Exhibit 10.4(y)


    
      

    

    EXHIBIT
      10.4(y)

    

      SECOND
        WAIVER AND AMENDMENT AGREEMENT

       

      THIS
        SECOND WAIVER AND AMENDMENT AGREEMENT (hereinafter
        referred to as this “Agreement”) is made and entered into as of April 16, 2007,
        by and between INNOTRAC
        CORPORATION,
        a
        Georgia corporation (hereinafter referred to as “Borrower”), and WACHOVIA
        BANK, NATIONAL ASSOCIATION
        (hereinafter referred to as “Bank”). 

       

      BACKGROUND
        STATEMENT

       

      A. Borrower
        and Bank are parties to that certain Third Amended and Restated Loan and
        Security Agreement dated March 28, 2006 (as previously amended by that certain
        Waiver and Amendment Agreement dated as of November 14, 2006, the “Loan
        Agreement”). Capitalized terms used herein, unless otherwise defined, shall have
        the meanings ascribed to them in the Loan Agreement. 

       

      B. Borrower
        has informed Bank that the Borrower has failed to comply with, or a default
        has
        occurred under, the following sections of the Loan Agreement: (i) Section
        7(a)
        as a result of Borrower's failure to maintain the required Fixed Charge Coverage
        Ratio for the month of December 2006, (ii) Section 5.6(i) as a result of
        Borrower's failure to provide Bank on or before February 9, 2007, with
        Borrower's forecasted balance sheet, cash flow statement, Borrowing Base
        projection and financial covenant compliance on a month by month basis for
        Borrower's 2007 fiscal year and (iii) Section 8.1(f) as a result of Borrower's
        failure to make the $800,000 payment described in the definition of "Fixed
        Charge Coverage Ratio" in Section 7(a). Such defaults are referred to herein
        as
        the "Existing Defaults" and constitute Events of Default under Section 8.1(b)
        of
        the Loan Agreement. In addition, the Borrower's income statement projections
        for
        fiscal year 2007 delivered to Bank under Section 5.6(i) of the Loan Agreement
        (the "2007 Projections") indicate that Borrower will be unable to maintain
        the
        required Fixed Charge Coverage Ratio for any period during Borrower's 2007
        fiscal year. 

      


      C. The
        Borrower has requested that the Bank waive the Existing Defaults and amend
        the
        Loan Agreement as hereinafter set forth and the Bank has agreed, subject
        to all
        of the terms and conditions set forth below.

       

      AGREEMENT

       

      FOR
        AND
        IN CONSIDERATION of the sum of Ten and No/100 Dollars ($10.00), the foregoing
        recitals, and other good and valuable consideration, the receipt and sufficiency
        of which are hereby acknowledged, Borrower and Bank do hereby agree as
        follows:

       

      1. Waiver
        of the Existing Defaults.
        Bank
        hereby waives the Existing Defaults and Borrower agrees to strictly comply
        with
        the Loan Agreement hereafter, the Borrower hereby ratifying and affirming
        the
        Loan Agreement and the other Loan Documents. Borrower hereby agrees that
        nothing
        herein shall constitute a waiver by Bank of any Default or Event of Default
        (except as expressly provided in this paragraph 1 with respect to the Existing
        Defaults), whether known or unknown, which may exist under the Loan Agreement
        or
        any other Loan Document. Borrower hereby further agrees that no action, inaction
        or agreement by Bank, including, without limitation, any extension, indulgence,
        waiver, consent or agreement of modification which may have occurred or have
        been granted or entered into (or which may be occurring or be granted or
        entered
        into hereunder or otherwise) with respect to nonpayment of the Loans or other
        Obligations or any portion thereof, or with respect to matters involving
        collateral security for the Loans or other Obligations, or with respect to
        any
        other matter relating to the Loans or other Obligations, shall require or
        imply
        any further extension, indulgence, waiver, consent or agreement by Bank.
        Except
        as expressly provided in this paragraph 1, Borrower hereby acknowledges and
        agrees that Bank has not made any agreement, and is in no way obligated,
        to
        grant any further extension, indulgence, waiver or consent with respect to
        the
        Loans, the other Obligations, the Loan Agreement or any other Loan Document.
        

