SECOND LIEN TERM LOAN AND SECURITY AGREEMENT

SECOND LIEN TERM LOAN AND SECURITY AGREEMENT

between

INNOTRAC CORPORATION

“Borrower”

and

CHATHAM CREDIT MANAGEMENT III, LLC,

As Agent For

CHATHAM INVESTMENT FUND III, LLC,

CHATHAM INVESTMENT FUND QP III, LLC

And

THE INSTITUTIONS FROM TIME TO TIME

PARTY HERETO,

“Lenders”

AND

CHATHAM CREDIT MANAGEMENT III, LLC, AS ADMINISTRATIVE

"Agent"

Dated: September 28, 2007

SECOND LIEN TERM LOAN AND SECURITY AGREEMENT

THIS SECOND LIEN TERM LOAN AND SECURITY AGREEMENT (as amended, modified or supplemented from time to time, this " Agreement ") made as of September 28, 2007, by and among  CHATHAM CREDIT MANAGEMENT III, LLC, as agent (the “ Agent ”) for CHATHAM INVESTMENT FUND III, LLC (“ Chatham Investment ”) and CHATHAM INVESTMENT FUND QP III, LLC (“ Chatham QP ”) each with an address at 400 Galleria Parkway, Suite 1950, Atlanta, Georgia 30339 (Chatham Investment, Chatham QP and any other financial institutions party hereto from time to time referred to individually as a “ Lender ” and collectively as the “ Lenders ”) and INNOTRAC CORPORATION , a Georgia corporation (" Borrower ").

W I T N E S S E T H :

WHEREAS , the Borrower desires that Lenders extend a term loan facility to the Borrower to repay existing indebtedness, to provide working capital financing for the Borrower, to pay transaction costs and expenses relating to this Agreement and the extension of the Loans and to provide funds for other general corporate purposes of the Borrower;

WHEREAS , the Borrower desires to secure all of its Obligations under the Loan Documents by granting to the Agent, for the benefit of each of the Lending Parties, a second priority security interest in and lien upon all of its assets and personal property;

NOW, THEREFORE , in consideration of the Loans hereafter made to Borrower by the Lenders pursuant hereto, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Borrower, the parties agree as follows:

1.           Definitions . Capitalized terms that are not otherwise defined herein shall have the meanings set forth in this Section 1 .

" Accession " has the meaning set forth in the Code.

" Account " has the meaning set forth in the Code, together with any guaranties, letters of credit, Letter-of-Credit Rights, and other security therefor, including Supporting Obligations.

" Account Debtor " means a Person who is obligated under any Account, Chattel Paper, General Intangible or Instrument.

“ Additional Term Loan ” has the meaning set forth in Section 2.1.4 hereof.

“ Additional Term Notes ” has the meaning set forth in Section 2.1.4 hereof.

" Affiliate " of a Person means (a) any Person directly or indirectly owning 5% or more of the voting stock or equity interests of such named Person or of which the named Person owns 5% or more of such voting stock or equity interests; (b) any Person controlling, controlled by or under common control with such named Person; (c) any officer, director or employee of such named Person or any Affiliate of the named Person; and (d) any family member of the named Person or any Affiliate of such named Person.

" Arbitration Rules " has the meaning set forth in Section 10.17 hereof.

“ Asset Disposition ” means any disposition, whether by sale, lease, transfer, loss, damage, destruction, casualty, condemnation or otherwise (including any such transaction effected by way of merger or consolidation), of any Stock or other property (whether real, personal or mixed) of Borrower, but excluding (a) dispositions of inventory in the ordinary course of business, (b) dispositions of temporary cash investments and cash payments otherwise permitted under this Agreement and (c) dispositions the Net Proceeds of which, in the aggregate for any twelve (12) month period during the Term, do not exceed $100,000.

" Base Rate " means, for any day, the rate per annum equal to the “Base Rate” then in effect under the Senior Loan Agreement. Any change in the Base Rate due to a change in the Base Rate under the Senior Loan Agreement shall be effective on the effective date of the change in such prime rate.

" BellSouth Agreement " means (i) that certain Innotrac Corporation Master Services Agreement No. R13017M, (ii) all letter purchase orders thereunder and (iii) all other contracts between Borrower and BellSouth Corporation relating to the agreement described in clause (i) in this definition, as all of the foregoing may be amended or otherwise modified from time to time.

" Borrower Information Certificate " means a certificate submitted by Borrower to Lenders on or before the Closing Date pursuant to Section 3.1 hereto concerning certain factual information about Borrower, to be substantially in the form of Exhibit 3.1.2 hereto.

" Business Day " means a weekday on which Senior Lender is open for business in Charlotte, North Carolina and Atlanta, Georgia.

“ 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.

“ Capital Lease ” means, with respect to any Person, any lease of any property (whether real, personal or mixed) by such Person as lessee which would, in accordance with GAAP, be required to be accounted for as a capital lease on the balance sheet of such Person.

“ Capital Lease Obligation ” means, with respect to any Capital Lease of any Person, the amount of the obligation of the lessee thereunder that, in accordance with GAAP, would appear on a balance sheet of such lessee in respect of such Capital Lease.

