Document:

Exhibit 10.1

Exhibit 10.1

TENTH MODIFICATION TO LOAN DOCUMENTS

THIS TENTH MODIFICATION TO LOAN DOCUMENTS (herein the “Modification”) is made and entered into
as of this 30th day of June, 2011, by and between Intelligent Systems Corporation, a Georgia
corporation (herein the “Borrower”), Corecard Software, Inc., a Delaware corporation and Chemfree
Corporation, a Georgia corporation (the aforesaid two 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 “Borrower 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.
20032749870 (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 on or about August 9, 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, Lender, Borrower and the Guarantors entered into that certain Sixth Modification of
Loan Documents dated as of December 1, 2007 for the purpose of extending the Maturity Date of the
Loan on the Note from December 1, 2007 to December 1, 2008 (all references to the Loan, Note, Loan
Documents and Guaranty shall be as amended by the aforesaid Sixth 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 in
full force and effect both the Financing Statement and the Guarantor Financing Statement of record
naming Borrower, QS Technologies, Inc. and Chemfree Corporation as debtors, and (ii) a continuation
statement in the UCC Records of the Secretary of State of Delaware under File No. 20081731866 on
May 20, 2008, which continuation statement continued in full force and effect both the Guarantor
Financing Statement of record Visaer, Inc. and Corecard Software, Inc. as debtors.

WHEREAS, Lender, Borrower and the Guarantors entered into that certain Seventh Modification of
Loan Documents dated as of December 1, 2008 for the purpose of extending the Maturity Date of the
Loan on the Note from December 1, 2008 to June 30, 2009 (all references to the Loan, Note, Loan
Documents and Guaranty shall be as amended by the aforesaid Seventh Modification of Loan
Documents);

WHEREAS, Lender, Borrower and the Guarantors entered into that certain Eight Modification of
Loan Documents dated as of June 26, 2009 for the purpose of extending the Maturity Date of the Loan
on the Note from June 30, 2009 to June 30, 2010 and to provide for certain other modifications
with respect to the Loan (all references to the Loan, Note, Loan Documents and Guaranty shall be as
amended by the aforesaid Eight Modification of Loan Documents);

 

 

WHEREAS, Lender, Borrower and the Guarantors entered into that certain Ninth Modification of
Loan Documents dated as of June 28, 2010 for the purpose of extending the Maturity Date of the Loan
on the Note from June 30, 2010 to June 30, 2011 and to provide for certain other modifications
with respect to the Loan (all references to the Loan, Note, Loan Documents and Guaranty shall be as
amended by the aforesaid Ninth Modification of Loan Documents);

WHEREAS, Borrower has requested and Lender has agreed to further extend the maturity date of
the Loan and Note from June 30, 2011 to June 30, 2012, 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 Note, each of the Loan Documents and each of the
Guaranty Documents are hereby modified to reflect that the maximum
availability under the terms of the Loan shall be equal to $1,250,000.

	 
	 	b.	 	The Maturity Date of the Loan and the Note is hereby
extended from June 30, 2011 to June 30, 2012, and Section 11.1 of the
Loan Agreement is hereby modified to provide that the date set forth in
the third line of such Section 11.1 shall hereafter read “June 29, 2012”.

	 
	 	c.	 	The Note is hereby modified to provide that interest
shall continue to accrue thereunder at the greater of (i) the “prime
rate” of Lender (as defined on the face of the Note) plus one and one
half percent (1.5%) per annum, or (ii) six and one half percent (6.5%),
and shall be adjusted daily with changes in the prime rate during the
term of the Note in the event the prime rate of Lender shall be greater
than five percent (5.0%).

	 
	 	d.	 	In connection with the execution of this Modification,
Borrower shall pay to Lender a loan extension fee in the amount of
$6,250.00.

	 
	 	e.	 	Section 7.11 of the Loan Agreement (which was added to
the Loan Agreement pursuant to the Eighth Modification of Loan Documents
referenced in the recitals hereinabove) is hereby modified to provide
that the Borrower shall maintain a minimum Tangible Net Worth of
$4,200,000 as of the end of each calendar quarter ending on September 30,
2011 and December 31, 2011, and a minimum Tangible Net Worth of
$4,800,000 as of the end of each calendar quarter during the remaining
term of the Loan.