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      2. Amendments.
        The
        Loan Agreement is amended as set forth below.

       

      (a) The
        following new definitions are hereby added to Section 1.1 of the Loan Agreement
        in alphabetical order as follows:

       

      "ClientLogic
        Acquisition"
        means
        the Borrower's acquisition of ClientLogic’s fulfillment and reverse logistics
        business in 2006.

       

      "ClientLogic
        Deferred Payments"
        means
        all cash payments made by Borrower at any time consisting of the following
        consideration paid for the ClientLogic Acquisition: (1) the $800,000 deferred
        purchase payment due in February 2007, (2) the earn-out payment due on or
        before
        April 2008, and (3) any other consideration paid in connection with the
        ClientLogic Acquisition. 

       

      "Control
        Agreement"
        means
        an agreement providing Bank with control (as defined in the applicable Uniform
        Commercial Code) over Pledged Securities Collateral, in form and substance
        satisfactory to the Bank in all respects, as amended or otherwise modified
        from
        time to time.

       

      "Dorfman
        Security Agreement"
        means
        the Security Agreement executed and delivered by Scott D. Dorfman in favor
        of
        the Bank, in form and substance satisfactory to the Bank in all respects,
        as
        amended or otherwise modified from time to time.

       

      "Eligible
        Pledged Securities Collateral"
        means
        Pledged Securities Collateral acceptable to Bank in its sole discretion from
        time to time.

       

      "Fair
        Market Value"
        means,
        at the time of determination, the fair market value of the Pledged Securities
        Collateral set forth on the most recent statement issued by the relevant
        securities intermediary with respect to the Pledged Securities Collateral
        delivered in accordance with the terms of the Dorfman Security Agreement,
        provided, however, in the event that such statement is not received by the
        Bank
        in a timely fashion, "Fair Market Value" means the fair market value of the
        Pledged Securities Collateral as reasonably determined by the Bank.

       

      "Pledged
        Securities Collateral"
        has the
        meaning set forth in the Dorfman Security Agreement and includes, without
        limitation, the securities accounts, marketable securities, investment property
        and all other property described therein.

      
        
           

          (b) The
            definition of "Availability Reserve" contained in Section 1.1 of the
            Loan
            Agreement is hereby amended and restated in its entirety as
            follows:

           

          "Applicable
            Margin"
            means,
            at any time of determination by Bank, as to any Base Rate Loan or LMIR
            Loan, the
            relevant percentage below corresponding to the Borrower's Average Excess
            Availability (90) set forth below:

           

        

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

      

       

      
        	
                 

                 

                Average
                  Excess 

                Availability
                  (90)

                 

              	
                 

                 

                Base
                  Rate Loans

                 

              	
                 

                 

                LMIR
                  Loans

                 

              
	
                <
                  $5,000,000

                 

              	
                0.00%

                 

              	
                2.00%

                 

              
	
                >
                  $5,000,000

                but
                  <
                  $7,500,000

                 

              	
                0.00%

                 

              	
                1.50%

                 

              
	
                >
                  $7,500,000

                but
                  <
                  $10,000,000

                 

              	
                0.00%

                 

              	
                1.25%

                 

              
	
                >
                  $10,000,000

                 

              	
                0.00%

                 

              	
                1.00%

                 

              


      

      


       

      Provided,
        however, notwithstanding the text in this paragraph above, at all times during
        which the Fixed Charge Coverage Ratio is less than 1.00 to 1.00, the Applicable
        Margin for (x) Base Rate Loans then in effect shall be 1.00% and the Applicable
        Margin for LMIR Loans then in effect shall be 2.85%. In order for Bank to
        determine the Fixed Charge Coverage Ratio under this definition, Borrower
        agrees
        to deliver the compliance certificate described in Section 5.6(d) certifying
        the
        Fixed Charge Coverage Ratio for each month notwithstanding any period during
        which the Fixed Charge Coverage Ratio may not be tested under Section 7(a).
        Nothing in this paragraph shall limit Bank's rights to impose the Default
        Rate
        under Section 2.8 of this Agreement, if applicable.