" Chattel Paper " has the meaning set forth in the Code, including Electronic Chattel Paper and Tangible Chattel Paper, together with any guaranties, letters of credit, Letter-of-Credit Rights, and other security therefore, including Supporting Obligations.

" 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.

" Closing Date " means the date on which all of the conditions precedent in Section 3 of this Agreement are satisfied or otherwise waived or postponed by Lenders in writing and the Term Loan is made under this Agreement.

" Code " means the Uniform Commercial Code (or any successor statute), as adopted and in force in the Jurisdiction or, when the laws of any other state govern the method or manner of the perfection or enforcement of any security interest in any of the Collateral, the Uniform Commercial Code (or any successor statute) of such state. Any term used in this Agreement and in any financing statement filed in connection herewith which is defined in the Code and not otherwise defined in this Agreement or in any other Loan Document has the meaning given to the term in the Code.

" Collateral " means all personal property of Borrower, wherever located and whether now owned by Borrower or hereafter acquired, including but not limited to: (a) all Inventory; (b) all General Intangibles; (c) all Accounts; (d) all Chattel Paper; (e) all Instruments and Documents and any other instrument or intangible representing payment for goods or services; (f) all Equipment; (g) all Investment Property; (h) all Commercial Tort Claims; (i) all Letter-of-Credit Rights; (j) all Deposit Accounts and funds on deposit therein, including but not limited to any Disbursements Account and Collection Accounts or funds otherwise on deposit with or under the control of any of Borrower’s banks; (k) all Fixtures; and (l) all parts, replacements, substitutions, profits, products, Accessions and cash and non-cash Proceeds and Supporting Obligations of any of the foregoing (including, but not limited to, insurance proceeds) in any form and wherever located. Collateral shall include all written or electronically recorded books and records relating to any such Collateral and other rights relating thereto.

" Collateral Location " means any location where Collateral is located, as identified and certified by Borrower on the Borrower Information Certificate.

“ Collections Account ” means that certain account of Agent, account number 4121039986 in the name of Agent at Wells Fargo Bank, N.A. in San Francisco, CA 94104, ABA No. 121000248, Ref: Innotrac Corporation or such other account as may be specified in writing by Agent as the “Collection Account.”

" Commercial Tort Claim " has the meaning set forth in the Code.

" Control Agreements " means any and all Deposit Account Control Agreements and Securities Account Control Agreements, including without limitation, the Wachovia Deposit Account Control Agreement and the Dorfman Securities Account Control Agreement.

" Debt " means all liabilities of a Person as determined under GAAP and all obligations which such Person has guaranteed or endorsed or is otherwise secondarily or jointly liable for, and shall include, without limitation (a) all obligations for borrowed money or purchased assets, (b) obligations secured by assets whether or not any personal liability exists, (c) the capitalized amount of any capital or finance lease obligations, (d) the unfunded portion of pension or benefit plans or other similar liabilities, (e) obligations as a general partner, (f) contingent obligations pursuant to guaranties, endorsements, letters of credit and other secondary liabilities, (g) obligations for deposits, and (h) obligations under Swap Agreements.

" Default " has the meaning set forth in the definition of Event of Default.

" Default Rate " means, on any date, with respect to the Loans and other Obligations, a rate per annum that is equal to 2.0 % in excess of the rate otherwise applicable to the Loans on such date.

" Deposit Account " has the meaning set forth in the Code.

" Deposit Account Control Agreement " means an agreement providing to Agent, for the benefit of each of the Lending Parties, “control” (as defined in the Code) over the Deposit Accounts of the Borrower constituting a second priority perfected lien, in form and substance satisfactory to the Lenders in all respects, as amended or otherwise modified from time to time.

" Disbursements Account " means any Deposit Account maintained by Borrower with a bank for the purpose of depositing the proceeds of the Loans made pursuant hereto.

" Document " has the meaning set forth in the Code.

" Dorfman Guaranty Agreement " means that certain Guaranty Agreement, dated as of the date hereof, executed and delivered by Scott D. Dorfman in favor of Agent, for the benefit of each of the Lending Parties, as amended or otherwise modified from time to time.

" Dorfman Pledged Collateral " has the meaning set forth in the Dorfman Pledge Agreement.

" Dorfman Pledge Agreement " means that certain Guarantor Pledge Agreement, dated as of the date hereof, executed and delivered by Scott D. Dorfman in favor of Agent, for the benefit of each of the Lending Parties, as amended or otherwise modified from time to time.

" EBITDA " means, for any applicable period, the sum of (A) the consolidated net income of Borrower and its Subsidiaries for such period (computed without regard to any extraordinary items of gain or loss as determined on the basis of GAAP) 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, and (3) depreciation and amortization.

“ Effective Interest Rate ” has the meaning set forth in Section 2.3.1 hereof.

" Environmental Laws " means, collectively the following acts and laws, as amended: the Comprehensive Environmental Response, Compensation and Liability Act of 1980; the Superfund Amendments and Reauthorization Act of 1986; the Resource Conservation and Recovery Act; the Toxic Substances Act; the Clean Water Act; the Clean Air Act; the Oil Pollution and Hazardous Substances Control Act of 1978; and any other "Superfund" or "Superlien" law or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree relating to, or imposing liability or standards of conduct concerning, any hazardous, toxic or dangerous waste, substance or material, as now or at any time hereafter in effect.

