Document:

Exhibit 10.2

EARN OUT AGREEMENT

This
EARN OUT AGREEMENT (this “Agreement”) is
made and entered into as of September 30, 2007, by and between Healthcare
Informatics Associates, Inc., a Delaware corporation (“Seller”),
and InfoLogix Systems Corporation, a Delaware corporation (the “Company”).

WHEREAS,
pursuant to an Asset Purchase Agreement (the “Purchase
Agreement”), dated as of the date hereof, among InfoLogix, Inc., a
Delaware corporation, the Company, Seller, and the stockholders of Seller
(together, the “Stockholders”), Seller is selling
the Purchased Assets to the Company;

WHEREAS,
the Purchase Agreement provides that Seller shall be eligible to receive
additional consideration based upon the financial performance of the Business
(as defined in Section 1), to be calculated based upon Net Contribution
Amount (as defined in Section 1) generated by the Business during each
Earn Out Period (as defined in Section 1); and

WHEREAS,
Seller and the Company have agreed that determination and payment of the
additional consideration contemplated by the Purchase Agreement is to be in
accordance with the terms of this Agreement.

NOW,
THEREFORE, in consideration of the premises and of the respective covenants and
provisions contained in this Agreement, the parties hereby agree as follows:

1.             Definitions.           For purposes of this Agreement, the terms
listed below have the following meanings. 
Capitalized terms used and not otherwise defined in this Agreement have
the meanings given to such terms in the Purchase Agreement.

“Business” shall mean the business of providing software
implementation and consulting services to the healthcare industry, as conducted
by the Seller as of the Closing Date. 
Any businesses providing similar services that are acquired by the
Company after the date hereof shall not be considered part of the “Business”
hereunder unless otherwise expressly agreed by Seller and Company in writing.

“Closing Date” shall mean the date of the closing of the
transactions contemplated by the Purchase Agreement.

“Dispute Auditors” shall have the meaning set forth in Section
3(b)(ii).

“Earn Out Amount” shall have the meaning set forth in Section
2(b).

“Earn Out Period” shall mean each 12 calendar month period
during the 24 month calendar period beginning with the first calendar month
immediately following the month in which the Closing Date occurs and ending on
the 24th calendar month immediately following the month in which the Closing
Date occurs.

“Earn Out Ratio” shall mean, for any Earn Out Period, the
quotient of (a) the Net Contribution Amount for such Earn Out Period divided
by (b) the Earn Out Target for such Earn Out Period.  The Earn Out Ratio shall be calculated to six
decimal places and shall be subject to standard rounding provisions.

“Earn Out Statement” 
shall have the meaning set forth in Section 3(b)(i).

“Earn Out Target” shall mean (a) for the first Earn Out
Period, $3,000,000, and (b) for the second Earn Out Period, $3,600,000.

“GAAP” shall mean generally accepted accounting principles in
the Unites States as in effect from time to time, applied consistently.

“Net Contribution Amount” shall mean, for any Earn Out Period
or Quarterly Performance Period, an amount determined in accordance with Exhibit
A to this Agreement.

“Person” shall mean any individual, corporation (including
any non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, or other
entity.

“Quarterly Performance Milestone” shall have the meaning set
forth in Section 4(e)(i).

“Quarterly Performance Period” shall have the meaning set
forth in Section 4(e).

2.             Earn Out Amount.

(a)           For each Earn Out Period, the Company shall, pursuant to Section 3,
calculate Net Contribution Amount for such period.

(b)           Based upon the Earn Out Ratio with respect to each Earn Out Period, the
Purchaser shall be entitled to receive a payment (the “Earn Out
Amount”) for each Earn Out Period pursuant to Section 3,
which shall be calculated as set forth below.

(i)            The Earn Out Amount for the first Earn Out
Period shall be calculated as follows:

	
  Earn Out Ratio

  	
   

  	
  Earn Out Amount

  
	
  Less than 0.700000

  	
   

  	
  $0

  
	
  Between 0.700000 and 1.000000

  	
   

  	
  Earn Out Ratio x
  $2,000,000

  
	
  Greater than 1.000000

  	
   

  	
  $2,000,000 +
  .25(Net Contribution Amount – Earn Out Target)

  

 

(ii)           The Earn Out Amount for the second Earn Out Period shall be calculated
as follows:

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  Earn Out Ratio

  	
   

  	
  Earn Out Amount

  
	
  Less than 0.700000

  	
   

  	
  $0

  
	
  Between 0.700000 and 1.000000

  	
   

  	
  Earn Out Ratio x
  $2,500,000

  
	
  Greater than 1.000000

  	
   

  	
  $2,500,000 +
  .25(Net Contribution Amount – Earn Out Target)

  

 

3.             Computation of Net Contribution
Amount.

(a)           Calculation of Net Contribution Amount.  The
components of Net Contribution Amount for any Earn Out Period shall be determined
in accordance with GAAP and shall be calculated as set forth on Exhibit A.

(b)           Time of Determination.

(i)            The Company shall prepare or cause to be
prepared and delivered to Seller, within 45 days after the end of each Earn Out
Period, a written statement setting forth the computation of Net Contribution
Amount and the Earn Out Ratio for the applicable Earn Out Period in sufficient
detail to permit Seller to confirm that such calculations have been made in
accordance with this Agreement (the “Earn Out Statement”).  Seller may provide written notice of
objection to the Company’s determination of Net Contribution Amount and\or the
Earn Out Ratio within 30 days after receipt of the Earn Out Statement by
Seller, which notice shall state in reasonable detail the specific reasons for
its objection.  If Seller does not
provide timely notice of objection as provided above, then Net Contribution
Amount and the Earn Out Ratio for the applicable Earn Out Period calculated by
the Company as set forth in the Earn Out Statement shall be binding and
conclusive on the parties.  During such
30 day period and during any period in which the calculation of Net
Contribution Amount and\or the Earn Out Ratio for the applicable Earn Out Period
and payment of the Earn Out Amount is in dispute between Seller and the
Company, Seller, or its agents, upon reasonable written notice to the Company,
shall have reasonable access during regular business hours, to inspect and
audit all records of the Business used by the Company in calculating Net
Contribution Amount and the Earn Out Ratio for the applicable Earn Out Period.