       

      Solely
        for the purposes of the definition of "Applicable Margin," the Borrowing
        Base
        shall be calculated without subtracting (i) the Target Reserve when in effect
        or
        (ii) the Availability Reserve when in effect. 

       

      "Availability
        Reserve"
        means,
        during any period following a month in which the Borrower's Fixed Charge
        Coverage Ratio for such previous month was less than 1.15 to 1.00, then,
        during
        such period, an amount equal to $2,000,000. 

       

      (c) The
        definition of "Borrowing Base" contained in Section 1.1 of the Loan Agreement
        is
        hereby amended and restated in its entirety as follows:

       

      "Borrowing
        Base"
        means,
        on any date of determination thereof, an amount equal to:

       

      (i) up
        to 85%
        of the total amount of Eligible Accounts, plus 

       

      (ii) up
        to 75%
        of the Fair Market Value of the Eligible Pledged Securities Collateral,
        plus

       

      (iii) the
        lesser of (a) $1,000,000 or (b) up to 50% of the total amount of Eligible
        Inventory; minus 

       

      (iv) any
        Reserves.

       

      (d) Section
        2.13 of the Loan Agreement is hereby amended and restated in its entirety
        as
        follows:

      
         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

           

        

      

      2.13 Termination.
        Upon at
        least thirty (30) days prior written notice to Bank, Borrower may, at its
        option, upon payment of the Early Termination Fee (defined below), terminate
        this Agreement and the Revolver Commitment in its entirety but not partially;
        provided however, no such termination by Borrower shall be effective until
        the
        full, final and indefeasible payment of the Obligations and Early Termination
        Fee in cash or immediately available funds and in the case of any Obligations
        consisting of contingent obligations, Bank's receipt of either cash or a
        direct
        pay letter of credit naming Bank as beneficiary and in form and substance
        and
        from an issuing bank acceptable to Bank, in each case in an amount not less
        than
        105% of the aggregate amount of all such contingent obligations. Any notice
        of
        termination given by Borrower shall be irrevocable unless Bank otherwise
        agrees
        in writing. "Early Termination Fee" means an amount equal to (i) 1.00% of
        the
        Revolver Commitment in the event of termination of the Revolver Commitment
        on or
        before November 14, 2007, and (ii) 0.25% of the Revolver Commitment in the
        event
        of termination of the Revolver Commitment after November 14, 2007, but before
        November 14, 2008. Bank may terminate this Agreement and the Revolver Commitment
        at any time, without notice, upon or after the occurrence of a Default or
        Event
        of Default.

       

      (e) Section
        5.1 of the Loan Agreement is hereby amended and restated in its entirety
        as
        follows:

       

      5.1 Use
        of
        Loan Proceeds.
        Shall
        use the proceeds of Loans solely for the following purposes and shall furnish
        Bank all evidence that Bank may require with respect to such uses: (i) for
        the
        payment of ClientLogic Deferred Payments and (ii) otherwise solely for the
        Borrower's working capital and general corporate purposes to be used in the
        ordinary course of the Borrower's business.

       

      (f) Section
        5.5 of the Loan Agreement is hereby amended and restated in its entirety
        as
        follows:

       

      5.5 Inspections
        of Books and Records and Field Examinations; Bank's Consultant.
        Shall
        permit inspections of the Collateral and the records of such Person pertaining
        thereto and verification of the Accounts, at such times and in such manner
        as
        may be required by Bank and shall further permit such inspections, reviews
        and
        field examinations of its other books and records and properties (with such
        frequency and at such times as Bank may desire) by Bank as Bank may deem
        necessary or desirable from time to time. The cost of all such field
        examinations, reviews, verifications and inspections shall be borne by Borrower,
        provided that the cost of field examinations shall not exceed $850 per examiner
        per day, plus Bank's reasonable out-of-pocket expenses. In addition to the
        foregoing, during any period in which (i) the Fixed Charge Coverage Ratio
        is
        less than 1.15 to 1.00 or (ii) a Default or Event of Default is in existence,
        then, during such period, at Borrower's sole cost and expense, Bank may retain
        a
        consultant acceptable to Bank in its sole discretion, and Borrower shall
        permit
        such consultant to perform any of the above-mentioned matters in this Section
        5.5 as well as such other examinations, reviews, verifications and inspections
        as may be requested by the Bank from time.