" Equipment " has the meaning set forth in the Code.

" ERISA " has the meaning set forth in Section 4.17 hereof.

" Eurodollar Reserve Percentage " means, for any day, the percentage (expressed as a decimal and rounded upwards, if necessary, to the next higher 1/100th of 1%) which is in effect for such day as prescribed by the Federal Reserve Board (or any successor) for determining the maximum reserve requirement (including without limitation any basic, supplemental or emergency reserves) in respect of eurocurrency liabilities or any similar category of liabilities for a member bank of the Federal Reserve System in New York City.

" Event of Default " means any event specified as such in Section 8.1 hereof (" Events of Default "), provided that there shall have been satisfied any requirement in connection with such event for the giving of notice or the lapse of time, or both; " Default " or "default" means any of such events, whether or not any such requirement for the giving of notice or the lapse of time or the happening of any further condition, event or act shall have been satisfied.

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

" Financial Covenants " means the covenants set forth in Section 7 hereof.

" Fixed Charge Coverage Ratio " means a ratio, computed as of the last day of each fiscal month of Borrower for the immediately preceding twelve (12) month trailing period, calculated as follows: (i) EBITDA, plus rent expense incurred during such period less the sum of (A) all unfinanced Capital Expenditures made in such period, and (B) any dividends and distributions paid in such period and (C) cash taxes paid in such 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 (excluding the repayment of the Obligations), plus (B) cash interest payments paid in such period, plus (C) Pro-Forma Term Loan Interest plus (D) rent expense paid during such period plus (E) all cash payments made by Borrower during such 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).

" Fixtures " has the meaning set forth in the Code.

“ Funded Debt ” means, with respect to any Person, without duplication, (a) all Debt for borrowed money and (b) all Debt evidenced by notes, bonds, debentures or similar instruments, or upon which interest payments are customarily made, in each case, that by its terms matures more than one (1) year from, or is directly or indirectly renewable or extendible at such Person’s option under a revolving credit or similar agreement obligating the lender or lenders to extend credit over a period of more than one (1) year from, the date of creation thereof, and specifically including, without limitation, Capital Lease Obligations, current maturities of long-term debt, revolving credit and short-term debt extendible beyond one (1) year at the option of the debtor, and also including, in the case of the Borrower, the Obligations the Senior Loan Obligations and, without duplication, Guaranteed Obligations in respect of Funded Debt of other Persons.

" Funding Direction Letter " means the written request for the Term Loan as identified in Section 3.1.2(o) hereof.

" GAAP " means generally accepted accounting principles as in effect in the United States from time to time.

" General Intangibles " has the meaning set forth in the Code, and includes, without limitation, general intangibles of Borrower, whether now owned or hereafter created or acquired by Borrower, including all choses in action, causes of action, company or other business records, inventions, blueprints, designs, patents, patent applications, trademarks, trademark applications, trade names, trade secrets, service marks, goodwill, brand names, copyrights, registrations, licenses, franchises, customer lists, permits, tax refund claims, computer programs, operational manuals, internet addresses and domain names, insurance refunds and premium rebates, all claims under guaranties, security interests or other security held by or granted to Borrower to secure payment of any of any of Borrower's Accounts by an Account Debtor, all rights to indemnification and all other intangible property of Borrower of every kind and nature (other than Accounts).

“ Guaranteed Obligations ” means, with respect to any Person, without duplication, any obligation of such Person guaranteeing, providing comfort or otherwise supporting any Indebtedness, lease, dividend, or other obligation (“ primary obligation ”) of any other Person (the “ primary obligor ”) in any manner, including any obligation or arrangement of such Person to (a) purchase or repurchase any such primary obligation, (b) advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency or any balance sheet condition of the primary obligor, (c) purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, (d) protect the beneficiary of such arrangement from loss (other than product warranties given in the ordinary course of business) or (e) indemnify the owner of such primary obligation against loss in respect thereof; provided that the term Guaranteed Obligations shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guaranteed Obligations at any time shall be deemed to be an amount equal to the lesser at such time of (x) the stated or determinable amount of the primary obligation in respect of which such Guaranteed Obligations is incurred and (y) the maximum amount for which such Person may be liable pursuant to the terms of the instrument embodying such Guaranteed Obligations, or, if not stated or determinable, the maximum reasonably anticipated liability (assuming full performance) in respect thereof.

" Guarantor " means Scott Dorfman and any other Person now or hereafter guaranteeing, endorsing or otherwise becoming liable for any Obligations.

" Guaranty Agreement " means the Dorfman Guaranty Agreement and any other guaranty of all or any Obligations now or hereafter executed and delivered by any Guarantor to Lenders, as amended or otherwise modified from time to time.

" Instrument " has the meaning set forth in the Code.

“ Interest Payment Date ” means the first Business Day of each month to occur while the Loans are outstanding.

“ Intercreditor Agreement ” means that certain Intercreditor Agreement by and among the Agent, for the benefit of each of the Lending Parties, the Senior Lender, and Borrower, dated as of the date hereof.

" Inventory " has the meaning set forth in the Code.

" Investment Property " has the meaning set forth in the Code.

" Item " means any "item" as defined in Section 4-104 of the Code, and shall also mean and include checks, drafts, money orders or other media of payment.

