EX-10.9 2 c72804exv10w9.htm EXHIBIT 10.9 Filed by Bowne Pure Compliance
 

Exhibit 10.9
SIXTH MODIFICATION TO LOAN DOCUMENTS
THIS SIXTH MODIFICATION TO LOAN DOCUMENTS (herein the “Modification”) is made and entered into as of this 1st day of December, 2007, by and between Intelligent Systems Corporation, a Georgia corporation (herein the “Borrower”), QS Technologies, Inc., a Georgia corporation, Visaer, Inc., a Delaware corporation, Corecard Software, Inc., a Delaware corporation, and Chemfree Corporation, a Georgia corporation (the aforesaid four corporations being individually and collectively referred to herein as the “Guarantors”), and Fidelity Bank, a Georgia state chartered bank (f/k/a Fidelity National Bank ) (herein the “Lender”).
RECITALS:
WHEREAS, on October 1, 2003, Lender made a loan to Borrower in the original principal amount of One Million Five Hundred Thousand and No/100 Dollars ($1,500,000.00) (the “Loan”) evidenced by that certain Commercial Promissory Note dated October 1, 2003 executed by Borrower in favor of Lender (herein the “Note”).
WHEREAS, the Loan and the Note are secured and evidenced by, among other instruments, the following:
  (a)  
Security Agreement from Borrower in favor of Lender dated of even date with the Note (herein the “Security Agreement”);
 
  (b)  
Loan Agreement by and between Borrower and Lender dated of even date with the Note (herein the “Loan Agreement”);
 
  (c)  
Financing Statement filed in Gwinnett County, Georgia records, File no. 067-2003-010805 (herein the “Financing Statement”).
 
  (d)  
Negative Pledge Agreement by and between Borrower and Lender dated of even date with the Note (herein the “Negative Pledge Agreement”);
 
  (e)  
Assignment of Policy as Collateral Security from Borrower in favor of Lender dated of even date with the Note (herein the “Life Insurance Assignment”); and
 
  (f)  
Subordination Agreements from Borrower and certain of the Guarantors in favor of Lender dated of even date with the Note (herein “Subordination Agreements”).
The Security Agreement, the Loan Agreement, the Financing Statement, the Negative Pledge Agreement, the Life Insurance Assignment and the Subordination Agreements are collectively referred to herein as the “Loan Documents”.
WHEREAS, on October 1, 2003, each of the Guarantors executed a Guaranty in favor of Lender whereby each of the Guarantors guaranteed all of the obligations of Borrower to Lender contained under the Loan, Note and Loan Documents (herein collectively the “Guaranties”);
WHEREAS, in order to secure their obligations under the terms of the Guaranties, each of the Guarantors executed in favor of Lender certain Security Agreements dated October 1, 2003 (herein the “Guarantor Security Agreements”), which Guarantor Security Agreements are further evidenced by a Financing Statement filed in Gwinnett County, Georgia Records File No. 067-2003-010805 and that certain Financing Statement filed with the Delaware Department of State under Filing No. 3274987 (herein collectively the “Guarantor Financing Statements”) (the Guaranties, the Guarantor Security Agreements and the Guarantor Financing Statements are herein collectively referred to herein as the “Guaranty Documents”);

 

 


 

WHEREAS, Lender, Borrower and the Guarantors entered into that certain First Modification of Loan Documents dated as of September 1, 2004 for the purpose of extending the Maturity Date of the Loan on the Note from September 1, 2004 to September 1, 2005 (all references to the Loan, Note, Loan Documents and Guaranty shall be as amended by the aforesaid First Modification of Loan Documents);
WHEREAS, Lender, Borrower and the Guarantors entered into that certain Second Modification of Loan Documents dated as of September 1, 2005 for the purpose of extending the Maturity Date of the Loan on the Note from September 1, 2005 to September 1, 2006 and to increase the maximum availability under the Loan and the Note from $1,500,000 to $2,000,000 (all references to the Loan, Note, Loan Documents and Guaranty shall be as amended by the aforesaid Second Modification of Loan Documents);
WHEREAS, Borrower requested and Lender agreed to increase the maximum availability under the Loan and the Note from $2,000,000 to $2,500,000 and Borrower, Guarantors and Lender entered into that certain Third Modification of Loan Documents dated as of June 16, 2006 in order to modify and ratify certain terms and provisions of the Note, the Loan Documents and the Guaranty Documents as more particularly set forth therein (all references to the Loan, Note, Loan Documents and Guaranty shall be as amended by the aforesaid Third Modification of Loan Documents);
WHEREAS, Borrower requested and Lender agreed to decrease the maximum availability under the Loan and the Note from $2,500,000 to $2,000,000 and to further extend the Maturity Date of the Loan and Note from September 1, 2006 to December 1, 2006, and Borrower, Guarantors and Lender entered into that certain Fourth Modification of Loan Documents dated as of August 11, 2006 in order to modify and ratify certain terms and provisions of the Note, the Loan Documents and the Guaranty Documents as more particularly set forth therein (all references to the Loan, Note, Loan Documents and Guaranty shall be as amended by the aforesaid Fourth Modification of Loan Documents);
WHEREAS, Lender, Borrower and the Guarantors entered into that certain Fifth Modification of Loan Documents dated as of December 1, 2006 for the purpose of extending the Maturity Date of the Loan on the Note from December 1, 2006 to December 1, 2007 (all references to the Loan, Note, Loan Documents and Guaranty shall be as amended by the aforesaid Fifth Modification of Loan Documents);
WHEREAS, Borrower has requested and Lender has agreed to further extend the Maturity Date of the Loan and Note from December 1, 2007 to December 1, 2008 and Borrower, Guarantors and Lender desire to enter into this Amendment in order to modify and ratify certain terms and provisions of the Note, the Loan Documents and the Guaranty Documents as more particularly set forth herein.
NOW, THEREFORE, for and in consideration of Ten and No/100 Dollars ($10.00) and other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, Lender, Borrower and Guarantors hereby agree as follows:
1. Recitals. The foregoing recitals are true and correct and are incorporated herein by this reference.
2. Capitalized Terms. All capitalized terms contained in this Modification shall have the same meaning afforded to them in the Note, Loan Documents and Guaranty Documents.
3. Specific Modifications to Documents.
  a.  
The maximum availability under the terms of the Loan shall continue to be $2,000,000 during the remaining term of the Loan.
 
