Document:

Exhibit 10.1

 

SECOND AMENDMENT TO CREDIT
AGREEMENT

 

This
Amendment is entered into as of June 1, 2009 by and among Arctic Cat Inc.,
a Minnesota corporation (the “Borrower”),
Arctic Cat Sales Inc., a Minnesota corporation, Arctic Cat Production LLC, a
Minnesota limited liability company, Arctic Cat Production Support LLC, a
Minnesota limited liability company, and Arctic Cat Shared Services LLC, a
Minnesota limited liability company (the “Guarantors”),
and Wells Fargo Bank, National Association, a national banking association, as
the Administrative Agent, Issuing Lender and sole Lender under the Credit
Agreement described below (in such capacities, the “Bank”).

 

The
Borrower and the Bank have entered into a Credit Agreement dated August 29,
2008, as amended by a First Amendment to Credit Agreement (the “First Amendment”) dated March 31, 2009, setting forth
the terms on which the Bank would make advances to and issue letters of credit
for the account of the Borrower (together with all amendments, modifications and
restatements thereof,  the “Credit Agreement”).

 

Pursuant
to their Guaranty dated August 29, 2008 (together with all amendments,
modifications and restatements thereof, the “Guaranty”),
the Guarantors have guarantied the payment and performance of all obligations
of the Borrower arising under the Credit Agreement and related documents.

 

Pursuant
to a Security Agreement dated August 29, 2008 (together with all
amendments, modifications and restatements thereof, the “Security
Agreement”), the Borrower and the Guarantors have granted the Bank a
security interest in substantially all of their personal property.

 

The
Borrower has asked the Bank to extend the revolving line of credit provided
under the Credit Agreement, and the Bank is willing to do so on the terms and
subject to the conditions set forth herein.

 

ACCORDINGLY,
in consideration of the mutual covenants contained in this Amendment and in the
other documents described herein, the parties hereby agree as follows:

 

1.                                      Definitions.

 

As
used in this Amendment, capitalized terms defined in the Credit Agreement and
not otherwise defined herein shall have the meanings given them in the Credit
Agreement.

 

2.                                      Amendment.

 

The
definition of “Facility Termination Date” in Section 1.1 of the Credit
Agreement is hereby amended in its entirety to read as follows:

 

“Facility Termination Date” means June 30, 2009,
or the earlier date of the termination of the Revolving Facility pursuant to Section 2.8 or 7.2.

 

3.                                      Amendment Fee.

 

Concurrently
with the execution and delivery of this Amendment, the Borrower shall pay to
the Bank an amendment fee in the amount of $20,000. Such fee shall be deemed
fully earned by the Bank’s execution and delivery of this Amendment.

 

4.                                      Representations
and Warranties.

 

The
Borrower and the Guarantors each hereby represent and warrant to each Lender
Party as follows:

 

(a)                                  Each of the Borrower and
each Guarantor has all requisite power and authority, corporate or otherwise,
to execute and deliver this Amendment and to perform this Amendment and the
Credit Agreement as amended hereby.  This
Amendment has been duly and validly executed and 

 

 

delivered
to the Administrative Agent by the Borrower and the Guarantors, and this
Amendment and the Credit Agreement as amended hereby constitute the legal,
valid and binding obligations of the Borrower and the Guarantors, enforceable
in accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance or similar laws affecting
creditors’ rights generally and general principles of equity (regardless of
whether the application of such principles is considered in a proceeding in
equity or at law).

 

(b)                                 The execution, delivery and
performance by the Borrower and the Guarantors of this Amendment, and the
performance of the Credit Agreement as amended hereby, have been duly
authorized by all necessary action (corporate or otherwise) and do not and will
not (i) require any authorization, consent or approval by any governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign (other than consents and approvals that have been obtained and remain
in full force and effect), (ii) violate the Organizational Documents of
the Borrower or any Guarantor or any provision of any law, rule, regulation or
order presently in effect having applicability to the Borrower or any
Guarantor, or (iii) except where such breach or default would not have a
Material Adverse Effect, result in a breach of or constitute a default under
any indenture or agreement to which the Borrower or any Guarantor is a party,
or by which the Borrower or any Guarantor or any property of the Borrower or
any Guarantor may be bound or affected.