" Jurisdiction " means the State of Georgia.

" Lending Party " means the Agent or any Lender; and “ Lending Parties ” means the Agent and the Lenders.

" LIBOR " means, with respect to the Loans, the rate of interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for one (1) month Dollar deposits as of 11:00 A.M. (London time); provided, however, if more than one (1) rate is specified on Telerate Page 3750, the applicable rate shall be the arithmetic mean of all such rates. If, for any reason, such rate is not available, then it shall mean with respect to any Loan, the rate of interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for one (1) month Dollar deposits as of 11:00 A.M. (London time); provided, however, if more than one (1) rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates.

" LIBOR Rate " means a rate per annum (rounded upwards, if necessary, to the next higher 1/100th of 1%) determined by Lenders pursuant to the following formula:

" Lien " means any mortgage, deed of trust, deed to secure debt, pledge, statutory lien or other lien arising by operation of law, security interest, trust arrangement, security deed, financing lease, collateral assignment or other encumbrance, conditional sale or title retention agreement, or any other interest in property designed to secure the repayment of obligations, whether arising by agreement or under any statute or law or otherwise.

" Loans " means the Term Loan and the Additional Term Loans made by the Lenders as provided in Section 2.1 hereof.

" Loan Documents " means this Agreement, each other Security Agreement, the Notes, each Guaranty Agreement, the Borrower Information Certificate, UCC financing statements and all other documents and instruments now or hereafter evidencing, describing, guaranteeing or securing the Obligations contemplated hereby or delivered in connection herewith, as they may be modified, amended, extended, renewed or substituted from time to time.

" Material Adverse Effect " means any (i) material adverse effect upon the validity, performance or enforceability of any of the Loan Documents or any of the transactions contemplated hereby or thereby, (ii) material adverse effect upon the properties, business, prospects or condition (financial or otherwise) of Borrower and/or any other Person obligated under any of the Loan Documents, (iii) material adverse effect upon the ability of Borrower or any other Person to fulfill any obligation under any of the Loan Documents, or (iv) material adverse effect on the Collateral.

" Material Agreement " means (a) the BellSouth Agreement, (b) the Target.com Agreement, and (c) all other agreements to which Borrower or any Guarantor is a party (other than the Loan Documents) (i) which is deemed to be a material contract as provided in Regulation S-K promulgated by the Securities and Exchange Commission under the Securities Act of 1933 or (ii) for which breach, termination, cancellation, nonperformance or failure to renew could reasonably be expected to have a Material Adverse Effect.

“ Net Proceeds ” means the aggregate cash proceeds received by any Person as a result of any of the transactions described in Section 2.4.1(b) (the “ Subject Transactions ”) hereof (including insurance proceeds and awards of compensation received with respect to the destruction or condemnation of all or part of such property) net of (a) direct costs of such Subject Transactions (including legal, accounting, underwriting and investment banking fees, and sales commissions, if any), (b) taxes paid or payable in connection with such Subject Transactions, (c) in connection with an Asset Disposition, amounts required to be applied to indebtedness permitted hereunder secured by a Permitted Lien on the assets sold or otherwise disposed of to the extent such Permitted Lien is senior to the Lien of the Agent, and (d) in connection with any Asset Disposition, a reasonable reserve (not to exceed 5% of the total purchase price) for post-closing adjustments to the purchase price, provided that upon the expiration of not more than ninety (90) days after the sale, any remaining reserve balance is remitted to Lenders for application to the Obligations. “Net Cash Proceeds” shall also include any cash received upon the sale or other disposition of any non-cash consideration received by the Borrower in any Asset Disposition

" Notes " shall mean the Term Note, any Additional Term Notes and any other promissory note now or hereafter evidencing any Obligations, and all amendments, modifications, extensions and renewals thereof.

" OFAC " means the United States Department of the Treasury's Office of Foreign Assets Control or any successor thereto.

“ Obligations ” means the Loans and all fees, indebtedness, liabilities, obligations, covenants and duties of Borrower or any Guarantor to the Lenders or the Agent of every kind, nature and description, direct or indirect, absolute or contingent, due or not due, in contract or tort, liquidated or unliquidated, arising under this Agreement, or under the other Loan Documents, by operation of law or otherwise in connection with the transactions contemplated hereby, now existing or hereafter arising, and whether or not for the payment of money or the performance or non-performance of any act, including, but not limited to, all damages that Borrower or any Guarantor may owe to the Lending Parties by reason of any breach by Borrower or any Guarantor of any representation, warranty, covenant, agreement or other provision of this Agreement or any of the other Loan Documents. Without limiting the generality of the foregoing, this term includes all principal, interest (including all interest that accrues after the commencement of any case or proceeding by or against Borrower or any Guarantor in bankruptcy, whether or not allowed in such case or proceeding), fees, charges, expenses, attorneys’ fees and any other sum payable by Borrower or any Guarantor to a Lending Party under this Agreement or any of the other Loan Documents.

" Permitted Debt " has the meaning set forth in Section 6.1 hereof.

" Permitted Liens " has the meaning set forth in Section 6.2 hereof.

" Person " means any natural person, corporation, unincorporated organization, trust, joint stock company, joint venture, association, company, limited or general partnership, limited liability company, any government or any agency or political subdivision of any government, or any other entity or organization.