(ii)           If Seller provides the Company with notice of objection pursuant to (i)
above within 30 days after receipt of the Earn Out Statement by Seller, the
Company and Seller shall attempt in good faith to reach an agreement as to the
issues in dispute.  If the parties fail
to resolve all such disagreements within 15 Business Days after the Company’s
receipt of the notice of objection (or such longer period as mutually agreed upon
by the parties), then any issues remaining in dispute may thereafter be
submitted by either Seller or the Company to a nationally recognized
independent accounting firm mutually agreed upon by the parties (the “Dispute Auditors”). 
The Company and Seller shall take, or cause to be taken, all actions and
do, or cause to be done, all things necessary to cooperate with the Dispute
Auditors in its resolution of the issues remaining in dispute, including
furnishing to the Dispute Auditors such work papers and other documents and
information relating to the disputed issues as the Dispute Auditors may
reasonably request.  The determination of
Net Contribution Amount and the Earn Out Ratio for the applicable Earn Out Period
by the Dispute Auditors shall be set forth in a notice to be delivered to
Seller and the Company within 45 days of the

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submission
to the Dispute Auditors of the issues remaining in dispute, and such
determination shall be binding and conclusive on the parties as to the amount
of Net Contribution Amount and the Earn Out Ratio for the applicable Earn Out
Period.  The fees and expenses of the
Dispute Auditors incurred for such determination shall be equitably apportioned
based upon the extent to which Seller or the Company is determined by the Dispute
Auditors to be the prevailing party in such determination.

(c)           Right of Set Off. 
Subject to the terms of the Purchase Agreement, the Company shall have
the right to withhold and set off any amount due Seller under this Agreement
against any amount owed by Seller or the Stockholders to the Company, including
pursuant to any claim for indemnification or payment of Damages to which the
Company may be entitled under the Purchase Agreement or any other agreement
entered into pursuant to the Purchase Agreement, or otherwise.

(d)           Payment of Earn Out Amount.

(i)            The Company shall, at the same time that the
Earn Out Statement is delivered by the Company to Seller, pay the Earn Out
Amount, if any, for the applicable Earn Out Period.  Such payment shall be by wire transfer of
immediately available funds to an account or accounts designated in writing by
Seller.

(ii)           If Seller provides the Company with timely notice of objection to the
Company’s calculation of Net Contribution Amount and/or the Earn Out Ratio for
an Earn Out Period pursuant to Section 3(b) and if it is finally
determined that an initial or additional payment of the Earn Out Amount is
required under this Agreement, then within five days of such final
determination, the Company shall pay to Seller any remaining portion of the
Earn Out Amount for the applicable Earn Out Period by wire transfer of
immediately available funds to an account or accounts designated in writing by
Seller.

4.             Operation of the Company and
Business.

(a)           During the term of this Agreement, the Company shall operate the
Business in the ordinary course of business, in good faith, and in a
commercially reasonable manner, and shall not take any action or omit to take
any action during any Earn Out Period that is intended to impede Seller’s
ability to earn the Earn Out Amount.

(b)           The Company acknowledges and agrees that the Earn Out Amount is a
material part of the purchase price under the Purchase Agreement and the
ability to receive the Earn Out Amount is a material inducement for Seller to
enter into the Purchase Agreement.  The
Company further acknowledges and agrees that achieving Net Contribution Amounts
at levels sufficient for Seller to earn the Earn Out Amount is a desirable
outcome for the Company and the ability of the Business to achieve sufficient
Net Contribution Amounts depends to a significant degree upon the provision of
adequate support and resources to the Business, as well as appropriate
management of the Business.    Immediately
after the date hereof, Seller, or its agents, upon reasonable written notice to
the Company, shall have reasonable access during regular business hours, to
inspect all records of the Business used by the Company in calculating Net
Contribution Amount and the Earn Out Ratio for the applicable Earn Out Period.

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(c)           During the term of this Agreement, while employed pursuant to, and
subject to the terms and conditions of, his Employment Agreement with the
Company dated as of the date hereof (the “Employment Agreement”),
Gerry Bartley (“Bartley”) shall devote his full
working time, energy, skill and best efforts to the operation of the Business
in a manner that faithfully and diligently furthers the business and interests
of the Company and its affiliates as a whole, and is consistent with the Company’s
overall performance goals and strategic objectives as established from time to
time.  Without limiting the foregoing,
Bartley shall engage in such review and planning activities with respect to the
Business as are customary for an executive in his position, and shall report to
the Company on the operations and results of the Business as requested by the
Company’s management.   Subject to the
Employment Agreement, if the Company and Bartley agree that Bartley is to
become substantially involved in the operations of the Company beyond the
operation of the Business, Seller and the Company shall discuss in good faith
whether any adjustment to the Earn Out Amount, Earn Out Ratio or Earn Out
Target are desirable and in the best interest of the Company and its stockholders.