 

(c)                                  All of the representations
and warranties contained in Article IV of the Credit Agreement are correct
in all material respects on and as of the date hereof as though made on and as
of such date, except to the extent that such representations and warranties
relate solely to an earlier date, in which case such representations and warranties
shall be correct only as of such date.

 

5.                                      Conditions
Precedent.

 

The
amendments set forth in Section 2
are subject to the conditions precedent that, on or before the date hereof (or
such later date as the Bank may approve in writing), the Borrower shall have
delivered to the Bank each of the following, each in form and substance
satisfactory to the Bank:

 

(a)                                  This Amendment, duly
executed by the Borrower.

 

(b)                                 The amendment fee specified
in Section 3.

 

(c)                                  A signed copy of the opinion
of counsel for the Borrower, addressed to the Administrative Agent and the
Lenders, confirming the matters set forth in paragraphs (a) and (b) of
Section 4 above, and such other
matters as the Administrative Agent may request.

 

6.                                      Release.

 

The
Borrower and the Guarantors each hereby waive, release, relinquish and forever
discharge the Bank, and its past and present directors, officers, agents,
employees, parents, subsidiaries, affiliates, insurers, attorneys,
representatives and assigns, and each and all thereof (collectively, the “Released Parties”), of and from any and all manner of
action or causes of action, suits, claims, demands, judgments, damages, levies,
and the execution of whatsoever kind, nature and/or description arising on or
before the date hereof, including, without limitation, any claims, losses,
costs or damages, including compensatory and punitive damages, in each case
whether known or unknown, liquidated or unliquidated, fixed or contingent,
direct or indirect, which the Borrower or any Guarantor ever had or now has or
may claim to have against any of the Released Parties, with respect to any
matter whatsoever, including, without limitation, the administration of the
Loan Documents and the negotiations relating to this Amendment.

 

2

 

7.                                      WAIVER OF JURY
TRIAL.

 

THE BORROWER, THE GUARANTORS AND THE BANK EACH IRREVOCABLY WAIVE ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE NOTE AGREEMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. THE GUARANTORS AND THE BANK EACH REPRESENT TO
EACH OTHER THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.

 

8.                                      Payment of
Costs.

 

The
Borrower reaffirms its obligation under the Credit Agreement, and specifically
agrees, to pay or reimburse the Bank on demand for all costs and expenses
incurred by the Bank in connection with the Loan Documents, including but not
limited to all fees and disbursements of legal counsel to the Bank, and
specifically including all costs and expenses of the Bank, including attorneys’
fees, incurred in connection with the drafting and preparation of this
Amendment and any related documents.

 

9.                                      Miscellaneous.

 

This
Amendment sets forth the entire agreement of the parties with respect to the
subject matter hereof. It cannot be waived, modified or amended except by a
writing signed by the party against which enforcement is sought. Except as
expressly amended by this Amendment, all of the terms and conditions of the
Credit Agreement shall remain in full force and effect. Nothing herein shall
constitute a waiver of any Default or Event of Default, including but not
limited to any Event of Default arising from the Borrower’s failure to deliver
certain documents required under Sections 4(b) and 4(c) of the First
Amendment when required thereunder. This Amendment shall be governed by the
internal law of Minnesota. This Amendment shall be binding upon and shall
accrue to the benefit of the parties and their successors and assigns. This
Amendment may be executed in any number of counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which
counterparts of this Amendment, taken together, shall constitute but one and
the same instrument.

 

Signature
pages follow

 

3

 

IN WITNESS WHEREOF, the parties hereto have executed
this Amendment as of the day and year first above-written, but actually on June 3,
2009.

 

	
   

  	
   

  	
  ARCTIC CAT INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/
  Timothy C. Delmore

  
	
   

  	
   

  	
  Name:

  	
  Timothy
  C. Delmore

  
	
   

  	
   

  	
  Title:

  	
  CFO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARCTIC CAT SALES INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/
  Timothy C. Delmore

  
	
   

  	
   

  	
  Name:

  	
  Timothy
  C. Delmore

  
	
   

  	
   

  	
  Title:

  	
  CFO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARCTIC CAT PRODUCTION LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/
  Timothy C. Delmore

  
	
   

  	
   

  	
  Name:

  	
  Timothy
  C. Delmore

  
	
   

  	
   

  	
  Title:

  	
  CFO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARCTIC CAT PRODUCTION SUPPORT LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/
  Timothy C. Delmore

  
	