“ PIK Amount ” has the meaning set forth in Section 2.1.4(a) hereof.

“ PIK Period ” has the meaning set forth in Section 2.1.4(a) hereof.

“ Prefunded Interest ” has the meaning set forth in Section 2.1.4 hereof.

" Proceeds " has the meaning set forth in the Code.

“ Pro-Forma Term Loan Interest ” means, for any applicable period, an amount equal to (a) the amount of the Loans multiplied by the then effective rate of interest on the Loans less (b) the amount of cash interest payments paid in such period with respect to the Loans.

" Projections " has the meaning set forth in Section 5.6(g) hereof.

" Properly Contested " means, in the case of any Debt of Borrower or any Guarantor (including any taxes) that is not paid as and when due or payable by reason of Borrower's or such Guarantor's bona fide dispute concerning its liability to pay same or concerning the amount thereof, (i) such Debt is being properly contested in good faith by appropriate proceedings promptly instituted and diligently conducted; (ii) Borrower or such Guarantor has established appropriate reserves as shall be required in conformity with GAAP; (iii) the non-payment of such Debt will not have a Material Adverse Effect and will not result in a forfeiture or sale of any assets of Borrower or such Guarantor; (iv) no Lien is imposed upon any of Borrower's or such Guarantor's assets with respect to such Debt unless such Lien is at all times junior and subordinate in priority to the Liens in favor of Lenders (except only with respect to property taxes that have priority as a matter of applicable state law) and enforcement of such Lien is stayed during the period prior to the final resolution or disposition of such dispute; (v) if the Debt results from, or is determined by the entry, rendition or issuance against Borrower or such Guarantor or any of its assets of a judgment, writ, order or decree, enforcement of such judgment, writ, order or decree is stayed pending a timely appeal or other judicial review; and (vi) if such contest is abandoned, settled or determined adversely (in whole or in part) to Borrower or such Guarantor, Borrower or such Guarantor forthwith pays such Debt and all penalties, interest and other amounts due in connection therewith.

" Regulated Materials " means any hazardous, toxic or dangerous waste, substance or material, the generation, handling, storage, disposal, treatment or emission of which is subject to any Environmental Law.

" Sanctioned Country " means a country subject to the sanctions program identified on the list maintained by OFAC and available at http://www.treas.gov/offices/eotffc/ofac/sanctions/index.html or as otherwise published from time to time.

" Sanctioned Person " means (i) a Person named on the list of Specially Designated Nationals or Blocked Persons maintained by OFAC available at http://www.treas.gov/offices/eotffc/ofac/sdn/ index.html or as otherwise published from time to time, or (ii) (A) an agency of the government of a Sanctioned Country, (B) an organization controlled by a Sanctioned Country, or (C) a Person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC.

" Security Agreement " means this Agreement as it relates to a security interest in the Collateral, the Control Agreements, the Dorfman Pledge Agreement, and any other mortgage instrument, security agreement or similar instrument now or hereafter executed by Borrower or other Person granting Lenders a security interest in any Collateral to secure the Obligations, as each may be amended or otherwise modified from time to time.

“ Senior Loan Obligations ” means the revolving credit loans and related liabilities and obligations of Borrower under the Senior Loan Agreement.

“ Senior Loan Agreement ” means that certain Loan and Security Agreement, dated as of the March 28, 2006, between the Senior Lender and the Borrower, as the same has been amended and as may be further amended, modified and/or restated from time to time according to the terms of the Intercreditor Agreement.

“ Senior Loan Documents ” means the “Loan Documents” as defined in the Senior Loan Agreement.

“ Senior Lender ” means Wachovia Bank, National Association, and its successors and assigns.

" Senior Officer " means the chairman of the board of directors, the president or the controller of, or in-house legal counsel to, Borrower.

" Solvent " means, as to any Person, that such Person has capital sufficient to carry on its business and transactions in which it is currently engaged and all business and transactions in which it is about to engage, is able to pay its debts as they mature, and has assets having a fair value greater than its liabilities, at fair valuation.

“ Stock ” means all shares, options, warrants, general or limited partnership interests, membership interests or other equivalents (regardless of how designated) of or in a corporation, partnership, limited liability company or equivalent entity whether voting or nonvoting, including common stock, preferred stock or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Exchange Act).

" Subsidiary " means any corporation, partnership or other entity in which Borrower, directly or indirectly, owns more than fifty percent (50%) of the stock, capital or income interests, or other beneficial interests, or which is effectively controlled by such Person.

" Supporting Obligation " has the meaning set forth in the Code.

" Swap Agreement " has the meaning for swap agreement as defined in 11 U.S.C. § 101, as in effect from time to time, or any successor statute, and includes, without limitation, any rate swap agreement, forward rate agreement, commodity swap, commodity option, interest rate option, forward foreign exchange agreement, spot foreign exchange agreement, rate cap agreement, rate floor agreement, rate collar agreement, currency swap agreement, cross-currency rate swap agreement, currency option and any other similar agreement.

" Tangible Chattel Paper " has the meaning set forth in the Code.

" Term " means the period from and including the Closing Date to but not including the Termination Date.