(d)           During the term of this Agreement, the Business shall be operated
subject to the resource budget as mutually agreed to by the parties within 60
days of the Closing Date (the “Resource Budget”).  Annually during the term of this Agreement,
the Company and Bartley (or such other representative as shall be appointed by
the Seller) shall meet to discuss such adjustments to the Resource Budget as
may be reasonably necessary or desirable, taking into consideration (i) the
achievement of a sufficient Net Contribution Amount by the Business and (ii)
the overall long-term performance goals and other strategic objectives of the
Business and the Company.  The Company
and Bartley (or such other representative as shall be appointed by the Seller)
shall also meet to discuss adjustments to the Resource Budget at the reasonable
request of the Company.  Any
modifications to the Resource Budget are subject to final approval by the
Company and may only be made by mutual written agreement of the Company and Seller.

(e)           During the term of this Agreement, while Bartley is employed by the
Company pursuant to the Employment Agreement, within 30 days following the last
day of each fiscal quarter starting with the first full fiscal quarter
immediately following the Closing Date (each a “Quarterly
Performance Period”), the Company shall provide Bartley with a
statement setting forth the Net Contribution Amount for such completed
Quarterly Performance Period. 
Notwithstanding anything to the contrary contained in this Agreement, if
the Net Contribution Amount for such Quarterly Performance Period:

(i)            is greater than or equal to 75% but less than
100% of the Net Contribution Amount milestone for such Quarterly Performance
Period as mutually agreed to by the parties (each, a “Quarterly
Performance Milestone”), Bartley shall promptly provide the Company
with a remediation plan acceptable to the Company and reasonably designed to
allow the Business to achieve future Quarterly Performance Milestones in a
manner consistent with the Company’s overall performance goals and other
strategic objectives;

(ii)           is greater than or equal to 50% but less than 75% of the applicable
Quarterly Performance Milestone, the Company and Bartley shall work together in
good faith to prepare a remediation plan reasonably designed to allow the
Business to achieve future Quarterly Performance Milestones in a manner
consistent with the Company’s overall performance goals and other strategic
objectives; provided, however, that if the Net Contribution Amount for each of
two consecutive Quarterly Performance Periods is greater than or equal to 50%
but less than 75% of the applicable Quarterly Performance Milestones for such
periods, then the Company shall be entitled,

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subject
to Section 4(a), to take such actions as it deems reasonably necessary
to allow the Business to achieve future milestones in a manner consistent with
the Company’s overall performance goals and other strategic objectives; and

(iii)          is less than 50% of the applicable Quarterly Performance Milestone, the
Company shall be entitled, subject to Section 4(a), to take such actions
as it deems reasonably necessary to allow the Business to achieve future
milestones in a manner consistent with the Company’s overall performance goals
and other strategic objectives.

(f)            Notwithstanding anything to the contrary
contained in this Agreement, until all obligations of the Company hereunder are
completed, the Company will use its reasonable efforts to require any successor
(whether direct or indirect, by purchase, merger, sale of stock or assets,
consolidation or otherwise) to assume and agree, in writing, to perform this
Agreement, in the same manner and to the same extent that the Company would
have been required to perform as if no such succession had taken place and
shall provide written evidence to Seller of such successor’s assumption of the
obligations hereunder no later than two Business Days following the closing of
the transaction which results in a successor being established.

5.             Miscellaneous.

(a)           Entire Agreement.  This
Agreement supersedes all prior agreements, whether written or oral, between the
parties with respect to its subject matter and constitutes a complete and
exclusive statement of the terms of the agreement between the parties with respect
to its subject matter.

(b)           Succession and Assignment.  This
Agreement shall be binding upon and inure to the benefit of the parties named
in this Agreement, their respective successors, and permitted assigns.  No party may assign this Agreement or any of
its rights, interests, or obligations under this Agreement without the prior
written approval of the other parties, provided that the Company may assign
this Agreement or any of its rights, interests, or obligations under this
Agreement to any of its Affiliates without approval of the other parties.

(c)           Counterparts.  This
Agreement may be executed in one or more counterparts, including by facsimile
transmission, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

(d)           Headings.  The section headings contained
in this Agreement are inserted for convenience only and shall not affect in any
way the meaning or interpretation of this Agreement.

(e)           Governing Law.  This
Agreement shall be governed by and construed in accordance with the domestic
substantive laws of the State of Delaware without giving effect to any choice
or conflict of law provision or rule (whether of the State of Delaware or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware. 
All judicial proceedings brought against any party arising out of or
relating to this Agreement or any obligation hereunder shall exclusively be brought
in any state court of competent jurisdiction in the State of Delaware and each
party irrevocably accepts generally and unconditionally the exclusive
jurisdiction and venue of such court, waives any defense of forum non
conveniens and agrees that service of process in any such proceeding in any
such court may be made by registered or certified mail, return receipt
requested, to such party at the address specified in this Agreement.

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(f)            Amendments and Waivers.  This
Agreement may not be amended, supplemented, or otherwise modified except by an
instrument in writing signed by each of the parties to this Agreement.  The failure of any party to this Agreement to
enforce at any time any of the provisions of this Agreement shall in no way be
construed to be a waiver of any such provision, nor in any way to affect the
validity of this Agreement or any part thereof or the right of any party
thereafter to enforce each and every such provision.  No waiver of any breach of this Agreement
shall be held to be a waiver of any other or subsequent breach.

(g)           Severability.  The
invalidity or unenforceability of any particular provision, or part of any
provision, of this Agreement shall not affect the other provisions or parts
hereof, and this Agreement shall be construed in all respects as if such
invalid or unenforceable provisions or parts were omitted.