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 Borrower and Guarantors hereby
specifically acknowledge and consent to the extension of the Maturity Date from June 30, 2011 to
June 30, 2012, as well as the release by Lender of QS Technologies, Inc. and Newvisco, Inc. (as
successor to Visaer, Inc.) as guarantors under the Loan.

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.

(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)

(SIGNATURE PAGE TO TENTH MODIFICATION TO LOAN DOCUMENTS TO FOLLOW)

 

 

IN WITNESS WHEREOF, Borrower, Guarantors and Lender have set their hands and seals to this
Tenth 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 L. Herron	 	 
	 

	 	 	 	 	 
	 

	 	Title:
	 	Secretary	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	[CORPORATE SEAL]	 	 
	 
	 	 	 	 	 	 
	 	 	GUARANTORS:	 	 
	 
	 	 	 	 	 	 
	 	 	CORECARD SOFTWARE, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ J. Leland Strange	 	 
	 

	 	 	 	 	 
	 

	 	Title:
	 	President/CEO	 	 
	 

	 	Attest:
	 	/s/ Bonnie L. Herron	 	 
	 

	 	 	 	 	 
	 

	 	Title:
	 	Secretary	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	[CORPORATE SEAL]
 	 	 
	 	 	CHEMFREE CORPORATION,	 	 
	 	 	a Georgia corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Bonnie L. Herron	 	 
	 

	 	 	 	 	 
	 

	 	Title:
	 	Secretary/CFO	 	 
	 

	 	Attest:
	 	/s/ J. Leland Strange	 	 
	 

	 	 	 	 	 
	 

	 	Title:
	 	Director	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	[CORPORATE SEAL]	 	 
	 	 	LENDER:	 	 
	 
	 	 	 	 	 	 
	 	 	FIDELITY BANK,	 	 
	 	 	a Georgia state chartered bank	 	 
	 	 	(f/k/a Fidelity National Bank)	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Raymond Zavacki	 	 
	 

	 	 	 	 	 
	 

	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	(BANK SEAL)Exhibit 10.2

Exhibit 10.2

SETTLEMENT AGREEMENT

This Settlement Agreement is entered into as of April 5, 2011, between, on the one hand,
ChemFree Corporation, a corporation organized and existing under the laws of the State of Georgia,
(“ChemFree”), and, on the other hand, McKenna Long & Aldridge LLP, (“MLA”), a limited liability
partnership organized and existing under the laws of the District of Columbia (Washington, D.C.).
ChemFree and MLA are referred to in this Settlement Agreement collectively as the “Parties” and
individually as a “Party”.

WHEREAS, on or about December 20, 2004, ChemFree instituted a civil action in the United
States District Court for the Northern District of Georgia against J. Walter Company, Ltd. and J.
Walter, Inc. alleging infringement of various patents owned by ChemFree, said civil action being
captioned ChemFree Corporation v. J. Walter, Inc. et al, Civil Action No. 04-cv-03711 (CRW)
(hereinafter the “Civil Action;” the defendants J. Walter Company, Ltd. and J. Walter, Inc. shall
hereinafter be referred to collectively as “Walter”);

WHEREAS, MLA entered an appearance as counsel on behalf of Walter in the Civil Action and, in
the course of its representation of Walter, participated in the assertion of an affirmative defense
and counterclaim alleging that ChemFree
and/or its inventors and/or its patent prosecution counsel and/or its co-owner, ZYMO
International, Inc., committed inequitable conduct before the United States Patent and Trademark
Office in connection with prosecuting the patents-in-suit, including various parent, continuation,
and/or divisional applications related to the patents-in-suit;

