AMENDMENT NO. 2 TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

EX-4.3 2 a10-7802_2ex4d3.htm EX-4.3

Exhibit 4.3

EXECUTION VERSION

AMENDMENT NO. 2
TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

AMENDMENT NO. 2 TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT, dated as of April 6, 2010 (this “Amendment”), among InfoLogix, Inc., a Delaware corporation (“Parent Borrower”), InfoLogix Systems Corporation, a Delaware corporation (“ISC”), Embedded Technologies, LLC, a Delaware limited liability company (“Embedded”), Opt Acquisition LLC, a Pennsylvania limited liability company (“Opt”), and InfoLogix—DDMS, Inc., a Delaware corporation (“DDMS”) (Parent Borrower, ISC, Embedded, Opt and DDMS are each referred to herein as a “Borrower” and collectively as “Borrowers”) and Hercules Technology Growth Capital, Inc., a Maryland corporation (“Lender”). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Loan Agreement referred to below.

RECITALS

WHEREAS, on November 20, 2009, Borrowers and Lender entered into that certain Amended and Restated Loan and Security Agreement (as amended, restated, supplemented or otherwise modified and in effect from time to time, the “Loan Agreement”), pursuant to which, subject to the terms and conditions set forth therein, Lender made advances and other extensions of credit available to Borrowers.

WHEREAS, Events of Default exist under (a) Section 9.1 and Section 9.2 of the Loan Agreement as a result of a breach of Section 2.1(c) and Section 2.6(a)(i) of the Loan Agreement, (b) Section 9.2 of the Loan Agreement as a result of a breach of Section 7.20(d) of the Loan Agreement for the month of February 2010, and (c) Section 9.2 of the Loan Agreement as a result of a breach of Section 7.20(a) of the Loan Agreement for the Three Month Measurement Period ending December 2009; such Events of Default described in clauses (a), (b) and (c) are herein referred to as the “Specified Events of Default”.

WHEREAS, Borrowers anticipate being in default under Section 9.2 of the Loan Agreement as a result of a breach of Section 7.20(a) of the Loan Agreement for the Measurement Period ending February 28, 2010 (such anticipatory default hereinafter referred to as the “Specified Anticipatory Default”).

WHEREAS, Borrowers have requested that Lender provide a Term Loan C to Borrowers in an original principal amount of $1,350,000, the proceeds of which shall be used to repay, in part, outstanding Overadvances on the date of funding such Term Loan C.

WHEREAS, Lender is agreeable to amend the terms of the Loan Agreement as herein provided, subject to the terms and conditions of this Amendment.

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 and Exhibits Thereto. The Loan Agreement and Exhibits thereto are hereby amended as provided in the marked pages of the Loan Agreement and such Exhibits attached hereto as Exhibit A.

§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 and Lien in favor of Lender; (iii) each of the other instruments or documents delivered in connection with the Loan Agreement or any of the Loan Documents and purported to be executed by it and acknowledges that all of the foregoing Loan Documents and other instruments, documents, filings and recordings shall continue in full force and effect. Each pledgor under a Pledge Agreement hereby adopts again, ratifies and confirms in all respects, as its own act and deed, each pledge granted by such pledgor thereunder. By its signature below, each Borrower hereby consents to this Amendment, and after taking into account this Amendment, acknowledges that this Amendment shall not alter, release, discharge or otherwise affect any of its obligations under any Loan Document under which such Borrower acts as a secondary obligor, if any.

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

(a) The execution and delivery of this Amendment and the performance of the Loan Agreement, as amended by this Amendment, by the Borrowers 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 and will not contravene with (A) any provision of law, statute, rule, regulation, order, writ, judgment, injunction, decree or award binding on such Borrower or any of its Subsidiaries or (B) such Borrower’s certificate or articles of incorporation or formation, other charter documents, by-laws or limited liability company agreements, other company agreements, or any stock or membership provision or any amendment thereof or (C) the provisions of any contract or agreement binding upon such Borrower.

(b) The execution and delivery of this Amendment and performance of the Loan Agreement, as amended by this Amendment, by the Borrowers and the transactions contemplated hereby are valid and legally binding obligations of each Borrower, enforceable against each such Borrower in accordance with the respective terms and provisions hereof.

(c) No order, consent, adjudication, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, or other action in respect of any governmental or public body or authority, or subdivision thereof, is required to be obtained in connection with the execution and delivery of this Amendment, the performance by Borrowers and their Subsidiaries of their obligations under this Amendment and the Loan Agreement as amended hereby or the legality, validity, binding effect or enforceability of any of the Loan Documents.

(d) Each of the representations and warranties of such Borrower contained in the Loan Agreement as amended hereby or in any document or instrument delivered pursuant to or in connection with the Loan Agreement as amended hereby are true and correct in all material respects (other than to the extent that any representation and warranty is already qualified by materiality, in which case, such representation and warranty shall be true and correct) as of the date hereof.

(e) Other than the Specified Events of Default and the Specified Anticipatory Default, after taking into account this Amendment, no Event of Default has occurred and is continuing, and no

event has occurred and is continuing that, with the passage of time or giving of notice, or both, would constitute an Event of Default.

§4. Conditions to Effectiveness. This Amendment shall become effective upon the receipt by Lender of each of the following items, provided that each of the following items are delivered or performed on or before April 6, 2010:

(a) Lender shall have received a duly executed copy of this Amendment by Borrowers.

(b) Lender shall have received a duly executed Term Note C by Borrowers.

(c) Lender shall have received a duly executed registration rights agreement by Parent Borrower in favor of Lender in the form of Exhibit B attached hereto.

(d) Lender shall have received copies, certified by the Secretary or Assistant Secretary (or the equivalent thereof) of each Borrower, in each case, of its certificate of incorporation or formation, as applicable (each certified by the Secretary of State of the State of such Borrower’s incorporation or formation, as applicable, as of a recent date), its by-laws or limited liability company agreement, as applicable, (or, to the extent that there have been no amendments or modifications to such documents since the date such documents were last delivered to Lender, and such documents remain in full force and effect, Lender shall have received a certification with respect thereto), its Board of Directors’ resolutions and of resolutions or actions of any other body authorizing the execution of the Loan Documents to which such Borrower is a party, the incumbency of its officers authorized to sign the Loan Documents (which shall identify by name and title and bear the signatures of the authorized officers and any other officers of such Borrower authorized to sign the Loan Documents to which such Borrower is a party (or, to the extent that the authorized officers of the applicable Person remains the same as the certification received as of the Closing Date, Lender shall have received a certification with respect thereto), which such documents shall be in form and substance reasonably satisfactory to Lender and upon which certificate Lender shall be entitled to rely until informed of any change in writing by such Borrower.

(e) Borrowers shall have paid in immediately available funds (i) all costs, internal charges and out-of-pocket expenses (including reasonable attorneys’ fees and expenses) of Lender and (ii) all reasonable fees and expenses of Morgan, Lewis & Bockius LLP, counsel to Lender.

(f) Lender shall have received such other documents as Lender or its counsel may have reasonably requested.

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

and remedies of Lender under the Loan Documents in respect thereof. This Amendment shall constitute a Loan Document.

§6. Release. Each Borrower, on behalf of itself and its affiliates, and its or their successors, assigns and agents, hereby expressly forever waives, releases and discharges any and all claims (including, without limitation, cross-claims, counterclaims, and rights of setoff and recoupment), causes of action (whether direct or derivative in nature), demands, suits, costs, liabilities, responsibilities, disputes, obligations, expenses and damages (collectively, the “Claims”) any of them may have or allege to have as of the date of this Amendment (and all defenses that may arise out of any of the foregoing) of any nature, description, or kind whatsoever, based in whole or in part on facts, whether actual, contingent or otherwise, now known, unknown, or subsequently discovered, whether arising in law, at equity or otherwise, against either Lender or Holder, or any of their respective subsidiaries, affiliates, agents, principals, managers, managing members, members, stockholders, “controlling persons” (within the meaning of the United States federal securities laws), directors, officers, employees, attorneys, consultants, advisors, agents, trusts, trustors, beneficiaries, heirs, executors and administrators of each of the foregoing (collectively, the “Released Parties”) arising out of the Existing Loan Agreement, the Existing Loan Documents, the Existing Warrant Agreement, the Loan Agreement, the Loan Documents and any or all of the actions and transactions contemplated hereby or thereby, including any actual or alleged performance or non-performance of any of the Released Parties under the Existing Loan Agreement, the Existing Loan Documents, the Existing Warrant Agreement, the Loan Agreement and the Loan Documents; provided that nothing in this Amendment shall be deemed to release Lender from any of its obligations under the Loan Agreement or Holder from any of its obligations under the Existing Warrant Agreement. Each Borrower hereby acknowledges that the agreements in this Section 6 are intended to be in full satisfaction of all or any alleged injuries or damages arising in connection with the Claims. In entering into this Amendment, each Borrower expressly disclaims any reliance on any representations, acts, or omissions by any of the Released Parties and hereby agrees and acknowledges that the validity and effectiveness of the releases set forth above does not depend in any way on any such representation, acts and/or omissions or the accuracy, completeness, or validity thereof. The provisions of this Section 6 shall survive (i) the entry into the Loan Agreement and the Loan Documents, the payment in full of all Secured Obligations of Borrowers under or in respect of the Loan Agreement and the other Loan Documents and all other amounts owing thereunder and the termination of all such Loan Documents and (ii) the exercise by Holder of any and all of its rights under the Existing Warrant Agreement.

§7. Miscellaneous.

(a) Governing Law. This Amendment has been negotiated and delivered to Lender in the State of California, and shall have been accepted by Lender in the State of California. This Amendment shall be governed by, and construed and enforced in accordance with, the laws of the State of California, excluding conflict of laws principles that would cause the application of laws of any other jurisdiction.

(b) Consent to Jurisdiction and Venue. All judicial proceedings (to the extent that the reference requirement of Section 7(c) is not applicable) arising in or under or related to this Amendment may be brought in any state or federal court located in the State of California. By execution and delivery of this Amendment, each party hereto generally and unconditionally: (a) consents to nonexclusive personal jurisdiction in Santa Clara County, State of California; (b) waives any objection as to jurisdiction or venue in Santa Clara County, State of California; (c) agrees not to assert any defense based on lack of jurisdiction or venue in the aforesaid courts; and (d) irrevocably agrees to be bound by any judgment rendered thereby in connection with this Amendment. Service of

process on any party hereto in any action arising out of or relating to this Amendment shall be effective if given in accordance with the requirements for notice set forth in Section 11.2 of the Loan Agreement, and shall be deemed effective and received as set forth in Section 11.2 of the Loan Agreement. Nothing herein shall affect the right to serve process in any other manner permitted by law or shall limit the right of either party to bring proceedings in the courts of any other jurisdiction.

(i) Because disputes arising in connection with complex financial transactions are most quickly and economically resolved by an experienced and expert person and the parties wish applicable state and federal laws to apply (rather than arbitration rules), the parties desire that their disputes be resolved by a judge applying such applicable laws. EACH OF BORROWER AND LENDER SPECIFICALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, CROSS CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR ANY OTHER CLAIM (COLLECTIVELY, “SECTION 7 CLAIMS”) ASSERTED BY BORROWER AGAINST LENDER OR ITS ASSIGNEE OR BY LENDER OR ITS ASSIGNEE AGAINST BORROWER. This waiver extends to all such Section 7 Claims, including Section 7 Claims that involve Persons other than Borrowers and Lender; Section 7 Claims that arise out of or are in any way connected to the relationship between any Borrower and Lender; and any Section 7 Claims for damages, breach of contract, tort, specific performance, or any equitable or legal relief of any kind, arising out of this Amendment.

(ii) If the waiver of jury trial set forth in Section 7(c)(i) is ineffective or unenforceable, the parties agree that all Section 7 Claims shall be resolved by reference to a private judge sitting without a jury, pursuant to Code of Civil Procedure Section 638, before a mutually acceptable referee or, if the parties cannot agree, a referee selected by the Presiding Judge of the Santa Clara County, California. Such proceeding shall be conducted in Santa Clara County, California, with California rules of evidence and discovery applicable to such proceeding.

(iii) In the event Section 7 Claims are to be resolved by judicial reference, either party may seek from a court identified in Section 7(b), any prejudgment order, writ or other relief and have such prejudgment order, writ or other relief enforced to the fullest extent permitted by law notwithstanding that all Section 7 Claims are otherwise subject to resolution by judicial reference.

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

(e) Payment of Fees. Each Borrower hereby agrees to pay Lender, on demand by Lender, all Lender Expenses and all other professional fees set forth in Section 11.11 of the Loan Agreement.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]

IN WITNESS WHEREOF, Borrowers and Lender have duly executed and delivered this Amendment No. 2 to Amended and Restated Loan and Security Agreement as of the day and year first above written.

	BORROWERS:

	INFOLOGIX, INC.


	By:	/s/ David T. Gulian
		David T. Gulian, President and CEO

	INFOLOGIX SYSTEMS CORPORATION


	By:	/s/ David T. Gulian
		David T. Gulian, President

	OPT ACQUISITION LLC

	By:	InfoLogix Systems Corporation, its sole Member


	By:	/s/ David T. Gulian
		David T. Gulian, President

	EMBEDDED TECHNOLOGIES, LLC

	By:	InfoLogix Systems Corporation, its sole Member


	By:	/s/ David T. Gulian
		David T. Gulian, President

	INFOLOGIX — DDMS, INC.


	By:	/s/ David T. Gulian
		David T. Gulian, President

LENDER:

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.


Signature:		/s/ Scott H. Harvey

Print Name:			Scott H. Harvey

Title:	Chief Legal Officer

Exhibit A

(Please see attached)

~~EXECUTION VERSION~~Exhibit A to

Amendment No. 2 to Amended and Restated Loan and Security Agreement

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is made and dated as of November 20, 2009 and is entered into by and 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 “Borrowers”) and Hercules Technology Growth Capital, Inc., a Maryland corporation (“Lender”).

