Document:

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

       

       

       

      9Exhibit 10.23

    
      

    

    EXHIBIT
      10.23

    

    

      EMPLOYMENT
        AGREEMENT

      

      THIS
        AGREEMENT (“Agreement”) is effective as of the 16th day of April, 2007, by and
        between SCOTT
        D. DORFMAN,
        an
        individual resident of the State of Georgia (“Employee”), and INNOTRAC
        CORPORATION,
        a
        Georgia corporation (the “Employer”).

      

      W
        I T
        N E S S E T H:

      

      WHEREAS,
        Employee previously entered into an Employment Agreement with the Employer
        dated
        August 31, 2000, which expired by its terms on December 31, 2005;
        and

      

      WHEREAS,
        the parties hereto desire to enter into an agreement for the Employer’s
        continued employment of Employee on the terms and conditions contained herein;
        and

      

      WHEREAS,
        this Employment Agreement supersedes any prior employment agreement or promises
        between Employer and Employee regarding the terms of Employee’s employment;
        and

      

      NOW,
        THEREFORE, in consideration of the premises and the mutual promises and
        agreements contained herein, the parties hereto, intending to be legally
        bound,
        hereby agree as follows:

      

      Section
        1. Employment.
        

      

      Subject
        to the terms hereof, the Employer hereby employs Employee, and Employee hereby
        accepts such employment. Employee will serve as President and Chief Executive
        Officer or in such other executive capacity as the Board of Directors of
        Employer (the “Board of Directors”) may hereafter from time to time determine.
        Employee agrees to devote his full business time and best efforts to the
        performance of the duties that Employer may assign Employee from time to
        time.

      

      Section
        2. Term
        of Employment.

      

      The
        term
        of Employee's employment (the “Term”) shall continue from the date hereof until
        the earlier of (a) December 31, 2009, provided that this date shall
        automatically extend until December 31, 2010 and until each December 31
        thereafter, unless either the Employer or the Employee provides written notice
        of non-renewal to the other party no later than the September 30th
        prior to
        the upcoming December 31st
        expiration date, or (b) the occurrence of any of the following
        events:

      

      (i) The
        death
        or total disability of Employee (total disability meaning the failure to
        fully
        perform his normal required services hereunder for a period of three (3)
        months during any consecutive twelve (12) month period during the term hereof,
        as determined by the Board of Directors, by reason of mental or physical
        disability);

      

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

         

      

      (ii) The
        termination by Employer of Employee's employment hereunder, upon prior written
        notice to Employee, for “good cause”, as determined by the Board of Directors.
        For purposes of this Agreement, “good cause” for termination of Employee's
        employment shall exist (A) if Employee is convicted of, pleads guilty to,
        or
        confesses to any felony or any act of fraud, misappropriation, theft or
        embezzlement, (B) if Employee fails to comply with the terms of this Agreement,
        and, within thirty (30) days after written notice from Employer of such failure,
        Employee has not corrected such failure or, having once received such notice
        of
        failure and having so corrected such failure, Employee at any time thereafter
        again so fails, (C) if Employee violates any of the provisions contained
        in
        Section 4 of this Agreement, (D) if Employee tests positive for illegal
        drugs, or (E) if Employee’s conduct is deemed unprofessional, unethical or
        detrimental to the Employer; or

      

      (iii) The
        termination of Employee’s employment by either party upon at least ninety (90)
        days prior written notice. 

      

      Section
        3. Compensation.

      

      3.1 Term
        of Employment.
        Employer
        will provide Employee with the following salary, expense reimbursement and
        additional employee benefits during the term of employment
        hereunder:

      

      (a) Salary.
        Employee will be paid a salary (the “Salary”) of no less than Four Hundred
        Twenty Five Thousand Dollars ($425,000) per annum, less deductions and
        withholdings required by applicable law. The Salary shall be paid to Employee
        in
        equal monthly installments (or on such more frequent basis as other executives
        of Employer are compensated). The Salary shall be reviewed by the Board of
        Directors of Employer on at least an annual basis.

      

      (b) Bonus.
        Employee will be entitled to an annual bonus, based on personal and company
        performance, as awarded by the Board of Directors. The Bonus for each calendar
        year shall be paid promptly upon the availability of annual financial results
        and no later than March 15 of the following calendar year. 

      

      (c) Vacation.
        Employee shall receive eight (8) weeks vacation time per calendar year during
        the term of this Agreement. Any unused vacation days in any calendar year
        may
        not be carried over to subsequent years.