       

      (g) Section
        5.6(a) of the Loan Agreement is hereby amended and restated in its entirety
        as
        follows:

      
         

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

           

        

      

      (a) Periodic
        Borrowing Base Information.
        On the
        third Business Day of each week, Borrower shall deliver to Bank a completed
        Borrowing Base Certificate in the form attached hereto as Exhibit 5.6(a)
        for the
        prior week (a "Borrowing Base Certificate"). Borrower shall attach to each
        Borrowing Base Certificate, which shall be certified electronically or manually
        by the controller or president of Borrower to be accurate and complete and
        in
        compliance with the terms of the Loan Documents, copies of the prior week's
        sales and collections registers. On or before the date which is thirty (30)
        days
        after the end of each month, Borrower shall deliver the following to Bank,
        which
        shall be certified electronically or manually by the controller or president
        of
        Borrower to be accurate and complete and in compliance with the terms of
        the
        Loan Documents: (i) a reconciliation statement for the Borrowing Base
        Certificate delivered for the last full week of the prior month, reconciling
        such Borrowing Base Certificate through the last day of such prior month,
        (ii) a
        report listing all Accounts of Borrower as of the last Business Day of the
        prior
        month (an "Accounts Receivable Report") which shall include the amount and
        age
        of each Account on an original invoice date aging basis, the name and mailing
        address of each Account Debtor, a detailing of all Accounts which do not
        constitute Eligible Accounts, and such other information as Bank may require
        in
        order to verify the Eligible Accounts, all in reasonable detail and in form
        acceptable to Bank, (iii) a report listing all Inventory and all Eligible
        Inventory of Borrower as of the last Business Day of the prior month, the
        cost
        thereof, specifying raw materials, work-in-process, finished goods and all
        Inventory which has not been timely sold by Borrower in the ordinary course
        of
        business, and such other information as Bank may require relating thereto,
        all
        in form acceptable to Bank (an "Inventory Report"), and (iv) any other report
        as
        Bank may from time to time require in its sole discretion, each prepared
        with
        respect to such periods and with respect to such information and reporting
        as
        Bank may require. Notwithstanding any provision herein to the contrary, Bank
        reserves the right, in the exercise of its sole discretion, to calculate
        the
        Borrowing Base on a basis more frequently than weekly from time to
        time.

       

      (h) Section
        5.6(i) of the Loan Agreement is hereby amended and restated in its entirety
        as
        follows:

       

      (i) Projections.
        (a) 
        On or
        before January 15, 2007, deliver Projections (as hereinafter defined) to
        Bank
        for Borrower for fiscal year 2007. "Projections" means Borrower's forecasted
        consolidated and consolidating balance sheet, income statement, cash flow
        statement (including a detail of capital expenditures), Borrowing Base
        projection and financial covenant compliance prepared on a month by month
        basis,
        all of the foregoing to be on a consistent basis with Borrower's historical
        financial statements, together with appropriate supporting details and a
        statement of underlying assumptions.

       

      (b) On
        the
        first Business Day of each week, deliver Cash Flow/Availability Projections
        (as
        hereinafter defined) to Bank for Borrower for such week and the next 12 weeks
        thereafter. "Cash Flow/Availability Projections" means a report, in form
        and
        substance satisfactory to Bank in all respects, setting forth Borrower's
        forecasted consolidated and consolidating cash flows and borrowing availability
        prepared on a week by week basis.

