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<SEC-DOCUMENT>0000950144-06-008508.txt : 20060906
<SEC-HEADER>0000950144-06-008508.hdr.sgml : 20060906
<ACCEPTANCE-DATETIME>20060906113447
ACCESSION NUMBER:		0000950144-06-008508
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		6
CONFORMED PERIOD OF REPORT:	20060831
ITEM INFORMATION:		Completion of Acquisition or Disposition of Assets
ITEM INFORMATION:		Regulation FD Disclosure
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20060906
DATE AS OF CHANGE:		20060906

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			INTELLIGENT SYSTEMS CORP
		CENTRAL INDEX KEY:			0000320340
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-PREPACKAGED SOFTWARE [7372]
		IRS NUMBER:				581964787
		STATE OF INCORPORATION:			GA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-09330
		FILM NUMBER:		061075806

	BUSINESS ADDRESS:	
		STREET 1:		4355 SHACKLEFORD RD
		CITY:			NORCROSS
		STATE:			GA
		ZIP:			30093
		BUSINESS PHONE:		4043812900

	MAIL ADDRESS:	
		STREET 1:		4355 SHACKLEFORD ROAD
		CITY:			NORCROSS
		STATE:			GA
		ZIP:			30093
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>g03282e8vk.htm
<DESCRIPTION>INTELLIGENT SYSTEMS CORPORATION
<TEXT>
<HTML>
<HEAD>
<TITLE>INTELLIGENT SYSTEMS CORPORATION</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 8-K</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>Current Report<BR>
Pursuant to Section&nbsp;13 or 15(d) of the<BR>
Securities Exchange Act of 1934</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Date of Report (Date of earliest event reported):</B>&nbsp;&nbsp;<B>August&nbsp;31, 2006</B></DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B><FONT style="border-bottom: 1px solid #000000">INTELLIGENT SYSTEMS CORPORATION</FONT></B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Exact name of Registrant as specified in its charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="31%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Georgia</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>1-9330</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>58-1964787</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(State or other jurisdiction
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Commission file number
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(I.R.S. Employer Identification No.)</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">of incorporation or organization)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD nowrap align="center" valign="top"><B>4355 Shackleford Road, Norcross, Georgia</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>30093</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(Address of principal executive offices)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Zip Code)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">Registrant&#146;s telephone number, including area code: <B>(770)&nbsp;381-2900</B></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2 below):
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFP 240.14a-12)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>









<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
















<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">Item&nbsp;2.01. Completion of Acquisition or Disposition of Assets</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">Item&nbsp;7.01. Regulation FD Disclosure</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">Item&nbsp;9.01. Financial Statements and Exhibits</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">SIGNATURE</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">Exhibit Index</A></TD></TR>
<TR><TD colspan="9"><A HREF="g03282exv2w1.htm">EX-2.1 INTEREST PURCHASE AND TRANSFER AGREEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="g03282exv2w2.htm">EX-2.2 PROMISSORY NOTE OF HORIZON SOFTWARE HOLDINGS, INC.</A></TD></TR>
<TR><TD colspan="9"><A HREF="g03282exv2w3.htm">EX-2.3 SECURITY AGREEMENT AND ASSIGNMENT INTEREST IN LIMITED LIABILITY COMPANY</A></TD></TR>
<TR><TD colspan="9"><A HREF="g03282exv2w4.htm">EX-2.4 FORM OF GUARANTY OF PAYMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="g03282exv99w1.htm">EX-99.1 PRESS RELEASE DATED 9-6-06</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>










<!-- link1 "Item&nbsp;2.01. Completion of Acquisition or Disposition of Assets" -->
<DIV align="left"><A NAME="000"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;2.01. Completion of Acquisition or Disposition of Assets.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On August&nbsp;31, 2006, Intelligent Systems Corporation (the &#147;Company&#148;) completed the sale of its
minority ownership position in Horizon Software, LLC (&#147;Horizon&#148;), a privately held software company
based in Loganville, Georgia. The Company sold 4,137,579 Series&nbsp;A Preferred Shares of Horizon,
representing its entire holdings in Horizon, to Horizon Software Holdings, Inc., an entity
comprised of the founder and officers of Horizon (the &#147;Buyer&#148;) for a purchase price of $5,600,000.
Simultaneously, the Company also sold its interest in an affiliate company of Horizon for $100,000.
At the closing of the transactions, the Company received an aggregate of $2,875,000 in cash and a
promissory note of Buyer in the principal amount of $2,875,000.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The promissory note of Buyer bears interest at the prime rate plus 1.5% and principal and interest
are due on January&nbsp;31, 2007, subject to certain conditions for accelerating or extending the
maturity date. The promissory note is secured by the individual guarantees of the shareholders of
Buyer and the assignment to the Company of 5,818,232 Common Shares of Horizon owned by Buyer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company has held its ownership interest in Horizon since June&nbsp;2002 and during that time, J.
Leland Strange, the CEO and Chairman of the Company, has been a member of the Board of Managers of
Horizon as representative of the Company in accordance with the terms of the Company&#146;s original
investment. The terms of the sale of the Horizon stock were negotiated on an arm&#146;s length basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company will furnish pro forma financial information related to the transaction in an amendment
to this Form 8-K within 71 calendar days of the date of this Form 8-K.
</DIV>

<!-- link1 "Item&nbsp;7.01. Regulation FD Disclosure" -->
<DIV align="left"><A NAME="001"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;7.01. Regulation&nbsp;FD Disclosure.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On September&nbsp;6, 2006, Intelligent Systems Corporation issued a press release disclosing the sale of
the Horizon asset. A copy of the September&nbsp;6, 2006 press release, attached hereto as Exhibit
99.1, is being furnished pursuant to Regulation&nbsp;FD and is incorporated by reference herein.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<!-- link1 "Item&nbsp;9.01. Financial Statements and Exhibits" -->
<DIV align="left"><A NAME="002"></A></DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Item&nbsp;9.01. Financial Statements and Exhibits.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>(c)&nbsp;Exhibits</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Exhibit&nbsp;2.1
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Interest Purchase and Transfer Agreement by and between Horizon Software Holdings,
Inc. and Intelligent Systems Corporation dated August&nbsp;31, 2006.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Exhibit&nbsp;2.2
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Promissory Note of Horizon Software Holdings, Inc. dated August&nbsp;31, 2006.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Exhibit&nbsp;2.3
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Security Agreement and Assignment of Interest in Limited Liability Company by and
between Horizon Software Holdings, Inc. and Intelligent Systems Corporation dated August
31, 2006.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Exhibit&nbsp;2.4
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Guaranty of Payment of shareholders of Buyer dated August&nbsp;31, 2006<BR></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Exhibit&nbsp;99.1
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Press Release issued by Intelligent Systems Corporation dated September&nbsp;6, 2006.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company will furnish pro forma financial information related to the transaction in an amendment
to this Form 8-K within 71 calendar days of the date of this Form 8-K.
</DIV>