   

  	
   

  	
  Name:

  	
  Timothy
  C. Delmore

  
	
   

  	
   

  	
  Title:

  	
  CFO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARCTIC CAT SHARED SERVICES LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/
  Timothy C. Delmore

  
	
   

  	
   

  	
  Name:

  	
  Timothy
  C. Delmore

  
	
   

  	
   

  	
  Title:

  	
  CFO

  

 

Signature page to Second Amendment to Arctic Cat
Inc. Credit Agreement

 

 

	
   

  	
   

  	
  WELLS FARGO BANK, NATIONAL
  ASSOCIATION, as Administrative Agent, Issuing Lender and Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/
   Jason D. Wells

  
	
   

  	
   

  	
  Name:
  Jason D. Wells

  
	
   

  	
   

  	
  Title:
  Assistant Vice-President

  

 

Signature page to Second Amendment to Arctic Cat
Inc. Credit AgreementExhibit
10.3

 

SECOND
AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

SECOND AMENDMENT TO LOAN AND
SECURITY AGREEMENT
dated as of May 31, 2009 (this “Second 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 by the First
Amendment to Loan and Security Agreement (the “First Amendment”) dated November 19,
2008 (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 adding the following definitions in the appropriate alphabetical
order:

 

“Fundamental Event Closing” means the consummation of the transaction
contemplated by the Fundamental Event Transaction on terms and subject to
definitive documentation in form and substance reasonably satisfactory to
Lender in its discretion and application of cash proceeds from such Fundamental
Event Transaction to the repayment of the Term Loan in full.

 

“Fundamental Event Transaction” means a binding definitive agreement
for one or more of the following (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 equity infusion in an amount of at
least $12,000,000, or (iv) the incurrence of Subordinated Indebtedness in
an amount of at least $12,000,000, each on terms and in form and substance
reasonably satisfactory to Lender in its discretion.

 

 

“Liquidity Event” shall have the meaning ascribed to it in Section 2.7(b) of
this Loan Agreement.

 

“Restructuring Fee” shall have the meaning ascribed to it in Section 7.23
of this Loan Agreement.

 

“Restructuring Fee First Installment” shall have the meaning ascribed
to it in Section 7.23 of this Loan Agreement.

 

“Second Amendment Effective Date” means May 31, 2009.

 

(b)           Section 1.1 of the Loan Agreement is hereby
amended by deleting the definition of “Fundamental Event Agreement” in its
entirety.

 

(c)           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 10-day period preceding any payments described in Section 2.7(b) exceeds
(ii) $11,326,808.  In the event such market capitalization
preceding any payments described in Section 2.7(b) does not exceed $11,326,808, then the Average Total Enterprise Value
Differential shall be deemed to be zero (0).

 

“Revolving Interest Rate” means

 

(a) for periods prior to the Second Amendment
Effective Date, the rates required pursuant to the terms of this Loan Agreement
as initially executed through the Amendment Effective Date of the First
Amendment and, from the Amendment Effective Date of the First Amendment until
immediately prior to the Second Amendment Effective Date, the rates required
pursuant to the terms of the First Amendment; and

 

(b) for the period commencing on the Second
Amendment Effective Date to and including September 30, 2009, the sum of (i) the
greater of fourteen and one-quarter percent (14.25%) per annum, and the prime
rate as reported in The Wall Street Journal plus nine and three-quarter percent
(9.75%) per annum, plus (ii) one and one half percent (1.50%) per annum,
which interest under this clause (ii) shall be payable in kind on the
first business day of each month, commencing June 1, 2009, by capitalizing
the amount of such interest accrued prior to such monthly payment date, and
adding such amount to the principal amount of the Revolving Loan; and

 

(c) for the period commencing on October 1,
2009 and at all times thereafter, the sum of (i) the greater of fourteen
and one-quarter percent (14.25%) per annum, and the prime rate as reported in
The Wall Street Journal plus nine and three quarter percent (9.75%) per annum,
plus (ii) four and one half percent (4.50%) per annum, which interest
under this clause (ii) shall be payable in kind on the first business day
of each month, commencing November 1, 2009, by capitalizing the amount of
such interest accrued prior to such monthly payment date, and adding such
amount to the principal amount of the Revolving Loan.

 

“Revolving Loan Maturity Date” means January 1, 2010.