(h)           Notices.  All notices, consents,
waivers, and other communications required or permitted by this Agreement shall
be in writing and shall be deemed given to a party when (i) delivered to the
appropriate address by hand or by nationally recognized courier service (costs
prepaid); (ii) sent by facsimile with confirmation of transmission by the
transmitting equipment; or (iii) received or rejected by the addressee, if sent
by certified mail, return receipt requested; in each case to the following
addresses or facsimile numbers and marked to the attention of the Person (by
name or title) designated below (or to such other address or facsimile number,
or Person as a party may designate in writing to the other parties):

If
to the Company:

InfoLogix Systems Corporation

101 East County Line Road

Suite 210

Hatboro, PA 19040

Attention:  Chief
Financial Officer

Telephone:  (215)
604-0691

Fax:  (267) 681-0682

With
a copy to (which shall not constitute notice):

Drinker Biddle & Reath LLP

18th and Cherry Streets

One Logan Square

Philadelphia, PA 19103-6996

Attention: Stephen T.
Burdumy and Scott B. Connolly

Telephone:  (215) 988-2700

Fax:  (215) 988-2757

If
to Seller:

Healthcare Informatics Associates, Inc.

16306 Agate Point Road

Bainbridge Island, WA 98110

Attention:  Gerry Bartley

Telephone:  (206) 842-6797

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Fax:  (206) 842-6672

With a copy to (which shall not constitute notice):

The James Law Group

121 SW Morrison Street, Suite 900

Portland, Oregon 97204

Attention:  Ronald J. Miller

Telephone: (503) 228-5380

Fax:  (503) 228-5381

A copy of any and all
notices, consents, and other communications sent by facsimile pursuant to this
Agreement shall also be sent by United States certified mail to the appropriate
address in accordance with this Agreement.

(i)            Expenses.  Except as otherwise expressly
provided in this Agreement, each party shall bear its own expenses in
connection with this Agreement.

(j)            Construction.  Within this Agreement, the singular shall
include the plural and the plural shall include the singular, and any gender
shall include all other genders, all as the meaning and the context of this
Agreement shall require.  Except as
otherwise indicated, all agreements defined in this Agreement refer to the same
as from time to time amended or supplemented. 
The parties have participated jointly in the negotiation and drafting of
this Agreement.  In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as having been drafted jointly by the parties and no presumption
or burden of proof shall arise favoring or disfavoring any party by virtue of
the authorship of any of the provisions of this Agreement.  The word “including” shall mean including
without limitation.  All references to
Sections refer to the Sections of this Agreement, and all references to
Exhibits refer to Exhibits attached to this Agreement, each of which is made a
part of this Agreement for all purposes. 
Any reference in this Agreement to wire transfers or other payments
requires payment in dollars of the United States of America unless some other
currency is expressly stated in that reference.

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IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered as of the date first written above.

	
  

  	
   

  	
  INFOLOGIX SYSTEMS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ David T. Gulian

  	
   

  
	
   

  	
   

  	
  Name:
  

  	
  David T. Gulian

  
	
   

  	
   

  	
  Title:

  	
  President and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HEALTHCARE INFORMATICS
  ASSOCIATES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Gerry Bartley

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Gerry Bartley

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Acknowledged and agreed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Gerry Bartley

  	
   

  	
   

  	
   

  
	
  Gerry Bartley

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Mary Ann Bartley

  	
   

  	
   

  	
   

  
	
  Mary Ann BartleyExhibit 10.3

THIS INSTRUMENT
IS SUBJECT TO THE TERMS OF A SUBORDINATION AGREEMENT DATED SEPTEMBER 30, 2007
IN FAVOR OF SOVEREIGN BANK, WHICH SUBORDINATION AGREEMENT IS INCORPORATED
HEREIN BY REFERENCE.  NOTWITHSTANDING ANY
CONTRARY STATEMENT CONTAINED IN THE WITHIN INSTRUMENT, NO PAYMENT ON ACCOUNT OF
THE PRINCIPAL OR INTEREST HEREOF SHALL BECOME DUE OR BE PAID AND NO ACTIONS
SHALL BE TAKEN HEREUNDER EXCEPT IN ACCORDANCE WITH THE TERMS OF SUCH
SUBORDINATION AGREEMENT.

THIS NOTE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED, OR HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, OR
THE DELIVERY TO MAKER OF AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO MAKER THAT SUCH OFFER, SALE, OR TRANSFER, PLEDGE, OR
HYPOTHECATION IS IN COMPLIANCE WITH THE ACT.

CONVERTIBLE
SUBORDINATED PROMISSORY NOTE

	
  $3,500,000

  	
  September 30,
  2007     

  

 

FOR VALUE RECEIVED, InfoLogix
Systems Corporation, a Delaware corporation (“Maker”),
hereby promises to pay to the order of Healthcare Informatics Associates, Inc.
(“Holder”), the principal sum of THREE MILLION
FIVE HUNDRED THOUSAND and 00/100 Dollars ($3,500,000), together with interest
on the outstanding principal balance of this Note from time to time outstanding
from the date hereof until this Note is paid in full.  Such principal and interest shall be payable
on the terms and conditions set forth in this Note.  This Note is being issued pursuant to an
Asset Purchase Agreement dated as of September 30, 2007 among Maker, Holder,
and certain other parties (the “Asset Purchase Agreement”).

1.             Interest
Rate.

(a)           The principal
sum outstanding from time to time under this Note shall bear interest at the
rate of 9% per annum, compounding annually, from the date hereof until the
principal balance of this Note is paid in full. 
All interest under this Note shall be paid as provided in Section 2
below.