<!-- link1 "SIGNATURE" -->
<DIV align="left"><A NAME="003"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">SIGNATURE
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date: September&nbsp;6, 2006
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" valign="top">INTELLIGENT SYSTEMS CORPORATION</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Registrant)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Bonnie L. Herron</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Bonnie L. Herron</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Financial Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<!-- link1 "Exhibit Index" -->
<DIV align="left"><A NAME="004"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Exhibit Index</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="12%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Exhibit Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Description</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Interest Purchase and Transfer Agreement by and between Horizon Software Holdings, Inc. and
Intelligent Systems Corporation dated August&nbsp;31, 2006.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Promissory Note of Horizon Software Holdings, Inc. dated August&nbsp;31, 2006.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Security Agreement and Assignment of Interest in Limited Liability Company by and between
Horizon Software Holdings, Inc. and Intelligent Systems Corporation dated August&nbsp;31, 2006.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Guaranty of Payment of shareholders of Buyer dated August&nbsp;31, 2006</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Press release issued by Intelligent Systems Corporation on September&nbsp;6, 2006</TD>
</TR>
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<DOCUMENT>
<TYPE>EX-2.1
<SEQUENCE>2
<FILENAME>g03282exv2w1.htm
<DESCRIPTION>EX-2.1 INTEREST PURCHASE AND TRANSFER AGREEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-2.1 INTEREST PURCHASE AND TRANSFER AGREEMENT</TITLE>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit 2.1
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>INTEREST PURCHASE AND TRANSFER AGREEMENT</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS INTEREST PURCHASE AND TRANSFER AGREEMENT (the &#147;Agreement&#148;) is made and entered into this
31<SUP style="font-size: 85%; vertical-align: text-top">st</SUP> day of August, 2006, by and between <B>HORIZON SOFTWARE HOLDINGS, INC., </B>a Georgia
corporation (&#147;Purchaser&#148;), and <B>INTELLIGENT SYSTEMS CORPORATION </B>(&#147;Seller&#148;), a Georgia corporation.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Statement of Background</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchaser and Seller are Members of Horizon Software International, LLC, a Georgia limited
liability company (the &#147;Company&#148;). Effective as of June&nbsp;1, 2002, Purchaser and Seller entered
into, among other agreements, the following: (a)&nbsp;that certain Operating Agreement of Horizon
Software International, LLC dated effective as of June&nbsp;1, 2002 (the &#147;Operating Agreement&#148;) and (b)
along with the Company, that certain Restricted Share Agreement (the &#147;Restricted Share Agreement&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller is the record and beneficial owner of 4,137,579 &#147;Series&nbsp;A Preferred Shares&#148; (as defined
in the Operating Agreement) in the Company (such shares together with all rights and interests
associated therewith, including without limitation all conversion rights, collectively, the
&#147;Membership Interest&#148;). The Purchaser desires to purchase the Membership Interest from the Seller,
and the Seller desires to sell the Membership Interest to the Purchaser on the terms and subject to
the conditions hereinafter contained.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The parties hereto desire to resolve all matters between them herein referred to or otherwise
relating or pertaining in any manner or way, directly or indirectly, to the Purchaser as herein
provided.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchaser and Seller also desire to obtain the approval and consent of the Company, to the
transfer and assignment described herein, subject to the terms hereof.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Statement of Agreement</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW THEREFORE, in consideration of the premises, the mutual covenants, promises, agreements,
representations and warranties contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do
hereby covenant, promise, agree, represent and warrant as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;Sale of Membership Interest. Contemporaneously with the execution, acknowledgment, sealing
and delivery of this Agreement, Purchaser hereby purchases from Seller, and Seller hereby sells,
conveys, assigns and transfers to Purchaser, the Membership Interest, and all of Seller&#146;s right,
title and interest in and to the Company, including all right, title, and interest in and to all
Company assets, liabilities, and rights to future profits.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;Purchase Price and Payment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;In consideration of, and as the sole and exclusive purchase price for, the Membership
Interest, Purchaser shall pay to Seller consistent with the terms of Section 2(b) hereof, the
amount of FIVE MILLION SIX HUNDRED THOUSAND and NO/100<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> DOLLARS ($5,600,000.00) (the
&#147;Purchase Price&#148;).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Purchase Price shall be paid as follows:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;Concurrently herewith Purchaser shall pay Seller by wire transfer an amount equal to TWO
MILLION SEVEN HUNDRED FIFTY THOUSAND ($2,750,000.00) and Seller acknowledges receipt of same;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;Purchaser shall pay Seller the balance of the Purchase Price pursuant to the terms of a
Promissory Note of even date herewith made by Purchaser in favor of Seller with an original
principal amount of TWO MILLION EIGHT HUNDRED FIFTY THOUSAND ($2,850,000.00) (the &#147;Note&#148;).
Purchaser&#146;s payment of amounts due under the Note shall be secured by: (i)&nbsp;personal guarantees made
by Robert Williamson, Teresa Williamson, Michael Williamson and Jon Williamson in favor of Seller;
and (ii)&nbsp;an amount of Common Shares (as defined in the Operating Agreement) converted from the
Membership Interest on even date herewith pursuant to the terms of that certain Security Agreement
and Assignment of Limited Liability Company Interest made by Purchaser in favor of Seller (the
&#147;Pledge Agreement&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;Resignations. To the extent the Seller so serves, the Seller hereby resigns as a manager,
director and officer of the Company, effective upon the execution, acknowledgment, sealing and
delivery of this Agreement. In addition, Seller shall deliver a Letter of Resignation executed by
J. Leland Strange (&#147;Strange&#148;) wherein, to the extent he so serves, Strange resigns from any and all
positions as a manager, director and officer of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;Tax Liability. The parties hereto agree and acknowledge that any tax liability associated
with the Membership Interest accruing prior to the effective date hereof shall be the sole
responsibility of Seller. Any tax liability associated with the Membership Interest accruing from
and after the effective date hereof shall be the responsibility of Purchaser. On or before April
15, 2007, Purchaser shall cause the Company to distribute to Seller an amount equal to thirty-six
percent (36%) of the net taxable income of all categories reflected on the Seller&#146;s 2006 Form K-1
from the Company. If the net result reflected on the Seller&#146;s 2006 Form K-1 is a loss, no amounts
will be paid to Seller under this Section&nbsp;4.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;Future Distributions. Seller, for and in consideration of the payment by Purchaser to
Seller hereunder, hereby assigns, conveys and transfers to Purchaser all of its right, title and
interest in and to any and all distributions associated with its ownership of the Membership
Interest and hereby releases any claims or rights it may have to any distributions associated with
the Membership Interest.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;Representations and Warranties of Seller. Seller represents and warrants to the Purchaser
that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Seller is the record and beneficial owner and has good and valid merchantable title to the
Membership Interest free and clear of any and all mortgages, pledges, liens, security interests,
conditional sale agreements, charges, restrictions and encumbrances of every nature whatsoever.
Seller does not own any interest, rights, options or any other beneficial interest in the Company
other than that represented by the Membership Interest.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Seller is a duly incorporated and organized Georgia corporation validly existing and in
good standing under Georgia law. The Seller has the corporate power and authority to execute,
acknowledge, seal and deliver this Agreement and all documents delivered pursuant to or in
connection with the consummation of the transactions contemplated herein (collectively, the
&#147;Transaction Documents&#148;), to consummate the transactions contemplated by this Agreement and all
Transaction Documents and to take any and all other actions required to be taken by the Seller
pursuant to the provisions of this Agreement and all the Transaction Documents. Neither the
execution, acknowledgment, sealing and delivery of this Agreement or any of the Transaction
Documents nor the consummation of the transactions contemplated by this Agreement shall constitute
any violation of any order, writ, injunction, decree, law, statute, rule or regulation applicable
to Seller.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;This Agreement and each of the Transaction Documents have been, and will be, duly executed
and delivered by Seller; and this Agreement and all the Transaction Documents are valid and binding
upon and fully enforceable against the Seller in accordance with their respective terms.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Seller has not incurred any liability or obligation for finders&#146;, brokerage or agents&#146;
fees or commissions in connection with this Agreement or the transactions contemplated hereby.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;This Agreement does not contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements by Seller contained herein not misleading.
There is no fact known to Seller which is not disclosed in this Agreement which affects the
accuracy of Seller&#146;s representations and warranties contained in this Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;Representations and Warranties of the Purchaser.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Purchaser is a duly organized Georgia corporation, validly existing and in good standing
under Georgia law. Purchaser has the corporate power and authority to execute, acknowledge, seal
and deliver this Agreement and all the Transaction Documents, to consummate the transactions
contemplated by this Agreement and all the Transaction Documents and to take any and all other
actions required to be taken by Purchaser pursuant to the provisions of this Agreement and all of
the Transaction Documents. Neither the execution, acknowledgment, sealing and delivery of this
Agreement or any Transaction Documents nor the consummation of the transactions contemplated by
this Agreement shall constitute any violation of any order, writ, injunction, decree, law, statute,
rule or regulation applicable to Purchaser.