RECITALS

A. Under the Existing Agreement (as defined below), Borrowers requested Lender to make available to them (i) a term loan (the “Existing Term Loan”) in an initial aggregate principal amount of $12,500,000 (the “Existing Term Loan Commitment”) and (ii) a revolving facility (the “Existing Revolving Loan”) in an initial aggregate principal amount of $12,500,000 (the “Existing Revolving Loan Commitment”); and

B. Under the First Amendment to Existing Agreement, dated as of November 19, 2008, the Existing Revolving Loan Commitment Amount was reduced to an aggregate principal amount of $9,000,000; and

C. As of the date hereof and immediately prior to giving effect to this Agreement, the Existing Secured Obligations equal $22,725,811.89, of which (i) $9,102,836 constitutes the aggregate principal amount of all Existing Revolving Loans, (ii) $11,768,582 constitutes the aggregate principal amount of the Existing Term Loan, (iii) $68,422 constitutes the aggregate accrued and unpaid interest on all Existing Revolving Loans, (iv) $98,521 constitutes the aggregate accrued and unpaid interest on the Existing Term Loan, (v) $160,000 constitutes that unpaid portion of the Restructuring Fee under and as defined in the Existing Agreement and (vi) $1,527,450.89 constitutes all other outstanding Existing Secured Obligations; and

D. As of the date hereof and immediately prior to giving effect to this Agreement, Lender assigned to Hercules Technology I, LLC a portion of its interest in the Existing Term Loan equal to $5,000,000, and substantially contemporaneously therewith, Hercules Technology I, LLC cancelled such $5,000,000 in exchange for 67,294,751 shares of common Capital Stock of Parent Borrower at par $0.00001; and

E. In connection with the negotiations to restructure the Existing Agreement, Borrowers have requested that Lender amend and restate the Existing Agreement and restructure the Existing Term Loan and the Existing Revolving Commitments and continue such loans hereunder as follows: (i) a term loan A (the “Term Loan A”) in an initial aggregate principal amount of $5,500,000 (the “Term Loan A Commitment”), (ii) a term loan B (the “Term Loan B”) in an initial aggregate principal amount of $5,000,000 (the “Term Loan B Commitment”) and (iii) a revolving facility (the “Revolving Loan”) in an initial aggregate principal of $12,000,000 (the “Revolving Loan Commitment”); and

F. Lender is willing to amend and restate the Existing Agreement and restructure the Existing Term and Existing Revolving Commitments as herein provided on the terms and conditions set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, each Borrower and Lender agree as follows:

SECTION 1. DEFINITIONS, RULES OF CONSTRUCTION AND ACKNOWLEDGMENTS

1.1. Definitions. Unless otherwise defined herein, the following capitalized terms shall have the following meanings:

“90-Day VWAP Price” means, as of the date of determination, the ninety (90) day volume weighted average price per share of Parent Borrower’s common Capital Stock, determined by reference to the closing price on an Approved Exchange of such common Capital Stock during such period.

“2009 Recapitalization” means the recapitalization of the Parent Borrower’s Capital Stock pursuant to that certain Debt Conversion Agreement.

“Account Control Agreement(s)” means any agreement in form, scope and substance satisfactory to Lender entered into by Lender, any Borrower and a third party bank or other institution (including a securities intermediary) in which such Borrower maintains a deposit account or securities account and which grants Lender a perfected first priority security interest in the subject account or accounts.

“ACH Authorization” means the ACH Debit Authorization Agreement in substantially the form of Exhibit I.

“Acquisition Agreement” means the acquisition agreement entered into in connection with a Permitted Acquisition.

“Acquisition Documents” means the Acquisition Agreement and each other agreement, instrument, side letter or other document executed and delivered in connection with a Permitted Acquisition.

“Adjusted 30-Day VWAP Price” means, as of the date of determination, the price per share of common Capital Stock of Parent Borrower equal to: (A) the thirty (30) day volume weighted average price of Parent Borrower’s common Capital Stock, determined by reference to: the closing price of such common Capital Stock as listed on the Approved Exchange during such period, multiplied by eighty percent (80%), so long as, as of the date of determination, the common Capital Stock of the Parent Borrower is listed an Approved Exchange or (B) in accordance with the Valuation Procedures, in the event the common Capital Stock of Parent Borrower has ceased to be listed on an Approved Exchange.

~~“Advance(s)” means a Revolving Loan Advance.~~

“Adjusted 60-Day Average Price” means, as of the date of determination, the price per share of common Capital Stock of Parent Borrower equal to: (A) the sixty (60) day average price of Parent Borrower’s common Capital Stock, determined by reference to: the closing price of such common Capital Stock as listed on the Approved Exchange during such period, multiplied by seventy percent (70%), so long as, as of the date of determination, the common Capital Stock of the Parent Borrower is listed an Approved Exchange or (B) in accordance with the Valuation Procedures, in the event the common Capital Stock of Parent Borrower has ceased to be listed on an Approved Exchange.

“Advance(s)” means, as of the Closing Date, a Revolving Loan Advance and, as of the First Amendment Effective Date, a Revolving Loan Advance or an Equipment Term Loan Advance, as applicable.

“Advance Date” means the funding date of any Advance.

“Advance Request” means a request for an Advance submitted by Parent Borrower on behalf of itself and of each Borrower to Lender in substantially the form of Exhibit A and in form and substance satisfactory to Lender.

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“Agreement” means this Amended and Restated Loan and Security Agreement, as amended from time to time.

“Amended Side Letter Agreement” means that certain Amended Side Letter Agreement dated as of November 20, 2009, among the Borrowers and the Lender.

“Approved Exchange” means any of Nasdaq, the New York Stock Exchange or the American Stock Exchange, to the extent that the common Capital Stock of the Parent Borrower shall at the date of determination be then traded and subject to an effective listing on such exchange.

“Approved Projections” means those projections of the annual operational budget of the Parent Borrower and its Subsidiaries on a consolidated basis, balance sheets and cash flow statements through the Term Loan B Maturity Date, delivered from time to time in accordance with the terms of this Agreement, all in form and substance, and with such supporting documentation and underlying assumptions, as reasonably acceptable to Lender and approved by Lender in writing.

“Assignee” has the meaning given to it in Section 11.13.

“Borrower” or “Borrowers” has the meaning ascribed to such terms in the Preamble hereto.

Notwithstanding the foregoing, the 2009 Recapitalization, the election of a new board of directors of Parent Borrower in connection with the 2009 Recapitalization or any change in the board of directors of Parent Borrower pursuant to Section 3.1 of the Debt Conversion Agreement that arises as a direct result of any action taken or inaction by Hercules LLC shall not constitute a Change in Control hereunder.

“Claims” has the meaning given to it in Section 11.10.

“Closing Date” means the date of this Agreement.

“Collateral” means the property described in Section 3.1.

“Collateral Assignments of Acquisition Documents” means those certain Collateral Assignments of Acquisition Documents dated as of the closing date of any Permitted Acquisition, among the applicable Borrowers and Lender, providing for collateral assignment of the applicable Borrower’s or Borrower’s respective rights and interests, but not obligations, under the applicable Acquisition Documents to Lender, a form of which document is attached hereto as Exhibit J.

“Confidential Information” has the meaning given to it in Section 11.12.

“Consolidated Adjusted EBITDA” means, at any date of determination, an amount equal to consolidated net income of Parent Borrower and its Subsidiaries for the most recently completed applicable Measurement Period, plus (a) the following to the extent deducted in calculating such consolidated net income: (i) Consolidated Interest Expenses paid or accrued in such applicable Measurement Period, (ii) the provision for Federal, state, local and foreign income taxes payable, (iii) depreciation and amortization expense, (iv) other non-recurring expenses reducing such consolidated net income which do not represent a cash item in such period or any future period, in each case of or by Parent Borrower and its Subsidiaries for such applicable Measurement Period, (v) non-cash charges for stock based compensation, (vi) non-recurring cash fees, costs, charges and expenses paid during such period incurred in connection with a Permitted Acquisition, (vii) non-recurring non-cash write-offs or write-downs of demo Equipment not to exceed $750,000 in the aggregate (in each case of or by the Parent Borrower and its Subsidiaries for such applicable Measurement Period), (viii) cash severance expenses in such amounts as are consistent with Parent Borrower’s severance plan as approved by Parent Borrower’s board of directors and otherwise mutually agreed upon by Parent Borrower and Lender, in Lender’s reasonable discretion, and (ix) fees, legal fees and expenses incurred and paid in connection with the preparation and negotiation of this Agreement ~~and~~, the 2009 Recapitalization and the First Amendment; and minus (b) the following, to the extent included in calculating such consolidated net income: (i) Federal, state, local and foreign income tax credits and (ii) all non-cash items increasing consolidated net income (in each case of or by Parent Borrower and its Subsidiaries for such applicable Measurement Period). For purposes of this calculation and without duplication, with respect to any period of determination, the consolidated adjusted EBITDA of a wholly-owned Subsidiary acquired as a result of a Permitted Acquisition, which shall be calculated in a manner consistent with the methodology set forth for Consolidated Adjusted EBITDA herein, may be included in the calculation of Consolidated Adjusted EBITDA as though such Permitted Acquisition was consummated on the first day of the applicable

case, of or by Parent Borrower and its Subsidiaries on a consolidated basis for the most recently completed Measurement Period. For purposes of calculating the Consolidated Interest Coverage Ratio, interest shall be included herein to the extent paid in cash or required to be paid in cash.

“Consolidated Interest Coverage Ratio” means, as of the date of determination, the ratio of (a) Consolidated Adjusted EBITDA for the most recently completed Three Month Measurement Period to (b) Consolidated Interest Expense for such Three Month Measurement Period.

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

“Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to (i) any indebtedness, letter of credit or other obligation of another, including any such obligation directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that Person, or in respect of which that Person is otherwise directly or indirectly liable; (ii) any obligations with respect to undrawn letters of credit, corporate credit cards or merchant services issued for the account of that Person; and (iii) all obligations arising under any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee or other support arrangement.

“Converted Adjusted Debt Amount” means, as of the date of determination, an amount equal to fifty percent (50%) of the aggregate outstanding principal amount of the Term Loan B.

“Converted Debt Amount” means, as of the date of determination, the aggregate outstanding principal amount of the Term Loan B.

“Converted Term Loan C Debt Amount” means, as of the date of determination, the aggregate outstanding principal amount of the Term Loan C.

“Copyright License” means any written agreement granting any right to use any Copyright or Copyright registration, now owned or hereafter acquired by any Borrower or in which any Borrower now holds or hereafter acquires any interest.

“Copyright Security Agreement” means a collateral grant of security interest in copyrights executed and delivered by the Borrowers and Lender, as such may be amended, restated or otherwise modified from time to time.

(p) Accounts not owned by the applicable Borrower free and clear of all Liens of any other Person other than the Liens in favor of Lender;

(q) Accounts not subject to a first priority Lien in favor of Lender;

(r) Equipment Accounts unless otherwise consented to by Lender in writing in its sole discretion as being “Eligible Accounts” for purposes hereof; and

(s) ~~(r)~~Accounts the collection of which Lender determines in its good faith credit judgment to be doubtful.

“Embedded” has the meaning ascribed to such term in the Preamble hereof.

“ERISA” is the Employee Retirement Income Security Act of 1974, and its regulations.

“Equipment Accounts” means accounts (accounts receivable) arising from the sale or other transfer of equipment that was financed (in whole or in part) by one or more Equipment Term Loan Advance(s).

“Equipment Purchase Orders” means the purchase orders for equipment to be purchased by a Borrower from JACO, PowerUp or such other equipment supplier(s) acceptable to Lender in its sole discretion.

“Equipment Term Loan” means the multiple advance term loan permitted under this Agreement as of the First Amendment Effective Date, subject to the terms and conditions hereof.

“Equipment Term Loan Advance” means an advance of funds under the Equipment Term Loan.

“Equipment Term Loan Availability Period” means the period commencing on the First Amendment Effective Date and continuing through and including April 30, 2010.

“Equipment Term Loan Commitment” means, as of the First Amendment Effective Date, Three Million Dollars ($3,000,000), as such commitment may be reduced from time to time pursuant to the terms hereof.

“Equipment Term Loan Fee” means three percent (3%) of the purchase price identified in the Equipment Purchase Orders approved by Lender in its sole discretion for purposes of funding one or more Equipment Term Loan Advance, as determined by Lender.

“Equipment Term Loan Interest Rate” means one and one-half percent (1.5%) per month.

“Equipment Term Loan Lockbox” means a lockbox maintained with a financial institution acceptable to Lender in its sole discretion and in the name of Lender.

“Equipment Term Loan Maturity Date” means December 31, 2010.

“Equipment Term Loan Note” means a promissory note in substantially the form of Exhibit B-4.

“Event of Default” has the meaning given to it in Section 9.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Existing Agreement” means that certain Loan and Security Agreement dated as of May 1, 2008 among the Borrowers and Lender, as amended prior to the date hereof and as further amended and restated by this Agreement.

“Existing Loan Documents” means those certain “Loan Documents” executed and delivered in connection with the Existing Agreement from time to time.

“Existing Revolving Loan” has the meaning ascribed to such term in the Recitals hereto.

“Existing Revolving Loan Commitment” has the meaning ascribed to such term in the Recitals hereto.

“Existing Secured Obligations” means all “Secured Obligations” arising under the Existing Agreement.

“Existing Term Loan” has the meaning ascribed to such term in the Recitals hereto.

“Existing Term Loan Commitment” has the meaning ascribed to such term in the Recitals hereto.

“Facility Charge” means an amount equal to $450,000.

“Financial Statements” has the meaning given to it in Section 7.1.

“First Amendment” means Amendment No. 1 to Amended and Restated Loan and Security Agreement, dated as of February 19, 2010, among Borrowers and Lender.

“First Amendment Effective Date” means February 19, 2010.

“GAAP” means generally accepted accounting principles in the United States of America, as in effect from time to time.

“Hercules LLC” means Hercules Technology I, LLC, a Delaware limited liability company.

“HIA” means Healthcare Informatics Associates, Inc., a Delaware corporation.

“HIA Indebtedness” means the obligations of ISC to HIA pursuant to the Subordinated Note and the Earn Out Agreement, each as defined in the HIA Subordination Agreement.

“HIA Subordination Agreement” means that certain Subordination Agreement executed and delivered by and among Lender, ISC and HIA dated as of May 1, 2008, as the same may be amended pursuant to the terms thereof from time to time.

that is not in the nature of a security interest) under the UCC or comparable law of any jurisdiction.

“Loan” or “Loans” means, collectively, the ~~Advances~~Revolving Loan, the Term Loans and the Equipment Term Loan made under this Agreement.

“Loan Documents” means this Agreement, the Notes, the ACH Authorization, the Security Documents, the Reaffirmation Agreement, the Amended Side Letter Agreement, the Waiver and Release Agreement, the HIA Subordination Agreement, any intercreditor agreements, any subordination agreements and any other documents executed or to be executed in connection with the Secured Obligations or the transactions contemplated hereby, as the same may from time to time be amended, modified, supplemented or restated.

“Mandatory Conversion Event” shall have the meaning assigned to such term in Section 2.9(b).

“Material Adverse Effect” means a material adverse effect upon: (i) the business, operations, properties, assets, or financial condition of Parent Borrower and its Subsidiaries taken as a whole; or (ii) the ability of any Borrower to perform the Secured Obligations in accordance with the terms of the Loan Documents, or the ability of Lender to enforce any of its rights or remedies with respect to the Secured Obligations; or (iii) the Collateral or Lender’s Liens on the Collateral or the priority of such Liens.