      

      (d) Expenses.
        Employer shall reimburse Employee for all reasonable and necessary expenses
        incurred by Employee at the request of and on behalf of Employer.

      

      (e) Benefit
        Plans.
        Employee may participate in such medical, dental, disability, hospitalization,
        life insurance and other benefit plans (such as pension and profit sharing
        plans) as Employer maintains from time to time for the benefit of other senior
        executives of Employer, on the terms and subject to the conditions set forth
        in
        such plans. Employer will contribute to the premiums for reasonable supplemental
        life and disability insurance coverage. 

      
        

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

        

      

      3.2 Effect
        of Termination.

      

      (a) Accrued
        Benefits.
        Except
        as hereinafter provided, upon the termination of the employment of Employee
        hereunder for any reason, Employee shall be entitled to all compensation
        and
        benefits earned or accrued under Section 3.1 as of the effective date of
        termination (the “Termination Date”), but from and after the Termination Date,
        no additional compensation or benefits shall be earned by Employee hereunder.
        If
        Employee’s termination of employment is for any reason other than by Employer
        pursuant to Section 2(b)(ii) above, Employee shall be deemed to have earned
        any
        Bonus payable with respect to the calendar year in which the Termination
        Date
        occurs on a prorated basis (based on the number of days in such calendar
        year
        through and including the Termination Date divided by 365) based upon the
        year
        to date financials and performance of the Employer and assuming performance
        at
        the target level for any individual performance criteria. Any such prorated
        Bonus shall be payable as soon as administratively practicable and no later
        than
        30 days following the Employee’s Termination Date.

      

      (b) Severance.
        If
        Employee's employment hereunder is terminated by Employer pursuant to
        Section 2(b)(iii) hereof, then, in addition to any other amount payable
        hereunder, Employer shall continue to pay Employee his normal Salary pursuant
        to
        Section 3.1(a) for a six-month period (on the same basis as if Employee
        continued to serve as an employee hereunder for such applicable period);
        provided, however, that all such continued Salary payments shall be paid
        to the
        Employee not later than the 15th
        day of
        the third month following the end of the year in which the Termination Date
        occurs, and any such continued Salary payment that would be payable after
        such
        date will be payable with the last payment that would occur prior to such
        date.

      

      (c) Stock
        Options.
        If
        Employee's employment is terminated pursuant to Section 2(b)(i) hereof or
        if Employee's employment is terminated by Employer pursuant to
        Section 2(b)(iii), all options to purchase stock of the Employer or an
        affiliate of the Employer granted to Employee shall immediately become fully
        vested and exercisable upon such termination. In the case of a termination
        pursuant to Section 2(b)(i) hereof, the options will expire in accordance
        with their respective scheduled expiration dates. Except as provided in Section
        3.3, in the case of a termination by Employer pursuant to Section 2(b)(iii)
        hereof, the options will expire on the earliest of (i) the first anniversary
        of
        the Employee’s Termination Date, (ii) the later of the 15th
        day of
        the third month following the date at which, or December 31 of the calendar
        year
        in which, the options would otherwise have expired in accordance with their
        scheduled post-employment exercise term, and (iii) the expiration of the
        maximum term provided in the options. Upon the death of Employee, any options
        that Employee would otherwise be entitled to exercise hereunder may be exercised
        by his personal representatives or heirs, as applicable. Except as provided
        in
        Section 3.3, if Employee's employment is terminated by Employer pursuant
        to
        Section 2(b)(ii), all options not then exercisable shall be forfeited as
        of the
        Termination Date and those options which are exercisable as of the Employee’s
        Termination Date shall be exercisable for the period provided in the options,
        or
        if longer, for a period of 60 days after the Termination Date, but in no
        event
        beyond the maximum option term provided in the options, and after such 60-day
        period, all unexercised options will expire. To the extent necessary, this
        provision shall be deemed an amendment of any option agreement between the
        Employee and the Employer or an affiliate of the Employer.

      
        

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

        

      

      3.3 Effect
        of Change in Control.
        Notwithstanding Section 3.2 above, if there is a Change in Control (as defined
        below) of the Employer and the Employee’s employment is terminated within 18
        months following the date of the Change in Control, the following provisions
        shall apply. 