(b)           Both before and
after any Event of Default, interest shall be calculated on the basis of a
360-day year (consisting of 12 months, each month consisting of 30 days) and
the actual number of days elapsed in any calendar year or part thereof.

2.             Principal
and Interest Payments; Maturity Date.

(a)           Subject to Sections
7, 8 and 9 below, interest shall accrue in arrears and shall
be paid in full in cash on the Maturity Date (as defined below).

(b)           The entire
outstanding balance of this Note shall be paid in full on September 30,
2010 (the “Maturity Date”).

(c)           If any payment
of principal or interest becomes due on a day which is not a Business Day, such
payment shall be due on the next succeeding Business Day.  For purposes of this Note, the term “Business Day” shall mean any day other than a Saturday,
Sunday, or holiday on which banks in the City of New York are or may elect to
be closed.

(d)           Amounts repaid
or prepaid under this Note may not be reborrowed.

(e)           Payments of
principal and interest  (including,
without limitation, any payment made pursuant to Section 10 below) shall
be made in lawful currency of the United States of America by wire transfer of
immediately available funds to the bank account of Holder set forth on Exhibit
A to this Note, or to such other bank account as Holder may from time to
time designate in writing to Maker.

3.             Prepayments.  Maker may prepay the principal of this Note
in whole or in part without penalty or premium; provided, however,
that any such prepayment shall be accompanied by the payment of all accrued and
unpaid interest under this Note and all other sums that are due and payable
under this Note or otherwise in connection with this Note on the date of
prepayment.

4.             Subordination.  Maker, Holder and Sovereign Bank have entered
into a Subordination Agreement dated as of September 30, 2007 (as amended,
supplemented, or otherwise modified from time to time, the “Subordination Agreement”). 
This Note is subordinated to the prior payment in full of the Senior
Debt (as defined in the Subordination Agreement) pursuant to, and to the extent
provided in, the Subordination Agreement.

5.             Events
of Default.  The
occurrence of any of the following events shall be an “Event of
Default” under this Note:

(a)           the nonpayment of any
principal, interest, or other amount due under this Note on the date such
payment is due, including, without limitation, any Redemption Amount (as
defined below) pursuant to Section 10;

(b)           the filing by or against Maker of any proceeding in bankruptcy,
receivership, insolvency, reorganization, liquidation, conservatorship, or
similar proceeding (and, in the case of any such proceeding instituted against
Maker, such proceeding is not dismissed or stayed within 90 days of the commencement
thereof);

(c)           the appointment
of (or taking possession by) a receiver, liquidator, assignee, trustee,
custodian, or other similar official for Maker or any assignment by Maker for
the benefit of creditors, or any levy, garnishment, attachment, or similar
proceeding is instituted against any material property of Maker;

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(d)           the insolvency of Maker or Maker admits in writing its inability to
pay its debts as they become due;

(e)           Maker defaults
in the due performance of any debt senior to this Note (“Senior Debt”) and such default shall have
caused the acceleration of payment of all amounts due under such Senior Debt;
or

(f)            Maker defaults
in the due performance or observance of any material  covenant to
be performed pursuant to this Note and such default is not cured by Maker
within 10 days after receiving notice of such default from Holder.

6.             Default Rate.  Upon the occurrence and during the
continuation of any Event of Default, at Holder’s option, this Note shall bear
interest at a rate per annum which shall be two and one-half percentage points
(2.5%) in excess of the interest rate otherwise in effect from time to time
under this Note but not more than the maximum rate allowed by law (the “Default Rate”).  The
Default Rate shall continue to apply until the Event of Default has been cured,
or in the event the principal of this Note has been accelerated, until this
Note is paid in full, including the period following entry of any judgment on
or relating to this Note.  Interest on
any such judgment shall accrue and be payable at the Default Rate after
judgment, any execution thereon, and until actual receipt by Holder of payment
in full of such judgment.  Interest at
the Default Rate shall be collectible as part of any judgment under this
Note.  The Default Rate shall change with
each change in the interest rate otherwise payable under this Note.

7.             Remedies.

(a)           Subject to the
Subordination Agreement, upon the occurrence of any Event of Default, the
entire unpaid principal balance of this Note, together with all accrued and
unpaid interest thereon and all other sums owing under this Note, shall, at
Holder’s option, become immediately due and payable, without presentation,
demand, or further action of any kind, and Holder may exercise any and all
rights and remedies available to Holder under this Note or otherwise available
to Holder at law or in equity.  The
failure of Holder to accelerate the outstanding principal balance of this Note
upon the occurrence of an Event of Default shall not constitute a waiver of
such default or of the right to accelerate this Note at any time thereafter so
long as the Event of Default remains uncured.

(b)           Maker shall be
responsible for all reasonable fees and expenses incurred by Holder and its
counsel in the collection or attempted collection, by foreclosure or otherwise,
of the principal amount of this Note, the interest thereon or any other payment
due hereunder (“Collection Costs”).

(c)           All payments
made under this Note shall be applied first to repayment of any outstanding
unpaid Collection Costs, then to repayment of any accrued but unpaid interest,
and then to repayment of the outstanding principal amount.

8.             Voluntary
Conversion.

(a)           Subject to Section
9 hereof, at any time and from time to time after the initial issuance of
this Note, Holder shall be entitled to convert all or a portion of the
outstanding and unpaid principal of this Note into fully paid and nonassessable
shares of Infologix, Inc. 

 3
 

(“Parent”)
common stock, par value $0.00001 per share (the “Common Stock”)
in accordance with this Section 8 (a “Voluntary
Conversion”); provided that, notwithstanding the foregoing, Holder
shall not be entitled to effect a Voluntary Conversion unless the total
principal to be converted equals or exceeds $1,000,000.