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Agreement does not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements by Purchaser contained herein not misleading.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;This Agreement has been, and each Transaction Document will be, duly executed and
delivered by Purchaser; and this Agreement and all Exhibits to this Agreement are valid and binding
upon and fully enforceable against Purchaser in accordance with their respective terms.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The Membership Interest will be acquired for investment for Purchaser&#146;s own account, not
as a nominee or agent, and not with a view to the sale or distribution of any part thereof, and
that Purchaser has no present intention of selling, granting participation in, or otherwise
distributing the same. By executing this Agreement, Purchaser further represents that it does not
have any contract, undertaking, agreement, or arrangement with any person to sell, transfer or
grant participations to such person, or to any third person, with respect to any of the Membership
Interest.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;Attorney In Fact. Seller hereby appoints Purchaser as its attorney-in-fact for the limited
purpose of executing any documents, filing and recording any documents, and taking any actions
Purchaser may deem necessary to further evidence or publish the transfer of the Membership
Interest.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;Indemnification by Seller. Seller shall defend, indemnify and hold harmless the Purchaser
and its heirs, personal and legal representatives, guardians, successors and assigns, from and
against any and all claims, threats, liabilities, taxes, interest, fines, penalties, suits,
actions, proceedings, demands, damages, losses, costs and expenses (including attorneys&#146; and
experts&#146; fees and court costs) of every kind and nature arising out of, resulting from, or in
connection with:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Any misrepresentation or breach by Seller of any representation or warranty contained in
this Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Nonfulfillment, failure to comply or breach by Seller of or with any covenant, promise or
agreement of Seller contained in this Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Any act, failure to act or omission by Seller, with respect to the Membership Interest,
prior to the date hereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Any and all tax liabilities associated with the Membership Interest prior to the date
hereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;Indemnification by Purchaser. The Purchaser shall defend, indemnify and hold harmless
Seller and its heirs, personal and legal representatives, guardians, successors and assigns, from
and against any and all claims, threats, liabilities, taxes, interest, fines, penalties, suits,
actions, proceedings, demands, damages, losses, costs and expenses (including attorneys&#146; and
experts&#146; fees and court costs) of every kind and nature arising out of, resulting from, or in
connection with:
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Any misrepresentation, omission or breach by the Purchaser of any representation or
warranty contained in this Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Any nonfulfillment, failure to comply or breach by the Purchaser of or with any covenant,
promise or agreement of the Purchaser contained in this Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Any act, failure to act or omission by the Purchaser, with respect to the Membership
Interest, after the date hereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Any and all tax liabilities associated with the Membership Interest after the date hereof,
except to the extent that Seller exercises its rights under the Pledge Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;Releases.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Except as provided in this Agreement and the Transaction Documents, the Seller does hereby
remise, release, acquit and forever discharge the Purchaser, the Company, and all of the
Purchaser&#146;s employees, agents, shareholders, members, officers and directors (collectively, the
&#147;Purchaser Released Parties&#148;) of and from all manner of actions, causes of action, suits, debts,
covenants, accounts, trespasses, contracts, agreements, damages, judgments, liabilities, losses,
costs, expenses and claims of any nature whatsoever, in law or equity, whether or not now or
hereafter known, suspected or claimed, which the Seller ever had, now has, or which it hereafter
can, shall or may have or allege against any Purchaser Released Party upon or by reason of any
matter, cause or thing from the beginning of the world to the date hereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Except as provided in this Agreement, the Purchaser does hereby remise, release, acquit
and forever discharge the Seller and all of Seller&#146;s employees, agents, shareholders, members,
officers and directors (collectively, the &#147;Seller Released Parties&#148;) of and from all manner of
actions, causes of action, suits, debts, covenants, accounts, trespasses, contracts, agreements of
damages, judgments, liabilities, losses, costs, expenses and claims of any nature whatsoever, in
law or equity, whether or not now or hereafter known, suspected or claimed, which the Purchaser
ever had, now has, or which it hereafter can, shall or may have or allege against any Seller
Released Party Seller upon or by reason of any matter, cause or thing from the beginning of the
world to the date hereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;In consideration of the approval and consent of Company to the transfer and assignment
described herein, Seller does hereby remise, release, acquit and forever discharge the Company and
Company&#146;s employees, agents, shareholders, members, officers and directors (collectively, the
&#147;Company Released Parties&#148;), of and from all manner of actions, causes of action, suits, debts,
covenants, accounts, trespasses, contracts, agreements, damages, judgments, liabilities, losses,
costs, expenses and claims of any nature whatsoever, in law or equity, whether or not now or
hereafter known, suspected or claimed, which the Seller ever had, now has, or which it hereafter
can, shall or may have or allege against the Company Released Parties upon or by reason of any
matter, cause or thing from the beginning of the world to the date hereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;Consent by Company; Release; Termination of Agreements.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;By its execution below, Company hereby grants its approval and consent to the transfer and
assignment described herein, subject to the terms hereof, and agrees that with respect to the
Membership Interest, Purchaser may be admitted as a member of the Company upon its execution
hereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;By its execution below, Company hereby releases the Seller Released Parties from any and
all claims with respect to the Company and further specifically waives any and all requirements
contained in the Operating Agreement with respect to the transfer of the Membership Interest,
including but not limited to the requirements of Article&nbsp;13 thereof and all of the provisions in
the Restricted Share Agreement and that certain Investor Rights Agreement made by and between
Company and Seller effective June&nbsp;1, 2002 (the &#147;Investor Rights Agreement&#148;).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;To the extent any restrictions or other agreement between the Purchaser or Seller
or Seller and Company with respect to the transfer of the Membership Interest exist, including
without limitation any restrictions contained in the Restricted Share Agreement and Investor Rights
Agreement, Company, Seller and Purchaser hereby waive, terminate, rescind and cancel as to one
another, effective as of the date hereof, any and all such agreements, whether oral or written, and
Seller, Purchaser and Company (as the case may be) shall have no further rights, duties or
obligations with respect to one another thereunder.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Except for this Agreement and the Transaction Documents, to the extent any other
agreements between Seller and Purchaser or Seller and Company or between Seller, Purchaser and
Company exist, the Purchaser, Seller and Company hereby terminate, rescind and cancel as to one
another, effective on the date hereof, any and all such agreements, whether oral or written, and
Seller, Purchaser and Company shall have no further rights, duties or obligations with respect to
one another thereunder.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;Miscellaneous Provisions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;All of the representations, warranties, covenants, promises and agreements of the parties
contained in this Agreement (or in any document delivered or to be delivered pursuant to this
Agreement or in connection herewith) shall survive the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;All covenants, provisions, agreements, representations and warranties provided by this
Agreement shall survive the execution, acknowledgment, sealing and delivery of this Agreement, each
Exhibit hereto and all of the transactions contemplated hereby.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;This Agreement was made in the State of Georgia and shall be governed by, construed and
enforced in all respects in accordance with the laws of the State of Georgia.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;As provided herein and as the context requires, the masculine gender shall be deemed to
include the feminine and the neuter genders and vice versa, and the singular shall be deemed to
include the plural and vice versa.
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;This Agreement constitutes the entire agreement between the parties and there are no other
commitments or agreements binding the parties other than set forth herein. This Agreement may be
amended only by an instrument in writing executed by the parties hereto.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;All notices or other communications required or permitted by this Agreement shall be
deemed given only if in writing and mailed first class United States mail, registered or certified
mail, postage prepaid, and addressed as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 3%; margin-top: 6pt">If to the Seller, then:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 3%; margin-top: 6pt">Intelligent Systems Corporation<BR>
4355 Shackleford Road<BR>
Norcross, Georgia 30097<BR>
Attn: J. Leland Strange
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 3%; margin-top: 6pt">with a copy to:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 3%; margin-top: 6pt"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 3%; margin-top: 6pt">If to the Purchaser then:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 3%; margin-top: 6pt">Horizon Software Holdings, Inc.<BR>
5835 Highway 20<BR>
Loganville, Georgia 30052<BR>
Attn: Bob Williamson, President/CEO
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 3%; margin-top: 6pt">with a copy to:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 3%; margin-top: 6pt">Andersen, Tate &#038; Carr, P.C.<BR>
1505 Lakes Parkway, Suite&nbsp;100<BR>
Lawrenceville, Georgia 30043<BR>
Attn: Eugene W. Luciani
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or to any such other address as a party to this Agreement shall notify the other parties as
provided in this Section.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;The captions or headings provided in this Agreement are for convenience only and shall not
be deemed to be a part of this Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;Should any provision of this Agreement require judicial interpretation, it is agreed that
the court interpreting or construing the same shall not apply a presumption that the terms hereof
shall be more strictly construed against one party by reason of the rule of
</DIV>