       

      (i) Section
        6.1(d) of the Loan Agreement is hereby amended and restated in its entirety
        as
        follows:

       

      (d) Purchase
        money Debt not exceeding $4,000,000 in aggregate principal amount at any
        time
        outstanding for Borrower and all Subsidiaries incurred to purchase Equipment,
        provided that the amount of such Debt shall not at any time exceed the purchase
        price of the Equipment purchased; and

       

      (j) Section
        7(a) of the Loan Agreement is hereby amended and restated in its entirety
        as
        follows:

      
         

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

           

        

      

      (a) Fixed
        Charge Coverage Ratio.
        At the
        end of each month, commencing with the month of December 2007, Borrower shall
        maintain a Fixed Charge Coverage Ratio of not less than the following amounts
        for the following months:

       

      
        	
                Required
                  Fixed Charge 

                Coverage
                  Ratio

                 

              	
                Month

                 

              
	
                1.00
                  to 1.0

                 

              	
                December
                  2007 through and 

                including
                  February 2008

                 

              
	
                1.05
                  to 1.0

                 

              	
                March
                  2008 through and 

                including
                  May 2008

                 

              
	
                1.15
                  to 1.0

                 

              	
                June
                  2008 and each month thereafter

                 

              


      

      


       

      As
        used
        herein, "Fixed Charge Coverage Ratio" means during any period of determination
        (i) EBITDA, plus rent expense incurred during any Applicable Period less
        the sum
        of (A) all unfinanced Capital Expenditures made in the Applicable Fiscal
        Period,
        and (B) any dividends and distributions paid in the Applicable Fiscal Period
        and
        (C) cash taxes paid in the Applicable Fiscal Period (without benefit of any
        refunds), divided by (ii) the sum of (A) the current portion of scheduled
        principal amortization on Funded Debt coming due in the next 12 months as
        of the
        end of the most recent fiscal month plus (B) cash interest payments paid
        in the
        Applicable Fiscal Period, plus (C) rent expense paid during any Applicable
        Period plus (D) all cash payments made by Borrower during the Applicable
        Period
        consisting of the following ClientLogic Deferred Payments: (1) the earn-out
        payment due on or before April 2008, and (2) any other consideration paid
        in
        connection with the ClientLogic Acquisition (other than the $800,000 deferred
        purchase payment due in February 2007). As used herein, (i) "EBITDA" means
        the
        sum of (A) consolidated net income of Borrower and its Subsidiaries in the
        Applicable Fiscal Period (computed without regard to any extraordinary items
        of
        gain or loss) plus (B) to the extent deducted from revenue in computing
        consolidated net income for such period, the sum of (1) interest expense,
        (2)
        income tax expense, (3) depreciation and amortization and (4) with respect
        to
        the bad debt reserve for Accounts owed to Borrower from Tactica International,
        any increases thereto occurring after September 30, 2005, but not exceeding
        $2,000,000 in such increases in the aggregate less (C) non-cash gains; (ii)
        "Capital Expenditures" means for any period the aggregate cost of all capital
        assets acquired by Borrower and its Subsidiaries during such period, as
        determined in accordance with GAAP; (iii) "Applicable Fiscal Period" means
        (A)
        for the period from January 2007 through and including January 2008, each
        such
        prescribed fiscal month plus the results for the prior fiscal months during
        such
        period and (B) thereafter, a period of twelve (12) consecutive, trailing
        fiscal
        months ending at the end of each prescribed fiscal month of Borrower; and
        (iv)
        "Funded Debt" means (A) Debts for borrowed funds, and (B) Debt for the deferred
        payment by one (1) year or more of any purchase money obligation.

       

      (k) Section
        8.1(n) of the Loan Agreement is hereby amended and restated in its entirety
        as
        follows:

      
         

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

           

        

      

      (n) Scott
        D.
        Dorfman shall (i) fail to deliver to Bank an executed and delivered Control
        Agreement granting the Bank sole control over, and a sole, first priority
        and
        perfected security interest in, securities account no. 614-443409 maintained
        with Fidelity Brokerage Service LLC (the "Controlled Account") on or before
        May
        14, 2007, (ii) permit any party to acquire control over, or otherwise obtain
        a
        security interest in, any other Pledged Securities Collateral, (iii) fail
        to
        maintain at all times a Fair Market Value of all Pledged Securities Collateral
        equal to at least $1,800,000, (iv) fail to maintain at all times a Fair Market
        Value of the Pledged Securities Collateral in the Controlled Account equal
        to at
        least $1,100,000 or (v) on a fully diluted basis, cease to control, with
        sole
        power to vote, at least 40% of each class of voting stock or other equity
        or
        income interests of Borrower.