 

 

“Term Loan Interest Rate” means

 

(a) for periods prior to the Second Amendment
Effective Date, the rates required pursuant to the terms of this Loan Agreement
as initially executed through the Amendment Effective Date of the First
Amendment, and, from the Amendment Effective Date of the First Amendment until
immediately prior to the Second Amendment Effective Date, the rates required
pursuant to the terms of the First Amendment; and

 

(b) for the period commencing on the Second
Amendment Effective Date to and including September 30, 2009, the sum of (i) the
greater of fifteen and three-quarter percent (15.75%) per annum, and the prime
rate as reported in The Wall Street Journal plus ten and three quarter percent
(10.75%) per annum; plus (ii) three and three quarter percent (3.75%) per annum,
which interest under this clause (ii) shall be payable in kind on the
first business day of each month, commencing June 1, 2009, 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 October 1,
2009 and at all times thereafter, the sum of (i) the greater of fifteen
and three-quarter percent (15.75%) per annum, and the prime rate as reported in
The Wall Street Journal plus ten and three quarter percent (10.75%) per annum,
plus (ii) six and three quarter percent (6.75%) per annum, which interest
under this clause (ii) shall be payable in kind on the first business day
of each month, commencing November 1, 2009, 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.

 

(d)           The definition of “Consolidated Adjusted EBITDA” in Section 1.1
of the Loan Agreement is hereby amended by inserting “and Second Amendment”
immediately following “Amendment” in clause (x) of such definition.

 

(e)           The definition of “Permitted Acquisition” in Section 1.1
of the Loan Agreement is hereby amended by deleting “of clause (i) and
(ii)” from the second parenthetical of the first paragraph of such definition
and inserting “of clause (i) and (ii)” immediately following “in each
case” in the third parenthetical of the first paragraph of such definition and
deleting the words “on an individual basis” in clause (xi) thereof.

 

(f)            Section 2.5(c) of the Loan Agreement is
hereby amended and restated as follows:

 

“(c)         Term Loan Repayment. 
On the first day of each month from February 1, 2009 through and
including May 1, 2009, the Borrowers repaid the principal of the Term Loan
in an aggregate amount as to all such payments of $600,000.  In addition, Borrowers shall repay the
outstanding principal under the Term Loan on the first Business Day of each
calendar month, commencing January 1, 2010, as follows: (i) for the
period commencing January 1, 2010 and continuing through and including May 1,
2010, in monthly installments each equal to an amount that is fifteen percent
(15.0%) of the outstanding principal balance of the Term Loan as of the Term
Loan Determination Date divided by 5; (ii) for the period commencing June 1,
2010 and continuing through and including May 1, 2011, in monthly
installments each equal to an amount that is twenty-five percent (25.0%) of the
outstanding principal balance of the Term Loan as of the Term Loan 

 

 

Determination Date, divided by 12; and (iii) for the period
commencing June 1, 2011 and continuing through and including the Term Loan
Maturity Date, in monthly installments each equal to an amount that is
fifty-five percent (55.0%) of the outstanding principal balance of the Term
Loan on the Term Loan Determination Date, divided by 12.  The Term Loan entire principal balance and
all accrued but unpaid interest hereunder, shall be due and payable on the Term
Loan Maturity Date.”

 

(g)           Section 2.6(c)(i) of the Loan Agreement is
hereby amended and restated as follows:

 

“i.            Upon any prepayment of the Term Loan
pursuant to Section 2.6(b) and Section 10.1,
Borrowers shall pay a prepayment charge equal to the following percentage of
the Term Loan being prepaid: if such payment is made or required to be made on
or after the Second Amendment Effective Date but prior to the date that is
twenty-four (24) months following the Closing Date, 2.0%; and thereafter, 1.0%
(each, a “Term Loan Prepayment Charge”).”

 

(h)           The following Section 2.6(d) shall be added
to the Loan Agreement immediately following Section 2.6(c) of the
Loan Agreement:

 

“(d)         Voluntary Commitment Reduction.

 

i. Borrower may, at any time upon at least 5 Business
Days’ notice to Lender, voluntarily terminate, in whole (or in part solely with
the consent of the Lender) the commitment evidenced by the Maximum Revolving
Loan Amount.