 

 

WHEREAS, on or about August 24, 2007, ChemFree served on MLA a proposed motion and brief
under the 21 day “safe harbor” provision of Rule 11(c)(2) of the Federal Rules of Civil Procedure
that proposed to seek sanctions against Walter for pursuing the inequitable conduct defense and
counterclaim in the Civil Action;

WHEREAS, on or about September 21, 2007, ChemFree moved the Court to impose sanctions under
Rule 11 of the Federal Rules of Civil Procedure against Walter for pursuing the inequitable conduct
defense and counterclaim in the Civil Action (hereinafter the “Rule 11 Motion”);

WHEREAS, on or about December 28, 2007, ChemFree moved the Court to grant it partial summary
judgment on the affirmative defense and counterclaim of inequitable conduct in the Civil Action;

 

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WHEREAS, on or about January 10, 2008, the law firm of King & Spalding LLP entered an
appearance of counsel on behalf of the Defendants in the Civil Action;

WHEREAS, on or about March 5, 2008, MLA attorneys Bruce P. Brown, Gregory S. Brow, Audrey E.
Klein, Shari Klevens, Adrian Mollo, Amir Rashid-Farokhi and Renzo Rocchegiani withdrew as counsel
for Defendants in the Civil Action;

WHEREAS, on or about June 10, 2008, the Court entered an Order granting ChemFree’s motion for
partial summary judgment on the inequitable conduct defense and counterclaim and granting-in-part
and denying-in-part ChemFree’s motion for Rule 11 sanctions in connection with pursuit of the
allegations of inequitable conduct set forth in Walter’s Amended Counterclaim in the Civil Action;

WHEREAS, the June 10, 2008, Order imposed Rule 11 sanctions only against MLA in its capacity
as counsel for Walter, but did not impose sanctions against Walter, either separately or jointly
and severally with MLA;

WHEREAS, on or about June 24, 2008, ChemFree submitted an application to the Court for
attorney’s fees and costs associated with defending against the inequitable conduct allegations;

 

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WHEREAS, on or about July 24, 2008, MLA attorneys Matthew Bailey and Rel Ambrozy withdrew as
counsel for Walter in the Civil Action;

WHEREAS, on or about July 28, 2008, MLA submitted a response in opposition to ChemFree’s
application to the Court for attorney’s fees and costs;

WHEREAS, by reason of the June 24, 2008, and July 28, 2008, submissions, there is a dispute
between ChemFree and MLA regarding the amount of Rule 11 sanctions that should be imposed under the
June 10, 2008, Order;

WHEREAS, notwithstanding the grant of partial summary judgment on the inequitable conduct
defense and counterclaim, Walter has continued to contest various other issues in the Civil Action
subsequent to the withdrawal of MLA’s attorney and Walter has been represented by the law firm of
King & Spalding LLP in connection with such other and ongoing litigation;

WHEREAS, from time to time during the Civil Action, ChemFree has alluded to the possibility of
seeking an additional award of attorneys fees under applicable law including, without
limitation, under the exceptional circumstances provision of 35 U.S.C. § 285;

 

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WHEREAS, on or about February 3, 2011, the Court in the Civil Action granted the joint request
of ChemFree and MLA to delay a hearing on ChemFree’s fee application in order to pursue settlement
of their dispute through mediation;

WHEREAS, the Parties desire to resolve the present dispute over ChemFree’s pending Rule 11 fee
application without further time and expense of litigation or other legal action;

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, ChemFree and MLA agree
as follows:

1. MONETARY CONSIDERATION (the “Settlement Payment”): MLA agrees to pay and ChemFree agrees
to accept the sum of $450,000.00 (the “Settlement Payment”) in cash or other good funds within a
reasonable period of time after execution of this Settlement Agreement and approval of the
Settlement Agreement by the Court in the Civil Action;