“Material Agreements” means the Acquisition Documents, the charter documents (including, as applicable and without limitation, articles of formation and by-laws) of each of the Parent Borrower and its Subsidiaries, and the Subordinated Indebtedness Documents.

“Maximum Rate” shall have the meaning assigned to such term in Section 2.3.

“Maximum Revolving Loan Amount” means $12,000,000.

“Maximum Term Loan A Amount” means $5,500,000.

“Maximum Term Loan B Amount” means $5,000,000.

“Measurement Period” means, at any date of determination, the most recently completed Twelve Month Measurement Period or Three Month Measurement Period, of Borrowers, as applicable.

“Nasdaq” means The Nasdaq Stock Market, LLC.

“Note(s)” means, collectively, the Revolving Notes, the Term Notes A ~~and/or~~, Term Notes B, the Term Notes C and/or the Equipment Term Loan Note.

“Opt” has the meaning ascribed to such term in the Preamble hereof.

“Overadvance” or “Overadvances” has the meaning ascribed to such terms in Section 2.1(c) hereof.

“Permitted Indebtedness” means: (i) Indebtedness of Borrowers in favor of Lender arising under this Agreement or any other Loan Document; (ii) Indebtedness existing on the Closing Date which is disclosed in Schedule 1A; (iii) Indebtedness of up to $750,000 outstanding at any time secured by a lien described in clause (vii) of the defined term “Permitted Liens,” provided such Indebtedness does not exceed the lesser of the cost or fair market value of the ~~Equipment~~equipment financed with such Indebtedness; (iv) Indebtedness incurred in the ordinary course of business with corporate credit cards that also constitutes a Permitted Investment pursuant to clause (viii) of such definition; (v) Subordinated Indebtedness; (vi) reimbursement obligations in connection with letters of credit that are secured by cash or Cash Equivalents and issued on behalf of the Parent Borrower or a Subsidiary thereof in an amount not to exceed $350,000 at any time outstanding; (vii) other Indebtedness in an amount not to exceed $250,000 at any time outstanding; and (viii) extensions, refinancings and renewals of any items of Permitted Indebtedness, provided that the principal amount is not increased or the terms modified to impose materially more burdensome terms upon Parent Borrower or its Subsidiary, as the case may be.

“Permitted Investment” means: (i) Investments of a Borrower in any other Person existing on the Closing Date which are disclosed in Schedule 1B; (ii) (a) marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency or any State thereof maturing within one year from the date of acquisition thereof, (b) commercial paper maturing no more than one year from the date of creation thereof and currently having a rating of at least A-2 or P-2 from either Standard & Poor’s Corporation or Moody’s Investors Service, (c) certificates of deposit issued by any bank with assets of at least $500,000,000 maturing no more than one year from the date of investment therein and (d) money market accounts; (iii) repurchases of stock from former employees, directors, or consultants of Parent Borrower under the terms of applicable repurchase agreements at the original issuance price of such securities in an aggregate amount not to exceed $250,000 in any fiscal year, provided that no Event of Default has occurred, is continuing or would exist after giving effect to the repurchases; (iv) Investments accepted in connection with Permitted Transfers; (v) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of each respective Borrower’s business; (vi) Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business, provided that this subparagraph (vi) shall not apply to Investments of any Borrower in any Subsidiary; (vii) Investments consisting of loans not involving the net transfer on a substantially contemporaneous basis of cash proceeds to employees, officers or directors relating to the purchase of Capital Stock of Parent Borrower pursuant to employee stock purchase plans or other similar agreements approved by Parent Borrower’s Board of Directors, and loans to any employees, officers or directors of any Borrower, or the guarantee by any Borrower of any such loans made by a third party permitted pursuant to Section 7.9(c); (viii) Investments consisting of travel advances in the ordinary course of business; (ix) Investments in newly-formed Subsidiaries organized in the United States, provided that such Subsidiaries enter into a Joinder Agreement promptly after their formation by Parent Borrower (or applicable Subsidiary) and execute such other documents as shall be reasonably requested by Lender; (x) Investments in subsidiaries organized outside of the United States approved in advance in writing by Lender; (xi) joint ventures or strategic alliances in the ordinary course of each respective Borrower’s

exclusive as to territory only as to discreet geographical areas outside of the United States in the ordinary course of business, (iii) dispositions of worn-out, obsolete or surplus ~~Equipment~~equipment at fair market value in the ordinary course of business, and (iv) other transfers of assets having a fair market value of not more than $500,000 in the aggregate in any fiscal year, provided, that Borrowers shall be required to make mandatory prepayments of the Term Loans and the Equipment Term Loan, in accordance with the provisions of Section 2.6(a)(v) herein, in the amounts by which the fair market value of any transfers of assets contemplated by clause (iv) herein exceed $250,000 in the aggregate in any fiscal year.

“Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, limited liability company, institution, other entity or government.

“Pledge Agreements” means, collectively, (a) that certain Pledge Agreement, dated as of May 1, 2008, executed and delivered by each Borrower pledging its respective interest as applicable, in DDMS, ISC, Embedded and Opt and (b) any other pledge agreement executed and delivered pursuant to the terms hereof, as each such agreement may be amended, restated or otherwise modified from time to time.

“Preferred Stock” means at any given time any equity security issued by Parent Borrower that has any rights, preferences or privileges senior to Parent Borrower’s common stock.

“Proposed Share Price” has the meaning given to such term in the definition of “Valuation Procedures”.

“Reaffirmation Agreement” means that certain Reaffirmation Agreement dated as of the Closing Date among Borrowers and Lender.

“Refinancing Event” means the closing of a loan with a lender other than Lender or the making of an equity contribution by a shareholder other than Lender or any other Lender’s affiliates, the proceeds of which are applied to pay in full in cash the aggregate outstanding principal amount of the Term ~~Loans~~Loan A and the Term Loan B, together with all accrued interest thereon (including interest accrued but not yet capitalized) and all other Secured Obligations arising in respect thereof (including, without limitation the Term Loan Prepayment Charge (if applicable)).

“Registration Rights Agreement” means the registration rights agreement substantially in the form of Exhibit K duly executed by Parent Borrower in favor of Lender.

“Revolving Interest Rate” shall equal twelve percent (12%) per annum, provided that upon a Refinancing Event the “Revolving Interest Rate” shall be reduced to the prime rate as reported in The Wall Street Journal plus 4.0% per annum; provided, however, any Revolving Loan constituting an Overadvance shall bear interest at the rate equal to fifteen percent (15%) per annum.

“Revolving Loan” has the meaning ascribed to such term in the Recitals hereto.

“Revolving Loan Advance” means any Revolving Loan funds advanced under this Agreement.

“Revolving Loan Commitment” has the meaning ascribed to such term in the Recitals hereto.

“Revolving Loan Maturity Date” means May 1, 2011, provided that in the event Borrowers notify Lender in writing not more than 30 days and not less than 15 days prior to such date requesting that Lender extend the “Revolving Loan Maturity Date” to November 1, 2011 (such written notification to state that such notice is a “Request for Extension of Revolving Loan Maturity Date,”), then following Lender’s written confirmation thereof to Borrowers, the Revolving Loan Maturity Date shall be extended to November 1, 2011, provided that no Event of Default exists at the time of delivery of such “Request for Extension of Revolving Loan Maturity Date” or shall exist at the time of the extension thereof by Lender.

“Revolving Note” means a promissory note in substantially the form of Exhibit B-3.

“SEC Reports” means the reports, forms or other information required to be filed by Parent Borrower under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months preceding the date hereof (or such shorter period as Parent Borrower was required by law to file such reports).

“Second Amendment” means Amendment No. 2 to Amended and Restated Loan and Security Agreement, dated as of April 6, 2010, among Borrowers and Lender.

“Second Amendment Effective Date” means April 6, 2010.

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

“Securities” means, collectively, (i) the Term Loan B ~~and~~, (ii) the shares of common Capital Stock of Parent Borrower issued to Lender pursuant to Section 2.5(a)(iii) and Section 2.9 hereof, (iii) the Term Loan C and (iv) the shares of common Capital Stock of Parent Borrower issued to Lender pursuant to Section 2.10 hereof.

“Securities Act” refers to the Securities Act of 1933, as amended.

“Security Documents” means, collectively, Section 3 of this Agreement, the Patent Security Agreement, the Trademark Security Agreement, the Copyright Security Agreement, the Pledge Agreements, the Account Control Agreements, the Collateral Assignments of Acquisition Documents, the Reaffirmation Agreement, all UCC Financing Statements and any other

documents executed or to be executed in connection with the foregoing or purporting to grant security interests and Liens on the assets of the applicable Borrower in favor of Lender, as the same may from time to time be amended, modified, supplemented or restated.

“Subordinated Indebtedness” means Indebtedness subordinated to the Secured Obligations in amounts and on terms and conditions satisfactory to Lender in its discretion and subject to subordination provisions or agreements satisfactory to Lender in its discretion, including without limitation, the HIA Indebtedness.

“Subordinated Indebtedness Documents” means any and all documents executed by Parent Borrower or any of its Subsidiaries giving rise to or otherwise executed in connection with the Subordinated Indebtedness, including without limitation, any and all promissory notes, loan agreements, security agreements, and any and all collateral and ancillary documents.

“Subsidiary” means an entity, whether corporate, partnership, limited liability company, joint venture or otherwise, in which Parent Borrower owns or controls, directly or indirectly, 50% or more of the outstanding voting securities, including each entity listed on Schedule 1 hereto.

“Term Loan A” has the meaning ascribed to such term in the Recitals hereto.

“Term Loan A Commitment” has the meaning ascribed to such term in the Recitals hereto.

“Term Loan A Interest Rate” means, for any day, (i) for the period commencing on the Closing Date and continuing through but not including the first anniversary of the Closing Date, twelve percent (12%) per annum, (ii) for the period commencing on the date which is the first anniversary of the Closing Date and continuing through but not including the second anniversary of the Closing Date, eighteen percent (18%) per annum, and (iii) thereafter, fifteen percent (15%) per annum.

“Term Loan A Maturity Date” means November 1, 2013.

“Term Loan B” has the meaning ascribed to such term in the Recitals hereto.

“Term Loan B Commitment” has the meaning ascribed to such term in the Recitals hereto.

“Term Loan B Conversion Notice” has the meaning ascribed to such term in Section 2.9(a)

“Term Loan B Conversion Opt Out Fee” means $12,500,000.

“Term Loan B Conversion Price” means $0.0743, provided that, if at any time while this Agreement is outstanding the common Capital Stock of the Parent Borrower is subdivided or combined the “Term Loan B Conversion Price” shall be proportionately adjusted.

“Term Loan B Conversion Right Termination Date” means the date which is one hundred and eighty (180) days following the Closing Date.

“Term Loan B Interest Rate” means, for any day, (i) for the period commencing on the Closing Date and continuing through but not including the first anniversary of the Closing Date, fourteen and one half percent (14.5%) per annum, (ii) for the period commencing on the date which is the first anniversary of the Closing Date and continuing through but not including the second anniversary of the Closing Date, twenty and one half percent (20.5%) per annum, and (iii) thereafter, seventeen and one half percent (17.5%) per annum.

“Term Loan B Maturity Date” means November 1, 2014.

~~“Term Loan B Conversion Opt Out Fee” means $12,500,000.~~

“Term Loan C” means the term loan made to the Borrowers on the Second Amendment Effective Date in the original principal amount of $1,350,000.

“Term Loan C Commitment” means $1,350,000.

“Term Loan C Conversion Notice” has the meaning ascribed to such term in Section 2.10(a)

“Term Loan C Conversion Price” means $3.276, provided that, if at any time while this Agreement is outstanding the common Capital Stock of the Parent Borrower is subdivided or combined the “Term Loan C Conversion Price” shall be proportionately adjusted.

“Term Loan C Interest Rate” means, for any day, eight percent (8.0%) per annum.

“Term Loan C Maturity Date” means April 1, 2013.

“Term Loan Prepayment Charge” means the prepayment charges described in Section 2.6(c) hereof.

“Term Loans” means, collectively, the Term Loan A, the Term Loan B and the Term Loan BC.

“Term Note A” means a promissory note in substantially the form of Exhibit B-1.

“Term Note B” means a promissory note in substantially the form of Exhibit B-2.

“Term Note C” means a promissory note in substantially the form of Exhibit B-5.

“Three Month Measurement Period” means, at any date of determination, the most recently completed three fiscal months of Borrowers.

“Trademark License” means any written agreement granting any right to use any Trademark or Trademark registration, now owned or hereafter acquired by any Borrower or in which Borrower now holds or hereafter acquires any interest.

“Trademark Security Agreement” means a trademark security agreement executed and delivered by the Borrowers and Lender as such may be amended, restated or otherwise modified from time to time.

“Trademarks” means all trademarks (registered, common law or otherwise) and any applications in connection therewith, including registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof.

“Twelve Month Measurement Period” means, at any date of determination, the most recently completed twelve consecutive calendar months of Borrowers.

“UCC” means the Uniform Commercial Code as the same is, from time to time, in effect in the State of California, provided, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, Lender’s Lien on any Collateral is governed by the Uniform Commercial Code as the same is, from time to time, in effect in a jurisdiction other than the State of California, then the term “UCC” shall mean the Uniform Commercial Code as in effect, from time to time, in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions.

“Valuation Procedures”, when used in reference to determining the price per share of Parent Borrower’s common Capital Stock, means, initially, the determination thereof in good faith by the Board of Directors of Parent Borrower (such price per share herein referred to as the “Proposed Share Price”) and approved by Lender, in its reasonable business judgment. In the event Lender does not accept the Proposed Share Price, then Parent Borrower and Lender shall, in good faith and at Borrowers’ expense, select an independent valuation firm mutually acceptable to each such Person to conduct a valuation of the share price of the Parent Borrower. The determination of such independent valuation firm shall be conclusive, absent manifest error, as between the Parent Borrower and Lender for purposes herein and all costs and expenses incurred in connection with such valuation shall be borne by the Borrowers.

“Waiver and Release Agreement” means that certain Waiver and Release Agreement, dated as of November 20, 2009, among the ~~Loan Parties~~Borrowers and the Lender.

“Yield Revenue Amount” means, (A) with respect to the Term Loan A, an amount equal to (i) the interest that would have accrued and been payable on the principal balance of the Term Loan A assuming that the Term Loan A had accrued interest at a rate per annum of 18% from the date which is six month following the Closing Date to the date of repayment, prepayment or acceleration (such date herein referred to as the “Determination Date”), minus (ii) the amount of interest actually paid by the Borrowers on account of the Term Loan A from the date which is six months following the Closing Date to the Determination Date; and (B) with respect to the Term Loan B, an amount equal to (i) the interest that would have accrued and been payable on the principal balance of the Term Loan B assuming that the Term Loan B had accrued interest at a rate per annum of 18% in cash plus 2.5% interest in kind (by adding such amount to the outstanding principal amount of the Term Loan B as if such payment in kind interest had been added to the outstanding principal amount of the Term Loan B on the applicable interest date)

Agreement and shall be continued hereunder as Revolving Loans and Revolving Loan Advances.

