the Loan Agreement orof any other instrument or agreement referred to therein or to prejudice anyright or remedy which Lender may now have or may have in the future under or inconnection with the Loan Agreement or any instrument or agreement referred totherein; or (b) to be a consent to any future amendment or modification orwaiver to any instrument or agreement the execution and delivery of which isconsented to hereby, or to any waiver of any of the provisions thereof.  Except as expressly amended hereby, the LoanAgreement shall continue in full force and effect.

 

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

 

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

 

**5.****            ****COUNTERPARTS**.  This Amendment may be signed in any number ofcounterparts, and by different parties hereto in separate counterparts, withthe same effect as if the signatures to each such counterpart were upon asingle instrument.  All counterpartsshall be deemed an original of this Amendment.

 

**6.****            ****INTEGRATION**.  This Amendment and any documents executed inconnection herewith or pursuant hereto contain the entire agreement between theparties with respect to the subject matter hereof and supersede all prioragreements, understandings, offers and negotiations, oral or written, withrespect thereto and no extrinsic evidence whatsoever may be introduced in anyjudicial or arbitration proceeding, if any, involving this Amendment; exceptthat any financing statements or other agreements or instruments filed byLender with respect to Borrower shall remain in full force and effect.

 

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**7.****            ****GOVERNINGLAW; VENUE.**  THISAMENDMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED INACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.  Borrower and Lender each submit to theexclusive jurisdiction of the State and Federal courts in Santa Clara 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/ David T. Gulian |   |
|                                 |                |
| Name: David Gulian                   |                |
|                                 |                |
| Title: President                     | ** **          |
|                                 |                |
| **INFOLOGIX SYSTEMS CORPORATION**    |                |
|                                 |                |
| By:                                  | /s/ David T. Gulian |   |
|                                 |                |
| Name: David Gulian                   |                |
|                                 |                |
| Title: President                     |                |
|                                 |                |
| **OPT ACQUISITION, LLC**             |                |
|                                 |                |
| By:                                  | /s/ David T. Gulian |   |
|                                 |                |
| Name: David Gulian                   |                |
|                                 |                |
| Title: President                     |                |
|                                 |                |
| **EMBEDDED TECHNOLOGIES, LLC**       |                |
| By: INFOLOGIX, INC. its  sole member |                |
|                                 |                |
| By:                                  | /s/ David T. Gulian |   |
|                                 |                |
| Name: David Gulian                   |                |
|                                 |                |
| Title: President                     |                |
|                                 |                |
|                                 |                |
| **INFOLOGIX – DDMS, INC.**      |                |
|                                 |                |
| By:                                  | /s/ David T. Gulian |   |
|                                 |                |
| Name: David Gulian                   |                |
|                                 |                |
| Title: President                     |                |

 

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

 

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