<P align="center" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">construction that a document is to be construed more strictly against the party who itself or
through its agent prepared same, it being agreed that all parties or their agents have participated
in the preparation hereof. Seller acknowledges that Andersen, Tate &#038; Carr, P.C. has represented
Purchaser with respect to the matters described herein and has provided no representation or advice
of any nature whatsoever to Seller. Further, it is acknowledged that Seller has been advised and
given the opportunity to seek independent legal counsel with respect to the matters described
herein.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties have executed, acknowledged, sealed and delivered this
Agreement the day and year first written above.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left"><U><B>THE SELLER</B></U>:</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left">INTELLIGENT SYSTEMS CORPORATION, a</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left">Georgia corporation</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Leland Strange</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">J. Leland Strange, President</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left"><U><B>THE PURCHASER</B></U>:</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left"><B>HORIZON SOFTWARE HOLDINGS, INC.</B>, a</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left">Georgia corporation</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Robert Williamson</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Robert Williamson, President</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.2
<SEQUENCE>3
<FILENAME>g03282exv2w2.htm
<DESCRIPTION>EX-2.2 PROMISSORY NOTE OF HORIZON SOFTWARE HOLDINGS, INC.
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-2.1 PROMISSORY NOTE/HOIZON SOFTWARE HOLDINGS</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit 2.2
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PROMISSORY NOTE</B>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">August&nbsp;31, 2006
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%"></TD>
    <TD width="5%"></TD>
    <TD width="47%"></TD>
</TR>
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<TR valign="bottom">
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">$2,850,000.00
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">Lawrenceville, Georgia</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;Promise To Pay. FOR VALUE RECEIVED, the undersigned HORIZON SOFTWARE HOLDINGS, INC., a
Georgia corporation (hereinafter referred to as the &#147;Maker&#148;), promises to pay to the order of
INTELLIGENT SYSTEMS CORPORATION, a Georgia corporation hereinafter referred to as the &#147;Payee&#148;; the
Payee, together with any subsequent holder(s) hereof, hereinafter collectively referred to as the
&#147;Holder&#148;, without grace, at the office of the Payee at 4355 Shackleford Road, Norcross, Georgia
30097 or at such other place as the Holder may designate to the Maker in writing from time to time,
the principal sum of TWO MILLION EIGHT HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($2,850,000.00),
together with interest thereon, or on so much thereof as is from time to time outstanding and
unpaid, at the rates hereinafter set forth (computed on the basis of a 360&nbsp;day year), in lawful
money of the United States of America, which shall at the time of payment be legal tender in
payment of all debts and dues, public and private; such principal and interest to be paid, without
offset or reduction whatsoever, in the manner hereinafter provided.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;Interest Rates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Interest. From and after the date hereof (until January&nbsp;31, 2007 or any Default (as
hereinafter defined) occurring prior thereto), interest on the principal balance hereof outstanding
from time to time shall accrue at the rate which is equal to the sum of one hundred fifty (150)
basis points plus the &#147;Atlanta Prime&#148; (as hereinafter defined) per annum. If the Maker exercises
its rights to extend the Maturity Date (as hereinafter defined) under Section 3(b) hereof, then,
from February&nbsp;1, 2007 until the earlier of the Maturity Date or a Default occurring on or after
February&nbsp;1, 2007, interest on the principal balance hereof outstanding from time to time shall
accrue at the rate which is equal to the sum of three hundred basis points plus the Atlanta Prime.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Atlanta Prime.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;As used herein, the term &#147;Atlanta Prime&#148; shall mean the prime interest rate quoted or
published from time to time by the Atlanta office of Wachovia Bank (hereinafter referred to as the
&#147;Atlanta Bank&#148;). If, and to the extent and from time to time, the Atlanta Prime increases or
decreases, then the interest rate hereunder shall be correspondingly increased or decreased, such
increase or decrease hereunder to be effective as of the date on which such increase or decrease of
the Atlanta Prime occurs;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;In the event that the Atlanta Bank, during the term or any renewal or extension hereof,
shall abolish or abandon the practice of publishing or quoting its prime interest rate, or should
the same in Holder&#146;s judgment become unascertainable, then from and
after the date on which the Atlanta Bank abolishes or abandons the practice of publishing or
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->1<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">quoting its prime interest rate or on which same become unascertainable, and for the remaining term
and any extension or renewal hereof (unless and until the Atlanta Bank should resume publishing or
quoting its prime interest rate, whereupon the Atlanta Prime shall, as of the date following such
resumption be the interest rate hereunder), the interest rate shall be equal to (i)&nbsp;the mean
average of the prime interest rates quoted or published from time to time, as determined in good
faith by Holder, by Citibank, N.A., Chase Manhattan Bank, N.A., and Bank of America, N.T. &#038; S.A.,
and their respective successors (hereinafter collectively referred to as the &#147;New York Banks&#148;), at
their respective principal or main office in New York, New York, or (ii)&nbsp;if any one of the New York
Banks discontinues quoting or publishing a prime interest rate or if same in Holder&#146;s judgment
should become ascertainable, then the average of the prime interest rates quoted or published from
time to time by the remaining New York Banks continuing to quote or publish a prime interest rate,
or (iii)&nbsp;if two of the aforesaid New York Banks discontinue quoting or publishing a prime interest
rate, or if same in Holder&#146;s judgment should become unascertainable, then the prime interest rate
quoted or published from time to time by the remaining New York Bank continuing to quote or publish
a prime interest rate. If the Atlanta Bank and all of the New York Banks should abolish or abandon
the practice of publishing or quoting a prime interest rate, or should the same in Holder&#146;s
judgment become unascertainable, then Holder, at its option, may designate an alternative index of
interest rates comparable to the prime interest rate; and the rate determined pursuant to such
alternative index shall, from and after the date on which the Atlanta Bank and all of the New York
Banks abolish or abandon the practice of publishing or quoting a prime interest rate, or on which
same become unascertainable, and for the remaining term and any extension or renewal hereof
(subject, however, to the resumption of the publication or quotation of the prime interest rate by
the Atlanta Bank, in which case such rate shall be the interest rate hereunder, effective as of the
date following such resumption), be the interest rate in effect for the remaining term and any
extension or renewal hereof, subject to adjustment as aforesaid if and to the extent that the rate
of interest determined pursuant to the alternative index of interest rates designed by Holder shall
increase or decrease, such adjustment, if any, to be made on the date on which any such increase or
decrease occurs.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;Maturity Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;On the Maturity Date (as defined hereafter), the entire outstanding principal balance of
the indebtedness hereby evidenced, together with all accrued but unpaid interest thereon, and all
other sums due to Holder hereunder or under the Loan Documents (as hereinafter defined), shall be
due and payable in full.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The &#147;Maturity Date&#148; shall be January&nbsp;31, 2007; provided that Borrower may, upon notice to
Lender and upon paying all accrued and unpaid interest up to the date of such notice, extend the
date for the maturity of this Note to any date on or prior to December&nbsp;31, 2007 and such date
shall, for all purposes, then become the &#147;Maturity Date&#148; hereunder.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;Prepayment. This Note may be prepaid in whole or in part at any time during the term
hereof; provided, however, any such prepayment must be accompanied by all accrued but unpaid
interest and Holder shall have no obligation to accept any prepayment unless such payment is made
in accordance with the terms of this paragraph.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;Default And Acceleration. It is hereby expressly agreed that should any default be made in
the payment as stipulated above of either principal, interest or other charges, and should such
default remain uncured for fifteen (15)&nbsp;days after written notice thereof, or should any default
occur under the Security Instrument (as hereinafter defined) or in any other document evidencing,
securing or in any way relating to the loan evidenced by this Note (a &#147;Default&#148;), the principal of
this obligation or any unpaid part thereof and all unpaid interest accrued thereon, together with
all other sums then owing to Holder hereunder or under the Security Instrument, shall, at the
option of the Holder, at once become due and payable without notice or demand and may be collected
forthwith, regardless of the stipulated date of maturity. Interest shall accrue on the outstanding
principal balance of this Note from the date of any Default hereunder (as long as such Default
continues), regardless of whether or not there has been an acceleration of the payment of principal
as set forth herein, or after maturity, at the rate equal to twelve (12%) percent per annum. All
such interest shall be paid at the time of and as a condition precedent to the curing of any
Default should Holder, in its sole discretion, allow such Default to be cured. Time is of the
essence of this Note. In the event this Note, or any part thereof, is collected by or through an
attorney-at-law, the Maker agrees to pay all costs of collection including, but not limited to,
actual attorney&#146;s fees calculated on an hourly basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;Waivers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Presentment for payment, demand, protest and notice of demand, protest and non-payment and
all other notices are hereby waived by the Maker. Failure to accelerate the debt evidenced hereby
by reason of Default shall not be construed as a waiver of any Default, a novation of this Note or
a waiver of the right of the Holder thereafter to insist upon strict compliance with the terms of
this Note without previous notice of such intention being given to the Maker. This Note may not be
changed orally or by any course of conduct or departure from the terms hereof, but only by an
agreement in writing signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Maker hereby waives and renounces for itself, its heirs, successors and assigns, all
rights to the benefits of any appraisement, exemption or homestead now provided, or which may
hereafter be provided by the Constitution or laws of the United States of America or of any state
thereof to and in all its property, real and personal, against the enforcement and collection of
the obligations evidenced by this Note.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The Maker hereby transfers, conveys and assigns to the Holder a sufficient amount of such
homestead or exemption as may be set apart in bankruptcy, to pay this Note in full, with all costs
of collection, and does hereby direct any trustee in bankruptcy having possession of such homestead
or exemption to deliver to the Holder a sufficient amount of property or money set apart as exempt
to pay the indebtedness evidenced hereby, or any renewal thereof, and does hereby irrevocably
appoint the Holder the attorney-in-fact for the Maker to claim any and all homestead exemptions
allowed by law.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;Loan Documents. This Note is secured by a pledge and security agreement of even date
herewith executed by the Maker in favor of the Holder pledging to the Holder, and granting a
security interest in, certain capital stock of Horizon Software International, LLC owned by the
Maker and personal guarantees made by Robert Williamson, Teresa Williamson, Michael
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Williamson and Jon Williamson to each of which reference is hereby made (collectively the &#147;Security
Instrument&#148; and together with this Note, and any other documents evidencing, securing or in any way
relating to the loan evidenced by this Note, collectively referred to as the &#147;Loan Documents&#148;).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;Governing Law. This Note is made and intended to constitute a contract under, and shall be
construed, interpreted and enforced in accordance with, the laws of the State of Georgia; provided,
however, that if Georgia conflict or choice of law rules would choose the law of another State, the
Maker hereby waives such rules and agrees that Georgia substantive, procedural and constitutional
law shall nonetheless govern.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;Jurisdiction; Venue. Maker hereby (i)&nbsp;submits to personal jurisdiction in the State of
Georgia for the enforcement of this Note, and (ii)&nbsp;waives any and all personal rights under the law
of any state to object to jurisdiction within the State of Georgia for the purposes of litigation
to enforce this Note, whether on grounds of forum non conveniens or otherwise. Nothing contained
herein, however, shall prevent Holder from bringing any action or exercising any rights against any
security and against Maker personally, and against any property of Maker, within any other state.
Initiating such proceeding or taking such action in any other state shall in no event constitute a
waiver of the agreement contained herein that the law of the State of Georgia shall govern the
rights and obligations of Maker and Holder hereunder or of the submission herein made by Maker to
personal jurisdiction within the State of Georgia. The aforesaid means of obtaining personal
jurisdiction and perfecting service of process are not intended to be exclusive but are cumulative
and in addition to all other means of obtaining personal jurisdiction and perfecting service of
process now or hereafter provided by the law of the State of Georgia or any other state.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;Notices. Any notices required or permitted to be given hereunder shall be given in
accordance with the notice provisions of the Interest Purchase and Transfer Agreement made between
Maker and Payee on even date herewith.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;Definitions. As used herein, the terms &#147;Maker&#148; and &#147;Holder&#148; shall be deemed to include
their respective heirs, successors, legal representatives and assigns, whether voluntary by action
of the parties or involuntary by operation of law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;Limit Of Validity. If from any circumstances whatsoever fulfillment of any provision of
this Note or any other Loan Document, at the time performance of such provision shall be due, shall
involve transcending the limit of validity presently prescribed by any applicable usury statute or
any other applicable law, with regard to obligations of like character and amount, then ipso facto
the obligation to be fulfilled shall be reduced to the limit of such validity, so that in no event
shall any exaction be possible under this Note or any Loan Document that is in excess of the
current limit of such validity, but such obligation shall be fulfilled to the limit of such
validity. The provisions of this paragraph shall control every other provision of this Note and
the other Loan Documents.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;Judicial Interpretation. Should any provision of this Note require judicial
interpretation, it is agreed that the court interpreting or construing the same shall not apply a
presumption that the terms hereof shall be more strictly construed against one party by reason of
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the rule of construction that a document is to be construed more strictly against the party who
itself or through its agent prepared same, it being agreed that all parties or their agents have
participated in the preparation hereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;Section&nbsp;Headings. Section and other headings contained in this Note are for reference
purposes only and are in no way intended to describe, interpret, define or limit the scope, extent
or intent of this Note or any provisions hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the Maker has executed this Note under seal on the date first above
written.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
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<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left"><B>HORIZON SOFTWARE HOLDINGS, INC.</B>,</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left">a Georgia corporation</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Robert Williamson</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Robert Williamson, President</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&#091;CORPORATE SEAL&#093;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
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</TABLE>
</DIV>



