Exhibit 10.4
LOAN DOCUMENTS MODIFICATION AGREEMENT
THIS LOAN DOCUMENTS MODIFICATION AGREEMENT (hereinafter referred to as this
"Amendment") is made and entered into as of the 20th day of May, 2005, by and
among INNOTRAC CORPORATION, a Georgia corporation and iFULFILLMENT, Inc., a
Georgia corporation (hereinafter collectively referred to as "Borrowers"), and
WACHOVIA BANK, NATIONAL ASSOCIATION, successor by merger to SOUTHTRUST BANK, an
Alabama banking corporation (hereinafter referred to as "Lender").
BACKGROUND STATEMENT
Borrowers and Lender are parties to that certain Third Second Amended and
Restated Line of Credit Note dated May 10, 2004, made by Borrowers to the order
of Lender in the original principal amount of Twenty Five Million and No/100
Dollars ($25,000,000.00), as modified by the parties from time-to-time
(hereinafter referred to as the "Note", and the loan evidenced thereby as the
"Loan"). The Note is secured by that certain (a) Second Amended and Restated
Loan and Security Agreement by and between Borrowers and Lender dated as of
April 3, 2003, as subsequently modified by the parties from time-to-time (the
"Loan Agreement"), and (b) any and all other documents related to the
aforementioned documents, as subsequently modified by the parties from
time-to-time (hereinafter collectively referred to as the "Loan Documents").
Borrowers and Lender have agreed to amend the Loan Agreement, to modify all of
the other Loan Documents to reflect the same, and the parties hereto are
entering into this Amendment to evidence their agreements.
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, Borrowers and Lender do hereby
agree as follows:
1. MODIFICATION OF LOAN AGREEMENT. As of the date hereof, the
representations and warranties set forth in the Loan Agreement are hereby
affirmed to be true and correct as of the date hereof. In addition, the terms of
the Loan Agreement are hereby modified and amended, effective as of the date
hereof, by deleting the definition of "Commitment Period" from Section 1.1 of
the Loan Agreement in its entirety and replacing the same with the following
substitute definition:
"Commitment Period - shall mean that period during which Bank is
obligated to make advances under the Line of Credit Loan hereunder, as provided
in Section 2.1 hereof. The Commitment Period shall commence upon satisfaction of
the conditions to lending set forth in Article III and shall continue until
September 1, 2005, unless sooner terminated according to the provisions hereof."
2. MODIFICATION OF NOTE. The terms of the Note are hereby modified and
amended, effective as of the date hereof, by deleting the last full paragraph on
the top of Page 2 of the Note starting with the words "Interest only at said
rates...", and replacing it with the following substitute paragraph:
"Interest only at said rates shall be due and payable monthly, in
arrears, commencing on the first (1st) day of June, 2005, and continuing on the
first day of each and every month thereafter through and including August 1,
2005. On September 1, 2005, all unpaid principal, plus accrued and unpaid
interest, shall be due and payable in full."
3. MODIFICATION OF LOAN DOCUMENTS. As of the date hereof, Borrowers
hereby reaffirm and restate each and every warranty and representation set forth
in the Loan Documents. The terms of the Loan Documents are hereby modified and
amended, effective as of the date hereof, so that any reference in any of the
Loan Documents to the Loan Agreement or the Note shall refer to the Loan
Agreement and Note as herein amended.
4. RATIFICATION; EXPENSES. Except as herein expressly modified or
amended, all the terms and conditions of the Note, the Loan Agreement and the
other Loan Documents are hereby ratified, affirmed, and approved. In
consideration of Lender agreeing to modify the Loan Agreement, Borrowers agree
to pay all fees and expenses incurred in connection with this Amendment
including Lender's attorneys' fees and expenses.