      

      (a) If
        Employee's employment hereunder is terminated by Employer pursuant to
        Section 2(b)(iii) hereof or by Employee for “Good Reason” as defined below,
        then, in addition to any other amount payable pursuant to Section 3.2(a)
        but in
        lieu of any amount payable under Section 3.2(b), the Employee shall be entitled
        to receive the compensation and benefits set forth in subsections (i) and
        (ii)
        below:

      

      (i) Severance.
        Employee will continue to receive his Salary as then in effect (subject to
        withholding of all applicable taxes) for a period of eighteen (18) months
        from
        his date of termination in the same manner as it was being paid as of the
        date
        of termination; provided, however, if Employee is a “specified employee” (as
        defined in Section 409A of the Code and the regulations thereunder), no such
        severance payment shall be made until the date that is six months and a day
        following the Employee’s date of termination of employment. Any payments that
        would otherwise be made during such six-month period shall be held by the
        Company and paid in a lump sum on the day following the end of such six-month
        period.

      

      (ii) Stock
        Options.
        Notwithstanding any provision in any option agreement, all outstanding stock
        options granted to Employee by Employer or an affiliate of Employer shall
        become
        fully vested on the date of Employee’s termination of employment and shall
        remain exercisable as provided in the applicable option agreement. To the
        extent
        necessary, this provision shall be deemed an amendment of any option agreement
        between the Employee and the Employer or an affiliate of the
        Employer.

      

      (b) If
        Employee's employment hereunder is terminated by Employee pursuant to
        Section 2(b)(iii) hereof other than for “Good Reason” as defined below,
        then, in addition to any other amount payable pursuant to Section 3.2(a),
        the
        Employee shall be entitled to receive the compensation and benefits set forth
        in
        subsections (i) and (ii) of Subsection 3.3(a) above, provided, however, that
        a
        period of 12 months shall be substituted for 18 months in subsection
        3.3(a)(i).

      

      3.4 Definitions.
        For purposes of this Agreement, the following terms shall have the meanings
        set
        forth below:

      
        

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

        

      

      (a) “Change
        in Control”
means
        any of the following events:

      

      (i) The
        acquisition (other than from the Employer) by any person of beneficial ownership
        of fifty percent (50%) or more of the combined voting power of the Employer's
        then outstanding voting securities; provided, however, that for purposes
        of this
        Section, person shall not include any person who on the date hereof owns
        25% or
        more of the Employer’s outstanding securities, and a Change in Control shall not
        be deemed to occur solely because fifty percent (50%) or more of the combined
        voting power of the Employer's then outstanding securities is acquired by
        (i) a
        trustee or other fiduciary holding securities under one or more employee
        benefit
        plans maintained by the Employer or any of its subsidiaries, or (ii) any
        corporation, which, immediately prior to such acquisition, is owned directly
        or
        indirectly by the shareholders of the Employer in the same proportion as
        their
        ownership of stock in the Employer immediately prior to such
        acquisition.

      

      (ii) Consummation
        of (1) a merger or consolidation involving the Employer if the shareholders
        of
        the Employer, immediately before such merger or consolidation do not, as
        a
        result of such merger or consolidation, own, directly or indirectly, more
        than
        fifty percent (50%) of the combined voting power of the then outstanding
        voting
        securities of the corporation resulting from such merger or consolidation
        in
        substantially the same proportion as their ownership of the combined voting
        power of the voting securities of the Employer outstanding immediately before
        such merger or consolidation, or (2) a complete liquidation or dissolution
        of
        the Employer, or (3) an agreement for the sale or other disposition of all
        or
        substantially all of the assets of the Employer.

      

      (iii) A
        change
        in the composition of the Board such that the individuals who, as of the
        date of
        this Agreement, constitute the Board (such Board shall be hereinafter referred
        to as the "Incumbent Board") cease for any reason to constitute at least
        a
        majority of the Board; provided, however, for purposes of this Section that
        any
        individual who becomes a member of the Board subsequent to the date of this
        Agreement whose election, or nomination for election by the Employer's
        shareholders, was approved by a vote of at least a majority of those individuals
        who are members of the Board and who were also members of the Incumbent Board
        (or deemed to be such pursuant to this proviso) shall be considered as though
        such individual were a member of the Incumbent Board; but, provided, further,
        that any such individual whose initial assumption of office occurs as a result
        of either an actual or threatened election contest (as such terms are used
        in
        Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, including
        any
        successor to such Rule), or other actual or threatened solicitation of proxies
        or consents by or on behalf of a Person other than the Board, shall not be
        so
        considered as a member of the Incumbent Board.