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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.3
<SEQUENCE>4
<FILENAME>g03282exv2w3.htm
<DESCRIPTION>EX-2.3 SECURITY AGREEMENT AND ASSIGNMENT INTEREST IN LIMITED LIABILITY COMPANY
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-2.3 SECURITY AGREEMENT AND ASSIGNMENT INTEREST</TITLE>
</HEAD>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit 2.3
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SECURITY AGREEMENT AND ASSIGNMENT</B><BR>
<U><B>OF INTEREST IN LIMITED LIABILITY COMPANY</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS SECURITY AGREEMENT AND ASSIGNMENT OF INTEREST IN LIMITED LIABILITY COMPANY (this
&#147;Assignment&#148;) is made as of August&nbsp;31, 2006, by HORIZON SOFTWARE HOLDINGS, INC., a Georgia
corporation (&#147;Assignor&#148;), in favor of INTELLIGENT SYSTEMS CORPORATION, a Georgia corporation
(&#147;Lender&#148;).
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Statement of Background</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assignor owns 5,818,232 Common Shares as a member of Horizon Software International, LLC (the
&#147;LLC&#148;), a Georgia limited liability company. Assignor has on even date herewith, executed a
Promissory Note of even date herewith in the original principal amount of $2,850,000.00 (the
&#147;Note&#148;). In order to secure payment of the Note, Assignor has agreed to pledge 5,818,232 Common
Shares, including all rights of Assignor to receive cash and other distributions of assets from the
LLC with respect to such 5,818,232 Common Shares as set forth in or provided for in the Amended
and Restated Operating Agreement of Horizon Software International, LLC dated on even date herewith
(the &#147;Operating Agreement&#148;), and all rights and interests of Assignor with respect to such
5,818,232 Common Shares in and to the assets of the LLC (hereinafter called the &#147;Interest&#148;).
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Statement of Agreement</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN CONSIDERATION of the making of a loan in the amount of $2,850,000 (the &#147;Loan&#148;) by Lender to
Assignor, evidenced by the Note, which will benefit the Assignor both directly and indirectly, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Assignor does hereby sell, assign, transfer, convey, and grant unto Lender, its
successors, and assigns the Interest, as security for the Note (the &#147;Guaranty&#148;; together with the
Note, and any and all documents, instruments or agreements executed and delivered in connection
with the Loan, each individually also referred to as a &#147;Loan Document&#148; and collectively as the
&#147;Loan Documents&#148;),
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TO HAVE AND TO HOLD UNTO Lender, its successors, and assigns, forever, upon and subject to the
following terms and conditions:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;Power of Attorney. Assignor hereby constitutes and appoints Lender as its true and lawful
attorney, with full power and authority in its name and stead with respect to the Interest only and
only after an &#147;Event of Default&#148; (as defined hereafter): (a)&nbsp;to collect any and all cash and other
distributions of assets from the LLC; and (b)&nbsp;to use such measures, legal or equitable, as in
Lender&#146;s discretion may be deemed necessary or appropriate to enforce the payment or distribution
thereof to Lender; and (c)&nbsp;to use and apply said cash and other distributions to the payment of the
Loan and to the payment of attorneys&#146; fees, court costs, labor charges, and expenses incurred in
connection with any and all things which Lender may do or cause to be done by virtue hereof, or to
pay such other indebtedness with respect to the LLC or the Loan Documents as Lender deems
appropriate in its sole discretion including, without limitation, payments on debts presently
encumbering the Interests or to any of the foregoing. The power of attorney hereby created is
coupled with an interest and is irrevocable. Assignor
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">hereby (i)&nbsp;gives Lender, as his attorney-in-fact, full power and authority to do and perform
each and every act or thing necessary or appropriate to accomplish the foregoing, as fully as
Assignor might or could do if Assignor were personally present, and (ii)&nbsp;ratifies and confirms all
that Lender, as Assignor&#146;s attorney-in-fact, shall lawfully do or cause to be done by virtue of the
hereinabove described power of attorney.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;Disclaimer of Responsibility. Lender shall not in any way be responsible for failure to do
any or all of the things for which rights, interests, powers, and authorities are herein granted.
Lender shall be responsible only for the application of such cash or other property as it actually
receives under the terms hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;No Liability. Prior to any election by Lender to become a substituted member of the LLC
with respect to the Interest, as hereinbelow provided, this Assignment shall not operate to place
any responsibility or obligation whatsoever upon Lender and thereafter only if and to the extent
assumed in writing by Lender. Lender shall not have assumed any liability, unless specifically
provided herein, as a result of this Assignment. Lender does not assume any obligation of Assignor
under the Operating Agreement by this Assignment. Assignor agrees to protect, indemnify, and save
harmless Lender from and against all liabilities, obligations, claims, damages, penalties, causes
of action, costs, and expenses (including, without limitation, attorneys&#146; fees and expenses) now or
hereafter arising by reason of this Assignment or the Operating Agreement and any claim and demand
whatsoever which may be asserted against Lender by reason of any alleged obligation or undertaking
to be performed or discharged by Lender under this Assignment or the Operating Agreement. In the
event Lender incurs any liability, loss, or damage by reason of this Assignment, in curing any
default or breach by Assignor of its obligations under the Operating Agreement, or in the defense
of any claims or demands arising out of or in connection with this Assignment, the amount of such
liability, loss, or damage shall be added to the Loan secured hereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;Further Assurance. Assignor agrees to execute upon the request of Lender any and all
instruments requested by Lender to evidence, perfect, or otherwise carry the purposes of this
Assignment into effect or to accomplish any other purpose deemed by Lender to be necessary or
appropriate in connection with this Assignment. Assignor shall pay all recording costs and
reasonable attorneys&#146; fees incurred by Lender in connection with any such instruments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;Warranties and Representations. Assignor hereby warrants and represents that the Interest
is free and clear of all liens and encumbrances; that neither the Interest nor any portion thereof
have been heretofore sold, assigned, transferred, or set over by any instrument now in force
(except as hereinafter provided) nor will they at any time during the term of this Assignment be
sold, assigned, transferred, or set over by Assignor or by any person or persons whomsoever,
without the prior written consent of Lender, which consent may be withheld in Lender&#146;s sole and
unfettered discretion; that there is no other claim whatsoever to the interests of Assignor in the
LLC, other than ones granted herein; that Assignor has good right to sell, assign, transfer, and
set over the LLC Interest and to grant to and confer upon Lender the rights, interests, powers, and
authorities herein granted and conferred; and that Lender has all rights and privileges of Assignor
with respect to the Interest under the LLC, subject to the provisions of Paragraphs 7 and 8 hereof.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;Assignor&#146;s Covenants. Assignor hereby agrees that he will not, at any time during the term
of this Assignment with respect to the Interest and without the prior written consent of Lender,
which consent may be withheld for any reason:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;convey or encumber or vote to convey or encumber the Interest in any manner whatsoever;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;consent to any material modification or amendment to the Operating Agreement;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;admit any additional members to the LLC;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;cause, permit, or allow any assets of the LLC to be leased, sold, conveyed, pledged,
hypothecated, transferred, or otherwise encumbered or disposed of except as permitted under the
Note; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;cause, permit, or allow the LLC to issue any additional interests, to be dissolved or
liquidated, or to acquire, be acquired by, merged, or consolidated into or with any other person or
entity.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assignor agrees that it will do all things necessary to maintain its Interest in full force
and effect, prior to any election by Lender to become a substituted member of the LLC with respect
to the Interest, as hereinbelow provided. During the term of this Assignment Assignor shall cause
the LLC to provide to Lender within 30&nbsp;days after the end of each month, the balance sheet and
income statement of the LLC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;Events of Default. Notwithstanding anything herein to the contrary, it is understood and
agreed that although this Assignment shall be effective as of the date hereof, no right or power
granted hereunder shall be exercised unless and until an &#147;Event of Default&#148; (as hereinafter
defined) shall occur. Any one or more of the following events shall, at the option of Lender,
constitute an &#147;Event of Default&#148; hereunder:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;should any default or event of default occur under a Loan Document or any other agreement
evidencing or securing all or any portion of the Loan, after giving effect to notice and all rights
to cure thereunder;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;should any representation or warranty of Assignor in a Loan Document prove to have been
false or misleading in any material respect when made;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;should Assignor fail to observe any covenant or agreement of Assignor herein contained and
not cure such within thirty (30)&nbsp;days of its receipt of notice of such failure;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;should any representation or warranty of Assignor herein contained prove to have been
false or misleading in any material respect when made;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;should there occur any partition, dissolution, or termination of the LLC;
</DIV>