(b) Advance Request. To obtain a Revolving Loan Advance, at least two (2) Business Days prior to the requested Advance Date, Parent Borrower, on its own behalf and on behalf of each Borrower, shall complete, sign and deliver an Advance Request and a Borrowing Base Certificate (with such Borrowing Base Certificate reflecting any adjustments in eligibility criteria requested by Lender whether or not any notice period in respect of such adjustment shall have then elapsed); provided, however that if Borrowers have submitted a Borrowing Base Certificate dated as of a date not more than 3 Business Days prior to the submission of the Advance Request, then the Parent Borrower shall not be required to submit a new Borrowing Base Certificate in connection with such Advance Request unless adjustments are required to reflect any adjustments in the eligibility criteria requested by Lender whether or not any notice period in respect of such adjustments shall have then elapsed. Lender shall fund the Revolving Advance in the manner requested by the Advance Request, provided that each of the conditions precedent to such Revolving Advance is satisfied as of the requested Advance Date.

(c) Overadvance Facility. Anything in this Agreement to the contrary notwithstanding, at the request of Parent Borrower, Lender shall make or expressly permit to remain outstanding any Revolving Loan Advance to Borrowers in amounts that cause the aggregate outstanding principal balance of the Revolving Loans to exceed the Borrowing Base (any such excess Revolving Loan Advance are herein referred to individually as an “Overadvance” and collectively as “Overadvances”), provided that (i) the aggregate principal amount of all such Overadvances outstanding shall not exceed $500,000 at any time; (ii) an Overadvance may be outstanding for no more than twenty-eight (28) consecutive calendar days; and (iii) no Overadvance shall be made or permitted to exist at any time (A) during the Overadvance Clean Down Period (and Borrower shall repay such Overadvances no later than the Business Day immediately preceding the first day of each Overadvance Clean Down Period as provided in Section 2.6(a)(iii)) or (B) that an Event of Default then exists or would arise as a result of such Overadvance. Overadvances may be made even if the conditions to lending set forth in Section 4 have not been met. All Overadvances shall constitute Revolving Loans and bear interest at the Revolving Interest Rate applicable for Overadvances. For purposes of this Section 2.1(c), (x) the aggregate principal amount of all Overadvances shall not exceed $500,000 at any time; and (y) no Overadvance shall cause the aggregate principal amount of all Revolving Loans to exceed the Revolving Loan Maximum Amount.

(d) Interest. Subject to the provisions of Section 2.1(c) Section 2.3 and Section 2.4, the principal balance of the Revolving Loan shall bear interest thereon from the initial Revolving Loan Advance Date for such Revolving Loan Advance, calculated at the floating Revolving Interest Rate based upon a year consisting of 360 days, as applicable, and payable for the actual number of days elapsed.

2.2 Term Loans; Equipment Term Loan.

(a) Term Loan A. On the Closing Date, a portion of the Existing Term Loan in the amount of the Maximum Term Loan A Amount shall be continued hereunder as the Term Loan A.

(b) Term Loan B. On the Closing Date, a portion of the Existing Term Loan in the amount of the Maximum Term Loan B Amount shall be continued hereunder as the Term Loan B.

i. Subject to the provisions of Section 2.3 and Section 2.4, the principal balance of the Term Loan A shall bear interest thereon from the Closing Date at the Term Loan A Interest Rate based on a year consisting of 360 days with interest computed daily based on the actual number of days elapsed.

ii. Subject to the provisions of Section 2.3 and Section 2.4, the principal balance of the Term Loan B shall bear interest thereon from the Closing Date at the Term Loan B Interest Rate based on a year consisting of 360 days with interest computed daily based on the actual number of days elapsed.

(d) Equipment Term Loan.

(i) Advances. Subject to the terms and conditions of this Agreement, Borrowers may, jointly and severally, draw Equipment Term Loan Advances on or before the last day of the Equipment Term Loan Availability Period, in one or more Equipment Term Loan Advances, in an aggregate principal amount of up to the Equipment Term Loan Commitment then outstanding, provided, Borrowers may request up to twelve (12) Equipment Term Loan Advances during the Equipment Term Loan Availability Period, and each Equipment Term Loan Advance shall be in a minimum amount of $250,000 or if the amount available to be borrowed under the Equipment Term Loan Commitment is less than $250,000, then such lesser amount. Upon the funding of any Equipment Term Loan Advance hereunder, the Equipment Term Loan Commitment shall be permanently terminated by an amount equal to such Equipment Term Loan Advance so funded. On the last day of the Equipment Term Loan Availability Period, all outstanding Equipment Term Loan Commitments shall be permanently terminated.

(ii) Advance Request. To obtain an Equipment Term Loan Advance, at least two (2) Business Days prior to the requested Advance Date, Parent Borrower, on its own behalf and on behalf of each Borrower, shall complete, sign and deliver an Advance Request and the Equipment Purchase Orders for which such Advance Request is being made. Lender shall have the right, in its sole discretion, to approve such Equipment Purchase Orders for which an Equipment Term Loan Advance is being requested (each such request to be only for the amounts then proposed to be paid in respect of any such approved Equipment Purchase Orders and not for any amounts to be applied to future payment obligations thereunder), and in the event Lender does not approve any such Equipment Purchase Order(s), the amount of the then requested Equipment Term Loan Advance shall automatically be reduced by the purchase price amount (or portion thereof that is the subject of the requested Equipment Term Loan Advance) identified in the Equipment Purchase Order(s) not approved by Lender or as Lender may otherwise determine in its sole discretion. Lender shall fund the Equipment Term Loan Advance requested as herein provided, provided that each of the conditions precedent to such Equipment Term

Loan Advance is satisfied as of the requested Advance Date, unless otherwise agreed to in writing by Lender.

(iii) Interest. Subject to the provisions of Section 2.3 and Section 2.4, the outstanding principal balance of the Equipment Term Loan shall bear interest thereon from the First Amendment Effective Date at the Equipment Term Loan Interest Rate based on a month consisting of 30 days with interest computed daily based on the actual number of days elapsed.

(e) Term Loan C.

i. Term Loan C. Subject to the terms and conditions of this Agreement, on the Second Amendment Effective Date, the Lender shall fund the Term Loan C in the amount of the Term Loan C Commitment, the proceeds of which shall be used to repay, in part, outstanding Overadvances on such date. Upon the funding of the Term Loan C hereunder, the Term Loan C Commitment shall be permanently terminated.

ii. Interest on the Term Loan C. Subject to the provisions of Section 2.3 and Section 2.4, the principal balance of the Term Loan C shall bear interest thereon from the Second Amendment Effective Date at the Term Loan C Interest Rate based on a year consisting of 360 days with interest computed daily based on the actual number of days elapsed.

2.3 Maximum Interest. Notwithstanding any provision in this Agreement, the Notes, or any other Loan Document, it is the parties’ intent not to contract for, charge or receive interest at a rate that is greater than the maximum rate permissible by law that a court of competent jurisdiction shall deem applicable hereto (which under the laws of the State of California shall be deemed to be the laws relating to permissible rates of interest on commercial loans) (the “Maximum Rate”). If a court of competent jurisdiction shall finally determine that Borrowers have actually paid to Lender an amount of interest in excess of the amount that would have been payable if all of the Secured Obligations had at all times borne interest at the Maximum Rate, then such excess interest actually paid by Borrowers shall be applied as follows: first, to the payment of all Lender Expenses; second, to the payment of accrued and unpaid interest on the Loans, to be apportioned pro rata amongst the Loans; third, to the payment of principal outstanding on the Term Loan A to be applied pro rata to remaining installments of such Term Loan, fourth, to the payment of principal outstanding on the Term Loan B, fifth, to the payment of principal outstanding on the Revolving Loans, sixth, to the payment of principal outstanding on the Equipment Term Loan, seventh, to the payment of principal outstanding on the Term Loan C, eighth, to the payment of any and all other Secured Obligations; and ~~seventh~~ninth, following the payment in full in cash of all Secured Obligations, the excess (if any) shall be refunded to Borrowers or as a court of competent jurisdiction may direct.

2.4 Default Interest. In the event any payment is not paid on the scheduled payment date, an amount equal to five percent (5%) of the past due amount shall be payable on demand. In addition, upon the occurrence and during the continuation of an Event of Default hereunder, all Secured Obligations (including, without limitation, principal, interest, compounded interest and professional fees) shall bear interest at a rate per annum equal to the rate set forth in Section 2.1(d), Section 2.2(c), Section 2.2(d)(iii) or Section 2.2(ce)(ii), as applicable, plus three percent

(3%) per annum (the “Default Rate”). and shall be payable upon demand. In the event any interest is not paid when due hereunder, at the Lender’s option, in its sole discretion, delinquent interest ~~shall be added to principal and shall~~and interest accruing at the Default Rate: (x) shall be paid in cash on demand thereof, and/or (y) shall be paid in kind by adding such amounts to the principal amount of the Term Loan B, notwithstanding on which Loan such delinquent interest and interest accruing at the Default Rate has accrued, and shall thereafter bear interest on interest, compounded at the rate set forth in Section ~~2.1(d), Section 2.2(c) or Section 2.4, as applicable.~~2.2(c)(ii) and be subject to the conversion rights of the Lender set forth in Section 2.9 and/or (z) through the issuance of additional shares of common Capital Stock of Parent Borrower to Lender or any designee of Lender, the number of such additional shares to be determined by Lender by dividing the amount of the accrued interest to be converted into common Capital Stock of the Parent Borrower by the Adjusted 60-Day Average Price, determined by Lender as of the date of Lender’s election for the issuance of additional shares as provided in this Section 2.4. In the event that the Parent Borrower and Lender do not agree on the Proposed Share Price, Lender in its sole discretion may, by a subsequent written notice to Borrowers, elect to receive payment in cash and/or in kind by adding such amounts to the principal amounts of the Term Loan B as of the original date of demand therefor. The issuance of such common Capital Stock of Parent Borrower to Lender or any designee of Lender, which stock certificates may include appropriate restrictive legends to the extent applicable, shall be made no more than ten (10) Business Days following the date of demand therefor or, as applicable, ten (10) Business Days following the final determination of the share price as a result of the Valuation Procedures. Parent Borrower shall have the right to pay cash in lieu of any fractional shares to be issued pursuant to this Section 2.4. For the avoidance of doubt, interest on an Overadvance made in accordance with Section 2.1(c) shall not bear interest at the Default Rate as a result of a breach of Section 2.6(a)(ii) due to such Overadvance being made or permitted to remain outstanding so long as such Overadvance remains outstanding in compliance with the terms of Section 2.1(c).

2.5 Payments.

(a) Interest; Payments Generally.

i. Borrowers will pay cash interest on the Loans on the first Business Day of each calendar month, commencing December 1, 2009.

ii. Notwithstanding subparagraph (a)(i) to the contrary and solely with respect to interest payments on the Term Loan B, (A) for the period commencing on the Closing Date and continuing through but not including the first anniversary of the Closing Date, on the applicable interest payment date for the Term Loan B, Borrowers will pay accrued and unpaid interest as follows: (1) twelve percent (12%) on the Term Loan B in cash and (2) two and one half percent (2.5%) interest in kind by adding such amount to the outstanding principal amount of the Term Loan B on the applicable interest payment date; (B) for the period commencing on the first anniversary of the Closing Date and continuing through but not including the second anniversary of the Closing Date, on the applicable interest payment date for the Term Loan B, Borrowers will pay accrued and unpaid interest as follows: (1) eighteen percent (18%) on the Term Loan B in cash and (2) two and one half percent (2.5%) interest in kind by adding

such amount to the outstanding principal amount of the Term Loan B on the applicable interest payment date; and (C) commencing on the second anniversary of the Closing Date and thereafter, on the applicable interest payment date for the Term Loan B, Borrowers will pay accrued and unpaid interest as follows: (1) fifteen percent (15%) interest on the Term Loan B in cash and (2) two and one half percent (2.5%) interest in kind by adding such amount to the outstanding principal amount of the Term Loan B on the applicable interest payment date.

iii. Notwithstanding subparagraph (a)(i) or subparagraph (a)(ii) to the contrary and solely with respect to interest payments on the Term Loan B, at any time that Borrowers either (A) fail to maintain a Consolidated Interest Coverage Ratio equal to or greater than 2.50 to 1.00 as of the last day of the calendar month for which financial statements have been delivered under Section 7.1(a) hereof or (B) fail to deliver the financial statements required under Section 7.1(a) hereof as required under such Section, then on the applicable interest payment date and at Lender’s election in its sole discretion by written notice to Borrowers at least one (1) Business Day prior to such interest payment date, Borrowers will pay interest on the Term Loan B, in whole or in part as determined by Lender in its sole discretion, by paying such accrued interest (x) in cash, and/or (y) in kind by adding such amounts to the principal amount of the Term Loan B as of such interest payment date and/or (z) through the issuance of additional shares of common Capital Stock of Parent Borrower to Lender or any designee of Lender, the number of such additional shares to be determined by Lender by dividing the amount of the accrued interest to be converted into common Capital Stock of the Parent Borrower by the Adjusted 3060-Day ~~VWAP~~Average Price. In the event that the Parent Borrower and Lender do not agree on the Proposed Share Price, Lender in its sole discretion may, by a subsequent written notice to Borrowers, elect to receive payment in cash and/or in kind by adding such amounts to the principal amounts of the Term Loan B as of such interest payment date. The issuance of such common Capital Stock of Parent Borrower to Lender or any designee of Lender, which stock certificates may include appropriate restrictive legends to the extent applicable, shall be made no more than ten (10) Business Days following the applicable interest payment date or, as applicable, ten (10) Business Days following the final determination of the share price as a result of the Valuation Procedures. Parent Borrower shall have the right to pay cash in lieu of any fractional shares to be issued pursuant to this Section 2.5(a)(iii). In the event that Lender has not delivered a notice as provided herein selecting the method of payment for any interest payment, Borrowers shall pay Lender accrued interest in cash on the applicable interest payment date.

iv. Notwithstanding subparagraph (a)(i) to the contrary and solely with respect to interest payments on the Term Loan C, on the applicable interest payment date and at Lender’s election in its sole discretion by written notice to Borrowers at least one (1) Business Day prior to such interest payment date, Borrowers will pay interest on the Term Loan C, in whole or in part as determined by Lender in its sole discretion, by paying such accrued interest (x) in cash, and/or

(y) in kind by adding such amounts to the principal amount of the Term Loan C as of such interest payment date.

v. ~~iv.~~ Borrowers shall make all payments under this Agreement without setoff, recoupment or deduction and regardless of any counterclaim or defense. Lender will initiate debit entries to the relevant Borrower’s account as authorized on the ACH Authorization on each payment date of all scheduled obligations payable to Lender under the Revolving Loan ~~and under~~, the Term Loans and the Equipment Term Loan.