      

      (iv) The
        occurrence of any other event or circumstance which is not covered by (i)
        through (iii) above which the Board determines affects control of the Company
        and adopts a resolution that such event or circumstance constitutes a Change
        in
        Control for the purposes of this Agreement.

      
        

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

        

      

      (b) A
        "Good
        Reason"
        for
        termination by Employee of Employee's employment shall mean the occurrence
        (without the Employee's express written consent), within the eighteen (18)
        month
        period following the date of a Change in Control, of any one of the following
        acts by the Employer, or failures by the Employer to act, unless, in the
        case of
        any act or failure to act described in paragraph (i) or (iv) below, such
        act or
        failure to act is corrected within 30 days after notice by the Employee to
        the
        Employer of the act or failure to act:

      

      (i)
        the
        assignment to Employee of any duties inconsistent with Employee's title and
        status set forth herein, or a substantial adverse alteration in the nature
        or
        status of Employee's responsibilities at the Employer from those in effect
        immediately prior to the Change in Control;

      

      (ii)
        a
        substantial reduction by the Employer in Employee's Base Salary;

      

      (iii)
        the
        relocation of Employee's principal office to a place more than 50 miles from
        Atlanta, Georgia;

      

      (iv)
        the
        failure by the Employer to continue in effect any compensation or benefit
        plan
        or program in which Employee participates immediately prior to the Change
        in
        Control, which is material to Employee's total compensation, unless an equitable
        arrangement (embodied in an ongoing substitute or alternative plan) has been
        made with respect to such plan, or the failure by the Employer to continue
        the
        Employee's participation in such plan (or in such substitute or alternative
        plan) on a basis not materially less favorable, both in terms of the amount
        of
        benefits provided and the level of Employee's participation relative to other
        participants, as existed at the time of the Change in Control.

      

      The
        Employee's right to terminate the Employee's employment for Good Reason shall
        not be affected by the Employee's incapacity due to physical or mental illness,
        except for a total disability as defined in Section 2 above. The Employee's
        continued employment shall not constitute consent to, or a waiver of rights
        with
        respect to, any act or failure to act constituting Good Reason
        hereunder.

      

      Section
        4. Partial
        Restraint on Post-termination Competition and Non-Solicitation.

      

      4.1 Definitions.
        For the
        purposes of this Section 4, the following definitions shall apply:

      

      (a) “Company
        Activities” means the business of providing
        fulfillment services, order processing, call center and customer care services,
        technology solutions, e-commerce services including e-commerce fulfillment
        and
        e-commerce return services as well as other similar services that Innotrac
        or
        its subsidiaries is involved in at the date of this agreement.

      
        

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

        

      

      (b) “Competitor”
        means any business, individual, partnership, joint venture, association,
        firm,
        corporation or other entity, other than the Employer or its affiliates or
        subsidiaries, engaged, wholly or partly, in Company Activities. 

      

      (c) “Competitive
        Position” means (i) the direct or indirect ownership or control of all or any
        portion of a Competitor; or (ii) any employment or independent contractor
        arrangement with any Competitor whereby Employee will serve such Competitor
        in
        any managerial capacity.

      

      (d) “Confidential
        Information” means any confidential, proprietary business information or data
        belonging to or pertaining to Employer that does not constitute a “Trade Secret”
(as hereinafter defined) and that is not generally known by or available
        through
        legal means to the public, including, but not limited to, information regarding
        Employer’s customers or actively sought prospective customers, suppliers,
        manufacturers and distributors gained by Employee as a result of his employment
        with Employer.

      

      (e) “Customer”
        means actual customers or actively sought prospective customers of Employer
        during the Term.

      

      (f) “Noncompete
        Period” or “Nonsolicitation Period” means the period beginning the date hereof
        and ending on (i) the first anniversary of the termination of Employee's
        employment with Employer if Employee is not entitled to any payment under
        the
        Retention Plan and (ii) the second anniversary of the termination of
        Employee’s employment with Employer if Employee receives any payment under the
        Retention Plan.

      

      (g) “Territory”
        means the area within a fifty (50) mile radius of any corporate office of
        Employer or any of its subsidiaries, affiliates or divisions. 