 

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2. RELEASE OF MLA BY CHEMFREE. Upon receipt of the Settlement Payment in full, ChemFree and
its officers, directors, members, trustees, employees, successors, assigns, insurers, agents and
attorneys of each of them do hereby forever, fully and finally, release, acquit and discharge MLA
and any current or former partners, employees, successors, insurers, assigns, agents and attorneys
of each of them from and for liability arising from, related to, or in connection with: (i) the
Rule 11 Motion; and (ii) any other claim for an award of attorney fees that ChemFree could have
brought or could bring under applicable law including, without limitation, under 28 U.S.C. § 1927
and/or 35 U.S.C. § 285, based on allegations of litigation misconduct by MLA or Walter during the
course of and in connection with MLA’s representation of Walter in the Civil Action.

 

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3. LIMITED RELEASE OF WALTER BY CHEMFREE. ChemFree hereby releases Walter and its officers,
directors, members, trustees, employees, successors, assigns, and insurers, for any claim for an
award of attorneys fees based on allegations of litigation misconduct whether under Rule 11 of
Federal Rules of Civil Procedure, 28 U.S.C. § 1927, 35 U.S.C. § 285 or other applicable law. The
release granted in this paragraph is limited in time to conduct, events and occurrences taking
place on or before July 24, 2008, representing the date that MLA withdrew as counsel for Walter in
the Civil Action. Otherwise, it is expressly
understood and agreed that Walter is not a party to this Settlement Agreement, nor is Walter
entitled to receive a copy of or otherwise review this Settlement Agreement except as otherwise
provided in this agreement. The Parties agree that the sole purpose for affording the within
limited release to Walter is to benefit MLA by reducing the likelihood that Walter will be able to
bring a claim of contribution or indemnity against MLA subsequent to execution of this Settlement
Agreement for alleged acts of litigation misconduct that may have occurred during the period of
time that Walter was represented by MLA in the Civil Action;

4. LIMITATION ON SCOPE OF RELEASE. It is understood by and between ChemFree and MLA that the
releases contemplated herein in favor of MLA and Walter shall be strictly limited to acts of
misconduct in connection with the conduct of the litigation through the date of MLA’s withdrawal of
representation set forth hereinabove. Otherwise, nothing in this Settlement Agreement shall be
construed as limiting ChemFree’s right to seek and obtain an award of attorneys’ fees under
applicable law including, without limitation, 35 U.S.C. § 285, based on a finding that Walter or
its attorneys committed acts of litigation misconduct after the date of MLA’s withdrawal of
representation;

 

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5. RESERVATION OF RIGHTS TO OBTAIN DAMAGES AND OTHER REMEDIES AGAINST WALTER FOR PATENT
INFRINGEMENT. It is understood by and between ChemFree and MLA that the releases contemplated
herein in favor of MLA and Walter shall be strictly limited to acts of “litigation misconduct,”
i.e., misconduct in connection with the conduct of the litigation. Otherwise, it is understood
that ChemFree does not release Walter, in any way, for liability for any causes of action,
including acts of patent infringement as alleged in ChemFree’s pleadings in the Civil Action.

6. RESERVATION OF RIGHTS TO OBTAIN ATTORNEY FEE AWARD FOR WILLFUL INFRINGEMENT. Nothing in
this Settlement Agreement shall be construed as limiting ChemFree’s right to seek and obtain an
award of attorneys’ fees and expenses of litigation under applicable law including, without
limitation, 35 U.S.C. § 285, based on a finding that Walter’s infringement of one or more of
ChemFree’s patent claims has been “willful,” it being otherwise understood and agreed that “willful
infringement” and “litigation misconduct” are two separate and distinct grounds for finding that a
case is “exceptional” within the meaning of 35 U.S.C. § 285.