(b)           The number of
shares of Common Stock issuable upon any Voluntary Conversion shall be
determined by dividing (i) the principal amount to be converted by (ii) the
Voluntary Conversion Price.  For the
purposes of this Note, “Voluntary Conversion Price”
means $5.50 (as adjusted for stock splits, stock dividends, combinations and
other similar events in accordance with Section 13).

(c)           To effect a
Voluntary Conversion on any date (a “Voluntary Conversion Date”),
Holder shall (i) transmit by facsimile (or otherwise deliver), for receipt on
or prior to 5:00 p.m., New York City time, on such date, a copy of an executed
notice of conversion (the “Voluntary Conversion
Notice”) to the Company setting forth the principal amount of this
Note to be converted and (ii) surrender this Note to a common carrier for
delivery to the Company as soon as practicable on or following such date (or an
indemnification undertaking with respect to this Note in the case of its loss,
theft or destruction).  On or before the
first Business Day following the date of receipt of a Conversion Notice, the
Company shall transmit by facsimile a confirmation of receipt of such
Conversion Notice to Holder and Parent’s transfer agent (the “Transfer Agent”).  On
or before the third Business Day following the date of receipt of a Voluntary  Conversion Notice, Parent shall (1) (X) provided that the
Transfer Agent is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program and so long
as the certificates therefor are not required to bear a restrictive legend
evidencing the lack of registration under the Act of the Common Stock
represented thereby, credit such aggregate number of shares of Common Stock to
which Holder shall be entitled to Holder’s or its designee’s balance account
with DTC through its Deposit Withdrawal Agent Commission system or (Y) if the
Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program, issue and deliver to the address as specified in the
Voluntary Conversion Notice, certificates, registered in the name of Holder or
its designee, for the number of shares of Common Stock to which Holder shall be
entitled, which certificates shall not bear any restrictive legend unless such
certificates are required to bear such a legend evidencing the Common Stock’s
lack of registration under the Act. 
Delivery of physical certificates shall be deemed to have been made if
delivered personally or when delivered to a nationally recognized overnight
carrier.  If the outstanding principal of
this Note is greater than the amount of principal to be converted, then the
Company shall as soon as practicable and in no event later than three Business
Days after receipt of this Note and at its own expense, issue and deliver to
Holder a new Note representing the outstanding principal not converted.  The person or persons entitled to receive the
shares of Common Stock issuable upon a Voluntary Conversion of this Note shall
be treated for all purposes as the record holder or holders of such shares of Common
Stock on the Voluntary Conversion Date.

(d)           Upon any
Voluntary Conversion pursuant to this Section 8, all interest then
accrued or payable on such principal amount through and including the Voluntary
Conversion Date shall be paid, at the option of Parent in its sole discretion,
either (i) in cash, or (ii) in a number of shares of Common Stock as determined
by dividing (A) the aggregate amount of such accrued and unpaid interest by (B)
the Voluntary Conversion Price.

 4
 

(e)           Parent shall
not issue any fraction of a share of Common Stock upon any Voluntary
Conversion.  If the Voluntary Conversion
would result in the issuance of a fraction of a share of Common Stock, Parent
shall round such fraction of a share of Common Stock down to the nearest whole
share and any fractional share shall be payable in cash based upon the ten day
average closing bid price of the Common Stock at such time.

9.             Mandatory
Conversion.

(a)           If, at any time
on or after the date of the initial issuance of this Note, the closing bid price
of the Common Stock on the principal market or exchange on which it is listed
or quoted, as reported by Bloomberg Financial Markets, for at least 45
consecutive trading days equals or exceeds $8.00 per share (as adjusted for
stock splits, stock dividends, combinations and other similar events in
accordance with Section 13), then, at the option of Maker exercised by
the delivery of written notice to Holder (a “Mandatory
Conversion Notice”), Maker may require Holder to convert all or any
portion of the outstanding and unpaid principal of this Note into Common Stock
(a “Mandatory Conversion”) pursuant to the
applicable conversion procedures in Section 8(c).  The Mandatory Conversion Notice shall specify
a date (the “Mandatory Conversion Date”) for
the Mandatory Conversion.

(b)           The number of
shares of Common Stock issuable upon any Mandatory Conversion shall be
determined by dividing (i) the principal amount to be converted by (ii) the
Mandatory Conversion Price.  For the
purposes of this Note, “Mandatory Conversion Price”
means $5.50 (as adjusted for stock splits, stock dividends, combinations and
other similar events).

(c)           Upon any
Mandatory Conversion pursuant to this Section 9, all interest then
accrued or payable on the principal amount to be converted through and
including the Mandatory Conversion Date shall be paid, at the option of Parent
in its sole discretion, either (i) in cash, or (ii) in a number of shares of
Common Stock as determined by dividing (A) the aggregate amount of such accrued
and unpaid interest by (B) the Mandatory Conversion Price.

(d)           Parent shall
not issue any fraction of a share of Common Stock upon any Mandatory
Conversion.  If the Mandatory Conversion
would result in the issuance of a fraction of a share of Common Stock, Parent
shall round such fraction of a share of Common Stock down to the nearest whole
share and any fractional share shall be payable in cash based upon the ten day
average closing bid price of the Common Stock at such time.