" Termination Date " means the earliest of (i) March 1, 2009, (ii) the date on which Borrower terminates this Agreement and the credit facilities provided hereunder pursuant to Section 2.8 hereof, and (iii) the date on which Lenders accelerates the Obligations and terminates this Agreement and the other Loan Documents pursuant to Section 8.2(a) hereof.

" Term Loan Commitment " means the commitment of Lenders, subject to the terms and conditions herein, to make the Term Loan in accordance with the provisions of Section 2 hereof in an aggregate amount of $5,000,000.

" Term Note " has the meaning set forth in Section 2.1.3 hereof.

" Third Party Waiver " means a waiver or subordination of Liens satisfactory to the Lending Parties from any lessors, mortgages, warehouse operators, processors or other third parties (other than the Senior Lender) that might have lien holders' enforcement rights against any Collateral, waiving or subordinating those rights in favor of Lenders and assuring Lenders’ access to the Collateral in exercise of Lenders’ rights hereunder.

" USA Patriot Act " means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, as amended.

" Wachovia Deposit Account Control Agreement " means an agreement with Senior Lender providing to Agent, for the benefit of each of the Lending Parties, “control” (as defined in the Code) over the Deposit Accounts of the Borrower, in form and substance satisfactory to the Lenders in all respects, as amended or otherwise modified from time to time.

1.2         Financial Terms . All financial terms used herein shall have the meanings assigned to them under GAAP unless another meaning shall be specified.

2.1.1     The Term Loan . Subject to the terms and conditions hereof and in reliance upon the representations and warranties set forth herein Lenders agree to make available to the Borrower on the Closing Date a term loan in an amount equal to the Term Loan Commitment for the purposes hereinafter set forth (the “ Term Loan ”). The Term Loan is not revolving in nature and any portion of the Term Loan that is repaid or prepaid may not be reborrowed.

2.1.2      Use of Proceeds . The proceeds of the Term Loan shall be used solely by Borrower for the following purposes: to repay existing indebtedness, to provide working capital financing for the Borrower, to pay transaction costs and expenses relating to this Agreement and the extension of the Term Loan and to provide funds for other general corporate purposes of the Borrower.

2.1.3     Term Note . The Term Loan shall be evidenced by one or more subordinated term notes substantially in the form of Exhibit A-1 hereto (the “ Term Note ”), dated the Closing Date in a principal amount equal to the Term Loan Commitment, duly executed and delivered by the Borrower and payable to Agent, for the benefit of the Lenders.

2.1.4     Additional Term Loans . In accordance with the terms and conditions set forth below, certain of the interest on the Loans shall be paid and funded by accruing and capitalizing a principal amount equal to such interest by adding such amount to the outstanding balance of the Loans (collectively “ Prefunded Interest ”) or funded in advance by issuing one or more additional subordinated term notes (the “ Additional Term Notes ”; and such indebtedness together with the Prefunded Interest, the “ Additional Term Loans ”). The Additional Term Notes shall be substantially in the form of Exhibit A-2 hereto, shall be dated the date of issuance, duly executed and delivered by the Borrower and payable to Agent, for the benefit of the Lenders.

(i)        Notwithstanding anything to the contrary herein, interest on the Loans for the period from the Closing Date through and including December 31, 2007 (the “ PIK Period ”) shall be accrued and capitalized on a monthly basis by adding an amount equal to the interest for each month of the PIK Period (the “ PIK Amount ”) to the outstanding balance of the Loans and shall constitute an Additional Term Loan payable in accordance with the terms of clause (ii) of this Section 2.1.4 .

(ii)       On January 1, 2008, the PIK Amount shall be paid, at Borrower’s option, (A) by wire transfer of immediately available funds to the Collections Account, or (B) by the issuance to Agent, for the benefit of the Lenders, of an Additional Term Note in a principal amount equal to the PIK Amount plus interest thereon at the Effective Rate for the PIK Period (the “ Additional Term Loan I ”). If the Borrower elects to pay the PIK Amount in accordance with the terms set forth therein by the issuance of an Additional Term Note, the aggregate outstanding principal balance of the Additional Term Loan I, together with all accrued and unpaid interest thereon, including, without limitation, any Default Interest if applicable, shall be due and payable in full on the date set forth in the Additional Term Note or if not stated therein, on March 1, 2009, if not sooner paid.

(b)        2008 Prefunded Interest . On January 1, 2008, Borrower shall prepay interest on the Loans for the period from January 1, 2008 to and including June 30, 2008 (the “ 2008 Prefunded Interest ”) which interest (i) shall be fully earned and non-refundable on January 1, 2008, and (ii) shall be paid by the issuance to Agent, for the benefit of the Lenders, of an Additional Term Note in a principal amount equal to the 2008 Prefunded Interest (the “ Additional Term Loan II ”). The aggregate outstanding principal balance of the Additional Term Loan II, together with all accrued and unpaid interest thereon including, without limitation, any Default Interest if applicable, shall be due and payable in full on the date set forth in the Additional Term Note or, if not stated therein, on March 1, 2009, if not sooner paid.