 

ii. Upon any termination of the commitment evidenced
by the Maximum Revolving Loan Amount, including without limitation, a voluntary
termination or reduction of the commitment evidenced by the Revolving Loan
Amount, if required pursuant to Section 10.01, or upon the Revolving Loan
Maturity Date, all Revolving Loan Advances, together with all accrued but
unpaid interest thereon, shall be immediately due and payable in full.”

 

(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 the Term Loan, Borrowers shall pay
to Lender an amount equal to (1) if the Fundamental Event Closing has
occurred on or prior to September 30, 2009, the greater, as of such date
of determination, of (x) $1,200,000, or (y) an amount equal to six
percent (6.0%) of the Average Total Enterprise Value Differential of Parent
Borrower, or (2) if the Fundamental Event Closing has not occurred on or
prior to September 30, 2009, the greater, as of such date of
determination, of (x) $1,500,000, or (y) an amount equal to six
percent (6.0%) 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 7.3(b) of the Loan Agreement is
hereby amended and restated as follows:

 

“(b)         Prior to the occurrence of an Event of
Default not more frequently than one time in each calendar quarter, and
following the occurrence of an Event of Default, more frequently as determined
by the Lender, upon the request of the Lender, the Borrowers will obtain and
deliver to the Lender, or, if the Lender so elects, will cooperate with the
Lender in the Lender’s obtaining, a report of an independent collateral auditor
satisfactory to the Lender with respect to the Accounts included in the
Borrowing Base, which report shall indicate whether or not the information set
forth in the Borrowing Base Certificate most recently delivered is accurate and
complete in all material respects based upon a review by such auditors (including
verification with respect to the amount, aging, identity and credit of the
respective account debtors and the billing practices of the Borrower or its
applicable Subsidiary).  All such
collateral value reports shall be conducted and made at the expense of the
Borrowers.”

 

(k)           Sections 7.20(a) and (b) 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 thereafter, commencing with the month ending October 31,
2009 and ending with the month ending April 30, 2012, 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, 2009

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  November 30, 2009

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  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 March 31,
2010, to be greater than the amount set forth below opposite such Measurement
Period ending date:

 

	
  Measurement Period Ending

  	
   

  	
  Consolidated Total

  Adjusted Leverage

  Ratio

  	
   

  
	
  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

  	
   

  

 

(l)            Section 7.14 of the Loan Agreement
is hereby amended by adding the following at the end of that section:

 

“Borrowers shall not accumulate or maintain cash in any disbursement
accounts (which such accounts include, but are not limited to, any accounts
payable accounts or payroll accounts), as of any date of determination, in
excess of checks outstanding against such deposit accounts as of that date and
amounts necessary to meet any minimum balance requirements for such deposit
accounts.  Further, Borrowers shall not
hold or maintain, directly or through a securities or commodities intermediary,
investment property (including without limitation any securities) in any of its
deposit or securities accounts, or enter into repurchase agreements with
respect to or through such accounts, without the prior written consent of the
Lender, and, at the request and option of the Lender, pursuant to a control or
other agreement in form and substance satisfactory to the Lender in its sole
discretion.”

 

(m)          The Loan Agreement is hereby amended by
adding the following subsections (i) and (j) to Section 7.22 thereof:

 

“(i)          Warrants.  On or before
the date that is ten (10) Business Days following the Second Amendment
Effective Date, Parent Borrower shall execute and deliver to Lender warrants
for 250,000 shares of common stock of Parent Borrower, to be in form and
substance reasonably satisfactory to Lender.”

 

 

“(j)          Legal Opinion Regarding Warrants. 
On or before the date that is ten (10) Business Days following the
Second Amendment Effective Date, Lender shall have received a legal opinion
from counsel to Parent Borrower in form and substance reasonably satisfactory
to Lender with respect to the warrants.

 

(n)           The Loan Agreement is hereby amended by
adding the following Sections 7.23 and 7.24 immediately following Section 7.22
thereof:

 

“7.23.      Restructuring Fee. 
Borrowers shall pay a Restructuring Fee to Lender in an amount equal to
$210,000 (the “Restructuring Fee”). 
Such Restructuring Fee shall be deemed fully earned on the Second
Amendment Effective Date and payable as follows: a $50,000 portion shall be payable
on the Second Amendment Effective Date (the “Restructuring Fee First
Installment”) and the remaining $160,000 balance shall be paid on the
earliest of (i) September 30, 2009, (ii) the acceleration of the
Secured Obligations, and (iii) payment in full of the Secured Obligations.