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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;should Assignor or the LLC make any assignment for the benefit of creditors; or should
there be appointed a receiver, liquidator, or trustee of Assignor or of the LLC, or of their
respective property or assets and such appointment not be removed or dismissed within ninety (90)
days; or should there be filed any petition for bankruptcy, reorganization, liquidation, or
arrangement of Assignor or the LLC pursuant to the federal Bankruptcy Code or any similar state
statute; or should Assignor or the LLC be adjudicated a bankrupt or insolvent; or should Assignor
or the LLC admit its inability to pay its debts as they become due; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;should the LLC default on any debt owed to a bank and such default not be cured after
giving effect to all notice and cure periods allowed thereunder.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nothing herein contained shall be deemed to affect or impair any rights which Lender may have
under the Loan Documents or under any other instrument now or hereafter evidencing, guarantying the
payment of, securing, or otherwise relating to the Loan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;Lender as Substituted Member. If an Event of Default occurs and is then continuing, Lender
shall have the right, but no obligation, to elect to become a substituted member with respect to
the Interest only and within the provisions of the Operating Agreement, upon the giving of notice
of such election to the Manager of the LLC, and Lender shall be substituted for Assignor, with
respect to the Interest only, as a member of the LLC as of the date of such notice.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;Adequate Consideration. Assignor has recognized and realized adequate and sufficient
consideration for the making of this Assignment. Assignor further acknowledges that Lender will
rely upon the warranties, representations, and agreements herein contained in making the Loan to
the LLC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;Uniform Commercial Code. In addition to the rights and privileges under this Assignment,
Lender shall have all of the rights, powers, and privileges of a secured party under the Uniform
Commercial Code of Georgia.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;Notices. Any notices, instructions, or other communications required or permitted under
the terms of this Assignment shall be given pursuant to the notice provisions under the Interest
Transfer and Assignment Agreement made by and between Assignor and Lender on even date herewith.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;Remedies Cumulative. This Assignment shall in no way operate to prevent Lender from
pursuing any remedy which it now or hereafter may have because of any present or future breach of
the terms and conditions of any Loan Document secured hereby, or because of the occurrence of any
other Event of Default.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;Waiver of Defenses. Assignor agrees that Lender may, from time to time, without notice to
Assignor, and without affecting, diminishing, or releasing the liability of Assignor hereunder (a)
retain or obtain and perfect by possession a security interest in any property to secure the Loan,
or any portion thereof, (b)&nbsp;retain or obtain the primary or secondary liability of any party or
parties, in addition to Assignor, with respect to Loan, or any portion thereof, (c)&nbsp;extend or renew
for any period (whether or not longer than the original period and on more than one occasion),
alter, or exchange any of the Loan or increase or decrease the Loan, (d)&nbsp;release or
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">compromise, or any undertaking of any other party or parties primarily or secondarily liable
on any of the Loan, (e)&nbsp;release its security interest, if any, in all or any property securing the
Loan, or any portion thereof, and permit any substitution or exchange for any such property (but
shall not be obligated to obtain or permit any substitution or exchange), and (f)&nbsp;alter, extend,
exchange, modify, release, or cancel any covenant, agreement, or provision contained in a Loan
Document. Assignor hereby expressly waives: (i)&nbsp;presentment, demand, notice of dishonor, protest,
and all other notice whatever, except to the extent expressly provided to the contrary herein, (ii)
all diligence on the part of Lender in collection or protection of, or realization upon, any
security for the Loan, or any portion thereof, for enforcing any remedy available to it under any
Loan Document, and (iii)&nbsp;the provisions of Section&nbsp;10-7-24 of the Official Code of Georgia
Annotated. No right or power of Assignor or anyone else to assert any claim or defense as to the
invalidity or unenforceability of any Loan Document or any of the other documents evidencing or
securing the Loan, or any portion thereof, shall impair or affect the covenants, agreements, and
obligations of Assignor hereunder. Assignor agrees that Assignor shall have no right of
subrogation, reimbursement, or indemnity whatsoever and no right of recourse to or with respect to
any assets or property of Assignor or to any collateral for the Loan, even upon payment in full of
the Loan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;Assignor&#146;s Covenants Absolute. It is fully understood that until this Assignment is
terminated in accordance with Paragraph&nbsp;15 hereof, Assignor&#146;s obligations and agreements hereunder
shall not be released, in whole or in part, by any action or thing which might, but for this
provision of this Assignment, be deemed a legal or equitable discharge of a surety or guarantor, or
by reason of any waiver, extension, modification, forbearance, or delay of other act or omission of
Lender or its failure to proceed promptly or otherwise, or by reason of any action taken or omitted
by Lender, whether or not such action or failure to act varies or increases the risk of, or affects
the rights or remedies of Assignor, or by reason of any further dealings among Assignor, Lender,
and any other guarantor or surety or other party, and Assignor hereby expressly waives and
surrenders any defense to the performance of its obligations and agreements hereunder based upon
any of the foregoing acts, omissions, things, agreements, or waivers of any of them; it being the
purpose and intent of the parties hereto that the covenants, agreements, and all obligations
hereunder are absolute, unconditional, and irrevocable under any and all circumstances except to
the extent otherwise specifically provided herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;Termination. This Assignment and the security title to and security interest created
hereby in the Interest shall terminate and be null and void and of no further force and effect on
the date on which the Loan has been paid in full. To the extent that Lender holds any collateral
or certificates evidencing the Interest, such shall be promptly returned upon termination of this
Assignment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.&nbsp;Miscellaneous. This Assignment shall inure to the benefit of Lender and any subsequent
holder of the Note, and shall be binding upon Assignor and its legal representatives, successors,
and assigns, and any subsequent owner of the Interest. This Assignment has been signed and
executed in the State of Georgia, and the nature, validity, and effect of this Assignment shall be
governed by and construed and enforced in accordance with the laws of the State of Georgia. This
Assignment constitutes the entire agreement between the parties hereto, and can be amended or
modified only by a writing executed by all of the parties hereto, or their respective successors,
transferees, or assigns. If any portion of this Assignment be legally
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">adjudicated invalid or unenforceable, the parties do hereby covenant and agree that such
portion or portions are absolutely and completely severable from all other portions of this
Assignment, and such other provisions shall not be affected by the adjudication of invalidity or
unenforceability. The headings used herein are for convenience of reference only and shall not be
deemed to impart substantive meaning or modify the textual content of this Assignment. As used
herein, the singular number shall include the plural, the plural the singular, and the use of the
masculine, feminine, or neuter gender shall include all genders, as the context may require, and
the term &#147;person&#148; shall include an individual, a corporation, an association, a partnership, a
trust, and an organization.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the undersigned Assignor has hereunto set his hand and seal as of the day
and year first above written.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD nowrap colspan="3" align="left"><B>HORIZON SOFTWARE HOLDINGS, INC.</B>, a <BR>
Georgia corporation<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Robert Williamson
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Robert Williamson, President&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