  b.  
The Maturity Date of the Loan and the Note is hereby extended from December 1, 2007 to December 1, 2008.

 

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4. No Impairment. Borrower and Guarantors agree that the terms and provisions hereof shall in no manner impair, limit, restrict or otherwise affect the obligations of Borrower and Guarantors to Lender or the priority of any lien evidenced by the Note, the Loan Documents or the Guaranty Documents, except as modified hereby.
5. No Defenses. Borrower and Guarantors acknowledge that they have no offsets, claims, counterclaims or defenses against Lender or under any of their obligations contained in the Note, the Loan Documents or the Guaranty Documents and to the extent any such offsets, claims, counterclaims, or defenses exist, the same are hereby waived by the Borrower and Guarantors.
6. Ratification. Except as amended hereby, each and every term and provision of the Note, the Loan Documents and the Guaranty Documents are hereby ratified and affirmed by Borrower and Guarantors and shall remain in full force and effect. The Guarantors hereby specifically acknowledge and consent to the extension of the Maturity Date from December 1, 2007 to December 1, 2008, as well as the prior release by Lender of (i) all of Lender’s collateral interest with respect to Borrower’s interest in Horizon Software International, LLC and (ii) all of Lender’s collateral interest in certain of the primary assets of QS Technologies, Inc.
7. No Novation. It is the intention of the parties hereto that the execution and delivery of this Modification shall in no way constitute a novation or extinguishment of the debt evidenced by the Note, Loan Documents or the Guaranty Documents.
8. Effect of Modification. In signing this Modification, the parties hereto expressly certify and covenant that they have carefully read all provisions contained herein, have had an opportunity to consult with legal counsel of their choosing and to consider the ramifications and terms of this Modification, and they have voluntarily signed this Modification with the understanding that it will be final and binding as to their interests and they have had a sufficient opportunity to review the Modification and consult with counsel of their choice prior to making such decision to execute this Modification. The parties hereby represent and warrant that this Modification is executed without reliance on any statement or representation of the other, except as expressly set forth in the within and foregoing Modification, and this Modification constitutes the entire Modification between the parties hereto and that no promise or inducement or consideration, other than that expressed in the within and foregoing Modification, has been offered or accepted and all such prior inducements or considerations are deemed merged herein.
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[SIGNATURES COMMENCE ON FOLLOWING PAGE]

 

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IN WITNESS WHEREOF, Borrower, Guarantors and Lender have set their hands and seals to this Sixth Modification as of the day and year first above-written.
             
    BORROWER:    
 
    INTELLIGENT SYSTEMS CORPORATION,
a Georgia corporation
   
 
           
 
  By:   /s/ J. Leland Strange
 
Title:  President / CEO
Attest: /s/ Bonnie Herron
 
Title:  Secretary
   
 
           
 
      [CORPORATE SEAL]    
 
           
    GUARANTORS:    
 
    QS TECHNOLOGIES, INC., a Georgia corporation    
 
           
 
  By:   /s/ J. Leland Strange    
 
           
 
      Title: President
Attest: /s/ Bonnie Herron
 
Title: Secretary
   
 
           
 
      [CORPORATE SEAL]    
 
           
    VISAER, INC., a Delaware corporation    
 
           
 
  By:   /s/ David Spellman    
 
           
 
      Title: President and CEO
Attest: /s/ Martin Crockett
 
Title: Controller
   
 
           
 
      [CORPORATE SEAL]    
 
           
    CORECARD SOFTWARE, INC.,
a Delaware corporation
   
 
           
 
  By:   /s/ J. Leland Strange    
 
           
 
      Title: President / CEO
Attest: /s/ Bonnie Herron
 
Title: Secretary
   
 
           
 
      [CORPORATE SEAL]    
 
           
    CHEMFREE CORPORATION,
a Georgia corporation
   
 
           
 
  By:   /s/ Francis A. Marks    
 
           
 
      Title: President
Attest: /s/ Bonnie Herron
 
Title: Secretary
   
 
           
 
      [CORPORATE SEAL]    
(SIGNATURES CONTINUED ON FOLLOWING PAGE)

 

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(SIGNATURE PAGE TO SIXTH MODIFICATION TO LOAN DOCUMENTS)
         
  LENDER:

FIDELITY BANK,

a Georgia state chartered bank
(f/k/a Fidelity National Bank)
 
 
  By:   /s/ Raymond H. Zavacki    
    Title: Vice President  
 
  (BANK SEAL)

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