 

7.24.        Fundamental Event Closing. 
The Fundamental Event Closing shall have occurred on or before July 31,
2009.

 

(o)           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,
7.3, 7.5, 7.6, 7.7, 7.8, 7.9, 7.14, 7.20, 7.21, 7.22, 7.23 or 7.24) 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, 7.3, 7.5, 7.6, 7.7, 7.8, 7.9,
7.14, 7.20, 7.21, 7.22, 7.23 or 7.24, the occurrence of such default; or”

 

(p)           Section 10.1 of the Loan Agreement
is hereby amended and restated in its entirety as follows:

 

“General.  Upon and during
the continuance of any one or more Events of Default, (i) Lender may, at
its option, terminate any of the commitments evidenced hereunder, accelerate
and demand payment of all or any part of the Secured Obligations together with
a Term Loan Prepayment Charge and the amounts referenced pursuant to Section 2.7(b) and
Section 7.23 herein, and declare the Secured Obligations to be immediately
due and payable (provided, that upon the
occurrence of an Event of Default of the type described in Section 9.6 and
Section 9.9, the Notes and all of the Secured Obligations shall
automatically be accelerated and made due and payable and the commitments
terminated, in each case without any further notice or act), and (ii) Lender
may notify any of Borrower’s account debtors or any Borrower to make payment
directly to Lender, compromise the amount of any such account on such
Borrower’s behalf and endorse Lender’s name without recourse on any such
payment for deposit directly to Lender’s account.  Lender may exercise all rights and remedies
with respect to the Collateral under the Loan Documents or otherwise available
to it under the UCC and other applicable law, 

 

 

including the right to release, hold, sell, lease, liquidate, collect,
realize upon, or otherwise dispose of all or any part of the Collateral and the
right to occupy, utilize, process and commingle the Collateral.  All Lender’s rights and remedies shall be
cumulative and not exclusive.”

 

(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.

 

(r)            Exhibit E of the Loan Agreement is
hereby amended and restated in its entirety in the form attached hereto as Exhibit E.

 

(s)           Exhibit H of the Loan Agreement is
hereby amended and restated in its entirety in the form attached hereto as Exhibit H.

 

§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 Second
Amendment, and after taking into account this Second Amendment, acknowledges
that this Second 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 in all material respects as of the date hereof and,
after taking into account this Second 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 Second
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 Second 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 Second Amendment shall become effective as of May 31, 2009,
upon the receipt by the Lender of each of the following, provided that each of
the following are delivered or performed on or before June 2, 2009:

 

(a)           executed originals of this Second 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 the Restructuring Fee First Installment;

 

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

 

(d)           unaudited internal financial statements, including
balance sheet and related statement of income and cash flows as of April 30,
2009, certified by the Chief Executive Officer or Chief Financing Officer in
accordance with Section 7.1 (a) of the Loan Agreement.

 

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

 

§5.          Effect of Amendment. 
Except as expressly set forth herein, this Second 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
Second 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 Second 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 Second
Amendment, the Lender hereby waives the Event of Default resulting from
Borrowers’ violation of the financial covenant contained in Section 7.20(a) of
the Loan Agreement for the Twelve Month Measurement Period ending January 31,  February 28, March 31, April 30,
2009 (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 Second
Amendment shall be governed by and construed in accordance with the laws of the
State of California.

 

§8.          Counterparts.  This Second
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 Second Amendment by
telecopy shall be effective as delivery of a manually executed counterpart of
this Second Amendment.

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

 

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

 

	
   

  	
   

  	
  BORROWERS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  INFOLOGIX, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David T.
  Gulian

  
	
   

  	
   

  	
   

  	
  David T. Gulian,
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  INFOLOGIX SYSTEMS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David T.
  Gulian

  
	
   

  	
   

  	
   

  	
  David T. Gulian,
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  OPT ACQUISITION LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David T.
  Gulian

  
	
   

  	
   

  	
   

  	
  David T. Gulian,
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EMBEDDED TECHNOLOGIES, LLC

  
	
   

  	
   

  	
  By: INFO LOGIX INC., its sole Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David T.
  Gulian

  
	
   

  	
   

  	
   

  	
  David T. Gulian,
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  INFOLOGIX – DDMS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David T.
  Gulian

  
	
   

  	
   

  	
   

  	
  David T. Gulian,
  Chief Executive 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

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