5. NO DEFENSES; RELEASE. For purposes of this Paragraph 5, the terms
"Borrower Parties" and "Lender Parties" shall mean and include Borrowers and
Lender, respectively, and each of their respective predecessors, successors and
assigns, and each past and present, direct and indirect, parent, subsidiary and
affiliated entity of each of the foregoing, and each past and present employee,
agent, attorney-in-fact, attorney-at-law, representative, officer, director,
shareholder, partner and joint venturer of each of the foregoing, and each heir,
executor, administrator, successor and assign of each of the foregoing;
references in this paragraph to "any" of such parties shall be deemed to mean
"any one or more" of such parties; and references in this sentence to "each of
the foregoing" shall mean and refer cumulatively to each party referred to in
this sentence up to the point of such reference. Borrower hereby acknowledge,
represent and agree: that Borrowers have no defenses, setoffs, claims,
counterclaims or causes of action of any kind or nature whatsoever with respect
to the Note and the other Loan Documents or the indebtedness evidenced and
secured thereby, or with respect to any other documents or instruments now or
heretofore evidencing, securing or in any way relating to the Loan, or with
respect to the administration or funding of the Loan, or with respect to any
other transaction, matter or occurrence between any of the Borrower Parties and
any Lender Parties or with respect to any acts or omissions of any Lender
Parties, with respect to each of the same, limited only to the extent that such
acts, claims or actions exist on or prior to the date hereof (all of said
defenses, setoffs, claims, counterclaims or causes of action being hereinafter
referred to as "Loan Related Claims"); that, to the extent that Borrowers may be
deemed to have any Loan Related Claims, Borrowers do hereby expressly waive,
release and relinquish any and all such Loan Related Claims, whether or not
known to or suspected by Borrowers; that Borrowers shall not institute or cause
to be instituted any legal action or proceeding of any kind based upon any Loan
Related Claims; and that Borrowers shall indemnify, hold harmless and defend all
Lender Parties from and against any and all Loan Related Claims and any and all
losses, damages, liabilities, costs and expenses suffered or incurred by any
Lender Parties as a result of any assertion or allegation by any Borrower
Parties of any Loan Related Claims or as a result of any legal action related
thereto.
6. NO NOVATION. Borrowers and Lender hereby acknowledge and agree that
this Amendment shall not constitute a novation of the indebtedness evidenced by
the Loan Documents, and further that the terms and provisions of the Loan
Documents shall remain valid and in full force and effect except as may be
hereinabove modified and amended.
7. NO WAIVER OR IMPLICATION. Borrowers hereby agree that nothing
herein shall constitute a waiver by Lender of any default, whether known or
unknown, which may exist under the Note or any other Loan Document. Borrowers
hereby further agree that no action, inaction or agreement by Lender, 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 Loan or any portion thereof, or with respect
to matters involving security for the Loan, or with respect to any other matter
relating to the Loan, shall require or imply any future extension, indulgence,
waiver, consent or agreement by Lender. Borrowers hereby acknowledge and agree
that Lender has made no agreement, and is in no way obligated, to grant any
future extension, indulgence, waiver or consent with respect to the Loan or any
matter relating to the Loan.
8. NO RELEASE OF COLLATERAL. Borrowers further acknowledge and agree
that this Amendment shall in no way occasion a release of any collateral held by
Lender as security to or for the Loan, and that all collateral held by Lender as
security to or for the Loan shall continue to secure the Loan.
9. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and
inure to the benefit of Borrowers and Lender and their respective successors and
assigns, whether voluntary by act of the parties or involuntary by operation of
law.
[Signatures on Following Page]
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IN WITNESS WHEREOF, this Amendment has been duly executed under seal by
Borrowers and Lender, as of the day and year first above written.
BORROWERS:
INNOTRAC CORPORATION,
a Georgia corporation (SEAL)
By: /s/ Scott D. Dorfman
-------------------------------------
Scott D. Dorfman, Chairman, President
and Chief Executive Officer
Attest: /s/ Scott D. Dorfman
---------------------------------
Scott D. Dorfman, Secretary
IFULFILLMENT, INC.,
a Georgia corporation (SEAL)
By: /s/ Scott D. Dorfman
-------------------------------------
Scott D. Dorfman, Chairman, President
and Chief Executive Officer
Attest: /s/ Scott D. Dorfman
---------------------------------
Scott D. Dorfman, Secretary
LENDER:
WACHOVIA BANK, NATIONAL ASSOCIATION,
successor by merger to SouthTrust Bank
By: /s/ Jerry Noles
-------------------------------------
Jerry Noles, Vice President
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