(c)         Additional Prefunded Interest . Thereafter, upon the occurrence of a payment Event of Default hereunder (“ Payment Default ”) or an Event of Default under the Senior Loan Documents which default results in a block by the Senior Lender of payments of interest or principal on the Loans by Borrower to the Agent pursuant to the terms of the Senior Loan Documents (“ Senior Blockage Default ”), Borrower shall, promptly upon the request of Lender, prepay interest by executing and delivering to Lender an Additional Term Note for an amount of up to six (6) months of interest on the Loans, which interest shall be fully earned and non-refundable on the date of the issuance of the such Additional Term Note. The aggregate outstanding principal balance of any such Additional Term Loans, together with all accrued and unpaid interest thereon including, without limitation, any Default Interest, if applicable, shall be due and payable in full on the date set forth in the Additional Term Note or, if not stated therein, on March 1, 2009, if not sooner paid.

2.2.1     Lockbox; Collections Account . Upon the payment in full of the Senior Loan Obligations and the termination of the Senior Loan Agreement, Borrower will immediately deposit all payments received by Borrower with respect to the Collateral in the identical form in which such payments were received, whether by cash or check, directly into an account (the “ Controlled Account ” ) with a financial institution acceptable to the Agent. If any Affiliate, any shareholder, officer, director, employee or agent of Borrower or any Affiliate, or any other Person acting for or in concert with Borrower shall receive any monies, checks, notes, drafts or other payments relating to or as proceeds of Collateral, each such Person shall receive all such items in trust for, and as the sole and exclusive property of, Agent and, immediately upon receipt thereof, shall remit the same (or cause the same to be remitted) in kind to the Controlled Account. Agent shall have the right to directly contact Account Debtors at any time to ensure that payments on the Accounts are directed to the Controlled Account. Each financial institution with which a Controlled Account is established shall enter execute and deliver a Deposit Account Control Agreement pursuant to which it acknowledges and agrees, in a manner satisfactory to Agent, that, among other things (a) the amounts on deposit in such Controlled Account are under the dominion and control of, and the financial institution holds such amounts as agent or bailee-in-possession for, Agent, for the benefit of the Lending Parties, (b) such financial institution will follow the instructions of Agent with respect to disposition of funds in the Controlled Account without further consent from Borrower, (c) such financial institution has no right to setoff against the Controlled Account or against any other account maintained by such financial institution into which the contents of the Controlled Account are transferred, other than with respect to standard fees and other charges relating to the administration of such account and for returned checks and similar items, and (d) that such financial institution, upon instructions from Agent in accordance with the terms of the Deposit Account Control Agreement, shall not permit Borrower or any Person through or under Borrower to use or withdraw funds from the Controlled Account and shall wire, or otherwise transfer, in immediately available funds to Agent in a manner satisfactory to Agent, funds deposited in the Controlled Account on a daily basis as such funds are collected. Borrower agrees to pay all fees, costs and expenses in connection with opening and maintaining the Controlled Account. All of such fees, costs and expenses if not paid by Borrower, may be paid by Agent and in such event all amounts paid by Agent shall constitute Liabilities hereunder, shall be payable to Agent by Borrower upon demand, and, until paid, shall bear interest at the highest rate then applicable to Loans hereunder. Borrower hereby grants to Lenders a security interest in and lien upon all items and balances held in any Controlled Account and the Disbursements Account as Collateral for the Obligations, in addition to and cumulative with the general security interest in all assets of Borrower (including all Deposit Accounts) contained in Section 9.1 hereof. Upon the request of the Agent at any time, Borrower shall notify and direct all Account Debtors to forward all payments on Accounts to a lockbox under Agent’s control from which all items of payment will be automatically deposited into the Collections Account.

2.2.2     Power of Attorney . Subject to the Intercreditor Agreement, Borrower hereby irrevocably appoints each of the Lending Parties (and any duly authorized Person designated by any Lending Party) as Borrower's attorney-in-fact to endorse Borrower's name on any checks, drafts, money orders or other media of payment which come into Lenders’ possession or control; this power being coupled with an interest is irrevocable so long as any of the Obligations remain outstanding. Such endorsement by Lenders under power of attorney shall, for all purposes, be deemed to have been made by Borrower (prior to any subsequent endorsement by Lenders) in negotiation of the item.

2.2.3     Application of Payments . Payment items received into the Collections Account shall be applied by Lenders on account of the Loans on the Business Day after deposited by Borrower, subject to chargebacks for uncollected payment items. No payment item received by Lenders shall constitute payment to Lenders until such item is actually collected by Lenders and credited to the Collections Account; provided , however , that Lenders shall have the right to charge back to the Borrower or any Deposit Account of Borrower an item which is returned for inability to collect, plus accrued interest during the period of Lenders’ provisional credit for such item prior to receiving notice of dishonor.

2.3.1     Interest . Borrower agrees to pay interest in respect of the unpaid principal amount of the Loans from the respective dates such principal amounts are advanced until paid (whether at stated maturity, on acceleration or otherwise) at a rate per annum (the “ Effective Interest Rate ”) equal to (a) the greater of (i) the LIBOR Rate or (ii) 5.75% plus (b) 9.25%; provided , however , that if, for any reason, LIBOR is not available, then Borrower agrees to pay interest in respect of the unpaid principal amount of the Loans at a rate per annum equal to (y) the greater of (i) the Base Rate or (ii) 8.25% plus (z) 6.75%. The Effective Interest Rate shall be adjusted daily as applicable to reflect the LIBOR then in effect; provided that if the Base Rate is the Effective Interest Rate then the interest rate shall be adjusted from time to time, effective as of the date of each change in the Base Rate, and the Base Rate shall continue to apply until LIBOR is available.