       

      3. Acknowledgments
        and Stipulations.
        Borrower hereby acknowledges, stipulates, and agrees: (a) that (i) the total
        outstanding principal balance of the Revolver Loans on the date of this
        Agreement is due and owing, in accordance with the terms of the Loan Agreement
        and the Revolver Note, without any defense, counterclaim, deduction, recoupment
        or offset and (ii) to the extent that Borrower has any defense, counterclaim,
        deduction, recoupment or offset with respect to the payment by the Borrower
        of
        the Obligations or the payment or performance of Borrower of its obligations
        under the terms of any Loan Agreement to which it is a party, the same is
        hereby
        waived; and (b) the Loan Documents executed by the Borrower are legal, valid,
        and binding obligations enforceable against the Borrower in accordance with
        their terms (subject to bankruptcy, insolvency, reorganization, arrangement,
        moratorium, or other similar laws relating to or affecting the rights of
        creditors generally and general principles of equity).

       

      4. Representations
        and Warranties.
        Borrower represents and warrants that (a) no Default or Event of Default
        exists
        under the Loan Documents, except for the Existing Defaults that are waived
        in
        accordance with the terms of this Agreement; (b) subject to the existence
        of the
        Existing Defaults, the representations and warranties of Borrower contained
        in
        the Loan Documents were true and correct in all material respects when made
        and
        continue to be true and correct in all material respects on the date hereof;
        (c)
        the execution, delivery, and performance by Borrower of this Agreement and
        the
        consummation of the transactions contemplated hereby are within the power
        and
        authority of Borrower and have been duly authorized by all necessary corporate
        action on the part of Borrower, do not require any governmental approvals,
        do
        not violate any provisions of any applicable law or any provision of the
        organizational documents of Borrower, and do not result in a breach of or
        constitute a default under any agreement or instrument to which Borrower
        are
        parties or by which they or any of their properties are bound; (d) this
        Agreement constitutes the legal, valid, and binding obligation of Borrower,
        enforceable against Borrower in accordance with its terms (subject to
        bankruptcy, insolvency, reorganization, arrangement moratorium or other similar
        laws relating to or affecting the rights of creditors generally and general
        principles of equity); and (e) Borrower has freely and voluntarily agreed
        to the
        releases and undertakings set forth in this Agreement.

       

      5. Relationship
        of Parties.
        This
        Agreement is not intended, nor shall it be construed, to create a partnership
        or
        joint venture relationship between or among any of the parties hereto. No
        Person
        other than a party hereto is intended to be a beneficiary hereof, and no
        Person
        other than a party hereto shall be authorized to rely upon or enforce the
        contents of this Agreement.

       

      6. No
        Novation.
        This
        Agreement is not intended to be, nor shall it be construed to create, a novation
        or accord and satisfaction, and the Loan Agreement and the other Loan Documents
        are hereby ratified and affirmed and remain in full force and effect.
        Notwithstanding any prior mutual temporary disregard of any of the terms
        of any
        of the Loan Documents, the parties agree that the terms of each of the Loan
        Documents shall be strictly adhered to on and after the date hereof, except
        as
        expressly modified by this Agreement.

       

      7. Bank's
        Waiver Fee; Reimbursement of Expenses.
        Borrower agrees to pay Bank a fully earned and non-refundable waiver fee
        on the
        date of this Agreement in immediately available funds in the amount of $5,000.00
        (the "Waiver Fee"). Borrower agrees to reimburse the Bank, on demand, for
        any
        costs and expenses, including, without limitation, legal fees, incurred by
        Bank
        in connection with the drafting, negotiation, execution, closing and execution
        of the transactions contemplated by this Agreement.