 

 - 8 - 

 

7. LIMITED WAIVER OF APPEAL RIGHTS: MLA and ChemFree, respectively, each waive the right to
seek an appeal of the June
10, 2008, Order including, without limitation, an appeal of the order granting partial summary
judgment on the inequitable conduct defense and/or the order granting-in-part and denying-in-part
ChemFree’s motion for Rule 11 sanctions. In addition, MLA and ChemFree, respectively, each agree
not to seek reconsideration of such order before the District Court. However, nothing in this
paragraph shall be construed as limiting ChemFree’s right to appeal or seek reconsideration of the
District Court’s June 18, 2010 Order, maintaining that one or more of ChemFree’s patent claims is
invalid as obvious under 35 U.S.C. § 103.

8. WAIVER OF RIGHT TO RECOUP SETTLEMENT PAYMENT IN THE EVENT OF APPEAL OR RECONSIDERATION
INITIATED BY WALTER: In the event that Walter appeals or otherwise seeks review or reconsideration
of the June 10, 2008, Order, and notwithstanding the outcome of any such appeal, review, and/or
reconsideration, MLA agrees and understands that it will not be able to recoup or otherwise recover
any of the Settlement Payment, it being the purpose of this Settlement Agreement to fully and
finally fix the amount to be paid by MLA, which amount shall neither be increased nor
diminished/refunded as a result of any further litigation in the case, whether before the District
Court or any Court of Appeals.

 

 - 9 - 

 

9. RELEASE OF CHEMFREE BY MLA: Upon payment of the Settlement Payment in full, MLA, and its
partners, employees, successors, assigns, insurers, agents and attorneys of each of them do hereby
forever, fully and finally, release, acquit and discharge ChemFree and its officers, directors,
members, employees, successors, assigns, agents and attorneys of each of them from and for all
manner of actions, causes of actions, civil actions, debts, dues, sums of money, covenants,
contracts, controversies, agreements, promises, damages, judgments, executions, claims and demands
whatsoever, which have accrued or which may hereafter accrue, known or unknown, expressed or
implied, obligations, contracts, negotiations, representations, matters, events or occurrences, at
law or in equity, arising from, related to, or in connection with the Civil Action, ChemFree’s
patents asserted in the Civil Action, ChemFree’s efforts to enforce its patent rights against
Walter, and/or ChemFree’s efforts to obtain an award of attorneys fees in the Civil Action.

 

 - 10 - 

 

10. CONDITIONAL CONFIDENTIALITY: Within a reasonable time following execution of this
Settlement Agreement, the Parties shall prepare and file with the Court a joint motion dismissing
ChemFree’s pending application for attorneys’ fees in a form substantially identical to Exhibit “A”
attached hereto, together with an accompanying, proposed Consent Order in a form
substantially identical to Exhibit “B” attached hereto. Otherwise, the Parties expressly
agree that the terms and conditions of this Settlement Agreement shall be kept confidential and
shall not be disclosed, divulged or disseminated to any third persons or entities except as
necessary for tax purposes or reporting required information to governmental agencies.
Notwithstanding the foregoing, however, either of the parties shall be permitted to disclose the
terms of this Settlement Agreement in the event that it becomes necessary for the Court to take the
amount of the Settlement Payment or any other terms of this Settlement Agreement into account, for
example, in connection with the calculation of any other and further attorney fee award that may be
imposed or awarded in the Civil Action including, without limitation, in the event that the Court
determines that Walter’s infringement is willful or that the litigation otherwise constitutes an
“exceptional case” within the meaning of 35 U.S.C. § 285, or in the event that it is otherwise
necessary to disclose the terms of this Settlement Agreement in order to enforce the terms of this
Settlement Agreement. In addition, MLA shall be permitted to disclose the terms of this Settlement
Agreement to the Court, any other court or tribunal and/or to Walter and its counsel in the event
that Walter threatens or asserts a claim against MLA to which this Settlement Agreement is
determined by MLA in good faith to be relevant.