10.           Redemption.

(a)           Subject to the
terms of this Section 10, if Parent engages in an offering of its equity
securities, the primary purpose of which is to raise capital (an “Offering”), Holder may require Maker to redeem a portion of
the outstanding and unpaid principal of this Note (the “Redemption
Amount”) equal to:

(i)            up to $1,000,000 if the net cash proceeds of the
Offering to Parent (after deduction of underwriting discounts, commissions and
expenses of sale) are at least $12,000,000;

 5
 

(ii)           up to $2,000,000 if the net cash proceeds of the Offering
to Parent (after deduction of underwriting discounts, commissions and expenses
of sale) are at least $15,000,000; and

(iii)          up to $2,500,000 if the net cash proceeds of the
Offering to Parent after deduction of underwriting discounts, commissions and
expenses of sale are at least $20,000,000.

(b)           Upon the
consummation of an Offering, but not prior to the public announcement of such
Offering, the Company shall deliver written notice thereof to Holder (an “Offering Notice”).  If
Holder wishes to redeem the Redemption Amount pursuant to this Section 10,
Holder shall deliver a written notice (the “Redemption
Notice”) to Maker during the period beginning upon Holder’s receipt
of the Offering Notice and ending 60 days after the consummation of the
Offering described in the Offering Notice, which Redemption Notice shall
indicate the Redemption Amount Holder is electing to redeem and shall be
accompanied by this Note. 
Notwithstanding the foregoing, if Maker delivers an Offering Notice to
Holder not less than 30 days before the consummation of the Offering, Maker may
require in such Offering Notice that Holder deliver its Redemption Notice prior
to the consummation of the Offering in order to effect a redemption pursuant to
this Section 10.

(c)           The portion of
this Note subject to redemption pursuant to this Section 10 shall be
redeemed by the Company in cash at a price equal to the sum of the Redemption
Amount being redeemed plus accrued and unpaid interest, if any, in respect of
such Redemption Amount up to and including the date of redemption (such sum,
the “Redemption Price”).

(d)           If Holder has
submitted a Redemption Notice in accordance with Section 10(b), Maker
shall deliver the applicable Redemption Price to Holder (i) concurrently with
the consummation of the applicable Offering if such Redemption Notice is
received at least five Business Days prior to the consummation of such Offering
or (ii) within five Business Days after Maker’s receipt of such Redemption
Notice otherwise.  In the event of a
redemption of less than all of the outstanding and unpaid principal of this
Note, Maker shall promptly cause to be issued and delivered to Holder a new
Note representing the outstanding principal that has not been redeemed.

(e)           Any payments
made pursuant to this Section shall be made in the manner described in Section
2(e).

11.           Set
Off.  The amount owed under this
Note is subject to reduction as provided in, and in accordance with, the Asset
Purchase Agreement to secure claims thereunder.

12.           Change
of Control.  In the
event of a Change of Control (as defined herein), the entire unpaid principal
balance of this Note, together with accrued and unpaid interest shall, at
Holder’s option, become immediately due and payable.  “Change of
Control” means (i) the sale of all or substantially all of the
assets of Maker to any unaffiliated third party, (ii) the sale or exchange of
more than 50% of the outstanding voting securities of Maker to an unaffiliated
individual, legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated
under the Securities Exchange Act of 1934, as amended) in a single transaction
or series of related transactions, or (iii) a merger or consolidation of Maker
with or into one or more entities if, 

 6
 

immediately
thereafter, more than 50% of the outstanding voting securities of the surviving
or resulting entity are owned (directly or indirectly) by persons other than
the stockholders of Maker as of the effective date of such merger or
consolidation.

13.           Stock Splits, Stock Dividends, etc. In case Parent
shall: (i) pay a dividend, make a distribution on the Common Stock or fix a
record date for determination of holders of capital stock of the Parent
entitled to receive such dividend or distribution in shares of Common Stock or
any other of its capital stock, (ii) subdivide its outstanding shares of Common
Stock into a greater number of shares of Common Stock, (iii) combine its
outstanding shares of its capital stock into a smaller number of shares of
Common Stock, or (iv) issue, by reclassification of its shares of Common Stock,
any shares of capital stock (including any reclassification in connection with
a consolidation or merger in which Parent is the continuing corporation), the
amount of Shares issuable upon the effect of a Voluntary Conversion or a Mandatory
Conversion immediately prior thereto shall be adjusted so that the Holder shall
be entitled to receive upon effect of such Voluntary Conversion or a Mandatory
Conversion that number of Shares (or other capital stock of the Company) which
the Holder would have owned or would have been entitled to receive after the
happening of such event had the Voluntary Conversion or Mandatory Conversion
occurred immediately prior to the record date, in the case of any such dividend
or distribution, or the effective date, in the case of any such subdivision,
combination or reclassification.

14.           Miscellaneous.

(a)           If any clause
or provision of this Note shall for any reason be held to be invalid or
unenforceable, in whole or in part, such invalidity or unenforceability shall
not affect any other provision of this Note, but this Note shall be construed
as if such invalid or unenforceable clause or provision had never been
contained in this Note.  If a law which
applies to a loan evidenced by this Note and that sets maximum loan charges is
finally interpreted so that the interest or other charges collected or to be
collected in connection with any such loan exceed the permitted limit, then (i)
any such loan charge shall be reduced by the amount necessary to reduce the charge
to the permitted limit, and (ii) any sums already collected from Maker which
exceed permitted limits will be refunded to Maker.  Holder may choose to make any such refund by
reducing the principal owed under this Note or by making a direct payment to
Maker.  Any such reduction or payment
shall not cure or waive any default by Maker under this Note.  Maker agrees, however, that in determining
whether or not any interest payable under this Note exceeds the highest rate
permitted by law, any non-principal payment, including, without limitation,
late charges, shall be deemed to the extent permitted by law to be an expense,
fee, or premium rather than interest.