(b) Revolving Loan Maturity Date. The entire principal balance of the Revolving Loan, together with all accrued interest, fees and other Secured Obligations on or relating to the Revolving Loan, shall be repaid in full on the Revolving Loan Maturity Date.

i. Borrowers shall repay the outstanding principal under the Term Loan A on the first Business Day of each calendar month, commencing December 1, 2010, in equal monthly installments equal to $152,777.78.

ii. The entire principal balance of the Term Loan A, together with all accrued interest, fees and other Secured Obligations on or relating to the Term Loan A, shall be repaid in full on the Term Loan A Maturity Date.

iii. The entire principal balance of the Term Loan B, together with all accrued interest, fees and other Secured Obligations on or relating to the Term Loan B, shall be repaid in full on the Term Loan B Maturity Date.

iv. The entire principal balance of the Equipment Term Loan, together with all accrued interest, fees and other Secured Obligations on or relating to the Equipment Term Loan, shall be repaid in full on the Equipment Term Loan Maturity Date.

v. The entire principal balance of the Term Loan C, together with all accrued interest, fees and other Secured Obligations on or relating to the Term Loan C, shall be repaid in full on the Term Loan C Maturity Date.

2.6 Prepayments.

(a) Mandatory Prepayments.

i. In the event the aggregate Revolving Loan Advances at any time exceed the Maximum Revolving Loan Amount, Borrowers shall repay the amount of that excess to Lender within three (3) Business Days of the date such excess arose.

ii. Subject to Section 2.1(c), in the event the aggregate Revolving Loan Advances at any time exceed the then current Borrowing Base, Borrowers shall repay the amount of that excess to Lender within three (3) Business Days of the date such excess arose.

iii. The entire principal balance of the Revolving Loan constituting an Overadvance and all accrued interest and fees on or relating to such Revolving Loan shall be repaid in full in cash on the Business Day immediately preceding the first day of each Overadvance Clean Down Period.

iv. On or prior to the forty-fifth (45th) day of each fiscal quarter, commencing with the fiscal quarter ending March 31, 2010, Borrowers shall prepay the principal amount of the Term Loans and accrued and unpaid interest thereon in an amount equal to (A) seventy five percent (75%) of Consolidated Excess Cash Flow in the event that the Consolidated Total Leverage Ratio as at such fiscal quarter end date, calculated based on a Twelve Month Measurement Period, is equal to or greater than 3.0 to 1.0 and (B) fifty percent (50%) of Consolidated Excess Cash Flow in the event that the Consolidated Total Leverage Ratio as at such fiscal quarter end date, calculated based on a Twelve Month Measurement Period, is less than 3.0 to 1.0. Such prepayments to be applied to the Term Loan A, the Term Loan B and the Term Loan BC as follows: first, to the payment of principal outstanding on the Term Loan A to be applied pro rata to installments of such Term Loan A; second, to the payment of accrued interest on the Term Loan A; third, to the payment of principal outstanding on the Term Loan B; fourth, to the payment of accrued interest on the Term Loan B; fifth, to the payment of principal outstanding on the ~~Revolving~~Term Loan ~~Advances~~C; sixth, to the payment of accrued interest on the ~~Revolving~~Term Loan ~~Advances;~~C, seventh, to the payment of Lender’s accrued costs, expenses, professional fees (including, without limitation, all Lender Expenses) and any other Secured Obligations on or relating to the Term Loans; and eighth, after all Secured Obligations ~~are~~on or relating to the Term Loans have been repaid, the excess (if any) shall be refunded to the Borrowers or as a court of competent jurisdiction may direct. Notwithstanding Section 2.6(c) and except as otherwise provided in the immediately preceding sentence, no Term Loan Prepayment Charge shall be required for any prepayment of the Term Loans under this Section 2.6(a)(iv).

v. On the date of any Permitted Transfer that results in a required prepayment pursuant to clause (iv) of the definition of “Permitted Transfer”, Borrowers shall prepay the principal amount of the Term Loans and the Equipment Term Loan and accrued and unpaid interest thereon as follows: first, to the payment of principal outstanding on the Term Loan A to be applied pro rata to installments of such Term Loan A, second, to the payment of accrued interest on the Term Loan A, third, to the payment of principal outstanding on the Term Loan B, ~~and~~ fourth, to the payment of accrued interest on the Term Loan B, fifth, to the payment of principal outstanding on the Equipment Term Loan, sixth, to the payment of accrued interest on the Equipment Term Loan, seventh, to the payment of principal outstanding on the Term Loan C and eighth, to the payment of accrued interest on the Term Loan C. No Term Loan Prepayment Charge shall be required for any prepayment of the Term Loans under this Section 2.6(a)(v).

vi. Notwithstanding anything to the contrary contained in this Agreement but subject to Section 10.2, Lender shall apply one hundred and three percent (103%) of the purchase price identified in the Equipment Purchase Orders relating to each item for which payment has been received in the Equipment Term Loan Lockbox or in respect of the equipment and any other items purchased from the proceeds of the Equipment Term Loan, as determined by Lender, to the prepayment of the Equipment Term Loan and other Secured Obligations on or relating to the Equipment Term Loan, as follows: first, to the payment of any outstanding Equipment Term Loan Fee, second, to the payment of the outstanding principal amount of the Equipment Term Loan, and third, to all other Secured Obligations on or relating to the Equipment Term Loan. Of the amounts not applied to the Equipment Term Loan and such other Secured Obligations as hereinabove provided, such amounts shall be returned to Borrowers (or as a court of competent jurisdiction otherwise directs) so long as no Event of Default then exists or could reasonably be expected (with the passage of time or the giving of notice, or both) to exist. In the event any amounts constituting the payment of any Equipment Accounts are received by a Borrower, one hundred percent (100%) of such amounts shall promptly (but in any event within one (1) Business Day of receipt thereof by such Borrower) be wired to Lender in immediately available funds for application to the Equipment Term Loan and other Secured Obligations as provided in this paragraph (a)(vi). The receipt and transfer of such amounts by a Borrower under this paragraph in violation of Section 7.25 shall not be deemed a waiver of any Event of Default arising as a result of the breach of such Section 7.25. Upon payment in full in cash of all Secured Obligations on or relating to the Equipment Term Loan, amounts received in the Equipment Term Loan Lockbox by Lender shall be returned by Lender to Borrowers (or as a court of competent jurisdiction otherwise directs) so long as no Event of Default then exists or could reasonably be expected (with the passage of time or the giving of notice, or both) to exist.

(b) Voluntary Prepayments.

i. Borrowers may prepay the Revolving Loan in whole or in part from time to time without premium or penalty.

ii. Without limiting the obligations of Borrowers under Section 2.9(b)(iii) and Section 2.9(b)(iv), Borrowers may prepay, in whole (or in part with the prior consent of Lender in its sole and absolute discretion), the Term Loan A and the Term Loan B at Borrowers’ option upon at least five (5) Business Days prior written notice to Lender, together with all accrued and unpaid interest thereon and the Term Loan Prepayment Charge on the amount so prepaid.

iii. Upon at least five (5) Business Days prior written notice to Lender, Borrowers may prepay the Equipment Term Loan in whole or in part from time to time without premium or penalty, together with all accrued and unpaid interest thereon.

iv. Upon at least five (5) Business Days prior written notice to Lender, Borrowers may prepay, in whole (or in part with the prior consent of Lender in its sole and absolute discretion), the Term Loan C, together with all accrued and unpaid interest thereon. No Term Loan Prepayment Charge shall be required for any prepayment of the Term Loan C under this Section 2.6(b)(iv).

i. Upon any repayment, prepayment or acceleration of either the Term Loan A and/or the Term Loan B pursuant to Section 2.6(b), Section 2.9(b) and Section 10.1, as applicable, Borrowers shall pay a prepayment charge equal to the following percentage of the Term Loan A and the Term Loan B being prepaid: (A) five percent (5.0%) if such payment is made or required to be made prior to the date that is the first anniversary of the Closing Date; (B) three percent (3.0%) if such payment is made or required to be made on or after the date that is the first anniversary of the Closing Date but prior to the date that is the second anniversary of the Closing Date; and (C) one percent (1.0%) thereafter.

ii. In the event the Borrowers repay or prepay in full the aggregate outstanding principal amount of the Term Loan A and/or the Term Loan B, together with all accrued interest thereon and all other Secured Obligations arising in respect thereof, or upon acceleration of the Term ~~Loans~~Loan A and/or the Term Loan B, in each case, at any time on or after the date which is six (6) months following the Closing Date and on or prior to the first anniversary of the Closing Date, Borrowers shall pay a prepayment charge equal to the Yield Revenue Amount. The prepayment charged described in this clause (c)(ii) of this Section 2.6 is in additional to, and not in lieu of, any prepayment charge arising under clause (c)(i) of this Section 2.6.

iii. Borrowers agree that the Term Loan Prepayment Charge is a reasonable calculation of Lender’s lost profits in view of the difficulties and

impracticality of determining actual damages resulting from an early repayment of the applicable Term Loan.

(d) Revolving Loan Commitment Reduction and Termination.

i. Borrowers may, at any time upon at least five (5) Business Days’ notice to Lender, voluntarily terminate, in whole (or in part solely with the consent of Lender) the Revolving Loan Commitment.

ii. Upon any termination of the Revolving Loan Commitment, including, without limitation, a voluntary termination or reduction of the Revolving Loan Commitment, 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.

(e) Equipment Term Loan Commitment Reduction and Termination. Borrowers may, at any time upon at least five (5) Business Days’ notice to Lender, voluntarily terminate, in whole or in part the Equipment Term Loan Commitment.

2.7 Fees.

(a) Facility Charge. The Facility Charge shall be fully earned and due on the Closing Date. Commencing on April 1, 2010 and on the first Business Day of each calendar month thereafter, Borrowers shall pay in cash to Lender a portion of the Facility Charge equal to $37,500 until such Facility Charge is paid in full in cash, provided, that (i) in the event the Loans are accelerated pursuant to the terms hereof, the Facility Charge shall become payable on the date such Loans are accelerated and (ii) so long as no Event of Default then exists or is continuing, interest shall not accrue against the amount of the Facility Charge due but not yet paid in accordance with the terms hereof.

(b) Equipment Term Loan Fee. On the date of funding any Equipment Term Loan Advance, the Equipment Term Loan Fee shall be fully earned and due. The Equipment Term Loan Fee shall be paid as provided in Section 2.6(a)(vi) or Section 10.2, as applicable.

2.8 Joint and Several Liability of Borrowers. Each Borrower is accepting joint and several liability hereunder and under the other Loan Documents in consideration of the financial accommodations to be provided by Lender under this Agreement, for the mutual benefit, directly and indirectly, of each Borrower and in consideration of the undertakings of the other Borrowers to accept joint and several liability for the Secured Obligations. Each Borrower, jointly and severally, hereby irrevocably, absolutely and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Borrowers, with respect to the payment and performance of all of the Secured Obligations (including, without limitation, any Secured Obligations arising under this Section 2.8), it being the intention of Borrowers that all the Secured Obligations shall be the joint and several obligations of Borrowers without preferences or distinction among them. If and to the extent that any of Borrowers shall fail to make any payment with respect to any of the Secured Obligations as and when due or to perform any of the Secured Obligations in accordance with the terms thereof, then in each such event, the

Parent Borrower shall have the right to pay cash in lieu of any fractional shares to be issued pursuant to this Section 2.9(b).

(c) Term Loan B as Secured Obligations. Until such time as Lender has received the duly executed stock certificates evidencing the shares of common Capital Stock of Parent Borrower described in paragraphs (a) and (b) of this Section 2.9, the Converted Debt Amount and the Converted Adjusted Debt Amount shall constitute Secured Obligations hereunder for all purposes, and upon delivery of such stock certificates, the applicable portion of the Converted Debt Amount or the Converted Adjusted Debt Amount shall be cancelled.

(d) Termination of Conversion Rights. Notwithstanding the foregoing in this Section 2.9 to the contrary, in the event that a Refinancing Event occurs prior to the Term Loan B Conversion Right Termination Date, the rights granted to Lender under this Section 2.9 shall thereafter automatically terminate, provided that, and for the avoidance of doubt, the termination of the rights granted to Lender under this Section 2.9 shall not abrogate or limit in any manner (i) any voluntary conversion demand of Lender arising under paragraph (a) hereof and/or any mandatory conversion obligation of Borrowers arising under paragraph (b) hereof, in either case, that arose prior to the Term Loan B Conversion Right Termination Date, and (ii) the prior issuance of any common Capital Stock of Parent Borrower to Lender or its designee pursuant to the terms of this Section 2.9.

2.10. Term Loan C Equity Conversion Right.

(a) Voluntary Conversion. At Lender’s option, in its sole discretion, Lender may, at any time and from time to time, elect to convert, in whole or in part, the Converted Term Loan C Debt Amount into common Capital Stock of Parent Borrower. In the event Lender so elects to convert all or any portion of the Converted Term Loan C Debt Amount into common Capital Stock of Parent Borrower, Lender will provide Parent Borrower ten (10) Business Days advance written notice thereof (such notice to state that it is a “Term Loan C Conversion Notice”). Prior to the date identified in such Term Loan C Conversion Notice, Parent Borrower (A) shall deliver to Lender or any designee of Lender identified in such Term Loan C Conversion Notice one or more stock certificates, which stock certificates may include appropriate restrictive legends to the extent applicable, evidencing the shares of common Capital Stock of Parent Borrower that are to be issued to Lender or its designee as provided in such Term Loan C Conversion Notice, and (B) pay Lender in cash with respect to that portion of the Converted Term Loan C Debt Amount identified in the Term Loan C Conversion Notice to be converted into shares of common Capital Stock of Parent Borrower all accrued and unpaid interest on the Converted Term Loan C Debt Amount and all other fees and Secured Obligations outstanding with respect thereto; provided, that such date for delivery of the stock certificates and payments of amounts herein shall be no earlier than ten (10) Business Days prior to the date identified for the effectiveness of such conversion in the Term Loan C Conversion Notice. The determination of the number of shares of common Capital Stock of Parent Borrower to be issued and delivered to Lender or its designee as provided herein shall initially be

calculated by Lender and identified in such Term Loan C Conversion Notice as follows: (i) the Converted Term Loan C Debt Amount identified by Lender in such Term Loan C Conversion Notice to be converted into common Capital Stock of Parent Borrower, divided by (ii) the Term Loan C Conversion Price. In the event of any dispute in the calculation of the number of shares of common Capital Stock of Borrower to be issued and delivered to Lender or its designee as identified in such Term Loan C Conversion Notice, Borrowers and Lender agree to review Lender’s calculation and determine such number of shares in good faith and without delay. Parent Borrower shall have the right to pay cash in lieu of any fractional shares to be issued pursuant to this Section 2.10(a).

