Exhibit 99.1
Execution
Copy
VOTING,
COOPERATION AND INDEMNIFICATION AGREEMENT
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Scott Dorfman
(“Dorfman”)
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Susan Mary Trotochaud
(“Spouse”)
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GSI Commerce,
Inc.
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a Delaware
corporation (“Parent”)
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935 First
Avenue
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King of
Prussia, PA 19406
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October 5,
2008
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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:
(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).
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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.
(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 or their properties are bound or affected; or (B) result
in any breach of or constitute a default or breach (with or without
the giving of notice, passage of time, or both) under, or give to
other Person any rights of termination, amendment, acceleration or
cancellation of, or result (with or without the giving of notice,
passage of time, or both) in the creation of an Encumbrance on any
of the Subject Securities pursuant to, any Contract to which any of
the Shareholders is a party or by which any of the Shareholders or
any of his, her or its properties is or may be bound or
affected.
(ii) 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, require any Consent of any
Person.
Title to Subject Securities. As of the date hereof,
each of the Shareholders Own in the aggregate (including shares
owned of record and shares owned beneficially), free and clear of
any Encumbrance (except for vesting conditions applicable to stock
options that have not yet been exercised by such Shareholder), the
number of issued and outstanding shares of Company Common Stock set
forth below such Shareholder’s name on the signature page
hereof, and the number of options, warrants and other rights to
acquire shares of Company Common Stock set forth below such
Shareholder’s name on the signature page hereof, and do not
directly or indirectly Own any shares of capital stock of the
Company, or any option, warrant or other right to acquire any
shares of capital stock of the Company, other than the shares and
options, warrants and other rights set forth below such
Shareholder’s name on the signature page hereof.
Accuracy of Representations.
(i) The
representations and warranties of each of the Shareholders
contained in this Agreement are accurate in all respects as of the
date of this Agreement, will be accurate in all respects at all
times through the Expiration Date and will be accurate in all
respects as of the date of the consummation of the Merger as if
made as of any such time or date.
(ii) The
representations and warranties of the Company contained in
Section 2.2 of the Merger Agreement are accurate as of the
date of the Merger Agreement and will be accurate as of the Closing
Date as if made on and as of the Closing Date.
6.
Representations and Warranties of Parent. Parent
represents and warrants to each of the Shareholders as
follows:
(a)
Authorization. Parent has the absolute and
unrestricted right, power, authority and capacity to execute and
deliver this Agreement and to perform its obligations hereunder.
This Agreement has been duly executed and delivered by Parent and
constitutes the legal, valid and binding obligation of Parent,
enforceable against Parent 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 Parent does not, and
the performance of this Agreement by Parent will not:
(A) conflict with or violate any Law, order, decree or
Judgment applicable to Parent or by which it or its properties are
bound or affected; or (B) result in any breach of or
constitute a default or breach (with or without the giving of
notice, passage of time, or both) under, or give to other Person
any rights of termination, amendment, acceleration or cancellation
of, any Contract to which Parent is a party or by which Parent or
any of its properties is or may be bound or affected, except, in
either case, for any conflict, violation, default or breach that
has not had and will not have a material adverse effect on the
ability of Parent to consummate the Merger and the other
transactions contemplated by the Merger Agreement.
(ii) Except
as may be required by the Securities Act, the Exchange Act, state
securities or “blue sky” laws, the Georgia Business
Corporation Code, as amended, any antitrust law or regulation
(including the Hart-Scott-Rodino Antitrust Improvements Act) and
the rules of the Nasdaq, the execution and delivery of this
Agreement by Parent does not, and the performance of this Agreement
by Parent will not, require the Consent of any Person.
Accuracy of Representations . The representations and
warranties of Parent contained in this Agreement are accurate in
all material respects as of the date of this Agreement and will be
accurate in all material respects as of the date of the
consummation of the Merger as if made as of the Closing
Date.
7.
Other Covenants of the Shareholders.
(a)
Company Shareholders’ Meeting and Covenants of the
Company . Each of the Shareholders, jointly and severally,
covenants and agrees that upon the request of Parent, each
Shareholder shall promptly take any and all actions necessary or
desirable to cause the Company Shareholders’ Meeting to be
held pursuant to the applicable provisions of the Georgia Business
Corporation Code, as amended, or any other applicable
law.
(b)
Further Assurances. At any time and from time
to time after the date hereof through the Closing Date, and without
additional consideration, each of the Shareholders will cooperate
with Parent, take such action and execute and deliver, or cause to
be executed and delivered, such additional or further transfers,
assignments, endorsements, consents and other instruments as Parent
may reasonably request for the purpose of effectively carrying out
and furthering the intent of the Merger Agreement and this
Agreement.
(c)
Legend. Immediately after the execution of this
Agreement (and from time to time prior to the Expiration Date upon
the acquisition by any of the Shareholders (individually or
jointly) of Ownership of any shares of Company Common Stock), each
of the Shareholders shall instruct the Company to cause each
certificate of such Shareholder evidencing any issued and
outstanding shares of Company Common Stock Owned by such
Shareholder (individually or jointly) to bear a legend in the
following form:
THE SHARES REPRESENTED BY
THIS CERTIFICATE MAY NOT BE SOLD, EXCHANGED OR OTHERWISE
TRANSFERRED OR DISPOSED OF EXCEPT
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IN COMPLIANCE WITH THE
TERMS AND CONDITIONS OF THAT CERTAIN VOTING, COOPERATION AND
INDEMNIFICATION AGREEMENT DATED AS OF OCTOBER 5, 2008, AS IT MAY BE
AMENDED, AMONG GSI COMMERCE, INC., SCOTT DORFMAN AND SUSAN MARY
TROTOCHAUD, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE
OFFICES OF THE ISSUER.
(d)
Escrow. To secure his obligations under
Section 8 of this Agreement, Dorfman agrees that Parent shall
cause to be delivered to a bank or brokerage firm mutually
acceptable to Parent and Dorfman (“Escrow Agent”) an
aggregate of Four Million $4,000,000 of the Merger Consideration
(“Escrow Funds”) otherwise payable to Dorfman upon
consummation of the Merger to be held, disbursed and released
pursuant to the terms of the Escrow Agreement in the form attached
hereto as Exhibit A (“Escrow Agreement”) to be
entered into among Dorfman, Parent and Escrow Agent prior to the
consummation of the Merger. Dorfman shall have the option of
delivering the Escrow Funds in cash or a combination of cash and
Parent Stock, provided, however, that the percentage that the value
of the Parent Stock so delivered bears to $4,000,000 shall not
exceed the percentage that the value of the Per Share Merger Stock
Consideration bears to the value of the Per Share Merger
Consideration in the Merger. For the purpose of this paragraph,
a
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