WHEREAS, Lender, Borrower and the Guarantors entered into that certain First Modification ofLoan Documents dated as of September 1, 2004 for the purpose of extending the Maturity Date of theLoan 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 LoanDocuments);WHEREAS, Lender, Borrower and the Guarantors entered into that certain Second Modification ofLoan Documents dated as of September 1, 2005 for the purpose of extending the Maturity Date of theLoan on the Note from September 1, 2005 to September 1, 2006 and to increase the maximumavailability 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 LoanDocuments);WHEREAS, Borrower requested and Lender agreed to increase the maximum availability under theLoan and the Note from $2,000,000 to $2,500,000 and Borrower, Guarantors and Lender entered intothat certain Third Modification of Loan Documents dated as of June 16, 2006 in order to modify andratify certain terms and provisions of the Note, the Loan Documents and the Guaranty Documents asmore particularly set forth therein (all references to the Loan, Note, Loan Documents and Guarantyshall be as amended by the aforesaid Third Modification of Loan Documents);WHEREAS, Borrower requested and Lender agreed to decrease the maximum availability under theLoan and the Note from $2,500,000 to $2,000,000 and to further extend the Maturity Date of the Loanand Note from September 1, 2006 to December 1, 2006, and Borrower, Guarantors and Lender enteredinto that certain Fourth Modification of Loan Documents dated on or about August 9, 2006 in orderto modify and ratify certain terms and provisions of the Note, the Loan Documents and the GuarantyDocuments as more particularly set forth therein (all references to the Loan, Note, Loan Documentsand 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 ofLoan Documents dated as of December 1, 2006 for the purpose of extending the Maturity Date of theLoan on the Note from December 1, 2006 to December 1, 2007 (all references to the Loan, Note, LoanDocuments and Guaranty shall be as amended by the aforesaid Fifth Modification of Loan Documents);WHEREAS, Lender, Borrower and the Guarantors entered into that certain Sixth Modification ofLoan Documents dated as of December 1, 2007 for the purpose of extending the Maturity Date of theLoan on the Note from December 1, 2007 to December 1, 2008 (all references to the Loan, Note, LoanDocuments and Guaranty shall be as amended by the aforesaid Fifth Modification of Loan Documents);WHEREAS, Lender filed (i) a continuation statement in the UCC Records of Gwinnett County,Georgia under File No. 067-2008-003877 on April 15, 2008, which continuation statement continued infull force and effect both the Financing Statement and the Guarantor Financing Statement of recordnaming Borrower, QS Technologies, Inc. and Chemfree Corporation as debtors, and (ii) a continuationstatement in the UCC Records of the Secretary of State of Delaware under File No. 20081731866 onMay 20, 2008, which continuation statement continued in full force and effect both the GuarantorFinancing Statement of record Visaer, Inc. and Corecard Software, Inc. as debtors.WHEREAS, Borrower has requested and Lender has agreed to further extend the maturity date ofthe Loan and Note from December 1, 2008 to June 30, 2009 and Borrower, Guarantors and Lender desireto enter into this Amendment in order to modify and ratify certain terms and provisions of theNote, the Loan Documents and the Guaranty Documents as more particularly set forth herein.
 