      

      (h) “Trade
        Secrets” means information or data of or about Employer, including but not
        limited to technical or non-technical data, formulas, patterns, compilations,
        programs, devices, methods, techniques, drawings, processes, financial data,
        financial plans, products plans, or lists of actual or potential customers,
        clients, distributees or licensees, information concerning Employer’s finances,
        services, staff, contemplated acquisitions, marketing investigations and
        surveys, that (i) derive economic value, actual or potential, from not being
        generally known to, and not being readily ascertainable by proper means by,
        other persons who can obtain economic value from their disclosure or use;
        and
        (ii) are the subject of efforts that are reasonable under the circumstances
        to
        maintain their secrecy.

      

      (i) “Work
        Product” means any and all work product, property, data documentation or
        information of any kind, prepared, conceived, discovered, developed or created
        by Employee for Employer or its affiliates, or any of Employer’s or its
        affiliates’ clients or customers.

      
        

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

        

      

      4.2 Trade
        Name and Confidential Information.
        

      

      (a) Employee
        hereby agrees that (i) with regard to each item constituting all or any portion
        of the Trade Secrets, at all times during the Term and all times during which
        such item continues to constitute a Trade Secret under applicable law; and
        (ii)
        with regard to any Confidential Information, during the Term and the Noncompete
        Period:

      

      (i) Employee
        shall not, directly or by assisting others, own, manage, operate, join, control
        or participate in the ownership, management, operation or control of, or
        be
        connected in any manner with, any business conducted under any corporate
        or
        trade name of Employer or name similar thereto, without the prior written
        consent of Employer; 

      

      (ii) Employee
        shall hold in confidence all Trade Secrets and all Confidential Information
        and
        will not, either directly or indirectly, use, sell, lend, lease, distribute,
        license, give, transfer, assign, show, disclose, disseminate, reproduce,
        copy,
        appropriate or otherwise communicate any Trade Secrets or Confidential
        Information, without the prior written consent of Employer; and

      

      (iii) Employee
        shall immediately notify Employer of any unauthorized disclosure or use of
        any
        Trade Secrets or Confidential Information of which Employee becomes aware.
        Employee shall assist Employer, to the extent necessary, in the procurement
        or
        any protection of Employer’s rights to or in any of the Trade Secrets or
        Confidential Information.

      

      4.3  Noncompetition.

      

      (a) The
        parties hereto acknowledge that Employee is conducting Company Activities
        throughout the Territory. Employee acknowledges that to protect adequately
        the
        interest of Employer in the business of Employer it is essential that any
        noncompete covenant with respect thereto cover all Company Activities and
        the
        entire Territory.

      

      (b) Employee
        hereby agrees that, during the Term and the Noncompete Period, Employee will
        not, in the Territory, either directly or indirectly, alone or in conjunction
        with any other party, accept, enter into or take any action in conjunction
        with
        or in furtherance of a Competitive Position. Employee shall notify Employer
        promptly in writing if Employee receives an offer of a Competitive Position
        during the Noncompete Term, and such notice shall describe all material terms
        of
        such offer.

      

      Nothing
        contained in this Section 4 shall prohibit Employee from acquiring not more
        than
        five percent (5%) of any company whose common stock is publicly traded on
        a
        national securities exchange or in the over-the-counter market.

      
        

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

        

      

      4.4 Nonsolicitation
        of Customers

      

      (a) During
        Employment Term.
        Employee hereby agrees that Employee will not, during the Term, either directly
        or indirectly, alone or in conjunction with any other party solicit, divert
        or
        appropriate or attempt to solicit, divert or appropriate, any Customer for
        the
        purpose of providing the Customer with services or products competitive with
        those offered by Employer during the Term. 

      

      (b) During
        Nonsolicitation Period.
        Employee hereby agrees that Employee will not, during the Nonsolicitation
        Period, either directly or indirectly, alone or in conjunction with any other
        party solicit, divert or appropriate or attempt to solicit, divert or
        appropriate, any Customer for the purpose of providing the Customer with
        services or products competitive with those offered by Employer during the
        Term;
        provided, however, that the covenant in this clause shall limit Employee’s
        conduct only with respect to those Customers with whom Employee had substantial
        contact (through direct, managerial or supervisory interaction with the Customer
        or the Customer’s account) during a period of time up to but no greater than two
        (2) years prior to the last day of the Term.

      

      4.5 Nonsolicitation
        of Employees.
        Employee hereby agrees that Employee will not, during the Term and
        Nonsolicitation Periods, directly or indirectly (i) solicit or actively seek
        to
        hire any employees of the Employer, or
        (ii)
        solicit or encourage any personnel employed by the Employer to terminate
        his or
        her relationship with the Employer.