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<DOCUMENT>
<TYPE>EX-2.4
<SEQUENCE>5
<FILENAME>g03282exv2w4.htm
<DESCRIPTION>EX-2.4 FORM OF GUARANTY OF PAYMENT
<TEXT>
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<TITLE>EX-2.4 FORM OF GUARANTY OF PAYMENT</TITLE>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;2.4
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">FORM OF GUARANTY OF PAYMENT
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For value received, the undersigned hereby unconditionally guarantees the payment of the
&#147;Note&#148; (as hereafter defined) and all extensions, modifications or renewals thereof, and all
expenses (including attorneys&#146; fees) incurred in the collection and enforcement of the Note, in the
enforcement of rights under any security therefor and in the enforcement of this Guaranty of
Payment; and the undersigned also hereby waives presentment, demand, notice of dishonor, protest
and all other notice whatever, and agrees that the holder of said Note may from time to time (a)
extend or renew said Note or (b)&nbsp;grant any release (either partial or total), compromises or
indulgences (including, but not limited to, failure or refusal to exercise one or more of the
rights or remedies provided by said Note) with respect to said Note or any extension, modification
or renewal thereof, with respect to any security therefor or with respect to any party liable
thereunder or hereunder, all without notice to, or further consent of, any of the undersigned and
without affecting the liability of the undersigned hereunder, any of whom may be sued by the holder
hereof with or without joining any of the makers, endorsers or guarantors of said Note or any other
party and without first or contemporaneously suing such makers, endorsers, guarantors or other
parties, or proving that such makers, endorsers guarantors or other parties are insolvent or unable
to respond to a judgment. &#147;Note&#148; shall mean that certain Promissory Note of even date herewith
made by Horizon Software Holdings, Inc. in favor of Intelligent Systems Corporation in an original
principal amount of $2,850,000.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, this Guaranty of Payment has been duly executed and sealed by the
undersigned; this 31<SUP style="font-size: 85%; vertical-align: text-top">st</SUP> day of August, 2006.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 55%"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
Signed By Individual Shareholders of Buyer
</DIV>