(b)           Maker may not
assign its rights or obligations under this Note to any person or entity without
the prior written consent of Holder; provided, however, that, notwithstanding
the foregoing, Maker may assign its rights and obligations under this Note
without the prior written consent of Holder if such assignment is made (i) to
an affiliate of Maker or (ii) in connection with the acquisition of Maker’s
business, whether by consolidation, acquisition of stock or assets, merger or
otherwise.  Any purported assignment
prohibited by this Note shall be void. 
The provisions of this Note shall be binding upon and inure to the
benefit of Maker and Holder, their respective personal representatives, heirs,
successors, and permitted assigns.

 7
 

(c)           This Note shall
not be sold, assigned, transferred, pledged, hypothecated, mortgaged, or
otherwise encumbered without the prior written consent of Maker, except for any
transfer of this Note pursuant to applicable laws of descent and distribution; provided,
that the transferee accepting this Note agrees to be bound by the terms,
conditions, and restrictions set forth herein, including, without limitation,
those related to subordination, set off, and restrictions on transferability
and to notify the holders of the Senior Debt of such transfer.

(d)           No
modification, amendment, or waiver of any provision of this Note will be effective
unless made in a writing signed by Maker and Holder.

(e)           The invalidity
or uneforceability of any particular provisions, or part of any provision, of
this Note shall not affect the other provisions or parts hereof, and this Note
shall be construed in all respects as if such invalid or unenforceable
provisions or parts were omitted.

(f)            All notices,
consents, waivers, and other communications required or permitted by this Note
shall be in writing and shall be deemed given to a party when (i) delivered to
the appropriate address by hand or by nationally recognized courier service
(costs prepaid); (ii) sent by facsimile with confirmation of transmission by
the transmitting equipment; or (iii) received or rejected by the addressee, if
sent by certified mail, return receipt requested; in each case to the following
addresses or facsimile numbers and marked to the attention of the person (by
name or title) designated below (or to such other address or facsimile number,
or person as a party may designate in writing to the other parties):

To Maker:

Infologix Systems Corporation

101 East County Line Road

Suite 210

Hatboro, PA 19040

Attention:  Chief Financial Officer

Telephone:  (215) 604-0691

Fax: 
(267) 681-0682

With a copy (which shall not
constitute notice) to:

Drinker Biddle & Reath LLP

18th and Cherry Streets

One Logan Square

Philadelphia, PA 
19103-6996

Attn: Stephen T. Burdumy and

Scott B.
Connolly

Telephone:  (215) 988-2700

To Holder:

Healthcare Informatics
Associates, Inc.

16306 Agate Point Road

 8
 

Bainbridge Island, WA 98110

Attn:  Gerry
Bartley

Telephone:
(206) 842-6797

With a copy (which shall not
constitute notice) to:

The James Law Group

121 SW Morrison Street, Suite 900

Portland, Oregon 97204

Attn: Ronald J. Miller

Telephone:
(503) 228-5380

A copy of any and all notices and other communications sent by
facsimile pursuant to this Section 14(f) shall also be sent by United
States mail to the appropriate address in accordance with this Section 14(f).

15.           Governing  Law.  This
Note shall be governed by and construed in accordance with the laws of the
State of Delaware and without giving effect to otherwise applicable principles
of conflicts of law of that or any other jurisdiction.

16.           CONSENT TO JURISDICTION.  FOR THE PURPOSE OF ENFORCING PAYMENT AND PERFORMANCE
OF THIS NOTE, MAKER HEREBY CONSENTS TO THE JURISDICTION AND VENUE OF THE COURTS
OF THE STATE OF DELAWARE OR OF ANY FEDERAL COURT LOCATED IN SUCH STATE.  MAKER HEREBY WAIVES THE RIGHT TO CONTEST THE
JURISDICTION AND VENUE OF THE COURTS LOCATED IN THE STATE OF DELAWARE ON THE
GROUND OF INCONVENIENCE OR OTHERWISE AND, FURTHER, WAIVES ANY RIGHT TO BRING
ANY ACTION OR PROCEEDING RELATING TO THIS NOTE IN ANY COURT OUTSIDE THE STATE
OF DELAWARE.  THE PROVISIONS OF THIS
SECTION SHALL NOT LIMIT OR OTHERWISE AFFECT THE RIGHT OF HOLDER TO INSTITUTE
AND CONDUCT AN ACTION IN ANY OTHER APPROPRIATE MANNER, JURISDICTION OR COURT.

17.           Maker’s Waivers. Maker and all
sureties, endorsers, guarantors and other parties now or hereafter liable for
the payment of this Note, in whole or in part, hereby severally (i) waive
demand, notice of demand, presentment for payment, notice of nonpayment, notice
of default, protest, notice of protest, and all other notices except those
required to be given under the terms of this Note, and further waive diligence
in collecting this Note or in enforcing any of the security for this Note; and
(ii) consent to any extension of time for the payment of this Note, or any
installment thereof, made by agreement by Holder with any person now or hereafter
liable for the payment of this Note, even if Maker is not a party to such
agreement.

18.           Waiver. Any covenant or condition
of this Note may be waived at any time, in writing, by the party entitled to
the benefit of such covenant or condition. Waiver of any default of any
covenant or condition, will not be a waiver of any succeeding default of the
covenant or condition or a waiver of the covenant or condition itself or any
other covenant or condition.

 9

IN WITNESS WHEREOF, Maker
has caused this Note to be executed and delivered on the date first written
above.

	
  

  	
  INFOLOGIX SYSTEMS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ David T. Gulian

  	
   

  
	
   

  	
  Name: 

  	
  David T. Gulian

  
	
   

  	
  Title: 

  	
  President and Chief Executive Officer

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