(b) Term Loan C as Secured Obligations. Until such time as Lender has received the duly executed stock certificates evidencing the shares of common Capital Stock of Parent Borrower described in paragraph (a) of this Section 2.10, the Converted Term Loan C Debt Amount shall constitute Secured Obligations hereunder for all purposes, and upon delivery of such stock certificates, the applicable portion of the Converted Term Loan C Debt Amount shall be cancelled.

SECTION 3. SECURITY INTEREST

3.1. Collateral Grant. As security for the prompt, complete and indefeasible payment when due (whether on the payment dates or otherwise) of all the Secured Obligations, each Borrower hereby reaffirms its grant to Lender of, and hereby grants to Lender, a security interest in all of such Borrower’s personal property, wherever located, now owned or hereafter acquired, including the following, and all proceeds and products thereof (collectively, the “Collateral”): (a) accounts (including health-care insurance receivables); (b) chattel paper (whether tangible or electronic); (c) fixtures; (d) general intangibles (including without limitation all Intellectual Property and payment intangibles); (e) instruments (including promissory notes); (f) documents (including, if applicable, electronic documents); (g) securities and all other investment property (but excluding thirty-five percent (35%) of the Capital Stock of any foreign Subsidiary); (h) deposit accounts excluding payroll and trust accounts; (i) Cash; (j) commercial tort claims; (k) goods (including inventory, equipment and any accessions thereto); (l) letter-of-credit rights (whether or not the letter of credit is evidenced by a writing); (m) supporting obligations; and (n) any other contract rights or rights to the payment of money, insurance claims and proceeds. Notwithstanding the foregoing, it is the intention of the parties to the Agreement that the term “Collateral” shall exclude (1) “intent-to-use” trademarks until such time as a Borrower begins to use such trademarks; and (2) any item of general intangibles that is now or hereafter held by a Borrower, solely in the event and to the extent that: (i) the grant of such security interest shall constitute or result in (A) the abandonment, invalidation or unenforceability of any right, title or interest of any Borrower therein or result in any Borrower’s loss of use of such asset or (B) a breach or termination pursuant to the terms of, or a default under, any such investment property or general intangible, in each case other than (i) to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable Law (including the Bankruptcy Code) or principles of equity or (ii) with respect to

(k) (i) evidence satisfactory to Lender in its discretion that all earn-out obligations of Borrowers and seller notes issued by Borrowers arising in connection with the Delta Acquisition Documents have been restructured in a manner and subject to terms and conditions and documentation satisfactory to Lender; and (ii) an officer’s certificate, duly executed by the Chief Executive Officer, Chief Financial Officer or President or equivalent position, dated as of the Closing Date, certifying and attaching, true, correct and complete copies of the documents evidencing such restructuring, such documents to include, without limitation, the Earn Out Agreement, dated as of May 2, 2008 (as amended) between ISC and Delta Health Systems, Inc.

(l) evidence satisfactory to Lender that the Debt Conversion Agreement dated as of November 20, 2009, between Parent Borrower and Hercules LLC has been duly executed by the parties thereto and the transactions described therein have closed and been effectuated substantially contemporaneously with this Agreement;

(m) executed original of the Registration Rights Agreement duly executed by an authorized officer of the Parent Borrower; and

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

4.2. All Advances. On each Advance Date:

(a) Lender shall have received an Advance Request for the relevant Advance as required by Section 2.1(b) or Section 2.2(d), as applicable, duly executed by each Borrower’s Chief Executive Officer, Chief Financial Officer or equivalent position.

(b) The representations and warranties set forth in this Agreement and each other Loan Document shall be true and correct in all material respects on and as of the Advance Date (other than to the extent that any representation and warranty is already qualified by materiality, in which case, such representation and warranty shall be true and correct as of such date) with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date.

(c) Each Borrower and the Borrowers, collectively shall be in compliance in all material respects with all the terms and provisions set forth herein and in each other Loan Document on its part to be observed or performed, and at the time of and immediately after such Advance no Event of Default shall have occurred and be continuing.

(d) Each Advance Request shall be deemed to constitute a representation and warranty by each Borrower on the relevant Advance Date as to the matters specified in paragraphs (b) and (c) of this Section 4.2 and as to the matters set forth in the Advance Request.

(e) In connection with any Advance Request for a Revolving Loan Advance, Lender shall have received the documents required pursuant to Section 2.1(b) hereof.

(f) In connection with any Advance Request for am Equipment Term Loan Advance, Lender shall have received the documents required pursuant to Section 2.2(d) hereof.

4.3. No Default. As of the Closing Date and each Advance Date, (i) no fact or condition exists that would (or would, with the passage of time, the giving of notice, or both) constitute an Event of Default and (ii) no event that has had or could reasonably be expected to have a Material Adverse Effect has occurred and is continuing.

4.4. Acknowledgment of Discretionary Lending. Borrowers acknowledge and agree that any Advance made or the funding of any Loans while an Event of Default is then continuing (or while a condition exists that would, or would with the passage of time, the giving of notice or both, constitute an Event of Default) is made at the sole discretion of Lender, and any willingness on the part of Lender to make any Advance or fund any Loans while an Event of Default is then continuing (or while a condition exists that would, or would with the passage of time, the giving of notice or both, constitute an Event of Default) shall not constitute a course of dealing or a willingness on the part of Lender to make any subsequent Advance or fund any other Loan, and shall not constitute a waiver or forbearance of such Event of Default (or such condition). Lender shall continue to have all rights and remedies under the Loan Documents in respect of such Event of Default (or such condition that could constitute an Event of Default), notwithstanding any funding of an Advance or the funding of any Loan made by Lender during the continuance of an Event of Default (or the continuance of such condition that could constitute an Event of Default).

SECTION 5. REPRESENTATIONS AND WARRANTIES OF BORROWERS

Each Borrower represents and warrants that:

5.1. Corporate Status. Such Borrower (other than Opt) is a corporation or limited liability company duly organized, legally existing and in good standing under the laws of the State of Delaware, and is duly qualified in all jurisdictions in which the nature of its business or location of its properties require such qualifications and where the failure to be qualified could reasonably be expected to have a Material Adverse Effect. Opt is a limited liability company duly organized and subsisting under the laws of the Commonwealth of Pennsylvania, and is duly qualified in all jurisdictions in which the nature of its business or location of its properties require such qualifications and where the failure to be qualified could reasonably be expected to have a Material Adverse Effect. Such Borrower’s present name, former names (if any), locations, place of formation, tax identification number, organizational identification number and other information are correctly set forth in Exhibit C (as may be updated by Borrowers in a written notice (including any Compliance Certificate) provided to Lender after the Closing Date, provided that no such update shall be deemed a waiver of any Event of Default resulting from matters disclosed therein).

5.2. Collateral. Such Borrower owns the Collateral, free of all Liens, except for Permitted Liens. Such Borrower has the power and authority to grant to Lender a Lien in the Collateral as security for the Secured Obligations.

5.12. Financial Accounts. Exhibit E (as may be updated by the Borrowers in a written notice provided to Lender after the Closing Date, provided that no such update shall be deemed a waiver of any Event of Default resulting from matters disclosed therein), is a true, correct and complete list of (a) all banks and other financial institutions at which Parent Borrower or any Subsidiary maintains Deposit Accounts and (b) all institutions at which Parent Borrower or any Subsidiary maintains an account holding Investment Property, and such exhibit correctly identifies the name, address and telephone number of each bank or other institution, the name in which the account is held, a description of the purpose of the account, and the complete account number therefor.

5.13. Intentionally Deleted.

5.14. Capitalization and Subsidiaries. Such Borrower’s capitalization as of the Closing Date is set forth on Schedule 5.14 annexed hereto. Such Borrower does not own any stock, partnership interest or other securities of any Person, except for Permitted Investments. Attached as Schedule 5.14 (as may be updated by Borrowers in a written notice provided to Lender after the Closing Date, provided that no such update shall be deemed a waiver of any Event of Default resulting from matters disclosed therein) is a true, correct and complete list of each Subsidiary and each other Person in which a Borrower owns any stock or other equity interests.

5.15. Eligible Accounts. For any Eligible Account in any Borrowing Base Certificate, all statements made and all unpaid balances appearing in all Borrowing Base Certificates, invoices, instruments and other documents evidencing such Eligible Accounts are and shall be true and correct (except for any good faith immaterial errors promptly corrected when discovered) and all such Borrowing Base Certificates, invoices, instruments and other documents, and all of each Borrower’s books are genuine and in all respects what they purport to be. All sales and other transactions underlying or giving rise to each Eligible Account shall comply in all material respects with all applicable laws and governmental rules and regulations. Such Borrower has no knowledge of any actual or imminent insolvency proceeding of any account debtor whose accounts are an Eligible Account in any Borrowing Base Certificate. To the best of such Borrower’s knowledge, all signatures and endorsements on all documents, instruments, and agreements relating to all Eligible Accounts are genuine, and all such documents, instruments and agreements are legally enforceable in accordance with their terms.

5.16. Equipment Purchase Orders and Equipment Accounts. All statements made in all Equipment Purchase Orders and any invoices, instruments or other documents relating thereto are and shall be true and correct (other than good faith immaterial errors in the general description of the items to be purchased (e.g., the part number) promptly corrected when discovered). All sales or other transfers of equipment financed in whole or in part by one or more Equipment Term Loan Advance(s) have been made in the ordinary course of business of the applicable Borrower, without any discount or reduction on the purchase price of such equipment and on terms for payment thereof in full in cash on or before a date which is the earlier of sixty (60) days following the date of invoice or the date of delivery of such equipment to such account debtor. All sales and other transactions underlying or giving rise to each Equipment Account shall comply in all material respects with all applicable laws and governmental rules and regulations. Such Borrower has no knowledge of any actual or imminent insolvency proceeding of any account debtor whose accounts constitute Equipment Accounts.

To the best of such Borrower’s knowledge, all signatures and endorsements on all documents, instruments, and agreements relating to all Equipment Accounts are genuine, and all such documents, instruments and agreements are legally enforceable in accordance with their terms.

SECTION 6. INSURANCE; INDEMNIFICATION

6.1. Coverage. Each Borrower shall cause to be carried and maintained commercial general liability insurance, on an occurrence form, against risks customarily insured against in each Borrower’s line of business. Such risks shall include the risks of bodily injury, including death, property damage, personal injury, advertising injury, and contractual liability. Each Borrower must maintain a minimum of $2,000,000 of commercial general liability insurance for each occurrence. Each Borrower has and agrees to maintain a minimum of $2,000,000 of directors and officers’ insurance for each occurrence and $5,000,000 in the aggregate. So long as Lender has any commitment to make any Advances to the Borrowers or there are any Secured Obligations outstanding, each Borrower shall also cause to be carried and maintained insurance upon the Collateral, insuring against all risks of physical loss or damage howsoever caused, in an amount not less than the full replacement cost of the Collateral, provided that such insurance may be subject to standard exceptions and deductibles. Each Borrower shall also carry and maintain a fidelity insurance policy in an amount not less than $100,000.

6.2. Certificates. Each Borrower shall deliver to Lender certificates of insurance in form and substance reasonably satisfactory to Lender that evidence such Borrower’s compliance with its insurance obligations in Section 6.1 and the obligations contained in this Section 6.2. Each Borrower’s insurance certificate shall state Lender is an additional insured for commercial general liability, an additional insured and a lender’s loss payee for all risk property damage insurance, subject to the insurer’s approval, a lender’s loss payee for fidelity insurance, and a lender’s loss payee for property insurance and additional insured for liability insurance for any future insurance that such Borrower may acquire from such insurer. The Borrowers shall deliver to Lender additional insured endorsements for liability and lender’s loss payable endorsements for all risk property damage insurance and fidelity, each in form and substance reasonably satisfactory to Lender. All certificates of insurance will provide for a minimum of thirty (30) days advance written notice to Lender of cancellation or any other change adverse to Lender’s interests. Any failure of Lender to scrutinize such insurance certificates for compliance is not a waiver of any of Lender’s rights, all of which are reserved.

6.3. Indemnity. Each Borrower hereby agrees to and does indemnify and hold Lender and its officers, directors, employees, agents, attorneys, representatives, professional advisors and shareholders harmless from and against any and all claims, costs, expenses, damages and liabilities (including such claims, costs, expenses, damages and liabilities based on liability in tort, including strict liability in tort), including reasonable attorneys’ fees and disbursements and other costs of investigation or defense (including those incurred upon any appeal), that may be instituted or asserted against or incurred by Lender or any such Person as the result of credit having been extended, suspended or terminated under this Agreement and the other Loan Documents or the administration of such credit, or in connection with or arising out of the transactions contemplated hereunder and thereunder, or any actions or failures to act in connection therewith, or arising out of the handling, disposition or utilization of the Collateral, or Lender relying on any instruction of a Borrower, or any other actions taken or not taken by

Lender hereunder or under any Loan Document, excluding in all cases claims resulting solely from Lender’s gross negligence or willful misconduct. Each Borrower agrees to pay, and to save Lender harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all excise, sales or other similar taxes (excluding taxes imposed on or measured by the net income of Lender) that may be payable or determined to be payable with respect to any of the Collateral or this Agreement.