2.3.2     Default Rate . During the period that any Event of Default shall have occurred and be continuing, all Loans and other outstanding Obligations shall, at the option of the Lender bear interest at the Default Rate. The Default Rate shall apply from the date of such Event of Default until such Event of Default is waived or cured or all of the Obligations are paid in full.

2.3.3     Interest Payments . Subject to Section 2.1.4 hereof, interest due pursuant to this Agreement shall be payable in arrears (i) in the case of the Loans, on each Interest Payment Date and on the Termination Date, and (ii) in the case of any other Obligation, when any portion of such Obligation shall be due (whether at maturity, by reason of prepayment or acceleration or otherwise). Interest at the Default Rate shall be payable on demand.

(a)         Maturity of Obligations . Obligations, other than principal and interest on the Loans, shall be payable by Borrower upon demand. The entire outstanding principal amount of the Loans, together with all accrued and unpaid interest thereon, and any remaining unpaid Obligations shall become due and payable in full on the Termination Date.

(b)        Dispositions and Debt Issuances . Subject to the Intercreditor Agreement, upon receipt by the Borrower of the Net Proceeds of any (i) Asset Disposition, (ii) issuance or sale of any Stock of Borrower or any Stock of the Subsidiary of Borrower (other than (1) proceeds from the issuance of Stock to employees of the Borrower pursuant to an employee stock option plan, and (2) proceeds of the issuance of Stock to the Borrower or any Subsidiary of the Borrower) or (iii) issuance or incurrence of any Funded Debt (other than under the Senior Loan Agreement), Borrower shall immediately prepay an aggregate principal amount of the Loans equal to one hundred percent (100%) of all such Net Proceeds.

2.4.2     Time and Location of Payment . Borrower shall make each payment of principal of and interest on the Loans and fees hereunder not later than 2:00 p.m. (local time Atlanta, Georgia) on the date when due, without set off, counterclaim or other deduction, in immediately available funds to the Collections Account. Whenever any payment of principal of, or interest on, the Loans or of fees shall be due on a day which is not a Business Day, the date for payment thereof shall be extended to the next succeeding Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest thereon shall be payable for such extended time.

2.4.3     Capital Requirements . If either (a) the introduction of, or any change in, or in the interpretation of, any applicable law or (b) compliance with any guideline or request from any central bank or comparable agency or other governmental authority (whether or not having the force of law), has or would have the effect of reducing the rate of return on the capital of, or has affected or would affect the amount of capital required to be maintained by Lenders or any corporation controlling Lenders as a consequence of, or with reference to, the Loans, below the rate which Lenders could have achieved by for such introduction, change or compliance, then within five (5) Business Days after written demand by Lenders, Borrower shall pay to Lenders from time to time as specified by Lenders additional amounts sufficient to compensate Lenders or such other corporation for such reduction. A certificate as to such amounts submitted to Borrower by Lenders shall, in the absence of manifest error, be presumed to be correct and binding for all purposes.

2.5         Calculation of Interest . All fees and other charges provided for in this Agreement that are calculated as a per annum percentage of any amount and all interest shall be calculated daily and shall be computed on the actual number of days elapsed over a year of 360 days. For purposes of computing interest and other charges hereunder, all payment items and other forms of payment received by Lenders shall be deemed applied by Lenders on account of the Obligations (subject to final payment of such items) on the first Business Day after Lenders receive such items in immediately available funds in the Collections Account. Each determination by Lenders of interest and fees hereunder shall be presumptive evidence of the correctness of such interest and fees.

2.6         Fees . Borrower shall pay to Lenders the following fees at the times specified for payment below:

2.6.1     Facility Fee . An annual facility fee equal with respect to the Term Loan Commitment (the “ Facility Fee ”) paid annually, in advance, in an amount equal to (a) on the Closing Date, 3% of the Term Loan Commitment and (b) on the first (1 ^st )anniversary of the Closing Date, 1.25% of the Term Loan Commitment. Each installment of the Facility Fee shall be fully earned and non-refundable when payable.

2.6.2     Success Fee . A success fee due and payable in two (2) installments as follows: (a) the first installment of $125,000.00, which shall be fully earned and non-refundable on the Closing Date, shall be due and payable on the first (1st) anniversary of the Closing Date, and (b) the second (2 ^nd ) installment of $52,100, which shall be fully earned and non-refundable on the first (1 ^st ) anniversary of the Closing Date, shall be due and payable on the Termination Date.

2.6.3     Early Termination Fee . In the event that the Borrower prepays or is required pursuant to the terms hereof to prepay all of any portion of the prior to the three (3) month anniversary of the Closing Date, a fee in an amount equal to (a) the amount of the Loans so prepaid multiplied by (b) a percentage equal to (i) the rate of interest per annum then applicable to the Loans multiplied by (ii) a fraction, the numerator of which is the number of days from the date that the Borrower so prepays the Loans to and including the date of the three (3) month anniversary of the Closing Date, and the denominator of which is 360. If such prepayment shall occur after the three (3) month anniversary of the Closing Date, no Early Termination Fee shall be payable. The Early Termination Fee