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Exhibit 99.1

Execution Copy

VOTING, COOPERATION AND INDEMNIFICATION AGREEMENT

 

 

 

Parties :

 

Scott Dorfman (“Dorfman”)

 

 

 

 

 

 

 

 

 

 

 

Susan Mary Trotochaud (“Spouse”)

 

 

 

 

 

 

 

 

 

 

 

GSI Commerce, Inc.

 

 

a Delaware corporation (“Parent”)

 

 

935 First Avenue

 

 

King of Prussia, PA 19406

 

 

 

Date :

 

October 5, 2008

Background: Parent, Bulldog Acquisition Corp., a Georgia corporation and a wholly owned subsidiary of Parent (“Acquisition Sub”), and Innotrac Corporation, a Georgia corporation (the “Company”), are entering into an Agreement and Plan of Merger dated as of the date hereof (the “Merger Agreement”), which provides (subject to the conditions set forth therein) for the merger of Acquisition Sub with and into the Company (the “Merger”) and the conversion of outstanding shares of common stock of the Company into cash and common stock of the Parent (“Parent Stock”). Dorfman and Spouse are shareholders (collectively, the “Shareholders”) of the Company. As a condition to the willingness of Parent and Acquisition Sub to enter into the Merger Agreement, Parent and Acquisition Sub have required that the Shareholders enter into, and in order to induce Parent and Acquisition Sub to enter into the Merger Agreement, the Shareholders have agreed to enter into, this Agreement.

      Intending to be legally bound , in consideration of the foregoing and the mutual agreements contained herein and in the Merger Agreement, the parties hereto agree as follows:

     1.  Certain Definitions

          (a) All capitalized terms used but not otherwise defined in this Agreement have the meanings ascribed to such terms in the Merger Agreement.

          (a) “ Expiration Date” shall mean the earlier of (i) the date upon which the Merger Agreement is validly terminated pursuant to Section 7.1 thereof and all fees and expenses due Parent pursuant to Section 7.3 thereof have been paid, and (ii) the date upon which the Merger becomes effective in accordance with the terms and conditions of the Merger Agreement.

          (c) A Shareholder shall be deemed to “Own” or to have acquired “Ownership” of a security if the Shareholder: (i) is a record owner of such security; or (ii) is a “beneficial owner” (within the meaning of Rule 13d-3 under the Exchange Act) of such security.

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          (d) The “Record Date” for a particular matter shall be the date fixed for persons entitled: (i) to receive notice of, and to vote at, a meeting of the shareholders of the Company called for the purpose of voting on such matter; or (ii) to take action by written consent of the shareholders of the Company with respect to such matter.

          (e) “Subject Securities” shall mean: (i) all securities of the Company (including shares of Company Common Stock and all options, warrants and other rights to acquire shares of Company Common Stock) Owned by the Shareholders (individually or jointly) as of the date of this Agreement; and (ii) all additional securities of the Company (including all additional shares of Company Common Stock and all additional options, warrants and other rights to acquire shares of Company Common Stock) of which the Shareholders (individually or jointly) acquire Ownership during the period from the date of this Agreement through the Expiration Date.

          (f) A Person shall be deemed to have effected a " Transfer” of a security if such Person directly or indirectly; (i) sells, pledges, encumbers, grants an option with respect to, transfers or disposes of such security or any interest in such security; (ii) enters into an agreement or commitment contemplating the possible sale of, pledge of, encumbrance of, grant of an option with respect to, transfer of or disposition of such security or any interest therein; or (iii) reduces such Person’s beneficial ownership of, interest in or risk relating to such security.

     2.  Transfer of Subject Securities

          (a) Transferee of Subject Securities to be Bound by this Agreement. Each of the Shareholders, jointly and severally, agrees that, during the period from the date of this Agreement through the Expiration Date, such Shareholder shall not cause or permit any Transfer of any of the Subject Securities Owned by such Shareholder to be effected except in accordance with Section 2(c).

          (b) Transfer of Voting Rights . Each of the Shareholders, jointly and severally, agrees that, during the period from the date of this Agreement through the Expiration Date, such Shareholder shall ensure that: (a) none of the Subject Securities Owned by such Shareholder is deposited into a voting trust; and (b) no proxy is granted, and no agreement or similar agreement is entered into, with respect to any of the Subject Securities Owned by such Shareholder.

          (c) Permitted Transfers . Section 2(a) shall not prohibit a transfer of Subject Securities by a Shareholder: (i) to any member of Shareholder’s immediate family; or to a trust for the benefit of Shareholder or any member of Shareholder’s immediate family; or (ii) upon the death of a Shareholder, provided, however, that a transfer referred to in this sentence shall be permitted only if, as a precondition to such transfer, each Person to which any of such Subject Securities, or any interest in any of such Subject Securities, is or may be transferred shall have agreed to be bound by all of the terms of this Agreement applicable to such Shareholder by executing a counterpart of this Agreement (with such modifications as Parent may reasonably request).