SECTION 7. COVENANTS OF BORROWER

Each Borrower agrees as follows:

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

(a) as soon as practicable (and in any event within thirty (30) days) after the end of each month, unaudited interim financial statements as of the end of such month (prepared on a consolidated and consolidating basis, if applicable), including balance sheet and related statements of income and cash flows, all certified by Parent Borrower’s Chief Executive Officer or Chief Financial Officer to the effect that they have been prepared in accordance with GAAP, except (i) for the absence of footnotes, (ii) that they are subject to normal quarter end and year end adjustments, and (iii) they do not contain certain non-cash items that are customarily included in quarterly and annual financial statements;

(b) as soon as practicable (and in any event within forty-five (45) days) after the end of each fiscal quarter, unaudited interim and year-to-date financial statements as of the end of such fiscal quarter (prepared on a consolidated and consolidating basis, if applicable), including balance sheet and related statements of income and cash flows, all certified by Parent Borrower’s Chief Executive Officer or Chief Financial Officer to the effect that they have been prepared in accordance with GAAP, except (i) for the absence of footnotes, and (ii) that they are subject to normal year end adjustments;

(c) as soon as practicable (and in any event within ninety (90) days) after the end of each fiscal year, (i) unqualified audited consolidated financial statements as of the end of such year, including balance sheet and related statements of income and cash flows, and setting forth in comparative form the corresponding figures for the preceding fiscal year, certified by a firm of independent certified public accountants selected by Parent Borrower and reasonably acceptable to Lender, accompanied by any management report from such accountants;

(d) so long as Lender has any commitment to make any Advances to the Borrowers or there are any Secured Obligations outstanding, as soon as practicable (and in any event within five (5) days after the end of each calendar week (each calendar week deemed, for purposes hereof, to end on a Friday), (i) a Borrowing Base Certificate and agings of accounts receivable and accounts payable and (ii) a schedule of Equipment

Accounts, identifying each account debtor’s name and contact details, the serial number (or other applicable identifying number) for the equipment sold to such account debtor, the original amount of the Equipment Account of such account debtor, the then outstanding amount of the Equipment Account of such account debtor, the date of invoice of such Equipment Account, the date of delivery of the equipment giving rise to such Equipment Account and such other information and documentation reasonably requested by Lender from time to time, provided that upon payment in full in cash of all Secured Obligations on or related to the Equipment Term Loan, the obligation of the Borrowers to deliver the Schedule described in this clause (d)(ii) shall terminate;

(e) promptly after the sending or filing thereof, as the case may be, copies of any proxy statements, financial statements or reports that any Borrower has made available to holders of its Preferred Stock and copies of any regular, periodic and special reports or registration statements that any Borrower files with the Securities and Exchange Commission or any Governmental Authority that may be substituted therefor, or any national securities exchange;

(f) promptly after the sending or filing thereof, as the case may be, copies of any proxy statements, financial statements or reports that any Borrower has made available to holders of its Capital Stock and copies of any regular, periodic and special reports or registration statements that any Borrower files with the Securities and Exchange Commission or any governmental authority that may be substituted therefor, or any national securities exchange; and

(g) financial and business projections promptly following their approval by a Borrower’s board of directors, as well as budgets, operating plans and other financial information reasonably requested by Lender.

The executed Compliance Certificate may be sent via facsimile to Lender at ###-###-#### or via e-mail to ***@***. All Financial Statements required to be delivered pursuant to clauses (a), (b) and (c) shall be sent via e-mail to ***@*** with a copy to ***@***, provided, that if e-mail is not available or sending such Financial Statements via e-mail is not possible, they shall be sent via facsimile to Lender at: (866) 468-8916, attention Chief Credit Officer.

7.2. Other Notices. Parent Borrower shall deliver to Lender, in form and detail reasonably satisfactory to Lender:

(a) promptly (but in any event within two (2) Business Days after receipt or delivery thereof) all material notices and instructions made under any Acquisition Documents;

(b) promptly (but in any event within two (2) Business Days after receipt or delivery thereof or knowledge thereof) copies of all written notices or claims challenging or questioning any Borrower’s ownership in any material Intellectual Property (or written notice of any claim challenging or questioning the ownership in any material licensed

Lender may reasonably request, to perfect and protect the Liens granted hereby and thereby. In addition, and for such purposes only, each Borrower hereby authorizes Lender to execute and deliver on behalf of such Borrower and to file such financing statements, collateral assignments, notices, control agreements, security agreements and other documents without the signature of such Borrower either in Lender’s name or in the name of Lender as agent and attorney-in-fact for such Borrower. Borrowers shall protect and defend each Borrower’s title to the Collateral and Lender’s Lien thereon against all Persons claiming any interest adverse to each Borrower or Lender other than Permitted Liens.

7.5. Compromise of Agreements.

(a) ~~7.5. Compromise of Agreements.~~ Accounts Generally. With respect to Accounts (other than Equipment Accounts) with a combined value in excess of ten percent (10%) of all of Borrowers’ Accounts (other than Equipment Accounts) then outstanding, no Borrower shall (a) grant any material extension of the time of payment thereof, (b) to any material extent, compromise, compound or settle the same for less than the full amount thereof, (c) release, wholly or partly, any Person liable for the payment thereof, or (d) allow any credit or discount whatsoever thereon other than trade discounts granted by such Borrower in the ordinary course of business of such Borrower.

(b) Equipment Accounts. With respect to Equipment Accounts, no Borrower shall (without the prior written consent of Lender, in its sole discretion): (a) grant any extension of the time of payment thereof, (b) to any extent, compromise, compound or settle the same for less than the full amount thereof, (c) release, wholly or partly, any Person liable for the payment thereof, or (d) allow any credit or discount whatsoever thereon.

7.6. Indebtedness. Parent Borrower shall not create, incur, assume, guarantee or be or remain liable with respect to any Indebtedness, or permit any Subsidiary so to do, other than Permitted Indebtedness, or prepay any Indebtedness or take any actions which impose on any Borrower an obligation to prepay any Indebtedness, except for (a) the conversion of Indebtedness into equity securities and the payment of cash in lieu of fractional shares in connection with such conversion and (b) the Permitted Subordinated Debt Payments under the HIA Indebtedness in accordance with the HIA Subordination Agreement, so long as no Event of Default shall have occurred or would result therefrom, or any event that, with the passage of time or giving of notice, or both, would constitute an Event of Default or would result therefrom.

7.7. Collateral; Prohibition of Liens. Each Borrower shall at all times keep the Collateral and all other property and assets used in such Borrower’s business or in which such Borrower now or hereafter holds any interest free and clear from any legal process or Liens whatsoever (except for Permitted Liens), and shall give Lender prompt written notice of any legal process affecting the Collateral or any Liens thereon. Parent Borrower shall cause its Subsidiaries to protect and defend such Subsidiary’s title to its assets from and against all Persons claiming any interest adverse to such Subsidiary, and Parent Borrower shall cause its Subsidiaries at all times to keep such Subsidiary’s property and assets free and clear from any legal process or Liens whatsoever (except for Permitted Liens), and shall give Lender prompt

(b) Consolidated Total Leverage Ratio. The Borrowers shall not permit the Consolidated Total Leverage Ratio for any Twelve Month Measurement Period ending during any fiscal quarter, commencing with the quarter ending June 30, 2010, to be greater than the ratio set forth below opposite such Measurement Period ending date:

Measurement Period Ending		Consolidated Total Leverage Ratio
June 30, 2010		6.00:1.00
September 30, 2010		6.00:1.00
December 31, 2010		5.00:1.00
March 31, 2011		4.00:1.00
June 30, 2011		3.00:1.00
September 30, 2011		2.50:1.00
December 31, 2011		2.00:1.00
March 31, 2012		1.75:1.00
June 30, 2012 and thereafter		1.50:1.00

(c) Consolidated Fixed Charge Coverage Ratio. The Borrowers shall not permit the Consolidated Fixed Charge Coverage Ratio for any Twelve Month Measurement Period ending during any fiscal quarter, commencing with the quarter ending June 30, 2010, to be less than the ratio set forth below opposite such Measurement Period ending date:

Measurement Period Ending		Consolidated Fixed Charge Coverage Ratio
June 30, 2010		0.75:1.00
September 30, 2010		0.75:1.00
December 31, 2010		1.00:1.00
March 31, 2011		1.00:1.00
June 30, 2011		1.25:1.00
September 30, 2011		1.25:1.00
December 31, 2011		1.50:1.00
March 31, 2012		1.50:1.00
June 30, 2012 and thereafter		2.00:1.00

(d) Minimum Cash On Hand. The Borrowers shall not permit at any time its unrestricted Cash on hand to be less than $1,000,000.

7.21. Use of Proceeds. Borrowers will use the proceeds from each of the Term ~~Loans~~Loan A, the Term Loan B and the Revolving Loan (i) to continue existing debt of the Parent Borrower on the Closing Date, (ii) to fund Permitted Acquisitions and (iii) for general corporate and working capital purposes. Borrowers will use the proceeds from the Equipment Term Loan solely to purchase equipment subject to Equipment Purchase Orders approved by Lender in its sole discretion. Borrowers will solely use the proceeds from the Term Loan C to repay, in part, outstanding Overadvances on the date of funding of the Term Loan C.

7.22. Reservation of Capital Stock. Parent Borrower shall, at all times after January 31, 2010, reserve for the issuance of additional shares of common Capital Stock pursuant to the terms of Section 2.5(a)(iii) and Section 2.9 hereof ~~and~~, and shall, at all times after the Second Amendment Effective Date, in addition to the foregoing (and not in lieu thereof) reserve for the issuance of additional shares of common Capital Stock pursuant to the terms of Section 2.4 and Section 2.10. In addition to the foregoing, Parent Borrower shall, at all times, have a sufficient number of authorized shares so as to permit the issuance of the shares of common Capital Stock as provided under Section 2.4, Section 2.5(a)(iii), Section 2.9 and Section ~~2.9~~.2.10.

7.23. Post Closing Requirements.

(e) Budget. On or before a date which is ninety (90) days following the Closing Date, Borrowers shall deliver to Lender a budget for the 2010 fiscal year, such budget to be in form and substance, and with such supporting documentation and underlying assumptions, as reasonably acceptable to Lender.

(f) TD Bank Accounts. On or before January 15, 2010, Borrowers shall enter into, and cause TD Bank to enter into, an Account Control Agreement with Lender or deliver to Lender, evidence satisfactory to Lender, that all TD Bank accounts have been closed.

7.24. Equipment Term Loan Lockbox. On or before March 1, 2010, Borrowers shall establish a lockbox with a financial institution acceptable to Lender in its sole discretion and in the name of Lender, and Borrowers shall enter into, and cause the financial institution where such lockbox is maintained to enter into, a control agreement in form, scope and substance acceptable to Lender with respect to such lockbox. At all times the Equipment Term Loan Lockbox shall be subject to a control agreement acceptable to Lender, and Borrowers shall have no right to terminate such lockbox arrangements without the prior written consent of Lender.

7.25. Equipment Accounts; Invoices for Equipment Accounts. All payments on Equipment Accounts shall be made to the Equipment Term Loan Lockbox. All invoices for equipment giving rise to Equipment Accounts shall clearly direct all account debtors to remit all payments in respect of such equipment to the Equipment Term Loan Lockbox.

7.26. Equipment Account Factoring. At Lender’s request, Borrowers shall promptly enter into one or more factoring arrangement(s) acceptable to Lender with respect to some or all of the Equipment Accounts. Amounts received from such factoring arrangements shall be paid directly to Lender as Lender directs and applied by Lender to Secured Obligations on or relating to the Equipment Term Loan as determined by Lender in its sole discretion.

SECTION 8. INTENTIONALLY DELETED.

SECTION 9. EVENTS OF DEFAULT

The occurrence of any one or more of the following events shall be an Event of Default:

9.1. Payments. Any Borrower fails to pay any amount due under this Agreement, the Notes or any of the other Loan Documents on the due date; or

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 2.6(a)(vi), 6, 7.1, 7.2, 7.3, 7.5, 7.6, 7.7, 7.8, 7.9, 7.14, 7.17, 7.19, 7.20, 7.21, ~~7.22~~7.22, 7.23, 7.24, 7.25 or ~~7.23~~7.26) 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 Section 7.20(d) arising solely as a result of an ACH debit entry by Lender the sole purpose of which is to pay out of pocket expenses of Lender, such default continues for more than five (5) 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 (c) with respect to a default under any of Sections 2.6(a)(vi), 6, 7.1, 7.2, 7.3, 7.5, 7.6, 7.7, 7.8, 7.9, 7.14, 7.17, 7.19, 7.20 (other than as expressly provided in clause (b) of this Section 9.2), 7.21, ~~7.22~~7.22, 7.23, 7.24, 7.25 or ~~7.23,~~7.26, the occurrence of such default; or

9.3. Material Adverse Effect. A circumstance has occurred that has had a Material Adverse Effect; or

9.4. Other Loan Documents. The occurrence of any default under any Loan Document or any other agreement between any Borrower and Lender and such default continues for more than fifteen (15) days after the earlier of (a) Lender has given notice of such default to Parent Borrower, or (b) Parent Borrower has actual knowledge of such default; or

9.5. Representations. Any representation or warranty made by any Borrower in any Loan Document shall have been false or misleading in any material respect; or

9.6. Insolvency. Any Borrower (A) (i) shall make an assignment for the benefit of creditors; or (ii) shall be unable to pay its debts as they become due, or be unable to pay or perform under the Loan Documents; or (iii) shall file a voluntary petition in bankruptcy; or (iv) shall file any petition, answer, or document seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation pertinent to such circumstances; or (v) shall seek or consent to or acquiesce in the appointment of any trustee, receiver, or liquidator of such Borrower or of all or any substantial part of the assets or property of such Borrower; or (vi) cease operations of its business, or shall terminate substantially all of its employees; or (vii) any Borrower or its directors or majority shareholders (or equivalent position) shall or majority members or equivalent position, take any action initiating any of the foregoing actions described in clauses (A)(i) through (A)(vi); or (B) either (i) sixty (60) days shall have expired after the commencement of an involuntary action against such Borrower seeking reorganization,arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, without such action being dismissed or all orders or proceedings thereunder affecting the operations or the business of such Borrower being stayed; or (ii) a stay of any such order or proceedings shall thereafter be set aside and the action setting it aside shall not be timely appealed; or (iii) any Borrower shall file any answer admitting or not contesting the material allegations of a petition filed against such Borrower in any such proceedings; or (iv) the court in which such proceedings are pending shall enter a decree or order granting the relief sought in any such proceedings; or (v) thirty (30) days shall have expired after

the appointment, without the consent or acquiescence of Borrower, of any trustee, receiver or liquidator of Borrower or of all or any substantial part of the properties of Borrower without such appointment being vacated; or (C) shall take any action in furtherance or preparation of any of the foregoing.

9.7. Attachments; Judgments. Any portion of any Borrower’s assets is attached or seized, or a levy is filed against any such assets, or a judgment or judgments is/are entered for the payment of money, individually or in the aggregate, of at least $100,000 which judgment is not covered by insurance and such judgment is not bonded, appealed or otherwise stayed for 30 consecutive days, or any Borrower is enjoined or in any way prevented by court order from conducting any material part of its business; provided, however, that any such attachment, seizure, levy or judgment in excess of $750,000, individually or in the aggregate, shall constitute an Event of Default hereunder not withstanding such insurance coverage, bonding, appeals or stay; or

9.8. Other Obligations. The occurrence of any default under any agreement or obligation of any Borrower involving any Indebtedness in excess of $100,000; or

9.9. Change in Control. A Change in Control shall occur.

SECTION 10. REMEDIES

10.1. 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 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 Loans 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, at its option, 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~~, enter into factoring arrangements in respect of any such account on such Borrower’s behalf and/or endorse ~~Lender~~Borrower’s name without recourse on any such payment for deposit directly to Lender’s account. Lender may, at its option, 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.