 

 - 11 - 

 

11. SEVERABILITY: In case any provision of this Settlement Agreement shall be held invalid,
illegal, or unenforceable in whole or in part, neither the validity of the remaining part of such
provision, nor the validity of any other provisions of this Settlement Agreement shall in any way
be affected thereby.

12. ENTIRE AGREEMENT: This Settlement Agreement supersedes all prior agreements,
discussions, and negotiations between ChemFree and MLA concerning all events and circumstances
related to the Civil Action, oral or written, and constitutes the entire agreement between ChemFree
and MLA concerning all events and circumstances related to the Civil Action, and all prior
discussions and negotiations are merged herein.

13. MODIFICATION OR AMENDMENT MUST BE IN WRITING: This Settlement Agreement may not be
amended, modified, changed, released, or discharged except by a writing signed by the duly
authorized representatives of each of the Parties or their successors or assigns.

14. GOVERNING LAW AND CONSTRUCTION: This Settlement Agreement shall be governed and
construed in accordance with the laws of the State of Georgia without regard to application of
conflict of law provisions of the laws of said State.

 

 - 12 - 

 

15. BINDING EFFECT OF AGREEMENT: This Settlement Agreement including every obligation,
representation and warranty contained herein shall be binding upon and inure to the benefit of
ChemFree and MLA and their respective past, present or future, direct or indirect, parent,
subsidiary and affiliated entity of legal successors, agents, attorneys, insurers, employees,
representatives, officers, directors, partners, shareholders, successors and assigns.

16. WARRANTY OF AUTHORITY TO MAKE THIS AGREEMENT: ChemFree and MLA represent and warrant to
each other on behalf of themselves that all necessary corporate consents, if any, have been
obtained and that the Parties are duly authorized to enter into and be bound by this Settlement
Agreement, that the individuals signing this Settlement Agreement on their behalf are duly
authorized to enter into and bind them to its terms and that by signing this Agreement the Parties
are bound to the terms hereof. Each Party further represents and warrants that it has been
represented by, or had the full opportunity to consult with, legal counsel with respect to the
negotiation of this Settlement Agreement and that each has participated in the review and drafting
of this Settlement Agreement such that no construction of the terms or effect of this Agreement
shall be made against any Party on the basis of such Party’s capacity as principal
drafter hereof. Each Party further represents and warrants that it has read this document and
that the terms of the Settlement Agreement are fully understood and voluntarily accepted by it.

 

 - 13 - 

 

17. COUNTERPARTS AND FACSIMILE COPY: This Settlement Agreement may be executed in several
counterparts, so all taken together shall constitute one and the same instrument, including sending
and signing this Agreement by telecopy. Each facsimile showing the signatures of all Parties shall
be accepted as an original.

IN WITNESS WHEREOF, the Parties do hereby execute this Settlement Agreement by duly authorized
officials as of April 5, 2011:

	 	 	 	 	 	 	 	 	 
	CHEMFREE CORPORATION	 	McKENNA LONG & ALDRIDGE, LLP	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Thomas W. McNally
	 	By:
	 	/s/ David L. Balser	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Thomas W. McNally
	 	 	 	David L. Balser	 	 
	 

	 	Vice-President &
	 	 	 	Partner and	 	 
	 

	 	General Manager
	 	 	 	General Counsel	 	 
	 
	 	 	 	 	 	 	 	 
	Witnessed by me this 2d day of May,
2011.	 	Witnessed by me this 3rd day of
May, 2011.	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Brenda W. Shelton	 	/s/ Susan J. Davis	 	 
	 	 	 	 	 
	Notary Public	 	Notary Public	 	 
	My Commission Expires:	 	My Commission Expires:	 	 
	 
	 	 	 	 	 	 	 	 
		 	 	 	 	 	

 

 - 14 - 

 

EXHIBIT “A”

IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION

	 	 	 	 	 	 	 
	CHEMFREE CORPORATION,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Plaintiff,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	v.