3. Voting of Shares.

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          (a) Agreement . Each of the Shareholders, jointly and severally, covenants and agrees that, during the period from the date of this Agreement through the Expiration Date, at any meeting of the shareholders of the Company, however called, and at every adjournment or postponement thereof, and in any written action by consent of the shareholders of the Company, unless otherwise directed in writing by Parent, such Shareholder shall (i) appear, or cause the holder of record as of the Record Date to appear, at any annual or special meeting of shareholders of the Company (including the Company’s Shareholder Meeting) for the purpose of establishing a quorum, and (ii) vote or cause to be voted all issued and outstanding shares of Company Common Stock that are Owned by such Shareholder (individually or jointly) as of the Record Date:

          (A) in favor of the Merger, the execution and delivery by the Company of the Merger Agreement and the adoption and approval of the terms thereof and in favor of the other transactions and actions contemplated by the Merger Agreement and any action required in furtherance hereof or thereof;

          (B) against the following actions (other than the Merger, the Merger Agreement and the other transactions contemplated by the Merger Agreement): (i) any extraordinary corporate transaction, such as a merger, consolidation or other business combination involving the Company; (ii) any sale, lease, sublease, license, sublicense or transfer of a material portion of the rights or other assets of the Company; (iii) any reorganization, recapitalization, dissolution or liquidation of the Company; (iv) any change in a majority of the board of directors of the Company; (v) any amendment to the Company’s certificate of incorporation or bylaws; (vi) any material change in the capitalization of the Company or the Company’s corporate structure; and (vii) any Acquisition Proposal or any action, agreement or transaction that would, directly or indirectly, result in an Acquisition Proposal; and (viii) any action, agreement or transaction that is intended or could reasonably be expected (I) to facilitate a person other than the Parent in acquiring the Company or (II) to impede, interfere with, delay, postpone, discourage or adversely affect the Merger or the other transactions contemplated by the Merger Agreement.

Prior to the Expiration Date, no Shareholder shall enter into any agreement or understanding with any Person to vote or give instructions in any manner inconsistent with clause “(A)” or clause "(B)” of the preceding sentence. Nothing in this Section 3(a) shall prevent the Shareholders from voting in their sole discretion on any matter other than the matters referred to in this Section 3(a).

          (b) Further Assurances . (i) Each Shareholder, at such Shareholder’s own expense, perform such further acts and execute such other documents and instruments as may reasonably be required to carry out and give effect to the provisions of this Agreement.

               (ii) No Shareholder shall enter into any tender, voting or other agreement, or grant a proxy or power of attorney, with respect to the Subject Securities that is inconsistent with this Agreement or otherwise take any other action with respect to the Subject Securities that would in any way restrict, limit or interfere with the performance of Shareholder’s obligations hereunder or the transactions contemplated hereby.

          (d) Waiver of Dissenters’ Rights . Each Shareholder hereby irrevocably and unconditionally waives, and agrees to cause to be waived and to prevent the exercise of, any dissenters’ rights, any rights of appraisal and any similar rights relating to the Merger or any

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related transaction that Shareholder or any other Person may have by virtue of, or with respect to, any shares of Company Common Stock Owned by Shareholder.

     4.  No Solicitation .

          (a) Each of the Shareholders, jointly and severally, covenants and agrees that, during the period commencing on the date of this Agreement and ending on the Expiration Date, none of them shall, directly or indirectly, nor shall any of them authorize or permit any Representative of any of them, directly or indirectly, to: (i) solicit, initiate, facilitate, induce or encourage, directly or indirectly, the making, submission or announcement of any Acquisition Proposal or take any action that could reasonably be expected to lead to an Acquisition Proposal; (ii) furnish any information regarding the Company to any Person in connection with or in response to an Acquisition Proposal or potential Acquisition Proposal; or (iii) engage in discussions with any Person with respect to any Acquisition Proposal.

          (b) Each of the Shareholders shall promptly advise Parent orally and in writing of any Acquisition Proposal (including the identity of the Person making or submitting such Acquisition Proposal and the terms thereof) that is made or submitted by any Person and received by any of them. Each of the Shareholders shall keep Parent fully informed with respect to the status of any such Acquisition Proposal and any modification or proposed modification thereto.

          (c) Each of the Shareholders shall immediately cease any existing discussions with any Person that relate to any Acquisition Proposal.

          (d) Nothing in Section 3 or Section 4 of this Agreement shall be deemed to prevent a Shareholder who is a member of the Company’s board of directors from voting or taking any other action, solely in his capacity as a member of the Company’s board of directors, to the extent permitted to be taken by the Company’s board of directors under Section 4.3 of the Merger Agreement.

     5.  Representations and Warranties of Shareholders. Each of the Shareholders, jointly and severally, represents and warrants to Parent as follows:

          (a) Authorization. Each of the Shareholders has the absolute and unrestricted right, power, authority and capacity to execute and deliver this Agreement and to perform his, her or its obligations hereunder. This Agreement has been duly executed and delivered by each of the Shareholders and constitutes legal, valid and binding obligations of the Shareholders, enforceable against each of the Shareholders in accordance with its terms.

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          (b) No Conflicts, Required Filings and Consents.

               (i) The execution and delivery of this Agreement by each of the Shareholders do not, and the performance of this Agreement by each of the Shareholders will not: (A) conflict with or violate any Law, order, decree or Judgment applicable to any of the Shareholders or by which he, she, it or they or any of his, her, its o


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