10.2 Collection; Foreclosure. Upon the occurrence and during the continuance of any Event of Default, Lender may, at any time or from time to time, apply, collect, liquidate, sell in one or more sales, lease or otherwise dispose of, any or all of the Collateral, in its then condition or following any commercially reasonable preparation or processing, in such order as Lender may elect. Any such sale may be made either at public or private sale at its place of business or

any part thereof is rescinded, avoided or avoidable, reduced in amount, or must otherwise be restored or returned by, or is recovered from, Lender or by any obligee of the Secured Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment, performance, or transfer of Collateral had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, avoided, avoidable, restored, returned, or recovered, the Loan Documents and the Secured Obligations shall be deemed, without any further action or documentation, to have been revived and reinstated except to the extent of the full and final payment to Lender in Cash.

11.15. Counterparts. This Agreement and any amendments, waivers, consents or supplements hereto may be executed in any number of counterparts, and by different parties hereto in separate counterparts, each of which when so delivered shall be deemed an original, but all of which counterparts shall constitute but one and the same instrument.

11.16. No Third Party Beneficiaries. No provisions of the Loan Documents are intended, nor will be interpreted, to provide or create any third-party beneficiary rights or any other rights of any kind in any person other than Lender and Borrowers unless specifically provided otherwise herein, and, except as otherwise so provided, all provisions of the Loan Documents will be personal and solely among Lender and the Borrowers.

11.17. Publicity. With Parent Borrower’s prior consent, which shall not be unreasonably withheld or delayed, Lender may use any Borrower’s name and logo, and include a brief description of the relationship between any Borrower and Lender, in Lender’s marketing materials.

11.18. Representations and Warranties of Lender. Solely in respect of the Securities described in clause (i) and clause (ii) of the definition of “Securities,” Lender represents and warrants the following~~, each as of the date hereof~~ as of the Closing Date; and, solely in respect of the Securities described in clause (iii) and clause (iv) of the definition of “Securities,” Lender represents and warrants the following as of the Second Amendment Effective Date:

(a) Investment Intent. Lender understands that the Securities it receives hereunder are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law. Lender is acquiring the Securities as principal for its own account for investment purposes only and not with a view to or for distributing or reselling such Securities or any part thereof, without prejudice, however, to Lender’s right at all times to sell or otherwise dispose of all or any part of such securities in compliance with applicable federal and state securities laws. Lender does not have any agreement or understanding, directly or indirectly, with any person or entity to distribute the Securities.

(b) Lender’s Status. At the time Lender was offered the Securities, Lender was, and at the date hereof Lender is, an “accredited investor” as defined in Rule 501(a) under the Securities Act. Lender is not a registered broker-dealer or agent thereof under Section 15 of the Exchange Act.

Table of Exhibits and Schedules

Exhibit A:	Advance Request Attachment to Advance Request

Exhibit B-1:	Term Note A ~~Note~~

Exhibit B-2:	Term B Note B

Exhibit B-3:	Revolving Note

Exhibit B-4	Equipment Term Loan Note

Exhibit B-5	Term Note C

Exhibit C:	Name, Locations, and Other Information for Borrowers

Exhibit D:	Borrowers’ Patents, Trademarks, Copyrights and Licenses

Exhibit E:	Borrowers’ Deposit Accounts and Investment Accounts

Exhibit F:	Compliance Certificate

Exhibit G:	Joinder Agreement

Exhibit H:	Borrowing Base Certificate

Exhibit I:	ACH Debit Authorization Agreement

Exhibit J:	Form of Collateral Assignment of Acquisition Documents

Exhibit K	Form of Registration Rights Agreement

Schedule 1	Subsidiaries
Schedule 1A	Existing Permitted Indebtedness
Schedule 1B	Existing Permitted Investments
Schedule 1C	Existing Permitted Liens
Schedule 5.3	Consents, Etc.
Schedule 5.5	Actions Before Governmental Authorities
Schedule 5.8	Tax Matters
Schedule 5.9	Intellectual Property Claims
Schedule 5.10	Intellectual Property
Schedule 5.11	Borrower Products
Schedule 5.14	Capitalization and Subsidiaries
Schedule 7.14	Deposit Accounts

EXHIBIT A

ADVANCE REQUEST

To:

Lender:

Date: , 20

Hercules Technology Growth Capital, Inc.

400 Hamilton Avenue, Suite 310

Palo Alto, CA 94301

Facsimile: 650 ###-###-####

Attn:

Infologix, Inc., on behalf of itself and InfoLogix Systems Corporation, Embedded Technologies, LLC, Opt Acquisition LLC and InfoLogix-DDMS, Inc. (collectively, the “Borrowers”) hereby request from Hercules Technology Growth Capital, Inc. (“Lender”) [a [Revolving Loan Advance] [an Equipment Term Loan Advance] in the amount of Dollars ($ ) on , 20 (the “Advance Date”) ~~pursuant to the~~, [which is at least two (2) Business Days following the date hereof for any Revolving Loan Advance] [which is at least two (2) Business Days following the date hereof for any Equipment Term Loan Advance], pursuant to the Amended and Restated Loan and Security Agreement, dated as of November 20, 2009 among Borrowers and Lender (as amended and in effect from time to time, the “Agreement”). Capitalized words and other terms used but not otherwise defined herein are used with the same meanings as defined in the Agreement.

Please:

(a)		Issue a check payable to Parent Borrower

		or

(b)		Wire Funds to Parent Borrower’s account

		Bank:
		Address:

		ABA Number:
		Account Number:
		Account Name:

		or

		Bank:
		Address:

		ABA Number:
		Account Number:
		Account Name:

~~Each~~[(Other than the continuation of the Specified Events of Default, each as defined in the Second Amendment),](1) each Borrower represents that the conditions precedent to the Advance set forth in the Agreement are satisfied and shall be satisfied upon the making of such Advance, including but not limited to: (i) that no event that has had a Material Adverse Effect has occurred and is continuing; (ii) that the representations and warranties set forth in the Agreement are and shall be true and correct in all material respects on and as of the Advance Date (other than to the extent that any representation and warranty is already qualified by materiality, in which case, such representation and warranty shall be true and correct as of such date) with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date; (iii) that each Borrower is in compliance in all material respects with all the terms and provisions set forth in each Loan Document on its part to be observed or performed; and (iv) that as of the Advance Date, no fact or condition exists that would (or would, with the passage of time, the giving of notice, or both) constitute an Event of Default under the Loan Documents. Each Borrower understands and acknowledges that Lender has the right to review the financial information supporting this representation and, based upon such review in its reasonable discretion, Lender may decline to fund the requested Advance.

Each Borrower hereby represents that no Borrower’s corporate and limited liability company status and locations have changed since the date of this Agreement or, if the Attachment to this Advance Request is completed, are as set forth in the Attachment to this Advance Request Borrower agrees to notify Lender promptly before the funding of the Loan if any of the matters which have been represented above shall not be true and correct on the Borrowing Date and if Lender has received no such notice before the Advance Date then the statements set forth above shall be deemed to have been made and shall be deemed to be true and correct as of the Advance Date.

Executed as of [ ], 20[ ].

BORROWERS:	INFOLOGIX, INC., ON BEHALF OF ITSELF AND
	INFOLOGIX SYSTEMS CORPORATION
	OPT ACQUISITION LLC
	EMBEDDED TECHNOLOGIES, LLC
	INFOLOGIX – DDMS, INC.

	By:
	Print Name:
	Title:

(1) To be included to the extent applicable.

ATTACHMENT TO ADVANCE REQUEST

Dated:

Each Borrower hereby represents and warrants to Lender that such Borrower’s current name and organizational status is as follows:

Name:	[ ]

Type of organization:	[ ]

State of organization:	[ ]

Organization file number:	[ ]

Each Borrower hereby represents and warrants to Lender that the street addresses, cities, states and postal codes of its current locations are as follows:

EXHIBIT B-4

FORM OF EQUIPMENT TERM LOAN NOTE

$3,000,000 Date: , 20[ ]

FOR VALUE RECEIVED, each of InfoLogix, Inc., a Delaware corporation, InfoLogix System Corporation, a Delaware corporation, Embedded Technologies, LLC a Delaware Limited Liability Company, Opt Acquisition LLC a Pennsylvania limited liability company, and InfoLogix-DDMS, Inc, a Delaware corporation, jointly and severally (each a “Borrower” and collectively, the “Borrowers”) hereby promises to pay to the order of Hercules Technology Growth Capital, Inc., a Maryland corporation or the holder of this Equipment Term Loan Note (the “Lender”) at 400 Hamilton Avenue, Suite 310, Palo Alto, CA 94301 or such other place of payment as the holder of this Equipment Term Loan Note (this “Note”) may specify from time to time in writing, in lawful money of the United States of America, the principal amount of Three Million Dollars ($3,000,000) or such other principal amount as Lender has advanced to Borrowers, together with interest thereon, all as provided in the Loan Agreement referred to below.

This Note is an Equipment Term Loan Note referred to in, and is executed and delivered in connection with, that certain Amended and Restated Loan and Security Agreement dated November 20, 2009, by and among Borrowers and Lender (as the same may from time to time be amended, modified or supplemented in accordance with its terms, the “Loan Agreement”), and is entitled to the benefit and security of the Loan Agreement and the other Loan Documents (as defined in the Loan Agreement), to which reference is made for a statement of all of the terms and conditions thereof. All payments shall be made in accordance with the Loan Agreement. All terms defined in the Loan Agreement shall have the same definitions when used herein, unless otherwise defined herein. An Event of Default under the Loan Agreement shall constitute a default under this Note.

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

[Remainder of Page Intentionally Left Blank]

	INFOLOGIX, INC.

		By:
		David T. Gulian, President and CEO


		INFOLOGIX SYSTEMS CORPORATION


		By:
		David T. Gulian, President


		OPT ACQUISITION LLC
		By: InfoLogix Systems Corporation, its sole Member


		By:
		David T. Gulian, President


		EMBEDDED TECHNOLOGIES, LLC
		By: InfoLogix Systems Corporation, its sole Member


		By:
		David T. Gulian, President


		INFOLOGIX — DDMS, INC.


		By:
		David T. Gulian, President

EXHIBIT B-5

FORM OF TERM NOTE C

THIS TERM NOTE C AND THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) NOR UNDER ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, ASSIGNED (OTHER THAN BY COLLATERAL ASSIGNMENT) OR OTHERWISE TRANSFERRED (OTHER THAN BY COLLATERAL ASSIGNMENT OR PLEDGE) UNTIL (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW OR (2) PARENT BORROWER RECEIVES AN OPINION OF COUNSEL TO PARENT BORROWER OR OTHER COUNSEL TO THE HOLDER OF SUCH NOTE WHICH OTHER COUNSEL IS SATISFACTORY TO PARENT BORROWER THAT SUCH NOTE AND/OR COMMON STOCK MAY BE SOLD, ASSIGNED OR OTHERWISE TRANSFERRED, WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.

$1,350,000 Date: , 20[ ]

FOR VALUE RECEIVED, each of InfoLogix, Inc., a Delaware corporation, InfoLogix System Corporation, a Delaware corporation, Embedded Technologies, LLC a Delaware Limited Liability Company, Opt Acquisition LLC a Pennsylvania limited liability company, and InfoLogix-DDMS, Inc, a Delaware corporation, jointly and severally (each a “Borrower” and collectively, the “Borrowers”) hereby promises to pay to the order of Hercules Technology Growth Capital, Inc., a Maryland corporation or the holder of this Term Note B (the “Lender”) at 400 Hamilton Avenue, Suite 310, Palo Alto, CA 94301 or such other place of payment as the holder of this Term Note B (this “Note”) may specify from time to time in writing, in lawful money of the United States of America, the principal amount of One Million Three Hundred Fifth Thousand Dollars ($1,350,000) or such other principal amount as Lender has advanced to Borrowers, together with interest thereon (whether as cash interest or payment in kind interest), all as provided in the Loan Agreement referred to below.

This Note is a Term Note C referred to in, and is executed and delivered in connection with, that certain Amended and Restated Loan and Security Agreement dated November 20, 2009, by and among Borrowers and Lender (as the same may from time to time be amended, modified or supplemented in accordance with its terms, the “Loan Agreement”), and is entitled to the benefit and security of the Loan Agreement and the other Loan Documents (as defined in the Loan Agreement), to which reference is made for a statement of all of the terms and conditions thereof. All payments shall be made in accordance with the Loan Agreement. All terms defined in the Loan Agreement shall have the same definitions when used herein, unless otherwise defined herein. An Event of Default under the Loan Agreement shall constitute a default under this Note. The obligations evidenced by this Note may be converted into shares of common Capital Stock as provided by the terms of the Loan Agreement.

in the State of California. This Note shall be governed by and construed and enforced in accordance with, the laws of the State of California, excluding any conflicts of law rules or principles that would cause the application of the laws of any other jurisdiction.

[Remainder of Page Intentionally Left Blank]

INFOLOGIX, INC.


	By:
	David T. Gulian, President and CEO


	INFOLOGIX SYSTEMS CORPORATION


	By:
	David T. Gulian, President


	OPT ACQUISITION LLC By: InfoLogix Systems Corporation, its sole Member


	By:
	David T. Gulian, President


	EMBEDDED TECHNOLOGIES, LLC By: InfoLogix Systems Corporation, its sole Member


	By:
	David T. Gulian, President


	INFOLOGIX — DDMS, INC.


	By:
	David T. Gulian, President

EXHIBIT H

BORROWING BASE CERTIFICATE

Borrower: InfoLogix, Inc. et al

Revolving Loan Commitment Amount: $12,000,000.00

ACCOUNTS RECEIVABLE
1. Accounts Receivable Book Value as of		$
2. Additions (please explain on reverse)		$
3. TOTAL ACCOUNTS RECEIVABLE		$
ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)
4. Amounts over 90 days due	$
5. Balance of 35% over 90 day accounts	$
6. Concentration Limits	$
7. Foreign Accounts	$
8. Deferred Revenue	$
9. Contra Accounts	$
10. Affiliate Accounts	$
11. Governmental Accounts	$
12. Conditional Payment	$
13. Disputed Accounts	$
14. Equipment Accounts	$
~~14.~~15. Other (please explain on reverse)	$
~~15.~~16. TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS		$
~~16.~~17. Eligible Accounts (#3 minus #1516)		$
~~17.~~18. LOAN VALUE OF ACCOUNTS (85% of #1617)		$
BALANCES
~~18.~~19. Maximum Revolving Loan Amount ($12,000,000)		$
~~19.~~20. Total Funds Available (Lesser of #1819 or #1718)		$
~~20.~~21. Present balance of Revolving Loans		$
~~21.~~22. RESERVE POSITION (#1920 minus #2021)		$

The undersigned represents and warrants that the foregoing is true, complete and correct, and that the information reflected in this Borrowing Base Certificate complies with the representations and warranties set forth in the Amended and Restated Loan and Security Agreement between the undersigned and Hercules Technology Growth Capital, Inc.

INFOLOGIX, INC.

By:
Authorized Signer

Exhibit B

(Omitted for Filing)