	 	 	)	 	 	CIVIL ACTION NO:
	 

	 	 	)	 	 	1: 04-CV-3711 (CRW)
	J. WALTER, INC. and

	 	 	)	 	 	 
	J. WALTER COMPANY, LTD.,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Defendants.

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	***************************

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	CHEMFREE CORPORATION,

	 	 	)

)	 	 	 
	Applicant,

	 	 	)

)	 	 	 
	v.

	 	 	)

)	 	 	 
	McKENNA LONG & ALDRIDGE LLP,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Respondent.

	 	 	)	 	 	 

JOINT MOTION TO DISMISS FEE APPLICATION

NOW COME Applicant Plaintiff ChemFree Corporation (ChemFree) and Respondent McKenna Long &
Aldridge LLP (“MLA”) and jointly move the Court to approve their confidential settlement agreement
and, subject to and in connection therewith, jointly move the Court to dismiss Plaintiff’s
Application for Attorneys’ Fees And Costs Pursuant to the Court’s June 5, 2008, Order Imposing Rule
11 Sanctions Against McKenna Long & Aldridge, filed under seal on or about June 24, 2008.

 

 - 15 - 

 

ChemFree and MLA show the Court that, pursuant to the Court’s permission to engage in
mediation, they mediated their dispute before a professional mediator during the period March 29,
through April 5, 2011. As a result of such mediation, the parties report that they have reached a
confidential settlement agreement resolving their dispute over the subject fee application thereby
obviating the need for the Court to determine the amount of any such fee award.

ChemFree and MLA further represent to the Court that they have agreed to keep the terms of
their settlement agreement confidential, except to the extent that it becomes necessary, at some
later stage of this civil action, for the Court to take the terms of the settlement agreement into
account in connection with making any other and further ruling in the case, such as, for example,
in the event that the Court awards additional attorneys fees and costs to ChemFree under
circumstances where the Walter defendants may be entitled to a credit against the amount of
attorneys’ fees awarded by reason of any amounts paid by MLA to ChemFree under the subject
settlement agreement, or to otherwise enforce the terms of the settlement agreement. In that
regard, ChemFree and MLA are amenable to allowing the Court to view their confidential settlement
agreement in camera if the Court deems such to be necessary in connection with approving the
settlement and dismissing the pending fee application.

 

 - 16 - 

 

A proposed Consent Order granting the within joint motion is attached hereto for the
consideration of the Court.

WHEREFORE, ChemFree and MLA jointly pray that the Court will consider and grant their motion.

Respectfully submitted, this
 _____th day of May, 2011.

	 	 	 	 	 
	DUANE MORRIS LLP

	 	McKENNA LONG & ALDRIDGE LLP
	 	 
	 
	 	 	 	 
	/s/ William A. Capp

	 	/s/	 	 
	 

	 	 	 	 
	William A. Capp

	 	[signed w/expressed permission by WAC]	 	 
	Georgia Bar No. 108823

	 	David L. Balser	 	 
	bcapp@duanemorris.com

	 	Georgia Bar No. 035835	 	 
	 
	 	dbalser@mckennalong.com	 	 
	Atlantic Center Plaza

	 	 	 	 
	1180 West Peachtree Street NW

	 	303 Peachtree Street	 	 
	Suite 700

	 	Suite 5300	 	 
	Atlanta, Georgia 30309-3448

	 	Atlanta, GA 30308	 	 
	 
	 	 	 	 
	Attorneys for Plaintiff
	 	 	 	 
	ChemFree Corporation
	 	 	 	 

 

 - 17 - 

 

EXHIBIT “B”

IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION

	 	 	 	 	 	 	 
	CHEMFREE CORPORATION,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Plaintiff,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	v.