      

      Section
        5. Miscellaneous.

      

      5.1 Severability.
        The
        covenants in this Agreement shall be construed as covenants independent of
        one
        another and as obligations distinct from any other contract between Employee
        and
        Employer. Any claim that Employee may have against Employer shall not constitute
        a defense to enforcement by Employer of this Agreement.

      

      5.2 Survival
        of Obligations.
        The
        covenants in Section 4 of this Agreement shall survive termination of Employee's
        employment, regardless of who causes the termination and under what
        circumstances.

      

      5.3 Notices.
        Any
        notice or other document to be given hereunder by any party hereto to any
        other
        party hereto shall be in writing and delivered in person or by courier, by
        telecopy transmission or sent by any express mail service, postage or fees
        prepaid at the following addresses: 

      
        

        
          
            
            

          

          
            9

            
              

            

          

          
            
            

        

      

      Employer

      

      Innotrac
        Corporation

      6655
        Sugarloaf Parkway

      Duluth,
        GA 30097

      Attention:
        General Counsel

      

      Employee

      

      Mr.
        Scott
        D. Dorfman

      8241
        Nesbit Ferry Road

      Atlanta,
        GA 30350

      

      or
        at
        such other address or number for a party as shall be specified by like notice.
        Any notice which is delivered in the manner provided herein shall be deemed
        to
        have been duly given to the party to whom it is directed upon actual receipt
        by
        such party or its agent. 

      

      5.4 Section
        409A.
        To the
        extent applicable, this Agreement shall at all times be operated in accordance
        with the requirements of Section 409A of the Internal Revenue Code of 1986,
        as
        amended, including the regulations promulgated thereunder. The Employer shall
        have authority to take action, or refrain from taking any action, with respect
        to the payments and benefits under this Agreement that is reasonably necessary
        to comply with Section 409A. Specifically, the Employer shall have the authority
        to delay the commencement of payments to “specified employees” of the Employer
        to the extent such delay is mandated by the provisions of Section
        409A.

      

      5.5 Binding
        Effect.
        This
        Agreement inures to the benefit of, and is binding upon, Employer and their
        respective successors and assigns, and Employee, together with Employee's
        executor, administrator, personal representative, heirs, and
        legatees.

      

      5.6 Entire
        Agreement.
        This
        Agreement is intended by the parties hereto to be the final expression of
        their
        agreement with respect to the subject matter hereof and is the complete and
        exclusive statement of the terms thereof, notwithstanding any representations,
        statements or agreements to the contrary heretofore made. This Agreement
        may be
        modified only by a written instrument signed by all of the parties hereto.
        

      

      5.7 Governing
        Law.
        This
        Agreement shall be deemed to be made in, and in all respects shall be
        interpreted, construed, and governed by and in accordance with, the laws
        of the
        State of Georgia. No provision of this Agreement shall be construed against
        or
        interpreted to the disadvantage of any party hereto by any court or other
        governmental or judicial authority or by any board of arbitrators by reason
        of
        such party or its counsel having or being deemed to have structured or drafted
        such provision.

      

      5.8 Headings.
        The
        section and paragraph headings contained in this Agreement are for reference
        purposes only and shall not affect in any way the meaning or interpretation
        of
        this Agreement.

      
        

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

        

      

      5.9 Specific
        Performance.
        Each
        party hereto hereby agrees that any remedy at law for any breach of the
        provisions contained in this Agreement shall be inadequate and that the other
        parties hereto shall be entitled to specific performance and any other
        appropriate injunctive relief in addition to any other remedy such party
        might
        have under this Agreement or at law or in equity. 

      

      5.10 Counterparts.
        This
        Agreement may be executed in two or more counterparts, each of which shall
        be
        deemed to be an original but all of which together shall constitute one and
        the
        same instrument.

      

      5.11 Public
        Announcement.
        Neither
        party shall disclose that this Agreement has been executed until such time
        as
        both parties mutually agree to such disclosure.

      

      

      

      IN
        WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
        date
        first above written.

      

                          INNOTRAC
        CORPORATION

      

      

                          By:   /s/
        Martin
        Blank                                                         

       

       

      

      

                          EMPLOYEE

      

      

                          /s/
        Scott D.
        Dorfman                                                         

                          Scott
        D.
        Dorfman

      

         

        11

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