      
         

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

           

        

      

      8. Release.
        To
        induce the Bank to enter into this Agreement, Borrower hereby releases, acquits,
        and forever discharges Bank and its respective officers, directors, attorneys,
        agents, employees, successors, and assigns, from all liabilities, claims,
        demands, actions, or causes of action of any kind (if there be any), whether
        absolute or contingent, due or to become due, disputed or undisputed, liquidated
        or unliquidated, at law or in equity, or known or unknown, that any one or
        more
        of them now have or, prior to the date hereof, ever have had against Bank,
        whether arising under or in connection with any of the Loan Documents or
        otherwise, and Borrower covenants not to sue at law or at equity Bank with
        respect to any of the foregoing liabilities, claims, demands, actions, or
        causes
        of action (if there be any). Borrower hereby acknowledges and agrees that
        the
        execution of this Agreement by Bank shall not constitute an acknowledgment
        of or
        admission by Bank of the existence of any claims or of liability for any
        matter
        or precedent upon which any claim or liability may be asserted. Borrower
        further
        acknowledges and agrees that, to the extent any such claims may exist, they
        are
        of a speculative nature so as to be incapable of objective valuation and
        that,
        in any event, the value to Borrower of the agreements of Bank contained in
        this
        Agreement and any other documents executed and delivered in connection with
        this
        Agreement substantially and materially exceeds any and all value of any kind
        or
        nature whatsoever of any such claims. Borrower further acknowledges and agrees
        Bank is in no way responsible or liable for the previous, current or future
        condition or deterioration of the business operations and/or financial condition
        of Borrower and that Bank has not breached any agreement or commitment to
        loan
        money or otherwise make financial accommodations available to Borrower or
        to
        fund any operations of Borrower at any time. Borrower represents and warrants
        to
        Bank that Borrower has not transferred or assigned to any Person any claim,
        demand, action or cause of action that Borrower has or ever had against Bank.
        

       

      9. Miscellaneous.
        This
        Agreement and the Loan Documents constitute the entire understanding of the
        parties with respect to the subject matter hereof and thereof; may not be
        modified, altered, or amended except by agreement in writing signed by all
        the
        parties hereto; shall be governed by and construed in accordance with the
        internal laws of the State of Georgia; shall be binding upon and inure to
        the
        benefit of the parties hereto and their respective successors and assigns;
        and
        may be executed and then delivered via facsimile transmission, via the sending
        of PDF or other copies thereof via email and in one or more counterparts,
        each
        of which shall be an original but all of which taken together shall constitute
        one and the same instrument. Time is of the essence of this Agreement. A
        default
        by Borrower under this Agreement shall constitute a Default and Event of
        Default
        under the Loan Agreement and the other Loan Documents. This Agreement is
        a Loan
        Document.

       

      10. Conditions
        Precedent; Post-Execution Agreements.
        This
        Agreement shall become effective only upon (i) payment by Borrower to Bank
        of
        the Waiver Fee in immediately available funds, (ii) execution and delivery
        of
        this Agreement by all parties hereto and (iii) execution and delivery of
        the
        Dorfman Security Agreement granting the Bank a sole, first priority and
        perfected security interest in marketable securities satisfactory to Bank
        in all
        respects having a Fair Market Value equal to at least $2,000,000 as of the
        date
        of this Agreement.

       

      [signatures
        set forth on the next page]

       

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          



      

      IN
        WITNESS WHEREOF, this Agreement has been duly executed and under seal by
        Borrower and Bank, as of the day and year first above written.

       

                          BORROWER:

       

                          INNOTRAC
        CORPORATION,
        a Georgia corporation (SEAL)

       

      


       

                          By:
/s/
        Scott D.
        Dorfman                                                            

                                                                 
        Scott D. Dorfman, President

       

                          BANK:

       

      


       

                          WACHOVIA
        BANK,
        NATIONAL ASSOCIATION

       

      


       

                          By:
/s/
        Jeanette
        Childress                                                         

                                                          Jeanette
        Childress, Director

       

       

       

      9