	 	 	)	 	 	CIVIL ACTION NO:
	 

	 	 	)	 	 	1: 04-CV-3711 (CRW)
	J. WALTER, INC. and

	 	 	)	 	 	 
	J. WALTER COMPANY, LTD.,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Defendants.

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	***************************

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	CHEMFREE CORPORATION,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Applicant,

	 	 	)

)	 	 	 
	v.

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	McKENNA LONG & ALDRIDGE LLP,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Respondent.

	 	 	)	 	 	 

CONSENT ORDER DISMISSING FEE APPLICATION

This matter is before the Court on Plaintiff’s Application for Attorneys’ Fees And Costs
Pursuant to the Court’s June 5, 2008, Order Imposing Rule 11 Sanctions Against McKenna Long &
Aldridge, filed under seal on or about June 24, 2008 (hereinafter “ChemFree’s Fee Application”),
and a joint motion by Plaintiff/Applicant ChemFree Corporation (“ChemFree”) and Respondent McKenna
Long & Aldridge LLP (“MLA”) to dismiss ChemFree’s Fee Application subject to approval of their
settlement agreement.

 

 - 18 - 

 

ChemFree and MLA have represented to the Court that they have reached a confidential
settlement agreement resolving their dispute over the subject fee application thereby obviating the
need for the Court to determine the amount of any such fee award.

ChemFree and MLA have further represented to the Court that they have agreed to keep the terms
of their settlement agreement confidential, except to the extent that it becomes necessary for the
Court to take the terms of the settlement agreement into account in connection with making any
other and further ruling in the case, such as, for example, in the event that the Court awards
additional attorneys fees and costs to ChemFree and against the Walter defendants under
circumstances where the Walter defendants may be entitled to a credit toward the amount of
attorneys’ fees owed by reason of any amounts paid to ChemFree by MLA under the subject settlement
agreement.

It appearing to the Court that the parties have consented hereto and it further appearing that
the relief requested by the parties is otherwise just and equitable under the circumstances, it is
hereby

ORDERED AS FOLLOWS:

(1) In lieu of ruling on ChemFree’s Fee Application, the Court approves the settlement
agreement between ChemFree and MLA;

(2) ChemFree’s Fee Application is hereby dismissed subject to the other terms and conditions
of this order;

 

 - 19 - 

 

(3) The Court will conditionally approve of ChemFree and MLA’s joint request to maintain the
terms of their settlement agreement confidential, except that, in the event the Court deems it
necessary to take the terms of such settlement agreement into consideration in connection with
deciding any other matter in this case or otherwise enforcing the provisions of the settlement
agreement, the parties shall promptly comply with any further Order of the Court to disclose the
terms of the settlement agreement to the Court and/or either of the Walter defendants, as may be
later determined by the Court; and

(4) The Court will retain jurisdiction as necessary to enforce the terms of the settlement
agreement.

SO ORDERED, this
 _____th day of May, 2011.

	 	 	 
	 

	 	 
	 

	 	CHARLES R. WOLLE
	 

	 	UNITED STATES DISTRICT COURT
	 
	 	 
	CONSENTED TO:

	 	CONSENTED TO:
	 
	 	 
	DUANE MORRIS LLP

	 	McKENNA LONG & ALDRIDGE LLP
	 
	 	 
	/s/ William A. Capp

	 	/s/
	 

	 	 
	William A. Capp

	 	[signed w/expressed permission by WAC]
	Georgia Bar No. 108823

	 	David L. Balser
	bcapp@duanemorris.com

	 	Georgia Bar No. 035835
	 

	 	dbalser@mckennalong.com
	 
	 	 
	Atlantic Center Plaza
	 	 
	1180 West Peachtree Street NW
	 	303 Peachtree Street
	Suite 700

	 	Suite 5300
	Atlanta, Georgia 30309-3448

	 	Atlanta, GA 30308
	 

	 	 
	 
	 	 
	Attorneys for Plaintiff
	 	 
	ChemFree Corporation
	 	 

 

 - 20 -

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