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NOW, THEREFORE, for and in consideration of Ten and No/100 Dollars ($10.00) and other good andvaluable 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 hereinby this reference.2. Capitalized Terms. All capitalized terms contained in this Modification shall havethe same meaning afforded to them in the Note, Loan Documents and Guaranty Documents.3. Specific Modifications to Documents. a. The Note, each of the Loan Documents and each of theGuaranty Documents are hereby modified to reflect that the maximumavailability under the terms of the Loan is hereby decreased from$2,000,000 to $1,250,000.  b. The Maturity Date of the Loan and the Note is herebyextended from December 1, 2008 to June 30, 2009.  c. The Note is hereby modified to provide that interestshall continue to accrue thereunder at the greater of (i) the “primerate” of Lender (as defined on the face of the Note) plus one and onehalf percent (1.5%) per annum, or (ii) six and three quarters percent(6.75%), and shall be adjusted daily with changes in the prime rateduring the term of the Note in the event the prime rate of Lender shallbe greater than five and one quarter percent (5.25%).  d. The following new paragraph 23 is hereby added to theSecurity Agreement and each of the Guarantor Security Agreements andshall be in full force and effect as of the date of this Modification:   In Lender’s sole and absolute discretion, and not inlieu of or in limitation of any other provisioncontained in this Agreement or any of the LoanDocuments, Lender shall have the right at all timesto (i) require Pledgor to notify each person who isor who may become obligated under or on account of anAccount in favor of Pledgor (each such person beingreferred to herein as an “Account Debtor”) or, (ii)in Lender’s sole and absolute discretion, directlynotify such Account Debtor, that all Accounts ofPledgor have been assigned to Lender and to collectAccounts directly in Lender’s own name. The depositsof all such proceeds of the Accounts shall bedeposited in kind in a special deposit accountestablished by Pledgor with Lender, over which Lendershall have sole and exclusive access and control forwithdrawal purposes (the “Dominion Account”)pursuant to a lock-box arrangement with Lender. Allfunds deposited in the Dominion Account shallimmediately become the property of Lender. Lenderassumes no responsibility for such lockboxarrangement, including, without limitation, any claimof accord and satisfaction or release with respect todeposits made within the DominionAccount. Lender shall have no duty to protect,ensure, collect or realize upon the Accounts orpreserve rights in them. Lender shall be entitled tocharge any and all collection costs and expenses,including attorneys fees, related to the DominionAccount to Borrower. e. In the connection with the execution of this Modification,Borrower shall pay to Lender a loan extension fee in the amount of $6,250.00.
 
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4. No Impairment. Borrower and Guarantors agree that the terms and provisions hereofshall in no manner impair, limit, restrict or otherwise affect the obligations of Borrower andGuarantors to Lender or the priority of any lien evidenced by the Note, the Loan Documents or theGuaranty 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 theNote, 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 theNote, the Loan Documents and the Guaranty Documents are hereby ratified and affirmed by Borrowerand Guarantors and shall remain in full force and effect. The Guarantors hereby specificallyacknowledge and consent to the extension of the Maturity Date from December 1, 2008 to June 30,2009, as well as the prior release by Lender of (i) all of Lender’s collateral interest withrespect to Borrower’s interest in Horizon Software International, LLC, (ii) all of Lender’scollateral interest in certain of the primary assets of QS Technologies, Inc. and (iii) all ofLender’s collateral interest and certain of the primary assets of Visaer, Inc.7. No Novation. It is the intention of the parties hereto that the execution anddelivery of this Modification shall in no way constitute a novation or extinguishment of the debtevidenced by the Note, Loan Documents or the Guaranty Documents.8. Effect of Modification. In signing this Modification, the parties hereto expresslycertify and covenant that they have carefully read all provisions contained herein, have had anopportunity to consult with legal counsel of their choosing and to consider the ramifications andterms of this Modification, and they have voluntarily signed this Modification with theunderstanding that it will be final and binding as to their interests and they have had asufficient opportunity to review the Modification and consult with counsel of their choice prior tomaking such decision to execute this Modification. The parties hereby represent and warrant thatthis 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 Modificationconstitutes the entire Modification between the parties hereto and that no promise or inducement orconsideration, other than that expressed in the within and foregoing Modification, has been offeredor accepted and all such prior inducements or considerations are deemed merged herein.[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK][SIGNATURES COMMENCE ON FOLLOWING PAGE]
 
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IN WITNESS WHEREOF, Borrower, Guarantors and Lender have set their hands and seals to thisSeventh Modification as of the day and year first above-written.         **BORROWER****:**     **INTELLIGENT SYSTEMS CORPORATION,**    a Georgia corporation           By: /s/ J. Leland Strange            Title: Pres.     Attest: /s/ Bonnie L. Herron     Title: Sec.           [CORPORATE SEAL]