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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>6
<FILENAME>g03282exv99w1.htm
<DESCRIPTION>EX-99.1 PRESS RELEASE DATED 9-6-06
<TEXT>
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<TITLE>EX-99.1 PRESS RELEASE DATED 9-6-06</TITLE>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;99.1
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>FOR IMMEDIATE RELEASE</B></U><BR>
For further information, call<BR>
Bonnie Herron, 770/564-5504<BR>
or email to <U>bherron@intelsys.com</U>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Intelligent Systems Completes Sale of Minority Stake in Horizon Software</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>***</B>

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Norcross, GA &#150; September&nbsp;6, 2006 &#151; Intelligent Systems Corporation (AMEX: INS) today announced the
sale of its minority interest in Horizon Software, Inc., a privately held software company
headquartered in Loganville, Georgia. Effective as of August&nbsp;31, 2006, Intelligent Systems sold
its entire holdings of Series&nbsp;A Preferred Shares of Horizon to Horizon Software Holdings, Inc. (the
&#147;Buyer&#148;), an entity comprised of Horizon&#146;s founder and other officers of the company. ISC sold the
Horizon stock for an aggregate price of $5.7&nbsp;million, consisting of $2.85&nbsp;million in cash at the
closing and a secured promissory note of Buyer for $2.85&nbsp;million due January&nbsp;31, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">J. Leland Strange, President and Chief Executive Officer of Intelligent Systems Corporation,
stated, &#147;Our investment in Horizon enabled the company to build on its base in the K-12 education
market for Foodservice Management systems and to accelerate its successful expansion into the
military, higher education and corporate/resident dining markets. This sale transaction provides a
solid return for Intelligent Systems and demonstrates the commitment and optimism of Horizon&#146;s
management owners to continue to excel as a privately-held software company.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As previously reported on August&nbsp;1, 2006, ISC completed the sale of its QS Technologies business to
Netsmart Technologies, Inc. in a transaction consisting of $1.9&nbsp;million cash, a promissory note of
$1.435&nbsp;million and the assumption by Netsmart of approximately $1.8&nbsp;million in net liabilities of
QS. In addition, ISC retained accounts receivable and cash of QS Technologies aggregating
approximately $2.0&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">ISC intends to file a Form 8-K today with the Securities and Exchange Commission related to the
Horizon Software transaction.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>About Intelligent Systems Corporation</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For over thirty years, Intelligent Systems Corporation &#091;AMEX: INS&#093; has identified, created,
operated and grown early stage technology companies. The company&#146;s consolidated subsidiaries
include VISaer, Inc. (<U>www.visaer.com</U>) and CoreCard Software, Inc. (<U>www.corecard.com</U>), (both
software companies) and ChemFree Corporation (<U>www.chemfree.com</U>) (an industrial products company).
Further information is available on the company&#146;s website at <U>www.intelsys.com</U>, or by calling the
company at 770/381-2900.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>In addition to historical information, this news release may contain forward-looking
statements relating to Intelligent Systems and its subsidiary and affiliated companies. These
statements include all statements that are not statements of historical fact regarding the intent,
belief or expectations of Intelligent Systems and its management with respect to, among other
things, results of operations, product plans, and financial condition. The words &#147;may,&#148; &#147;will,&#148;
&#147;anticipate,&#148; &#147;believe,&#148; &#147;intend,&#148; &#147;expect,&#148; &#147;estimate,&#148; &#147;plan,&#148; &#147;strategy&#148; and similar expressions
are intended to identify forward-looking statements. Prospective investors are cautioned that any
such forward-looking statements are not guarantees of future performance and involve risks and
uncertainties and that actual results may differ materially from those contemplated by such
forward-looking statements. The company does not undertake to update or revise any forward-looking
statements whether as a result of new developments or otherwise. Among the factors that could
cause actual results to differ materially from those indicated by such forward-looking statements
are delays in product development, undetected software errors, competitive pressures (including
pricing), changes in customers&#146; requirements or financial condition, market acceptance of products
and services, changes in financial markets, changes in the performance, financial condition or
valuation of affiliate companies, the risks associated with investments in privately-held early
stage companies, and general economic conditions, particularly those that cause business or
government to delay or cancel purchase decisions. Factors that affect the company&#146;s performance
and financial results are more fully disclosed in the company&#146;s most recent filings with the
Securities and Exchange Commission, including its annual report on Form 10-KSB and its subsequent
filings.</I>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><I># # # #</I>
</DIV>



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